House of Commons

Wednesday 13th February 2013 Commons Chamber

Wednesday 13 February 2013

The House met at half-past Eleven o’clock

Prayers

Wednesday 13th February 2013 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 13th February 2013 Commons Chamber

The Secretary of State was asked—

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

1. What recent assessment he has made of the contribution of the nuclear power industry to the Scottish economy.

[The Secretary of State for Scotland (Michael Moore)]

There is currently just over 2 GW of installed and operational nuclear capacity in Scotland, split between Torness and Hunterston B. In 2011, 33% of electricity generated in Scotland came from these two nuclear power stations.

[Alun Cairns]

Is the Secretary of State aware that Wylfa and Anglesey are about to benefit from a massive investment in a new nuclear power station? Does he share my disappointment in the attitude shown by the Scottish Government, who reject any new nuclear investment?

[Michael Moore]

Clearly, there is a significant contribution to our current energy mix from nuclear. My hon. Friend will be aware that planning on these matters is devolved to Scotland. It is a matter, rightly, for the Scottish Parliament to determine. For my part, I am delighted that we are seeing an increase in the proportion of renewables in our energy mix as part of a sustainable, affordable energy supply in the UK.

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

EDF Group’s nuclear power stations, including Torness in my constituency, produced their highest output for seven years in 2012. Does the Secretary of State agree that there is a continuing long-term role for nuclear in keeping the lights on in Scotland?

[Michael Moore]

I do not think that anybody can ignore the significant contribution that nuclear makes. Like the hon. Lady, I have many constituents who are employed at Torness. Nuclear power stations play an important role in our local economies, but I want to see a sustainable mix across the energy supplies and generation sector, and with renewables and others in the mix, that is a good thing too.

[Mr Mike Weir (Angus) (SNP)]

Why are this Government determined to throw money at an industry that has never been economically viable, while refusing to set a decarbonisation target to boost the renewables industry, which is already creating thousands of new jobs in Scotland?

[Michael Moore]

Through energy market reform, we are underpinning the renewables sector for a very long time to come. What I do not understand is how the Scottish National party can propose independence, when Scottish Renewables would end up losing the biggest source of consumers who underpin the economics of that very important sector.

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

2. What estimate he has made of the number of households in Scotland affected by the under-occupancy penalty.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

In its impact assessment, published on 28 June 2012, the Department for Work and Pensions estimates that 80,000 claimants of housing benefit in the social rented sector in Scotland will be affected by the under-occupation measure.

[Dr Whiteford]

The Minister knows as well as I do that thousands of people in low-income households in Scotland who are going to lose out because of the bedroom tax have no realistic prospect of moving to a smaller house. According to that impact assessment, claimants in Scotland will be disproportionately hit because of the mismatch between the available housing stock and the needs of tenants, so will the right hon. Gentleman take this opportunity to distance himself from the shameful attempt of this Government to stigmatise and penalise people who live in council houses and need help with their rent?

[David Mundell]

What is shameful is the way that the Scottish National party plays party politics with vulnerable people, pretending that there can be no welfare changes, yet putting forward nothing in their place and not indicating how welfare would be paid for in an independent Scotland.

[Graeme Morrice (Livingston) (Lab)]

12. The bedroom tax and other changes to housing benefit mean that millions of pounds will be removed from the Scottish economy and hundreds of jobs will be lost across the country, according to the Fraser of Allander Institute. Can the Minister tell the House what discussions he has had with the Chancellor about how to mitigate these losses to the Scottish economy?

[David Mundell]

The hon. Gentleman and his colleagues fail ever to mention the discretionary housing payments fund, which will support people in difficult situations. He and his colleagues should be urging councils in Scotland to make use of that money. Scotland will get a very good share of the £155 million being provided.

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

Does the Minister not recognise the fact that there are people crying as a result of being given notices right now that tell them that they will have to get out of their house, or lose housing benefit as a result, come 1 April? That is the reality of the situation. Can the Minister not waken up to that fact?

[David Mundell]

I am surprised that the hon. Gentleman and others are not working with their local councils and housing associations to draw attention to the availability of the discretionary payments funds and the fact that there will be an opportunity to support the most vulnerable.

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

As well as the bedroom tax, the Government are preparing to tighten further the worst squeeze on ordinary people’s living standards in decades by cutting most benefits and tax credits by 4% in real terms over the next three years in plans that hurt the poorest 40% in Scotland three and a half times harder than the wealthiest. Does the Minister not accept that, with 800,000 working-age couples and single people in Scotland losing up to £5 a week, those cuts are not just socially brutal, but disastrous for the Scottish economy?

[David Mundell]

What I accept is that the Labour party put this country into the financial circumstances we found after the 2010 election. It says it wanted to reform welfare. It is quite happy to criticise individual measures, but it comes up with no proposals at all on how to fund them and puts forward no alternative proposals.

[Fiona Bruce (Congleton) (Con)]

3. What steps he is taking to improve transport links between Scotland and England.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

I welcome the recent announcement by my right hon. Friend the Secretary of State for Transport on the planned extension of HS2 to Manchester and Leeds. Journey times between Scotland and London will be significantly reduced as a result.

[Fiona Bruce]

Does the Minister agree that there is a strange irony in the fact that HS2 will bring our two nations closer together yet the Scottish Government are intent on driving a wedge between them and pushing them further apart?

[David Mundell]

My hon. Friend is quite right to point out the irony. Most policies pursued by the Scottish National party are about breaking up Britain, but on this issue it appears to want to bring Britain closer together.

[Stewart Hosie (Dundee East) (SNP)]

The Minister’s answers simply will not do. If he was serious about improving transport links between Scotland and England, HS2, which is a massive investment, would not start in London and grind to a halt halfway through England in Manchester or Leeds; it would carry on to Glasgow and Edinburgh along the west and east coasts of Scotland. I ask him to go one better than the Department for Transport and tell us whether the Government have even a time scale for developing a plan for completing HS2 to Scotland.

[David Mundell]

What this Government are doing is engaging with the Scottish Government in a discussion, and at the moment we are waiting to hear from them.

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

Does my right hon. Friend recognise the importance to transport links of dualling the A1, and will he continue to press the case with Scottish Ministers and colleagues in the UK Government?

[David Mundell]

I welcome the Chancellor’s announcement that the A1 will become a motorway to Newcastle. He made it clear, I think in response to my right hon. Friend, that the Department for Transport would look at the case for dualling the A1 to the Scottish border.

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

As chair of the all-party west coast main line group, I wrote to a Scottish Government Minister to ask what they were prepared to do with regard to investment for the HS2 route starting from the north. Is it not irresponsible that the Scottish Government will not answer that question on HS2, even though two city councils—Edinburgh and Glasgow—will discuss it?

[David Mundell]

I am disappointed that the hon. Gentleman, particularly in his capacity as chair of the all-party west coast main line group, has not had a response from the Scottish Government. As I indicated in my earlier answer, the UK Government are waiting for a response from the Scottish Government. We have made it absolutely clear that we want to work with them to ensure that the people of Scotland and the United Kingdom benefit from HS2.

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

I agree with earlier questioners and the Minister that HS2, if it is to go ahead, will be exceedingly important to both the north of England and transport links between Scotland and England. Can I therefore have his assurance that he and his right hon. Friend the Secretary of State will argue formidably for that in Cabinet and encourage the Government to start HS2, if it goes ahead, in the north?

[David Mundell]

I appreciate my right hon. Friend’s question. As always, she has taken a keen interest in Scotland, but she knows as well as I do that the Government’s position is that HS2 will start in the south.

[Anas Sarwar (Glasgow Central) (Lab)]

Connectivity between Scotland and London is crucial to Scotland’s economic future. Can the Minister explain why, despite ongoing conversations between the UK and Scottish Governments, Scots are still in the dark about whether we will actually see a new line in Scotland?

[David Mundell]

I do not accept that Scots are in the dark with regard to a new line to Scotland. The UK Government have made it perfectly clear that their aspiration is to achieve high-speed rail to Scotland. We want to work very closely with the Scottish Government and we look forward to their making specific proposals.

[Ian Murray (Edinburgh South) (Lab)]

4. What representations he has made to the Chancellor of the Exchequer on the 2013 Budget.

[Sheila Gilmore (Edinburgh East) (Lab)]

5. What representations he has made to the Chancellor of the Exchequer on the 2013 Budget.

[The Secretary of State for Scotland (Michael Moore)]

I am in close contact with the Scottish business community and Treasury colleagues in the run-up to Budget 2013, and I have discussed with them a range of measures to support economic growth and fairness.

[Ian Murray]

The Secretary of State is well respected across this House, but surely he, as a Liberal Democrat, can see the unfairness in giving millionaires a massive tax cut in April while introducing the bedroom tax. Could he make urgent representations to the Chancellor to reverse both of those policies before the draconian bedroom tax does untold damage not only to the vulnerable and disabled, but to our councils and housing associations?

[Michael Moore]

I thank the hon. Gentleman for his kind opening comments. I point out to him that, as a result of measures that we have already taken and which, as a Liberal Democrat, I am very happy to champion, 183,000 Scots will be taken out of tax altogether from this April; 2 million people in low and middle-income families will pay less tax; and people on the minimum wage are paying half the tax that they were under the previous Government. Our 45p tax rate in April will be higher than that which prevailed under Labour for 12 years and 11 months. I wonder whether the hon. Gentleman is proud of that record.

[Sheila Gilmore]

Twenty-seven one-bedroom houses were available for let in the social sector in Edinburgh last week. Bids for them ranged from 30-odd to 300. New-build affordable starts in Scotland have fallen in the past two years from 7,900 to 3,400 because of cuts by the Scottish Government. Will the Secretary of State go to his Government in advance of the Budget and argue for a U-turn? His Government saved the trees; why not save the people?

[Michael Moore]

I say politely to the hon. Lady that, like many of her colleagues, she routinely forgets the terrible financial backdrop against which we have had to make some very difficult decisions. We want a sustainable welfare system and will continue to emphasise and develop the fairness agenda, which is what we have achieved through cuts in tax and by introducing change, through universal credit, to get a much stronger and better welfare system.

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

Does the Minister agree that having the lowest corporation tax of all the G7 countries makes Scotland an incredibly attractive place to invest, and that that would be endangered in the unlikely event, I hope, of Scotland becoming independent?

[Michael Moore]

I absolutely agree that it is essential that we have a competitive business environment, and our corporation tax proposals go right to the heart of that. We want to continue to rebalance and strengthen the economy and take it away from the terrible cliff that we came to under the previous Government.

[Mr Alan Reid (Argyll and Bute) (LD)]

10. I thank the Under-Secretary for organising the fuel summit in Glasgow, at which it was revealed that the island fuel duty discount could go up to 7p or 8p a litre while remaining in the Treasury budget of £5 million. Will my right hon. Friend the Secretary of State lobby the Chancellor to increase the discount to 7p or 8p in the Budget, so that the full budget is spent to the benefit of island motorists?

[Michael Moore]

It was important to have that summit to discuss all the key issues and to emphasise how that fuel discount has provided for people in island and remote communities. My hon. Friend has made a strong case for the Budget and I am sure that the Chancellor will have heard it.

[Angus Robertson (Moray) (SNP)]

Has the Secretary of State raised the unfairness of the bedroom tax with the Chancellor of the Exchequer? Will he not tell him that it is one of the most rancid pieces of legislation to have been rammed through since the poll tax? Will he remind us how many Scottish Members of this House voted for it?

[Michael Moore]

For as long as the hon. Gentleman’s party makes lots of promises but with no way of paying for them, folk will not listen terribly carefully to what he has to say.

[Angus Robertson]

Anybody watching this debate will have noticed that the Secretary of State was not prepared to confirm that 82% of Scottish Members of this House voted against the bedroom tax. Just as with the poll tax, an unpopular, regressive measure is being imposed on the people in Scotland when the overwhelming majority of their public representatives are totally opposed to it. Could the Secretary of State explain how, in a modern, 21st-centruy democracy, it is possible to impose something just like the poll tax—the bedroom tax—on Scotland?

[Michael Moore]

I want a sustainable welfare system that protects the most vulnerable and supports people into work and makes it pay. The reforms under universal credit will help to ensure that happens—backed up by our fair tax delivery, which has meant that more than 180,000 Scots have been taken out of tax altogether and that 2 million Scottish families on low and middle incomes are paying less tax.

[Margaret Curran (Glasgow East) (Lab)]

Will the Secretary of State make a representation on behalf of my constituent, Mrs Frances Connor? Treatment for her cancer has left her with no feeling in her feet or hands. Her only help comes from her son, who stays with her three nights a week. The bedroom tax means that she cannot afford the room where her son stays. Why is the Secretary of State making it impossible for a son to care for his mother?

