House of Commons

Tuesday 11th December 2012 Commons Chamber

Tuesday 11 December 2012

The House met at half-past Eleven o’clock

Prayers

Tuesday 11th December 2012 Commons Chamber

[Mr Speaker in the Chair]

Business before Questions

City of London (Various Powers) Bill [Lords] (By Order)

Second Reading opposed and deferred until Tuesday 18 December (Standing Order No. 20).

Oral Answers to Questions

Tuesday 11th December 2012 Commons Chamber

The Chancellor of the Exchequer was asked—

[Mr Edward Leigh (Gainsborough) (Con)]

1. What plans he has for future private finance initiatives.

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

Last week, the Government announced the details of a new approach to replace the private finance initiative with private finance initiative 2, which is a more transparent approach to securing investment in public infrastructure. The Government will become a shareholder in future projects. We can all see now that the public sector was sharing the risk under PFI. We will now ensure that we also share in the rewards.

[Mr Leigh]

I looked at PFI for nine years on the Public Accounts Committee. I am sure people will agree that it was a good system that was scandalously misused to rip off tomorrow’s taxpayers for the sake of today and to rip off the public sector in favour of the private sector. How can the Chancellor assure the House that, if he is to use PFI 2 to pay for large infrastructure projects, we will not repeat the mistakes of the past?

[Mr Osborne]

I sat on the PAC under my hon. Friend’s chairmanship and I remember our investigations into various hospital and prison schemes that had gone wrong. As we saw it, there were three problems. First, contracts were very inflexible, so it cost a huge amount to do things such as change light bulbs or clean hospitals and the like. Secondly, the private sector got all the upside of the projects and made more money than expected. Thirdly, there was no control on the overall off-balance sheet total. We are addressing all three: we are creating more flexible and transparent contracts; we will share in the upside by taking a public sector stake and having the public sector on the board; and at the Budget we will set out a control total for PFI 2 liabilities.

[Helen Goodman (Bishop Auckland) (Lab)]

The Chancellor says that things are getting better, but Essex county council has issued a social impact bond on which it proposes to pay 12%—six times the price of gilts—and the Government are putting £20 million into subsidising this financing. Why are the Government wasting money like that at a time of austerity?

[Mr Osborne]

I think that most people in the House—I thought this was the case in all parties—welcome the innovative work being done on social financing and social impact bonds. Sir Ronald Cohen is one of the leading advocates of this and has been advising the Government. It is all about trying to get new forms of financing into improving our society. I would have hoped she would have welcomed that, rather than criticising it.

[Mr Andrew Tyrie (Chichester) (Con)]

Many on the Treasury Select Committee are already concerned that Whitehall Departments might again find themselves addicted to the “get something now, pay later” culture that bedevilled PFI the first time round. What is also concerning us is that a number of the proposals set out by the Government—I refer, in particular, to page 13 of the document produced—look more like motherhood and apple pie than something substantive enough to offset that Whitehall pressure. Will the Chancellor assure the House that, excluding value-for-money considerations, all accounting incentives to remove PFI from balance sheets will now be closed off to Departments?

[Mr Osborne]

I say to the Chair of the Treasury Select Committee that we will set out at the Budget—of course, he will want to scrutinise this carefully—a new control total for the off-balance sheet liabilities of PFI. We already now publish the whole-of-Government accounts so that people can see the liabilities built up under the previous Administration. The country now has more than £280 billion of PFI debt, of which only £40 billion has been paid off, so he is absolutely right to hold our feet to the fire to ensure that we properly account for this and remove perverse incentives in Whitehall. We want the private sector investing with us in public services, however, so it is important that we have the right regime.

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

The House will be pleased that the Chancellor is not trying to get rid of PFI, but trying to improve it in those areas where it can be improved. What does he mean, however, when he says that the Government will take a stake in the projects? How will he do that? It will need more than a director on the board, which I heard him say.

[Mr Osborne]

We propose to take a public sector share and put in an equity stake on behalf of the public sector. It will be a minority stake, but it means that we will share in the upside, and, of course, in order to keep an eye on our investment, we will have a director on the board representing the public sector, which was not the case in previous projects.

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

Cumbria’s health service is under immense pressure because of PFI deals going back a decade and more. What can the Chancellor do to go toe-to-toe with the private sector to renegotiate existing PFI deals to ensure that more money goes to front-line health services?

[Mr Osborne]

We are seeking to renegotiate existing contracts to get better value for money for taxpayers and local communities. I have a figure here showing that in north Cumbria the public were being charged £466 to replace a light fitting under the PFI contract that was signed. That is completely unacceptable—it is people being ripped off. That is what we are seeking to end.

[Mr John Baron (Basildon and Billericay) (Con)]

2. What steps he is taking to support business creation.

[Chris Skidmore (Kingswood) (Con)]

3. What steps he is taking to encourage private sector job creation.

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

7. What steps he is taking to support business creation.

[Richard Graham (Gloucester) (Con)]

9. What steps he is taking to encourage private sector job creation.

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

Some 1.2 million private sector jobs have been created since the first quarter of 2010. Last year more new businesses were created than in any other year on record. In the autumn statement we took further steps to support job creation and business creation by reducing the corporation tax rate to 21%, extending the small business rate relief scheme to support 500,000 small businesses and increasing by tenfold the annual investment allowance to £250,000.

[Mr Baron]

The Labour Government more than doubled the national debt. This Government have done well to reduce the deficit by 25%, but this still means that we are adding to our debt, albeit at three quarters the pace. Financial repression and quantitative easing will ease the debt somewhat through higher inflation, but may I encourage the Chancellor, despite some positive measures in the autumn statement, to be bolder in encouraging economic growth, including by cutting small business corporation tax, which is the only credible way—

[Mr Speaker]

Order. We have got the gist of it; it was simply too long.

[Mr Osborne]

My hon. Friend is right that the deficit is how much we add to the debt each year. That is why we have to bring the deficit down—it has come down by 25%—but he is also right that we have to have a competitive private sector. We have to have a private sector-led recovery, which is why we have increased the annual investment allowance, for example. He recommends a cut in the small company corporation tax rate. [Interruption.] The shadow Chancellor from a sedentary position said, “That’d be a good idea,” but he was going to put the rate up when we came into office. We have cut the rate to 20% and increased the annual investment allowance.

[Chris Skidmore]

Does the Chancellor agree that increasing the annual investment allowance from £25,000 to £250,000 will make a huge difference to local small businesses and lead to additional and vital job creation in the private sector?

[Mr Osborne]

I think it will help, alongside the reduction in the small company rate. I am pleased that the Federation of Small Businesses said we had listened to the concerns of members, and the chambers of commerce were also supportive. Over the next two years this measure will encourage investment from small and medium-sized businesses, although all businesses that invest will benefit.

[Andrew Jones]

As someone who has set up small businesses myself, I think that encouraging small business creation is part of the solution to the country’s economic problems. Does my right hon. Friend agree that it is a sign of the strength of the private sector in this country that we have seen new businesses created in such record numbers and that this has been one of the factors in generating the 1 million-plus private sector jobs created since the election?

[Mr Osborne]

It is welcome that more than 1 million jobs have been created in the private sector. We now have record female employment, which is also welcome, while the number of those on out-of-work benefits has fallen by 190,000, which is something I hope everyone would welcome.

[Mr Speaker]

I call Richard Graham. Not here.

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

May I congratulate the Chancellor on his U-turn on capital allowances for manufacturing industry? When did he realise that his previous stance of dismissing them as complex reliefs was wrong and at total variance with the Government’s stated aim of supporting manufacturing? When did his conversion to supporting these allowances take place, as long called for by Labour Members and the Engineering Employers Federation?

[Mr Osborne]

The first thing I would say is that we reduced the small companies rate—which would have gone up to 22% under the plans put in place by the last Labour Budget—to 20%. We have now introduced a £250,000 annual investment allowance for small and medium-sized businesses for the next two years. The right hon. Gentleman says that the Labour party had been calling for this. It had 13 years to introduce a £250,000 annual investment allowance. There were all those Budgets that the shadow Chancellor wrote and he did not put it in place.

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

The Chancellor will know that the all-party parliamentary groups on Yorkshire and North Lincolnshire and on manufacturing welcome the change in attitude towards the capital allowances. However, businesses in Yorkshire are saying that they are looking for some leadership and some light at the end of the tunnel, and they ended up feeling thoroughly depressed after watching the autumn statement. When is the Chancellor going to show more leadership? Let us see some light at the end of the tunnel.

[Mr Osborne]

I have to say that the reaction to the autumn statement from the business organisations of Britain was very positive. It was warmly welcomed because we are maintaining control of the public finances, which is a prerequisite for stability and recovery, and because we are taking steps to cut the corporation tax rate and increase the annual investment allowances. I still do not know whether Labour supports the cut in corporation tax. Its Front Benchers have been sending out confused messages on that over the past couple of days. Perhaps we will hear from the shadow Chancellor when he gets to his feet.

[Rachel Reeves (Leeds West) (Lab)]

The Chancellor knows that business success is key to getting our economy growing, to getting the deficit down and to creating jobs. Will he therefore tell us what was the judgment of the Office for Budget Responsibility on the impact on growth of the measures that he announced in the autumn statement last week?

[Mr Osborne]

The Office for Budget Responsibility said that there was a measurable impact on growth in the short term, and of course we have to pay for this in the long term, so it has taken that into account. I have always said that we want to improve the long-term supply potential of the British economy, and one of the most encouraging signs is that the UK, which was becoming a less and less competitive place to do business, is now back in the world’s top 10 competitive economies.

[Rachel Reeves]

I am not surprised that the Chancellor does not want to answer my question, because the OBR’s assessment is that his measures will add just 0.1% to UK gross domestic product by 2018. That must also be set against the fact that growth has been downgraded this year, next year and every year of this Parliament. Is it not the truth that the Chancellor has no plans for jobs and growth, and that that is why the Government are set to borrow an extra £212 billion during the course of this Parliament, breaking the fiscal rules that he gave to this country?

[Mr Osborne]

When the Labour party was in office, its approach led to the economy shrinking by 6% of GDP. We have set in place plans to ensure that the deficit it left us is dealt with and that our economy is more competitive. I would have thought that the hon. Lady would welcome the fact that we have over 1 million new jobs in the economy and a record rate of small business creation. That is something to celebrate in our economy.

[Mr Nick Gibb (Bognor Regis and Littlehampton) (Con)]

May I welcome the Government’s announcement in the autumn statement to put more resources into ensuring that multinationals pay their fair share of tax? That is a key measure to help UK-based business creation. May I also suggest that the Chancellor consider introducing a requirement on multinationals to disclose in advance significant connected party transactions as a way of speeding up transfer pricing inquiries?

[Mr Osborne]

My hon. Friend makes a good point. Obviously, everyone is frustrated when they see multinational companies breaking the tax laws or interpreting them in such a way that they basically avoid paying corporation tax. That situation is not acceptable. We are putting more money into the enforcement of the rules and working with countries such as France and Germany to change the international rules so that we can have a better situation in the future. It would not work if we just acted unilaterally, because these are by definition multinationals. That is why we have to work with other countries.

[Yvonne Fovargue (Makerfield) (Lab)]

4. What recent assessment he has made of the effect of the Government’s fiscal policies on the level of child poverty.

[Mr David Hanson (Delyn) (Lab)]

13. What recent assessment he has made of the effect of the Government’s fiscal policies on the level of child poverty.

[The Economic Secretary to the Treasury (Sajid Javid)]

The Government have protected vulnerable groups as far as possible while undertaking the urgent task of tackling the record fiscal deficit that we inherited. Work remains the best and most immediate way out of poverty, and we have continued to prioritise work incentives through welfare reform and increasing the personal allowance.

[Yvonne Fovargue]

The total cost to a two-child family on the minimum wage of the freeze in child benefit, the 1% increase in working tax credit and the VAT increase over four years will be £5,033. The extra tax allowances and the child tax credit will save them only £1,770, leaving them with a net loss of £3,263. How many more children do the Government expect to be in poverty as a result of those cuts?

[Sajid Javid]

I know that the hon. Lady cares deeply about the issue and she has done a lot of good work with vulnerable families in the past. She will be concerned, as I am, that under the last term of the previous Government child poverty, as defined by the Department for Work and Pensions, increased by 200,000 to 3.9 million. This Government believe that there should be a relentless focus on the causes of poverty, such as worklessness, so I hope that she will join me in welcoming the fact that the number of people employed today in Britain is at a record high.

[Mr Hanson]

He cannot get away with that, Mr Speaker; it is complete nonsense. Will he confirm—yes or no—that people on the minimum wage will be worse off at the end of this Parliament because of the tax and benefit changes than they would have been from the tax savings my hon. Friend the Member for Makerfield (Yvonne Fovargue)mentioned a moment ago? Cuts on child benefit and on working families tax credit will make people poorer: will he confirm that?

[Sajid Javid]

I am not going to take any lectures on child poverty from the right hon. Gentleman—[Interruption.]

[Mr Speaker]

Order. The Minister must be heard.

[Sajid Javid]

The right hon. Gentleman was a senior member of the previous Government, who, over 13 years, presided over an increase in the number of workless households to a record 3.9 million. In his constituency, in the last Labour term, the number of youth jobseeker’s allowance claimants increased by 148%. I hope that he will join me in welcoming the fact that such claims are down by 19% under this Government.

[Charlie Elphicke (Dover) (Con)]

May I ask the Minister to confirm that the previous Government’s child poverty targets were missed by 600,000, that according to the latest figures child poverty fell last year by 300,000 and that universal credit will reduce child poverty further, by up to 350,000?

[Sajid Javid]

My hon. Friend is absolutely right. The Government are relentlessly focused on eradicating poverty and the measures he has talked about, such as universal credit, increase work incentives and help people back into work.

[George Freeman (Mid Norfolk) (Con)]

Is it not the truth that the best way to tackle child poverty is to have parents in work? Does my hon. Friend agree that the creation of 1.2 million new private sector jobs, the taking of more than 1 million of the lowest paid out of tax and the abolition of the rise in fuel duty planned by the previous Government make the average family more than £125 better off and does more for child poverty than any scaremongering by the Opposition?

[Sajid Javid]

That is right. If we can deal with worklessness, we can help deal with poverty. In the past two years, 1.2 million private sector jobs have been created—more than were created on a net basis by the previous Government over 10 years.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

Last month, the Joseph Rowntree Foundation said that more than 6.1 million people in poverty are in working households. Does the Minister believe that a real-terms cut to in-work support for the lowest paid helps to tackle child poverty and will he agree to publish a child poverty impact assessment alongside the Bill on benefits uprating?

[Sajid Javid]

As I have said, we will not take any lectures from the Opposition on child poverty. I used the previous Government’s figures. She talks about workless households, but they increased by 200,000 during Labour’s last term in power and I believe that the policies the Government have in place to deal with the root causes of poverty are the right ones.

[Penny Mordaunt (Portsmouth North) (Con)]

5. What consideration he has given to the introduction of transferable tax allowances for married couples.

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

The Government’s commitment to introducing a proposal to recognise marriage through the tax and benefits system remains firm. We want to show that we value commitment, so we will consider a range of options and advance proposals at the appropriate time.

[Penny Mordaunt]

With the introduction of the tapered removal of child benefit with one parent earning between £50,000 and £60,000, will the Minister give further consideration to how we can support families at this difficult time?

[Mr Gauke]

My hon. Friend is right to highlight the fact that we have introduced a range of measures that will have an impact on all parts of society, including the highest earning 10% to 15% through the child benefit changes. Of course, we look to do whatever we can to support families. That includes providing free early learning for three and four-year-olds and extending the 15 hours a week of early years education and care from 2012-13 to all disadvantaged two-year-olds.

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

Is cutting maternity pay part of the Government’s strategy to support stable families?

[Mr Gauke]

I will be interested to know whether the hon. Gentleman will support the benefits uprating Bill. He is shaking his head, so I take it that we have finally got an answer on the Labour party’s position.

[Sheila Gilmore (Edinburgh East) (Lab)]

6. What assessment he has made of the effectiveness of the funding arrangements which he agreed with the Secretary of State for Work and Pensions for the Work Programme.

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

The Work programme is the biggest single payment-by-results programme Great Britain has ever seen. The funding arrangements I agreed with the Secretary of State for Work and Pensions ensure that providers are paid to find sustained job outcomes for those who are or are at risk of being long term unemployed. For the very first time, providers are paid in part through the benefit savings that they generate.

[Sheila Gilmore]

The Chief Secretary wants us to look at the cheapness of the scheme to providers, but buying cheap can be a false economy if the product does not work. The price here is being paid by people staying in long-term unemployment, not getting jobs and still being on benefit. Is not the Work programme a failure?

[Danny Alexander]

No, I do not believe it is. The hon. Lady refers to costs, and she will know that the flexible new deal, which the Work programme replaced, cost £7,495 per job outcome; that compares with costs of about £2,000 under the Work programme. It is a great deal more cost-effective. The hon. Lady will also be aware that 56% of those first Work programme starters have come off benefits and that up to September this year, there have been 200,000 job entries, as reported by providers, so there is a sense of progress in the Work programme, too.

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

Does my right hon. Friend agree with the CBI, which has said that the Work programme has already helped to turn around the lives of thousands of people and is delivering real value for money for the taxpayer?

[Danny Alexander]

Yes, I do agree. The fact that the job outcomes are more stretching than previous schemes before providers get paid and that they are paid only for results—not just for activity—of course means that it is harder for them to start with, but the fact that there have been 200,000 job entries under the scheme up to September 2012 speaks for itself.

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

8. What recent assessment he has made of the effect of the Government’s fiscal policies on the level of long-term youth unemployment.

[The Financial Secretary to the Treasury (Greg Clark)]

I have made a recent assessment of the impact of fiscal policies on youth unemployment rates. With few exceptions, European countries with the highest deficits also tend to be the countries with the highest youth unemployment rates. In this country, a big increase in the deficit under the previous Government went hand in hand with a big increase in the rate of youth unemployment. Under this Government, the deficit is now coming down, and so is youth unemployment—including, as the hon. Lady knows, in her own constituency.

[Meg Hillier]

Overall in my constituency, the number of claimants on jobseeker’s allowance in October was the 22nd highest of all constituencies. Among 18 to 24-year-olds, the rate was 10.4%. That is far too high. My constituency has regular visits from the occupants of No. 10 and No. 11 Downing street to extol the virtues of Tech City, but what is the Treasury doing to make sure that my constituents are able to get any of the jobs created, especially when the Work programme is also failing them?

[Greg Clark]

The hon. Lady was a Minister in the last Government, and she will know that in her own constituency there are fewer young unemployed people now than there were in the last year of the Government of whom she was a member. I am surprised that she has not taken the opportunity to refer to the fact that the rate of youth unemployment in Hackney South and Shoreditch has fallen by 20% over the last 12 months.

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

May I tell my right hon. Friend that under the last two Labour Governments, the youth unemployment claimant count in South West Bedfordshire rose by 180%, whereas it has fallen by 6% since we have been in office? Does that not show that, in difficult times, although there is, of course, further to go, we are moving in the right direction?

[Greg Clark]

My hon. Friend is absolutely right. That is why it is important for us to maintain the course, pay down the deficit and build confidence in the labour market. We know what happened under the previous Government: in their last two years, long-term youth unemployment doubled.

[Andy Sawford (Corby) (Lab/Co-op)]

Is the Minister aware that recent independent surveys show that Corby and east Northamptonshire is one of the most difficult places in the country for a young unemployed person trying to find work? I can tell him that I meet young people, day in, day out, who are desperately trying to find work, so will he look at the unique case for having an enterprise zone for Corby and east Northamptonshire, extending by one the number of enterprise zones that the Government have created?

[Greg Clark]

I welcome the hon. Gentleman to the Chamber. When he organised a day think tank, he and I had some very productive exchanges. I should be happy to meet him to discuss the situation in Corby, which is an enterprising town with the potential to create many jobs. As he will know, under the “city deals” system I am responsible for devolving powers to places throughout the country, and I am keen to receive more applications.

[Dan Rogerson (North Cornwall) (LD)]

A significant factor for young people seeking work in rural areas is the cost of transport and fuel. I therefore welcome last week’s announcement, and also the news that the Treasury is considering extending the rural islands fuel discount to some especially rural parts of the mainland. Such a change would make a huge difference to some of the poorest communities in the United Kingdom, and would encourage growth in employment.

[Greg Clark]

My hon. Friend is absolutely right: that is one of the reasons why we were determined to reverse, and then to cancel, the fuel tax increase proposed by the Labour party. As for the rural scheme that he mentioned, we are having conversations with the European Commission in order to establish whether we can proceed with it.

[Sir Tony Baldry (Banbury) (Con)]

10. What steps he is taking to reduce the cost of living.

[Graham Evans (Weaver Vale) (Con)]

15. What steps he is taking to reduce the cost of living.

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

The Government continue to take steps to support households. We will increase the personal allowance further to £9,440 in April 2013 to support hard-working individuals. That cash increase of £1,335 in 2013-14 is the largest ever. We have also cancelled the 3p fuel duty increase that was planned for January, and announced a third council tax freeze and a two-year reduction in the cap on rail fares.

[Sir Tony Baldry]

I just want to make sure that I have got my figures right. Am I correct in thinking that under the Labour Government fuel duty rose by 20p, and that had they remained in power, they would have planned for it to rise by 13p more than it will rise under this Government?

[Danny Alexander]

As usual, my hon. Friend has his facts absolutely right. The action taken on fuel duty by this Government means that in April next year, pump prices will be approximately 13p a litre lower than they would have been had the last Government remained in office.

[Graham Evans]

I welcome the announcements in the autumn statement, particularly the announcement of an increase in the personal allowance, which will take 2.6 million people in the north-west of England out of income tax altogether. Will my right hon. Friend reassure us that he will continue to raise the allowance to ensure that it always pays to work?

[Mr Speaker]

In relation to the cost of living?

[Graham Evans]

Indeed, Mr. Speaker.

[Danny Alexander]

Ensuring, through increases in the personal allowance, that low and middle-income workers in particular can keep more of the money that they earn rather than handing it over to the Exchequer helps those people to deal with pressures related to the cost of living. I can certainly assure my hon. Friend that I will continue to push that policy, along with my Liberal Democrat and Conservative colleagues. At the time of the last general election I made a key promise to lift the income tax threshold to £10,000, and I intend to deliver that promise as soon as possible. [Hon. Members:“ Like the promise about tuition fees?”]

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

The—

[Mr Speaker]

Order. Labour Members are shouting their heads off, and the hon. Gentleman cannot be heard. Let us hear from Mr Davies.

[Geraint Davies]

The incomes of the top 10% in Britain have risen by 11% in the last two years, but we heard in the autumn statement that they would be cut by only 0.5%. Does Chief Secretary not agree that those people are in a fantastic position to take on increases in the cost of living, unlike the poorest 40%, who are being unnecessarily smashed by this Government?

[Danny Alexander]

The hon. Gentleman should recognise that the top 10% make up the part of the population that is contributing most to dealing with the financial problems caused by the Labour party—the mess that we are trying to clean up—both in cash terms and in terms of a share of their incomes. He should welcome the fact that this Government are doing more than any previous Government to ensure that the wealthiest in society contribute most to sorting out the financial problems that he and his colleagues created.

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

In the interests of transparency, will the Chief Secretary and his colleagues make public an impact assessment relating to child poverty before the welfare uprating Bill is laid before Parliament, not least because it would help us to understand the impacts of the cost of living and benefit freezes on low-paid working families?

[Danny Alexander]

The Department for Work and Pensions will, of course, publish an impact assessment in the normal way when the Bill is published.

[Stephen Williams (Bristol West) (LD)]

The most significant way in which any Government can help people with their household budgets is to put more money in their pockets and purses, particularly money that they have earned themselves and which is subject to taxation. Does the Chief Secretary agree that one of the most important things that the coalition Government will do is lift millions of people out of income tax altogether, and, by April next year, deliver a broad income tax cut of £600 a year in relation to the level in April 2010?

[Danny Alexander]

Like my hon. Friend, I want to build a strong economy and a fair society where everyone has a chance to get on in life. The commitment to raise the income tax threshold was a commitment that he and I and all our colleagues made at the general election, and we are delivering on it in Government. There is a tax cut for working people cumulatively over this Parliament, and next year it will be worth £50 a month to people on low and middle incomes. That is real help for hard-working families at what is a difficult time.

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

Average wages in Scotland have fallen by 7.4% under this Chief Secretary, and from next year 182,000 couple-families in work with children will stand to lose money through tax credits. Why are this Government always standing up for millionaires while hammering the strivers?

[Danny Alexander]

I will not take any lectures on millionaires from the Labour party, which thought it appropriate that a millionaire private equity fund manager should pay less on his income than the person who cleans his office. Labour’s record on taxing the wealthy, dealing with tax avoidance and closing tax loopholes is nothing to be proud of, and the hon. Gentleman should stop raising that point.

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

11. What steps he is taking to discourage tax avoidance by wealthy people.

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

In seeking a fair contribution from the wealthy, the Government’s first priority is to tackle those who avoid or evade tax. The autumn statement contained a number of new measures to ensure that, including repatriating £5 billion in unpaid tax from Switzerland and new investment in Her Majesty’s Revenue and Customs to enable it to expand its anti-avoidance activity, in particular the specialist unit that supervises the compliance of affluent individuals.

[Stephen Gilbert]

People in Cornwall expect the wealthiest to pay their fair share of tax, so I welcome the Government’s planned offshore tax evasion strategy, which is much needed to track down funds that have been squirreled away and undertaxed. Will it cover British overseas territories as well as Crown dependencies, and what is the Minister’s assessment of the potential revenue?

[Mr Gauke]

Yes, it would. My hon. Friend gives me an opportunity to highlight the progress we have made in particular with the Isle of Man in ensuring there is much greater exchange of information. The net is closing in on those who wish to evade their taxes. Whether in Switzerland, Liechtenstein or the Isle of Man, it is becoming ever harder for them to evade paying taxes.

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

Does the Minister think that HMRC losing an extra 10,000 staff will make it harder or easier to tackle tax avoidance and evasion?

[Mr Gauke]

It is important to focus on the number of HMRC staff working on tax evasion and tax avoidance. Let me give two statistics: between 2005 and 2010 that number fell by 9,000, but between 2010 and 2015 it will increase by 2,500.

[Nigel Adams (Selby and Ainsty) (Con)]

Does the Minister have any explanation as to why Labour never introduced a general anti-abuse rule when in government?

[Mr Gauke]

That is a very good question, but I am afraid I cannot give an answer to it. What I can say is that we have today published draft legislation for a general anti-abuse rule and it will come into force next year.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

The Government’s shares for rights scheme is not only unpopular with the business community, but the head of the Institute for Fiscal Studies warned in the Financial Times today that it will

“foster a whole new avoidance industry”,

and the Office for Budget Responsibility believes the tax avoidance loophole it will create could cost up to £1 billion. Does the Minister agree with the OBR estimate? If so, why is he pressing ahead with a policy that is unpopular with business and could cost the taxpayer £1 billion?

[Mr Gauke]

First, it is not unpopular with business. Business groups have welcomed it, and the fact is that some aspects of our employment law can stand in the way of job creation. The OBR estimates that within the scorecard period this policy will cost £80 million in 2017-18. We believe it is the right move in order to ensure we have a more competitive environment.

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

12. If he will take steps to open up dark pool trades on the UK equity markets to greater transparency.

[The Financial Secretary to the Treasury (Greg Clark)]

The regulation of dark pools is subject to the markets in financial instruments directive, which is currently undergoing legislative review. The Government are negotiating to ensure that all dark pools are subject to regulatory oversight and that appropriate transparency measures are applied to them. However, we believe that dark pools provide a valuable service to pension funds and other investors and that regulation should not prohibit that.

[Natascha Engel]

Dark pools have that name for a reason: they are murky and not transparent, allowing financial institutions to buy and sell shares without anybody seeing what they are doing. Why will the Minister not just apply the same rules to dark pool trades as are applied to the open stock market, where everybody can see exactly what is sold, when it is sold, to whom it is sold and at what cost?

[Greg Clark]

As you well know, Mr Speaker, dark pools allow one party to keep important details from other parties, which is a fair description of the economic policies of the Labour party. I say to the hon. Lady that the providers of pension funds are very clear that to over-regulate the dark pools would lead to a reduction in people’s pension pots. They have said that over the course of a 40-year pension fund this would require the pension fund holder to work an extra year. That is not in anyone’s interest.

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

Will my right hon. Friend update the House on the progress the Government are making in implementing the recommendations of the Kay review of equity markets and long-term decision making?

[Greg Clark]

I certainly commend John Kay for the clarity of his review, and we are taking steps, both in Europe and domestically, to implement his recommendations.

[Nia Griffith (Llanelli) (Lab)]

14. What the level of public sector net borrowing was in (a) the first seven months of 2012-13 and (b) the equivalent period in 2011-12.

[The Economic Secretary to the Treasury (Sajid Javid)]

According to the Office for National Statistics, public sector net borrowing for the first seven months of 2012-13 was £73.3 billion, excluding the transfer of the Royal Mail pension assets. Public sector net borrowing for the equivalent period in 2011-12 was £68.3 billion.

[Nia Griffith]

Will the Minister explain to the many families in my constituency, who are very angry at an autumn statement that has left them with less money to spend in the local economy, why borrowing has been revised up by more than £200 billion compared with the Chancellor’s plans two years ago? What will it take for him to realise that we need jobs and growth before we can get the deficit down?

[Sajid Javid]

I think that the hon. Lady submitted that question before the autumn statement, not expecting the Office for Budget Responsibility to confirm that the deficit is going to keep on falling. She risks becoming, like her friend the shadow Chancellor, an economic arsonist. He has created an economic inferno but is more interested in throwing stones at the firefighters. What her constituents want to know is that the deficit is coming down, and it is down by a quarter. That is creating jobs and confidence, and that is what this country needs.

[Dr Julian Huppert (Cambridge) (LD)]

16. What assessment he has made of the importance of capital infrastructure projects in helping rebalance the economy.

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

Investment in infrastructure networks is a major determinant of growth and productivity, but historically such investment in this country has not kept up with the needs of a growing population. That is why this Government have increased capital expenditure compared with the previous Government’s plans, including with the extra capital we announced last week. In fact, public investment as a share of GDP is now higher on average in this Parliament than it was under the previous Government.

[Dr Huppert]

I thank my right hon. Friend for that, and I was delighted to see in the autumn statement extra capital investment, especially in housing, rail, cycling, science and broadband, particularly in Cambridge. What plans does he have to improve the energy infrastructure, including storage, to provide more certainty for investors?

[Danny Alexander]

That is an extremely good point, because on 29 November we introduced the Energy Bill, setting out the contracts for difference, which will deliver a stable financial environment of incentives, particularly for investment in renewables. Alongside that agreement, we set out the level of support consumers will pay for low-carbon generation—the so-called levy control framework—which will triple support for renewables between now and 2020, ensuring a great deal of investor confidence in that area. Along with gas investment, as set out in the autumn statement, that will help to bring forward massive investment that this country needs.

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

18. There is a tendency for coalition infrastructure schemes to be news-ready many years before they are shovel-ready. Another tendency is unfairness; three out of the four road schemes in the autumn statement last week were in the south, including one helping port access in Thurrock. When is the port city of Hull going to get the A63 upgrade that is central to our regeneration?

[Danny Alexander]

The hon. Lady ought also to have noted that the autumn statement announced the complete dualling of the A1 between London and Newcastle, which is a very important scheme, and the upgrades for the A160 to Immingham, a very important port on the Humber estuary. That work has been accelerated under the new scheme introduced by the Department for Transport. I would have thought that she would welcome that, rather than criticise it.

[Jim McGovern (Dundee West) (Lab)]

17. What steps he is taking to tackle interest rate swap mis-selling.

[The Financial Secretary to the Treasury (Greg Clark)]

The Government have been clear that the mis-selling of financial products is wrong, and we support the Financial Services Authority’s ongoing work to tackle the issue. The Treasury and the FSA have established monthly round-table discussions with the banks and the business groups to ensure that these concerns are addressed. We will continue to work with all parties involved to ensure that the banks provide the appropriate redress.

[Jim McGovern]

Constituents who have contacted me said that they are struggling and that they have been waiting for more than a year for the FSA review, during which time the banks have taken no remedial action whatever. What can the Minister do to help the victims of mis-selling now?

[Greg Clark]

I am glad the hon. Gentleman has asked me that question. I agree that customers who have been mis-sold products need quick redress, so I have pushed the FSA and it has agreed to implement a six-month maximum time scale for the banks to complete the review and provide the redress. I have also asked the banks and they have agreed to stop payments on these products for businesses facing financial difficulty.

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

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

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

The core purpose of the Treasury is to ensure the stability and prosperity of the economy. I can announce today that Budget 2013 will be on Wednesday 20 March.

[Michael Connarty]

I thank the Chancellor for probably the most complete answer he has given today, at a time when every city in our countries has food kitchens feeding the poor and in London people are queuing up to get second-hand reject food from stores and Pret A Manger. I know that the Chancellor borrowed £425 million from the good causes fund of the lottery for the Olympics, and the National Audit Office has said there is an estimated £377 million profit from the Olympics. Could he now return that to the good causes so they can give it to the charities looking after the poor in our country, which he clearly is not?

[Mr Osborne]

It is a credit to those who delivered the Olympic games that they came in under budget. The Olympic underspend is money which, if we spent it, would add straight to the deficit. It is not a pot of money sitting in some Government bank account. That would be a difficult decision to take and would have to be balanced alongside other decisions, but I make a broader point: we are trying to sort out the economic problems that this Government inherited. The problems that the hon. Gentleman talks about are problems caused by the deepest recession and the biggest financial crisis of the 21st century, and perhaps one day a Labour MP will get up and apologise for it.

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

T6. As somebody who has had a long interest in exempting some of the poorest people in this country from tax—incidentally, an idea I held long before the Liberals pinched it from me—I congratulate my right hon. Friend on almost achieving this target in his autumn statement. When economic circumstances allow, could he be even bolder?

[Mr Osborne]

I am proud to be part of a coalition Government of Conservatives and Liberal Democrats who have delivered that policy and are delivering it. A very substantial increase next year will mean that individuals are £229 better off in real terms as a result just of the increase in April, so that is to be welcomed. As for when we get to £10,000, I have just announced the Budget date and we will have to wait for that Budget for tax decisions, but even if the £10,000 allowance were to increase with our current CPI forecasts from the OBR, it would hit £10,000 in 2015.

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

In the autumn statement, the Chancellor announced a real-terms cut in tax credits and benefits over the next three years and the Government say they will ask the House to vote on that, so can the Chancellor tell the House the answer to two questions? First, what percentage of families hit by these cuts to tax credits and benefit are in work? Secondly, as a result of the autumn statement tax and benefit changes, including the change to the personal allowance, will the average one-earner couple in work with children be better off or worse off?

[Mr Osborne]

It is good to see the shadow Chancellor back. Of course tax credits go to some people in work, but we are also helping those people with a personal allowance increase, and working households will be £125 better off. Perhaps he can answer a question, if that is allowed, Mr Speaker: how will Labour vote on the Bill?

[Mr Speaker]

It is very important that the public are not misled, however inadvertently, by a member of the Government. This is not an occasion for shadow Ministers to answer questions. In our system, they ask questions and Ministers are expected to answer them. That is the situation.

[Ed Balls]

I will answer, though, Mr Speaker, but before I do it is important that Members on both sides of the House know the answers to the questions I asked the Chancellor. First, 60% of families hit by his tax and benefit changes are in work. Secondly, according to the Institute for Fiscal Studies, as a result of the autumn statement measures a working family—the average one-earner couple—will be £534 a year worse off by 2015. Those are the very families who pull up the blinds and go to work. Every Tory constituency has, on average, over 6,000 of those families who will lose out. In answer to his question, we will look at the legislation, but if he intends—[Interruption.] He asked me a question and I am going to answer it. If he intends to go ahead with such an unfair hit on middle and low-income working families while giving a £3 billion top-rate tax cut, we will oppose it. Why is he making striving working families pay the price for his economic failure?

[Mr Osborne]

As I have said, working households will be £125 better off. The right hon. Gentleman quotes the Institute for Fiscal Studies, which has been very clear in its response to the autumn statement that people who are in work and paying the basic rate of tax will do better. The reason we are having to take these difficult decisions on public sector pay, on benefits and the like is because of the mess he created. When will he stand up and say, “I’m sorry we borrowed too much and spent too much. We’ll never do it again”?

[Penny Mordaunt (Portsmouth North) (Con)]

T9. Unlike suppliers, who are in a position to judge whether to continue giving goods and services to a company in difficulties, many consumers are not so well informed. Is it not time we amended administration law to make savers and gift voucher holders preferred creditors?

[The Economic Secretary to the Treasury (Sajid Javid)]

My hon. Friend makes a good point about the protection of individuals using saving or voucher schemes, and I commend her work on raising awareness about that important issue. I know that she raised the issue recently during business questions and received a response from the relevant Minister. If it would be helpful, I will speak with the Minister and raise her ongoing concerns.

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

T2. May I welcome the funding in the autumn statement for building future schools, or what we call Building Schools for the Future? May I also welcome the extra allowances for capital investment, or what we call capital allowances? Why did we have to wait two years and have a double-dip recession for those good Labour policies to return to government?

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

The hon. Gentleman will recall that the Building Schools for the Future scheme was expensive and inefficient and that we had to scrap it because it was unaffordable. It was one of the many unaffordable promises that he and his colleagues made before the election in order to get people’s hopes up, yet still the former Chief Secretary left a note stating, “There’s no money left.”

[Mr David Ruffley (Bury St Edmunds) (Con)]

It is manifestly in the interests of the British taxpayer that foreign sovereign wealth funds invest in national infrastructure projects. Will the Chief Secretary indicate what progress is being made in that respect?

[Danny Alexander]

Significant progress is being made in that respect. We have seen significant investment in Thames Water, for example, by overseas investment funds. We announced in the autumn statement some funding for junction 30 of the M25, which is part of ensuring a significant investment from people in Dubai in a major port facility near London. No doubt there will be further such announcements to make in future.

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

In my constituency, the claimant count is just short of 3,000, double what it was five years ago. Does the Treasury accept that it is the rise in long-term unemployment and the failure of the Work programme that has resulted in the benefits bill rising so much this year?

[Danny Alexander]

No, I do not accept that. As I said in answer to the hon. Member for Edinburgh East (Sheila Gilmore), who has taken a great interest in these matters, the Work programme is a great success in getting people off benefits and into job starts, but not necessarily through job outcomes. Over 1 million jobs have been created in the past two and a half years, so that there are now a record number of people in employment in this country. He should welcome that, not criticise it.

[Duncan Hames (Chippenham) (LD)]

I thank Ministers for listening to the pleas of MPs explaining the plight of pensioners with self-invested pension plans that were affected by the cap on drawdown. Will the announcement in the autumn statement to lift that cap come into force in time to protect their pension income in this financial year?

[Sajid Javid]

I thank my hon. Friend for that question; I remember that he raised this issue last time at oral questions. He has been a great campaigner on it, and I commend him for that. I am pleased that he welcomes the decision to raise the cap to 120%. That will be in the next Finance Bill. We are consulting with stakeholders about the easiest way to bring it in, and we will try to do so as soon as possible.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

T4. Thanks to Jobs Growth Wales, an innovative start-up in my constituency called Boulders Climbing Centre, which I recently visited, has taken on a new member of staff. Will Ministers join me in congratulating the Welsh Government on their scheme and explain why they cancelled funding for the future jobs fund?

[Danny Alexander]

The future jobs fund was a massively expensive programme that saw more than half of participants return to benefit after completing it, and it was largely in the public sector. Of course I welcome the scheme that the hon. Gentleman mentioned; if it has created a job in his constituency, that is welcome. The truth is, though, that the biggest problem we have in this country is clearing up the mess that Labour left, and that is why we have to find better, more efficient ways of doing things.

[Mr Brooks Newmark (Braintree) (Con)]

The Treasury has today made a written statement alerting Parliament to a newly discovered error made by Northern Rock—an error made, I hasten to add, under the previous Government, starting in 2008—that could cost the taxpayer hundreds of millions of pounds. Does my right hon. Friend agree that this is yet another example of the previous Government’s total failure to regulate the banking system properly costing this country dearly? Could he—[Interruption.]

[Mr Speaker]

Order. May I gently explain to the hon. Gentleman two things? First, topical questions are supposed to be brief, and secondly, they are supposed to relate to the policy of the current Government, not that of the previous one. A short one-sentence reply will, I am sure, suffice—no?

[Mr Osborne]

Will you allow me, Mr Speaker, to spend a little time on this? We put down a written statement at half-past 11 today because of an error originating in 2008, when Northern Rock was in public ownership. Some customers with certain types of mainly unsecured loans were not given all the mandatory information in their statements to which they were entitled by law. As a result, interest payments on these loans are not legally enforceable. UK Asset Resolution, which manages Northern Rock—[Interruption.] Can I just make this point? One hundred and fifty—[Interruption.]

[Mr Speaker]

Order.