[Michael Moore]

Like the hon. Lady, I express my deepest sympathy to her constituent and her family and recognise the challenging personal circumstances in which they live. We are looking to support some of the most vulnerable in these circumstances with transitional arrangements, and I would be happy to discuss that further with the hon. Lady.

[Margaret Curran]

I thank the Secretary of State for that answer. Perhaps in that discussion we could talk about the thousands of others who are hit by this bedroom tax, because the transitional protections do not help those people. I wonder if the right hon. Gentleman ever imagined that he would be signing off such policies with the Tories. Last year he said:

“judge us by our record.”

Is making a son’s care for his mother unaffordable what he had in mind?

[Michael Moore]

May I, as I did in response to the hon. Member for Edinburgh East (Sheila Gilmore), remind the hon. Lady of the scale of the financial challenge that faced this Government when they came into office and the need to tackle those serious problems? She should also remember that we have introduced huge extra measures to help families across Scotland. I have to say to her, as I said to the hon. Member for Moray (Angus Robertson), that we are not hearing credible solutions coming forward from her and her colleagues. Until such time as we do, we will not take any lessons on fairness from her.

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

6. What consideration his Department has given to the recommendations of the Electoral Commission’s report on the Scottish referendum.

[The Secretary of State for Scotland (Michael Moore)]

The United Kingdom Government welcome the reports from the Electoral Commission. We agree with the commission’s advice on the question, on the funding levels for the referendum, and on the clarity of the process.

[Mr MacNeil]

When in opposition the Secretary of State wanted to extinguish his office; now he is in government he is publishing papers that talk about extinguishing Scotland—yes, extinguishing Scotland. As an act of repentance, will he ensure that his Tory-Liberal Government play fair with the Electoral Commission, as the Scottish National party Government are doing, and, as the Electoral Commission referee has asked, enter into dialogue together on Scotland’s future?

[Michael Moore]

I am sure that the hon. Gentleman welcomes the publication earlier this week of this major contribution to the debate by the UK Government. We agree with the Electoral Commission’s recommendations. The document fleshes out the issues on the legal status of Scotland within the UK. Of course, over time, as these issues are discussed further, we will, as appropriate, meet the Scottish Government, as I have already said on many occasions. [Hon. Members: “Ah!”] I am delighted that that is good news for the hon. Gentleman and his colleagues.

[Mrs Eleanor Laing (Epping Forest) (Con)]

We all want the referendum campaign to be fair. Does the Secretary of State agree that it is essential that all parties taking part in the referendum campaign must adhere to what the Electoral Commission has said about spending limits?

[Michael Moore]

My hon. Friend is entirely right.

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

Now that we have cross-party agreement on accepting the recommendations of the Electoral Commission, will the Secretary of State say what information he is going to put into the public domain on the implications of separation from the UK for things such as pensions, the welfare system and the economy of Scotland, which people need to know before they cast their vote?

[Michael Moore]

The hon. Lady is entirely right to focus on the need for us to move on from the process arguments to the issues of substance for families across Scotland. I am delighted that yesterday in the Privy Council the section 30 order was approved so that now we will have a legal, fair and decisive referendum. In that referendum, we have to discuss the big issues. As we have seen this week with the legal paper, which will be followed by others on the issues she mentions, there are some big questions that need to be debated—and so far no answers from the Scottish National party.

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

Does my right hon. Friend accept that if the outcome of the referendum is to engage the confidence of the Scottish people, the campaign must be conducted with candour and transparency? This week the Government published their view of the legal consequences of independence. Is it not time for those who argue for independence to do the same?

[Michael Moore]

It has been a curious week, but my right hon. and learned Friend is right to highlight that at times the Scottish National party has not been clear whether to embrace the opinions of our legal experts or to lambast them. The great merit of this document is that we have now laid out all the key arguments, backed up by the most impressive legal opinions, and nothing has come forward from the Scottish Government.

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

7. What recent discussions he has had with representatives of universities in Scotland on the effects of UK Government policy on higher education in Scotland.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

My right hon. Friend the Secretary of State and I are in regular contact with representatives of universities in Scotland on a range of issues.

[Pete Wishart]

I thank the Minister for his response—so far, so good. He will know how important foreign students are to our economy. He will also know how unhappy our universities are with his Government, and they have every right to be. His Tory Government’s obsession with immigration is starting to really hurt us: a 26% reduction in students from India, a 25% reduction from Pakistan and a 14% reduction from Nigeria. Surely he can agree that we could obviously do this much better in Scotland if we had control over these issues.

[David Mundell]

Not for the first time I am confused by the SNP position. On some occasions, it states that it wants to have the same immigration rules as the rest of the UK so it can be in a common travel area; on other occasions, such as this, it says it wants uncontrolled mass immigration. Which is it?

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

13. Scotland’s proud history of research, innovation and discovery is inextricably bound up with the success of the United Kingdom. Does the Minister agree that the only sure and certain and the best way to ensure that Scotland remains a leader in world-class research is for Scotland to remain in the United Kingdom?

[David Mundell]

I absolutely agree with the hon. Gentleman. He will be aware that Scottish universities and research institutes receive £436 million from UK research councils—roughly 13% of the overall scientific research funding. [Interruption.]

[Mr Speaker]

Order. There are a lot of very noisy private conversations taking place in the Chamber. Let us have a bit of order so that we can hear Mr Michael Connarty.

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

8. What recent discussions he has had with the Secretary of State for Culture, Media and Sport and Ministers in the Scottish Government on the level of gambling machine usage in Scotland.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

My right hon. Friend the Secretary of State and I have regular discussions with the Secretary of State for Culture, Media and Sport and with Scottish Ministers on a range of issues.

[Michael Connarty]

I am not sure whether to thank the Minister for that very unhelpful answer. Fixed-odds gambling terminals—[Interruption.]

[Mr Speaker]

Order. We will just have to extend the session. There is a point to having some courtesy towards the Member who is asking the question. I am sure that is something that Members learned at school.

[Michael Connarty]

Thank you very much, Mr Speaker. I will take cheers from anywhere.

Fixed-odds gambling terminals have sucked up £122 million in profits in the betting shops in Scotland. They are called the crack cocaine of the gambling industry. Is it not time for the Secretary of State to join me in lobbying to have the gambling prevalence survey reinstated, considering how much addictive gambling there is in Scotland and other parts of the UK?

[David Mundell]

I do not agree with the hon. Gentleman on the reintroduction of the prevalence survey, but I commend the Daily Record and the hon. Gentleman for highlighting issues relating to problem gambling. He may be aware that the Government are currently conducting a consultation on the links between problem gambling and B2 machines. I urge him, Daily Record readers and everyone with an interest in this matter to contribute to that consultation.

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

9. When he last met representatives of local government in Scotland.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

My right hon. Friend the Secretary of State and I are in regular contact with representatives of local government in Scotland on a range of issues.

[Gemma Doyle]

The truth is that the Secretary of State has not met the Convention of Scottish Local Authorities since 12 September last year. The consequences of the bedroom tax, which he voted for and which risks making 10,000 people in Scotland homeless, will be dealt with by local authorities. What will he do about that and when will he meet COSLA?

[David Mundell]

The hon. Lady should know that the Secretary of State has met COSLA within the past two weeks and is in regular contact with its leader. He will be making COSLA aware of the discretionary payments fund, which has been greatly increased in Scotland, and of how local authorities can utilise that.

[Ann McKechin (Glasgow North) (Lab)]

What assessment has the Minister made of the impact of the bedroom tax on the credit rating of local authorities and other social landlords, which is bound to go down, having an impact on house building and maintenance?

[David Mundell]

I am afraid that the hon. Lady’s assumption is wrong. At meetings with COSLA, the Scottish Federation of Housing Associations and my noble Friend Lord Freud, we have discussed that very issue and satisfied the concerns of housing associations and local authorities.

The Prime Minister was asked—

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

Q1. If he will list his official engagements for Wednesday 13 February.

[The Prime Minister (Mr David Cameron)]

This morning, I had meetings with ministerial colleagues and others, and in addition to my duties in the House, I shall have further such meetings later today.

[Dr McCrea]

My constituent Constable Philippa Reynolds is being buried this afternoon, having been killed on duty with the PSNI in Londonderry. I am sure the whole House will join me in expressing sympathy to her family and acknowledging her dedicated service.

The horsemeat scandal has not only seriously undermined confidence in the safety of the food we eat, but threatens a very successful meat industry. Will the Prime Minister assure me that the Government will relentlessly follow every lead until each person or business responsible for any criminal or fraudulent act has been caught, exposed, prosecuted and then expelled from ever again having any part in the UK food industry?

[The Prime Minister]

I fully support what the hon. Gentleman has said, but first let me join him in praising Constable Reynolds, who died going about her job, keeping people safe in the community she loved. As well as wishing the two injured officers a full and quick recovery, I join him in sending my deepest condolences and those of everyone in the House to Constable Reynolds’ colleagues and loved ones.

On the appalling situation of people buying beef products in supermarkets and finding out that they could contain horsemeat, let me remind the House of what has happened and then bring it up to date. On 15 January, the Irish authorities identified problems in a number of beef products. On 16 January, I told the House that I had asked the Food Standards Agency to conduct an urgent investigation. As part of that investigation, there has been more testing and tracing, and this enhanced testing regime actually led to the discovery from Findus and others of not just contamination but, in some instances, of horsemeat being passed off as beef.

That is completely unacceptable, which is why it is right that the Secretary of State for Environment, Food and Rural Affairs has led these meetings with retailers and producers. We have agreed a tougher inspection regime, and have asked hospitals, schools and prisons to check with their suppliers that they are testing their products. As the hon. Gentleman and the House know, yesterday the police and the FSA raided two premises, one in west Yorkshire, the other in west Wales, and as he said, if there has been criminal activity, there should be the full intervention of the law. We have also asked for meaningful tests from retailers and producers, and those will be published in full. He is right to say what he does.

[Rory Stewart (Penrith and The Border) (Con)]

In a week when both sides of the House have celebrated the wonders of the United Kingdom, I am delighted to discover that I now represent a midlands constituency. Will the Prime Minister please join me in celebrating a culture that touches both sides of the English-Scottish border by celebrating Cumbria day with us today?

[The Prime Minister]

I am very much looking forward to joining my hon. Friend at the celebration of Cumbria day here in the House of Commons. He is incredibly fortunate to represent one of the most beautiful and brilliant constituencies in the House of Commons. I particularly remember the time we spent at the Butchers Arms in his constituency—an outstanding pub in a beautiful part of our world.

[Edward Miliband (Doncaster North) (Lab)]

Can the Prime Minister tell us whether, at the end of this Parliament, living standards will be higher or lower than they were at the beginning?

[The Prime Minister]

We are helping working people by giving 24 million people a tax cut this year, and living standards will certainly be higher for those people on the minimum wage who are working full time, whose income tax bill has already been halved under this Government.

[Edward Miliband]

It was ever such a simple question, and I just want a simple answer. In 2015, people will be asking, “Am I better off now than I was five years ago?” What is the right hon. Gentleman’s answer?

[The Prime Minister]

The answer is that people will be a lot better off than they were under Labour with a record deficit, with unreformed welfare and with a busted banking system. They will have seen a Government who have got the deficit down, cut their income taxes and dealt with the banks. As the Governor of the Bank of England said today, we are on the road to recovery.

[Edward Miliband]

All the right hon. Gentleman shows is how out of touch he is. He is even out of touch with his own Office for Budget Responsibility’s figures, which show that, by 2015, people will be worse off than they were in 2010 because prices have been rising faster than earnings under his Government. Why is this happening? He told us that the economy would be growing, but the truth is that it has been flatlining. Will he acknowledge that it is his failure to get growth that means that we have falling, not rising, living standards in this country?

[The Prime Minister]

The right hon. Gentleman says that prices are rising, but I would remind him that inflation is lower under this Government than what we inherited from Labour. It has been cut in half from its peak. Of course, if his question is, “Have you had to take difficult decisions to deal with the deficit, to get on top of the problems that we face, to reform welfare and to clean up our banks”—you bet we have had to take difficult decisions! No one in this country is in any doubt about why we have had to take difficult decisions; it is because of the mess that he left.

[Edward Miliband]

First, the deficit is going up, not down, because of the right hon. Gentleman’s economic failure. Secondly, we have a flatlining economy and—this will be the question over the next two years—declining living standards as a result. But of course, amidst those falling living standards, there is one group for whom the good times will come this April. Can he just remind us what the thinking was when he decided to provide an average tax cut of £100,000 for everyone earning over £1 million in this country?

[The Prime Minister]

The right hon. Gentleman should be familiar with the figures. When he put the top rate of tax up to 50p, millionaires paid £7 billion less in tax. That is what happened under his plans. I will tell him what is going to happen in April: every single taxpayer in this country, all 24 million of them, will see a tax cut as we raise the personal allowance, and as we get close to our goal of being able to earn £10,000 without paying any income tax at all. Of course, the biggest tax cut has been for those hard-working people on the minimum wage, going out to work day after day, who have seen their income tax bills cut in half. That is who we stand for, and that is who we are helping.

[Edward Miliband]

No matter how much the right hon. Gentleman blusters, he knows the truth. He has cut tax credits and raised VAT, and people are worse off, not better off. Does it not speak to how out of touch he is that last week he attended the Tory party winter ball, auctioned off a portrait of himself for £100,000 and then declared, without a hint of irony, that the Tories were

“no longer the party of privilege”?

You couldn’t make it up! Let me put the question another way. We are talking about people who are earning £20,000 a week—[Interruption.] Let me ask him the question again. What is it about those people that made him think that, this April, they needed extra help to keep the wolf from the door?

[The Prime Minister]

Let me remind the right hon. Gentleman that it is this Government who have helped working people by freezing council tax, cutting petrol duty, cutting tax for 24 million people, and legislating so that people get the lowest tariff on their energy bills. That is what we have done while having a top rate of tax that is higher than any year when he was in the Treasury.

The right hon. Gentleman talks about important political events and speeches, and perhaps he will confirm something. I have here an invitation; he is going to make a major speech tomorrow, and I have the invitation. This is the invitation that has been sent out:

“Ed Miliband is going to make a ‘major’ speech on the economy on Thursday. It won’t have any new policies in it,”.

[Edward Miliband]

Let me tell the Prime Minister that he would be most welcome to attend the speech and he might learn something.

Every week that goes by, evidence mounts against the Government on the economy. There is a living standards crisis for the many and all he does is stand up for a few at the top. We have a failing Prime Minister; he is out of touch, and he stands up for the wrong people.

[The Prime Minister]

Once again, the right hon. Gentleman has nothing to say about the deficit, nothing to say about welfare, and nothing to say about growth. Now he is going to make a speech tomorrow, which he kindly invites me to, but if there are not any policies, what would be the point of coming? Let me refer him to his policy guru, the hon. Member for Dagenham and Rainham (Jon Cruddas), who is responsible for Labour’s manifesto. He says:

“Simply opposing the cuts without an alternative is no good,”.

That is right; the whole Opposition Front Bench is no good.

[Mr Mark Spencer (Sherwood) (Con)]

Q2. The welfare state and the NHS are there to support our constituents when they fall on difficult times. Will the Prime Minister assure the House that the Government will not allow them to be abused by illegal immigrants and foreign nationals who come here as benefit tourists?

[The Prime Minister]

My hon. Friend makes a very important point. Britain has always been an open and welcoming economy, but it is not right if our systems are being abused. That is why yesterday I chaired a committee meeting in Whitehall, which my hon. Friend the Minister for Immigration is leading, where we are going to look at every single one of our systems—housing, health, benefits—and make sure that we are not a soft touch for those who want to come here. It is vital that we get this right. Many parts of our current arrangements simply do not pass a simple common-sense test in terms of access to housing, access to the health service and access to justice, and other things that should be the right of all British citizens but are not the right of anyone who just chooses to come here.

[Mr Nigel Dodds (Belfast North) (DUP)]

If the Prime Minister is serious about tackling the serious problem of misleading labelling and the contamination of product, what possible future is there for his coalition with the Lib Dems?

[The Prime Minister]

The coalition must be clearly labelled at all points. However, the right hon. Gentleman references an important point which is that retailers bear a real responsibility. At the end of the day, they are putting products on their shelves and they must be really clear about where that meat came from and who it was supplied by. It is up to them to test that, and I think that is vital.

[Claire Perry (Devizes) (Con)]

Q3. Will my right hon. Friend confirm that with the Government’s plans to cap social care bills at £75,000 we are finally starting to defuse the ticking time bomb that is adult social care? The action will allow the insurance market to grow to protect against the liability, and we are helping people to protect their family homes in their old age.

[The Prime Minister]

My hon. Friend makes an important point and I would have thought that every Member of Parliament had heard from their constituents, and in meetings with groups such as Age Concern, and others, that right now it is completely unfair that the fickle finger of fate can pick someone out for dementia or Alzheimer’s and they lose the house they have invested their lifetime savings in. That is not fair, and for the first time this Government have come up with the money to make sure that we put a cap on what any family has to spend. It is the biggest pro-inheritance move that any Government have made in 20 years. Let us be clear: the intention is not that people should have to spend £75,000, but because we have put a cap in place there should be a proper insurance market. I do not want anyone to have to pay anything, and that is what these reforms can help to achieve.

[Anas Sarwar (Glasgow Central) (Lab)]

Q4. The Prime Minister is rightly shocked by the revelations that many food products contain 100% horse. Does he share my concern that, if tested, many of his answers may contain 100% bull?

[The Prime Minister]

That was a very good line, but I do think this is a serious issue. People are genuinely worried about what they are buying at the supermarket, and I really think we have got to get a grip of this rather than make jokes about it—but I will think of another one by the end of the session.

[Penny Mordaunt (Portsmouth North) (Con)]

Q5. Does the Prime Minister take a dim view of people who say one thing and do another, such as campaigning against—[Interruption.]

[Mr Speaker]

Order. The hon. Lady must be heard.

[Penny Mordaunt]

—such as campaigning against greenfield development and then voting for it, as the Liberal Democrat candidate in Eastleigh has, or purporting to support fan ownership of football clubs while undermining the community buy-out of Pompey, as the Professional Footballers Association has done this week?

[The Prime Minister]

First, may I wish my hon. Friend well in her campaign to help Portsmouth football club? What she does is very important. On the Eastleigh by-election—I hope all my hon. Friends will join me on the campaign trail in Eastleigh—what I would say to people in Eastleigh is that if they want a straight-talking candidate who does exactly what it says on the tin, Maria Hutchings is a local mum and a fantastic campaigner, and she would make a great Member of Parliament.

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

May I ask the Prime Minister for his help? I have to say to the House that I am defeated in my attempts to get a response from NHS South West London, on behalf of my constituent, Mr Aziz, who has pulmonary hypertension, chronic lung disease and left heart disease. Those at NHS South West London will not respond to my correspondence asking whether they will agree to look at allowing Professor Madden, the world famous cardiologist, to prescribe sildenafil for Mr Aziz’s treatment. I can get no response and my constituent might die, should he not get a decision.

[The Prime Minister]

I am very happy to take up the case that the hon. Lady quite rightly raises in the House. If she gives me the details, I will see what I can do to try to get a better answer from the health authority.

[David Mowat (Warrington South) (Con)]

Q6. Each year many dozens of my constituents have to sell their houses to pay for social care, which is random and unfair. Does the Prime Minister agree that the proposals announced last week will at last start to mitigate this issue?

[The Prime Minister]

My hon. Friend makes a very important point. As he says, it is completely random who can end up suffering from dementia and then suddenly find that, because they could be spending five, 10 or even more years in a care home, all the savings that they carefully put away through their hard-working life are completely wiped out. To cap the cost for the first time is a major breakthrough. It is a progressive move, but it will also help hard-working families who want to save and pass on their houses to their children. It will be this Government who will have made that possible.

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

Q7. Since the coalition came to power, some 350 libraries have closed. The Communities Secretary has dismissed those campaigning to save local libraries—parents hoping to teach their children to read or those who want to study our history and literature—as “just…a bunch of luvvies.”—[Official Report, 17 December 2012; Vol. 555, c. 561.]Whatever happened to the big society?

[The Prime Minister]

I strongly support our libraries and in my constituency we have worked very hard to ensure that libraries will be staying open—and they will be. The hon. Gentleman asks about the big society. Part of the answer to helping to keep libraries open is to tap the enthusiasm of communities to volunteer in libraries and to work in libraries to keep them open. I am sure that he, like me, will welcome the report this week showing that volunteering is up and charitable giving is up. I think the big society has a big role to play in keeping libraries open, sometimes in the teeth of opposition from Labour councils.

[Stephen Williams (Bristol West) (LD)]

On Saturday I spoke at an event in my constituency, organised by Christian Aid and hosted by the Woodlands church in Clifton, on tax avoidance in developing countries. Does the Prime Minister agree that we could do much to combat this problem by assisting developing countries to develop their own tax collection and assessment capabilities, and by requiring British companies to be completely transparent about profits made and taxes paid in each country of operation?

[The Prime Minister]

My hon. Friend makes a very important point, and there is a huge amount of things we can do here. The work we have done with some less developed countries has actually seen their tax base sometimes as much as treble, and we need to do far more in all these countries because it is an absolutely vital part of development. I also agree with the issue he raises with respect to tax transparency, and that is why the Government are putting it at the head of our G8 agenda for the meeting that will take place in June at Lough Erne in Northern Ireland. One of the great things about this agenda is that it brings together developed and developing countries with a shared agenda that is good for both.

[David Simpson (Upper Bann) (DUP)]

Q8. The Prime Minister gave the House an update on the EU negotiations on the budget, and he will know that regional aid, which comes from the EU, plays an important role for some of the regional assemblies when it comes to attracting inward investment. Will he update the House on the continuation of regional aid?

[The Prime Minister]

The outcome of the budget leaves the amount of overall regional aid that Britain will receive broadly similar to the last period at around €11 billion. There are changes in the definitions of regions, partly because of the new concept of transition regions. What we now need to do is to sit down, as the United Kingdom, and work out how best to make sure that the money is fairly divided between Wales, Northern Ireland, Scotland and England. There are transition regions in England that are looking to benefit, but I am sure that we can have fruitful discussions and come to a good conclusion.

[Andrea Leadsom (South Northamptonshire) (Con)]

Is my right hon. Friend amused that the Leader of the Opposition and the Deputy Prime Minister are both trying to claim credit for his brilliant achievement of a real-terms cut in the EU budget? Does he hope that they will now follow his lead and both call for a referendum to be put to the British people?

[The Prime Minister]

I hope that, first, they will convince their MEPs to vote for the budget reduction: that would be helpful—[Interruption.] I also hope we can make some progress on the referendum issue, because the shadow Chancellor, who—as ever—is shouting from a sedentary position, was asked whether Labour would support an EU referendum, and he said:

“That slightly depends on how stupid we are, doesn’t it?”

That was his opening gambit. He went on to say that

“we’ve absolutely not ruled out a referendum”.

That is slightly in contrast to the leader of the Labour party, who said, “We don’t want an in-out referendum.” Perhaps when they have come up with an answer to this question, they will come to the House of Commons and tell us what it is.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

Q9. According to a freedom of information answer, there were 4,000 fewer uniformed police officers on London’s streets after the Prime Minister’s first two years in office. With the percentage of crimes being solved in London down as well, why has the Prime Minister broken his promise to protect front-line policing?

[The Prime Minister]

Crime is down by 10%, not just generally, but specifically in the Harrow community safety partnership area—the hon. Gentleman’s area. That is a much greater reduction than for the whole Metropolitan police area. The number of neighbourhood police officers is actually up since the election, from 895 to 3,418, and there are many fewer officers in back-office jobs. In 2010, there were 1,346 of them and there are now fewer than 1,000. On all this, what we have seen is, yes, a reform agenda for the police and there have been spending reductions, but crime is down and visible policing is up.

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

With Japan, the eurozone and Switzerland all talking down their currencies, despite the statement by the G7 yesterday, does my right hon. Friend agree that the most important aim of the G20 meeting in Moscow this coming weekend should be to establish means to prevent competitive devaluation, which in the 1930s—[Interruption.] I was alive in the 1930s—as I can remember from my father’s experience, caused widespread unemployment and the protectionism that goes with it?

[The Prime Minister]

First, I would like to confirm that my right hon. Friend was not only alive in the 1930s but was, as now, absolutely thriving. What he says is important: no one wants to see a string of competitive devaluations. What happened to sterling as a result of the very deep recession here obviously was a depreciation. I do not believe that we can depreciate our way to growth, whatever country we are, but what we should do is use the benefit when there is a structural change to make sure we increase our competitiveness. That is what Britain needs to do.

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

Q10. The Prime Minister cannot have it both ways on care for elderly—with delivery and quality going on at the same time as council cuts. In Coventry, for example, an extra £28 million has to be cut from the budget—for Birmingham, the figure is £600 million—with nearly 1,000 jobs being lost over a period of two or three years. May we have a fair deal for the elderly, a fair deal for Coventry and a fair deal for the west midlands?