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

rose—

[Mr Speaker]

Order. I do not require any help from the hon. Gentleman; he should concentrate on the pursuit of his own duties to the best of his ability. I would say to the Chancellor that if the written ministerial statement has been made it is not entirely obvious to me why we need its terms to be repeated before the Chamber. [Interruption.] Order. I will use my discretion. The right hon. Gentleman can have a few seconds more, but then I really must proceed with topical questions, for which allowance will have to be made.

[Mr Osborne]

Mr Speaker, 152,000 customers have been affected. These are people with loans of less than £25,000. The cost to UK Asset Resolution is estimated at £270 million. UK Asset Resolution has ordered a full inquiry into what happened in 2008, and we will come to the House with more information when we have it. I wanted to bring this news to the House at the very first opportunity, and I find it pretty extraordinary that the Opposition do not want the public to hear it.

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

T7. New research from Which?—[Interruption.]

[Mr Speaker]

Order. Whatever discontent there may be on either side of the House about this matter, it would be a courtesy to hear Teresa Pearce.

[Teresa Pearce]

Thank you, Mr Speaker.

New research from Which? reveals that nearly half of front-line bank staff believe that pressure selling still dominates the culture of banking. Will the Minister join me in calling for banking remuneration and incentive structures to be changed to reward ethics and service, rather than aggressive selling targets, in order to help to change the culture of banking?

[The Financial Secretary to the Treasury (Greg Clark)]

The hon. Lady is absolutely right that one of the real problems in banking over recent years was that the people who had a trusted relationship with their customers saw them as sales targets rather than as people to be helped. That needs to change. The Financial Conduct Authority is very clear that these kinds of incentives have to go.

[Andrea Leadsom (South Northamptonshire) (Con)]

I congratulate my right hon. Friend the City Minister on reassuring us that he intends to require the Prudential Regulatory Authority and the FCA to promote new bank competition. Does he agree that full account portability could offer the biggest game changer for bank competition, and that an amendment to the draft Financial Services (Banking Reform) Bill could achieve that?

[Greg Clark]

I am grateful to my hon. Friend for her question and for her campaigning on this issue. My hon. Friend the Economic Secretary and I will meet her to discuss her proposals. The draft Bill responds to the Vickers report. He said that if portability reforms were not adequate we could take further steps, so we have a vehicle to do so.

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

T8. Perfectly viable businesses up and down the country are going bust while the Government meet the Financial Services Authority and the banks on an ongoing basis to try to come to a conclusion on interest-rate swaps, so I have a suggestion that might focus their minds and make them arrive at a decision more quickly. Why will the right hon. Gentleman not take steps to allow a moratorium on paying back loans that include interest-rate swaps? That would make everybody come to a decision very quickly and help perfectly viable businesses during the recession.

[Greg Clark]

In answer to an earlier question, I said that I have written to all of the banks and asked them—and they have agreed—to forbear on charging businesses where these matters are in dispute and if the company has financial problems. I am also speeding up the process to resolve these issues once and for all. The matter is rightly of concern to many businesses right across the country and I will do everything I can to help.

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

The beer duty escalator was brought in by the previous Government in a very different economic situation. Many CAMRA members will come to Parliament tomorrow. The Economic Secretary said that he would reflect on and consider the issue. How is he getting on?

[Sajid Javid]

My hon. Friend has been an assiduous campaigner on this issue and I welcome the strength of his campaign. I am still reflecting and considering. I am aware that campaigners will come here tomorrow and intend to meet a couple from my own constituency.

[Nick Smith (Blaenau Gwent) (Lab)]

T10. Eleven jobseekers are chasing every vacancy in Blaenau Gwent. Does the Chancellor think that the Work programme will prove to be good value for money?

[Mr Osborne]

Yes, I do, and the CBI has welcomed it. I hope that the hon. Gentleman welcomes the fact that we have record employment in our country—a record number of women are working—and that youth unemployment has fallen recently as well.

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

Benefits have increased at twice the rate of earnings since the onset of the financial crisis. Could the Chancellor reassure me that, in spite of criticisms from those on the Opposition Benches, he will not veer from the 1% commitment that he made last week?

[Mr Osborne]

My hon. Friend has that reassurance. We have discovered an extraordinary thing today, namely that Labour will vote against yet another measure to deal with the deficit. Labour would have a higher benefits bill as a result of that decision and it will have to explain that to the hard-working people of this country.

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

I listened carefully to the Chancellor’s answer to the question asked by my hon. Friend the Member for Linlithgow and East Falkirk (Michael Connarty) about food poverty, but he did not actually answer it. Is he ashamed that, under his watch, by the end of this year a quarter of a million people across the country will have accessed emergency food aid?

[Mr Osborne]

We are dealing with the economic mess that the previous Government left behind, when unemployment rose, the economy shrank by 6% and people were put into poverty. That is the cause of these problems and Government Members are dealing with them and clearing up the mess that that man—the right hon. Member for Morley and Outwood (Ed Balls)—left behind.

[Mr Speaker]

Last but not least, Mr Bob Blackman.

[Bob Blackman (Harrow East) (Con)]

The Government moved swiftly to compensate the victims of the Equitable Life scandal, who were ignored by the Labour Government. The one set of people who were excluded from the legislation were the pre-1992 trapped annuitants. I know that the Minister has been considering this issue. Will he update the House on what consideration will be given to those weak and vulnerable people who just want some safety for the rest of their lives?

[Sajid Javid]

My hon. Friend has campaigned well on this issue and I recently met representatives of the Equitable Members Action Group to discuss it. The Government are focused on delivering the current scheme efficiently and effectively.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I am sorry to disappoint colleagues.

Petition

Tuesday 11th December 2012 Commons Chamber

Alex Cunningham (Stockton North) (Lab)

- Hansard - - Excerpts

I should like to present a petition on behalf of the chairman of Stockton mosque, Councillor Mohammed Javed. It declares that the petitioners are profoundly concerned about the portrayal of the Islamic faith in the online video “Innocence of Muslims” and calls for it to be banned. The petition is accompanied by a larger one that was presented to my hon. Friend the Member for Hartlepool (Mr Wright) and I at a meeting last month, which was attended by hundreds of local community members from mosques across Teesside. The petition is signed by some 4,000 Teesside residents, mostly Muslims, who are shocked and upset about how their proudly held faith has been affronted in that way—their shock is shared by my hon. Friends the Members for Middlesbrough South and East Cleveland (Tom Blenkinsop) and for Middlesbrough (Andy McDonald). I hope the House will take the strength of feeling into account and stand with the hundreds of thousands of Muslims up and down the country who are calling for the Government to ban this appalling film.

Following is the full text of the petition:

[The Petition of Cllr Mohammed Javed,

Declares that the Petitioner believes that the film, “The Innoncence of Muslims” is disrespectful, offensive and untruthful, and could incite hatred towards Muslims.

The Petitioner therefore requests that the House of Commons urges the Government to take necessary measure to ban the film, and introduce new legislation to prevent Islamophobia and the incitement of religious hatred against Muslims.

And the Petitioners remain, etc.]

[P001149]

Points of Order

Tuesday 11th December 2012 Commons Chamber

12:35

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

On a point of order, Mr Speaker.

[Mr Speaker]

Exceptionally, I will allow a point of order, for reasons that will be apparent.

[Ed Balls]

May I have your guidance, Mr Speaker? Is it in order for the Chancellor of the Exchequer, pre-empting a written statement, to slip out news during topical questions about Northern Rock that could well have fiscal implications, including for Government borrowing, in a way that is designed to avoid any proper scrutiny or questioning from the Opposition? Is this not just another example of the Chancellor refusing to answer questions in this House? Would it not be in order for the Chancellor or another Treasury Minister to make an oral statement in this House today and be properly scrutinised, rather than once again playing fast and loose with the public finances and Parliament?

[Mr Speaker]

I will hear the Chancellor the Exchequer on this matter, and then I will give a verdict.

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

Further to that point of order, Mr Speaker. There was no pre-empting of the announcement. It was laid as a written statement one hour ago. I thought that it would be appropriate to illuminate the written statement in oral questions, as Ministers frequently do from the Dispatch Box. There is, of course, a debate on the economy this afternoon, during which we can answer questions. It relates to errors that took place in Northern Rock in 2008 that have affected a number of customers. Customers will be receiving letters from Northern Rock. As I said, I thought that it would be helpful to illuminate the details of the written statement, but apparently that is not the case.

[Ed Balls]

rose—

[Mr Speaker]

The right hon. Member for Morley and Outwood (Ed Balls) is itching to raise a further point of order, but I ask him to hear what I have to say first. This cannot be a debate; there are a couple of points of order to which I am giving a reply. My response, whether Members like it or not, is as follows.

First, I feel sure that the Chancellor of the Exchequer intended to be helpful to the House. It is not for me to impugn motives, and I do not do so. However, was it a good idea to handle this matter via the device of topical questions in the way that it was done? The answer is no, it could have been better done. I am sure that the hon. Member for Braintree (Mr Newmark) was doing his best, according to his own lights, but it was unwise to deal with it in that way.

Secondly, I simply make the point—[Interruption.] It may be topical, but that does not necessarily mean that it should be raised at topical questions. My understanding, which is very easily explained, is that although something is a topical matter, it does not mean that it should be the subject of a topical question if the Government have tabled a written—

[Mr Brooks Newmark (Braintree) (Con)]

rose—

[Mr Speaker]

No, I do not require any assistance from the hon. Gentleman. He should do his own job to the best of his ability. I am giving a verdict on the matter.

The Government have laid a written ministerial statement. If they had wanted to make an oral statement, they could have made one. They did not do so, but made a written ministerial statement. I repeat: I am sure that the Chancellor meant well. That is the kindest thing, in the circumstances, that I can reasonably say. There is nothing further to be said on this matter now, but we may well return to it.

Equal Marriage Consultation

Tuesday 11th December 2012 Commons Chamber

11:30

[The Minister for Women and Equalities (Maria Miller)]

With permission, Mr Speaker, I would like to make a statement on the Government’s proposals to enable same-sex couples to marry. Copies of the consultation response will be available in the Libraries of both Houses.

Not long ago, talk of marriage as one of the building blocks of society was dismissed by some as out of date. Of course, those of us in this House who have taken a closer interest know that marriage remains something to which most people aspire. Therefore, far from being a peripheral issue, the future of marriage should concern us all.

Today we are setting out how the Government will extend marriage to same-sex couples. The consultation has been the subject of much debate both within and outside the House, and I am immensely grateful to the many hon. Members who have taken time to discuss the proposals with me, adding their voices to the 19 petitions received by the Government and the record 228,000 individuals and organisations who responded to the consultation.

For some, this is a contentious and radical reform, or, indeed, a reform too far. Historical facts, however, show that over the generations marriage has had a long history of evolution. In the 19th century inequalities prevented Catholics, atheists, Quakers and many others from marrying except in the Anglican Church. When that changed, was it accepted without protest? No, I am sure it was not. In the 20th century when the law was changed to recognise married men and married women as equal before law, was that accepted without fierce protest? No. In each century Parliament has acted—sometimes radically—to ensure that marriage reflects our society to keep it relevant and meaningful. Marriage is not static; it has evolved and Parliament has chosen to act over the centuries to make it fairer and more equal.We now face another such moment—another such chance in this new century.

For me, extending marriage to same-sex couples will strengthen, not weaken, that vital institution, and the response I am publishing today makes it clear that we will enable same-sex couples to get married through a civil ceremony. We will also enable religious organisations that wish to conduct same-sex marriages to do so, on a similar opt-in basis to that available for civil partnerships. That is important for the obvious reason that it would be wrong to ban organisations that wish to conduct same-sex marriages from doing so.

I am under no illusions and I am fully aware that the proposals set out today to allow same-sex couples to marry are contentious. I am also clear that there should be complete respect for religious organisations and individual religious leaders who do not wish to marry same-sex couples. The Government must balance the importance of treating all couples equally and fairly with respect for religious organisations’ rights to their beliefs.

We must be fair to same-sex couples and the state should not ban them from such a great institution. Equally, however, we must be fair to people of faith, and the religious protections I will set out will ensure that fairness is at the heart of our proposals. Churches have a right to fight for and articulate their beliefs and to be under no compulsion to conduct same-sex marriages. As the Prime Minister said, we are 100% clear that if any church, synagogue or mosque does not want to conduct a gay marriage it will not—absolutely must not—be forced to hold it.

Part of our response will include a quadruple lock, putting into English law clear and unambiguous protections. I will go into the detail of those locks, but I first want to reiterate comments I made yesterday on Europe. I know that many hon. Members are worried that European courts will force religious organisations to conduct same-sex marriages. The law is complex, but that complexity is absolutely no excuse for misunderstanding the facts. Case law of the European Court of Human Rights, and rights set out in the European convention on human rights, put protection of religious belief in this matter beyond doubt.

The Government’s legal position has confirmed that, with appropriate legislative drafting, the chance of a successful legal challenge through domestic or European courts is negligible. I have therefore asked the Government’s lawyers to ensure that that is the case. Our response sets out clear safeguards—a quadruple lock of measures to protect religious organisations. The Government have always been absolutely clear that no religious organisation will be forced to conduct same-sex marriages. The system of locks will iron-clad the protection in law, adding to the existing protections in European legislation, so that those who do not want to conduct same-sex marriages will never have to.

First, we will write on to the face of the Bill a declaration that no religious organisation, or individual minister, can be forced to marry same-sex couples or to permit that to happen on their premises. Secondly, I will amend the Equality Act 2010 so that no discrimination claims can be brought against religious organisations or individual ministers for refusing to marry a same-sex couple or for refusing to allow their premises to be used for this purpose.

Thirdly, the legislation will make it unlawful for religious organisations or their ministers to marry same-sex couples unless the organisation has expressly opted to do so. As part of this lock, a religious organisation will have to opt in as a whole, and each individual Minister will then have to opt in too. Therefore, if a religious organisation has chosen not to conduct same-sex marriage, none of its Ministers will be able to do so. However, if an organisation has chosen to conduct same-sex marriage, individual Ministers are still under no compulsion to conduct one unless they wish to do so.

Finally, because the Churches of England and Wales have explicitly stated that they do not wish to conduct same-sex marriage, the legislation will explicitly state that it would be illegal for the Churches of England and Wales to marry same-sex couples. That provision recognises and protects the unique and established nature of those Churches. The Church’s canon law will also continue to ban the marriage of same-sex couples. Therefore, even if those institutions wanted to conduct same-sex marriage, it would require a change to primary legislation at a later date and a change to canon law—additional protection that cannot be breached.

It is important to address directly other concerns raised by religious institutions. Other legal cases, including those involving the provision of services such as bed and breakfast or the wearing of religious symbols, have no bearing on the legal situation regarding marriage, because most religious marriage is a commitment made before God—it is at the heart of religious belief. There is clear protection under article 9 of the European convention on human rights and clarity in case law that the European Court of Human Rights considers same-sex marriage to be a matter for each individual member state.

Faith has underpinned British society for centuries, and it is important to me that equality before the law is seen in the same way. The proposals will allow both to co-exist without threat or challenge to the other. People of faith hold views that must be respected. That is why I have been absolutely clear that I would never introduce a Bill that encroaches or threatens religious freedoms. It is with those strongly held views in mind that the proposals presented today have been designed.

I believe the proposals strike the right balance—protecting important religious freedoms while ensuring that same-sex couples have the same freedom to marry as opposite-sex couples. By making marriage available to everyone, we will ensure that it remains a vibrant institution. Our changes will allow more people to make lifelong commitments and enjoy the benefits of an institution that has for centuries lain at the heart of our society.

12:48

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

Thank you, Mr Speaker—it is good to be here again. I welcome the Minister’s commitment to introduce same-sex marriages, but I am at a loss about why she could not have made all those points in the House yesterday, especially as most of them were made by Ministers to the press on Friday.

I agree with the Minister that we should support same-sex marriage. When couples want to get married and to make the long-term, loving commitment it entails, we should celebrate and not discriminate. Marriage is more than a historic tradition; it is about how the state and society today view and value long-term commitment. We should not prevent people from getting married and gaining recognition from the state on grounds of gender or sexuality, and Parliament should not say that some loving relationships have greater value than others.

While Labour was in government, we changed the law many times to tackle outdated prejudice and discrimination against lesbians, gay men, and bisexual and transgender people. Many of those measures were controversial at the time but are now taken for granted even by those who opposed them at the start: an equal age of consent, ending the ban on serving in the armed forces, ending discrimination in adoption and fertility treatment and abolishing section 28. Year after year, we changed the law and argued for the justice and common sense of each of those changes, and opponents were proved wrong—the sky did not fall in. This is the next sensible step. To deny same-sex couples the chance to marry and have their relationship recognised by the state as of equal worth to other loving couples would be unfair and out of date.

The Minister will know that I have argued for some time for those Churches and religious organisations that want to be able to celebrate same-sex marriage to be able to do so. I have met religious leaders from many faiths who want to be able to treat all loving couples equally and who show powerfully that the debate on same-sex marriage should not become polarised between Church and state. There are very different views between and within faiths.

I agree that freedom of religion is important. The Minister is right that no Church or religious organisations should be required to hold same-sex marriage and that respect for freedom of religion should be built into the proposed legislation, but we will need to look at the details of the proposals because it is important that she does not become too defensive about this. Freedom of religion also means that those faith groups, such as the Quakers, the Unitarians and others who want to be able to celebrate same-sex marriage should be able to do so. Those who argue that marriage should never change are out of touch with public feeling. Based on that argument, civil marriage would never have been introduced in the 1830s, married women would never have been given the right to own property, no one would be able to remarry after a divorce and the law would not have been changed to outlaw rape within marriage.

It is deeply disappointing that some in the House yesterday wanted to link same-sex marriage with polygamy or to suggest that it was somehow an affront to those in so-called normal marriages. I hope that those who have opposed the plans in the House and some Church leaders will think carefully and not repeat some of the hysterical language they have used before. These proposals include considerable respect for freedom of religion, freedom of belief and freedom for those who wish to continue to oppose same-sex marriage within their own organisations. I hope, however, that they will now respect the majority of us in the House and beyond who wish to support same-sex marriage and will not try to veto everyone else. No one faith, group or organisation owns marriage.

Surveys have found that seven out of 10 people support extending civil marriage to same-sex couples and that six out of 10 people of faith support extending it too. Marriage has never been a rigid, unchanging institution. It is only when marriage loses its relevance to communities or is seen as outdated or unjust that it risks becoming weakened or forgotten. I hope that the Minister will accept the support for these measures, promote them with confidence, not be defensive about the changes, and urge everyone to support the reforms, which will strengthen marriage and support equality too.

[Maria Miller]

I welcome the right hon. Lady’s support for the statement. She is right to highlight the widespread support for what the Government have outlined outside this place and on both sides of the House.

It is important to pick up on the right hon. Lady’s point about showing respect for both sides of the argument. As we participate in these or any discussions, none of us should try to polarise the debate. The language we use and the stance we take are looked at far and wide—people will be looking at how we deal with these issues—so I hope that hon. Members will appreciate and echo in their comments the respect that I am showing to religious institutions and to people in same-sex relationships. I think I made it clear that it is up to religious institutions to decide how they deal with these matters. That is not being defensive; it is about respecting those important religious beliefs.

[Several hon. Members]

rose—

[Mr Speaker]

Order. Very many Members are seeking to catch my eye, and I am keen to accommodate them, so brevity is of the essence.

[Martin Vickers (Cleethorpes) (Con)]

The Secretary of State has outlined a major social change that many of those whom we represent find unacceptable. Such significant change should be allowed to evolve, rather than be pushed through. Will the Minister agree to seek an electoral mandate before proceeding?

[Maria Miller]

My hon. Friend is right that many of these matters evolve over time. Our consultation has allowed us to listen to the many and varied views and reflect those views in the proposals. On an electoral mandate, the Conservative party’s commitment was set out in the contract for equalities, which sat alongside our manifesto at the election, and which laid out the importance of considering the case for changing the law.

[Lilian Greenwood (Nottingham South) (Lab)]

Does the Minister agree that, given that respect for freedom of religion is vital, it is right that faith groups that wish to marry same-sex couples should be allowed to do so?

[Maria Miller]

I can give the hon. Lady a simple answer: yes.

[Nick Herbert (Arundel and South Downs) (Con)]

I welcome my right hon. Friend’s statement. She correctly says that this proposal commands widespread support in the country, as all opinion polls show, but, just as this measure is about safeguarding the rights of one minority, is it not also important jealously to guard the rights of another—those who choose in conscience not to agree and those Churches that do not wish to conduct such ceremonies? Does she agree that those who were concerned about the proposal, in the belief that Churches would be forced to conduct such ceremonies, need no longer be concerned, now that they understand that there is a lock and that no Church will be forced to do so?

[Maria Miller]

My right hon. Friend has done a great deal of work in this area, and we listen to him with great interest. He is right that the quadruple lock I have outlined today should give clear reassurance to hon. Members and anybody outside listening that there is a considerable and thought-through way of ensuring that ministers and religious organisations are under no compulsion to undertake same-sex marriages, if they believe that it does not accord with their faith. It is absolutely right that we respect the stance taken by religious organisations and that we put in place safeguards at a domestic and European level to ensure that those safeguards are effective.

[Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)]

As chair of the all-party group on equalities, I very much welcome the Minister’s statement. Does she agree that this is not a matter of redefining marriage, but of extending it to a group that currently does not have that right? It is a matter of equal rights in our society in the 21st century.

[Maria Miller]

I thank the hon. Lady for her support. As I outlined in my statement, we have seen marriage evolve over generations to ensure it remains relevant and vibrant, and these proposals do that again for our century, while putting in place that quadruple lock, those safeguards and the clear articulation of our respect for religious belief, so that we strike the right balance between the rights of same-sex couples and those of religious institutions.

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

I warmly welcome the Government’s announcement. My right hon. Friend has struck the right balance between protecting religious freedoms and extending legal equality to the LGBT community some 43 years after the Stonewall riots. Does she agree that, despite the noises behind me, it will be much less than 43 years before people wonder what all the fuss was about today?

[Maria Miller]

I understand my hon. Friend’s sentiments; I do, however, understand what the fuss is all about. People have deep-seated religious convictions and beliefs. If we are to go forward successfully with these measures, we need to ensure that our respect is clear. I will meet religious institutions later today to talk about these things in more detail and ensure that they are happy with the locks we are putting in place.

[Kerry McCarthy (Bristol East) (Lab)]

Given that the right to marriage is now being extended, albeit in quite a limited form, should not the right to enter into a civil partnership be extended to those heterosexual couples who perhaps do not like the religious connotations of marriage?

[Maria Miller]

I understand the hon. Lady’s point, but we do not feel that there is significant demand for the extension of civil partnerships in the way she describes. What we want to ensure is that marriage is extended to same-sex couples.

[Sir Roger Gale (North Thanet) (Con)]

I had the privilege of chairing the Civil Partnership Bill through Committee in the House of Commons. Throughout the passage of that legislation, clear undertakings were given that it was not the thin end of a wedge, that it would not lead to marriage and that it satisfied all the necessary legal and equality demands of the time. I accept that the present Government cannot be bound by a previous Government, but it will require a degree of faith—I use the word advisedly—if we are to move forward down this road. The Minister said that 60% of the general public are in favour of this measure. The letters I have handed to Ministers suggest that 98% of my constituents are opposed to it. Will she publish the figures?

[Maria Miller]

I think my hon. Friend might have mistaken what I was talking about. I did not quote a figure in that respect, although I would always be happy to share with him any such figures. There are important differences in perception of civil partnerships and marriage. What we are putting forward today is about ensuring that the universally understood and recognised idea of marriage is available to more people. That is something we should celebrate. I hope I can convince him, through the quadruple lock I have announced, that the sort of protections that he and his constituents would look for are very much to the fore of our minds.

[Chris Bryant (Rhondda) (Lab)]

Marriage has changed over the centuries, has it not? For centuries, the Church of England’s doctrine was that the primary purpose of marriage was the procreation of children, but many heterosexual couples either are unable to have children or choose not to have them. Marriage today is, for very many people, about many other things—companionship, sharing one’s life, mutual support and so on. As I said to the Minister yesterday, I find it difficult to believe that any Christian, including many Anglican bishops and clergy, would not want that for every member of their parish. Will she therefore consider not putting such an ultimate lock on the Church of England, so that there is freedom for the Church of England? Those in the Church of England all voted to keep slavery for 30 years, but eventually they changed their minds.

[Maria Miller]

I am sure that the hon. Gentleman will take time to lobby his previous employer on these matters. Obviously it is for individual religious institutions to look at that. The Church of England can come forward with a change of view at any point in time and we can consider the appropriate actions to be taken.

[Mrs Cheryl Gillan (Chesham and Amersham) (Con)]

I thank the Minister for her statement today, but many people in Chesham and Amersham are desperately concerned about the Government’s proposals. What can my right hon. Friend say to my constituents, who genuinely feel that the Government are challenging their deeply held religious beliefs and, despite her many assurances today, do not believe that they are being heard by her or that their religion is truly being protected?

[Maria Miller]

I reassure my right hon. Friend that we have absolutely heard loud and clear the concerns that have been raised. Hence, we have brought forward our proposals today with a quadruple lock, which will provide the reassurance that I know that many people—whether her constituents or others—have been calling for, so that only when an organisation has opted in would it be able to consider undertaking same-sex marriages, and even then ministers can still decide not to do so. The amendments to the Equality Act and the provisions relating to the Church of England all work together to provide, I hope, the sort of reassurance that my right hon. Friend is calling for.

[Kevin Brennan (Cardiff West) (Lab)]

I support the Minister’s statement today. Can she explain the reference in her statement to the “Churches of England and Wales”? She continued: “That provision recognises and protects the unique and established nature of those Churches.” The Church in Wales was disestablished in 1920, so will she explain in what sense she referred to it as an established Church in her statement?

[Maria Miller]

I welcome the hon. Gentleman’s comments and his support. I was recognising the different obligations on the Church of England and the Church in Wales and ensuring that the protections there reflect those obligations in full, but if he wants to go into any other details, I hope we can do so in the Bill Committee.

[Mr Edward Leigh (Gainsborough) (Con)]

During the passage of the civil rights legislation, the Government and the hon. Member for Rhondda (Chris Bryant) repeatedly assured us that civil partnerships would not lead to same-sex marriage. Then, the consultation that we have just had specifically excluded religious marriage between same-sex couples. Now, the Government assure us that human rights legislation is clear. It is not: the Minister should read the verdict of Aidan O’Neill, QC, who says the only absolutely safe defence for Churches is to get out of same-sex marriages. How can she legislate for something she has not consulted on?

[Maria Miller]

I am sure that my hon. Friend would not want me to answer for the hon. Member for Rhondda—I am sure the latter can answer for himself on any undertakings he might have given when he was a Minister. What I am trying to do is ensure that marriage is accessible to more people and that clear safeguards are in place. If my hon. Friend wants to talk to me in detail about those safeguards, I am happy to do that. I know that he, like me, wants to ensure that marriage is special. The provisions we have brought forward today will ensure that it remains that way.

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

I welcome the move to equalise marriage. It is important that we make the change to allow same-sex couples to mark their love and commitment through marriage. That equality is welcome, but I also support my hon. Friend the Member for Bristol East (Kerry McCarthy). I know an opposite-sex couple who would have welcomed a civil partnership, a form of commitment that some people want. It is disappointing that it was not considered; it should be in future.

[Maria Miller]

The hon. Lady will know that that was a question in the consultation. There was not the demand in the consultation for the change she describes, but it is also important to note that our priority is to allow same-sex marriage, not to overhaul marriage law. That is where I want to keep the focus.

[Mr Crispin Blunt (Reigate) (Con)]

I welcome my right hon. Friend’s statement and in particular the change in the Government’s position as a result of the consultation on lifting the proposed proscription on religious organisations conducting same-sex marriages. May I issue her a word of caution? It might be better to leave religious institutions to manage their own internal discipline on whether they take part in this, rather than our legislating for it.

[Maria Miller]

My hon. Friend is absolutely right. There is no way in which the Government want to become involved in the philosophy of our religious institutions. It is ultimately for them to take their stance, whether it is the Church of England making it clear up front that it does not wish to be involved in this—although it has the right to change that position over time if it wants—or any other religious institution.

[Dr William McCrea (South Antrim) (DUP)]

Does the Minister feel that she is competent to act as God—to change and challenge the definition of marriage, between one man and one woman?

[Maria Miller]

I am sure that the hon. Gentleman would not want me to comment on the first part of his question, because that would be inappropriate. What I am doing is ensuring that marriage is a vibrant and relevant institution in our country today, and I am sure he will want to support that. In regard to the part of the country that he represents, the Northern Ireland Government are clearly taking a different view, and we respect that. We should all show respect for both sides of the argument.

[Mr Stewart Jackson (Peterborough) (Con)]

I congratulate my right hon. Friend on delivering consultation results that are reminiscent of a Liberian presidential election. I believe that these proposals are a constitutional outrage and a disgrace. There is no electoral mandate for these policies. Will she explain what popular support she has received for erasing the words “husband” and “wife” from our laws and customs, as set out in her Department’s equality impact assessment?

[Maria Miller]

I know that my hon. Friend has deep-seated views on this matter, and in saying what I am about to say, I am in no way trying to move him away from them. The consultation was very clear: we were talking about how we were going to implement this proposal, not whether we were going to implement it. We clearly set it out in the contract for equalities that we were going to consider the case for a change in the law, and that is exactly what we have been doing. Also, I would ask him not to pursue the issue of changing the usage of the words “husband” and “wife”, because the Government have absolutely no intention of doing that.

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

Since 2004, many of my constituents have registered their civil partnerships. If and when the law changes, some of them might want to get married, in either a civil or a religious ceremony. Would that require them to dissolve their civil partnership, or would there be a mechanism in the law to enable them to commute it or have a marriage in addition to their civil partnership?

[Maria Miller]

That is just the sort of important detail that many people will want to hear more about. I can tell the hon. Lady that there will be a facility for people who are in a civil partnership to convert it to a marriage, although there will be no compulsion to do so. I look forward to perhaps hearing her further comments as we discuss the Bill in Committee.

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

How will the legal protections that the Minister has described apply in those denominations in which authority resides not with a central organisation or with ministers but with the local congregation? Will she bear it in mind that the fear of having to engage in litigation, even if it is unlikely to succeed, is a genuine one in many Churches?

[Maria Miller]

My right hon. Friend also asks a thoughtful question. The reason we are putting in place changes to the Equality Act 2010 is that we want to ensure that people are not fearful of the potential litigation that could occur without those changes. In answer to the first part of his question, those issues would be for local congregations and local representatives of religious institutions to deal with.

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

I am sure that the Minister will want to acknowledge the initiatives on this issue in the Scottish Parliament. I am particularly proud that Scotland is leading the way on equal marriage. What discussions has she had with the Scottish Government about the necessary amendments to UK-wide equality legislation to ensure that celebrants in Scotland would be protected from legal action if they were to speak out against, or refuse to take part in, same-sex marriage ceremonies?

[Maria Miller]

That, too, is an important detail that has to be got right. We are pleased that we have put forward our proposals now. I think that the Scottish Government might well be putting forward theirs shortly. We have already started to have discussions at official level to ensure that those kinds of issues are dealt with. It is important that this measure should work across the devolved responsibilities, and it is a priority to ensure that that happens.

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

Is the Minister following developments in Denmark? The Churches there have sought exactly the kind of exclusion that this Government are seeking, but it has been ruled illegal. If that ruling also pertained in this country, what triple or quadruple lock could she possibly offer to Churches in that regard?

[Maria Miller]

I draw the attention of my hon. Friend—she is also a learned Friend—to the case law that is building up in the European Court of Human Rights. It has become clear that this is a question that is determined at local level. Our proposals will make clear in law the intentions of Parliament and the Government at local level, and we believe that that will put the protection of religious belief beyond doubt in this matter.

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

Further to the point that the hon. Member for Perth and North Perthshire (Pete Wishart) has just made, may I point out that there is strong support across Scotland for the principle of equal marriage that the Minister has set out today, with 64% of people—people in poor Scotland, rich Scotland, urban Scotland and rural Scotland—supporting it? Will she make it clear, however, whether the Scottish Government have asked this Government for the provisions in this legislation to apply to Scotland if it is passed by this House?

[Maria Miller]

I welcome the hon. Gentleman’s articulation of the support of the people of Scotland for the measures that this Government have brought forward today, and I thank him for that. The ways in which we would ensure clear read-across between the Scottish provisions and those made by Westminster are just the sort of details that we will be discussing. He would of course not wish me to pre-empt such a consultation by starting those discussions before making a statement like this to the House.

[Mr Peter Bone (Wellingborough) (Con)]

I was up late last night reading “An invitation to join the government of Britain”, the Conservative manifesto; “A future fair for all”, the Labour manifesto; and this wonderful work “Change that works for you”, the Liberal Democrat manifesto, as well as “The Coalition: our programme for government”. There is no mention in those political bibles of redefining marriage; it is not even hinted at. How dare the Minister suggest that she has any right or any mandate to bring in this legislation?

[Maria Miller]

My hon. Friend obviously has very strong views on this. As I have said, I respect those views, but I ask him to ensure that he balances them with a respect for others who might not agree with him. It is clearly set out in the contract for equalities that sat alongside our manifesto that we would consider the case for a change in the law, and that is exactly what we are doing today. I think he should be celebrating this development, and I really hope that I can convince him that the quadruple lock will provide just the kind of assurances that he seeks.

[Mark Durkan (Foyle) (SDLP)]

Does the Minister accept that, as well as providing for civil marriage, the state has for some time recognised and registered marriages conducted under the sacramental privilege of various Churches? That legal capacity for Churches has always respected their own rules of ritual eligibility, and has been qualified only by the provision that there be no lawful impediment, such as a close blood relationship, one party already being married or the couple being of the same sex. Will she confirm that her proposal is essentially to remove the lawful impediment to marrying a couple of the same sex, and that it will in no other way encroach on the sacramental privilege of any Church or interfere with any Church’s rules of ritual eligibility?

[Maria Miller]

I can give the hon. Gentleman an absolute assurance that our proposals will do exactly what he is asking for, which is to ensure that there is no compulsion on religious institutions or individuals to undertake same-sex marriages. I ask him to look closely at the details of the quad locks that we have set out in our statement today. Of course we will be working with religious institutions to ensure that those locks work as they need to do, because it is our intention to provide the kind of safeguards that he is talking about.

[Sir Tony Baldry (Banbury) (Con)]

On the principle of this matter, I sometimes think that we are talking at cross purposes. For me, there is absolutely no dispute that the hon. Member for Rhondda (Chris Bryant), my right hon. Friend the Member for Arundel and South Downs (Nick Herbert), my hon. Friend the Member for Reigate (Mr Blunt) and I were all created equal in the image of God. That is not the issue. For the Church of England, the uniqueness of marriage is that it embodies the distinctiveness of men and women, so removing that complementarity from the definition of marriage is to lose any social institution where sexual difference is explicitly acknowledged.

[Maria Miller]

My hon. Friend has articulated incredibly clearly the position of that particular religious institution, and I fully respect that view. We have accordingly put in place a clear protection, particularly for the Church of England. The important thing to state here is that that view is not held across the board, and other religious institutions would certainly differ from it. It is important that we have that respect in place, however, and I believe that our proposals will ensure that the Church of England can continue to hold those religious beliefs without fear of their being undermined.

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

The Minister just spoke about the special protection for the Church of England. The Church of England plays a special role in this country as our established Church, so is she satisfied that it is once again opting out of equalities legislation?

[Maria Miller]

The spirit of our debate today has been one of trying to find a way to ensure that we can provide protection for religious belief. I urge the hon. Lady to think about that carefully, because in the context of the provision of our quadruple lock it is important that we provide for that change in the Equality Act if we are to give the certainty that, as other hon. Members have highlighted, is so important.

[Sir Gerald Howarth (Aldershot) (Con)]

Will my right hon. Friend accept that the great majority of people in this country—62% according to ComRes—regard marriage as being between a man and a woman, a situation that has persisted for centuries; that neither she nor the Prime Minister, and neither the Deputy Prime Minister nor the Leader of the Opposition, has any mandate whatsoever to inflict this massive social and cultural change on our country; that the consultation exercise has been a complete sham; and that the Government had made up their mind in advance what outcome they wanted and failed to take into account the 600,000 people who signed the Coalition for Marriage petition?

[Maria Miller]

I hope I can reassure my hon. Friend and neighbour in Hampshire that we have absolutely looked not only at the consultation responses but at the petitions we have been given, although they are not part of the consultation response because they were not part of the consultation. It is important that we consider both sides of the debate, understand the strength of feeling and make provisions for people’s religious beliefs. I do not ever want to try to trade statistics in this place, because the subject we are dealing with is even more important than that. It concerns respect for people’s differences, and we have an obligation to ensure that those differences can be protected in law.

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

I welcome the statement and indicate my support for this change. Is it the Government’s intention that same-sex couples have the option of a civil partnership or a marriage, or will marriage simply become the standard means for any couple to affirm the status of their relationship?

[Maria Miller]

As a result of looking at the consultation responses, we believe that to protect those who have entered into a civil partnership we should continue to have that option available. There will be an option.

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

I am prepared to support this measure on the grounds of equality before the law, provided that religious freedom is protected. Will my right hon. Friend comment on my remaining worry that teachers of particular faiths, whether they are in faith schools or non-faith schools in the state sector, might be expected to teach something that goes against their conscience?

[Maria Miller]

I would expect my hon. Friend to bring up another important issue, and he did. I can reassure him that nothing will change in what children are taught. Teachers will continue to be able to describe their own belief that marriage is between a man and a woman while, importantly, acknowledging that there can also be same-sex marriages. In faith schools in particular, people will want to ensure that the beliefs of that faith are clearly and well articulated for children.

[Jim Shannon (Strangford) (DUP)]

I have had the single largest postbag that I have had as an MP on this issue from those who are opposed to it. The churches are opposed and my constituents are opposed—99.9% of the people in the area I represent are opposed to this legislative change. The Minister suggested in her answer to an earlier question that the 550,000 people who signed the Coalition for Marriage petition were ignored or sidelined. She will understand why many of us look on that with suspicion. Why was the Coalition for Marriage petition excluded from the headline figure? Is it not a case of some people being more equal than others?

[Maria Miller]

The hon. Gentleman is obviously right to say that there are strong feelings and I absolutely understand what he is saying. I can reassure him that we have considered all petitions and all responses to the consultation—more than 200,000 of them—which has taken a while. I remind him of the starting point for the consultation, however: it was not whether we would proceed with this measure, but how we would proceed with it. On that basis, I have made proposals today that I believe will provide the sort of safeguards that his constituents have been raising.

[Several hon. Members]

rose—

[Mr Speaker]

Order. A great number of hon. and right hon. Members are still seeking to catch my eye and I want to accommodate them on this very important matter. I hope they will help me to help them by being brief. Perhaps we can be given a textbook example of the genre by Mr Bernard Jenkin.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

I commend my right hon. Friend for the sensitive way in which she is approaching the issue and welcome her statement and the legislation she is proposing. Does she agree that it is legislation not to change the society in which we live but to recognise how society has already changed, and that we should afford the freedom to marry to every citizen in this country?

[Maria Miller]

In the tradition of brevity, yes.

[Stephen Williams (Bristol West) (LD)]

I have long wanted to see a society in which couples who love each other, whether they are of the same sex or the opposite sex, can demonstrate that love and commitment in front of their family and their friends and for that commitment to be recognised by society. Does the Minister agree that all of us who want to see such a society should be very proud of her announcement today, which is a major strike for civil rights and equality in our country?

[Maria Miller]

Yes, although it will now be important to work with religious institutions to ensure that there is happiness about the safeguards.

[David Simpson (Upper Bann) (DUP)]

rose—

[Mr Speaker]

Was the hon. Gentleman in the Chamber at the start of the statement? He was. We must hear him. I call Mr David Simpson.

[David Simpson]

Further to a previous question, if a school teacher who teaches religious education believes that the Bible teaches that this act is wrong and tells her pupils that, will she be protected?

[Maria Miller]

The answer is absolutely yes, if that is the individual’s belief. That is particularly important for faith schools, but as we would expect from all our teachers, we would want to ensure that such a belief was expressed in a balanced way.

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

I am a member of a party that supports equal marriage, but the Minister none the less must take into account that this was in no election manifesto, that it was not in the coalition agreement and that many members of my constituency, my church and my party feel that much more work must be done to see whether it is possible to redefine civil marriage separately from the traditional definitions of religious marriage. She therefore needs to proceed very carefully and cautiously, engage with the faith leaders to seek their agreement before proceeding, and proceed with draft legislation before moving speedily to get something on the statute book.

[Maria Miller]

My right hon. Friend obviously has strong views on the question. My priority is to allow same-sex couples to marry and not to overhaul marriage law, but he is right to say that we need to work with religious leaders. I will start those discussions as soon as the statement has finished.