[The Prime Minister]

At the start of this Government in 2010 when we made the decision not to cut the NHS, we put NHS money into adult social care in local government because we recognised the importance of that budget. I would argue, too, that this week’s move to cap social care costs, while of course not solving the whole problem, was important. By creating a cap on what people will be charged, we can create an insurance market so that everyone can try to protect themselves against the long-term costs of social care. That should see more money coming into this absolutely vital area.

[Charlie Elphicke (Dover) (Con)]

Q11. Will the Prime Minister join me in welcoming figures from the Council of Mortgage Lenders showing that the number of first-time buyers has hit a five-year high?

[The Prime Minister]

I certainly join my hon. Friend on that. This problem has dogged our economy over the last few years. No one wants us to go back to the 110% mortgages that we had during the boom times, but we need to make available to young people the chance of earning a decent salary to be able to buy a decent flat or house with a mortgage that does not require a massive deposit. That has not been possible for people in recent years, and I think that the Bank of England move on the funding for lending scheme—£80 billion—is now feeding through to the mortgage market and making available lower mortgages at a decent long-term rate. That is very important for our market.

[Stephen Pound (Ealing North) (Lab)]

Q12. Further to the Prime Minister’s rather acerbic exchange with the Leader of the Opposition earlier, will he tell the House whether he will personally benefit from the millionaires’ tax cut to be introduced this April?

[The Prime Minister]

I will pay all the taxes that are due in the proper way. The point I would make is that all the years in which the hon. Gentleman sat on this side of the House, there was a top rate of tax that was lower than the one we are putting in place. I did not hear any groaning from the hon. Gentleman then.

[Guto Bebb (Aberconwy) (Con)]

Q13. A typical council tax payer in my Aberconwy constituency will now pay £124 more than they did in 2010 because the money made available to the Labour Welsh Government has been used to fund their pet project to secure their majority in the Assembly. Does the Prime Minister share my concern that hard-working families in Wales are being used in order to fund the Labour party’s pork-barrel policy in Cardiff Bay?

[The Prime Minister]

My hon. Friend makes a very good point. This Government have made available money for a council tax freeze. That has the consequence that money for that freeze is available in Wales, so people in Wales will know who to blame if their council tax is not frozen. It is the Labour Assembly Government in Wales: they are to blame; they are the ones who are charging hard-working people more for their council tax.

[Mr Iain McKenzie (Inverclyde) (Lab)]

Q14. We all remember the Prime Minister’s promise last October that he would legislate to force energy companies to put customers on the lowest tariff. Will he explain why his Energy Bill contains no such commitment and why he has broken that promise?

[The Prime Minister]

I have to tell the hon. Gentleman that he is completely wrong. The Energy Bill does exactly what I said in the House; it is about legislating to force companies to give people the lowest tariff.

[Dr Julian Huppert (Cambridge) (LD)]

rose—

[Hon. Members]

Oh, no.

[Mr Speaker]

Order. It is very discourteous of the House to issue a collective groan—notably on the Opposition Benches. It is quite inexplicable. I have called the good doctor; let us hear from the good doctor.

[Dr Huppert]

Schools in Cambridgeshire were underfunded for decades by both the last Labour Government and the one before that, and the latest figure shows that they receive £600 per pupil per year less than the English average—the worst funding in the entire country. Does the Prime Minister agree that that is simply unfair? Will he support the Cambridge News “Fair deal for our schools” campaign, and pledge to end the discrepancy during the current Parliament?

[The Prime Minister]

I will consider carefully what my hon. Friend has said, but I will say to him now that we have protected the schools budget so that per-pupil funding is the same throughout this Parliament, and head teachers can plan on that basis. By encouraging academy schools and free schools, we are ensuring that more of the education money goes directly to them.

[Yvonne Fovargue (Makerfield) (Lab)]

Q15. The Institute for Fiscal Affairs described the Chancellor’s tax changes and benefit cuts as giving with one hand and taking away with many others. Does the Prime Minister think that that is fair on hard-working families, when at the same time he is giving to millionaires with both hands?

[The Prime Minister]

I do not agree that that is what the IFS said. As I said when I quoted the IFS last week, it has pointed out that the highest increase in tax payments has come from the better off, and the changes that the Government have made are particularly helping hard-working people on the minimum wage who will see their income tax bills cut in half. That is what this Government are doing, and we will not forget the abolition of the 10p tax rate that clobbered every hard-working person in the country.

[Richard Harrington (Watford) (Con)]

I know that the Prime Minister is aware of the Watford community exchange, which will take place on Friday. It will involve a meeting between 50 businesses and 50 charities and community organisations. I hope that the Prime Minister will congratulate Chris Luff of Freedom Communications, which has already offered 150 hours of its time to help local charities, including Westfield community centre. I also hope that the Prime Minister will encourage all his colleagues, including Ministers, to initiate similar proceedings in their constituencies, because this is the big society in action.

[The Prime Minister]

My hon. Friend is absolutely right. A very large part of the big society is businesses coming together to help voluntary groups and charities in local communities. I think it is excellent that my hon. Friend is doing that good work in his constituency, and I pay tribute to all who are joining him. As I said earlier, it is good news that volunteering is up, charitable giving is up, and the big society is getting bigger.

[Mr Ben Bradshaw (Exeter) (Lab)]

Is the Prime Minister still eating processed beef?

[The Prime Minister]

I am following very carefully what the Food Standards Agency says, and what the Food Standards Agency says is that there is nothing unsafe on our shelves.

[Martin Vickers (Cleethorpes) (Con)]

Procedures at the Northern Lincolnshire and Goole Hospitals NHS Foundation Trust are being reviewed because of the high mortality rate, which is obviously of considerable concern to my constituents. Will the Prime Minister assure them that whatever recommendations result from the review will be implemented in full?

[The Prime Minister]

I can certainly give that assurance. It is important that we get to the bottom of any hospital having an unnaturally high mortality rate. It is also important that such inspections and investigations are carried out properly, and that we all learn the lessons of the Mid Staffordshire inquiry report.

Press Regulation

Wednesday 13th February 2013 Commons Chamber

12:33

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

(Urgent Question): To ask the Secretary of State for Culture, Media and Sport if she will make a statement on the proposal for a royal charter on press regulation.

[The Secretary of State for Culture, Media and Sport (Maria Miller)]

I must make it clear that following the publication of Lord Justice Leveson’s report, cross-party talks have been exploring different ways of implementing the tough self-regulatory system for the press which he recommended, and which would ensure that justice was done for the victims of press abuse.

As Members will know, there are already several press bills in the public domain which have been published by various organisations. The draft royal charter published by my party yesterday is outside the normal arrangements for collective agreement, and does not reflect an agreed position between the Conservative and Liberal Democrat parties.

I made it clear to the House on 3 December that we would

“send a loud message to the press of this country, and…that the status quo is not an option.” —[Official Report, 3 December 2012; Vol. 554, c. 594.]

Both the Prime Minister and I wholeheartedly support a tough new system of independent self-regulation, as outlined by Lord Justice Leveson. We know that any new model must restore public confidence and ensure that the abuses of the past cannot happen again, but we continue to have grave reservations about statutory underpinning and, as such, we have concerns about implementing a press Bill. The royal charter I have published would put in place Leveson’s recommendations without the need for statutory underpinning. It would see the toughest press regulation this country has ever had, without compromising press freedom. The royal charter implements the principles of Leveson in a practical fashion and is the Conservative party’s alternative to Lord Justice Leveson’s suggested use of Ofcom as a verifying body. All parties now agree with us that handing further powers to Ofcom, an already powerful body, would not be appropriate.

Let us be clear: the charter does not create a regulator; rather, it establishes the body that will oversee the regulator. The regulatory system that the royal charter body will oversee will be tough, and the regulator will have the powers that Leveson set out to investigate serious or systemic breaches of the press code; to impose up to £1 million fines; and to require corrections and other remedies, including prominent apologies. The royal charter body will provide tough oversight and ensure that the new regulatory body is efficient and effective.

We have also published draft clauses for exemplary damages, which will provide real incentives for the industry to join the regulator and ensure that there are serious consequences for those that do not. This is tough regulation and a tough package, and delivers the principles of Leveson.

Lord Justice Leveson’s report was almost 2,000 pages long, and areas were raised in it about which all political parties have expressed great concern. Ofcom is but one example. All political parties expressed serious reservations around data protection proposals and their potential impact on important investigative journalism. There were also concerns about whether it would be appropriate for the Information Commissioner to investigate, and then decide on, public interest.

The royal charter reflects a principled way forward, proposed by the Conservative side of the coalition. We are clear that this is a workable solution, but it is only a draft, and we will continue to debate it as part of the cross-party talks, and we will continue to seek to secure agreement. We are all committed to the Leveson principles. This is about taking the Leveson report forward, and making sure it can work in practice. The challenge before all of us is to find an agreement. The victims deserve nothing less.

[Ms Harman]

I thank the Secretary of State for that answer, but will she acknowledge that, as they stand, the Conservatives’ proposals do not implement the Leveson report recommendations? We called for cross-party talks and have been engaging in them in good faith, with her and with the Minister for Government Policy. Does she agree that what Leveson proposes is fair and is reasonable? It protects free speech and protects people from abuse and harassment by the press. There can be no justification for watering it down. The most straightforward way of implementing Leveson is by statute, rather than by royal charter and statute, but whichever route is chosen, we must implement the full Leveson, not Leveson-lite.

Leveson said that the system must be independent of Government, yet, through the Privy Council, Ministers would be able to tamper with the royal charter at any time. Will the Secretary of State address that problem with clauses in statute providing that, once established, Ministers cannot tamper with the charter? Leveson said the recognition panel must be independent of the press, yet the royal charter as drafted will allow the press to be part of the appointment process to the very body whose job is to guarantee the independence of the system. Will the Secretary of State take the press out of the appointment system, and will she undertake to come forward with changes to the recognition criteria, so that what is in the royal charter matches, rather than dilutes, Leveson?

Leveson’s report was published in November and there is growing impatience for it to be implemented. The December debate in this House made that clear, and the vote in the Lords on the Defamation Bill last week showed that there will be no acceptance of Leveson being watered down or kicked into the long grass. We will be reasonable on this, but we will be robust. We have an opportunity to make an important change that has been needed for decades. We must ensure that what the press did to the Dowlers, the McCanns, Abigail Witchalls’s family and to so many others, who suffered so terribly and whose lives were made a misery, can never happen again. Their heart-rending evidence to Leveson is the unanswerable case for lasting change. A big responsibility falls on us, and history will judge us as having failed in our duty if we do not implement Leveson now.

[Maria Miller]

I start by thanking the right hon. and learned Lady for the work we have been doing together and for today’s opportunity to clarify some of the points she has raised. She is right to start by making sure that we all focus on the group of people we need to focus on—the victims. She knows that the Conservative party, myself and the Prime Minister are absolutely committed to implementing the principles in Leveson. She may need to reconsider her choice of words in advocating implementing Leveson in full, because she will know that that is not what her party advocates, and it is not what my party advocates either. There are clear recommendations on data protection and the use of Ofcom as the verifying body that she has already expressed deep concerns about, so I am sure she did not mean to say that she would advocate the full implementation of Leveson, as she just did in her remarks.

The right hon. and learned Lady rightly says that if we are to take a royal charter approach—I was pleased to see that there was not a wholehearted rejection of that when we put it forward yesterday—we do need to make sure that it cannot be tampered with. She will know, having looked at the charter itself, that we have made clear provisions to ensure that such tampering is not possible. I would very much welcome her intervening on me now to give her party’s clear undertaking that that would not be an approach she would take; she can take it from the Conservative party that there is no way that we would ever want to tamper with a royal charter, and I am sure that she would be able to give those undertakings, too.

The right hon. and learned Lady also raised the issue of the appointment process, rightly saying that it needs to be independent. That is why we have taken the approach that we have, which is to involve the Commissioner for Public Appointments and to make sure that we are following the good practice that we have on appointments to organisations that are similar to this. I have to say that some of the bodies involved in the conversations about the Leveson report, such as Hacked Off, have actually proposed involving politicians and the press in an appointments process. We would wholeheartedly reject that, because we do not think it is right. We know that the appointments process for the verification body needs to be independent, and those who have read the details of what we are proposing will see that that is exactly what we are doing.

The right hon. and learned Lady also outlined concerns about the recognition criteria. She is right to say that we need to make sure that we give very full regard to the criteria as set out in the Leveson report. That is why we have used his recommendations as the basis for that section of the royal charter, but clearly we have to make sure that they work in practice, and remove any uncertainty and any concerns about clarity. I know that she and I would agree that, as we move forward, certainty and clarity are vital in this area.