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

As all marriages now are between different-sex people, it is surprising that only 61% regard marriage in such a way—it should be 100%. Like my hon. Friends who disagree with me on this, I would hope that 200 years ago I would have been part of the Clapham sect, and I think it would be a good idea to have a joint opinion poll from the Freedom to Marry campaign and the Coalition for Marriage asking a yes/no question. We could then work from the same figures, which would probably show that two thirds of the population want this legislation to go through. I support that.

[Maria Miller]

I would suggest that it is the role of Parliament to debate such issues. I would not want to rely on opinion polls to determine such an important issue.

[Jane Ellison (Battersea) (Con)]

We all represent a great many young constituents, although they are perhaps not our most active correspondents on this issue. Life is very tough for many young gay people, so does the Minister agree that this is an important way of sending out a signal to them as they grow up in our society that we value and treat them equally?

[Maria Miller]

I certainly hope that that will be one result from what we are talking about today.

[Mr Laurence Robertson (Tewkesbury) (Con)]

The Government are hiding behind triple locks and quadruple locks on what may or may not happen in churches. Let me point out that although there are religious and civil ceremonies, there is only one marriage, and many people of all faiths and no faith are deeply offended—I repeat, deeply offended—by these proposals.

[Maria Miller]

My hon. Friend is absolutely right that there is one marriage—there are different ways into it, but there is just one concept of marriage. The locks that we propose are very much about listening to people’s concerns, but not just listening, as they are also about acting and ensuring that the safeguards are effective.

[Mr Julian Brazier (Canterbury) (Con)]

My right hon. Friend well knows that schools are required to teach children about family life. Given that the Government are proposing to redefine marriage, which is at the heart of the matter, I echo other Members in asking what concrete safeguards the Government propose to put in place to protect Christian teachers who teach that marriage should only be between a man and a woman.

[Maria Miller]

I reiterate and underline what I said earlier—that nothing we have announced today will change how children are taught. Teachers will be able to describe their belief that marriage is between a man and a woman, but as with all teaching, we would of course expect that to be done in a balanced manner.

[Gavin Barwell (Croydon Central) (Con)]

I warmly welcome what my right hon. Friend has said today, but some of my constituents and some of my closest friends on these Benches have real concerns. Is not the message today that we must find a way to ensure that those churches that do not wish to conduct same-sex marriages do not have to, but that while they rightly demand that their religious freedom is protected, they cannot deny others who wish to conduct these marriages the opportunity to do so?

[Maria Miller]

I could not agree more with my hon. Friend, who I think has articulated the position absolutely correctly. That is the Government’s position.

[Dr Matthew Offord (Hendon) (Con)]

Yesterday I asked the Minister about polygamy, and she was unable to answer my concerns. Is she aware of the campaigns now taking place in Canada to legalise polygamy, since marriage was redefined there in 2005?

[Maria Miller]

I think I did answer my hon. Friend’s question yesterday by saying that marriage in this country is between two people.

[Mr David Burrowes (Enfield, Southgate) (Con)]

Now that the state wishes to redefine marriage, will it redefine adultery and non-consummation?

[Maria Miller]

Again, that is an important detail, which I am sure will be looked at further when the Bill is examined in Committee. I can say clearly to my hon. Friend—the consultation document says that there must be clarity on this issue—that no changes to the laws of adultery are proposed and that same-sex couples will have the current laws of adultery available to them if those laws apply. If they do not apply, there will also be grounds of “unreasonable behaviour” for individuals to seek divorce if the behaviour falls short of adultery. I believe that this reflects the current situation for civil partnerships.

[John Glen (Salisbury) (Con)]

In April this year, when the Scottish National party produced a consultation that allowed anonymous responses, the Conservative party said:

“Nothing the SNP now assert on the basis of a rigged consultation to which SNP members can contribute anonymously and as many times as they like will command confidence”.

Why, then, in the case of this consultation, in which 60% of the respondents were anonymous on a matter that was not in the manifesto and when my constituents do not want this to happen by a factor of 25:1, are the Government pressing ahead with it?

[Maria Miller]

I can perhaps reassure my hon. Friend that the consultation we undertook was carried out correctly and properly, and that proper safeguards were put in place to avoid any multiple submissions. I urge my hon. Friend to consider the fact that while many people who do not agree with the Government’s position may contact him about their views, there may be many others who do agree with it but whose voices are not as strong.

[John Pugh (Southport) (LD)]

Given that the proposals are clearly based on the principle of equality, does it not make the refusal to offer civil partnerships to heterosexual couples completely incapable of coherent explanation and thus subject to obvious legal challenge in the future?

[Maria Miller]

We are saying that we have not identified a need for opposite-sex civil partnerships and, as I have already said, my priority is to allow same-sex couples to get married without undertaking a complete overhaul of either civil partnerships or marriage law in general.

[Dr Sarah Wollaston (Totnes) (Con)]

I love being married. Surely it cannot be right in this day and age to deny the symbolism around marriage to our constituents on the basis of their sexuality. Does the Minister join me in looking forward to a day when all faiths, not just the Church, guarantee full equality to all women and to all people whatever their sexuality?

[Maria Miller]

I understand my hon. Friend’s sentiment and, on a personal level, I have a great deal of sympathy with what she says. As a House of Parliament, however, we need to respect the fact that not everybody is in the same position on these issues. I believe there are important merits in offering marriage to more and more people, and I hope every Member will join me in celebrating the importance of marriage in our society today.

[Mr Robin Walker (Worcester) (Con)]

As a supporter of the institution of marriage, I welcome in principle the Government’s desire to extend it to more people through equal civil marriage. However, I and many of my constituents are deeply concerned that the extension of this legislation into the religious domain could increase the risk of costly legal challenges to the Churches and religious groups. Can the Minister offer any clear assurance that the Government’s legal advice is not only that such challenges would fail but that the Churches can be protected from extra costs that might be imposed?

[Maria Miller]

I reiterate that the triple lock is designed to make sure that changes in the Equality Act 2010 work at a local level so that churches and, indeed, that individuals do not face the prospect of challenge and that any challenge will be directed at the Government. Even more important, case law and the European convention ensure that we have put beyond doubt the protection of religious belief in this matter. These are the sort of concrete reassurances that I am sure my hon. Friend and his constituents would welcome.

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

A year ago, the Prime Minister described the United Kingdom as a Christian country. Does my right hon. Friend, whom I greatly like and admire, recognise that this legislation will mark a significant moment as this country will be passing a law that is directly contrary to what Jesus said about marriage in Mark chapter 10 and Matthew chapter 19?

[Maria Miller]

My hon. Friend is right that, as I outlined in the statement, this is a significant moment. We have faced other such significant moments in the evolution of marriage, and Parliament has been a radical campaigner on this issue over the centuries. I hope that my hon. Friend, who I know takes a thoughtful approach to this matter, will agree to look at the quadruple lock that I proposed today. I would certainly be happy to sit down with him and talk about it further if he has any further anxieties.

[Mr Marcus Jones (Nuneaton) (Con)]

Notwithstanding my right hon. Friend’s comments, can she explain how the Bill will guarantee that my constituents, including teachers or public sector workers who disagree with the state’s new definition of marriage, will not fall foul of employment laws for expressing their personal views in the workplace? Will it not just be a lawyer’s paradise?

[Maria Miller]

I can understand why my hon. Friend wants to raise that question today. Recent case law, which we would not want to go into on the Floor of the House, has highlighted how individuals who have raised their own views on the issue of equal marriage have experienced problems. What I have been reassured about, however, is the fact that those issues have been resolved and the courts have been very clear that individuals are entitled to their private views on this matter and that those views should not be held against them.

[Fiona Bruce (Congleton) (Con)]

I understand that the head of the Government Equalities Office told representatives of the Roman Catholic Bishops’ Conference that each signatory to the coalition for marriage petition would be counted as an individual response to the Government’s consultation. Because of that assurance, many supporters of traditional marriage focused on that petition. Why did it not happen? Was it because including those half a million and more signatures would have shown a substantial majority against plans to redefine marriage—something that is also confirmed by my constituency postbag?

[Maria Miller]

Let me emphasise again that we have read all the petitions and all the submissions to the consultation, and reassure my hon. Friend that every single one of those submissions has validity. However, I must also remind her that our starting point was not whether we would introduce these measures, but how we would do so. While the strength of feeling is clearly there, other Members have mentioned organisations and individuals who support these measures, and we must ensure that we take a balanced approach.

[Mr Philip Hollobone (Kettering) (Con)]

I am afraid that that answer simply is not good enough. I put it to the Government that their professed deep-seated and heartfelt commitment to equality does not appear to have applied to the consultation itself. Can the Minister explain to the very fair-minded residents of the Kettering constituency why the views of the overwhelming majority of respondents have been rejected, including a massive petition with more than half a million signatures?

[Maria Miller]

I know that my hon. Friend speaks powerfully for the people of Kettering, and I know that he will want to stand up for the wide range of views that undoubtedly exist in his constituency. I assure him that all those views have been considered, and that they have helped us to form our response today. We have proposed a quadruple lock to protect religious institutions, but it is also important for us to represent people who may even live in his constituency: gay couples who want to be able to celebrate their love and commitment to each other through marriage.

[Kris Hopkins (Keighley) (Con)]

I warmly welcome my right hon. Friend’s statement and this important legislation. On Saturday I had the pleasure of attending the installation of the Rev. Pat Bateman as vicar of All Saints church in Ilkley. Several religious leaders who attended the ceremony expressed a fear that they might be forced to conduct gay marriages in their churches. Can my right hon. Friend reassure them that that is not the case?

[Maria Miller]

I welcome my hon. Friend’s support. I can certainly reassure him that it will be for religious organisations and, indeed, individual ministers to discuss the issue themselves, and to examine the protections that we have introduced in order to ensure that no ministers or religious organisations will be forced to conduct same-sex marriages if they feel that that does not accord with their own religious beliefs.

[Craig Whittaker (Calder Valley) (Con)]

The Minister has said today that she has given a clear articulation of protection for religious freedoms by introducing a quadruple lock. However, she has also said that there is a “negligible” chance that that will be challenged. Can she tell us what the risk of a challenge is in percentage terms?

[Maria Miller]

I remind my hon. Friend that it is not just the quadruple lock that will provide that protection. The case law of the European Court of Human Rights, and the rights in the European convention, put the protection of religious belief in this matter beyond doubt, and I ask him to focus on that.

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

I warmly welcome the Minister’s commitment to the introduction of equal marriage. I also welcome the quadruple lock guarantee which will ensure that churches that do not wish to conduct such ceremonies do not have to do so. We must accept, however, that the consultation process has been divisive. Does she agree that we should now seek to reassure all those churches that they have nothing to fear from the legislation?

[Maria Miller]

I hope I can convince my hon. Friend that the consultation was absolutely fair, but he is right to say that we now need to work not just with the churches but with religious institutions throughout our country to ensure that the safeguards that are clearly necessary are effective.

[David Rutley (Macclesfield) (Con)]

Many Macclesfield residents have expressed concern about the legislation. Having known the Minister for many years, I am aware that family and marriage are very important in her own life. What those residents want to know is how churches and faith groups will be protected not just from human rights laws but from equalities legislation. That is what worries them.

[Maria Miller]

The people of Macclesfield are well represented by my hon. Friend, and I know that the importance of family ranks high in his life as well. I can assure him that the amendments that we will introduce to the Equality Act 2010 will provide protections in local law to ensure that individuals, and indeed religious institutions, need have no fear of action being brought against them on equality grounds. I hope that he will be able to convey those reassurances to his constituents.

[Richard Graham (Gloucester) (Con)]

Although the debate is still divisive, I welcome the balance struck by my right hon. Friend’s proposals to make marriage—which so many of us value hugely—available to all who want to be married, while protecting the freedoms of those who disagree. The last of the four important proposed legal locks recognises the opposition of the Church of England, and will make it illegal for same-sex marriages to be conducted in C of E churches. Can my right hon. Friend confirm that it will be possible for Roman Catholic and evangelical churches to opt out in a similar way if they so wish?

[Maria Miller]

My hon. Friend is right to say that what we are trying to establish today is a balanced approach. I can tell him that the various mechanisms that I have outlined today will provide protections that both the Roman Catholic Church and the Evangelical Church have identified to me at both national and local level.

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

Will the Minister please tell the House how many respondents to the consultation were resident outside the United Kingdom?

[Maria Miller]

The hon. Gentleman will know that there were more than 200,000 responses to the consultation, and that people outside the United Kingdom were given an opportunity to participate. We collected all the information and examined it in detail, and it helped us to think about how, not whether, we should implement the proposals. That is what I ask my hon. Friend to focus on.

[Jeremy Lefroy (Stafford) (Con)]

Can my right hon. Friend unequivocally guarantee freedom of conscience and speech to my constituents, at work and elsewhere, allowing them to disagree publicly with the redefinition of marriage without sanction by their employers?

[Maria Miller]

As I said earlier, a case involving an individual who articulated a view about equal civil marriage has already gone to court. I think that the courts have upheld the view that individuals are entitled to their private views, and that their jobs can be safeguarded on those grounds.

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

rose—

[Mr Speaker]

Order. The hon. Gentleman has perambulated around the Chamber. If he assures me that he has at all times remained within it, we must hear him. It is a very curious approach, but it is not of itself a breach of the Standing Orders of the House. [Hon. Members: “He has been hiding.”] He has been hiding! Let us now hear from Mr Alec Shelbrooke.

[Alec Shelbrooke]

I am most grateful to you, Mr. Speaker. I have indeed moved around. I was not going to get involved, but I just want to say this to the Minister. The fact is that the vast majority of my constituents simply do not believe that the European Court of Human Rights will not take this further. I think that a great many Members on this side of the House would support the Bill if we withdrew from the European convention on human rights and introduced a British Bill of Rights. That, by the way, was in the Conservative manifesto.

[Maria Miller]

I know that my hon. Friend never hides his views—although he may have been hiding himself from you in the Chamber today, Mr. Speaker—but I ask him to join me in trying to move away from the hyperbole that has been employed in campaigns that we have all witnessed in recent months. When the facts are looked at, the safeguards are clear. I remind him—at the risk of repeating myself unduly—that the case law of the European Court of Human Rights, as well as the European convention, clearly puts the protection of religious belief in this matter beyond doubt, and that is the Government’s legal position.

[Mark Pawsey (Rugby) (Con)]

The Minister herself described the institution of marriage as a building block of our society, but last year nearly 50% of all babies were born to couples who were not married. Given that marriage rates in Spain and Holland collapsed after the introduction of same-sex marriage, does she not fear that in this country even fewer couples intending to have children will choose to marry?

[Maria Miller]

I respect my hon. Friend’s views on this, and share his concern that many people today do not view marriage as relevant to them. I hope all Members will take this issue very seriously, because we should encourage more people to see marriage as an important way to cement their relationships and show commitment and responsibility, and so strengthen our society. I do not think that what my hon. Friend has said would happen in the UK, however. I think our proposals will be welcomed and will serve to promote the relevance of marriage today.

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

How many people of the Muslim faith—and of the Sikh and Hindu faiths—responded to the consultation, and how many were for this proposal and how many were against? I must tell the Minister that in my constituency concerns have been raised with me about this redefinition by people from the churches, the mosques and the gurdwaras. I ask her to take that on board.

[Maria Miller]

My hon. Friend is right to suggest that this issue is important for not only the Churches, but for faith groups across the board. That is why the protections I have outlined will work across the board. This is not a numbers game, but I am happy to look at whether we can provide the detailed information that my hon. Friend requests.

[Bob Blackman (Harrow East) (Con)]

I welcome the tone in which the Minister delivered the statement. One concern, however, is that there has not yet been any mention of what changes will be made to the Marriage Act 1949, which guarantees the rights of individuals to get married in a place of their choosing where they live or where they have a residence, and that many religious institutions—particularly those with relatively small congregations—will be forced against their will to host marriages.

[Maria Miller]

My hon. Friend must look at the quadruple lock I have announced today for the reassurance he seeks. Under that, there is no way a religious institution or individual would be forced to do what he says. I have already acknowledged the particular situation of the Church of England, which is why we have taken specific measures to protect it.

[Penny Mordaunt (Portsmouth North) (Con)]

I would like to reassure the House that, as an unmarried heterosexual woman, if these measures go through I will certainly consider the institution. The heart of the matter, however, is whether it will be possible to allow same-sex marriages, whether civil or religious, and still protect those religious organisations that do not wish to participate. What can the Minister do to reassure Members who might be sceptical that that will be possible?

[Maria Miller]

I believe that we can provide local reassurance through the law, and I have already outlined the European situation. By working together with religious organisations, we can build confidence in what we are proposing. It is right that following this statement we should work collaboratively, and I would be happy to meet any Member who wants to discuss these matters in more detail.

[Richard Drax (South Dorset) (Con)]

I do not agree with the redefinition of marriage, and nor do the majority of the constituents of South Dorset. Other than arrogance and intolerance, what right have the Minister and the Government got to stamp their legislative boot on religious faith?

[Maria Miller]

My hon. Friend represents the people of South Dorset extremely well. He rightly vigorously puts forward his own views, and I respect that. However, the state has had a stake in the institution of marriage for more than 170 years, and I therefore believe it is right that the state asks itself whether it is right to exclude people from the institution of marriage simply because they are gay. I do not believe that is right, which is why these changes have been proposed and the Government are presenting our response to the consultation.

[Dr Julian Huppert (Cambridge) (LD)]

I congratulate the Minister on her comments. The state should not bar a couple who want to marry just because of their gender, and the state should not bar a religious body that wishes to do so from conducting same-sex marriages. Will she also look, however, at providing in England legally binding humanist weddings, which work so successfully in Scotland?

[Maria Miller]

That is a detail I am happy to look at. It is not part of our proposals today, but, in the spirit of collaboration, I will be happy to talk to my hon. Friend about it.

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

I have listened to the Minister’s remarks on the legal robustness of this possible change in legislation and redefinition of marriage, but I am somewhat sceptical. Why has she not made public the Attorney-General’s specific advice on this matter?

[Maria Miller]

As I am sure my hon. Friend knows, any advice the Government receive is privileged information. I have set out the Government’s legal position, which is straightforward and clear, and I hope it will provide my hon. Friend with the reassurance he seeks.

[Mr Speaker]

I am grateful to the Minister, the shadow Minister and all colleagues. Some 62 Back Benchers were able to contribute in 60 minutes of Back-Bench time. That shows what we can do when we put our minds to it. I warmly thank the Minister of State for her statement.

Northern Ireland

Tuesday 11th December 2012 Commons Chamber

13:55

[The Secretary of State for Northern Ireland (Mrs Theresa Villiers)]

With permission, Mr Speaker, I would like to make a statement about recent events in Northern Ireland.

Over the past week a series of protests has taken place relating to the decision taken by Belfast city council on the flying of the Union flag. A number of these have witnessed violence, rioting and attacks on police officers. Yesterday evening, a masked gang threw a petrol bomb inside an unmarked police car; a young policewoman narrowly escaped very serious injury. That is now being treated by police as attempted murder.

As I made clear in the House last Wednesday, there can be absolutely no excuse or justification for this kind of thuggish and lawless behaviour. It is despicable. We condemn it unreservedly, and it must stop immediately. I welcome the motion passed unanimously yesterday in the Northern Ireland Assembly, which unequivocally condemned

“rioting and the campaign of intimidation, harassment and violent attacks on elected representatives”

and reaffirmed

“the absolute and unconditional commitment of all its Members to respecting and upholding the rule of law and the pursuit of their political objectives by purely legal and political means”.

Let us be very clear: no one can be in any doubt about the Government’s support for the Union and its flag, but the people engaged in the kind of violence we have seen in the past few days are not defending the Union flag. There is nothing remotely British about what they are doing. They are dishonouring and shaming the flag of our country through their lawless and violent activities. They discredit the cause that they claim to support. They are also doing untold damage to hard-pressed traders in the run-up to Christmas, and they undermine those who are working tirelessly to promote Northern Ireland to bring about investment, jobs and prosperity.

In addition to outbreaks of violence, appalling threats have been made against elected politicians, including a death threat to the hon. Member for Belfast East (Naomi Long). I know that the whole House will join me in expressing our complete solidarity with the hon. Lady and her colleagues in the Alliance party and all the people who have been threatened and intimidated over the last week by this disgraceful conduct. The right of elected representatives to go about their daily business without the threat or fear of intimidation is one of the hallmarks of our democracy, and these threats are nothing less than an attack on democracy in this country.

Throughout this crisis, I have stayed in close contact with the Chief Constable for Northern Ireland. Some 32 police officers have been injured in the line of duty during the last week, and I want to take this opportunity to pay the warmest of tributes to the brave men and women of the Police Service of Northern Ireland, who once again find themselves in the front line in countering and tackling violence, and once again they have shown themselves to be fearless guardians of the rule of law whenever, and from wherever, it comes under attack. I received a further update from the Chief Constable this morning. He informed me that about 38 people have now been charged in relation to this disorder. Those engaged in violence should be in no doubt of the determination of the Chief Constable and the PSNI to apply the full force of the law—those engaged in violence should be well aware of that fact. I have also discussed with the Chief Constable the threats to elected politicians. Again, I am in no doubt as to the extreme seriousness Matt Baggott, like the rest of us, attaches to those unacceptable threats. I assure the House that the PSNI is doing all it can to enable elected politicians to carry out their duties and serve their constituents.

For our part, the UK Government will continue to give their fullest backing to the PSNI. That is why, in the face of the deteriorating security situation we inherited, the Government secured an exceptional additional £200 million from the Treasury reserve. We will continue to do all we can to assist the Chief Constable in keeping the people of Northern Ireland safe and secure, whether from so-called dissidents or from those responsible for this week’s events.

Yet responsibility for solving the underlying issues that have led to the violence does not rest solely with the police or with the UK Government, and it is right that local politicians in Northern Ireland take the lead in trying to reach agreement on a way forward. In tackling these issues, I believe that everybody has a responsibility to consider very carefully the impact of their words and deeds on wider community relations.

Once again, the trouble we have seen in Belfast and elsewhere underlines the urgent necessity of working towards a genuinely shared future for all the people of Northern Ireland. We have made it clear that where the Executive take the difficult decisions needed to deliver that, they will have the Government’s full backing. It would be a huge lost opportunity if Northern Ireland politics were to continue to be defined by questions of identity. There is a pressing need to focus on the wider issues of the economy, jobs and delivery.

The scenes of the past few days have been deplorable, but we should not let them detract from the positive progress that Northern Ireland has made in recent years. That was highlighted last Friday by the visit to Belfast of US Secretary of State Hillary Clinton. She rightly pointed to the many difficult decisions taken by local politicians and the leadership they have shown in bringing us to where we are today. I am sure that those politicians will not allow the achievements that have been made to be undermined by lawless violence of the kind we have seen over the past week. I am also sure that this House will remain united in support of their efforts to move the peace process further forwards towards a genuinely shared future for all in Northern Ireland.

00:00

[Vernon Coaker (Gedling) (Lab)]

I thank the Secretary of State for coming to the House to make this statement and for advance sight of it. Let me say why I, and the Opposition, called on her to do so. There have been eight consecutive nights of violence in Northern Ireland. A Member of this House has had her life disgracefully threatened, and her Alliance party has seen its representatives intimidated and subjected to violence, and its property attacked.

Violence against the police has escalated, to the extent that an attempt was made to murder a female officer last night by breaking the window of a police car and throwing a petrol bomb inside while she was still in the vehicle. Dozens of officers have been injured after coming under sustained attack over the course of the week. A few days before, another murderous attack on the police was narrowly avoided only when a vehicle carrying a rocket was apprehended in Derry. It cannot go on, and Westminster’s voice must also be heard. This violence would not be tolerated in London, Cardiff or Edinburgh, and it should not be tolerated in Belfast. A clear and strong message must be sent from this place today that says this violence is wrong, unacceptable and without justification.

May I join the Secretary of State in once again paying tribute to the Police Service of Northern Ireland for its dedication and bravery? I spoke earlier to the Justice Minister, whom I also met a few days ago in Belfast. What discussions has the Secretary of State had with him and the Chief Constable about resources and the police’s capacity to deal with this disorder, and the continuing national security threat? Will she update the House on what her latest security assessment is?

The homes of public representatives have been vandalised and attacked. Local councillors, who are doing their best on behalf of the communities they serve, and their families have seen their homes targeted and vandalised. I am sure I speak for the whole House when I say that whether we are talking about a Democratic Unionist party councillor in Dungannon, two Alliance councillors and their family in Bangor, or the husband of a Sinn Fein councillor in Armagh, such violence is wrong and must stop. I stand shoulder to shoulder with public representatives in Northern Ireland, for democracy and against violence. When a Member of Parliament is threatened and attacked, I view it as a threat to and attack on all of us and everything we stand for.

Will the Secretary of State tell me what assessment she has made of the involvement of loyalist paramilitaries in the rioting? Does she view their actions as a threat to national security? What discussions has she had with the Prime Minister about this? Has he discussed the ongoing violence with the First Minister and Deputy First Minister, or the Justice Minister?

I know there are underlying issues and I am realistic about the challenges we face. I have been with Unionist and loyalist political representatives to visit areas in Belfast and other parts of Northern Ireland, and I want to say this: hon. Members and others from Northern Ireland are doing a really difficult job in these circumstances in these communities. I do not doubt their sincerity, integrity or hard work. They are dealing with frustration and anger, and they need support in helping to channel that away from violence and towards politics. I will do what I can to help, and I make that offer in republican and nationalist communities, too. But violence is never justified and it is wrong. It is damaging those communities and until it stops we cannot even begin to discuss or do anything about the longer-term issues that need to be resolved. What discussions has the Secretary of State had with political representatives about supporting work in these communities? Will she consider bringing political leaders together to see what can be done and what support the UK Government can give to any initiatives in these areas?

I care deeply about Northern Ireland and its people, and I know the Secretary of State and all other hon. Members do, too. I think it was exceptionally important today that we came together as the United Kingdom House of Commons and said that. Northern Ireland matters; it is important. I hope that we see this awful violence ended and that we can look forward to a 2013 in which Northern Ireland is showcased on the world stage as the great place it truly is.

[Mrs Villiers]

I thank the shadow Secretary of State for the measured tone of his response. Like him, I believe that violence of the sort we have seen over the past week is unacceptable in Northern Ireland, just as it would be unacceptable anywhere else in the United Kingdom. In particular, I fully agree with him that these attacks on the police are absolutely despicable and should not be tolerated.

The hon. Gentleman is right to highlight the arrests recently made in Londonderry in relation to an explosively formed projectile device. They were very significant arrests and Northern Ireland is a safer place as a result of their having taken place. He asked about my contacts with the Justice Minister. I believe I have spoken three times to the Justice Minister since these events started to unfold. I have also spoken to Deputy Chief Constable Judith Gillespie and spoken three times to the Chief Constable to make sure that I am fully aware of their concerns. I know that the Justice Minister continues to work extremely hard to ensure that the police have all the resources they need, and the UK Government are entirely supportive of him in his efforts to do that.

The shadow Secretary of State asked for an update on the general security situation. The threat level from dissident terrorism remains at “severe”, meaning that an attack is highly likely. The PSNI continues to focus strongly not only on these disturbances, but on all activities undertaken by paramilitaries and all terrorist activities in Northern Ireland. He particularly asked me about the investigation of loyalist paramilitary involvement in the disturbances, and I was discussing that with the Chief Constable this morning. It appears that some loyalist paramilitaries attended some of these events. There does not appear to be evidence of organised orchestration by paramilitary groups, but I am sure that the PSNI will be reviewing this carefully and will continue to investigate it as part of its wider investigation, which is extremely serious in relation not just to the disorder, but to the disgraceful threats received by elected representatives.

The shadow Secretary of State asked me whether I have discussed this matter with the Prime Minister. I have been keeping the Prime Minister fully informed on this; a copy of my statement was sent to him, I discussed this matter with his chief of staff this morning and he is following events very closely. The shadow Secretary of State also asked about my contact with Northern Ireland politicians. I spoke this morning to the First Minister about this situation specifically, and I have had a whole series of meetings; pretty much every discussion I have had with Northern Ireland politicians since being appointed Secretary of State for Northern Ireland has focused on building a shared future and dealing with sectarianism, because that is one of the crucial challenges we face as a nation, in the United Kingdom in general and in Northern Ireland in particular.

The shadow Secretary of State was right to focus on and express concern about frustration and anger. It is essential that that frustration is channelled only into legitimate protest and into the political process as well. The history of Northern Ireland shows what incredible progress can be made once people abandon violence and promote the peaceful and democratic resolution of differences across the community.

[Mr Laurence Robertson (Tewkesbury) (Con)]

As a Unionist who believes that the Union flag should fly over every public building in the United Kingdom, may I join the Secretary of State in condemning the violence that we have seen in the Province? I join her also in paying tribute to the members of the PSNI and in sending our sympathies to those who have been injured. I pay great tribute to the hon. Member for Belfast East (Naomi Long), who has shown great courage and determination at this time. She is a very valuable member of the Select Committee—a Committee that is working hard to try to help improve the economy of Northern Ireland. Does the Secretary of State agree that nothing could do more to undermine those efforts than the violence that we are currently seeing on our television screens every day?

[Mrs Villiers]

I thank my hon. Friend for giving me another opportunity to express my concern and sympathy for the hon. Member for Belfast East and all the others who have found themselves in a similar position, not least Sammy Brush, the DUP councillor.

I completely agree with my hon. Friend, the Chairman of the Northern Ireland Affairs Committee. This is absolutely the last thing Northern Ireland needs. At a time when so much effort is going into reviving the private sector in Northern Ireland and boosting its economy, to promote inward investment and to promote Northern Ireland as a great place to live, to work and to invest, it is hugely damaging to see scenes of riot and disorder on our TV screens. That is another reason why it is imperative that no matter how strongly people feel about flags, they express themselves only through democratic means and never by violence and disorder.

[Naomi Long (Belfast East) (Alliance)]

I thank the Secretary of State for her statement, and I join her in condemning last night’s wanton and gratuitous attempt to murder police officers who were guarding my constituency office and for whom I have the utmost admiration and respect. That attack is no different from previous murder attempts by dissident republicans against the security services.

Can the Secretary of State therefore confirm that this violence is being treated as a matter of national security, and advise when the Prime Minister will meet the Northern Ireland Justice Minister to discuss the security situation in Northern Ireland, as has been requested? Finally, does she agree that if we are to have a shared future capable of dealing with emotive and charged issues such as the flying of flags, it will require strong, courageous and above all generous leadership, willing to give a little of their own position in order to gain the greater prize for the whole community?

[Mrs Villiers]

I am grateful to the hon. Lady for her question. However one chooses to label these attacks, whether one calls them terrorism or criminal activities, they are utterly unacceptable. There is a technical definition of national security, but whether or not one applies that in this case, it is unacceptable for these attacks and threats to take place.

With reference to the Prime Minister and the Justice Minister, as Northern Ireland Secretary I remain happy to meet the Justice Minister whenever he would like, and I am happy to pass on again his request to the Prime Minister for a direct meeting with him. I have every sympathy with the hon. Lady’s call for generous leadership. Again, the successes of the past 20 years demonstrate that generous leadership and being prepared to compromise can lead to tremendous benefits right across the community, and I have every confidence that the political leadership in Northern Ireland is capable of that form of generous leadership on flags, as it has been on so many other issues.

[Kris Hopkins (Keighley) (Con)]

May I reiterate my support and admiration for the brave men and women of the Police Service of Northern Ireland, and condemn the mindless thugs who are betraying the name of Unionism, which I support? Does the Secretary of State agree that every brick and petrol bomb that is thrown damages inward investment, job creation and tourism in Northern Ireland?

[Mrs Villiers]

Yes, I agree that significant economic damage is being done as a result of these riots, which is another reason why it is urgent that they cease.

[Paul Murphy (Torfaen) (Lab)]

Does the Secretary of State agree that although the priority must be to end the appalling violence, the Alliance party genuinely tried to find a compromise on a very difficult issue? Does she accept that it is important for her, as the United Kingdom Secretary of State not only to talk to the political leaders in Northern Ireland—that is vital—but to engage in conversation with leaders of local government in Northern Ireland, to try to stop the violence happening elsewhere?

[Mrs Villiers]

I agree that it is very important for me and for my Minister of State to engage with local government on these and other issues, and with the wider community as well. It is essential that councillors from Belfast city council are able to take decisions on issues such as flags without being intimidated, and without having a riot outside their door. It was a disgraceful start to a sad series of events that a council was prevented from taking a vote on the issue. It is down to the council to take its own decisions on these matters.

[Stephen Lloyd (Eastbourne) (LD)]

I wholeheartedly support the Secretary of State’s statement today and endorse, from my own perspective and that of my party, the dignity with which the hon. Member for Belfast East (Naomi Long) has dealt with the very challenging scenarios of the past 10 days for her and for the Alliance party that she represents. I represent a constituency whose Member of Parliament, Ian Gow, was murdered many years ago by the IRA. He is still fondly remembered across the whole party political spectrum in Eastbourne. I seek reassurance from the Secretary of State—it is particularly relevant to what the hon. Member for Belfast East and some other politicians have been going through—that both the UK Government and the devolved Government will work closely together to ensure that elected politicians in the north of Ireland continuously and continually have the appropriate levels of security for their protection?

[Mrs Villiers]

Yes, I can certainly give the hon. Gentleman that assurance.

[Dr William McCrea (South Antrim) (DUP)]

At the outset, on behalf of my right hon. and hon. Friends, I unreservedly condemn those who have engaged in violence on our streets and assure those injured or affected by such violence, including the police, of our support. I also unreservedly condemn any threat against the hon. Member for Belfast East (Naomi Long) and her colleagues. I certainly know what that is like because the IRA tried not only to attack my property, but to assassinate me and my complete family because I wanted to hold to the Union flag. However, does the Secretary of State agree that it is not right to demonise those who wish to protest peacefully against a decision to remove the Union flag from Belfast city council? That flag is the very core of the Unionist identity and many people of Northern Ireland died in order to keep it aloft in our Province. Can the Secretary of State therefore assure me that the PSNI has every resource that it needs to maintain law and order and to facilitate peaceful protest?

[Mrs Villiers]

I very much welcome the hon. Gentleman’s forthright condemnation of what has gone on. Clearly, he has a special perspective on this, having himself been a victim of such terrible threats in the past. It is a fundamental part of our democracy that people have the right to protest peacefully. That cannot, of course, justify the terrible scenes that we have seen on our television screens over the past week.

[Ben Gummer (Ipswich) (Con)]

Everyone in the House will have seen how communities across the United Kingdom have fought hard over the past few years to reclaim the Union flag as an identity for everyone who lives in this country—something that we saw so splendidly this summer in the jubilee and the Olympics. Is my right hon. Friend not frustrated that in this year when the flag really did become a symbol for everyone who lives in this country, no matter from what background they come, it is being so abused at present?

[Mrs Villiers]

It is a concern that we see our Union flag being abused. Like my hon. Friend, I shared the joy that I think everyone felt with fantastically successful events this year, such as the Queen’s jubilee and the Olympics, where the Union flag played such a wonderful central role and such a positive one. That is another reason why those who persist in that course of conduct should stop immediately and confine their activities to peaceful participation in the democratic process, rather than seeking to hold people to ransom by rioting and threatening them.

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

I, too, offer my full support to my hon. Friend the Member for Belfast East (Naomi Long). The Secretary of State referred to her conversations with the Chief Constable of the PSNI, who has indicated that the violence has been stoked up by individuals using social media. Does she agree that in order to identify those responsible it is essential that the police, with proper authorisation, can access relevant details of the communications of those causing the chaos? If she agrees, does she think that the Deputy Prime Minister’s threat to block the draft Communications Data Bill will help or hinder those who have to keep order in such circumstances?

[Mrs Villiers]

The right hon. Gentleman, who is a former Minister, will appreciate that, regardless of what happens to the proposed Bill, there are already opportunities for the police to look at social media: they can do that in a public way, as everyone else does. I can assure him that the PSNI is carefully monitoring social media within the parameters of what it is allowed to do by law.

[Mr David Anderson (Blaydon) (Lab)]

I agree entirely with the Secretary of State’s claim that this is nothing less than a fundamental attack on democracy. Part of being a democracy is accepting that sometimes we do not get what we want. Opposition Members know that very well, as every day of the week we have to accept things we do not like, and the same was true for Government Members when they were in opposition. Can we be very clear, on behalf of everyone in this House, that there is no way that the people leading the riots will succeed and that we will support the people in Belfast in carrying out their democratic mandate in what they have agreed to do properly?

[Mrs Villiers]

I welcome that firm statement, which I am sure that everyone will endorse. Such decisions need to be taken on the basis of democracy and consent, and indeed decisions on matters as sensitive as flags need to be taken after calm reflection. It is important that a real effort is made to take into account the concerns of people right across the community. There is a way forward. Northern Ireland has demonstrated that it can resolve seemingly intractable problems that have divided people for 800 years, so I am sure that they can find a sensible way forward on flags as well.

[Ms Margaret Ritchie (South Down) (SDLP)]

I thank the Secretary of State for her statement. In condemning the levels of unrest on the streets of Belfast and the assault on democracy and on our hon. Friend the Member for Belfast East (Naomi Long) and others across Northern Ireland over the past few days, does she agree that parties that agreed to designated days for flying the Union flag at Stormont should not have exaggerated the significance of having the same policy at Belfast city hall and that the consequences of such agitation, including the distribution of inappropriate literature door to door in east Belfast, have contributed considerably to the unrest on the streets?

[Mrs Villiers]

As I have said, the important approach is to recognise that those decisions are very sensitive and that different people in Northern Ireland view flags in completely different ways. I think that the guiding principle should always be that those decisions should be taken with care and thought after dialogue and with a mind on the impact on community relations and an understanding of their impact on people who have different views right across the community.

[Kate Hoey (Vauxhall) (Lab)]

Does the Secretary of State accept that for many hard-working, decent, pro-Union people there is a feeling that a shared future sometimes looks like a dripping away of their British identity? Does she accept that the Taoiseach and the Irish Government continually stand up for the nationalist community and their idea of a united Ireland? Will she, as Secretary of State, stand up more for the pro-Union community and the fact that this is the United Kingdom, and will she help by condemning the fact that a children’s playground has been named after an IRA gunman?

[Mrs Villiers]

It is my job, as Northern Ireland Secretary, to stand up for all the people in Northern Ireland. I say to the hon. Lady what I have said many times: this Government are not neutral on the Union, and neither am I. I am very supportive of the Union and Northern Ireland’s place within it. She invites me to get involved in the dispute about the naming of a playground. It is for the council involved to take that decision. I repeat what I have already said: it is very important that decisions on sensitive matters, whether playgrounds or flags, are taken in a measured way with appropriate attention to community relations and the consequences of those decisions on the wider community, including on people whose views are very different from those of the people taking the decisions.

[Ian Paisley (North Antrim) (DUP)]

If I am reading the Secretary of State correctly, I agree that it is completely insensitive and foolish for people to think that they can name play-parks after murderers and terrorists and remove the national flag from Northern Ireland, or reduce its flying, and think that there will be no consequences whatsoever. Sadly, we have seen that identity and the struggle for identity have consequences, and I condemn the violent consequences that have occurred. In giving meaning to the words in her statement, that nobody can be in any doubt about the Government’s support for the Union and its flag, will she go to Northern Ireland at her earliest convenience and reiterate again and again the view that Ulster’s Britishness is not diminished whatsoever?

[Mrs Villiers]

As I have said, I have repeated on many occasions the Government’s support for the Union and for Northern Ireland’s place within it. The question of Northern Ireland’s future is settled on the principles of the Belfast agreement; it will only ever be decided by democracy and by consent. When it comes to the politics of identity, I think that it is very important that when decisions are taken, whether on flags or other issues, the very different traditions, perspectives and perceptions of identity in Northern Ireland are taken into account, but I will never be in doubt about my support for the Union or about the UK Government’s support for it.

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

I fear that in many of these replies to the questions on the statement the idea of identity in Northern Ireland is being treated as somehow a theoretical construct. Last Thursday, when you, Mr Speaker, assisted by calling me to speak on the 41st anniversary of the McGurk’s bar bombing, what was revealed to me was that the people who had researched a book on the bombing and come here to launch it are deeply locked in the past. Clearly those people from west Belfast still feel a deep bitterness towards the United Kingdom and the involvement of its armed forces in their community. Similarly, in my work in the peace process over there, I have found that the people on the ground, not the politicians, feel deeply threatened by the turmoil that goes on at street level about identity, which leads to continued violence by IRA paramilitaries and the clear ability in loyalist communities to round up people on the streets and create violence. I urge the Secretary of State, apart from helping me get to the truth about the McGurk’s bar bombing, to get on the ground, talk to people and stop lecturing them from above.

[Mrs Villiers]

I can assure the hon. Gentleman that I and the Minister of State do talk with people on the ground about these matters—it is a crucial part of being effective in our roles. With regard to the matter of identity, the important thing is to remember that one of the fundamental principles of the Belfast agreement was the need to recognise that people in Northern Ireland view their identities differently. The agreement recognised the ability of individuals in Northern Ireland to define themselves as British or Irish, and indeed some may choose to define themselves simply as Northern Irish. The politics of identity is fluid and changing, but a key part of the Belfast agreement was recognition of an individual’s right to define their identity in whatever way they choose.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I want to add my voice to those that have expressed solidarity with the hon. Member for Belfast East (Naomi Long) and with those brave public servants who put themselves in harm’s way to protect the public. Will the Secretary of State provide some reassurance about discussions she might have had with the Justice Minister in Northern Ireland and the Chief Constable on the violence and whether they have all the resources needed to deal with it?

[Mrs Villiers]

I have discussed both matters with the Justice Minister and the Chief Constable on a number of occasions over the past few months. The Chief Constable is on record as indicating previously that he has the resources necessary to police Northern Ireland, and that is in no small part because of the £200 million that this Government allocated from the Treasury reserve to the PSNI to support its efforts to keep people in Northern Ireland safe and secure and to combat the terrorist threat. The Chief Constable has not raised resourcing with me, but I am always open to conversations about that. Indeed, I am working with him on what will happen once the four-year period of the £200 million that has already been allocated expires and on what future arrangements might be made.

On conversations with David Ford, I am always happy to listen to his concerns, and if he feels that further resource issues need to be addressed, I am happy to discuss them with him.

[Mark Durkan (Foyle) (SDLP)]

I commend the Secretary of State for her statement and join her in offering support to my colleague, the hon. Member for Belfast East (Naomi Long), to all her party colleagues who have endured attack, and to representatives of Sinn Fein and the DUP who have endured attack. That empathy comes from a party that has suffered attack from loyalists and republicans. Does the Secretary of State agree that no national flag, whether the Union flag or the tricolour, should be used or abused as a visual aid to sectarianism or as a partisan prop in the way that has happened all too often in the past?

Does the Secretary of State recognise that in circumstances where Northern Ireland will be moving towards having 11 new councils under a carve-up determined by Sinn Fein and the DUP, there is a danger that the whole issue of flags being determined at council level will be played out in those new council chambers in a very difficult and dangerous way? Does she further recognise that there needs to be real dialogue among all parties about how we handle and manage that situation, in relation not only to flags but to the sensitive issue of the naming of public amenities run by councils, including play spaces, which in my view should be neutral and apolitical?

[Mrs Villiers]

Given the sensitivity of issues relating to national flags, yes, one does need to be cautious in terms of how the flag is approached in political debate. Certainly, any kind of inflammatory approach to these issues is not helpful. The key lies in dialogue and learning from past successes in the peace process where many more intractable issues have been resolved and compromises have been found. There is a real opportunity for the political parties, working together, to find a resolution on this. I welcome last night’s statements from the DUP and the Ulster Unionist party that they want to start such a dialogue.

[Kevin Brennan (Cardiff West) (Lab)]

I, too, express solidarity with the hon. Member for Belfast East (Naomi Long), who has shown great courage and dignity in the light of the attacks that she has suffered, and with all our colleagues from Northern Ireland—our valued colleagues in this place—who operate in a political environment in the north of Ireland which perhaps some of us can never fully understand. What is the Secretary of State going to do to make sure that this dialogue between the political parties takes place? It is all very well for us here in this House to express our condemnations of violence, but what needs to be done on the ground is to ensure that the political parties agree that they will operate with statesmanship and not just through rhetoric.

[Mrs Villiers]

I am very happy to engage in whatever way would be found helpful by the Northern Ireland parties. I echo the hon. Gentleman’s praise for hon. Members from Northern Ireland and the tremendous work that they do for all their constituents. Matters relating to the flag raise difficult issues. This is an opportunity for me, and indeed for the whole House, again to endorse the need to address sectarian barriers. There is very good work going on by the Northern Ireland Executive on things such as shared education—for example, getting schools working together so that children have an experience of being educated alongside those from other faiths. A lot of work has gone into the Executive’s cohesion, sharing and integration strategy. There is the will to make the change. The Northern Ireland parties have delivered phenomenal success in changing in the past, and it is now time to press ahead further and faster in addressing the sectarian barriers and moving towards a genuinely shared, cohesive and integrated society.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I, too, express solidarity with the hon. Member for Belfast East (Naomi Long) on the difficult issues that she is facing.

The Secretary of State said that the Chief Constable had not asked for additional resources, but I understand that Terry Spence, the chair of the Police Federation for Northern Ireland, has called for 1,000 extra officers in the PSNI to help deal with the possibility of further terrorist threats. Given the recent events, does the Secretary of State intend to pursue that, particularly with the Treasury in light of the additional resources that have been supplied previously?

[Mrs Villiers]

As I said, I am working directly with the Chief Constable on what will happen in the period after the current additional four-year spending uplift of £200 million comes to an end. I am also working with him and others on the preparations for the G8 summit to ensure that the PSNI have all the appropriate resources. So yes, this is something that I keep a very close eye on. It is always difficult in these times when we need to deal with the deficit, but we are determined to ensure that the PSNI have all the support they need to keep Northern Ireland safe and secure.

[Jim Shannon (Strangford) (DUP)]

I thank the Secretary of State for her statement. In the early hours of Saturday morning, the Alliance councillor in my constituency had her home attacked. I visited her, first, to give her support, but also because she is a personal friend. I have worked with her on many constituency issues for the betterment of the whole community. She had the living room windows, porch windows and bedroom windows smashed in her home, which she has lived in for 24 years, and her car windows broken as well, in what can be described as a cowardly and shameful attack. This single lady, who lives on her own, said to me that it will cost some £5,000 for her windows to be fixed and had some concern about how that was going to happen as Christmas approaches. What steps can the Secretary of State take to ensure that the £5,000 is made available for the replacement of her windows and, indeed, that there is help for everyone else who has had cars burned, windows smashed and houses damaged?

[Mrs Villiers]

I thank the hon. Gentleman for drawing the House’s attention to yet another very sad case. I am particularly concerned about the number of women who have been targeted as a result of these threats—not only the hon. Member for Belfast East (Naomi Long) but a number of her Alliance local councillor colleagues. That is of course a matter of very grave concern, particularly at a time when everyone says that we need to attract more women into politics. Few things would provide more of a deterrent to entering politics than the idea that one’s front windows are going to be smashed and one is going to be intimidated. As I said, the PSNI are very focused on protecting those who are subject to these threats. It is difficult for me to comment on individual cases, but I am happy to discuss this one on a bilateral basis with the hon. Gentleman.

Bill Presented

Energy Efficiency and Reduction in Energy Costs Bill

Presentation and First Reading (Standing Order No. 57)

Dr Alan Whitehead, supported by Mr Tim Yeo, John Hemming, Caroline Lucas, Martin Horwood, Sir Peter Bottomley, Martin Caton and Joan Walley, presented a Bill to promote energy efficiency and a reduction in energy costs; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 18 January 2013, and to be printed (Bill 105).

Planning Applications (Community Right of Appeal)

Tuesday 11th December 2012 Commons Chamber

Motion for leave to bring in a Bill (Standing Order No. 23)

14:37

[Chris Skidmore (Kingswood) (Con)]

I beg to move,

That leave be given to bring in a Bill to provide that communities may appeal against planning decisions on collection of the signatures of a required percentage of the electorate in the relevant ward within a designated time period; and for connected purposes.

I should inform the House of my own personal interests with regard to this Bill. Ever since I became the Conservative candidate for Kingswood, which lies principally on green-belt land between Bristol and Bath, I have campaigned with local community groups to protect green-belt land from the threat of over-development. The previous Government had the top-down regional spatial strategy under which over 10,000 houses were planned in that area. Local community organisations such as the fantastic Save Our Green Spaces group, which represents Oldland Common, Warmley and Siston, and Hanham District Greenbelt Conservation Society, worked tremendously hard on collecting signatures for petitions and letters opposing the regional spatial strategy, which thankfully this Government have removed. They have introduced the national planning policy framework, which has provided specific protection for green-belt land, and that is incredibly welcome.

We were able to defeat planning applications from developers to build on green-belt land because South Gloucestershire council was on our side—it has now introduced its core strategy to protect green-belt land in Kingswood—but under the previous Government, each time the applications were defeated, the developer was allowed to appeal, and appeal again, gradually eroding local people’s faith in the whole planning process.

Other applications have been made on non-green-belt land since 2010. Local residents have fought such applications for nearly a decade, particularly one by Tesco to build a large supermarket in Hanham. Local residents opposed the application for 10 years and every time they managed to defeat it, with the council’s support, Tesco would simply come back, appeal the decision and put in another application.

This seems to be a David and Goliath-type situation in which the developers are Goliath and the residents are David. When the residents lose an application, as they did a couple of months ago when Tesco won over the council, which was afraid of the legal costs—I think that played a big part in its decision to allow the application to go through—do they have a right of appeal? No, they do not. The planning process remains dangerously unequal. We have taken away David’s sling, so he cannot even try to bring down the monster.

This Bill would address that problem. To restore confidence in the planning system, we need to have in place a right of appeal for residents when an application goes through and the developer wins. I do not intend this proposal to be another piece of red tape, which is why I have suggested that it should involve certain percentages. For example, 50% of those registered on the electoral roll in the local authority ward would have to sign a petition within a designated time period of one month—two months at most—to trigger an appeal to the Planning Inspectorate or even the Secretary of State.

That would be vital. I am sure Members will recognise that every single constituency has constituents who fight planning applications based on the claim that they represent the views of the silent majority. No one likes to be called a nimby—not in my back yard—but, for want of a better word, that is what the press call them. How do we define whether someone is a genuine nimby who simply does not want a development to take place? I am pro-development and keen to have thousands of houses built in south Gloucestershire on non-green-belt land, which has been agreed in the core strategy, but a persistent minority will claim that they have majority support and will continue to do so even once an application has gone through. If we introduce the appeal mechanism, it would ensure not only democratic accountability, but shut up those people who claim that they have support. If they cannot get 50% of the electorate to subscribe to a petition within a month, they will lose their case to claim that they represent the majority.

This Bill would help to restore confidence in the planning system and to create a symmetric planning system. The Conservative party’s “Open Source Planning” Green Paper discussed introducing something similar in February 2010. The Government have yet to do so, but I hope that the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Grantham and Stamford (Nick Boles), who is listening and who kindly came to Kingswood to meet community groups—their members spoke of their frustration at the lack of accountability and lack of the right of appeal for local residents—will take this on board and that it will end up as a future programme.

This is ultimately a question of fairness. The fact is that we allow developers to appeal planning decisions and they often have big pockets and barristers on their side, but where are we for the little man? We need to stand up for residents who are genuinely concerned about planning applications that will blight their local areas for generations. It is not good enough to say, “The council passed it and it is democratically elected, so you can vote them out in five years’ time.” The councillors may well be voted out, but the community as a whole will have to live with their decisions for generations to come. A community right of appeal would restore the local population’s confidence in a planning system that will allow them to become democratically engaged, so I recommend this Bill to the House.

Question put and agreed to.

Ordered,

That Chris Skidmore present the Bill.

Chris Skidmore accordingly presented the Bill.

Bill read the First time; to be read the Second time on Friday 1 March, and to be printed (Bill 106).

The Economy

Tuesday 11th December 2012 Commons Chamber

14:45

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

I beg to move,

That this House has considered the matter of the economy.

I am pleased that this House has the opportunity to discuss the economic challenges that our country faces. The statement delivered by the Chancellor last week was a statement for the world as it is, not a statement about the world as we had hoped it would be, but in it we took the tough but fair decisions needed to fix the mess that we inherited, by bringing the deficit down, maintaining our international credibility and creating a platform for jobs and growth.

We ensured that the burden was fairly shared, asking those who have the most to contribute the most, bringing the cost of our welfare system under control and further squeezing Whitehall bureaucracy. We also addressed issues to make life easier through these tough times by cutting income tax and fuel duty and putting more money back into the pockets of working families.

That is why the autumn statement has been welcomed widely by the CBI, the British Retail Consortium, the Institute of Directors, the British Chambers of Commerce, the Federation of Small Businesses, the Engineering Employers Federation and many others that have the best interests of the British economy at heart. We inherited a mess, but we are clearing it up and building a stronger economy and a fairer society so that every person in Britain is able to get on in life.

As the Chancellor made clear last week, the road to recovery is longer than we had hoped, but this Government are committed to finishing the job and strengthening the British economy. Despite the mess we inherited and despite the headwinds from the eurozone and the impact of the banking crisis, we are making progress. The deficit has been cut by a quarter and, as the shadow Chancellor himself rightly observed last week, the deficit is falling in each and every year of the forecast. More than 1 million private sector jobs have been created and nearly 1 million young people have started apprenticeships, and exports of goods to major emerging markets have doubled since 2009.

[Mr David Hanson (Delyn) (Lab)]

Two years ago I sat on the National Insurance Contributions Bill Committee, which considered the national insurance contributions holiday. The Government then promised that some 400,000 employers would take up that scheme, but we were told by the Exchequer Secretary in a parliamentary answer today that only 20,000 have done so. If the Chief Secretary is not even good enough at forecasting the development of his own schemes, how can we trust his forecasts for the economy?

[Danny Alexander]

The right hon. Gentleman is right that take-up of that scheme has been much lower than we had expected. I think, therefore, that he would welcome the additional measures that we have taken in the autumn statement to support small businesses by, for example, continuing the small business rates relief holiday for another 12 months. The additional increases in capital allowances, which are particularly directed towards small and medium-sized enterprises, are precisely designed to encourage small businesses to invest.

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

Will the Minister give way?

[Danny Alexander]

I want to make some progress first. I know that many Members want to speak and there is already a time limit on speeches.

The forecasts are those of the independent Office for Budget Responsibility, and I do not think that the Labour party’s trend of attacking it is welcome.

[Gavin Shuker]

Will the Minister confirm that, under any measure, this Conservative-led Government will borrow more in the five years of this Parliament than Labour did in 13 years?

[Danny Alexander]

It is transparent from the figures presented by the Office for Budget Responsibility that borrowing is higher than it forecast in 2010. If the hon. Gentleman was being fair-minded, he would also draw the House’s attention to the analysis by the Institute for Fiscal Studies, which suggests that if we had continued with the path of spending set out by the previous Chancellor, we would be borrowing a further £200 billion —something that the country can ill afford.

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

The OBR, which is independent and gives interesting forecasts, has said that the unemployment count is likely to rise in each of the next four years. Will the right hon. Gentleman explain why that is?

[Danny Alexander]

The OBR has forecast that unemployment will be slightly higher next year and then fall in subsequent years. It also forecasts a rise in employment over that period. If the hon. Lady is looking for variances between reality and the OBR’s previous forecasts, it is fair to say that unemployment is now considerably lower than the OBR forecast a year ago. I hope that she welcomes that fact.

It is true that the OBR has lowered its growth forecasts and that the recovery is slower than we would have liked, but we are on the right road and the announcements that we made last week will help the country to make further progress along it. I should add that the OBR does not attribute the slower growth to the Government’s fiscal policy, but to external pressures from the eurozone and other parts of the world, and to the long-term impact of the financial crisis, especially on our banking system. If the Labour party wants to accept the OBR’s figures, it also needs to accept its analysis.

As the House knows, savings had to be found and we have decided to reduce departmental resource budgets by 1% next year and 2% the year after. We are confident that that will not impact heavily on front-line services. For example, according to the recently published “Digital Efficiency Report”, if all Departments continued to move their transactional services online and became digital by default, we could save £1.2 billion over the next two years. If all Departments moved to the property occupation benchmark of 10 square metres per person, they could save a further £300 million each year.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

Does the right hon. Gentleman agree with the following analysis? Two and a half years ago, he asked for five years to balance the books, but without a plan for jobs and growth, he needs another five years. He still does not have a plan for jobs and growth, so it will always be five years.

[Danny Alexander]

No, I do not agree with the hon. Lady’s analysis.

There are still savings to be made in day-to-day administration costs. I am confident that the civil service can continue to produce more for less and provide excellent value for money to the public.

The welfare system makes up more than £200 billion of public spending and cannot be immune from the effort to deal with the deficit. As a result of the financial pressures that we are facing, we have had to take the difficult decision that we can uprate working-age benefits by only 1% in the coming three years. That figure represents a rise each year, but it will be below the rate of inflation. It is not as high as some may have expected, but it is what the country can afford. That is a tough choice, but an even-handed one, and it avoids some of the more punitive proposals that have been floated in recent months.

Most benefit claimants would love to work and are trying their best to find a job. However, we need to recognise that in-work incomes have risen at half the rate of benefits since the financial crisis. Those who are in work will be better off thanks to our income tax cuts. When we are increasing public sector pay by only 1%, it would simply not be fair to increase the benefits of those who are out of work at a higher rate than those we employ to work for us.

Even while making those cuts, we have taken steps to protect those who are most in need. That is why disability living allowance and other benefits specifically for the most disabled and their carers will continue to increase in line with inflation. It is also why the basic state pension will increase by 2.5% next April, which is higher than either earnings or prices, honouring our commitment to the triple lock. The application of the triple lock means that there will be a better rise in the basic state pension than pensioners have seen before. Pensioners will see a cash increase of £2.70 a week in the basic state pension in 2013-14.

While we are protecting those in need, it is only right that we ask the most from those who earn the most. That is why the higher rate threshold for personal income tax will also be uprated by only 1% in 2014-15 and 2015-16. It is also why the annual allowance for pensions tax relief will be reduced from £50,000 to £40,000, and the lifetime allowance from £1.5 million to £1.25 million. That will raise more than £1 billion a year by the end of the period and is something for which I, for one, have argued for quite some time. The savings from Whitehall, welfare and the wealthy, and the targeted tax rises, are helping to cut the deficit in the medium term and to boost growth now.

Our capital spending plan will see £5 billion switched from current spending to investment in infrastructure, providing a better connected UK on roads, on rails and online. We will provide £350 million for the regional growth fund, enabling it to continue its success in creating jobs throughout the country. We are rolling out rural broadband across the country and have announced £50 million for the second wave of super-connected cities across the UK from Portsmouth to Perth, via Newport and Northern Ireland.

We have announced funding for a number of road building and maintenance projects. We will be dualling the A30 in Cornwall—an improvement that has long been campaigned for, not least by my hon. Friend the Member for North Cornwall (Dan Rogerson), who is in his place. I congratulate him on his efforts. We will also bring the A1 up to motorway standard all the way to Newcastle. I have been made aware of the need to improve that road north of Newcastle, not least by my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith), and have asked my right hon. Friend the Secretary of State for Transport to work up plans for potential improvements north of Newcastle.

The capital projects will not only create jobs in the short term, but crucially will raise the quality of the country’s infrastructure and our growth potential in the medium term. Labour Members may be interested to know that during the previous Government’s time in office, we fell from eighth to 33rd in the global league table for the quality of infrastructure. That is not good enough and is why John Cridland of the CBI said last week that it is

“absolutely right to shift the focus from current to capital spending to boost jobs today and the UK’s competitiveness tomorrow.”

As colleagues will know, our plans will mean that as a share of the economy, the investment that the Government are putting forward in this Parliament is greater than the average over Labour’s period in office. These investments, not just in roads, but in schools, colleges and flood defences, can only serve to help our businesses in the future.

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

I am pleased by the Chief Secretary’s recent conversion to investing in capital projects, such as building new schools. Now is perhaps an opportune time for him to apologise to the schools in my constituency that had their Building Schools for the Future funding taken away. Can they expect it back?

[Danny Alexander]

I have not had a recent conversion to capital expenditure. The hon. Gentleman will remember that in the spending review in 2010, we committed over £2 billion a year more to capital expenditure than had been set out in the previous Government’s plans. In the autumn statement last year we added £5 billion and in this year’s autumn statement we added another £5 billion for a range of projects. I hope that he will recognise that the Building Schools for the Future programme was expensive and bureaucratic. The proposals that have been brought forward by the Department for Education are a better and more cost-effective way to meet at least some of the needs in the school system in this country.

[Mr Stewart Jackson (Peterborough) (Con)]

On the subject of apologies, will my right hon. Friend invite Her Majesty’s loyal Opposition to apologise for the debt millstone of the private finance initiative in the national health service, which amounts to more than £63 billion? The right hon. Member for Morley and Outwood (Ed Balls) is aware of that, because it was all about hiding the debt off balance sheet and ensuring that our children struggle with it. [Interruption.]

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I am sorry to interrupt the hon. Gentleman. We will not have shouting across the Chamber and we will not have wagging of fingers, even from a Whip. Have you finished, Mr Jackson?

[Mr Jackson]

I am sure that my right hon. Friend will agree with my analysis of PFI.

[Danny Alexander]

My hon. Friend adds another item to the long list of items for which the people of this country deserve an apology from the Labour party. We have had no such apology yet, but we live in hope. Perhaps the shadow Chief Secretary will begin her speech with an apology for the many and various mistakes. [Interruption.]

[Madam Deputy Speaker]

Order. Let us try just once more. By Whips, I mean Government Whips as well as Opposition Whips. Government Whips are not to shout across the Chamber. Is that clear?

[Greg Hands (Chelsea and Fulham) (Con)]

indicated assent.

[Madam Deputy Speaker]

Good.

[Danny Alexander]

Thank you, Madam Deputy Speaker. I hope this debate will be conducted in a calm manner as befits the seriousness of the issues we are discussing.

[Frank Dobson (Holborn and St Pancras) (Lab)]

Can the Chief Secretary to the Treasury tell the House of a single Tory or Liberal Democrat MP who objected to a PFI hospital or school being built in their constituency under the Labour Government?

[Danny Alexander]

Not off the top of my head, but I dare say that hon. Members on the Government Benches can speak for themselves. I have, however, heard a number of objections to the structure of PFI contracts. In fairness to the right hon. Gentleman, the PF2 model is not designed to abolish PFI and can play an important role in developing new projects. We want to strip away some of the most egregious features such as facilities management costs—a couple of years ago the Treasury was going to be charged several thousand pounds by the PFI holder for putting up a Christmas tree. That issue was resolved but it is a small example of the excessive costs involved. In Treasury questions earlier today the Chancellor gave an example concerning the cost of changing a light bulb in a hospital in Cumbria.

I am sure that on reflection the right hon. Member for Holborn and St Pancras (Frank Dobson) would agree that reforming PFI to strip out some unnecessary features such as facilities management costs and so on, and having a simpler, clearer model in which the taxpayer can share in any gains, is a big improvement. I hope that when he has looked at what is being proposed, he will welcome it.

[Mr Stewart Jackson]

My right hon. Friend may wish to comment on the fact that another example of Labour prudence was spending £250 million on private contractors in the NHS for operations that were never carried out.

[Danny Alexander]

The Government are trying to move to a system of payment by results. Too often the model of spending under the previous Government was payment for absolutely no results—[Interruption.] I will make some progress, despite the shouting from the second row of the Opposition Benches.

The Government know how important businesses are to growth, and we are taking the necessary steps so that businesses can increase employment and exports and lead the country back to prosperity. That is why we have announced, among other things, an extension of the small business rate relief scheme that will benefit over 500,000 small businesses. The extension of empty property rate relief to newly built commercial property has been called for by Members across the House, and I hope it will enable commercial property development to move forward in many parts of the country that have recently been blighted.

We have announced increased funding for UK Trade and Investment to support the growth in exports, particularly in emerging markets, alongside a substantial new trade finance scheme that will significantly help medium-sized exporters looking to win new markets across the world. Most importantly, we have announced an increase in the annual investment allowance limit from £25,000 to £250,000 for a time-limited period of two years—a capital allowance relief that I hope will send a signal to medium-sized manufacturers that now is the best time to invest in new plant and machinery. I pay particular tribute to my hon. Friend the Member for Burnley (Gordon Birtwistle) and the Liberal Democrat campaign for manufacturing that he has set up for arguing so cogently and strongly for that measure.

The Government have also announced a further drop in corporation tax to encourage investment in the United Kingdom. From April 2014 the rate in Britain will stand at just 21%—significantly lower than current levels in France, Germany or the USA. We want the world to know that the United Kingdom is open for business and that companies that invest and employ people in this country are very welcome. At the same time, however, Her Majesty’s Revenue and Customs is also receiving a further £77 million in this spending review period to ensure that where taxes should be paid, they are paid—I am sure that even the shadow Chancellor welcomes that. That increase, on top of the £900 million I announced at the spending review, will mean that HMRC will bring in total additional revenues of £9 billion each year by the end of 2014-15.

Our agreement with Switzerland to recover previously unpaid UK tax is expected to bring in a further £5 billion over the next six years. We have signed a ground-breaking agreement with the United States on automatic exchange of information, setting a new standard in tax transparency. Today we are publishing the draft Finance Bill for 2013, which confirms the introduction of the UK’s first ever general anti-abuse rule in the tax system. That measure will act as a significant deterrent to all those engaged in abusive tax avoidance. It could have been introduced at any point in Labour’s 13 years in office, but it was not. That is an example of the failure to act on tax avoidance and evasion that we saw during that time. This is not just a matter of finance; it is a matter of principle. Millions of small businesses and tens of millions of people across the UK pay the proper amount of tax, day in, day out. Ensuring that people cannot avoid our tax system is a priority for the Government so that the burden can be spread fairly.

There has been a lot of recent interest in this area, particularly with regard to the tax payments of specific multinational companies. I will not comment on individual cases but I am sure that all businesses, large or small, will take note of the reaction of the British people to recent events. Everyone understands that we must all work hard to get the economy going again and that businesses will play a key role in ensuring that growth. The reaction also shows that people believe that those at the top who earn or profit the most should also contribute the most. I agree with that—yes, we want a stronger economy, but we also want a fairer society.

Measures announced by the coalition last week will help millions of people across the country who are working hard. I am proud that we will be increasing the income tax personal allowance by a further £235 next April. That will mean that 2.2 million people have been taken out of tax by this Government, leading to around 20 million people being nearly £600 a year better off from next April. That is £50 a month extra in people’s pockets as a result of the Government’s measures on income tax and is, quite simply, the biggest income tax cut for working people in a generation—from the front page of the Liberal Democrat manifesto to the pockets of 24 million working people.

I am also proud that the coalition Government are cancelling the fuel duty increase that was planned for next month.

[Nic Dakin (Scunthorpe) (Lab)]

Will the Chief Secretary to the Treasury remind the House which page of the Liberal Democrat manifesto the increase in VAT was on?

[Danny Alexander]

No, because it was not there. That was one of a number of difficult choices that we as a Government have had to make to clean up the mess in the British economy that was left by the hon. Gentleman and his colleagues.

[Emily Thornberry]

rose—

[Danny Alexander]

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

[Emily Thornberry]

Am I right in remembering—I think it was on page 14 of the Liberal Democrat manifesto—a pledge to cut 7,000 tax inspectors?

[Danny Alexander]

The hon. Lady will know that HMRC has had to make efficiency savings along with the rest of the Government. It had to make savings when the Labour party was in office and it continues to have to do that. We have increased investment specifically in the part of HMRC focused on tackling tax avoidance and evasion—an area that saw underinvestment during Labour’s time in office. As a result, 2,000 extra specialist tax inspectors—[Interruption.] My hon. Friend the Exchequer Secretary to the Treasury brings me up to date and tells me that the figure is 2,500. Those inspectors are specifically focused on tackling tax avoidance in the affluence unit and those units that focus on offshore companies and all other tax avoidance schemes, and on implementing the anti-avoidance rule.

[Dan Rogerson (North Cornwall) (LD)]

Will my hon. Friend give way?

[Danny Alexander]

I will give way one more time and then I will move on.

[Dan Rogerson]

I am grateful to my right hon. Friend, not least for his response to Cornwall’s call for investment in the A30 infrastructure project and his earlier kind words. Does he recall that when in opposition we had to watch the then Labour Government cutting and closing HMRC offices in a lot of regions around the country, and putting on the scrap heap a lot of skilled tax inspectors, the benefit of whose experience we sadly no longer have?

[Danny Alexander]

As always, my hon. Friend makes a good point. We need people with experience in compliance and enforcement, and we are expanding employment in those areas. That is the right thing to do and it should have been done a long time ago.

The previous Government set out plans to increase fuel duty above inflation last year, this year and again in 2013 and 2014. However, as a result of repeated action by this Government, pump prices will remain at least 10p per litre lower for the remainder of this Parliament than they would have been had the Labour party remained in government.

[Rachel Reeves (Leeds West) (Lab)]

Slide 24 of the report by the Institute for Fiscal Studies shows that, including fuel duty changes and the changes to the personal allowance and tax credits, a one-earner couple with two children will be £534 worse off on average as a result of the changes in the autumn statement. Will the right hon. Gentleman confirm that?

[Danny Alexander]

No, I cannot confirm that. I do not recognise those figures—[Interruption.] Labour Members are waving bits of paper—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. The shadow Chancellor absolutely knows that he is not to throw papers across the Dispatch Box. It is no good him blaming his hon. Friend the Member for Leeds West (Rachel Reeves) for following his example. That will not happen again.

[Danny Alexander]

That is another way in which the shadow Chancellor is setting a bad example. Littering in the Chamber is not to be encouraged, and I am glad you, Madam Deputy Speaker, took a tough line on it.

The Government’s fuel duty measures will keep money in the pockets of millions of fathers on the school run or mothers driving to the office. As a highland MP, I know the burden that fuel costs can place on people in remote areas. That is why we are piloting the fuel rebate scheme for motorists on the Scottish islands and the Isles of Scilly. I am keen to push for EU approval for an extension of the scheme to other remote parts of the country that display similar characteristics. Of course, that will be a long and difficult job, but I am determined to gather evidence to support the case.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

The right hon. Gentleman will know that the rebate scheme has been a success. When will mainland areas of Scotland be included? There are already such schemes in continental mainland areas, so why is there a delay in its introduction in mainland Scotland? Areas such as Caithness, Sutherland and Argyll need it—and need it quick.

[Danny Alexander]

I am grateful for the hon. Gentleman’s endorsement of the current scheme as a success. I hope he will spread the word to his constituents and ensure that the credit goes to the appropriate place.

To win the argument at European level for an extension of the scheme, we must pass the same test and provide the same evidence to justify including such remote areas. We are working with local authorities in various parts of the country to gather evidence to support our case. As the hon. Gentleman will recall, we must take that evidence to the European Commission. If it approves our proposal, it must in turn be approved by all 27 EU member states. There are a number of hurdles and a significant process to engage in to gather evidence.

[Mr MacNeil]

rose—

[Danny Alexander]

If the hon. Gentleman will forgive me, I will make progress. Many hon. Members wish to speak in the debate.

There has been good engagement between the Treasury and the FairFuelUK campaign, which has pressed its case very strongly. I welcome its engagement.

The Government are on the road to cutting the deficit we inherited, but we are also building a fairer society. The distributional analysis that we publish shows that that continues to be the case, despite the tough choices we have made. It is worth pointing out that, under the previous Government, the Treasury never published detailed distributional analyses of its decisions, but under this Government the Treasury publishes them at every fiscal event. The analyses show that the top 20% of households continue to make the greatest contribution. In fact, the cumulative impact since the June 2010 Budget of tax, tax credit and benefit reforms shows that households in the top 10% see the greatest reduction in their income, both in cash terms and as a percentage of net income or expenditure.

[Alex Cunningham (Stockton North) (Lab)]

People in my constituency who cannot afford a car and who earn much less than most others tell me that the inflation rate on the things they have to buy is several times greater than the headline figure, which includes goods that they would just love to be able to buy. When will the Government recognise that inflation for the poorest people in our society is much higher than it is for the rest of us, and do something real? The Government have done some things, but when will they do something that makes a difference to those people instead of cutting their food intake, which is exactly what is happening?

[Danny Alexander]

A range of goods is included in the consumer prices index of inflation, which the Office for National Statistics constructs—it is an independent body and is responsible for constructing those baskets of goods. Some items go up in price faster than others. We are doing what we can and what the country can afford, but our priority must be to get this country back to a position in which we can pay our way in the world. Nothing would hurt the poorest in society more than losing control of our public finances, which I suspect would happen if the Labour party ever again gained the reins of power.

The quad discussed introducing a mansion tax, but a fair tax on homes worth more than £2 million was not agreed. However, the good news is that we have established a sensible, workable plan for raising additional revenues from the highest-value properties. If that does not happen in this Government’s term of office, it will be in the Liberal Democrat manifesto for the next election.

[Emily Thornberry]

Hooray!

[Danny Alexander]

I am grateful for the hon. Lady’s support—I take support from wherever it comes these days.

The Government have taken sensible further steps to restrict pensions tax relief. The decisions the Government are taking are not easy, but as a country we must live within our means. The scale of the problems this country faces means that the period of fiscal restraint must continue for longer. That is why the Government will shortly set out spending plans for the financial year 2015-16. I will carry out a spending round in the first six months of next year to set those budgets and ensure that we continue to build a sensible long-term plan for the country’s finances. We will need to find an extra £10 billion of savings from Departments in the spending round. That will mean more difficult choices, but they are also responsible choices as the coalition continues to work to restore stability to the UK economy.

We have heard this afternoon and in Question Time that some criticise the autumn statement. The division in British politics is very clear. Government Members live in the real world. We understand that times are tough and that there is no endless supply of money, and recognise that the right and responsible action is to take the difficult decisions to ensure we can live within our means. Labour Members appear to live in a fantasy world. They still believe that they ended boom and bust, despite the events of the past five years. They still refuse to apologise for the mess they created and fail to be honest with the British people about the tough decisions that any party in government would have to take.

It will come as no surprise to hon. Members that I will not take advice from the Labour party, which wrecked our economy because it allowed the country to become too dependent on revenues from the City of London and paid too little attention to the rest of the country. Labour insulted pensioners up and down the country by increasing the basic state pension by 75p, and insulted 5 million of the lowest-paid workers by increasing their income tax bill with the abolition of the 10p rate.

[Mr MacNeil]

rose—

[Danny Alexander]

I will not give way—I will finish my speech shortly.

The Labour party thought it was right that private equity managers should pay a lower rate of tax on their earnings than the person who cleaned their office, and insulted hard-working people and businesses up and down the country by failing to crack down on tax avoidance and evasion in 13 years in office.

This Government face some of the most serious decisions we have had to make in our recent history. We are recovering from a decade of debt, we inherited the largest deficit since the second world war, and we have had to face a multitude of problems abroad. However, we continue to take simple, sensible steps towards recovery. We continue to build a strong, sustainable economy and to build a fair society. I commend the autumn statement to the House.

15:17

[Rachel Reeves (Leeds West) (Lab)]

The Opposition welcome this opportunity to debate the state of the economy, the Chancellor’s record over the past two and a half years and the measures he has introduced in the autumn statement. Last Wednesday he came to the House and admitted that he had failed—failed to get the economy moving, failed to meet his borrowing targets and failed to listen to our advice and change course.

First, though, let us go back to the heady first months of this coalition Government—when they were still getting on, when they were fraternising in the rose garden. In the 2010 spending review, the Chancellor decided to implement a programme of unprecedented fiscal contraction. We said it was not the right time to cut demand, given that the economy was only just recovering from the global financial crisis, and that the cuts went too far and were being implemented too fast.

[Kwasi Kwarteng (Spelthorne) (Con)]

Is it not true that we are actually spending more than we were two years ago and that no real cuts have been made? What would the hon. Lady like to say about that?

[Rachel Reeves]

There is one particular area where the Government are spending more money, and that is welfare, on which they are spending £13.6 billion more during this Parliament, because more people are out of work or in part-time work and so receiving more tax credits. That is a sign of the Government’s failure, not of their success.

In the 24 months since the spending review, where have we got to? How much progress has been made? Is the Chancellor’s plan working? The verdict is in. We now know that borrowing and debt figures have been revised up for this year, for next year and for every year of this Parliament. The Government are borrowing £212 billion more than they planned. They said that five years of austerity would be difficult, but that it was necessary to support our economy, and they said that it might hurt, but that it would work. Well, it has not worked, but it has hurt, and we are no closer to clearing our deficit than we were two years ago. [Interruption.]

[Hon. Members]

Bye, bye!

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Where is the hon. Member for Spelthorne (Kwasi Kwarteng) going? Excuse me. He has just intervened on a debate. Normally, one stays for a debate that one intervenes in.

[Rachel Reeves]

Thank you, Madam Deputy Speaker. Perhaps the hon. Gentleman did not like the answer to his intervention. Fair enough—I would not be pleased to hear that my Government were spending an extra £14 billion on welfare because of their failure.

This year the economy will shrink by 0.1%. The Chancellor’s two gap years—two years of painful cuts, more borrowing and no growth—are a shocking indictment of a failed plan. He stands up and tells the nation that the British economy is healing and that he is equipping Britain to win in the global race, yet over the 24 months since the spending review the UK economy has grown by just 0.6%. In the same period, the US economy grew by 4.1% and the German economy by 3.6%. Helpfully, the International Monetary Fund’s world economic outlook data allow us to put together a league table of 184 countries based on total growth between 2010 and 2012, so we can now analyse our performance in the global race that he describes with this Government at the helm. Of those 184 countries, where do Members think Britain comes? We are 158th. It is a relegation battle. We are behind Togo and Namibia, Albania and Macedonia, but there is no need to worry—apparently we are hot on the heels of Mali, Samoa and Fiji! We are the worst performing G7 country, apart from Italy. In the global race, Britain is well and truly in the slow lane with this Chancellor at the helm.

[Mr MacNeil]

Does the hon. Lady agree that the context she has rightly given the House is the reason the Scottish referendum on independence will be won in 2014?

[Rachel Reeves]

I will let the good people of Scotland make their decision when the time comes, but I believe that we are stronger together—stronger united than divided.

The worst aspect of the Chancellor’s two wasted years is the long-term damage being done to our economy. Every month of inaction, every failed initiative and every growth forecast downgraded is another hammer blow to the work force, our businesses and our national infrastructure. The skills and motivation of British workers are going to waste, with one in three of our 2.5 million unemployed out of work for more than a year and 3 million of those with jobs wanting to work more hours, but unable to find the work. In reality, we are falling behind, and the Chancellor has nobody to blame—not the snow, not the royal wedding, not the eurozone.

I agree with the chief economist of UBS, George Magnus—[Interruption.] [Hon. Members: “He’s gone!”] Obviously the hon. Member for Spelthorne (Kwasi Kwarteng) does not want to hear what the chief economist of UBS has to say. I will send him a copy of Hansard. George Magnus said that the Chancellor’s excuse

“falls under the category of ‘Sorry Miss, the dog ate my homework’”.

He also said that

“the problem I think that the Chancellor has with the eurozone is that we are just like them. We have this single-minded focus on austerity and the lack of growth is basically crippling our ability to meet our fiscal targets.”

I agree that the Chancellor and his economic plan are to blame. Two and a half years of austerity, two and a half years of this Chancellor, and what do we have to show for it? We have no growth, more borrowing and a tragic waste of time. [Interruption.] It is good to see the hon. Member for Spelthorne in his place again.

A year ago the IMF warned:

“If activity were to undershoot current expectations and risk a period of stagnation or contraction, countries that face historically low yields (for example…the United Kingdom) should also consider delaying some of their planned consolidation.”

At that time the IMF was predicting 1.6% growth this year; now the OBR tells us that the economy is more likely to shrink by 1.6% this year.

[Gordon Birtwistle (Burnley) (LD)]

Would the hon. Lady like to comment on the 6.4% collapse in GDP in 2008, and at the end of her speech will she enlighten us all on what her economic policy will be?

[Rachel Reeves]

Like other countries around the world, our GDP contracted during the global financial crisis. Germany and the United States have managed to recover that growth; we have not, because our Chancellor chose a different course—austerity—when jobs and growth are needed to get the economy moving and the deficit down. Unlike this Government, we recognise that we need to take action to stimulate jobs and growth. That is why we have said there should be a national insurance holiday for small businesses taking on new workers and a bank bonus tax to fund a programme of youth jobs, and that we should genuinely bring forward infrastructure investment and temporarily cut VAT to 17.5%. Those are the policies that would get the economy moving, get jobs back in our economy and help to bring the deficit down in a sustainable way.

[Andrew Gwynne]

The Government have placed great emphasis on the views of the Office for Budget Responsibility. My hon. Friend will be aware from reports in today’s media that Robert Chote of the OBR has suggested that the UK need not fear losing its triple A rating. Does she see us losing our triple A rating as a ringing endorsement of this Government’s economic policies?

[Rachel Reeves]

Let us see what the rating agencies have to say in the new year. Of course we are on negative watch, but it was not we who said the rating agencies should be the be-all and end-all. Indeed, they were giving Lehman Brothers a triple A rating until that company crashed and almost took the global economy with it. It was the Chancellor who said that a triple A rating would be the watchword of his chancellorship, so if it were to go, it would be a damning indictment of what this Government have presided over.

What was the Government’s response to all the bad economic news last Wednesday? Let us give credit where it is due. The Chancellor now agrees with us that we should not go ahead with the fuel duty increase in January; he agrees with us that introducing regional pay in our public services would be costly and impractical; he agreed with us that we should reverse the relaxation of restrictions on pension tax relief for the very rich; he agreed with us that it was a mistake to implement deep cuts to capital programmes such as Building Schools for the Future; and he agreed with us that cutting investment allowances risked damaging incentives for long-term wealth creation. We propose the creation of a British investment bank to support small businesses, and the Chancellor has produced a pale imitation of that, but I am afraid that all these measures are too little, too late—robbing Peter to pay Paul. Smoke and mirrors will not hide the lack of a real, purposeful growth strategy.