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

The Liberal Democrats have always been clear that we would prefer independent press regulation backed by statute rather than a royal charter, but we do accept that a royal charter could work. Unfortunately, the draft royal charter currently fails to meet the general requirements set out by Leveson. Regardless of what political parties might say now, does the Secretary of State accept that, as it stands, there is nothing to prevent the charter in law from being amended by a future Government through the Privy Council?

[Maria Miller]

I thank my hon. Friend for his welcome support. I give a clear undertaking that we will continue to work together through the cross-party process to make sure that we come to a consensus. I completely understand his desire to make sure that any verification body has clarity, certainty and longevity. That is exactly why we will put clear provisions in the charter that state clearly that any changes would have to have the full support of the three party leaders and a two-thirds majority vote in both Houses of Parliament. I believe that provides the sort of certainty that my hon. Friend is looking for.

[Mr Jack Straw (Blackburn) (Lab)]

May I ask the Secretary of State about data protection? I acknowledge the concerns expressed on both sides about Leveson’s chapter on data protection, but in 2008-09 both sides of the House agreed to change the Data Protection Act to provide for a two-year maximum jail sentence for breach of the data protection rules, with a clear public interest defence for journalists. The provision is on the statute book, and for four years we have been asking for it to be brought into force. Will the Secretary of State say what possible reason there is for not bringing in that very important provision? It is not about catching out journalists acting in the public interest, but about dealing with unscrupulous claims management companies—people who unlawfully trade in data and are getting away with it at the moment, because the Government have failed to implement that section.

[Maria Miller]

The right hon. Gentleman raised that point in our last debate on this subject and I understand the depth of his feeling. Numerous changes are going on in the area of data protection, particularly with regard to the EU regulations. It is something I am looking at very carefully. I am also looking at consulting on the provisions in Leveson, so that we have people’s input and can make one set of changes to data protection rather than having a slightly more ad hoc piecemeal approach.

[Mr John Whittingdale (Maldon) (Con)]

Does my right hon. Friend agree that there is considerable public impatience to have a new, strong independent regulator in place as soon as possible? Will she re-emphasise to the industry the need to reach agreement very swiftly, and will she confirm that her approach will both ensure that the new body conforms with all Lord Justice Leveson’s recommendations and allow it to start its work without waiting for legislation?

[Maria Miller]

I thank my hon. Friend for his comments. He is right; momentum is important. The implications of the amendments made in the Lords last week are that people want to see change. That clear message has gone out to the press, and it is certainly something that we are underlining through our response to this urgent question.

[Sir Gerald Kaufman (Manchester, Gorton) (Lab)]

As someone who has expressed my long-standing repugnance towards statutory regulation of the press, may I point out to the right hon. Lady that it is getting on for three months since the Leveson report was published? The Government said they would act speedily, yet the press continue to wriggle out of any agreement or responsibility and are seeking to abolish the licensing hours for the last chance saloon. Will she make it absolutely clear that this is unacceptable and that she will set a deadline, and if that deadline is reached without agreement by the press, the House will have to act?

[Maria Miller]

The right hon. Gentleman makes his point powerfully. Perhaps I can reassure him by saying that the self-regulatory approach that Leveson advocated requires the press to put together a new regulatory regime. Every indication I have is that that is exactly what is happening. The publication of the plans yesterday for a royal charter oversight body is our contribution to doing exactly what the right hon. Gentleman is calling for, which is to act as swiftly as we can. Putting the charter body in place will take significantly less time than some of the recommendations for Bills that have come from other quarters.

[Mr Edward Leigh (Gainsborough) (Con)]

In this place, the first reaction to scandal is to call for statutory regulation. May I urge colleagues who make such a call to learn from personal experience? In that context, perhaps we should call the new statutory regulator the independent press standards authority—or IPSA for short.

[Maria Miller]

My hon. Friend is absolutely right, and I underline the fact that this would be the toughest press regulation that this country had ever seen. There would be a £1 million fine if someone is not a member of the self-regulatory body, as they would be subject to exemplary damages. Those are not things that the press want to see—they are things that Leveson called for, and would be enacted under the approach that we are taking.

[Mr Tom Watson (West Bromwich East) (Lab)]

The Prime Minister looked the Dowler family in the eye and gave them a solemn pledge that he would enact Leveson in full. Does the Secretary of State think that they deserve an explanation from him on why that is not the case in these proposals?

[Maria Miller]

The hon. Gentleman will know that we are absolutely committed to taking forward the principles of Leveson but, even more importantly, we want to make sure that oversight of the self-regulatory approach that we have taken is fully independent of both the press and the Government. He might agree that having a charter that is not subject to continuous amendment by the House may well give us that result.

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

Does my right hon. Friend agree that it would be appropriate for Lord Justice Leveson to come to the House so that aspects of his report can be subject to parliamentary scrutiny, perhaps by the Committee on which I used to serve?

[Maria Miller]

I know that the Select Committee on Culture, Media and Sport has raised this issue, and it is something to which Lord Justice Leveson would need to respond directly. However, I can reassure my hon. Friend that I will always be available to come to the Committee and explain the rationale behind our approach.

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

Can public confidence be restored as the Secretary of State has just stated without all-party agreement?

[Maria Miller]

The hon. Gentleman is right to suggest that a consensual approach is needed, which is why I am pleased that, for the past three months, we have been working together to reach a position in which all three parties can agree. The Conservative party published the royal charter yesterday as a way of trying to move that process forward and, as I said, I was pleased that it was not rejected. We will have further cross-party talks tomorrow. I really think that he is right: we need to reach consensus on this.

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

If the measures proposed by my right hon. Friend had been in place, would they have made any less likely the great scandals that led to the setting up of Leveson—namely the failure of the police to investigate and prosecute on phone hacking, and the criminal libel of the McCann family by the Sunday Express?

[Maria Miller]

My right hon. Friend is right to raise the issue of the police and the comments that were made in Lord Justice Leveson’s report about their role. My right hon. Friend will have noted, I hope, the report by my right hon. Friend the Home Secretary yesterday, in which she took up the issues that Lord Justice Leveson raised. I would make a further point about culture—not just culture in the police force but the culture of the press. The tough self-regulatory approach that Lord Justice Leveson set out will do a great deal to make sure that that culture and the ethos of the press prevent such abuses from happening again.

[John McDonnell (Hayes and Harlington) (Lab)]

The Leveson report also recommended consideration of the insertion of conscience clauses in journalists’ contracts, which would enable a journalist to reject and refuse any instruction from an editor or employer that was contrary to the code of practice. The National Union of Journalists has approached editors to negotiate a change of contracts to include a conscience clause, but the editors are not engaging in meaningful discussions on that recommendation. Will the Government urge all sides to come together to meet and discuss effectively the introduction of conscience clauses, as that would give further protection to everyone concerned in the industry?

[Maria Miller]

Clearly that is something for the editors as employers to look at carefully. I hear the point that the hon. Gentleman makes—it is important that we have a journalistic industry with integrity, and I am sure that he is making that point very well and that it will be heard by people outside the House.

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

I congratulate the Secretary of State on coming up with proposals that avoid legislation, but she has sadly failed to satisfy fully either side in the debate. Will she specifically tell the House how the proposals are viewed by the local press, and what representation it will have under future regulatory structures?

[Maria Miller]

I welcome my hon. Friend’s contribution, and I hope that by trying to take the Leveson proposals and make them workable we will come to an arrangement that everyone will feel will make the situation much better for the future. She is right to raise the issue of the local press: the press industry itself, in its deliberations on the new self-regulatory body, is looking at that in detail. It is for it to work out how the local press is accommodated, but I echo her concern, particularly given, as we all know, the financially difficult times that the local press faces, and remembering that it is not necessarily the architect of the problems that we are trying to address. That needs to be recognised in the way in which self-regulation is worked through in future.

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

I thank the Secretary of State for her statement. As part of ongoing talks about Leveson, press standards and press regulation, will she update the House on discussions that she and her officials have had with the devolved institutions, and the possible impact of a royal charter in a place such as Northern Ireland where press standards are of the utmost importance?

[Maria Miller]

The hon. Lady is right to raise the issue of the devolved authorities, and that is something that we have firmly in our sights. In particular, there are issues with the approach that the Scottish Government might take. Our approach would be clear: we need some commonality if at all possible, so that publishers have one set of regulatory provisions. We shall certainly try to continue our talks with the devolved authorities in that respect.

[Glyn Davies (Montgomeryshire) (Con)]

A vital principle that underpins democracy is the freedom of the press from statutory regulation. My right hon. Friend has proposed a system of regulation based on a royal charter, which she described as a basis for discussion. Can she reassure us that the vital principle of non-statutory regulation will be maintained whatever solution is finally agreed?

[Maria Miller]

I can absolutely give my hon. Friend that undertaking. We believe that we can achieve the ends and principles that Leveson set out without taking a statutory approach, and the royal charter document that we published yesterday gives us grounds to believe that that is fully achievable.

[Chris Bryant (Rhondda) (Lab)]

I draw Members’ attention to my entry in the Register of Members’ Financial Interests. The real problem with the royal charter process is that it is the most autocratic tool in any Government’s weaponry, because it is easily changed at will by a Government, and no Government can bind their successors unless that is underpinned by statute. Will most people not think that this is a pretty shabby deal between the Government and proprietors, as the Government promised last year that they would publish the details of all meetings with proprietors by Cabinet Ministers, but they have not done so since last June? Must they not publish before tomorrow’s meeting the details of all their meetings with proprietors?

[Maria Miller]

The hon. Gentleman knows that all those sorts of meetings are published in the usual way.

[Chris Bryant]

That is untrue.

[Maria Miller]

If the hon. Gentleman will allow me to answer his question about the amendability of a charter, he will see in the royal charter that there are clear provisions that it should not be tampered with. If he feels that his party might tamper with the charter in that way, perhaps the right hon. and learned Member for Camberwell and Peckham (Ms Harman) should underline that that would not happen. Finally, the hon. Gentleman can give no guarantee that a press Bill would not be changed. Ultimately, the parliamentary process leaves any Bill that comes before the House subject to amendment. We believe that a charter approach gives us something that is a far clearer way of providing the freedom of speech that we want for the press in future.

[Bill Wiggin (North Herefordshire) (Con)]

Every time the press make up a story they effectively deceive my constituents who buy their newspapers. When can my constituents expect to have proper protection from deception in their newspapers?

[Maria Miller]

My hon. Friend will know that the editors’ code already sets out clear provisions to achieve that. The new approach that Lord Justice Leveson has proposed would underline the importance of the culture of the press. We are working swiftly to make sure that that is put in place, and by implementing a royal charter to put in place a verification body we can do that an awful lot more swiftly than through a Bill that would go through Parliament.

[Mrs Madeleine Moon (Bridgend) (Lab)]

Public trust, both in the media and in this House, is the big issue that is to be discussed in relation to Leveson. How can the public trust that what is coming from Government is not a political compromise, rather than something that will protect the public from the abuse that they have faced in the past?

[Maria Miller]

The very clear assurance that I can give the hon. Lady is the assurance that the Prime Minister gave on 29 November, that we agree in full with the Leveson principles and are taking them forward. I find it difficult to believe that anybody would think that the press facing £1 million fines or, if publications are not part of the self-regulatory body, exemplary damages, is anything other than the toughest form of regulation that this country has ever seen and among the toughest in the western world.

[Zac Goldsmith (Richmond Park) (Con)]

Although it is important that we keep the press out of the appointments process and that we do not allow any room at all for ministerial interference, I welcome the progress that we have made so far, but I would like clarity on one point from the Secretary of State. Part of the goal that everyone shares is to even out the playing field between David and Goliath, whoever David happens to be. Surely part of that requires arbitration to be free for complainants, not merely inexpensive, whatever that means—free, as it is at present under the Press Complaints Commission.

[Maria Miller]

My hon. Friend is right to raise the issue of access to justice. He will know from reading Lord Justice Leveson’s report that he considers it very important that there should be a cost-effective process and ready access. We are trying to make that objective work in the way that it works in many other areas of the law in relation to tribunal access. There would be a very low cost barrier in place for people to get into the arbitral arm. Above all, they will always be free to put forward any complaints and internal processes will continue to be free at the point of access.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

Yesterday Gerry McCann, the father of Madeleine McCann, said:

“This royal charter plan falls far short of Leveson . . . The Conservative party can’t rewrite Leveson now. They must think again.”