The chief executive of British Airways summed it up yesterday when he said:

“I don’t see an agenda for growth.”

I agree, and so does the Office for Budget Responsibility. Taking into account all the Government’s measures from the autumn statement, the OBR has concluded that they will add just 0.1% to UK GDP over the next five years. The economy is shrinking this year. Growth next year—forecast at 2.9% just two years ago—is now forecast at just 1.2%. Indeed, we have seen downgrades not just this year and next, but the year after.

[Charlie Elphicke (Dover) (Con)]

Why does the Institute for Fiscal Studies say that there would be £200 billion more borrowing under Labour’s plans?

[Rachel Reeves]

There is £212 billion more borrowing under this Government’s plans.

Families will continue to feel the Chancellor’s failure in their wallets and their homes. Average earnings will not outpace inflation until the second quarter of 2014. It will take even longer for families to recover the loss to their living standards that this Government’s economic failure has cost them.

The lack of growth and the increase in borrowing under this Chancellor have meant that he has had to come back and ask the country for more. And who are the Government asking to bear the brunt of the past two and a half years of failure? Luckily, Andrew Neil asked the Chief Secretary to the Treasury that question on BBC1 last Wednesday. He asked him whether

“those who are on ordinary incomes are suffering a lot more than most”.

The Chief Secretary to the Treasury replied: “That is absolutely right.” That was the only sense he spoke all day. It is no surprise that he is increasingly described as the Conservatives’ favourite Liberal Democrat in the Cabinet. Apparently, they regard him as easier to deal with and more persuadable. The Chancellor’s favourite Liberal Democrat has finally told the country what we have known for a long time: that this Government are asking ordinary families to foot the bill for their economic mess.

The facts speak for themselves. Analysis by the House of Commons Library shows that a one-earner family on £20,000 with two children will lose £279 a year from next April. Slide 24 of the Institute for Fiscal Studies report shows that a two-income family with children will lose £534 as a result of the changes, including all the measures in the autumn statement. Slide 17 of the IFS assessment shows that middle and lower earners will lose most as a result of the autumn statement, with the poorest 40% losing more than the richest 10%. How can that be fair? And this is all to pay for the Government’s £212 billion of extra borrowing. They are hurting those who are trying to get on and do the best for themselves and their families. That cannot be fair.

Mothers across the country will be worried about the real-terms cut in maternity pay, worth £180, that the Chancellor announced last Wednesday. That comes on top of other deep cuts that will hit pregnant women on low incomes, such as the abolished Sure Start maternity allowance and the health in pregnancy grant. This is further proof that the Government are out of touch and simply do not understand the pressures families are facing, day in, day out.

[Gavin Shuker]

What assessment has my hon. Friend made of the impact of the changes, particularly those relating to people on low incomes, on the overall growth of the economy? It strikes me that they are exactly the people we ought to be encouraging to spend right now.

[Rachel Reeves]

My hon. Friend is right. It is a false economy to cut the incomes of the lowest paid, because they will have less money to spend in their communities. What really matters, however, is the real impact that the changes will have on their living standards and those of their children.

The Resolution Foundation has said that 60% of the cuts to benefits and tax credits will hit working households—that is, those who are trying to get on in life. Given that the welfare bill is forecast to be £13.6 billion higher in this Parliament than the Chancellor thought it would be—another target tossed aside—perhaps it is time for the Government to concentrate on getting people back to work in order to reduce the welfare bill. In February this year, the former employment Minister, now the Secretary of State for Justice, said:

“The Work Programme is doing a good job and is on track. It is helping long-term unemployed people into work.”

And only today the Chief Secretary to the Treasury said that the scheme was going well, but we now know that for every 100 people who are unemployed, the programme has seen only two people back into work. If that is the Government’s idea of a programme that is on track, I would hate to see one that is not.

It is not surprising that OBR documents released last week showed that the number of people claiming jobseeker’s allowance was set to rise from 1.58 million this year to 1.69 million in 2014, and that the number forecast for 2016 had been revised up by 340,000. That will be a third of a million more people receiving JSA compared with the number forecast in March this year.

Let us not forget that the Prime Minister dismissed the last Labour Government’s future jobs fund, which helped 120,000 young people back into work, yet an impact analysis for the Department for Work and Pensions found that we all gained £7,750 per participant through wages, increased tax receipts and reduced benefit payments. This Government ditched a plan that worked for one that has failed, so we will not be lectured by them on welfare or on job creation.

At the same time, one group of people continue to gain from the Chancellor and the Chief Secretary’s policies. If someone earns more than £1 million a year, next year they will receive an average tax cut worth £107,000. It beggars belief that while taking from families on low incomes with one hand, the Chancellor gives to millionaires with the other—there is one rule for the very richest, another for everyone else.

[Charlie Elphicke]

The hon. Lady talks about the Government favouring the richest, but if we look at the distributional impact of tax and benefit reforms on the IFS slides to which she has referred, we can see very clearly that the richest 10% lose £260 in net income whereas everyone else is far less disadvantaged. Does she not agree that the richest are shouldering more of the burden?

[Rachel Reeves]

If the hon. Gentleman thinks that those on average incomes being worse off by £534 year is not very much, it is up to him to justify that to the people of Dover and Deal. Page 17 of the IFS analysis shows that the poorest 10% are 1.6% worse off, the second decile are 1.7% worse off, the third 1.3%, the fourth 0.6% and the top only 0.5%. The four lowest deciles—those on the lowest and modest incomes—are being hit hardest by the changes in the autumn statement, while those at the top get off relatively unscathed. That is the reality and if he wants to put that slide in his leaflets in Dover and explain it to his constituents, I am sure that they would appreciate it.

As I have said, it is one rule for the richest and another for everyone else. The poor are expected to work harder or else they will be made poorer, but apparently the rich will work harder only if they are made richer. It is the same old out-of-touch Tories and their Liberal Democrat accomplices.

There are some who think that the Chancellor is a master of political strategy; his autumn statement was clearly delicately put together. He said that borrowing was down this year, but that is only by using money from the sale of 4G contracts, which has yet to happen. He said that his cuts were targeting the workshy, when in reality they hit working people. He said that austerity was necessary for us to compete with our global competitors when, after two years of austerity, we have fallen further behind. He lived up to his reputation as a part-time Chancellor, because it was a statement that worried more about tomorrow’s headlines than the economic reality. For all of the Chancellor’s cynical political games and for all the smoke and mirrors, the real story is being felt across the country. Living standards are being squeezed, long-term unemployment is rising, borrowing is up, growth is flatlining: it is a story of a failed Chancellor and his Lib Dem accomplice desperately trying to find a way out of the mess their economic failure has got them into.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I remind hon. Members that we will start with an eight-minute time limit on speeches.

15:37

[David Rutley (Macclesfield) (Con)]

There is one form of climate change that would be welcomed on both sides of the House, and that is the creation of a climate in which enterprise can thrive and flourish. The autumn statement reconfirmed that this Government are committed to ensuring that those conditions are in place and have made positive strides in that direction.

The statement builds on the sound economic platform that has been in place for some time now. The deficit has been cut by a quarter and because of the tough action that had to be taken, the cost of borrowing is at historically low levels. What is more, 1.2 million jobs have been created in the private sector—something that was not mentioned by the hon. Member for Leeds West (Rachel Reeves)—and more jobs are being created in the private sector than are being lost in the public sector. That is true in the north-west, where I live, and across the whole country.

Last week’s policy announcements were well received by businesses and it is easy to see why. There was a further reduction in corporation tax from 28% to 21% in 2014 and a rise in the additional investment allowance from £25,000 to a whopping £255,000 for two years. That shows that, under this Government, Britain is definitely open for business.

The Government’s strategy for enterprise has strong foundations, much stronger than the so-called industrial strategies that have been debated for decades. Between the end of the second world war and the 1970s, Governments in this country and France tried to pick winners only to fail spectacularly. West Germany and the reunified Germany were much more resistant to that temptation. As Sir Geoffrey Owen of the London School of Economics recently wrote:

“The German economic miracle that began in the 1950s was not the result of industrial policy, but underpinned by a broader set of policies of which the promotion of competition and openness to foreign trade were probably the most important.”

He went on to advocate a “horizontal” approach in which competition is promoted, innovation is encouraged and industrial change is positively facilitated—as this Government are doing.

Hon. Members may have noticed how Sweden, which was so bedevilled by high taxes, high spending and massive inflation in the 1980s has coped well with the current global economic challenges. Rather than picking winners, the Swedish Government, who have driven forward a sector-by-sector approach, focused on deregulation, and that has spurred on their success. They have identified ways to deregulate banking, transport, power production, telecommunications, postal services and even food retailing.

Sweden’s Anders Borg is not the most conventional of Finance Ministers. While I would not advise the Chief Secretary to follow Mr Borg’s lead in sporting a ponytail and an earring, I think we can learn from Sweden’s approach. In a recent speech, Mr Borg explained:

“There was a very, very broad-based deregulation. Today, if you go to the OECD, going for growth report, they are looking at 8 different sectors, 6 out of those…have less regulatory burden than the US. So we have gone from being one of the heaviest regulated economies of Europe to one of the least regulated when it comes to product markets.”

As a result, Sweden’s economy is going from strength to strength.

In the UK, in “The Plan for Growth” published in March 2011, the Government set out actions to clear pathways in a number of important key sectors, including advanced manufacturing, digital and creative sectors and, importantly for Macclesfield and north-east Cheshire, life sciences. Both the Macclesfield and Tatton constituencies are home to AstraZeneca’s largest operations in the UK, which account for an amazing 2% of UK exports. I am delighted that, working together with my constituency neighbour the Chancellor, Cheshire East council and AstraZeneca, we were able to secure funding from the regional growth fund to create a bioscience park at the Alderley Park site, which is a positive step for the highly skilled work force in the area and a huge priority for the local economy.

As with Sweden, deregulation is a critical step for our enterprise agenda. Sadly, under the last Government, Britain fell from fourth to 89th in the World Economic Forum’s league table for countries with the lowest burden of regulation. Their lasting legacy was not just the deficit, as it was also the burden of regulation. I am proud that, under this Government, we have been able to claw back 17 places in those rankings—but we are not complacent. The Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon) is leading the deregulatory charge. The autumn statement has built on that momentum and taken the deregulatory agenda to a much higher level. The innovative one-in, one-out strategy is being replaced with a one-in, two-out approach from January. In the spring, the second phase of the red tape challenge will be launched. This will give businesses another chance to highlight those regulations that are holding them back from delivering more for the economy.

The Government’s continuing commitment, refreshed with the energy of a new ministerial team, will be vital in making progress in engaging Whitehall Departments in this critical task. Again, there are lessons to be learned from overseas—whether it be from New Zealand, the Netherlands or even from Bosnia. My favourite example is looking at what has been happening with the “Bulldozer” deregulation initiative in Bosnia, which was particularly progressive. After the Bosnian war, the bulldozer programme was instigated by no less than Paddy Ashdown—one of our coalition colleagues—who was serving as a high-level diplomat in Bosnia at the time. The programme identified 50 roadblocks or regulations that were holding back the economy, and changes were pushed through in 150 days. The bulldozer committee, working with local entrepreneurs and businesses prioritised the areas for reform and worked with the Government to see them through.

I think that we can learn from others who have advocated intervention on behalf of business. I am not usually favourable towards that, but I think we can take a lesson from the Bosnian bulldozer approach, breaking down barriers to business—not intervening, but breaking down barriers before breakfast, before lunch, before tea and before dinner. I am pleased that the Government are taking a clear lead in that direction.

While the present Government are actively proceeding with their strategy for enterprise, the Labour party has offered no apology for their shocking record in office, and has certainly offered no alternative. The truth is that Labour has no clear plans for the economy, which is the single biggest issue facing the current Parliament. However, we can get a sense of what life would be like under a Labour Government by observing what is going on across the channel. President Hollande’s socialist economic policy is one that the Labour party would be proud to call its own, but matters have gone from challenging to absolutely disastrous. The Economist recently described France as a

“time-bomb at the heart of Europe.”

This Government are right to take a different course, and the autumn statement is an important step on that journey. Putting the public finances in order and implementing a strategy for enterprise by breaking down barriers for business and opening the doors to new opportunities in export markets is the right approach, and I commend it to the House.

15:45

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

I hope that the hon. Member for Macclesfield (David Rutley) will forgive me if, in the time available to me, I do not follow him down the road of bulldozers or anything else. I should begin by drawing the House’s attention to my entry in the Register of Members’ Financial Interests.

I am sorry that the Chancellor is not present, partly because he used to kick up a real fuss whenever I did not appear in the House or was slightly delayed. It would have been nice if he had been here: I am sure that plenty of us would have liked to press him on the question of how on earth he can claim abject failure as success, which is what he was trying to do last week.

Two years ago, it was not meant to be like this. Two years ago, the new Government said that they would be able to balance the books by the end of the current Parliament, and that debt would be falling as a proportion of national income. In 2010, they said that all the problems we faced were entirely home-grown. They compared this country mendaciously with Greece, and said that we would lose our credit rating, which they may yet regret. In other words, they set about trashing confidence and blaming the last Government for everything. That is despite the fact that the Conservatives supported every single penny of our spending until December 2008, and the Liberals were doing exactly the same until the evening of 10 May 2010, when they changed their minds.

The new Government’s position was that it was all the fault of the previous Government. How much has that changed? Last week, they began saying that this was an international crisis. They said that it had been caused by the eurozone; by the United States fiscal cliff; by inflation. However, all three of those things were around in 2010, and were known about. The problem that we have at present is that we simply do not have the growth that we were expecting, with the result that the Government have missed their debt reduction target and are experiencing serious difficulties in relation to borrowing. I shall say more about that shortly.

The Chancellor’s problem is that the growth profile that is presented in the report from the Office for Budget Responsibility, which was published last week, is remarkably similar to the profile that was published two years ago, but it is now running at least between two and four years late. If we do not achieve the growth profile that is set out in the report, both our borrowing and our debt will be higher, because the two are completely interlinked. I see no evidence for believing that the figures will be any more right this time than they were two years ago.

It is interesting to note that the OBR assumes, just as the Treasury modelling used to assume, that somehow we will always return to a 2.5% trend rate of growth. That theology was being questioned when I was in the Treasury, and I think that we will have to look at it again now. The Japanese are apparently contemplating what would be the fifth recession in 15 years. I honestly do not think that those of us in the western world—and Japan is, economically, in the same position—can assume that everything will bounce back as if nothing had happened. This will have a profound implication for all the political parties in the House, as well as further afield.

However, it is in relation to borrowing that I would have taken the Chancellor to task had he been here. During his speech last week, he made great play of how transparent he was being in taking into account the money that he had managed to find as a result of quantitative easing at the Bank of England and from the Royal Mail’s pension funds. What he did not say was that he could claim that borrowing was falling this year only because he had banked the sale of the 4G auction, which will bring in a very handy £3.5 billion—and, furthermore, will have to bring it in before the end of March if it is to score properly. That is the only reason why he could claim that, because the figures show that although borrowing has a downward profile, we are in fact borrowing £212 billion more than the Chancellor intended to borrow. We are borrowing much more, therefore.

The OBR report contains a number of findings that ought to worry those on the Treasury Bench as well as the rest of us. For example, over the next few years a very handy cumulative total of £73 billion will come in from the asset purchase facility—quantitative easing by the Bank of England. That money is not being created because of increased revenues or increased economic activity, however. It is basically a financial transaction that the OBR has said is okay to put in the books in this way, as opposed to scoring things differently which would have left a large hole in the economic figures.

[Charlie Elphicke]

The right hon. Gentleman is making a typically thoughtful speech. If he were the Chancellor, would he pursue the five-point plan the shadow Chancellor has proposed, given that it would cost £20 billion? Does he think there is the capacity to do that, and does he think it would be a sensible policy to pursue?

[Mr Darling]

I will address that point later. It is an important point, and I do not believe we should just sit back and hope that growth returns. The shadow Chancellor and many others both inside and outside the House also do not believe that the Government’s approach is right.

We are heavily dependent on money that is coming in from a financial transaction. In addition, the OBR has now found that by 2016-17 our revenues will be £30 billion less than it forecast in March. That is a huge gap, which will have to be filled.

What should we do? Whenever the Opposition suggest that perhaps the Government could do a little more, the Government parties—the Conservatives and Liberal Democrats—always say, “That’s all about borrowing more.” This Government are borrowing £212 billion more than they said they would not because we are spending money on projects and so forth, but because of failure—because our revenues are down. That is why we have got this gap.

When we eventually have a recovery, this country will need infrastructure. Over many years, we spent a lot of money on transport and energy. That was the sort of spending the Government say should not have been made, but we now know it was desperately needed, and we need to invest more in infrastructure, as well as get debt and borrowing down. We must invest in education, too.

On energy, the Government’s policy is completely contradictory. We are getting different signals every day of the week. On transport, I say again that it is not good enough to have no airport policy until halfway through the next Parliament, when we will not be able to do anything as another election will be coming up. That is not the right signal to send to our country, let alone the outside world.

Investing more in infrastructure projects would be one way to get confidence back. Confidence was trashed two years ago. If anyone were running a business now, would they hire more people or open a new production facility? No, they would not, because it appears that the economy will be bumping along the ground for another five years or so. I again remind Members of what has happened to Japan. People say, “We would never be like that,” but Japan has had non-existent growth for 15 years.

[Mr MacNeil]

Some commentators—at one time Ben Bernanke, and lately notably Paul Krugman—have talked about higher inflation targets for Japan, and also for the UK and other countries that are suffering a downturn. What is the right hon. Gentleman’s opinion on that? Does he, too, support higher inflation targets as a way of stimulating recovery?

[Mr Darling]

There is a lot of debate about that issue. I do not have the time to address it in detail, but I have said—including in a programme that will be broadcast tonight—that I think the Bank of England needs to examine its role, because for a long time we have said its job is purely to target inflation, yet central banks across the world are now also targeting growth, and perhaps we should consider whether we should formalise that role. Mark Carney was an excellent choice as the next Governor, and I hope he will think about that.

Talking about Governors, the current Governor, Sir Mervyn King, made an important point in New York last night when he talked about the G20, which had done so much at the height of the crisis in 2009, showing the determination that people expected in order to prevent the entire world economy from going over a precipice, and said that that spirit was now dead. He is absolutely right about that. It is important that we in this country, along with President Obama, now that he has been re-elected, look again at what we can do collectively as part of the global community to try to get the world economy not only to resolve some of the problems we face, but get growth going again.

That inevitably takes me on to Europe and the eurozone, because it is a tragedy that a legal structure and an economic structure that could do something about getting growth going again is simply failing to do so. Greece is not sorted out yet; another attempt was made a couple of weeks ago, but as far as I can see it leaves Greece with even more debt than it had. Until the Spanish banks are bailed out, they will simply hold back the whole of the eurozone, and the sooner Spain goes to get the bail-out it needs, the better it will be. Then we need to deal with the question of austerity. Austerity on its own does not work. Those who are interested may wish to know that there is an interesting article by Olli Rehn, the economic Commissioner, in today’s Financial Times, in which he just asserts that it is going to work, in the same way as this Government assert that austerity is going to work—frankly, I do not see it. We need to use our engagement in relation to the eurozone and to the European Union to try to persuade countries that unless they act together, in the same way as we did three or four years ago, although in a slightly different context, we and the eurozone countries are simply going to bump along on the bottom for years. If that is the case, the human cost is that we are condemning tens of thousands, if not hundreds of thousands, of people in this country, and perhaps millions of people in the European Union, to unemployment and low standards of living. If we do that, future generations will never forgive us.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I call Kwasi Kwarteng.

15:56

[Kwasi Kwarteng (Spelthorne) (Con)]

Thank you, Mr Deputy Speaker. You have not been in the Chair for the whole of the afternoon, but I am pleased to see you there now.

Clearly, we have stated our positions at the beginning of this debate. The Labour Opposition have spoken eloquently about the need for growth and Government Members have commented on the mess in our public finances that we inherited in 2010. The gravity of the situation in 2010 should not be underestimated: our deficit to GDP ratio in 2010 was higher than it had ever been in peacetime conditions. That was a function of probably the worst management of public finances that this country ever had the misfortunate to live under.

I am very pleased to follow the right hon. Member for Edinburgh South West (Mr Darling), who served at the tail end of that Administration as Chancellor of the Exchequer. To use a cricketing metaphor, he was very much like the night-watchman who is sent in when the team has collapsed to 70-8 and the light is pretty dim. He did well in trying to steady the ship, but we have to look at the damage that had been caused in the public finances before he took over his post and at what the Labour Administration did not only from 1997, but in particular from 2001 to 2007, during which time they ran a deficit in each consecutive year for seven or eight years before the crisis happened. No academic textbook and no economic school of thought thinks that it is a good idea to run a deficit when the economy is growing. In 2004, the economy was growing at 3%; it was going at full rate, jobs were being created and investment was taking place. What was the deficit then? It was 3%; even under the Maastricht criteria, the previous Government would have failed. No Keynesian in his right mind, and certainly not John Maynard Keynes himself, would have ever contemplated running a deficit of more than 3% when the economy was growing at 3%.

[David Rutley]

Will my hon. Friend confirm that even former Prime Minister Tony Blair felt, on reflection, that Labour was spending too much when it was in office?

[Kwasi Kwarteng]

Absolutely. The former Prime Minister has said that on a number of occasions. I have been on record as saying that the first Labour Administration between 1997 and 2001 was, I freely admit, a very conservative fiscal Government. As the right hon. Member for Edinburgh South West well knows, during those four years the budget was never in deficit. We ran two years of surpluses and the budget in the other years was balanced. It was only after 2001 that the disaster occurred, that the wheels spun off the car and we suffered under a profligate traditional Labour tax and spend regime. I use the phrase “tax and spend” very gingerly, because the taxation never covered the spending.

That was precisely the reason why the Government ran those deficits—to pay for their projects, to pay for greater spending. They were required to borrow money. I remember that in 2001 one of their favourite columnists, Polly Toynbee, said that Labour would have to tax more in order to spend the money. At least that was an honest position. She was suggesting that Labour should try and balance the budget at a higher level of spending. I and my colleagues might want to balance the budget at a lower rate of spending, but both Polly Toynbee and those on the Government Benches would accept is that it is a road to disaster to borrow yet more money in order to spend on grand projects or whatever utopia the Government want to build in this country. We now have the consequence of this recklessness—of Government Ministers at the time spending more and more money and running 3% deficits.

[Mr MacNeil]

Can the hon. Gentleman tell us for how many years since 2001 the UK has been able to pay its way?

[Kwasi Kwarteng]

I can answer the hon. Gentleman very directly. With reference to our public finances, we have been borrowing money every year—every single year. It is likely that even if we are able to eliminate the structural deficit by 2018, this country will have seen nearly 20 years of continual deficits. This is an appalling legacy that Labour has left the country. Since the end of the second world war, we have never run 20 years of continual deficits, which we will do as a consequence of Labour mismanagement and old-fashioned incompetence.

[Charlie Elphicke]

In his praise for the former Chancellor, has my hon. Friend noticed that the right hon. Gentleman said in his memoirs not only that the Labour Government overspent, but that they ran a parallel Treasury operation while he was Chancellor trying to sort it all out as a night-watchman, undermining his work while he was trying to stabilise the ship?

[Kwasi Kwarteng]

That is right. Many historians will be needed fully to plumb the depths of the goings-on of that Administration—the level of incompetence, the level of secrecy, the high spending, the culture of fear that prevailed in the Treasury for much of that time. It will need many people to investigate that.

It was always the function of the British Treasury, as my hon. Friend well knows, to have a very conservative approach to public finances. It was always the tradition that we in the British Treasury tried to match expenditure to income.

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

I am listening carefully to the hon. Gentleman, but I think his historical facts are a little distorted. There has been some sort of deficit in nearly every year that we have had a Conservative Government since the end of the second world war. If he looks at the period 10 years on from 1996-97, he will see that both the debt and the deficit were lower after 10 years of Labour government. What he is saying is simply not correct.

[Kwasi Kwarteng]

I appreciate the hon. Gentleman’s intervention, but if he looks at the deficit and the direction of travel and what happened in the 1980s, he will see that the deficit came down, again after a period of Labour mismanagement, every single year from 1979 to 1989, and that the budget was balanced in 1989. It was only as a consequence of the recession that we went back into deficit, as a Keynesian economist would tell him.

Let us look at what has happened over the past three years. The Government came into office when the eurozone was in crisis and there was a massive run on Greek sovereign bonds. The Chancellor’s approach, quite rightly, was to make the deficit our No. 1 priority. That, in effect, calmed the markets. Opposition Members might scoff at the bond markets, but they are very powerful. It was particularly interesting to note that in the six weeks before the general election British gilts were actually rising in value and yields were falling, because the markets rightly believed that Labour would be turfed out of office. In anticipation of that happy event, and before the quantitative easing, people started buying British gilts.

The Chancellor’s approach to dealing with the deficit is exactly the right one, because it followed the insight that we have to deal with spending. All countries in the western world have to do that. That is what the fiscal cliff debate in America is about, because it understands that spending has to be on the table; the issue is the degree to which revenue should be on the table. It has a mature approach to public spending. It is only the Labour party that lives in this Shangri-La world in which we can carry on spending and borrowing money with abandon and making the crisis even worse.

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

I think this is the most extraordinary rewriting of economic history I have ever heard in the Chamber. The hon. Gentleman has not once mentioned the banks and the financial crash. Does he not realise that the public sector deficit in 2007, just before the crash, was about 3%? It only rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The hon. Gentleman will have no time to answer you, Mr Meacher, and I am sure that you want an answer.

[Kwasi Kwarteng]

The right hon. Gentleman has talked me out and I must end my speech, but I am happy to discuss the banks with him at any time. My point today is looking at—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order.

16:06

[Mr Mike Weir (Angus) (SNP)]

I am pleased to be able to make a short contribution and, hopefully, offer a Scottish perspective on the argument. It will come as no surprise to most in the Chamber that the Scottish National party does not support the general economic policy of the coalition Government, who have now announced that austerity will continue until at least 2018, and possibly well beyond. On Sunday, the ever-cheerful Secretary of State for Business, Innovation and Skills was warning of a triple-dip recession.

Whatever Labour might be saying now, we also remember that prior to the 2010 general election the then Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), said that the Labour Government, if re-elected, would impose cuts that would be deeper and tougher than those imposed by the Conservative Administration led by Mrs Thatcher. With that in mind, would the economic situation we find ourselves in be any different had Labour retained power? Somehow I doubt it, despite their sound and fury today.

We take a much more different tack on how to tackle the situation. History shows us that ever-deeper austerity will not lead us out of the current mess. We need to invest for the future and ensure that there is capital investment to create work for firms and for individuals and to put money back into local economies. The First Minister of Scotland was the first to advocate such a policy when the financial crisis hit us, and the Scottish Government have pursued that policy within the bounds of their powers under the devolution settlement.

Indeed, since 2008 the Scottish Government have written to the UK Government at least eight times to call for more capital investment, and there have been four joint calls for that with the devolved Administrations in Wales and Northern Ireland. In November 2008, the First Minister announced that £100 million would be brought forward to invest in tackling the housing crisis, which had been caused by years of under-investment by previous Administrations. The Scottish Government have pursued that enlightened policy despite the fact that the capital budget available to them has been cut by 33% over the last few years.

The one piece of good news in the autumn statement was the Chancellor’s partial conversion to investment, as shown by the news of new capital investment. Scotland will receive around £330 million of that to allow the Scottish Government to proceed with some of the projects that are ready to go. It is not sufficient, but it is a start and I welcomed it when it was announced. However, had the Chancellor taken those steps earlier, we might have been able to avoid the double-dip recession that the UK has suffered.

The Scottish Government have been doing everything in their power to kick-start the Scottish economy. In February, they announced a capital spending package of £380 million until 2015 focused on housing, health, digital and maintenance programmes.

[Anas Sarwar (Glasgow Central) (Lab)]

Can the hon. Gentleman confirm whether the capital housing budget has been increased or decreased under the Scottish Government?

[Mr Weir]

The Scottish Government have been putting more and more money into capital investment. [Interruption.] It has not been decreasing. They have been putting money into capital investments that matter, despite the overall budget from Westminster having been cut.

The Scottish Government have been taking the action that the former Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), called for earlier. In June, they announced a £105 million package of investment for so-called shovel-ready projects. Conventional capital investment has been boosted by a £2.5 billion pipeline of infrastructure projects that is being delivered through the non-profit distributing model. The Scottish Government recognised long before the current Chancellor did that the model of private participation in infrastructure was fundamentally flawed, although Labour does not seem to have cottoned on to that yet. A total of £700 million has been switched from the resource to the capital budget to support capital investment. The Scottish Government are supporting a range of innovative finance initiatives such as the National Housing Trust.

It appears from what he said this afternoon that even the former Chancellor has changed his original views and now supports the increase in capital expenditure on infrastructure, although that has not prevented his Labour colleagues in Scotland from continually attacking it; such is the way of politics, I suppose. Indeed, their leader has announced a cuts commission—an initiative whose only backers appear to be their friends in the Better Together campaign, the Conservatives.

[Mr MacNeil]

Has my hon. Friend noticed, as I have, that the main cheerleaders for Labour in Scotland’s cuts are the Tories in Wales, who welcome them on board with the same ideological baggage?

[Mr Weir]

My hon. Friend makes a good point. The Conservatives in Scotland have also supported the cuts commission, so it appears that they are all cutters together rather than better together.

The SNP Government in Scotland have been very active in ensuring that we rebalance our economy with investment in new green initiatives. The Government down here often talk about that, but we have seen little evidence of it. Indeed, the proposals in the Energy Bill give cause for concern about the way in which this Government look at green investment and whether there is to be investment in new green energy or whether the Treasury is winning the battle and we are going down a different route.

This is important to Scotland because the renewables industries now support more than 11,000 jobs in Scotland, and that figure is growing. There have been significant investments in green energy. Gamesa chose Leith for its new UK offshore wind manufacturing plant, which will create up to 800 jobs. Burcote Wind has announced plans for a £l billion investment creating up to 600 new jobs. Global Energy Group has announced that Nigg skills academy will deliver training for up to 3,000 people over three years. Scottish Power has announced the creation of 300 skilled jobs as part of a £5 billion investment in Scotland’s grid, and it is also investing £6.5 million in grass-roots skills development.

[Anas Sarwar]

The hon. Gentleman is talking about all this fantastic new investment which is happening in Scotland within the United Kingdom. Would that still be the case if Scotland were an independent country? What would corporation tax be in an independent country—20%, 15%, or the current level?

[Mr Weir]

The hon. Gentleman cannot tell me what corporation tax will be here next year, never mind what it will be in Scotland in a few years’ time. This investment is taking place. He and his party keep saying that the referendum is causing uncertainty, but all this investment is coming in now. People are investing in Scotland despite the scaremongering from the Labour party. I ask him to consider this: the real barrier to investment in the UK is not uncertainty about a referendum in Scotland but uncertainty about the referendum on Europe that Government Members and increasingly people in his party are pushing for.

[Anas Sarwar]

Will the hon. Gentleman give way?

[Mr Weir]

No, I have already given way enough.

There is uncertainty in politics and uncertainty on Europe, but in Scotland we are pressing ahead. Despite all the scaremongering from Better Together, investment is still going on. Most recently, Areva announced a substantial investment in wind. Beyond renewables, Diageo has made significant investments in the whisky industry. A great deal of investment is going on. They are coming to Scotland because it is a good place to do business and because it has a Government who are pushing forward and taking the steps necessary to create an environment to build up an economy that makes sure that there is work, that puts money into local firms and local economies and that puts people back in work. Those are the important things that people care about and that is what the Scottish Government are doing—that is why they are so successful—rather than following the austerity model, which seems to be the only thing that this House can talk about.

That has all been done with the limited powers of devolution and without the key economic levers of power that would allow the Scottish Government to do even more. That will change when Scotland votes for independence in 2014 and we will unlock the real opportunities to build a better Scotland, rather than be locked into the austerity agenda of the UK parties.

16:15

[Chris Kelly (Dudley South) (Con)]

Thank you, Mr Deputy Speaker, for calling me to speak in this important debate, not least because I was otherwise due to serve on a Public Bill Committee. I draw the House’s attention to my declaration in the Register of Members’ Financial Interests.

I will restrict my remarks to how I see the autumn statement benefiting and assisting the economy in my own region. Many businesses across the west midlands are set to benefit from the plans laid out by my right hon. Friend the Chancellor last week. The 368,000 small businesses in the region, including many in my own black country constituency, will benefit from the business bank, which brings together existing Government finance plans and uses £1 billion to stimulate the market for long-term capital. The decision to increase the annual investment allowance limit from £25,000 to £250,000 for two years, in addition to an extra £25 million per year for UK Trade and Investment’s assistance and guidance on exports, will be of great help to an area such as mine, which is crammed with small and medium-sized engineering and manufacturing firms. In addition, the scrapping of the 3p rise in fuel duty, which means that fuel prices will be 10p lower than they would have been under the plans of the Labour party, will help ease the strain of transport costs for small and medium-sized enterprises.

My right hon. Friend the Chancellor has demonstrated once again that Britain is open for business. The reduction in corporation tax to 21% from April 2014 means that the UK will have the lowest corporation tax in the G7. It is worth noting that the total amount raised in corporation tax for the year 2011-12 was £43.4 billion—20% higher than it was for Labour’s last year in office. Lower corporation tax is working. It is resulting in the higher yields that the Treasury needs, while also contributing to increased private sector investment and employment.

Prior to the autumn statement, the black country chamber of commerce, which has many members in my constituency, called for my right hon. Friend the Chancellor to support a pro-business environment. In response to the measures announced by my right hon. Friend, the chamber’s president, Paul Bennett, welcomed his actions to get British business growing:

“The Chancellor’s Statement was encouraging for businesses and many of our members concerns seem to have been addressed”.

Meanwhile, Mark Hastings, the director general of the Institute for Family Business, described several of the measures as “encouraging”. This qualified support reflects the attitudes of many of the business people whom I have spoken to recently in my own constituency—they recognise that this Government are on their side—and of those in the family business sector, in which I am involved as the founder and chairman of the all-party group on family business.

It is pleasing to see the Chancellor building on this Government’s support for British businesses. Last year, we saw an increase of 250,000 in the number of private businesses, which included 226,000 new small businesses, a good proportion of which were in the west midlands. It is obvious, but still worth pointing out, that every successful large employer in the private sector started off as a small start-up. Even JCB, which was started by the inspirational J.C. Bamford and which I have had the privilege of visiting in Rocester, was once a small enterprise in a small shed. I refer the House to my declaration in the register relating to the last election.

This Government are cutting red tape and making it easier for budding entrepreneurs in this country to set up their own businesses, and that is clearly being borne out by the figures. All of that is in marked contrast to the previous Labour Administration, who introduced the equivalent of six new regulations for every single working day they were in power. It is estimated by the British Chambers of Commerce that those new regulations have cost British businesses almost £77 billion since 1998.

Last week, the Chancellor announced further support for local enterprise partnerships, which the Government created. That is the right approach because it promotes local growth by ensuring that Government spending is aligned with the priorities of local business communities. We have an excellent LEP in the black country, which is ably chaired by the no-nonsense Stewart Towe of Hadley Industries. I am confident that the Government’s approach will help to create the conditions that will enable the private sector to get on with creating more jobs in the black country.

The Government are continuing to demonstrate that they are not afraid to take tough decisions in the face of tough economic times. A clear message is being sent out that Britain is open for business and that Britain has a pro-business Government.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Before I call the new Member for Rotherham, I remind everybody that this is a maiden speech.

16:20

[Sarah Champion (Rotherham) (Lab)]

Thank you, Mr Deputy Speaker, for allowing me to make my maiden speech during this important debate on the economy.

My first job was in Rotherham and for the past four years I have been proud to manage Bluebell Wood children’s hospice, also in Rotherham. In that role, I have had the pleasure of supporting many local families. However, Bluebell, like all hospices, is a charity and, like everyone else, we are victims of the economic downturn. I am grateful that there is currently a national review of all palliative care funding as it seems deeply unfair that children’s hospices get no statutory support.

We are facing big challenges to protect the NHS in Rotherham. I am appalled that 750 jobs in our local hospital are under threat, under a Government who promised not to cut the NHS. The people of Rotherham can be assured that, as their MP, I will do everything possible to fight those cuts and to save the vital services on which so many people rely.

My immediate predecessor, Denis MacShane, was a distinguished Member of this House for 18 years. He achieved much good work for Rotherham by championing the steel works and trade unions, raising money for local medical charities and being vocal in his fight against racism. However, he also made a mistake, for which he has paid dear. I will build on all the good work that he has done for the people of Rotherham.

Having read the maiden speeches of previous MPs for Rotherham, I note with regret that a generation ago, in 1976, Stan Crowther’s principal concern was the growing unemployment in Rotherham and especially the plight of young jobless people. I am deeply saddened that, 36 years later, youth unemployment is still a major concern for the town. Across our nation, there are almost a million young jobless people. In Rotherham, a staggering one in five young people are out of work. We must all be worried about the danger of creating a workless generation—a generation without hope.

Rotherham people have never been afraid of hard work. Until the 1980s, tens of thousands of Rotherham men worked long hours in the town’s steelworks and coal mines. The pits have all but gone, and another round of redundancies at the steelworks was announced a few weeks ago. So what options are there for young people when they leave school? The vast majority cannot go to university any more as they cannot afford tuition fees. Last week, the Prime Minister talked about the “bank of mum and dad”. That is not an option for most young people in Rotherham. With education maintenance allowance scrapped and tuition fees trebled under this Government, and with five people applying for every job in Rotherham, what future are we offering our young people?

I recently visited Rotherham college of arts and technology: meeting the apprentices and staff was so inspiring. This has to be the way forward. I will do all I can to secure placements, training opportunities and apprenticeships for Rotherham. With Tata Steel and Rolls-Royce planning to make big investments in the area, we do have opportunities and our young people need to be ready to take them.

The people of Rotherham are proud of their town, but they cannot understand why none of the good things are ever shared. Let me redress that. Seven out of 10 top Formula 1 racing cars are constructed of Rotherham steel. Every five seconds, somewhere in the world, an aircraft takes off or lands that is reliant on gear made from Rotherham steel. In recent years, Rotherham has embraced growing industries in advanced manufacturing, finance and IT services. Rotherham Ready, which was launched in 2005, is internationally acclaimed for its approach to integrating enterprise into learning for all children aged four to 19.

This year, 18 new independent businesses opened in Rotherham town centre, as well as two national retailers. The recent £7.5 million Clifton Park restoration is a benchmark of excellence. Rotherham Show is the largest free show in the north of England and welcomed 80,000 visitors during its two days in September. Rotherham United’s stunning new home, the New York stadium, opened its doors to a sell-out crowd this year. Rotherham is the only place in the country affiliated to the Athena international programme, the main aim of which is to secure balance in leadership worldwide. As the first ever woman to be elected as MP for Rotherham, I am particularly pleased with that affiliation and I will work to support more young women to reach their full potential.

I spent the past few weeks knocking on doors and talking to well over 1,000 Rotherham residents. As a vox pop goes, I think that is a pretty good sample, so let me be their voice. Regardless of their politics, and without exception, everyone was polite and welcoming and they were passionate about Rotherham. Rotherham people work hard, but the message they asked me to give is that no matter how hard they work they are being hurt by an economy that is flatlining and a Government who are helping the wrong people. Those in the lowest-paid jobs who are trying to do the right thing are seeing their working tax credits cut, yet at the same time millionaires are handed a tax bonus. All in it together? That kind of spin does not work with the people of Rotherham. Rotherham people want work—they are strivers, not skivers—and they need just a little support so that they can put food on the table and do the best for their children. The answer is to get people back to work by real action to kick-start the failing economy, not to cut benefits that people depend on to survive.

Rotherham voters are also worried about the impact and change that new immigrants might bring to their community. I know they are neither racist nor bigoted in raising those genuine concerns, but when opportunities are few and times are tough we must understand that people get more protective of what they have. We need a different approach; we need a grown-up debate to address people’s concerns and put sensible policies in place while recognising the richness that immigrant communities bring to the UK. We need a better-funded UK Border Agency with stronger controls to combat illegal immigration, but we also need help for those who come to my surgeries and are being forced to wait too long for legitimate immigration issues to be resolved.

Many of those proud to call Rotherham home are of Kashmiri descent and their relatives came to Rotherham to work in the steel industry or mines in the ‘50s and ‘60s. Their contribution helped to make Rotherham the town it is today, which is why I will stand firmly with them in support of Kashmir’s right to self-determination. I am also proud that peace and security in the middle east remains one of Labour’s most important foreign policy objectives, and as a new MP I will continue to work for the day when we see the creation of a viable Palestinian state that can live in peace alongside Israel. Sadly, during the by-election a number of candidates tried to bring race and immigration into the debate in a divisive manner. I am proud that the people of Rotherham politely sent them packing with a clear message: “We are one Rotherham.”

I believe in Labour’s one nation values of equality and fairness for all, and I thank the people of Rotherham for electing me as their representative to Parliament because they also believe in equality and fairness. During the by-election I met Barbara, an 84-year-old great grandmother, proud to be Rotherham born and bred. She is typical of all that is best in Rotherham and I want to serve people such as her.

16:28

[Stephen Williams (Bristol West) (LD)]

It is a pleasure to follow the new hon. Member for Rotherham (Sarah Champion), who, as she said, is the first hon. Lady to represent that constituency. We all remember our maiden speeches for a long time—if we are honest, probably longer than anyone else remembers them—and we learned a great deal about Rotherham from the vivid and balanced picture that she painted of the challenges facing her constituency as well as some of the good things that have happened in recent years. Perhaps I can extrapolate that picture wider into today’s debate on the state of the economy. As we know, the economy still faces deep-seated challenges, but none the less good things are happening at the same time.

The economy fell into a very deep hole in the last couple of the years of the previous Government—it contracted by more than 6%. We must be honest that it is taking longer than any of us would have wanted to repair and recover from that deep economic damage, but, none the less, good things are happening. Some 1.2 million private sector jobs have been created since the first quarter of 2010. Unemployment has consistently fallen this year, and employment is at a new high. The rate of unemployment in the UK is marginally lower than the rate in the US—7.8% versus 7.9%—and considerably lower than the rate in the eurozone, which is 11.7%.

My hon. Friend the Member for Spelthorne (Kwasi Kwarteng)—my coalition colleague, who is no longer in the Chamber—spoke at length about the public finances and the state of Government borrowing. The OBR has said that borrowing will fall by £1.5 billion from fiscal years 2011-12 to 2012-13. Borrowing has fallen throughout this Parliament, and the deficit, as a proportion of our economy, has been reduced by a quarter in the first two years of the coalition Government. Reducing that deficit fully to the point at which we have balanced the nation’s books is taking longer than we would like, but the trajectory is clear.

We still have a higher rate of borrowing than most of our fellow EU member states, yet the Government can borrow at a lower rate than them. The UK Government can currently borrow on the international markets at a rate of 1.8%. Germany, practically the only nation that can borrow at a lower rate, borrows at 1.3%—France borrows at more than 2%, Spain at 5.24%, and Greece at an eye-watering 15.2%. The UK Government, despite having one of the largest deficits in the developed world, can borrow at those low rates because of international confidence that the country and our public finances are coming back on track.

However, hon. Members want more confidence at home. We want more confidence among our constituents, whether they are in Rotherham or Bristol West, that the Government are on their side and are doing what they can for them in these difficult times. Constituents want confidence that the Government are holding down the cost of living and giving them more money in their pockets.

For those reasons, I welcome the fact that the Government have again held down the cost of fuel by cancelling the 3p per litre rise in fuel prices that was due to take place on 1 January. Many of my Liberal Democrat rural colleagues welcome that initiative and campaigned for it, but it will also make a difference to the urban poor whom I represent in Bristol. However, the measure is enormously expensive—it will cost roughly £1.6 billion next year. At some point, politicians must face the fact that fuel prices are going in only one direction in our lifetimes, and that we need to find a new way of taxing movement—I believe road user pricing is the way forward. The fuel duty increase cancellation and previous measures taken by the Government save the average private motorist about £40 per annum, but they could save a road haulier—a small business person—up to £1,200 a year, which is a major advantage for many road haulage firms in the country.

The Government have frozen council tax and capped the increase in rail fares, but the biggest difference this Government have made is putting more money into people’s pockets by raising the income tax threshold—it will not surprise the House to hear me say that yet again. When the Government came to office, the income tax threshold was just under £6,500. As a result of the announcements in the autumn statement last week, the amount of tax-free pay that individuals can receive will increase to £9,440. That is an increase of £3,000 over the first three years of the coalition Government.

We will have taken 2.2 million people out of income tax altogether. Come next April, when our constituents look at their payslips, they will see that they have received an income tax cut of £600 since the Government came to office. That disproportionately helps people who work part-time, particularly women who work part-time, and will also help young people. Young people on the minimum wage, even at a full-time rate, will be raised out of income tax completely—they will no longer pay any income tax—while the income tax bill for an adult on the minimum wage will be halved from £1,020 when we came to office to £520 now. That makes a significant difference to people on low earnings.

Liberal Democrats also want fair taxes on the wealthy. The coalition Government have increased capital gains tax and stamp duty on expensive properties—[Hon. Members: “What about the mansion tax?”] I am coming to that. We have hauled more people into higher rate tax and clawed back pension tax relief—a person could put £250,000 into their pension under Labour, but that figure will be £40,000 under the coalition. The Liberal Democrats wanted a mansion tax, but we agreed not to proceed with it, in return for our Conservative coalition partners not pushing for punitive measures restricting benefits. That means that the loopy idea—in my opinion—of restricting housing benefit for under-25s is not Government policy.

We also need to do more, and the Government are doing more, to tackle tax avoidance and tax evasion. The Treasury has an affluence unit. We have a new treaty with Switzerland and we are tackling corporate tax avoidance—I am sure that Starbucks, Amazon and others will be shamed into doing the right thing. The Government are balancing the nation’s books, building a sustainable economy, restructuring the banks and introducing fair taxation. We have made much progress. We know the road is difficult, but now is not the time to be blown off course.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Before I call the hon. Member for Croydon North (Steve Reed), I remind hon. Members that this is his maiden speech.

16:36

[Steve Reed (Croydon North) (Lab)]

I am honoured to stand in this Chamber as the Member of Parliament for Croydon North. During the recent by-election, I spoke to thousands of people across the constituency, and one of the things that most struck me in every part of the community was the great warmth and affection for my predecessor, Malcolm Wicks, and the profound sadness that people felt at his passing just a few short weeks ago.

Malcolm was a man of great integrity, a genuinely decent human being, and a man with a sincere and lifelong commitment to social justice. He made a difference, improving support for carers, for children and for older people. In Malcolm, the people of Croydon North had a true champion and a good friend. As many in the Chamber will know, Malcolm had a great sense of fun—he did not take himself too seriously—and that much was clear to the office staff who walked into his office one afternoon to find him bouncing around the room playing air guitar with his good friend Keith Hill, the former Member of Parliament for Streatham. I know that Members on both sides of the House miss Malcolm very much.

Until my election as a Member of Parliament, I had the pleasure and privilege of leading Lambeth council. I am proud of the work I did there, alongside many talented colleagues, to turn around a once failing council. Lambeth children’s services were in the bottom 3% nationally when I was elected leader, but were rated by Ofsted as the best in the country when I left. I hope that that experience of transforming public services will be of value to the House and the people of Croydon North.

At Lambeth, I pioneered the concept of co-operative councils and co-operative public services. I believe that public services work better when they do things with people rather than to people, and that means finding new ways to give people and communities more control over what happens to them. It means giving people the power they need to make the changes they want. We can see the benefit of that in tenant-managed housing estates that become better places to live, in community-led youth services that give young people a better chance in life, and in care services for older and disabled people where the service user has the power and support to choose what they want, rather than be told what they will get.

I pay tribute to the growing number of councils and dozens of other organisations nationally that are pioneering more co-operative ways of running public services so that they are more directly responsive and accountable to the people who use them. This is the future of public services, and I hope to continue championing it here with my colleagues.

I would like to pay tribute to the constituency I represent. Croydon North is one of the most diverse and vibrant places in the country. People have come to live there from across the world. The area’s greatest strength is its diversity. Anyone who walks along the London road, which runs through the constituency, will find restaurants, businesses, faces and languages from every corner of the globe. In an age of globalised trade and communication, that diversity is a resource to be harnessed for the good of everyone. I was heartened by the fact that during the by-election those who sought to divide the community were rejected. People in Croydon North understand that we best confront the challenges we face when we stand together in solidarity.

Croydon North faces real challenges. It is a relatively poor area, and people living there feel let down because the slow decline of the area over recent years has not been addressed. Unemployment is too high, the streets are not clean enough, and people worry that police are being taken off the streets when crimes such as robbery are on the rise. There is real concern that the help and investment promised after last year’s riots have not come through. Croydon was one of the areas worst hit by the riots, and Croydon North bore the brunt of the mindless hooliganism, looting, burning and destruction that so appalled the nation in the summer of last year.

The Rozario family lost their home in a fire, but they have not received any compensation because of a lack of support from the public authorities. The Hassan family saw their business—the sole source of their livelihood —burnt down, but they have been left struggling and in debt, instead of being helped to get back on their feet. Charlene Munro and her four-year-old son fled their home when they saw hundreds of rioters approaching; they returned the next day to find it destroyed. Instead of getting the help they needed, they feel abandoned. These are hard-working people—the backbone of their community, strivers. I want to make a plea on their behalf and on behalf of so many others like them that the promises made to Croydon North after the riots be met in full. The people who live and work there deserve nothing less.

Mr Deputy Speaker, I would like to conclude by thanking you, Members on all sides and the staff of the House for the very warm welcome I have received here. I hope during my term of office to represent the people of Croydon North to the best of my ability. If, when I finally leave this place, I have earned even a fraction of the respect and warmth that people felt for my predecessor, Malcolm Wicks, I will have done well.

16:42

[Justin Tomlinson (North Swindon) (Con)]

I congratulate the hon. Member for Croydon North (Steve Reed) on a powerful maiden speech—I cast my mind back to the nerves I felt during my first speech—which he delivered in an exceptionally articulate way. It is clear that his local government experience—championing the future of public service, along with understanding and delivering much needed improvements—will be a great asset to this House. I also congratulate the hon. Member for Rotherham (Sarah Champion), whose exceptional experience in children’s services will be a vital asset to us all in Parliament.

Let me turn to a few key messages in the autumn Budget that I picked up on, having spoken to a number of my constituents. On fuel duty, I pay tribute to my hon. Friend the Member for Harlow (Robert Halfon), who has championed the campaign with huge support across the country and among MPs. It was absolutely essential that we froze fuel duty, because it is the most tangible tax there is. We all pay all sorts of taxes, and although people will have a rough idea how much council tax, income tax or national insurance they pay—they will not know exactly—everybody knows exactly what it costs to fill up the car. That impacts on consumer confidence, which is something we desperately need to protect in this country, so this move by the Government was welcome.

I also welcome the further move on the income tax threshold. It is a principle of ours to ensure that work pays, and what better way to incentivise people than to leave more money in their pockets? By the end of the Parliament, those on the minimum wage will be paying half what they were paying in income tax when we came to power. That stands in stark contrast to the 3.9 million workless households we saw under the former Government. Some 24.4 million people will benefit from the changes we have made to the income tax threshold by an average of £247 per person, but I would like to see a further change. Whenever any changes are made to pay-as-you-earn—whether by this Government or future Governments —they should be shown on employees’ payslips. We get excited in these debates about such changes, but more often than not they fly past the public. If we are going to get the public to take ownership of the tax system, those changes should be displayed clearly. I welcome the move to introduce an annual tax statement. I was one of the 10 MPs who supported the private Member’s Bill on that subject. Any notification of changes to PAYE on people’s payslips would make a big difference.

I am also delighted to see further measures to support business. Before I became an MP, I was a small business owner in Swindon. We now have 4.2 million self-employed people in this country, which is a record number. That shows that we are truly open for business. The cut in corporation tax takes it down to the lowest rate in the G7, and the extension of the small business rate will make a huge difference to small traders. I would also urge the Government to continue to look at the principle of the rates system, because to a certain extent the golden goose has been killed. High street businesses in particular are facing further threats from internet companies, which benefit from not having high street rate bills to pay. That is something that we must take into account.

The £250,000 annual investment allowance will also make a huge difference. I know that my hon. Friend the Member for Dudley South (Chris Kelly) has championed that cause for a long time. The need for this measure reflects the fact that businesses are nervous. For the first time in history, businesses are holding more money in their current accounts than they are borrowing. That is partly because of the perception that they will be unable to borrow money, and they want to stay in control. I hope that the increase in the annual investment allowance will open up the coffers, and that the effects of that will filter through to the election.

[Mr John Redwood (Wokingham) (Con)]

Given the warm welcome in the House, particularly on this side, for all tax freezes and reductions, will my hon. Friend urge those on our Front Bench to do more of that, so that we can get the economy growing more quickly?

[Justin Tomlinson]

I thank my right hon. Friend for that important suggestion, which I endorse. We would all welcome such measures being taken whenever possible, given the financial constraints that we inherited.

I also welcome the extra investment in UK Trade & Investment in relation to exports. The Office for Budget Responsibility has recognised the challenges involved in exporting to the eurozone. Honda, the biggest employer in my constituency, has faced challenges in exporting cars to a declining market, although the UK market has experienced an 8.6% increase. We have seen our exports to emerging markets double, however, and the investment through UKTI will make a big difference. I have attended lots of events with the Government and with banks to encourage businesses to consider exporting to those markets, and that extra help to remove barriers will make a big difference.

I want to make a plea for a greater push promoting young entrepreneurs. The Government have launched the £2,500 start-up loans. I have been working with Young Enterprise, Virgin Media Pioneers and the National Association of College and University Entrepreneurs. Even the Scouts have a young entrepreneur’s badge now, and my wife and I had a very enjoyable evening helping to judge that. They even offered us free cake and cups of tea to try to influence our decision. I was the only one of the 350 students studying business at my university who went on to run their own business. I believe that that university education taught any entrepreneurial flair and risk-taking out of us. We need to encourage more young people who have boundless energy and enthusiasm, and enough cheek to question the accepted ways, to find new niche markets.

I have been working with New college and Swindon college in my constituency to try to set up further opportunities for young people. This will involve not only the traditional young enterprise scheme set up in the main foyer in which the students sell to their friends but the opportunity to set up a pitch in the local market. They will have a wooden table and do three days’ trading. If they are not set up by 9 o’clock in the morning, they will lose that day’s trading. Those who are successful will then be offered cheaper pitches in the summer holidays, after they have finished college, and we hope that they will be the next generation of entrepreneurs. Many famous business people, including Lord Sugar, Richard Branson and the founders of Marks & Spencer and the Superdry clothing brand, started on a market stall. If we can get those young people to take that risk, we can create the next wave of jobs, and I encourage the Government to do what they can on that front.

On the banks, we all welcome the fact that we still have record low interest rates. That is due in no small part to the fact that the tough decisions we have taken have protected our triple A credit rating. That has made a huge difference to businesses that are borrowing money and to mortgage holders. However, we still need to do more to encourage access to finance from banks. Whenever I talk to banks, they tell me that they have money and that it is available to borrow. Whenever I talk to businesses, they say that there is no such money. There is clearly a perception problem.

The Government should help to provide information on the funding that is available, whether from the Government, from the banks that say they have money or from the national loans guarantee scheme. I am told time and again that everything possible is being done to communicate such information but that it is difficult to get hold of the businesses that need it. That is not the case, however, because once a year the Government send out a business rates mailer to every business. It might simply say that they do not have to pay anything because the small business rate relief has been extended, but the Government still have to write to them to tell them that. My suggestion is that we should include something in that mailer—we have already paid the postage, so the taxpayer will be no worse off—outlining what funding is available through the banks and through the Government, what opportunities there are to employ and offer opportunities for apprentices and about the business mentor scheme. Some 40,000 business mentors are there to help and I have seen them make a big difference when I met Mentorsme, an organisation that has helped a number of businesses in my constituency. Let us use the business rate mailer to spread the opportunities that are available. Those measures will make a big difference to us all.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Before I call the hon. Member for Middlesbrough (Andy McDonald), I remind hon. Members that this is his maiden speech.

16:50

[Andy McDonald (Middlesbrough) (Lab)]

I am greatly honoured and feel immensely humbled and privileged to be in this place, representing the town of my birth. The circumstances that have caused me to be here were of course most tragic and sudden and I wish to make some comment about my immediate predecessor Sir Stuart Bell, who sadly died on 13 October 2012.

Sir Stuart became MP for Middlesbrough in 1983 after beating a certain Tony Blair in the selection process and represented the Middlesbrough constituency for almost 30 years until 2012. Such a lengthy period of service is quite remarkable and he was duly knighted in 2004 for his services to Parliament, as well as being awarded the Légion d’Honneur in 2006 for his contribution to British-French relations. Seven successive general election victories is a record that speaks for itself.

Middlesbrough is still a comparatively young town, and in the early part of the 19th century was nothing more than four farmhouses with a population of some 25 souls. It was the discovery of ironstone in the Eston hills and the subsequent production of pig iron that saw Middlesbrough’s Klondike-like growth over a relatively few short years. Indeed, the first MP for Middlesbrough was Henry Bolckow. a German national until his naturalisation as a British subject in 1841. He is undoubtedly one of the founders of modern Middlesbrough.

In 1851, at the time Bolckow opened his blast furnaces on Teesside, the population was 8,000; by 1871 it had grown to 40,000. In 1853, the town received a charter of incorporation and Bolckow became its first mayor and the town’s first MP when it was granted the status of a parliamentary borough in 1868. I have been labouring under the misapprehension that I was the first locally born MP for Middlesbrough, but I discovered that Penry Williams beat me to it when he was first elected as a Liberal MP in 1910. However, I think I can lay claim to being the first Labour MP for Middlesbrough to have been born in the town.

I could not let this occasion pass without mentioning one of my most notable predecessors, namely Ellen Wilkinson, otherwise known as “Red Ellen”, who first won the Middlesbrough East seat in 1924. She was of course a leading light in the women’s suffrage movement and, having lost Middlesbrough East in 1931, went on to become the Labour MP for Jarrow, holding ministerial office as well as taking part in the famous Jarrow march. It was lovely during the course of the election to meet Bob Carter of Bellamy court in Pallister park, who is well into his 90s and was a runner for Ellen Wilkinson. He was vote-catching in that last election.

The town motto is “Erimus” which means “We shall be” and is a direct response to the motto of the Brus family who owned the site on which Middlesbrough is built. Their motto “Fuimus” means “We have been'” and the town motto was chosen to signify the town’s will to grow and become great from its foundation. It encapsulates the energy, ambition and aspiration of the people who came from all over the British isles and beyond to seek employment in the burgeoning industries of the mid and late 19th century.

Since those times people have continued to come from far and wide to work in our world-class industries of steel, bridge and shipbuilding, petro-chemicals and oil and gas, and now in our digital and renewable energy industries. By definition, glancing back over just a few generations, we in Middlesbrough can all trace our forebears to other parts of these islands and much further afield—right across the globe. In short, we all came from somewhere else.

Our magnificent Teesside university, which in very recent times was awarded the title of university of the year, continues to draw students from all over the world and contributes in no small measure to the development of new industries, especially in the area of digital technologies. That all adds to our diversity and the rich cultural mix of our town, and it is a joy for me to be at the service of all the people of Middlesbrough of whatever background, or whatever faith, or of none, in full recognition of the common values at large in our community as we work towards our shared values of social justice, understanding, peace and tolerance.

We have a real sense of community in Middlesbrough, and we have a lot to be proud of, including our wonderful James Cook University hospital and our schools, the majority of which have either been rebuilt or refurbished over the last 10 years or so. We also have MIMA—the Middlesbrough Institute of Modern Art—and, of course, the magnificent, trophy-winning Middlesbrough football club. Undoubtedly, however, we face very challenging economic times. Our rates of unemployment are unenviably high, which is why I will conclude my speech with a plea.

Although the entire House will undoubtedly agree with me that it is never acceptable for an individual to reject the genuine opportunity of work, it seems to be increasingly part of the accepted orthodoxy that those who suffer the indignity of unemployment do so as a result of the lifestyle choice that they make. That is a gross and offensive misrepresentation.

In a town where more than 10 people currently chase each and every job that comes along, it is a most cruel slight and insult to say, as some assert with unremitting regularity, that all such people are somehow by definition scroungers. To all those who would say such things, I make this plea: if they are fortunate enough to be in employment or to have other means and if they can heat their homes and support their families, they should tread carefully on the sensitivities of those who cannot make such boasts. Such attacks on the powerless and impoverished serve only to reaffirm their sense of alienation and desperation, which in turn fractures our society and offends against the finest of British traditions that in times of hardship, we protect, support and care for one another.

It is my belief that the overwhelming majority of the British people expect us in this House to speak up for working families that are having their budgets squeezed and for young people who are struggling to find their first job. In recent weeks, I have talked to thousands of people in Middlesbrough, so I know that people are anxious and scared for the future of their families. To make matters worse, there is a sense that some politicians are determined to set community against community and neighbour against neighbour. It is my fervent belief that we must strenuously resist the temptation of such politically expedient arguments, and as an alternative we should engender a real sense of one nation so that we can rebuild our country and restore fairness so that everyone has a stake and not just a privileged few.

16:57

[Gordon Birtwistle (Burnley) (LD)]

I congratulate the new hon. Member for Middlesbrough (Andy McDonald) on his interesting and excellent maiden speech.

I listened to the autumn statement with a lot of interest because I, a simple mere Back Bencher, was able to put forward a proposal to the Chancellor of the Exchequer and the Chief Secretary to the Treasury, suggesting that industry would blossom and grow if we included in the autumn statement something to help with capital allowances. I was delighted to see that such a measure was included in it. Industry needs confidence to grow and it needs confidence to start to invest. I believe that this major part of the autumn statement has not much been picked up around the country. Companies in Burnley, to which I spoke prior to the autumn statement, assured me that such a measure would help them to invest in brand-new plant and equipment, so I shall follow up to see if they have delivered on that.

Some plant and equipment could be made mainly in the UK, but some of it will come from abroad. The main point, however, is that the companies investing in this plant and equipment will need more people to work on the new pieces of kit. They will also become more efficient and deliver more profits—and hence provide more tax. That will obviously help the country along.

Another interesting feature of the autumn statement that was not published anywhere else was the increase from 100% to 120% in the Government Actuary’s Department rate for self-invested personal pensions. We have tied pensions to the triple lock, so that the vast majority of old age pensioners will receive an increase that is way above the inflation rate. However, this is a major step that will benefit those who have made their own arrangements through various SIPP and self-administered pension schemes. They will now be able to spend more of what they have invested in pension funds, rather than the Government’s holding it back, and that will create growth because they will start to enjoy spending money that they have saved over many years.

The main thing that we must do is invest in manufacturing. I used to be in manufacturing myself: I worked in the aerospace industry. Over the next 20 years, the airlines of the world will spend some $7 trillion on new aeroplanes and helicopters, and, as the second-biggest manufacturer in aerospace equipment, we must get involved. That will mean a growth of 5% in the industry every year, so over 20 years we will have to double our capacity to produce aerospace components. Well over 100,000 people already work directly in the industry, and the supply chain employs even more. The country must get involved, and in order to do that we must expand.

Another aspect of the autumn statement that was not picked up by any of the newspapers was the £100 million that the Chancellor has put into the aerospace supply chain. In Lancashire, the North West Aerospace Alliance has bid for a national aerospace supply chain centre to be built somewhere in the north-west. I hope that it is built in Burnley, but as long as it is built somewhere in the north-west, I shall be delighted. I am sure that you would love to see it built in Chorley, Mr Deputy Speaker, but I suspect that it will go to BAE’s new industrial park in Samlesbury.

We need a massive investment in the aerospace industry, but one of the big problems with the doubling of the industry over the next 20 years is the provision of staff with the necessary skills. Over the last 30 years, various Governments ignored apprenticeships—and the last Government were just as bad as their predecessors. I am glad that the coalition Government are investing in apprenticeships, but the wreckage of 20 or 30 years cannot be turned around in two years. Apprentices need to be given more time in which to learn the job, and I am delighted that that is happening.

The last Government wanted 50%, of students, or even more, to go to university and study subjects which, in the main, were no longer applicable. What we want is for young people either to go into apprenticeships or jobs or to go to university to study the subjects of the future rather than the past: subjects such as high-tech manufacturing, including high-tech food manufacturing.

When I visited the British Aerospace apprentice school in Warton, I met the apprentice of the year, a young lady who had been on BAE’s apprentice scheme. She had been told by her college not to be an engineer but to go to university and study something else, because she was far too clever to be an engineer. It refused even to advise her on what an engineer was.

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

I have been at a meeting of the all-party parliamentary apprenticeships group in the last couple of hours. About 30 apprentices were present. One of them, a woman who is now at Vauxhall, said that her school had spent all its time trying to persuade her to try to get into university rather than becoming an apprentice. It was clear from what she was saying that those at the school thought that it would be higher in the league table if people passed A-levels and went to university rather than entering what that woman said was a very fulfilling career. That seems to be the pattern in many schools today.

[Gordon Birtwistle]

I am grateful for that intervention, and I entirely agree with the hon. Gentleman. I am the chairman of the all-party group on apprenticeships. Unfortunately, I have been sat here in the Chamber today waiting to speak, instead of being at that all-party group meeting, and I am sorry I missed hearing from those apprentices.

The hon. Gentleman may recall that two Airbus apprentices came to a previous meeting. Both of them had turned down the chance to go to Oxford university in order to be apprentices at Airbus. Both of them said, “We’ve come to Airbus, and it has taken us through its apprenticeship programme and paid for us to go to university.” Both of them were proud to say they had bought new cars and were happy to pick up their friends, who had gone to university and now had not got jobs, and to take them out on a Friday night.

We must encourage young people to go to university via companies such as Airbus, Rolls-Royce and BAE Systems. I agree with the hon. Gentleman that it is wrong for schools to advise young people to go to university just to ensure that their figures for pupils attending university go up. That is outrageous, and it needs to be looked at. I have argued that case for quite some time.

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

First, may I apologise for not having been in the Chamber for long?

I urge the hon. Gentleman to pick up on the issue of how schools deal with people who want to be apprentices. The Business, Innovation and Skills Committee has just undertaken a report on the subject, and that theme came up time and again. It is in all our interests to ensure that what has been described does not happen. We had too much elitism in the past, and we do not want it continuing in the future.

[Gordon Birtwistle]

Once again, I agree with the right hon. Gentleman. It is always a great moment when the right hon. Gentleman rises and speaks in this Chamber—even though he has only just turned up.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

On a point of clarification, Mr Binley is not a right hon. Member. He has been in the Chamber a little longer than suggested, too.

[Gordon Birtwistle]

I apologise. The hon. Member for Northampton South (Mr Binley) must have been so quiet that I had not seen him in his place.

I agree that the schools and colleges in this country must no longer downgrade apprenticeships, and must no longer say to students, “If you don’t pass, you’ll be an apprentice.” That is an outrageous statement for schools to make. It is time they woke up. I must say that it is also time that this Government’s Department for Education woke up to the fact that going to university is no longer the be-all and end-all, because there is far more to life than going to university.

I am a little upset that the Secretary of State for Education does not think a right lot about careers advice, because I believe that careers advice in schools is crucial. Young people need to be told about, and shown, what is available these days outside the school gates. The Secretary of State and his Department must realise that and advise schools that careers advice is crucial to young people’s futures. Perhaps even more importantly, it is crucial to the economy of this country, because if we do not train people for the jobs of the future, we will all go down the pan.

17:03

[Emily Thornberry (Islington South and Finsbury) (Lab)]

The autumn statement showed that this Government’s handling of the economy has been a profound failure. It shows what happens when a Government do not have any plan for jobs and growth. If they do not have a plan for jobs and growth, they come back after two and a half years and say, “Actually, we need another five years,” and if they still do not have a plan for jobs and growth, they will come back after another two and a half years and again say they need another five years, and so it will go on, because borrowing is up and debt is up and economic growth is down. The Government have wasted two and a half years. People simply do not buy it any more. The Business Secretary said that the Government’s credibility hinges on whether or not they eliminate the deficit. After the autumn statement it is clear that the credibility of this Government, supported by the Liberal Democrats, is in tatters.

I want to talk about the poor, because my poor constituents believe they are being punished for the failure of this Government and their reckless welfare reform. I also want to talk about the rich and how they are being let off the hook—again, that is because of the Government’s failure to make sure we collect all the tax we are owed. Why did the Government, when they first came into office, cut the number of tax inspectors by 7,000? The ambition was to cut the number of tax inspectors to an all-time low of 56,100. I remember that I wrote to the Chancellor in November 2010 saying that that would be counter-productive. When the Government are cutting the staff who prevent tax avoidance and evasion, how can my constituents believe that tackling it is a priority? Indeed, in answer to a parliamentary question, the Government admitted that every new tax inspector brings an additional £600,000 a year into the Exchequer.

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

indicated dissent.

[Emily Thornberry]

The Economic Secretary shakes his head, but I am just quoting what was said in the Government’s answer to a parliamentary question. He is welcome to intervene if he wishes to correct me.

[Mr Gauke]

As the hon. Lady has invited me to make this point, I will do so. If someone looks at the number of people working for Her Majesty’s Revenue and Customs in enforcement and compliance—not the other areas; there are a lot of processing jobs—they find that under the previous Government’s plans it fell by 9,000, whereas under this Government’s plans it will increase by 2,500.

[Emily Thornberry]

The fact is that 7,000 jobs have gone under this Government’s plans, and the gap between what we collect and what we are owed is estimated to be £35 billion, which is twice the housing benefit bill. Independent research commissioned by the Public and Commercial Services Union reckoned that the real figure was more like £120 billion, which is six and a half times the housing benefit bill. Whatever the true sum, the fact is that without a sufficient number of tax inspectors we cannot ensure that the rules apply to everyone. Everyone should pay tax; it should not just be for the little people. Paying one’s taxes should not be some sort of charitable gesture, and I have little understanding as to why it was seen as appropriate for this Government to continue to cut back on tax inspectors. If we are to have rules, they need to be applied. The Exchequer Secretary says that there were many processing jobs, but presumably people in that job need to make sure that the sums add up, that everything has been claimed that should have been claimed and that everything has been paid that should have been paid. Without that essential processing we will never know whether or not tax avoidance has been taking place—this is not just about major companies; it happens throughout the system. At a time like this, we need to make sure that everyone plays by the rules. If everyone does that and if the rules apply to us all and we have a fair society, we have the very one nation that Labour Members have been talking about.

Of course, the rules also apply to those who claim benefits and of course if someone can work, they must work. That is what unites this whole House. What does not unite this House is the language used by Government Front Benchers—the language of “scroungers”. Such language is simply offensive, as the highly eloquent maiden speech by my new hon. Friend the Member for Middlesbrough (Andy McDonald) so well set out. Such language is a smokescreen that covers up a great deal of what this Government are actually doing. Although they talk about scroungers and those who stay in bed, keep the curtains closed and do not go out to work—the remarks are highly offensive—they do not address the issue, which is that many, many people who are out of work want to work, but the fact of the matter is that people cannot go from welfare into work if the work is not there.

Furthermore, many of the changes that this Government are making and announced in the autumn statement will affect those very people who work. I want to go on to address the issue of not just those who are poor and not working, but that of those who are working in my constituency and are dependent on benefits. Sometimes I feel as though I live in a different world where Government Members believe that only those who are out of work claim benefits. In fact, many people who work depend on benefits. Surely that is a conundrum. Many people meet me on the street and say, “How can the welfare benefit bill be going up if a million additional people have got work?” The truth is self-evident. Many people who are now working work part-time or are self-employed rely on housing benefit and tax credits, the very things that the Minister will be cutting as a result of the autumn statement. Let us use the terms that he uses, such as the strivers. Those very strivers are having their support system cut away by this Government. Even in the hon. Gentleman’s offensive terms, that cannot be justified.

I want to talk specifically about housing benefit because the issue affects my constituents particularly. I hear Government Members say, “Why should it be that people on average earnings receive less than people on benefits?” That has a certain ring to it and I know that the Conservatives are out of touch, but surely some of them must know someone who rents a flat and who understands that housing benefit goes not to the tenant, but to the landlord. It is because rents have gone up so much in London and the south-east that the housing benefit bill continues to rise. In the past two years, private rents in London have gone up by 25%, according to London Councils. In those circumstances, how can it be justified to attack housing benefit, to put an arbitrary cap on housing benefit, or to believe that housing benefit should be the same level in London as it is anywhere else in the country? How can that be fair?

It is not the fault of my poor constituents that their rent is high. It is the fault of my Government and of Conservative Governments who did not build enough housing. There was a time when Conservative and Labour Governments used to compete with each other as to how much affordable housing they could build. In the 1970s, four fifths of the housing budget was spent on building new homes and one fifth on housing benefit. Now it is completely turned on its head and we continue to pay the price of failure. We must build more housing and we must not simply dance on a pin, analysing what affordable housing means.

The Minister represents a party that defines affordable housing as costing 80% of market rent. He and his party should get some sort of George Orwellian prize for double-speak. Eighty per cent. of market rent in my constituency could not be afforded by ordinary people in my constituency. I went on to the Rightmove website this morning and looked at the prices of three-bedroom flats in my constituency. Does the hon. Gentleman know how much the rent for a bog-standard three-bedroom flat in my constituency would be? Four hundred pounds a week. How much is the housing benefit cap? Three hundred and forty pounds a week. There was only one flat on Rightmove that was under the amount of the cap so how can people in my constituency, who will be subjected to the housing benefit cap, afford to continue to live in Islington?

There is an argument that the poor should not be living in Islington, but I respectfully disagree. My constituency should be a mixed constituency and should have rich and poor. Generations of poor people who live in my constituency should be allowed to continue to live there. Furthermore, the housing benefit cap is one atrocious measure that this Government have introduced, but we wait for the next, which is universal credit. There will be a cap of £500 a week for a four-bedroom flat in my constituency. There were 69 that were under the £400 current housing benefit—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order.

17:18

[Richard Drax (South Dorset) (Con)]

It is a pleasure to follow the hon. Member for Islington South and Finsbury (Emily Thornberry). I agree with her on one point: everyone should pay tax, but more of that later.

May I pay tribute to those who made their maiden speeches, and welcome them to this place? I remember mine all too clearly; it is a nerve-wracking moment for all of us.

In the eight minutes that I have, I do not want to look back or play the blame game with the Opposition, other than to remind the country of their profligate years, but enough said: we have to look to the future and how we get ourselves out of this mess. Let me go back over some basic principles which, it seems to me—maybe I am getting this horribly wrong—many in the House have forgotten. Baroness Thatcher, a lady for whom I have huge respect and admiration, was brought up, as the House knows, in a grocer’s store. Her economic principles, like most of her principles, were very simple and on the whole they were sound: “You spend what you earn. You borrow too much and you go broke. Eating into capital is the road to ruin.” She believed in a light-touch, low-tax Government.

We had the chance to be radical when we came to power, but regrettably, linked to the Lib Dems as we are, that was never going to be a reality. Taxes, both business and personal, remain at punitive levels. They curtail incentive, reinvestment, aspiration and jobs. Employers’ national insurance contributions are a classic example. I run a business, albeit a small one, and pay nearly 15% for each person I employ. That is madness, and it is certainly not based on Conservative or free-marketeer principles. My advice to those on the Government Front Bench is to scrap employers’ national insurance contributions if they want to see unemployment fall and businesses thrive.

The deficit is down, which I welcome, but borrowing is rising, as we have heard, and state expenditure remains unacceptably high, with savings in real terms at negligible levels. So we print more and more money—it is called quantitative easing—tons of it, in fact, and down the plug it has gone. But at some stage it will spill over into the bath and we will start to spend it. Inflation will rise and interest rates will inevitably have to rise to combat it. At that stage, we will see pain on an unprecedented level in this country.

In the meantime, we pile more and more taxes on the better-off, who already face punitive rates, while those at the bottom are taken out of tax altogether. Why? The hon. Member for Islington South and Finsbury said that everyone should pay their taxes fairly. If we take those on the lower end out of tax altogether, what incentive do they have to put away their rubbish or to contribute to their fire or police service?

[Sheila Gilmore (Edinburgh East) (Lab)]

The hon. Gentleman’s view of economics seems to miss the fact that when Governments invest, jobs are created, more money comes into the Treasury and less goes out by way of wasteful benefits. What has gone wrong in the last two and half years is that the Government have pulled the plug on investment, which now, rather belatedly, they are trying to put back in a small way. By the way, some people might not be paying income tax, but they are paying council tax towards the very services he has just mentioned.

[Richard Drax]

Unfortunately, the Government have invested; the hon. Lady is absolutely right. Governments, particularly during Labour’s 13 years in office, invested to such an extent that we are now in the mess we currently find ourselves in. It is not for Governments to play economics; it is for business men and women, entrepreneurs, small businesses and retailers to generate our economy. I hear again and again from people on all sides that the broadest shoulders should bear the biggest load and that we are all in it together. We are not, and we never will be, and we fool ourselves and do a disservice to those struggling to make ends meet if we think otherwise. Let us not forget that the better-off, whether businesses or individuals, play a useful role in our economy. Except for a few notable occasions, they pay tax. They create jobs and buy goods, which generates jobs, and in many cases they take their wealth responsibly and give back in countless ways, so let us stop killing the golden goose.

The simple fact is that we must cut state expenditure. The EU is a classic case. Some £51 million a day goes to that unaccountable, Soviet-style bureaucracy, the same EU that mislays €5.2 billion every year, according to the European Court of Auditors. Yet they want more, and we give it to them. We boast about giving 0.7% of our GDP in overseas aid. Do not get me wrong: I am all for charity, but charity should start in this country, particularly now that so many of our constituents are struggling. Let me give an analogy, the farming analogy, as I call it. If a third-world country needs to learn how to farm, we do not send it millions of pounds that go into the pockets of some genocidal maniac; we send a farmer and we teach them how to look after themselves. How many apprentices, nurses, doctors, hospitals and schools could be looked after if we had all the money that is going abroad?

Let us not forget the defence of our country and our armed services, which are being slashed to an unforgivable level. We have a bloated welfare bill; it has been discussed in this place again and again. Then there is the NHS, where all sides bury their heads in the sand. That bill will go on rising and rising to unaffordable levels. There may be—I am sure there is—another way, but no, we do not do that; we ring-fence it instead.

We need a country where the entrepreneur—the business man and woman—can fly free of red tape, punitive tax rates and burdensome regulations from the EU. In South Dorset, I have a young Marine who has set up a company called Ovik Solutions. He makes armoured vehicles based on old Land Rover chassis. Riot-proof and bomb-proof, they are currently serving in Northern Ireland—120 of them. One can see the white vehicles—they are his. The company is going from strength, from employing two people to 15. Ovik will provide British jobs, based on British engineering and ingenuity, in Britain. How ironic that its inspiration, Jaguar Land Rover, is now owned by India and production is moving to China.

What lessons have our Government learned? Here we are, on our knees, and what do we do? We appoint the right hon. Member for Twickenham (Vince Cable) as the Business Secretary. This man is no friend of business; he is a friend of those who say “Tax, and tax, and tax, and tax.” We do not need a man of that ilk in charge of our business.

Another crazy move, brought in by the Opposition when in government, involves our brewing industry. I am of course talking about the beer duty escalator—it is absolutely mad; jobs are going in their scores every year—and it is possible for no other reason than that people like to drink beer. This is a home-grown industry that we are singularly doing an awful lot to destroy.

What must we do? We must deregulate, we must lower taxes, and we must cut state expenditure. Yes, there will be pain—of course there will—but I am convinced that in the longer term, if the private sector is allowed to flourish, as it has done, much to this Government’s credit, with the creation of 1 million new jobs, then we, and it, will create the wealth and the jobs that we need.

17:27

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

May I say what a pleasure it is to follow the maiden speeches by our new colleagues, my hon. Friends the Members for Rotherham (Sarah Champion), for Croydon North (Steve Reed), and for Middlesbrough (Andy McDonald)? I think that I speak for everyone on the Opposition Benches when I say that they were superb contributions and that the arrival of six new Labour MPs, in all, has given us a tantalising glimpse of what life will be like in 2015 when Labour again has a parliamentary majority.

There is no doubt that the economy is the defining issue of this Parliament and that the deficit reduction plan is the defining measure by which this Government will be judged. In that context, last week’s autumn statement showed us that it is shocking how far they have fallen short, on the basis of their own yardstick, in terms of the progress they have made so far. In the emergency budget after the election, the Chancellor told us that he would need, first, four and then five years to sort the deficit out. He said that we could not afford to do it any slower and ease the pain, as Labour wanted. He said that it would be painful but it would be worth it. Last week, two and half years in, with hundreds of thousands of people made unemployed and the stripping out of the Army, the police, council services and everything else, he told us: “I need another five years.” He told us that we have almost nothing to show for the pain our constituents have endured so far.

Whether people are supporters of the Chancellor or not, the fact is that every time he comes to the House to report on his progress, he has to tell us that the economy has not grown as he had hoped since the last time he was here; that he is planning, more often than not, to borrow more than the last time he was here; that spending on public services will be cut more than the last time he was here; and that future growth will be less than he expected the last time he was here. Crucially, we now know that without the Treasury’s accounting tricks, borrowing would be higher this year than last year. This is a Chancellor who has failed, but it is our constituents who have to pay the price of that failure.

[Lisa Nandy (Wigan) (Lab)]

Austerity has wreaked havoc in areas such as Wigan precisely because the public and private sectors are so interdependent. The huge cuts to the public sector have had an appalling impact on the private sector as well. Does my hon. Friend share my disappointment that the Chancellor has refused to acknowledge that and refused to change course, as we have urged him to do? Having listened to the hon. Member for South Dorset (Richard Drax), it seems to me not only that the Government refuse to acknowledge that, but that they simply do not understand it.