Does not the reaction of Mr McCann show that this plan fails the very test that the Prime Minister himself set out in his evidence to the Leveson inquiry—that everything must satisfy the victims of press abuse in this country?

[Maria Miller]

The hon. Gentleman will know that we are taking a 2,000-page document and making it work in practice. That has been our objective every step of the way. None of the main political parties in the House agrees with every single recommendation of Lord Justice Leveson. We have outlined the issues that those on both sides of the House have with regard to data protection and the potential roles of Ofcom that were outlined in the report. The hon. Gentleman should understand that making that report work in practice has been our central drive over the past two and a half to three months and we will continue to do so, making sure that the full principles of Leveson are put in place. We owe that to the people whom we are trying to support.

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

I certainly welcome the proposals that my right hon. Friend is putting forward, as far as they go. Can she confirm that it will not be compulsory for publications to sign up to the new body if they do not feel the need to do so? That freedom is important, even if it means that they are taking more of a risk by staying outside.

[Maria Miller]

My hon. Friend will know from the provisions in the Leveson report that there is no compulsion there. He has formed his recommendations on the basis of the use of incentives. That is where the clauses dealing with defamation and the exemplary damages come into play. That provides the sort of incentive that publications which feel that they are at risk in this area need, but clearly, those publications that do not feel they are at risk may choose not to be members of the new self-regulatory body. That is their decision.

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

Last week the Culture, Media and Sport Committee heard from representatives of the Press Council of Ireland. They made two important points. One was the important and positive role that the National Union of Journalists plays in the process over there. Secondly, they were bemused, as were many Opposition Members, at the discontent shown by proprietors in this country, whereas they are content with the legislation in Ireland. Can the Secretary of State explain why?

[Maria Miller]

I am not sure I can explain any discontent on the part of proprietors on that score. The Committee would need to call them and question them more closely. But what I have seen from the press is a desire to engage and to put in place the sort of self-regulatory body that Lord Justice Leveson called for. In parallel with that, it is timely that we also make sure that the verification body that plays such an important part is also in place, otherwise we will not be able to implement Leveson in full. That is why cross-party talks are so important and why we need consensus on this. We need to be clear on that point.

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

I welcome the progress that has been made, in particular the agreement now from the Government that some statute is required in order to create the incentives to join such a new system. I acknowledge that a royal charter could be an alternative way of establishing an independent body, provided the recognition criteria are right. But can my right hon. Friend explain to the House what happens if there is no regulator that is worthy of recognition, in the view of the recognition body? In that instance, will all newspapers automatically be subject to the exemplary fines and the costs, or will we have no system at all?

[Maria Miller]

It is the former.

[Kevin Brennan (Cardiff West) (Lab)]

On a day when six more former journalists of the News of the World have been arrested, including two sitting journalists of The Sun, on charges which the police say represent a new conspiracy in the phone-hacking scandal, is it not even more important than ever that the Secretary of State shows some urgency about her action? Unless real action is taken and unless the full principles of Leveson are implemented, the public will not forgive her.

[Maria Miller]

The hon. Gentleman is right that urgency is a vital part of this. Momentum is important. That is why we published our royal charter document yesterday and why I was pleased to see that there was a general acceptance that this could well be a way forward. We have further cross-party talks tomorrow. The point was made earlier in our discussions that we need a consensus, and this is the time when that consensus can start to be formed.

[Mr Peter Bone (Wellingborough) (Con)]

Whatever proposal passes this House, surely the important thing is that the culture of the press changes. Should not we, as a Government, set an example? One of the criticisms was that the Government and press were getting too close together, yet earlier this week, on Monday, we had the social care statement, which had been widely leaked to the press the previous weekend. Favourite journalists were given advance information. The Government must stop that if the public are to take us seriously on the issue.

[Maria Miller]

My hon. Friend is right that it is a culture issue, which I raised before in my comments. We need to make sure that the calls for transparency in Lord Leveson’s report are heeded. The subject has been part of our cross-party discussions and we have formulated a paper on it, which is at present with the Opposition. I hope that tomorrow, in our further discussions, we can pick up on the issue of transparency and they can respond to our recommendations.

[Sheila Gilmore (Edinburgh East) (Lab)]

Consensus is very important, but what I am hearing here from the Secretary of State is, “Consensus on my terms”— consensus that takes away any suggestion that there could be statutory underpinning and it undermines many of the other recommendations. That is not really consensus, is it?

[Maria Miller]

The hon. Lady should be focusing on the ends, not the means. All our parties agree with the principles in Leveson. All our parties agree that we would not want to see the Leveson report implemented in full. We have to work together in the environment in which we find ourselves and come to an agreement. We believe that the charter document provides a way of getting to absolutely the same ends, just by different means.

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

Does the Secretary of State accept that whenever statutory underpinning is promoted, we must remember that it runs the risk of a future Minister restricting press activity that is genuinely in the public interest? Therefore, can she reassure me that the principles of Leveson can be delivered without statutory underpinning?

[Maria Miller]

I can absolutely give my hon. Friend that assurance. I think that there is a philosophical difference between the approach of the parties in that regard, but it is not an unbridgeable gap. I will continue to try to work with both the Liberal Democrats and the Labour party to come to an agreement on this. Otherwise, we run the risk of not moving forward with Leveson, which I think would be inexcusable and unforgiveable.

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

Newsquest Media Group, Johnston Press, Ackrill Media Group and all the local newspapers in Yorkshire and the north have stated unanimously that they do not want Parliament bearing down on them. We just want to hold local organisations and politicians hard to account. I urge the Secretary of State to push forward quickly with her proposals, which are excellent and what people in the north want. Well done.

[Maria Miller]

I thank my hon. Friend for that endorsement of our approach. He makes an extremely important point, which is that we have to understand that our local papers are a vital part of our local communities. We must ensure that they can continue to be vibrant and that they do not fall foul of an approach that was not really designed to affect them; it was designed to deal with abuses in other areas of the press. He makes an extremely important point.

[Bob Stewart (Beckenham) (Con)]

My right hon. Friend said that the Government totally accept the main principles of Lord Justice Leveson’s report. She also suggested that the report’s main recommendations are acceptable. Is it possible for those main recommendations to be instituted without some form of statutory underpinning?

[Maria Miller]

My hon. Friend raises the issue of Leveson’s criteria and approach, which we believe can be effected in the main without statutory underpinning. What we have been talking about, however, is the importance of recognising the exemplary damages through statute, which would need to be in place to make sure that it is as effective as it needs to be so that the balance of provisions that Leveson put forward work in the way he intended.

Points of Order

Wednesday 13th February 2013 Commons Chamber

[Chris Bryant (Rhondda) (Lab)]

On a point of order, Mr Speaker. Will you confirm—I hope the Secretary of State will stay for this, as I will be brief—that there is a process whereby a Minister can correct what they have said in the House when they have inadvertently misled it? The Secretary of State said earlier that the details of meetings between newspaper proprietors and editors and Ministers are published in the ordinary way—I think the precise words she used were “the normal way”. In actual fact, they have not now been published in the normal or ordinary way for eight months. At a time when the Government are debating a very sensitive issue and bringing forward proposals in relation to the newspaper industry, I think that our voters would expect complete transparency on the matter. She can correct the record, can she not?

[Mr Speaker]

It is open to the Minister to correct the record if she has made a mistake and if she therefore judges it necessary to do so. She can respond now, but she is under absolutely no obligation to do so.

[The Secretary of State for Culture, Media and Sport (Maria Miller)]

indicated dissent.

[Mr Speaker]

That is fair enough. The hon. Gentleman has raised his point and I have given him his answer. I hope that is clear.

[Mr Tom Watson (West Bromwich East) (Lab)]

On a point of order, Mr Speaker. My apologies to you and to Members of the House. I neglected to draw attention to my entry in the register. I am the author of a book on corruption at News Corporation.

[Mr Speaker]

I am grateful to the hon. Gentleman. I am familiar with his book and have myself read it. He has put it on the record. [Interruption.] The Under-Secretary of State for Culture, Media and Sport, the hon. Member for Wantage (Mr Vaizey), is requesting a copy. I do not think that the purpose of the exercise was to increase sales of the book, but that might be the inadvertent consequence.

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

On a point of order, Mr Speaker. Have you had any notice from Ministers in either the Home Office or the Department for Culture, Media and Sport that they wish to correct the record of written answers to me regarding a report prepared by Operation Podium on ticket crime? I ask because Ministers in both Departments responded to my request that they place a copy of the report in the Library by saying that the information it contained is operationally sensitive. I have a copy in my possession and know that it does not contain sensitive information. In fact, it states clearly on the front that it is not protectively marked and that it is suitable for the publication scheme. I am also aware that it has been distributed to many commercial organisations. I am sure that Ministers did not intend to mislead the House or withhold information from it, so if you have not received word that Ministers would like to correct the record, will you advise me on the best course of action to pursue to remind the Government of their duties to Members of the House?

[Mr Speaker]

I am grateful to the hon. Lady for her point of order and for her courtesy in providing me with notice of it. She has expressed her dissatisfaction with the answers to her questions she has received and explained the basis of that dissatisfaction. Ministers will also have noted her concerns, or will shortly hear of them. If she remains dissatisfied, she may pursue the matter through the mechanism of debate, or it is open to her to raise the nature of the answers she has received with the House’s Procedure Committee. One approach would be to write to, or otherwise have contact with, the hon. Member for Broxbourne (Mr Walker), who chairs the Committee. Those on the Treasury Bench will have heard her point of order. I hope that addresses the matter for today.

Science, Technology and Engineering (Careers Information in Schools)

Wednesday 13th February 2013 Commons Chamber

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

13:15

[Peter Luff (Mid Worcestershire) (Con)]

I beg to move,

That leave be given to bring in a Bill to enable pupils in primary, middle, high and secondary schools to gain greater understanding of careers in science, technology and engineering; to establish a duty on schools to provide opportunities for pupils to gain such understanding; to provide for the establishment of advisory groups drawn from industry and relevant external bodies to assist schools in the provision of such opportunities; to require governing bodies of middle, secondary and high schools to include two local employers; to impose a duty on the Department for Education to ensure a database of national schemes providing relevant opportunities is established; to enable graduate level practitioners of science, technology, engineering and mathematics to teach these subjects in schools for limited periods without full teaching qualifications; and for connected purposes.

I begin with two declarations of interest. First, I was recently appointed as a non-executive director of a small advanced manufacturing company. Secondly, one of my two heroes is that most brilliant of engineers, Isambard Kingdom Brunel. As someone who now wishes he had been an engineer, recent experience has convinced me that the shortage of engineering and technological skills is one of the greatest avoidable threats to our nation’s prosperity and security. I am grateful to the Under-Secretary of State for Skills, my hon. Friend the Member for West Suffolk (Matthew Hancock), for being here to listen to the case.

What I am trying to do in the Bill is simple and focused: to increase demand from young people and to make them more enthusiastic about pursuing STEM subjects—science, technology, engineering and maths—and careers, whether as apprentices or graduates; to inspire them about the possibilities in engineering, science and technology; to show them by practical example and experience while at school that engineering and technology are exciting and important careers; and then to sustain that interest throughout their time at school.

I am grateful to all the engineering institutions, professional organisations and trade associations, and to the CBI and the many large companies I have consulted in bringing forward these proposals. Without exception, they have told me that they enthusiastically support my analysis and what the Bill seeks to do.

In the ’70s, ’80s and ’90s, engineering got a pretty bad press. The news was dominated by strikes and job losses. It is hardly surprising that the legacy of that time has had its impact. It is no wonder parents have been reluctant to recommend engineering careers to their children. But during my five years as Chair of the Business, Innovation and Skills Committee in the last Parliament, and during my two and a half years as a Defence Minister in this one, the overriding concern I heard time and again from manufacturing and technology companies was that there just are not enough engineers—apprentices and graduates—to meet demand. I remember one test and evaluation company telling me last year that it had been forced to give up looking for engineering graduates in the UK and was now recruiting from Spain, Portugal and Greece. That might help to plug the skills gap for the companies that take that decision, but it is a lost opportunity for the country and for our young people.

Furthermore, recruiting from abroad is not always an option. In defence, the armed forces, the civil service and in companies, we often have to have UK nationals doing the work on national security grounds—the so-called “UK eyes only” requirement. To take the most obvious example, unlike a nuclear engineering company in the civil sector, defence companies providing and supporting the nuclear deterrent simply cannot rely on foreign engineering skills.

There are some real signs of encouragement. The number of GCSE single science entrants is going up, as are applications to university for STEM subjects. Apprenticeships in engineering and technology are increasing, too. However, there is a wide consensus that we have to do much more to sustain that improvement over many years. As the Science and Technology Committee stated in a report last week,

“there is a persistent shortfall in the numbers of engineers required to achieve economic growth, a situation that is likely to worsen unless radical action is taken.”