[Jonathan Reynolds]

I completely agree. It is self-evident. The economy has grown by just 0.6% in the past two years and this year it has shrunk by 0.1%, with talk of the UK yo-yoing back into recession for the third time as the recovery continues to falter.

Without any significant growth, the Chancellor will fail to meet his own targets. Borrowing is only lower this year because the Chancellor has included on the balance sheet the £3.5 billion from the auction of 4G. That would make sense if the 4G mobile spectrum had indeed been sold for that amount, but the auction has not taken place yet. That means that the Chancellor has balanced the books with money that he simply does not have. If I asked my bank manager to accept that I had paid off a chunk of my mortgage as long as she factored in the sale of my car, but that I had not actually sold it yet, she would laugh at me. We should be no more convinced by the Chancellor’s actions.

Without the addition of the estimated windfall from the 4G auction, borrowing this year would actually be £2 billion higher than last year. Despite the promises that the austerity measures would stabilise the economy, this year the Government will borrow more—£212 billion more—than they had planned. Coalition MPs frequently warn us of the dangers of borrowing too much, but they never seem keen to take their own medicine. The Government’s deficit reduction plan is not working and it is simply mismanagement to pretend otherwise.

Deficit reduction is not the only promise that the Chancellor has broken. As well as telling us that austerity would be the solution, he famously promised that we are all in this together. We are not all in this together. The Government have given a £3 billion handout to the richest people in the country, yet a family with two children where one parent earns a relatively modest income of, for example, £20,000 are the ones who lose out.

Furthermore, the Government’s claim that the 50p tax rate meant that millionaires fled the country does not stand up to scrutiny. A simple look at the figures shows that the overall number of taxpayers remained almost unchanged between 2009-10 and 2010-11. Following the introduction of the 50p rate, there may have been a deterioration in declared incomes above £1 million, but that was without doubt the result of the wealthy forestalling their income from one tax period to another. The Government should have kept the rate for the next tax year to ascertain exactly what it brought in, because, goodness knows, we needed the money.

It is the same unequal story right across the country: it is Labour-run councils, particularly those in the north of the country, that bear the brunt of the cuts. On average, Labour-run authorities have seen their budget cut by £107 per person, which is three times higher than the figure for Conservative town halls. Councils will not receive detailed information for their 2014-15 budgets until later this month, but nationally they know that they will face cuts of £445 million in that financial year. Councils such as Tameside face an anxious wait to see whether that reduction will be applied equally or whether councils such as ours will again have to suffer disproportionately.

The situation in adult social care in particular is of great concern to me. I meet people in my surgeries who are in severe need of help, but simply not enough money is provided for social care in this country to meet that need. I have met people with caring responsibilities for adults and children who have told me of their sheer desperation at the prospect of their respite care being taken away. We need to do something urgently to properly support those people.

On unemployment, in my constituency 10 jobseekers are now chasing every advertised vacancy. A good portion of them are over 50 years old and starting to wonder if they will ever work again. Long-term unemployment is rising across the country and nearly 1 million young people are out of work. That is the principal cause of the Government’s borrowing problems and the OBR forecasts that the claimant count will continue to go up.

The Work programme was the Government’s attempt to get people off welfare and into work, but a successful welfare-to-work programme is not possible if there is no work available. According to the Government’s own statistics, just two out of 100 participants were still in work after six months, which means that the chance of getting a job was higher if people did not take part in the scheme. Members should contrast that with the success of the future jobs fund, run by the previous Government and spearheaded by the former Member of Parliament for Stalybridge and Hyde, James Purnell. Unlike the job-hunting support offered through the Work programme, the future jobs fund provided six months’ real work for every participant. It also had long-lasting results: in Tameside, half of those who took part went on to secure permanent employment. Of course, if we are to cut the deficit, we need to get people back into work—that is vital—but the turnaround is not just about the nation’s finances; it is also about an individual’s pride. I therefore urge the Government to look again at the success of the future jobs fund as they try to move forward from the failure of the Work programme.

For those who want to work, but have been failed by the lack of jobs and the impotence of the Work programme, there was even worse news last week. The Chancellor announced that they will be made poorer in real terms because their benefits will not be increased in line with inflation. That will cause hardship not just for the unemployed, but for a great many people in work. We heard today in Treasury questions that the majority of the people who will be affected are in work.

If that had been done as part of the Chancellor asking us to tighten our belts, it would be one thing, but the autumn statement in its totality represents a net giveaway for the next three financial years. It was not the Chancellor asking for more from the British people. The Chancellor can afford a tax cut for millionaires and a cut in corporation tax, but he asks people who get out of bed and go to work on low wages to pay for it. That is a disgrace.

The autumn statement is proof that the economic policies of the Conservative Government are simply not working. We cannot cut the deficit effectively unless the economy is growing, and the Government are not doing enough to foster economic growth. Today, while we talk about taxes, growth, double dips and triple dips, let us not fall into the trap of thinking that this is a debate purely about numbers; this debate is and should be firmly rooted in the increasing struggles of the people we all represent: the growing number of people who are accessing food banks, those who are choosing between eating and heating, and those who live with the fear that their homes may soon be repossessed. Those people are the economic reality of our country and we owe it to them to run our economy better than we are doing at present.

17:36

[Frank Dobson (Holborn and St Pancras) (Lab)]

As one of the ancients, I must say that I was heartened by the maiden speeches of my hon. Friends the Members for Middlesbrough (Andy McDonald), for Croydon North (Steve Reed) and for Rotherham (Sarah Champion), who brought a great deal of cogency and compassion to the debate. I look forward to their participating yet more.

I have been struck, yet again, by the extent to which the thinking of Conservative Members is utterly dominated by the myth of the Thatcher legacy: that she transformed the British economy and that it was saved from ruin through competition, deregulation and privatisation. One can expect Tories to think that, but a lot of commentators in the newspapers and on television and radio clearly take the same view. It is entirely erroneous. The annual economic growth under Mrs Thatcher was exactly the same as that under the Governments of Jim Callaghan and Harold Wilson who preceded her.

But Mrs Thatcher had no excuse. The windfall takings from privatisation and North sea oil amounted to £155 billion. Practically every other country in the world that had such a windfall established a sovereign wealth fund to be invested over a long period. Instead, these Tories who claim to be careful with money blew the lot.

[Kwasi Kwarteng]

Will the right hon. Gentleman give way?

[Frank Dobson]

No, I shall not give way for the time being because I cannot make up my mind whether the hon. Gentleman is here or not.

The hon. Member for Burnley (Gordon Birtwistle) ought to remember that Mrs Thatcher abolished apprenticeships. She did not invest in research, improving engineering, infrastructure or retooling British industry. Her real legacy was to introduce the almost total dominance of banking and finance into our economy. What a decade and a decade and a decade we got out of that!

The bankers’ bonus has become one of the greatest scandals of all time. The British Bankers Association, the trade group of these respectable bankers, actually ran the LIBOR rate rigging so that people could make money. The payment protection insurance scams were intended to make money—they were not a charitable effort. Barclays was involved in the LIBOR scandal, in the PPI scandal and in sanctions busting, and it managed to lose £7 billion in the crash. Its auditors, PricewaterhouseCoopers, apparently did not notice any of that. It should have noticed, because the bank was not involved in those things as a charity; it was getting a percentage of every transaction and one would have thought its auditors might have spotted that.

The magnificent HSBC was involved in the LIBOR and PPI scandals, and we now know it was involved in sanctions busting in Iran, Burma and North Korea. It has been involved in the financing of gunrunners and in money laundering from drug barons in Mexico. To facilitate the Mexican drug barons it opened not six, 60, 600 or 6,000 but 60,000 secret accounts for Mexicans in the Cayman Islands, and it received a percentage from each. HSBC was not in it as a charity; it was in it to get money.

Presumably, some of the bankers were paid bonuses for the profits they made from sanctions busting, gunrunning and money laundering, yet HSBC, the former masters of the universe, lost £27 billion in the crash and its auditors, KPMG, did not get a sniff of it—not a thing. That is a disgrace and is damaging our economy and the reputation of British businesses trying to get work abroad. People say, “Have you got one of these dodgy auditors? Have you got a dodgy banker on your team? It’s not very helpful if you have.” That is a real problem.

To make up for the mess that the bankers caused—and continue to cause—ordinary people in this country are expected to skimp and save. My hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) shares the problem I have in my constituency of housing benefit. She will, therefore, be familiar with stories such as that of the woman who came to my advice service on Friday and lives in a council flat that was sold under the right to buy. She is expected to pay £485 rent to the private landlord who now owns that flat, but has been told that her benefit will come down by £160 a week, meaning she can no longer live there. Perhaps more importantly—even to decent, what used to be one-nation Tories—her nine-year-old daughter who is doing well at primary school will not be able to live in that flat any more, and neither will her 19-year-old son who is doing an apprenticeship. They will be driven out under what I first described—I know the Deputy Prime Minister does not like this description—as a policy of social cleansing.

The chair of the Tory party—when he isn’t Mr Green—says that people should not be able to live in places they cannot afford, but what about the people in my constituency who sweep the streets, keep the hospitals clean, work as nurses, drive buses and make the city work and a civilised place? They are exactly the people who are being driven out by the benefit changes, and I hope to God my party will vote against them.

17:43

[Ms Margaret Ritchie (South Down) (SDLP)]

I begin by congratulating my hon. Friends the Members for Rotherham (Sarah Champion), for Croydon North (Steve Reed) and for Middlesbrough (Andy McDonald) on making their maiden speeches today.

I commend the Treasury for coming to its senses and cancelling the proposed increase in fuel duty. It seems there is at least some acknowledgement of the need to encourage growth in the economy rather than cut a path to perpetual stagnation. The move will put money back in people’s pockets, encourage local businesses and hopefully spur growth in the local economy, particularly in rural areas. Social Democratic and Labour party Members called for that measure, like many of our colleagues from other parties who take their seats in the House of Commons.

However, that was a brief moment of hope in an otherwise dismal autumn statement. Statistics show that this is the slowest recovery from a financial crisis in history. The OBR downgraded growth to minus 0.1%. Since the statement, the City of London has cast doubt on the Chancellor’s assertions that the economy will return to growth next year, stating that falling revenues from North sea oil and poor manufacturing figures could push the UK into an unprecedented triple-dip recession.

In the light of that, the only commitment the Chancellor will have no problem meeting is his promise to extend austerity until 2017-18. The only reason the borrowing figures look slightly healthier than expected is the sleight-of-hand, last-minute inclusion of the 4G spectrum auction windfall. On that topic, will the Chancellor or the appropriate Minister confirm, as I was told in response to a written question recently, why Northern Ireland will not receive Barnett consequential funding as a result of that sale?

Against such a backdrop, it is hard to see how anyone could argue that the Chancellor’s economic strategy is bringing the economy back to a position of strength. Quite simply, austerity is not working, including for people in Northern Ireland.

[David Simpson (Upper Bann) (DUP)]

At the beginning of the hon. Lady’s speech, she mentioned the cancellation of the 3p increase—it is a good thing the Chancellor did not go ahead with that because it would have had a detrimental effect on the domestic user. Does she agree that one way to help the Northern Ireland economy would be for the Government to get to grips with smuggled fuel from the Irish Republic, which loses them tens of millions of pounds?

[Ms Ritchie]

I thank the hon. Gentleman for his intervention. Like him, I believe that fuel laundering and smuggling is a major problem. It needs to be addressed by the Treasury, and by the Department of Finance and the Revenue Commissioners in the south of Ireland.

We have record youth unemployment in Northern Ireland, and local businesses face a climate of extremely low consumer confidence and no prospect of growth. We had the highest rate of youth unemployment in the last quarter for which figures are available—some 18%. More recently, we heard the terrible news of the closure of Patton, a major construction firm, with the loss of more than 150 jobs.

The Government have spoken repeatedly of rebalancing the economy, but talk of their flagship policy—the devolution of corporation tax—was notable only by its absence from the Chancellor’s statement last week. It is critical that the Northern Ireland Assembly and Executive are granted more economic levers that we can use to rebuild our economy. The Government’s decision has been a long time coming, but it is crucial for our medium and long-term planning that they make it as soon as possible.

The Chancellor listened to our concerns about the adverse impact of the carbon floor price and the exemption will deliver a degree of much-needed support to local business. However, such news does not remove the reality of the broader economic picture. As the Northern Ireland Finance Minister has indicated, the result will likely be more cuts being implemented by the Northern Ireland Executive, particularly with regard to welfare payments.

[Dr William McCrea (South Antrim) (DUP)]

I commend the hon. Lady for her speech. Does she agree that banks need to be more sympathetic in lending to small and medium-sized businesses if they are to prosper, because of the challenges they face?

[Ms Ritchie]

I thank the hon. Gentleman for his intervention. I agree that the banking regime in Northern Ireland is stringent at the moment. We have a unique situation in Northern Ireland. Some of the banking institutions are owned by the south of Ireland, but some have direct links to the Royal Bank of Scotland and Danske Bank. So there is that sort of mix as well. Suffice it to say that small and medium-sized enterprises are facing difficult economic challenges, and to have banks unwilling to lend or provide the necessary credit at this difficult time is not helping economic growth. That needs to be explored by the Treasury and, in the case of Northern Ireland, in some instances, directly with the Department of Finance in Dublin.

[Jim Shannon (Strangford) (DUP)]

Does the hon. Lady think that one way of boosting the economy would be to encourage the construction industry, which, as all Members know, has had particular problems? Does she think that the banks should be more sympathetic to the construction industry in particular?

[Ms Ritchie]

I agree that the construction industry, along with agriculture and tourism, is a vital economic lever in Northern Ireland, but, owing to the economic challenges of the recession, many people employed in the construction industry have found themselves without work and many businesses have gone to the wall. They did not meet with a sympathetic reception from the banking institutions, but they need assistance because they are necessary to pump-prime our local economy.

The Chancellor’s welfare plans will remove more than £4 billion from the welfare budget by uprating benefits by just 1% a year until 2015. With a legacy of physical and social neglect from the troubles, this will remove the necessary level of support from many of our people and a substantial sum of money from the local economy. Instead of addressing their own shortcomings, the Government are vilifying the poor and those on welfare as a smokescreen for their own appalling economic record. That will place those most needy and vulnerable in the current economic climate in an even more precarious situation and will hurt not just the unemployed, but those who rely on in-work benefits. It is nothing more than a real-terms cut for those most in need by the same Chancellor who handed out a tax cut for the wealthiest in society at the last Budget. It would seem that some of us are more “all in this together” than others.

The autumn statement might have been politically more surefooted than the Chancellor’s last Budget, but I fail to see what it will do to address the core problems facing the economy. It might reassure some Tory voters here, but I do not think that my constituents or the people of Northern Ireland will find much to cheer about. I fear that we will be having this same debate, with similarly poor economic figures, come the next Budget.

17:52

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

I congratulate my hon. Friends the Members for Middlesbrough (Andy McDonald), for Croydon North (Steve Reed) and for Rotherham (Sarah Champion), who gave three excellent speeches and demonstrated the great capabilities and talent coming into the parliamentary Labour party and which we hope to see more of in 2015.

The economy has been weakened by poor decisions by the Chancellor leading to declining growth, so borrowing is higher, which means that the public debt is worse. While public spending totals are similar to those in the March Budget, tax revenue forecasts are far more pessimistic. The Office for Budget Responsibility suggests that by 2015-16 tax receipts will be £662 billion instead of £692 billion. That is a 4% overestimation, as corporation tax, income tax and VAT at 20% have not brought in and will not bring in the tax take expected. That £30 billion shortfall translates into a £30 billion rise in public sector net borrowing.

In every year except 2012-13 borrowing is higher, and the gap grows over time. This year’s figures are flattered by the £3.5 billion sale of the spectrum for 4G, which is yet to occur, and by the £5 billion tax deal with Switzerland. Let us look at the Chancellor’s much lauded

“largest tax evasion settlement in UK history”.

It is anticipated by the Chancellor to bring in more than £5 billion over the next six years, although the OBR described that clearly as “highly uncertain” because of the lack of information about the value of the assets held by UK citizens in Switzerland. Indeed, the Treasury has stated:

“The final stage of the ratification process is expected to be concluded shortly, but there remains a possibility that the Swiss government will have to hold a referendum on the agreement… This is therefore a significant fiscal risk to the forecast.”

The Treasury added:

“The estimated revenue raised by this measure is also highly uncertain as there is little hard information about the value of UK individuals’ financial assets in Switzerland, and how these individuals will respond to the policy.”

Apart from those settlements, by 2015-16 three years of higher borrowing will push up public sector net debt by £67 billion, or 4%. The Chancellor’s own rules state that public debt as a share of national income must fall by 2015-16. To pass that test, the growth in public debt must be lower than growth in cash or nominal GDP.

In March, the OBR massaged its nominal GDP growth forecast up to 5.7% in 2015-16 alone, in order just to exceed the 5.3% rise forecast in public sector net debt. Now the OBR has slashed its GDP growth forecast for that year to 4.6%. No matter how much the Chancellor likes to fudge and fiddle the figures, he cannot massage down the 5.9% hike in debt forecast by the OBR for 2015-16. The chances of his meeting the terms of his own debt rule have taken only two and a half years to be completely destroyed by the growth-strangling policies he now wishes desperately to reverse, as we saw with the U-turn on capital allowances. The Chancellor says he has missed his debt rule by a fraction and that he will retain the 2015-16 debt target, even though it will now be impossible to hit.

The public finances are now difficult to compare with those under previous Budgets because the statistics are affected by large transfers of cash or classification changes. In fact, the Chancellor’s raid on surplus funds sitting in the Bank of England originates from his quantitative easing programme. The OBR says the surpluses are temporary, so although the Chancellor’s cash grab flatters headline public borrowing figures by some £12.3 billion in 2013-14, future Governments will have to repay the Bank of England an estimated £6 billion to £7 billion in 2021-22 for this Chancellor’s record purchasing of our own bonds. Without that cash grab, the Chancellor would have broken not just his fiscal rule—which he clearly has—but his debt target for 2016-17 and his deficit promises.

Here we are, going into 2013, and all the Chancellor can say is that we need another five years to deal with the deficit problem. That is exactly the same statement he made in June 2010—a stagnant sentence for a stagnated economy, stifled by a part-time Chancellor. This is an autumn statement following autumn statements and Budgets for the last two and a half years, all of which have failed to meet any of the stated aims of the Chancellor’s original objective. Two and a half years later, we are still five years away from the total eradication of the deficit. This Government will have accrued more debt in five years than in the entire 13 years of Labour’s rule. Under this Chancellor’s watch, in 2015 the UK will unfortunately hold the worst public sector net deficit in the west, according to OBR and IMF figures.

Was the autumn statement a growth strategy? No. Is this a deficit and debt-reducing strategy? No. Is this a strategy for borrowing? Yes it is, and on the backs of the low and middle-income workers—borrowing for failure, not for investment.

[Richard Drax]

Will the hon. Gentleman give way?

[Tom Blenkinsop]

I am sorry, I will not.

Can the Chancellor guarantee that we will borrow at a low interest rate because we will still have a triple A rating? No. The very cornerstone on which this coalition is premised has been utterly flawed. As a result, a recovering economy in May 2010 has been so damaged that we have witnessed a double-dip recession, with the strong likelihood that it will become a triple-dip recession—something that the Secretary of State for Business, Innovation and Skills had to admit only this Sunday was a distinct possibility. In essence, the Chancellor is on the brink of exchanging the triple A credit rating he inherited from Labour—and which he prized most of all—for a potential triple dip of his own making.

17:58

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

I cannot help but begin by noting that, with nearly two hours to go, there is not a single Tory MP rising to defend the Chancellor’s policies. That speaks for itself—I cannot remember the last time it happened.

[George Freeman (Mid Norfolk) (Con)]

rose—

[Mr Meacher]

No, I am not going to give way; I have not even started. I am just observing what has happened.

I congratulate my three new hon. Friends the Members for Middlesbrough (Andy McDonald), for Rotherham (Sarah Champion) and for Croydon North (Steve Reed) on what I thought were quite remarkable speeches—confident, informed, quite amusing in places and committed. When I first came to this House—a long time ago—new Members took their listeners on a tour of their constituencies, touching on the buildings, the people and the history, but saying nothing about politics. That was not the protocol. I am glad that that rule has gone. We heard passionate speeches today that were all about politics, including the national health service, child care services and the defence of the unemployed. I think that all three of my new hon. Friends will make a big contribution to this House.

[Richard Drax]

I do not want to touch on the economy, but may I just say that if what the right hon. Gentleman has just described was indeed the case, is it not rather sad that that protocol was not observed?

[Mr Meacher]

I obviously made a mistake in giving way to the hon. Gentleman.

As the Chancellor acknowledged, he had two main objectives in his autumn statement/mini-Budget. One was to generate the growth that has certainly eluded him for the past two and a half years; the other was to rebalance the economy and lay the foundations for genuine, sustainable, long-term growth. He failed miserably on both counts. On the first test, the International Monetary Fund, the OECD, the Federation of European Employers, the CBI, the British Chambers of Commerce and the Federation of Small Businesses have all been telling him that he simply must inject growth into the economy and stop endlessly hacking away at public expenditure. Just how desperately such actions are needed is shown by the fact that the Chancellor’s own forecast in his 2010 Budget that cumulative public sector net borrowing over the next four years would be £322 billion has now been increased to a staggering £539 billion. That is an increase of £217 billion. The key point is that that increase is almost wholly attributable to the failure of the economy to grow. That is the significant point behind this debate.

[Kwasi Kwarteng]

Will the right hon. Gentleman give way?

[Mr Meacher]

I will give way to the hon. Gentleman, because he was kind enough to give way to me at the end of his speech.

[Kwasi Kwarteng]

I am glad to see that some courtesies are still observed in the House. Does the right hon. Gentleman accept that this country and this Government have a problem with current spending levels, or does he believe that we can carry on increasing spending indefinitely?

[Mr Meacher]

Of course I believe that there is a problem with the level of debt and the level of the public sector deficit; everyone accepts that. The issue is how it should be dealt with. I believe that the way this Government are dealing with it is profoundly self-defeating.

The Chancellor has failed in the sense that, according to the OBR, despite an output gap that remains incredibly high at 3.7%, the net effect of all his measures in the autumn statement will be to raise the general growth rate by a footling 0.1%. That is an extraordinary judgment on the Chancellor.

The Chancellor also failed his second test, which was to shift the economy on to a more sustainable long-term footing, moving away from his over-dependence on finance—a move we all agree with—and towards a much stronger industrial and manufacturing base. Eighteen months ago, he announced with great fanfare the march of the makers. That never happened, however. He has now promised a £40 billion guarantee for private infrastructure investment, but the problem is not one of too little credit; it is one of too little demand for credit. The latest figures show construction plummeting ominously, largely because of its great dependence on the public sector, which the Chancellor is shrinking. Moreover, UK manufacturing will this year suffer the biggest deficit in traded goods in its entire history—a deficit of roughly £110 billion, or 7.5% of gross domestic product. That is utterly unsustainable, and if that trend is not reversed, it will inevitably lead to an almighty crash in British living standards before long.

[Gordon Birtwistle]

rose—

[Mr Meacher]

I will not give way again, as I do not have much time left.

Why is the Chancellor not meeting his own tests? It is because he is obsessed with a neo-liberal ideology that forbids any public sector lead role in the economy. In fact, the Chancellor is crucifying Britain today on a cross of dogma. What should a sensible steward of the British economy do now? He should do two things: reinstate the capital spending programmes cancelled in the great drive towards deficit reduction, with special priority given to house building, energy and transport renewal and green technology; and set up a national investment bank with its own portfolio of investment projects, focused on key infrastructure and cutting-edge technology.

How will that be paid for? There are three options. Instead of any further £50 billion tranche of quantitative easing being used to consolidate bank balance sheets, as has happened every time up till now, the Chancellor should divert at least a portion of it towards generating 1 million or more jobs by investing it directly in industrial and manufacturing projects. Or he could levy a capital gains tax charge—I know that this would not be welcome on the Government Benches—on the colossal gains made by a minuscule proportion of the mega-rich, which The Sunday Times, a Murdoch paper, believes to have been in the order of £155 billion in the past three years. Or he could justify—yes, I think he could—a temporary increase in borrowing, of, say, £150 million to raise £30 billion at an interest rate of 0.5% on the reasonable grounds that with such a weak economy but cyclically adjusted net borrowing forecast at only 3% this year, he has given himself enough leeway to delay tightening. Those are the three options, and not to do any of them is a culpable negligence for which he will not be forgiven.

On the Chancellor’s second objective of rebalancing the economy, several measures need to be taken urgently. First, British manufacturing clearly needs a larger flow of qualified skilled workers. The academic underpinning of the STEM subjects—science, technology, engineering and maths—should be steadily increased; a viable and effective post-14 vocational route, with a much stronger work component, should be established in schools; and employers should be made to take responsibility for on-site training. Secondly, the bane of short-termist bank lending to British manufacturing must be tackled by giving incentives to develop a long-term ongoing relationship between banks and their customers, as is done very successfully in the German Mittelstand. Thirdly, the supply chains, which are crucial to any successful manufacturing economy but which have been broken up by privatisation and foreign sell-offs over the past 30 years, urgently need to be restored to achieve a secure base for SMEs. Fourthly, the sacrifice of key industrial sectors and companies to uninhibited acquisition in the international markets—Pilkington, P&O, Corus, BT, O2, Smith Electronics, Cadbury and BA; it is a very long list and a laissez-faire policy that no other major country in the west would ever allow—should be reversed if Britain’s economy and its survival are to be secured.

All those things need to be done, because the alternative under present policy is semi-permanent continuation of a condition of semi-slump.

18:08

[George Freeman (Mid Norfolk) (Con)]

It is pleasure to rise and to prove the right hon. Member for Oldham West and Royton (Mr Meacher) wrong through my passionate defence of the Chancellor, not that he needs it, and my welcome for the autumn statement.

I am old enough to remember the 1970s and when the economic history of that period is written, I think it will be rather simple: in 1979 a Conservative Government inherited bankrupt public finances and put them straight with an enterprise economy. A Conservative Government sorted out the mess of the European currency-inspired recession of the early 1990s and gave the future Labour Government a golden legacy in 1997. After two years of sound public finances following the previous Conservative Administration’s public spending commitments, the previous Labour Government embarked on an unprecedented spending spree—a boom disguised under various labels, such as cool Britannia—that left this generation with an historic debt legacy for which we, our children and our grandchildren will be paying the bills for many years to come.

[Sheila Gilmore]

One of the problems with the hon. Gentleman’s retelling of history is that the Labour Government paid down national debt so that it was lower after the first few years of that Government than it had been at the end of the previous Tory Government.

[George Freeman]

I am grateful for that intervention. If the previous Labour Government paid down the debt, why have we inherited this historic debt legacy—a legacy, it is worth reminding the House, that sees us paying debt interest payments that are set to rise to £76 billion a year, which is more than the amount spent on more than three Departments? This is a historic legacy, for which the Labour party should be ashamed.

[Kwasi Kwarteng]

I was wondering what my hon. Friend thought about the fact that the previous Labour Government ran consistent deficits from 2001 to 2007—even while the economy was growing.

[George Freeman]

My hon. Friend makes an excellent point, principally about the structural deficit. The public are not daft: they know the difference between a Government who spend more each year than they receive and one who wilfully disregard the underlying causes of the deficit, which were and still remain for us to tackle—the problem of an ageing society for the NHS, the public sector pensions bill and the out-of-control welfare state. I shall say something shortly about the Government’s important reforms in that regard.

I welcome this autumn statement, which begins the process of tackling once again the toxic debt legacy left to us by the Labour party. I welcome the fact that a Conservative Chancellor in a coalition Government has been able to deliver substantial savings—£33 billion in the welfare budget, £60 billion savings in interest repayments and £70 billion savings on the cost of government in Whitehall—allowing us to create the incentives for work, taking a million of the lowest-paid employees out of tax altogether, raising the tax threshold and abolishing Labour’s planned fuel duty rise, with the net result that over the last two years we have seen the creation of more than 1.2 million net new jobs in the private sector.

[Frank Dobson]

Does the hon. Gentleman not think it rather odd that the Government are unprepared to give any estimate of how many of those “new private sector jobs” are ones that have been outsourced by the public sector? Has it not been estimated that even in the field of further education, the total approaches 200,000?

[George Freeman]

I am grateful for that intervention because it gives me the chance to make the fundamental point that Labour Members seem constantly unable to grasp—that every penny they spend from this Dispatch Box is money that has to be taken off this country’s citizens in tax, and that they will receive it only if it is earned by the private sector. It is the private sector that ultimately earns the money that the public sector spends. This Government’s rebalancing programme to restore our public finances will allow us once again to spend on the public sector sustainably with moneys earned by the private sector. That is one of the most crucial and important reforms made by this Government, and I welcome it.

Yes, the Office for Budget Responsibility has made clear what the Chancellor has consistently said—that this will be a long a fragile recovery and that it has been made worse by the crisis in the sclerotic eurozone, with the debts of the 2008 recession now being clearer than they were at the time. That has become clear not least because we now have the OBR—another of this Government’s important reforms—putting some transparency and honesty at the heart of Government statistics. That is not always comfortable, but it is an important—

[Frank Dobson]

Will the hon. Gentleman give way?

[George Freeman]

No, I have already given way to the right hon. Gentleman.

Of course we are in the process of a long and slow recovery, but the evidence—in terms of new jobs, the data on private sector growth, and the business community’s strong support for this statement and the measures previously announced by the Government—suggests that the policy of rebalancing the economy is right and working. We must have an economy that is led by the private sector. We need to do more to support industry and the knowledge economy, which this Government are doing, and we need to do more to support regional growth outside Greater London and the south-eastern area.

It is an irony of the last Labour Government that, despite preaching the language of regional economics, what it came down to was a vast tax transfer through the regional development agency structure. In my own field, more than £15 billion was spent on business support, but according to the Richard report, only 0.5% of that was received by businesses on the ground floor, as it were. The last Government embarked on a major boom in regional spending, but it was not sustainable. One of the sadnesses of this crisis is that many of the people who were offered jobs during that boom in the public sector are paying the price now. That is not their fault; it is the fault of those who were running the economy at the time, and I for one am waiting for them to say sorry.

The net growth figures are low at present, but that disguises a very important and profoundly positive change. We have rightly taken money out of the public sector in order to rebalance the economy and bring our public finances under control. The fact that the net growth figures are positive is a sign of the profound growth that is beginning to happen in the private sector, and which bodes well for our public finances in the long term.

I welcome the Government’s plan A-plus, which is intended to restore our public finances and get the deficit under control, and I welcome the fact that the annual deficit is now down by 25%, although there is more to be done. The plan is also intended to free up money to be invested in infrastructure. More than £20 billion has been committed to infrastructure projects that are long overdue, and last week £600 million of extra investment in science and the knowledge economy was announced. I shall say more about that in a moment. The truth is that we need a plan A-plus plus plus, but we do not need the plan B espoused by the Opposition. That B stands for borrowing, it stands for the bankruptcy of our public finances, and it stands for Balls.

[Nigel Adams (Selby and Ainsty) (Con)]

My hon. Friend said earlier that he remembered the 1970s. I wonder whether he remembers the late 1960s, when Viv Nicholson, the pools winner, said that she would “Spend, spend, spend.” She eventually went bankrupt. Does my hon. Friend agree that even she would be embarrassed by the Opposition’s approach to spending and debt?

[George Freeman]

My hon. Friend has made an excellent point. One must choose one’s advisers carefully. When taking advice from rock stars, one should listen to the music, but not spend accordingly. “Spend, spend, spend” is exactly what the last Government did, and we are all paying the price now.

I entered the House after a 15-year career starting companies in the life sciences sector—which involves some of the most exciting parts of the country’s economy: medicine, agriculture and the clean technologies—in Cambridge, Norwich, Scotland and some of the northern cities, and in London. I believe that that sector represents a hugely exciting opportunity for the country as we rebalance our trade away from the sclerotic eurozone and towards the faster-growing emerging nations of the world—some of the BRIC economies, and the “next 11” that were identified by Jim O’Neill in his seminal paper.

Those economies are growing at a rate of 7% or 8% a year, which, compounded over 10 years, amounts to 100% growth. They are the vibrant markets of tomorrow, and we have an opportunity to support them with our knowledge economy and our life sciences. Today that means helping them to develop the basics of public health care, such as nutrition, food security and medicine, but tomorrow they will quickly grow and develop much more sophisticated needs and markets.

The life sciences sector is crucial to our economic recovery and to a sustainable model of economic growth, and I strongly welcome the support for it that has come from the Chancellor and his team. Last week a further £600 million was announced for our science base, which is already paying dividends—in the last year alone, more than £1 billion has been invested in early-stage life science ventures funds in this country—and GlaxoSmithKline has announced a £500 million investment in an advanced manufacturing facility. The strategy is working, and I encourage the Government to stick to it.

I am the Member of Parliament for Mid Norfolk, a rural area which, in recent decades, has been viewed as something of a rural backwater, and has received all too little investment. In our region, the dualling of the A11, the investment in the Cambridge-to-Norwich rail link between the two life science clusters and the £90 million announced recently for support for our research and innovation centres have all been extremely welcome, and are already having positive effects locally. I was in Cambridge on Monday with the Prime Minister, launching the new cancer genomics centre.

There is a spirit of optimism afoot in our region. That speaks for the success of this strategy, which I welcome and commend to the House.

18:20

[Austin Mitchell (Great Grimsby) (Lab)]

It is a pleasure to take part in this debate, during which we have heard three excellent maiden speeches. All of them were very impressive, so it is clear that we oldies will have to pull our socks up. As I listened to the speeches, I abandoned my long-standing hope of reaching the shadow Cabinet, because the competition will clearly be too strong.

However, much of the debate, including the last speech from the Government Benches, has been disappointing, as it has been too much about who got us into this mess and not enough about how we can get out of it. We are undoubtedly in a mess: we have a fiscal deficit; we have a massive debt burden; we are in the grip of deflation; demand is very low; we have just had a double-dip recession and we are heading for a triple-dip; unemployment is far too high; GDP is 4% down on 2008, because, unlike most countries, we have not made up that shortfall; the balance of payments gap is now gaping, standing at 7.5% of GDP; and our manufacturing has shrunk too much to pay our way in the world. By any definition, that is a mess.

The question is: how will we get out of this mess? The Government’s policy shows no sign of getting us out of it. It was described at the start as an expansionary fiscal contraction, which is an oxymoron—more “moron” than “oxy”. Their aims have been impossible to achieve because every increase in unemployment means a reduction in tax revenues and an increase in spending to support misery, and the Government are therefore not cutting debt. The Chancellor says, “We’re cutting debt to keep our triple-A rating.” Such a rating goes to a healthy economy with prospects, which our economy is not, and next year we will lose our triple-A rating. Interestingly, the Government are now saying that that does not matter. We will lose that rating because of the disastrous state of our economy.

The only answer is to have growth. It is a simple way of paying off the debt. The only way to pay off the debt is to get growth into the economy, and the only way to get growth into the economy is to stimulate the economy. A few years ago, President Obama put in a $780 billion stimulus through his national recovery Act. We must have such a stimulus, too—although Labour has been very cautious on that—and it can only be paid for by borrowing. There needs to be more borrowing.

The arguments against borrowing are pathetic. Borrowing has become the fig leaf of the Tory party; it covers any failure, and the failures have been fairly substantial. The Government are obsessed; they have a piggy-banking fear of borrowing. We cannot, however, pay off debt and deflate the economy at the same time.

Where else are we to get this stimulus if not from Government borrowing? Individuals and families are burdened with debt, as are companies. They are not spending; they are trying to pay off debt. Spending and stimulus will come only if the Government borrow more, therefore. There is no problem with that. Interest rates are at record lows, and our credit is good at present, so we can borrow, and we should borrow to spend.

We should borrow to build housing. We should have a big housing drive, and most of it should be public housing for rent. That is what we need, because people cannot afford to buy. We should subsidise jobs if necessary, too. We must borrow, spend and stimulate. That is the only way out.

We need more quantitative easing, which I hope will bring the pound down. The pound is now up 8%. When the Governor of the Bank of England starts saying in his speeches that the pound is too high, it must be horrendously overvalued because no Governor of the Bank of England has said that before. The value of the pound needs to fall, to boost exporting industry.

The Government have been very clever at apportioning blame for the situation the country is in. First, they blamed Labour, although our borrowing was essentially to save the banks, and I am sure the current Government would not have wanted us not to save the banks, would they? If they did not want that, Government Members should say so now. The Government then blamed scroungers lying in bed as the strivers go off to work—that is a very touching picture. They then blamed the size of the benefit bill, which we now gather must be cut still further—although not until 2015, after the election, it should be noted. Now they are blaming the eurozone. It certainly has problems but it must be pointed out that the deflation here and the deflation in the eurozone are both being done for ideological reasons. The ideological reason in Europe is that people do not want to give up on the euro. They cannot afford it to break up, so they have to keep trying to make the unworkable work. That is depressing the European economy, because it is producing deflation in all the Mediterranean economies. That deflation in those weaker economies—the uncompetitive economies—in turn produces a fall in demand for German goods; they cannot afford the BMWs and the Mercs any longer, so Germany becomes depressed. We perhaps feel a touch of schadenfreude about that, but it spreads depression right round Europe.

Our depression is caused by the Chancellor’s ideology and his horror of borrowing. We know how to get out of this recession but for ideological reasons no Government are doing what they should do to get of it. The same is true in the United States, where President Obama is being held back from giving any stimulus and cutting taxes for the mass of the population by the Republican desire to cut taxes only for the wealthy. That has produced the fiscal cliff on which the American economy is now hanging.

So there is no prospect anywhere—no certainty—of expansion, and if there is no possibility of growth and expansion, people and companies are not going to invest. All the pious hopes that the hon. Member for Mid Norfolk (George Freeman) has just given us about a resurgence of companies are in vain, because companies will not invest as there is no prospect of profit and no prospect of success. That is the trap we are all in, and we are there because of piggy-banking ideology, ignorance about real economics and simple bad economics in practice, which is killing growth and blighting the lives of our young people.

What do the Government have to offer at the end of this debate? It is pathetic to see that Government Members have not even bothered to turn up to defend the Government; Labour Members have had to do all the attacking and the speaking, because Government Members have had to be dragged in. All the Government have to offer is more debt, more misery, more cuts—£10 billion to £15 billion of them—and more fracking. This Government are one of the best fracking Governments in the world, holding out great hopes that it will provide a new regenerative miracle. That is all they can offer. What they cannot offer is hope, prospects, improvement, growth.

18:27

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

Regrettably, the economy is on course for a lost decade under this most paradoxical of Chancellors: reckless on one hand, but complacent on the other; a historian, but with precious little grasp of learning its most obvious lessons; and a tactician, but now pursuing the basest strategy of all in politics—attempting to divide and rule by separating those on middle incomes from low-wage Britain, and the poorly paid from the unemployed. His Conservative predecessors, people such as Winston Churchill, Harold Macmillan and Iain Macleod, would surely recoil in horror if they could they see what this Chancellor is doing to the reputation of the party that once proudly stood for the principle of one nation, but does no longer.

There is no social group that this Chancellor will not exploit for perceived political gain, but he stands exposed in this debate: he has no idea of how to regenerate the missing growth in the UK economy; he has no clue on how to undo the damage he is doing to ordinary families’ living standards and slumping real wages; and he has no concept that his policies on welfare represent no more than a throwback to the worst excesses of harsh Victorian Toryism.

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

Does my hon. Friend not recall that when Government Members were in opposition, in the good years, as we might call them, they took the credit, but they will not take the credit for getting us into this mess in the bad years?

[Mr Bain]

I thank my hon. Friend for that. What I do remember is that when the right hon. Gentleman was shadow Chancellor he backed every single penny of the public spending plans of the Labour Government until the financial crisis hit. Indeed, he had the sauce to call them “eye-wateringly tight” on occasion in this House.

What we see is a Chancellor with a plan aimed at winning marginal seats at the next general election at any cost, but bringing in the cruellest sequence of benefit cuts since those of the national Government in 1931 and aiming his harshest measures at the most vulnerable in our society.

Our economy is suffering from the slowest journey out of recession since the 1870s. As a result of the extreme austerity measures that the Chancellor has introduced, it will now take nearly seven years to repair the lost output from this recession, compared with just four years during the great depression in the 1930s. We were told two and a half years ago that a policy of expansionary fiscal contraction would restore confidence, but instead nearly 4% of output has gone, the Chancellor’s supplementary target on debt falling as a share of GDP by the end of this Parliament has gone, and many economists, including at Citigroup, expect the loss of Britain’s triple A credit rating within the next 18 months, the retention of which the Chancellor made his principal criterion of credibility.

No wonder that on The New Yorker website last week, the Chancellor’s policies were dismissed as an example of what the US should avoid—a commitment to the deflationary economics of the 1930s, with the Reaganite trickle-down economics of the 1980s and the even harsher Benthamite economics of the 1830s. Instead of uniting this country in a crusade against long-term and youth unemployment and what Beveridge called the social evil of idleness, this Chancellor wants to divide society by demonising the unemployed in a way that no Government have done since the time of the Poor Law in 1834.

Despite the Bank of England running the loosest monetary policy in several generations and owning three tenths of our national debt through the use of its asset purchase facility, the OBR predicts that joblessness will rise by as much as 340,000 over its forecast period. So we can see that the US economy, having adopted a different policy from the austerity of this Government, yet described by the Nobel laureate Paul Krugman in The New York Times yesterday as

“still, by most measures, deeply depressed”,

has grown nearly three times as fast as the UK, and according to the Congressional Budget Office, will have a deficit next year of 4%, compared with a deficit of 6.1% in this country, and UK debt will be nearly 18% higher in 2015-16 as a share of GDP than that forecast by the OBR in 2010 on the EUROSTAT measure.

Make no mistake, this Chancellor’s policies on taxation, benefits and spending are cutting the incomes of the poorest tenth of households by 2.7%, at a time when the OECD forecasts that we will see barely half the rise in economic demand that will be seen in America next year, and barely a third of that the year after, despite the looming fiscal cliff. Despite the stream of measures unveiled in the autumn statement, the OBR’s verdict on their usefulness was as unerring as it was deadly for the Chancellor’s reputation—just a 0.1% rise in GDP over the next two years, at the same time as the OBR downgraded growth by 1.7% over the same period.

Increasingly, we see that this Chancellor’s legacy will be to turn the long-term prospects of the UK economy into those of a low-wage, low-skill, low-investment and low-productivity economy. On wages, this Government cannot answer positively the question posed by millions of ordinary people across the country: am I better off now than I was four years ago? The Government cannot answer positively the question: am I better off now than I was eight years ago? The reality is that with the median wage across the UK having fallen by a shocking 7.9% in real terms in this Chancellor’s first two years in office, and by 7.4% in Scotland, people are worse off now than they were 10 years ago. The Resolution Foundation, in evaluating the effects of the autumn statement, predicted that real wages in 2017 will be no higher than they were in 1999. This Government have made the wrong choices on who to help at a time of poor consumer confidence and weak demand. When they could have helped households with the cost of child care, which is rising in Scotland by 6% a year, boosted female employment and cut inequality, they decided to hurt the poorest 40% of the public harder, as a share of their income, than they will hurt the richest 10%. Lone parents who are in work and on tax credits, of whom there are 115,000 in Scotland, will be worse off by an average of £300 a year by 2015, according to the Resolution Foundation. Three quarters of the cuts in tax credits will hurt precisely the strivers the Chancellor purports to back.

The Chancellor’s legacy on investment is equally dire. Business investment is now lower than the Office for Budget Responsibility forecast a year ago, with manufacturing investment having dropped by 6.7% in the last quarter compared with a year ago. Despite funding for lending, there is precious little evidence that demand for lending in the economy is rising. Net lending by the banks to small and medium-sized businesses fell by a further £2.4 billion in the three months to August this year, according to the Bank of England.

The Government could have changed course in the autumn statement and acted to stem the £20 billion rise in the benefits bill during this Parliament by getting more of the 1,320 long-term jobless in my constituency back to work by cutting VAT and adopting more active labour market policies than their failing Work programme. They could have bolstered construction and housing by building as many as 100,000 homes across the UK by allocating the 4G proceeds to productive use rather than simply trying to cook the books with them. They could have done that, but they did not. They have let the country down, and that is the legacy not only of the Chancellor, but, sadly, of the entire Government.

18:36

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I start by thanking my hon. Friends who made their maiden speeches. We heard some excellent contributions, which gives the Opposition hope that when we return to government we will have some extremely good people representing their constituencies. In particular, my hon. Friend the Member for Rotherham (Sarah Champion), who made a very dignified speech, brings a wealth of experience from her background in the children’s hospice movement and will be a great asset to Parliament. My hon. Friend the Member for Croydon North (Steve Reed), who has direct experience of local government, and indeed of a co-operative council, will also bring us experience. We heard a passionate speech on the plight of the unemployed from my hon. Friend the Member for Middlesbrough (Andy McDonald), who talked about his home town and the people he represents. I was particularly interested in his speech because he mentioned two things that are close to my heart: football and art. It sounds as though I ought to visit Middlesbrough in the not-too-distant future.

I should also mention the speeches made by other right hon. and hon. Members, particularly my right hon. Friends the Members for Edinburgh South West (Mr Darling), for Holborn and St Pancras (Frank Dobson) and for Oldham West and Royton (Mr Meacher), my hon. Friends the Members for Islington South and Finsbury (Emily Thornberry), for Stalybridge and Hyde (Jonathan Reynolds), for Middlesbrough South and East Cleveland (Tom Blenkinsop), for Great Grimsby (Austin Mitchell) and for Glasgow North East (Mr Bain) and the hon. Member for South Down (Ms Ritchie). They all demonstrated why there are problems with what the Chancellor did in the autumn statement, and every one of them took the opportunity to make suggestions, to pick up on the problems and to represent their constituents.

When the Chancellor came to the House last Wednesday to deliver his autumn statement, he was clearly determined to have no repeat of the omnishambles Budget that unravelled last time around. He was determined this time to avoid pasties, churches and caravans. There was a bit of hilarity and laughter on the Government Benches while he delivered his statement, but I must say to the Minister and to Government Members that many millions of people across the UK do not feel much like celebrating or laughing because of the bad news the autumn statement brought them.

The hon. Member for Spelthorne (Kwasi Kwarteng), who is now back in his place, having been removed to the naughty step for a period of time, talked about the gravity of the situation. I am not sure that he really understands the gravity of the situation facing families in my constituency who are struggling on part-time hours and who have seen their working tax credits cut. Nor do I think that Government Members really understand the problems faced by the woman with chronic health problems whom I met recently, who is panicking that she is going to be forced to move house because of the bedroom tax, or the plight of young people desperate to get a start in a real job.

In the middle of what one journalist described last week as “jiggery-pokery” and the hon. Member for South Down spoke of earlier as “sleight of hand”, the harsh reality is that the economy is set to shrink and growth forecasts are downgraded yet again. Over the past two years, the economy has grown by just 0.6% compared with the 4.6% that the Government promised. Nearly 1 million young people are out of work. Prices are forecast to carry on rising faster than wages for at least another year, until 2014. Debt figures are revised upwards this year and for future years. The Government are set to borrow £212 billion more than they planned. The Chancellor has failed on his own fiscal rule and the Prime Minister’s pledge to balance the books by 2015. So much for the Chancellor claiming to be healing the economy.

Last Wednesday the Chancellor made a big song and dance about how borrowing is forecast to fall. As we have heard repeatedly since then—indeed, several hon. Members commented on it today—the only reason he has been able to claim this is that the Government have added the 4G mobile spectrum auction to this year’s figures even though Government delays mean that the auction has not happened yet. Without the receipts pencilled in from the 4G sale, borrowing would be forecast to be £2 billion higher this year than last year. Government Front Benchers may try to brush off those figures, but Labour Members are not going to let the Chancellor get away so easily, because they are the real figures that expose the reality behind his failed economic plan. As we have heard in speech after speech, the fact is—I hope that Ministers are listening to this—that the Government’s policies have failed to bring growth back to the economy.

The Chancellor claimed that he would cut the welfare bill, yet it is forecast to be some £13.6 billion higher in this Parliament than he boasted two and a half years ago. Again, rather than face up to reality and change course, he has decided to carry on regardless and instead make hard-working families shoulder the cost of his failure. Speaker after speaker has highlighted how the impact falls on precisely the people the Government say they want to support. Most working-age benefits, including child tax credit and maternity pay, will rise by only 1% for the next three years—a real-terms cut. Child benefit is to go up by only 1% for two years from 2014—another real-terms cut.

We do need to reform and modernise our welfare system. People who can work should work if the jobs are available for them; there should be no ifs or buts about that. However, that is not what the Chancellor is about. He is trying to characterise this as the workers versus the workshy and trying to get the public to believe that it is about the strivers versus the shirkers. That might make for some soundbites but it does not do anything to help the decent people who are out of work through no fault of their own, who are desperate to get a job, who want to pay their way, and who will do everything they possibly can to do so.

As we have heard, six out of 10 households who will be hit by these real-terms cuts to tax credits and benefits are actually in work. The House of Commons Library has shown that the decisions in the autumn statement, together with all the other changes to tax and benefits that take effect in April, mean that a one-earner family on £20,000 a year with two children will lose £279 a year. The Chief Secretary to the Treasury did not seem to recognise those figures when my hon. Friend the Member for Leeds West (Rachel Reeves) spoke earlier, but perhaps the Exchequer Secretary will have something more to say about them.

Not only is this hitting hard-working people and families who are striving to do the right thing, but research from the Library shows that 81% of the revenue from the key additional direct tax, tax credit and benefit changes in the autumn statement will come from women—£867 million of over £1 billion raised. The Chancellor has added a mummy tax to his granny tax. Women are being hit three times harder than men by a Cabinet with three times more men than women—perhaps no surprise there.

We heard a number of excellent contributions this afternoon. Opposition Members spoke about the true cost of the Government’s failed economic policies and the reality behind the measures announced in the autumn statement. The Prime Minister may have once promised that we are all in this together, but given that hard-working, striving families and workers were singled out on the same day that the Government gave a £3 billion handout to the richest people in the country, it is clear that his promise has been broken.

Constituents across the length and breadth of the UK may well have given the Chancellor the benefit of the doubt, but many of them are now coming to realise that he is more interested in tax breaks for millionaires than in getting people into real jobs. I suspect that the 6,000-odd people in each Tory constituency who will be affected by that will wake up to the reality and that many of them will not repeat their vote for the Conservative party or, indeed, vote for the Liberal Democrats come the next election.

While the Chancellor is playing games and making the worst-paid workers pay for the costs of his failure, Labour will continue to fight to make sure that the voices of those whom he is hitting hard are heard. Opposition Members are proud to represent the voices of those people—the workers and the strivers. We will keep pushing the Chancellor to change course, to cut VAT temporarily, to bring in a bank bonus tax to fund a job guarantee for young people, genuinely to bring forward infrastructure investment, properly to reform the banking system, to introduce a national insurance contributions holiday scheme for small businesses, and to come up with a real strategy for growth, not just a strategy to cover the cost of failure.

To repeat the words of my right hon. Friend the shadow Chancellor earlier today—I say this to my right hon. Friend the Member for Holborn and St Pancras and others who raised this point—we will look at the Government’s proposed legislation, but if they intend to go ahead with such an unfair hit on middle and lower-income working families while giving a £3 billion top-rate tax cut, we will oppose it.

18:47

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

This has been a passionate and thoughtful debate. I begin by congratulating the three hon. Members who made their maiden speeches this afternoon—all three were of the highest standards. The hon. Member for Rotherham (Sarah Champion) spoke with great pride and passion for her constituency. The hon. Member for Croydon North (Steve Reed) brought his local government expertise to the debate, and his understanding of the area he represents was most impressive. He also spoke movingly about his predecessor, Malcolm Wicks. The hon. Member for Middlesbrough (Andy McDonald), who is the first Middlesbrough-born Labour MP, spoke with great pride about his constituency. I imagine that being the MP for one’s home town must bring a particular pleasure to delivering a maiden speech and representing one’s constituency. He also spoke warmly of his predecessor, Sir Stuart Bell. I congratulate them all and wish them well in the House of Commons. I am sure they will make many further eloquent and passionate speeches from the Opposition Benches over the years ahead.

I also thank a number of my hon. Friends for their contributions. My hon. Friend the Member for Macclesfield (David Rutley) spoke about how it is necessary to get growth in the economy and discussed ways of achieving that. My hon. Friend the Member for Spelthorne (Kwasi Kwarteng) made a strong and persuasive critique of the previous Government’s record and, indeed, of the level of borrowing under them.

My hon. Friend the Member for Dudley South (Chris Kelly) set out some of the benefits for businesses in the autumn statement, highlighting in particular the corporation tax cuts and the annual investment allowance, which will benefit many west midlands businesses. My hon. Friend the Member for Bristol West (Stephen Williams) made the point that it is right to reduce the deficit, even though it is taking longer than we had envisaged.

My hon. Friend the Member for North Swindon (Justin Tomlinson) welcomed the cancellation of the fuel duty rise, which was due in January, and set out the case for greater tax transparency. He was absolutely right to raise that and this Government are taking steps to ensure that people understand the tax they pay.

My hon. Friend the Member for Burnley (Gordon Birtwistle) spoke about apprenticeships, of which there are 1 million more as a consequence of the Government’s actions. He talked about help for businesses in the north-west, including in the aerospace industry. He also spoke about the annual investment allowance.

My hon. Friend the Member for South Dorset (Richard Drax) made a strong and passionate speech calling for lower taxes. My hon. Friend the Member for Mid Norfolk (George Freeman) set out the steps that the Government are taking to turn around the economy, and drew a parallel with the steps taken by Margaret Thatcher’s Government in the 1970s and 1980s.

I will not go through the list of all the right hon. and hon. Members who contributed to the debate, but I thank them all. In particular, I acknowledge the speech by the former Chancellor, the right hon. Member for Edinburgh South West (Mr Darling). As ever, he brought great expertise to these matters. I did not agree with everything he said, but I thought that his was a far better response to the autumn statement than some that we have heard from Opposition Members, not least the shadow Chancellor.

The right hon. Member for Edinburgh South West said that we live in difficult times. When there is clearly major disagreement between the parties in government and the Opposition about the correct response to the difficulties, we should all acknowledge that growth is lower than we would like it to be and lower than the independent Office for Budget Responsibility anticipated, but we should also acknowledge that there are encouraging factors in the economy. We should all welcome the fact that private sector employment has grown significantly in recent months. The fact that the deficit is falling in every year of this Parliament is to be welcomed. It would be regrettable if the Labour party sought to undermine the Office for Budget Responsibility in making its independent assessment of the public finances.

These are clearly difficult times, not just for the UK economy, but elsewhere. Growth in the UK economy next year has been revised down from where we had hoped it would be, but it is still likely to be greater than the growth in Germany, France and the eurozone. The key question is why growth is lower. The analysis of the Office for Budget Responsibility is very clear: it is because of the uncertainties created by the crisis in the eurozone, because commodity prices are rising more than we would have liked and because the damage done to the economy by the crash of 2007-08 was greater than had been realised.

The answer from the Labour party, essentially, is that we could solve all those problems simply by borrowing more. Very few Labour Members say that explicitly, although the hon. Member for Great Grimsby (Austin Mitchell) was happy to say that that is the right approach. The Labour party says that borrowing is higher than we would like, which it is, but its solution is to borrow more. That makes no sense at all.

It is also not the case that the high level of borrowing that we inherited—a record amount outside wartime—was purely to do with bailing out the banking sector. The shadow Chancellor may not accept this, but the International Monetary Fund tells us that the structural deficit before the crash was 5.2% of GDP—a hugely dangerous level. Any Government who ignored that and failed to address it would be taking the most enormous risk with the country. It is vital that we have fiscal credibility. We could not have gone on as we were. Had we not taken action and gone further than was set out in the plans of the right hon. Member for Edinburgh South West, we would have faced great difficulties. We could not dismiss the risk of the UK being sucked into a sovereign debt crisis, and it would have been complacent of us if we had done so.

The Government have acted to bring the deficit down, but at every step we have been opposed by the Labour party. Most of us did not come into politics to raise VAT, but it was necessary to do that and we also had to take steps to reduce departmental spending—again, that was opposed by the Labour party. We had to reform the welfare system and find £18 billion of cuts, including the introduction of a welfare cap, and we had to make changes to the child benefit system that hit the top 10% or 15% of households. The Labour party opposed all that and, as far as we can see, will not touch a penny of the welfare budget. That is not a great surprise given its record in office. In real terms, the welfare bill increased by 40% in 13 years. Before Labour Members say that that was a response to the crash in 2007-08, half of that increase—20%—occurred before the crash. In the good times the welfare bill was rising out of control.

[Kwasi Kwarteng]

What does my hon. Friend think about the fact that spending between 1997 and 2007 doubled in nominal terms—it went up more than 50% in real terms—and that the welfare bill more than doubled in that time?

[Mr Gauke]

My point is that we could not continue in that way. The difficulty with the Labour party’s record is that it believes most problems can be solved by throwing money at them. We have run out of money and cannot afford to do that. That is why we are taking difficult decisions and the welfare uprating will be 1%—we now know that the Labour party will oppose that. We must get welfare spending under control. That measure will save £2 billion, and if one looks at other measures introduced in the autumn statement, one sees that working households—including those in the lowest decile—will gain in 2013.

[Sheila Gilmore]

Will the Minister give way?

[Mr Gauke]

I will press on because we are running out of time. If all measures to be introduced next April are taken into account, all working families gain, including those in the lowest decile. It is the right thing to do. We have raised the personal allowance yet further and cancelled Labour’s increase in fuel duty next January. Each time the average car is filled up, the motorist will pay £5 less fuel duty than they would have done had we implemented the Labour party’s plans.

As the Prime Minister and Chancellor have said, we face a global race and must make ourselves more competitive. That means moving from current spending to capital spending, which is why we will be spending £9 billion more on capital in this Parliament than the Labour party would have done. Do Labour Members support that switch from current spending to capital spending? That is why we can afford—and why it is necessary—to reduce corporation tax from 28% to 21%. The Labour party allowed our tax position to become uncompetitive.

There is competition for investment. Businesses can choose where they locate and invest. To ensure they choose this country, we need improved infrastructure and to control public spending. We must reform welfare and public services and we need competitive taxes. The Government are prepared to take difficult decisions but the Labour party consistently ducks those decisions and opposes every spending cut and reform. It opposes getting to grips with welfare spending and panders to every group, and the country will recognise that at the next election.

Question put and agreed to.

Resolved,

That this House has considered the matter of the economy.

Business without Debate

Tuesday 11th December 2012 Commons Chamber

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Excise

That the Machine Games Duty (Exemptions) Order 2012 (S.I., 2012, No. 2898), dated 19 November 2012, a copy of which was laid before this House on 19 November, be approved.—(Mr Swayne.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Prevention of Nuclear Proliferation

That the Financial Restrictions (Iran) Order 2012 (S.I., 2012, No. 2904), dated 20 November 2012, a copy of which was laid before this House on 20 November, be approved.—(Mr Swayne.)

Question agreed to.

Parliamentary Commission on Banking Standards

Ordered,

That, notwithstanding the Order of this House of 16 July 2012, it be an instruction to the Parliamentary Commission on Banking Standards that it should report on legislative action no later than 19 December 2012.—(Mr Swayne.)

Business of the House

Ordered,

That, at the sitting on Thursday 13 December, notwithstanding paragraph (4) of Standing Order No. 14, the Motion in the name of Mr Andrew Lansley relating to Lay members of the Committee on Standards shall have precedence over the business determined by the Backbench Business Committee.—(Mr Swayne.)

“Innocence of Muslims”

Tuesday 11th December 2012 Commons Chamber

19:01

[Alex Cunningham (Stockton North) (Lab)]

I should like to present a petition on behalf of the chairman of Stockton mosque, Councillor Mohammed Javed. It declares that the petitioners are profoundly concerned about the portrayal of the Islamic faith in the online video “Innocence of Muslims” and calls for it to be banned. The petition is accompanied by a larger one that was presented to my hon. Friend the Member for Hartlepool (Mr Wright) and I at a meeting last month, which was attended by hundreds of local community members from mosques across Teesside. The petition is signed by some 4,000 Teesside residents, mostly Muslims, who are shocked and upset about how their proudly held faith has been affronted in that way—their shock is shared by my hon. Friends the Members for Middlesbrough South and East Cleveland (Tom Blenkinsop) and for Middlesbrough (Andy McDonald). I hope the House will take the strength of feeling into account and stand with the hundreds of thousands of Muslims up and down the country who are calling for the Government to ban this appalling film.

Following is the full text of the petition:

[The Petition of Cllr Mohammed Javed,

Declares that the Petitioner believes that the film, “The Innoncence of Muslims” is disrespectful, offensive and untruthful, and could incite hatred towards Muslims.

The Petitioner therefore requests that the House of Commons urges the Government to take necessary measure to ban the film, and introduce new legislation to prevent Islamophobia and the incitement of religious hatred against Muslims.

And the Petitioners remain, etc.]

[P001149]

Israel and Palestine

Tuesday 11th December 2012 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Mr Swayne.)

19:02

[Mark Hendrick (Preston) (Lab/Co-op)]

On 29 November, the United Nations General Assembly voted to upgrade Palestine’s status to non-member observer. The Assembly voted 138 to 9 in favour, with 41 nations abstaining, including the UK. The USA supported Israel and voted against upgrading Palestine’s UN status.

The vote should be welcomed as a symbolic milestone in Palestine’s ambition for statehood, rather than as “unfortunate and counter-productive”, as the US Secretary of State has chosen to describe it. Enhanced UN status brings Palestine closer to the international community, its organisations and values. The Palestinians can now take part in UN debates and potentially join bodies such as the International Criminal Court.

By abstaining in the vote, Britain has made itself less relevant to meaningful engagement in the search for peace. As my right hon. Friend the Member for Paisley and Renfrewshire South (Mr Alexander) warned the Foreign Secretary before the vote:

“Abstention tomorrow would be an abdication of Britain’s responsibilities.”—[Official Report, 28 November 2012; Vol. 554, c. 231.]

The UK did not stand on the side of progress but instead chose the politically expedient option. I would be interested to know what the Minister believes was achieved by the UK abstaining from the vote and how that strengthens the goal of a two-state solution.

In response to the vote, Israel announced on 30 November that it will build 3,000 new housing units in the west bank and East Jerusalem and withhold more than £75 million in customs duties. Israel’s response to the perfectly legal move of upgrading Palestine’s UN status is an illegal move to try and ruin a two-state solution and withhold Palestinian money. The proposed housing units would be built in the Ariel, Elkana, Efrat and Karnei Shomron settlements in the west bank, and in the settlements of Pisgat Ze’ev and Gilo in occupied East Jerusalem, according to the Ministry of Housing and Construction. In the words of the Foreign Secretary, if implemented the plans would make the two-state solution “almost inconceivable”, because in effect they would largely cut off occupied East Jerusalem from the rest of the occupied territories.

[Jim Shannon (Strangford) (DUP)]

It might come as no surprise that I have a slightly different opinion. Does the hon. Gentleman feel that if there is to be peace in the middle east between Palestine and Israel, recognition of the state of Israel has to come first?

[Mark Hendrick]

Yes, I do. It is important that Hamas recognises Israel and that Israel is there to stay.

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

It is not just Hamas. In August 2010, the Palestinian Authority’s Minister for Tourism said that the Palestinian goal was to bring about an end to Israel, so senior members of the PA also need to come clean and recognise the state of Israel’s right to exist, do they not?

[Mark Hendrick]

I think the hon. Gentleman is referring to one member, not members, of the PA, and it is not the majority view among Palestinians. The majority view is that Israel should exist alongside them, and a two-state solution is what most people would want in Israel and Palestine.

The negative impacts of the E1 plan on the prospects of a viable and independent Palestinian state, with East Jerusalem as its capital, cannot be overestimated. If fully implemented, E1 would deny East Jerusalem its last remaining area for future growth and economic development. In addition, the location of E1 and its massive size would assure Israeli control over the key junction area connecting the northern part of the west bank to the south.

Israeli ambassadors to the UK, France, Sweden, Spain and Denmark were summoned to hear condemnation of the plans, but no further action has been taken, unless the Minister can give me an update.

[Graham Jones (Hyndburn) (Lab)]

Does my hon. Friend agree that it should not be a surprise that the E1 development is going ahead, given that all the infrastructure was in place for quite a while and that this announcement comes on the back of all the roads and other infrastructure that already exists in that area, which is problematic in itself?

[Mark Hendrick]

The fact is that that infrastructure should not be in place and that Israeli settlements should not be on Palestinian land—full stop. To say that it is a result of previous illegal development, and that there should therefore be future development, is illogical.

[Bob Blackman (Harrow East) (Con)]

Will the hon. Gentleman give way?

[Mark Hendrick]

I shall give way one final time.

[Bob Blackman]

I think the key issue of settlements is one of the concerns. Does the hon. Gentleman not accept that Israel has habitually given land for peace in a series of settlement destructions to enable a peaceful solution to take place, and that the biggest obstruction to peace is the failure of the Palestinians to sit down and negotiate with the Israeli Government on a proper peaceful solution for the whole region?

[Mark Hendrick]

The hon. Gentleman talks about giving land for peace, but the land Israel has given did not belong to it in the first place. The only land of any size that has been given is Gaza, but the Israelis have made it plain that they do not want Gaza; they want as much of the west bank as they can take. While the building of settlements by stealth is going on, Israel claims to want peace but in the meantime does everything it can to build these settlements, which we know will be an obstacle to peace.

[Michael Ellis (Northampton North) (Con)]

Will the hon. Gentleman give way?

[Mark Hendrick]

I will not, because I want the Minister to have time to respond and I still have quite a bit to say.

Despite vigorous efforts to win over European countries, only the Czech Republic supported Israel on 29 November. The move signals a widening gulf, not just between Israel and Europe but between Europe and the United States. Israel’s response might well be a bluff, given that bellicose rhetoric will play well with the settlement wing of Likud ahead of the elections on the 22 January. It has been reported that President Obama secured a commitment from Israel not to construct any units in E1 back in May 2009. However, whether or not this announcement is sabre rattling, it remains another chapter in an intractable dispute that is at the heart of geopolitical instability in the region. It is also a further clear sign that Israel is not committed to securing a two-state solution. Israel is continually changing the facts on the ground, which is an obstacle to peace, and at the same time blames the Palestinians for not entering into talks.

Let us remember that settlements are not residential enclaves, but virtual military barracks—fortified castles that separate Palestinians from their schools, places of business and extended communities. They threaten the safety of Palestinians who venture near, consume the lion’s share of the region’s water and prevent normal movement of people and goods. The result is ethnic segregation and discrimination, with Palestinians treated as second-class citizens in the occupied territories that belong to them. There are also more than 1.25 million forgotten non-Jewish citizens of Israel—principally Muslims and Christians—who are treated as third-class citizens. Indeed, both Desmond Tutu and Nelson Mandela have compared Israel’s segregation of Palestine to apartheid.

[Michael Ellis]

Will the hon. Gentleman give way?

[Mark Hendrick]

I will not, because I have very little time.

[Michael Ellis]

Just me.

[Mark Hendrick]

Everybody says that, but then there are lots of people.

According to the UN Office for the Co-ordination of Humanitarian Affairs, Israeli settlers in the west bank consume approximately six times the water used by Palestinians. There has been a threefold increase in the number of settler housing units in 2012 compared with 2011. The settler population was estimated at more than 520,000 last year. When I first visited Palestine in 2002 the population was 50,000, so there has been a tenfold increase. The UN also estimates that there are around 540 internal checkpoints, roadblocks and other physical obstacles that impede Palestinian movement in the west bank. The demolition of Palestinian structures is on the rise, displacing more than 1,000 people in 2011. The Palestinian economy is also severely constrained by Israeli restrictions on access to markets and natural resources. The annual cost of this has been estimated at €5.2 billion, or 85% of total Palestinian GDP, which has led to the Palestinian Authority being dependent on large amounts of funds from the EU and other foreign donors. Between 1994 and 2011, the EU gave €5 billion to Palestine. However, the impact of Israel’s paralysing constraints on Palestinian access to markets and resources is too great to be covered by aid alone. The PA currently faces an acute budget crisis.

The real tragedy of this tit-for-tat conflict is the human collateral. The continued loss of lives on both sides is truly appalling. I am concerned that inertia has set in and that the international community has become an observer of a tragedy that is regularly broadcast across the world, with hope of finding a viable resolution lost. Last month Israel launched a major offensive on Gaza —Operation Pillar of Defence, so-called—killing the military commander of Hamas in an air strike. After continuous bombardment, a ceasefire was negotiated between the two sides. The UN confirmed that 158 Palestinians and six Israelis were killed. The fatalities included a pregnant woman carrying twins, an 11-month-old boy and two infants. The reality of these statistics on the ground is truly appalling. The UN Office for the Co-ordination of Humanitarian Affairs reported:

“On 4 November, Israeli forces stationed in an observatory tower shot and killed a 23 year-old mentally-challenged Palestinian…It was not until two hours later, following coordination with the Israeli military, that a Palestinian ambulance was permitted to reach the area”.

The fact remains that this is an uneven conflict. Some 1,377 Palestinians were killed in the Gaza war from 27 December 2008 to 18 January 2009, while 13 Israelis died in the same period. More recently, statistics from the OCHA for casualties and fatalities prior to 6 November show that 71 Palestinians were killed by Israel in the Gaza strip in 2012, with 291 injured. In the same period, 19 Israelis were injured by Palestinian fire from Gaza and none were killed.

I call on the Minister to press the European Union and the Israelis to secure an end to the siege of Gaza. Even our Prime Minister once described Gaza as a prison, so it is incumbent on our Government to demand the freedom of the prisoners who are being subjected to collective punishment because of the sins of a minority. When I questioned the Foreign Secretary on a statement last month, he refused to comment on what he regarded as proportionate. I can only take from that the embarrassment that he might feel if he tried to explain away Israel’s grossly disproportionate response to terrorist rockets fired from Gaza.

I should like briefly to talk about the Quartet’s road map for peace, which was first announced in 2002. My first visit to Israel and Palestine was in 2002, when the road map was a source of hope for peace. At that time there were 50,000 settlers in the Palestine territories; there are now more than 500,000, and peace seems much further away. Ten foreign ministers of the European Union’s Mediterranean states—Bulgaria, Cyprus, Spain, France, Greece, Italy, Malta, Portugal, Romania and Slovenia—sent an open letter to the then Prime Minister, Tony Blair, in 2007, in which they stated unequivocally and without any diplomatic nuance that they believed the road map had failed. The letter stated:

“We might as well admit it straight away”.

It went on to say that this was

“the recognition of a shared failure we can no longer ignore: the ‘road map’ has failed.”

It is clear that there is no credible plan on the table to achieve a two-state solution or peace, and I believe that the UK has a responsibility to work with our European partners to create a credible plan and to use all the instruments at our disposal to bring pressure to bear on Israel. The settlements are illegal under international law, specifically article 49 of the fourth Geneva convention and United Nations Security Council resolutions 242 and 338. The United Nations, the International Court of Justice and the overwhelming majority of states share this view. Israel controls the borders, airspace and coastline and has overwhelming control of life in the area.

The establishment of settlements has created a discriminatory two-tier system in the west bank, with settlers enjoying the rights and benefits of Israeli citizenship while the Palestinians are subjected to Israeli military law. This year, I had an opportunity to visit a prison in the west bank, where I observed children as young as 14 being tried by a military court for throwing stones at an Israeli defence force vehicle. One of the children received a two-year prison sentence from military officers who should not have been in a court in Palestine; indeed, that court should not have been on Palestinian land in the west bank.

In a recent report, the former EU Commissioner for External Relations, Hans van den Broek, gives evidence of how EU member states have helped to sustain the Israeli settlements. He stated:

“As settlement construction has continued and accelerated, however, we Europeans have failed to move from words to action. So far we have refrained from deploying our considerable political and economic leverage”.

Will the Minister tell us what the UK Government are doing to apply pressure on Israel to cease settlement building, either bilaterally or multilaterally through the European Union? The Foreign Secretary has made it plain that it is impossible for an EU of 27 countries unanimously to agree to economic sanctions against Israel, but he has yet to say whether he would be in favour of sanctions against Israel in principle if agreement on sanctions could be found across the EU at some stage in the future. I invite the Minister to comment on that point.

The most recent estimate of the value of EU imports from the settlements, provided by the Israeli Government to the World Bank, is €230 million a year. That is approximately 15 times the annual value of EU imports from Palestinians. With more than 4 million Palestinians and over 500,000 Israeli settlers living in the occupied territory, that means that the EU imports over 100 times more per settler than per Palestinian. The most common settlement products sold in Europe are agricultural products such as dates, citrus fruits and herbs, and manufactured products including cosmetics, carbonation devices, plastics, textile products and toys. Despite its firm position that the settlements are not part of Israel, Europe has been accepting imports of those settlements’ products with the origin designated as Israel. I believe that the UK Government should lobby the EU member states to adopt our own policy of consumer labelling for all settlement products and also for manufactured goods. Beyond the trade in settlement goods, some European-owned companies have invested in settlements and related infrastructure or are providing services to them. Examples that have been reported include G4S.

Adding to the contradictions at the heart of the EU’s policy towards Israel’s illegal settlements, the EU has failed fully to exclude settlements from the benefits of its co-operation programmes and bilateral agreements with Israel. In several cases, EU public funds for research and development have been used directly to support activities in settlements. The newly ratified EU-Israel agreement on conformity assessment and acceptance of industrial products is an example of the EU’s failure to insist on a firm distinction between Israel and the illegal settlements. The Government need to raise this with the European Commission. At the heart of the UK’s policy towards Israel is the contradiction between recognising that the settlements are illegal, running counter to achieving a two-state solution, and our continuing to trade with the region through the EU. I would be grateful if the Minister could share with the House any updates on recent developments in the political situation in Israel and Palestine.

I also want to press the Minister to assure me that his Department will consider the following proposals for action against inertia: the suspension of appropriate strategic dialogue meetings with Israel to show that the UK is prepared to act in opposition to Israel’s settlement policy; the use of Government advice to discourage businesses from purchasing settlement goods and from all other commercial and investment links with settlements; a ban on the imports of settlement products, as called for by Ireland; the championing of the exclusion of all settlement products in the EU and European Free Trade Association from preferential market access by insisting that Israel starts designating the origin of settlement products other than by “Israel”; the exclusion of settlements from bilateral agreements and co-operation instruments with Israel by means of explicit legal provisions and safeguards; the removal of organisations’ funding settlements from tax deduction systems, as happens in Norway; the prevention of financial transactions to settlements and related activities by means of applying restrictive measures as a more comprehensive approach; the issuing of guidelines for European tour operators to prevent support for settlement businesses; and no longer selling UK-supplied components that can be used in the conflict.

As I have said, there is tragic complacency in the international community and the UK about the latest developments in the Palestine-Israel conflict and an observable lack of commitment from the key players towards securing a two-state solution. I believe that the UK has an important role to play and we should not underestimate our influence, particularly in Europe, in leveraging more political and, more important, economic pressure on Israel. That will require moral and political leadership and action, but we should not shy away from that and I urge the Minister to use his office to promote peace in the region by pushing for a two-state solution.

19:21

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mark Simmonds)]

I congratulate the hon. Member for Preston (Mark Hendrick) on securing this important debate and apologise on behalf of my colleague the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for North East Bedfordshire (Alistair Burt), who has responsibility for the middle east and is, I am afraid, out of the country on Foreign Office business.

Right at the beginning of my speech, I want to contradict the hon. Gentleman’s view that there is complacency at the heart of the international community and in the UK Government. I can assure him that there is no complacency at all. Indeed, the UK worked intensively to support Egypt and the United States in facilitating the negotiations to stop the conflict. The UK is continuing to provide international development support both to the Palestinian Authority and in Gaza, where it is providing health and social services to the population. That help is available for as long as it is required.

I also want to make it clear that the settlements that the Israelis have built and are proposing are condemned by us. Settlements are illegal under international law and undermine the possibility of a two-state solution to the Israel-Palestine conflict and those working for a sustainable peace. We look to Israel to take all necessary steps to prevent settlement construction.

The Government’s central objective is to ensure a rapid return to credible negotiations in order finally to achieve a two-state solution, which I believe all Members of this House want to see, irrespective of which side of the debate they are on. That has been and will continue to be the guiding principle that determines our policy on this issue. We firmly support a negotiated settlement leading to a safe and secure Israel alongside a viable and sovereign Palestinian state based on 1967 borders with agreed land swaps, Jerusalem as the shared capital of both states and a just, fair and agreed settlement for refugees. That is the only way to secure a sustainable end to the conflict and it has wide support in this House and across the international community. We strongly believe that achieving such a solution is firmly in the interests of the Israelis, the Palestinians and the wider region.

I have to acknowledge, however, that we are gravely concerned about the dangerous impasse in the peace process, particularly over the last two years. We believe that the window to a two-state solution is rapidly closing. That is why we took the stance we did on the Palestinian resolution at the UN General Assembly, which was guided by the principle of how to create the right environment for a swift return to talks and the strongest possible foundations for the peace process.

In support of that principle and objective, we sought a commitment from the Palestinian leadership immediately to return to negotiations—without preconditions. This was the essential answer to the charge that by moving the resolution, the Palestinians were taking a path away from negotiations. We also sought a reassurance from the Palestinian leadership that it would not immediately pursue action in the UN agencies and the International Criminal Court. Our country, the UK, is a strong supporter of international justice and the International Criminal Court, and we would ultimately like to see a Palestinian state represented throughout all the organs of the United Nations. However, we judge that if the Palestinians were to build on this resolution by pursuing ICC jurisdiction over the occupied territories at this stage, it could make virtually impossible a swift return to negotiations, which is what we all want to see.

[Mark Hendrick]

I thank the Minister for his generosity in giving way. First, what is the point of upgrading Palestine’s status if it does not get the benefits of an upgrade? Secondly, if settlements continue as they are, it is unlikely that there will ever be meaningful discussions. Thirdly—I have forgotten the third point.

[Mark Simmonds]

As this is the hon. Gentleman’s debate, I will allow him to intervene again if he remembers his third point.

I understand the points he made. What we have to do is to look forward to try to bring together all the respective parties that are interested in trying to find a satisfactory two-state solution. As part of that, a Palestinian state will, I hope, be a full member of the United Nations at some point in the future.

[Mark Hendrick]

My third point is that a peace process has been mentioned, but there is not really a peace process to speak of at the moment. All we had were meetings convened by the Egyptians to try to stop the conflict in Gaza. We would all like to see a peace process continue and the Minister agrees with me about a two-state solution, but there is just nothing happening on the ground.

[Mark Simmonds]

If the hon. Gentleman will be patient, I will come on, time permitting, to exactly what we are doing to try to stimulate, encourage and facilitate the peace process and get it back on track. It is not true, however, to say that nothing is happening. There are, for example, ongoing talks chaired by the Egyptians between the Palestinians and the Israelis, albeit not directly as the two sides are in separate rooms. The two key elements coming out of that are, first, the need for Israel to ease the restrictions on Gaza, particularly so that economic activity can take place; and, secondly, the need for Egypt to tackle the arms smuggling into the Sinai, which is Israel’s main concern about the rockets that are going into it.

We engaged intensively with the Palestinians before the vote in the General Assembly, and in advance of it we urged Israel to avoid reacting in a way that would undermine the peace process and to return to the negotiations. We made it absolutely clear that we would not support a reaction that sidelined President Abbas or risked the collapse of the Palestinian Authority. We have made it very clear to the Israeli Government that their decision to build 3,000 new housing units on the west bank and in East Jerusalem, to unfreeze the development of the area known as E1 on the west bank and to withhold tax revenue from the Palestinian Authority is not acceptable. The settlements plan in particular has the potential to alter the situation on the ground on a scale that threatens the viability of a two-state solution.

[Michael Ellis]

Does the Minister agree with me that provocative actions on both sides is unhelpful in such a volatile situation, and that it is particularly provocative of the Palestinians to have involved or threatened to involve the ICC in this context because that is clearly not going to advance peace on both sides? Does he agree that Israel has a right to protect its citizens?

[Mark Simmonds]

I certainly agree that Israel has a right to peace and security, and a right to protect its citizens from rocket attacks, which were extremely prevalent during the fortnight leading up to the escalation of the conflict in Gaza. However, what the international community and the House need to focus on is how we are to get the Palestinians and the Israelis back around the negotiating table, without preconditions, to find a satisfactory, lasting solution to the conflict that has dogged that part of the world for so many years.

[Graham Jones]

I am grateful to the Minister for giving way, as he has not much time left. When will we reach a point when the two-state solution is dead and a one-state solution becomes a viable option?

[Mark Simmonds]

I do not think that we are there yet, but, as I said earlier, I think that the door is beginning to close on the realistic possibility of a two-state solution. That is why it is essential for the international community to act now, and essential for the United States in particular to engage with the peace process following the vote in the UN General Assembly. My right hon. Friend the Foreign Secretary has had a series of discussions with the United States Administration in an attempt to persuade them to become seriously engaged with the peace process, and they are doing that.

The hon. Member for Preston asked what we were doing with our European Union partners. We have had a series of meetings in the European Union in which there has been collective agreement on the necessity to push further for EU concerted action to try to bring the parties together. We need to ensure that not only the EU but the UN is engaged in the process, alongside the United States. The UK’s position, however, has been absolutely clear. We will engage with any Palestinian Government who show, through their words and actions, that they are committed to the principles set out by President Abbas in Cairo.

I hope that Members will forgive me for not saying more. I am running out of time. I very much hope that the House will continue to engage with this—

19:32

House adjourned without Question put (Standing Order No. 9(7)).