We need at least half as many more engineers. We might even need to double the numbers qualifying at both level 3 and 4. To succeed in this, we need to repeat three key messages. First, designing, making and building things matters and provides real job satisfaction—old truths that are being rediscovered. Secondly, careers in engineering and technology are now well paid. Thirdly, engineering has changed as technology has developed; it is now about problem solving, not oily rags. Considerable practical outreach activity is directed at school key stages 3 and 4. Some estimates suggest that there are more than 3,000 schemes reaching out to those age groups across the country, but their reach is worryingly patchy: there are hot spots of overlapping activity and deserts of inactivity. Unless pupils towards the end of key stage 2—ages 10 and 11—realise the importance of doing well in maths and physics, they will never be able to pursue engineering or science careers. As the Science and Technology Committee said in last week’s report,

“young people must be inspired to study science and engineering in the first place.”

At its simplest, we need to inspire boys and girls at a much younger age to want to do well in the two key subjects of maths and physics. Perhaps the single greatest need is to make more girls want to do physics. We do not need more schemes in order to do so. Indeed, there are probably already too many. Rather, we should build on the excellent existing work of EngineeringUK, the Royal Academy of Engineering and many others.

We need more co-ordinated and focused business and official support for schemes designed to attract young people to science, engineering and technology by providing real experience, challenge and understanding. Such schemes include Big Bang, Tomorrow’s Engineers, the Science, Technology, Engineering and Mathematics Network and its ambassador programme, the STEM directories and Primary Engineer, which is particularly important in addressing the key stage 2 point.

We also need to make even better use of the many other more specific schemes that exist. Two of my favourites include, first, the Bloodhound SSC—supersonic car—project, which will attempt the 1,000 mph land speed record next year and is reaching out to about 4,000 schools. The project will feature in a programme on CBBC this evening—your children might like to watch it, Mr Speaker. Secondly, Imagineering began in the midlands and is a long-standing practical scheme to give young people real engineering challenges at school.

A major issue is that in most schools—this is not a criticism, just an observation—teachers are not aware of the reality of modern engineering and science. They just cannot steer pupils in the right direction. However, as an engineering employer told the Science and Technology Committee:

“I believe it is unreasonable to expect teachers to have a great in-depth experience and knowledge of the manufacturing sector…the only group that can do that is the employers. That is our bit of the bargain.”

Schools often deter girls from engineering and science careers. Defence company BAE Systems tells the story of a girl whose recent application to become an apprentice was shredded by her head teacher because, “Girls don’t do that sort of thing.” Well, they do—and they do it outstandingly well, both as apprentices and as graduates. Nevertheless, however we measure the participation of women in engineering, it comes out at about 10% at best, which is the lowest rate in the European Union—27th out of 27.

It need not be like that. Missile manufacturer MBDA’s engineering intake is now 50% female. If its success could be replicated more widely, our skills problem would be solved. Securing genuinely equal access at school to information on the modern reality of engineering and science would help achieve this, and that is a key aim of this Bill. Such equal access would show that there is something in engineering and technology for everyone—fast jets, passenger aircraft, avionics, cars, bridges, tunnels, satellites, mobile phones, green technologies, environmental sustainability, water supplies in the third world, food, health and medicine, and even vacuum cleaners and hand dryers. The list goes on.

The Bill contains some of the ideas that command strongest support in the professions and industry. Each measure is a free-standing proposal to the Government, but taken together they could be really powerful. My proposals build in part on suggestions in Lord Heseltine’s report on growth and they go some way to addressing my concern about the profound inadequacy of careers advice in schools.

The Bill does five things. First, it imposes a light-touch duty on schools—primary, middle and secondary—to expose their pupils to the realities of modern engineering and technology. Secondly, it imposes a parallel obligation on local enterprise partnerships to help schools in their area to fulfil that duty. Thirdly, it adopts Lord Heseltine’s recommendation that secondary schools should have two employers on the governing body, but adds that they cannot both be accountants, solicitors or estate agents—one must be from a science, technology, engineering or manufacturing background. Fourthly, it imposes a duty on the Department for Education to continue its support for activity on engineering-awareness schemes. I say to the skills Minister that I am not convinced that the Department really understands how vital it is to help young people make informed career choices. Finally, it sweeps away all restrictions on schools using professional engineers and scientists from local employers to teach maths and physics where they have teacher shortages. It is better to be taught—I know that my hon. Friend the Member for Wycombe (Steve Baker) strongly agrees with this—by an enthusiastic young professional who can show the value of the subject to a sceptical class than by someone who is a good professional teacher in other subjects, but who has no training in maths or physics.

An early measure of success over time would be the number of young people doing well in GCSE maths and physics. Later, it would be a significant increase in the number of girls taking A-level physics. Eventually, it would be a sustained increase in applicants to engineering courses and increasing female participation in the profession.

Of course, we have been talking about this for years, but we cannot be complacent. We are, as the Prime Minister has said, in a global race. China is moving up the value chain. Like India, it is churning out thousands of engineers every year. Our place as one of the largest manufacturing nations on the planet—which we still are—is threatened. Our resilience and security over a wide range of threats, from food and water shortages to cyber-security and defence, depend on getting more British engineers and scientists.

If the Bill’s measures worked, the system would have to respond with more teachers, more university technology colleges, more places in further and higher education institutions, different courses and so on. That, however, is the supply side; this Bill is about increasing demand. First, let us help more young people to understand the great careers available in science, engineering and technology.

With my A-level physics and maths I, too, should have been an engineer, but to my continuing regret no one told me at the right time about the exciting careers in engineering. I do not want ignorance of the opportunities to be a reason for more young people to make the same mistake as me.

[Mr Speaker]

We have had the pleasure of the presence of the hon. Gentleman in this House for two decades. That is, perhaps, some compensation. The question is that the hon. Member have leave to bring in the Bill. [Interruption.] Mr Birtwistle, you are poised; is that because you wish to speak in opposition to the Bill?

[Gordon Birtwistle (Burnley) (LD)]

indicated dissent.

[Mr Speaker]

We are grateful.

Question put and agreed to.

Ordered,

That Peter Luff, Mr Graham Stuart, Charles Hendry, Mr James Arbuthnot, Mr Robin Walker, Miss Anne McIntosh, Gordon Birtwistle, Meg Munn, Mr Barry Sheerman, Mr Adrian Bailey, Fiona Mactaggart and Mr Nick Raynsford present the Bill.

Peter Luff accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 1 March, and to be printed (Bill 138).

Police

Wednesday 13th February 2013 Commons Chamber

13:26

[The Minister of State, Home Department (Mr Jeremy Browne)]

I beg to move,

That the Police Grant Report (England and Wales) for 2013-14 (HC 876), which was laid before this House on 4 February, be approved.

I am very grateful to those hon. Members who have joined me in the Chamber to take part in this debate on the 2013-14 police funding settlement. In addition to seeking their approval of the police grant report (England and Wales) 2013-14, I also want to focus on how we are reforming the police to make them more effective, more efficient and more responsive to local needs.

On 19 December, the Minister for Policing and Criminal Justice laid before the House a written ministerial statement and a provisional police grant report that set out the Government’s proposed allocations to police and crime commissioners in England and Wales. We have decided that force level allocations will remain as announced on 19 December.

Before I go into the details of that announcement, it is important to set this debate in context. When our coalition Government came to office in May 2010, Britain had the largest peacetime deficit in our history. For every £3 the Labour Government raised in tax, they spent £4. The gap was being plugged by the Treasury borrowing almost £500 million every single day. It was the economics of the madhouse. Labour has had two periods in office during my lifetime, and on both occasions it presided over a budgetary catastrophe.

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

I have in my hand a copy of the Liberal Democrat 2010 manifesto published in, I think, April 2010. I presume the hon. Gentleman knew what his party was saying at the time. The manifesto says that the Liberal Democrats would pay

“for 3,000 more police on the beat, affordable because we are cutting other spending”.

What happened in those few weeks before the hon. Gentleman became a Minister?

[Mr Browne]

I would be the first to acknowledge that we should have said in our manifesto, “Vote Liberal Democrat and crime will be at the lowest level in recorded history”, but we were insufficiently bold. We were too modest, actually, about the contribution that we would make to the well-being of our country.

The only two conclusions that can reasonably be drawn from Labour’s two catastrophic periods in office in the past 40 years are that we here in Britain have been particularly unlucky to have had especially inept Labour politicians, in which case it seems strange indeed to be enlisting the most culpable Cabinet Ministers from the previous regime to run the show for Labour today, or, more fundamentally, that socialism is completely incompatible with competent economic management. Either way, when we came into office in 2010 there was, in the immortal and shameless words of the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), “no money left.”

[Emma Reynolds (Wolverhampton North East) (Lab)]

I suggest to the hon. Gentleman that we should not have a debate about Government competence, because we would be here all day. Perhaps I could bring him back to the police grant. West Midlands police force is going to suffer another £25 million cut, which is a huge amount to take out of its budget. We have lost more than 900 police officers since the general election. Will he agree to look at the implications for big police forces such as those in the west midlands, where there are high policing demands and needs, of the application of the floors and ceilings on their budgets?

[Mr Browne]

I am grateful for this early opportunity to tell the House what has happened to crime in the west midlands since this coalition was formed and my party came into government: it has fallen. As I have said in the House before, the two things that seem to make Labour MPs look most glum are finding out that their constituents are more likely to get a job or that they are less likely to be victims of crime. In the past two years, crime in the west midlands has fallen by 13%, which is an extraordinary achievement. If I represented a west midlands constituency, I would be pleased that my constituents were less likely to be victims of crime than they were in 2010. I find it extraordinary that Labour MPs do not seem to take that view.

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

rose—

[Mr Browne]

I give way to the hon. Gentleman, who lives near me in Herne Hill in south London.

[Jack Dromey]

I bow to no one in my admiration for our excellent West Midlands police service under the leadership of our police and crime commissioner, Bob Jones, and our chief constable, Chris Sims. Can the hon. Gentleman even begin to explain the unfairness of an approach that has led to 814 police officers going in Birmingham but to an additional 257 police officers in Surrey?

[Mr Browne]

As I have already explained, crime has fallen by 13% in the west midlands. The purpose of the police is not to employ as many people as possible but to try to make the public as safe as possible and reduce the amount of crime, and that is what is happening. Since the crime survey in England and Wales began in 1981—I know it seems hard to believe, Mr Speaker, but I was at primary school then—crime has never been lower in England and Wales than it is today. That is an extraordinary achievement.

[Jack Dromey]

rose—

[Mr Browne]

I will not give way. Why does the hon. Gentleman not reflect on that achievement? Why do Labour Members all look so sour and unhappy about the fact that their constituents are less likely to be victims of crime under this Government than they were under the previous Labour Government?

[Jack Dromey]

Will the Minister give way?

[Mr Browne]

I will in a bit, but the hon. Gentleman has had a go already.

I was talking about the budgetary context and the hon. Gentleman’s west midlands colleague, the glibly shameless right hon. Member for Birmingham, Hodge Hill, who said that there was “no money left.” I note that he did not say, “There’s just a little bit of money left” or “There’s a little bit of money; I wish there were a bit more but there isn’t.” There was, in his words, “no money left.” That was the reality of our inheritance, and our coalition Government, working in the national interest, is turning the oil tanker around. The deficit has been cut by a quarter over two years, and about 1 million private sector jobs have been created.

However, tidying up Labour’s mess is a difficult and painstaking process that cannot be achieved overnight. In order to deal with the deficit, tough decisions have to be made. I know that Labour Members, who have never made a tough decision in their lives, find that traumatic, but it has to be done. There is therefore less money for the Home Office and less money for the police. As a service that was spending, in total, in excess of £14 billion per year, the police can and must take their fair share of the reductions in funding. As set out in the policing Minister’s written ministerial statement, central Government funding to the police will be £8.7 billion in 2013-14, which is only 1.9% less than in 2012-13. It is important to remember that the police do not receive all their funding from central Government. In fact, the police receive about a quarter of their funding from the police precept component of council tax, which is of course determined locally.

We have sought to protect the police as far as possible. The autumn statement in December included further cuts of 1% to most departmental budgets. However, the Home Secretary decided to protect the police from these additional reductions in 2013-14. She also decided not to pass on reductions relating to the November 2011 announcement on pay restraint in 2013-14, which could have resulted in a further reduction of £66 million in police funding in 2013-14. All this means that in 2013-14 the police will receive the same amount of funding as was agreed in the October 2010 spending review.

Naturally, police and crime commissioners are keen to know what their funding allocations will be for 2014-15, and particularly whether the departmental reductions announced in the autumn statement and the impact of pay restraint will be passed on to the police in that year. We will announce our decision with regard to 2014-15 as soon as we are in a position to do so. The reduction in the police budget has coincided with a small reduction in the number of officers, but ultimately decisions on the size and composition of the work force are for individual chief officers and police and crime commissioners.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

Dorset police authority has the lowest level of funding from formula grant per resident of any police force in England and Wales. Given the particular characteristics of Dorset, which is a mix of rural and urban with a night-time economy and many tourists, the police commissioner is very anxious to participate in future changes to the funding formula. What advice can my hon. Friend give me on securing greater involvement for Dorset?

[Mr Browne]

I heard Labour Members sniggering during my hon. Friend’s intervention. Dorset is a county where all the Members of Parliament are from the Government side of the House, but, interestingly, we are not showering money on one area of the country over another because of the political colour of its MPs and councils—something that Labour Members may wish to reflect on. We are keen that the funding allocations are fair, and I will speak about that in more detail later. It is worth also bringing to the House’s attention the fact that in the past year alone crime in Dorset has fallen by 10%. That is another significant achievement, and it means that people in Dorset are safer than they were when Labour was last in government.

[Jack Dromey]

Despite the valiant efforts of West Midlands police service, figures for last year demonstrate that 3,684 fewer crimes were solved. I will repeat my question, although it might be a vain attempt to get an answer from the hon. Gentleman as he is speaking from his pre-prepared script. How can he begin to justify 814 fewer police officers in Birmingham but 257 extra police officers in Surrey?

[Mr Browne]

Let me say two things. Fewer crimes are being solved because there are fewer crimes. I will say this again, because the hon. Gentleman obviously missed it the first time. Let me tell him how much progress has been made in the past year alone. I recognise that every crime has a victim and I want to see crime go even lower. I am genuinely pleased that crime is lower now than it was at the last general election, when his party got the second worst result in its history and did well to do as well as that. Crime in the west midlands has fallen in the past year not by 5%, 10%, 11% or even 12%, but by 13%. Surely we can agree, if we cannot agree on anything else, that our constituents being less likely to be victims of crime is a good thing. However partisan Labour MPs are, surely they do not want their constituents to be more likely to be victims of crime just so they can try to score more cheap points across the Chamber.

[Several hon. Members]

rose—

[Mr Browne]

I want to make a bit of progress and will give way later. I have given way several times to Labour MPs, who all seem to want to make the same point, which is that they are upset that crime is falling in their—[Interruption.] If any Labour MP wants to intervene because crime has risen in their area since the general election, they can get up. Anyone? Go on.

[Chris Leslie]

rose—

[Mr Browne]

No, crime has not risen in the hon. Gentleman’s area. It is down.

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

rose—

[Mr Browne]

No, it has not risen in the hon. Gentleman’s area. It has not risen in either of those areas. While there has been much debate about the number of police officers—a point made by the hon. Member for Birmingham, Erdington (Jack Dromey)—surely the most salient fact is this: crime is falling. While total officer numbers fell by 2.9% between September 2011 and 2012, most recent statistics show a 7% reduction in police recorded crime in the same period and an even bigger reduction in the independent crime survey figures for crime in England and Wales.

[Several hon. Members]

rose—

[Mr Browne]

I will give way right now to anybody who has seen an increase in crime. To be honest, I think there has been an increase in crime in Devon and Cornwall—I cannot see any Members from Devon and Cornwall here—but that is not true for anywhere else in the country. Every single Labour MP here today has reason to be grateful to the police and to this Government for overseeing the lowest period of crime since the survey began 32 years ago.

[Several hon. Members]

rose—

[Mr Browne]

I will get to the details, because some Members are actually genuinely interested in police funding, rather than in trying to score party political points. I owe it to them to treat them seriously, so let me turn to the funding settlement details.

In the past 12 months we have heard from policing partners on a number of funding issues, including the police allocation formula, as raised by my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke), the process of damping and the community safety fund. There is a widely held view that the police allocation formula should be subject to a full review before any changes are made to the current damping policy. We will commence a review later this year. In the meantime, the current damping arrangements will remain, but a review will be undertaken on whether we can improve the allocation of central police funding.

Linked to the issue of allocation is the precept—the police element of council tax. Of course, I recognise that there is considerable disparity between force areas in the proportion of overall funding that comes from council tax, but we have to ensure that funding allocations to the police are as equitable as they can be. This is why all forces have received an equal percentage of the reduction in core Government funding.

On community safety funding, in 2013-14 police and crime commissioners will receive funding from a new and un-ring fenced transitional community safety fund, which they can use to invest in tackling drugs and crime or in community safety activities. In 2013-14, that funding will total £90 million. PCCs will have discretion to invest funding from the CSF in their own locally determined community safety priorities, including in existing programmes. This fund provides PCCs with the full flexibility to invest in their own priorities. To ensure that PCCs are able to make an informed decision about how to use their CSF allocations, we will publish details on the Home Office website of the existing drugs, crime and community safety funding streams that are ending. From 2014-15, the CSF will be rolled into the police main grant to give PCCs even greater freedom and flexibility over how they use their resources.

In summary, we cannot afford to continue the borrowing-fuelled levels of spending under the previous Government. The fact that crime continues to fall shows that the quality of policing cannot, and should not, be measured purely in terms of the level of resources put into it.

[Mr Alan Campbell (Tynemouth) (Lab)]

In Northumbria, the police and crime commissioner and the chief constable are proposing to increase the precept on average by less than 5p per household to recruit 50 additional officers. Does the hon. Gentleman agree with that?

[Mr Browne]

That is their decision. That is what they were elected in Northumbria to decide. There seems to be a lot of good news in Northumbria. Let me see, the hon. Gentleman is one of the best parts of the whole country—no wonder he did not intervene earlier. In the two years since his party was chucked out of office with one of its lowest shares of the vote ever and our coalition came in, crime has fallen by 18% in Northumbria. People in Northumbria are safer now than they were before. They are less likely to be victims of crime, and I very much welcome that.

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

The Minister seems to have had a memory lapse. Every year that Labour was in government, crime fell. We are all overjoyed that it continues to fall, but he must realise that it is the foundation that we laid, and that he now jeopardises, that is the point. In London, his Government are imposing 20% cuts on the Met. Her Majesty’s inspectorate of constabulary said that anything more than 12% would impact on front-line services. Can he tell me that he is confident that progress will continue to be made?

[Mr Browne]

If the right hon. Lady is accusing me of being too party political, it is worth saying that crime started to fall when John Major was Prime Minister. What is notable is that Labour MPs, when they were in government, used to say that crime was falling because they were spending more money on the police. Now, however, because of their complete fiscal incontinence, we are having to spend marginally less money on the police. We have lower crime than when Labour was in office, and the lowest level of independently recorded crime in the survey since it began more than 30 years ago. Surely that is good news. Let us try to establish that point, and let us see whether the hon. Member for Denton and Reddish (Andrew Gwynne) agrees.

[Andrew Gwynne]

I am grateful to the Minister for giving way. I am also grateful for the fact that I think he acknowledges the point made by my right hon. Friend the Member for Lewisham, Deptford (Dame Joan Ruddock), which is that the crime rate has fallen consistently every year since 1995, including in every year under the previous Labour Government. That fall was not necessarily about police numbers. Does he not recognise that we started to see the biggest fundamental drop in crime under the previous Government when we shifted police resources into neighbourhood policing teams?

[Mr Browne]

I am delighted that we have made some progress. The hon. Gentleman says that reducing crime is not necessarily to do with police numbers. We agree with that. However, we have to spend the money that is allocated to the police as well as we possibly can. Let me introduce another brand new concept to Labour Members: value for money in the public sector and spending taxpayers’ money as if it were one’s own—try that. I know that that is an amazing, novel concept, but that is what we are trying to do.

[Jack Dromey]

rose—

[Mr Browne]

I have given way before, twice. When budgets are tight, it puts an even greater onus on Government to achieve greater efficiencies and value for money—an even greater onus. We recognise the importance of the police.

Although funding reductions are unavoidable, the Government have substantially reformed the police over the last few years, and that reform is working. We have fundamentally changed the accountability framework for policing, introducing direct democratic accountability. Police and crime commissioners were elected in November and are now actively consulting on their police and crime plans and budgets for 2013-14. Those plans will set the scale of their ambition for the future, but already they have begun to demonstrate that they are driving forward innovative and flexible use of their budgets and taking bold decisions.

We have already seen evidence of that bold leadership, with forces looking seriously at how they manage their estate, including the future of New Scotland Yard here in London. We have seen the determination of other PCCs to put more police officers on the street through raising the precept, in some cases; others are restructuring their budgets to secure the future of police community safety officers; and others are looking to push collaboration to new areas to secure value for money for their electorate. There is no one-size-fits-all approach, but innovative policy making is taking place to achieve greater community safety and value for money. In the knowledge that they will be held to account directly by the public, PCCs are seeking to take measures to maintain and improve the service to the public within what is, as I have already admitted, a very tight financial climate.

PCCs, their chief constables and the officers and staff they lead are now supported by the new College of Policing. The college will support the fight against crime by equipping the police with the skills and knowledge they need to provide the very best service to their communities. Headed by an outstanding chief constable, Alex Marshall, and with Professor Shirley Pearce as its chair, the college will work in the public interest, supporting the police in their critical mission to cut crime by driving professionalism and integrity in policing.

[Keith Vaz (Leicester East) (Lab)]

As the Minister probably knows, the chief executive of the college gave evidence to the Home Affairs Committee yesterday. Will he help me with the budgets of the new landscape? As he knows, the Serious Organised Crime Agency and the National Policing Improvement Agency have been abolished and will now form part of the National Crime Agency. The total budget of SOCA and the NPIA was £865 million, but the NCA’s budget will be £400 million and the college’s budget will be £50 million. What has happened to the rest of the £865 million?

[Mr Browne]

The right hon. Gentleman makes a fair point, which we considered at length during the Committee stage of the Crime and Courts Bill. The crucial point is that only a small proportion of the NPIA’s budget is being transferred to the NCA. From memory—I do not have the paper to hand—I think the figure is £12 million or £13 million. The functions covered by the vast majority of the NPIA’s budget will not be transferred to the NCA. It is not accurate, therefore, to conflate SOCA’s budget and the NPIA’s budget and say that between them their budgets were bigger than the NCA’s budget, because quite a lot of the NPIA features will not be transferring to the NCA.

Few things could be more directly relevant to public confidence and the British model of policing by consent than the integrity of our police officers. Police officers are citizens in uniform and their fellow citizens must be able to have confidence that they exercise their powers without fear or favour. That is why my right hon. Friend the Home Secretary announced a range of measures to enhance police integrity in the House yesterday. Greater independent investigation of the most serious and sensitive complaints against the police will be made possible by rebalancing resource between the Independent Police Complaints Commission and force professional standards directorates. A publicly available list of struck-off officers will ensure that those who are dismissed for misconduct cannot re-enter the police by the back door. We will significantly strengthen vetting of all officers, particularly the most senior officers, and we will introduce national registers of pay and perks, gifts and hospitality, contact with the media and outside interests.

All that will be underpinned by a code of ethics for the police—a single set of ethical standards by which officers and staff will work. The college will own and develop this and PCCs and chief officers will ensure that it runs right through policing and the careers of police officers and police staff. Accountability, professionalism and integrity—these are the areas where our reforms are focused and on which we are making a substantial difference.

We also rely, however, on being able to continue to attract the very best people into policing. For the avoidance of doubt, outstanding people are already attracted to some of the most difficult and demanding jobs available in our police forces. We need to ensure that we continue to attract the people with the right skills and expertise to forge a force fit for the 21st century. That means opening up policing. We are consulting on three direct entry schemes that will open up the police to a wider pool of talent, so that forces will be able to bring in people with diverse backgrounds and new perspectives. Combined with the strong leaders already working in forces and the improved nurturing of internal talent through the College of Policing, we will have a police force that is even better equipped to fight crime.

[Bob Stewart (Beckenham) (Con)]

There is huge talent in our armed forces, at non-commissioned officer, young officer and senior officer level. Some of these people will be leaving the armed forces, but at the moment it is extremely difficult for non-commissioned officers and junior officers to join the police—in fact, there seems to be a bar. Is there any possibility of encouraging more transfers from our military forces to our police forces?

[Mr Browne]

My hon. Friend makes a good point. I would imagine that many people with military backgrounds would be ideally suited to pursuing this career option. In my constituency the week before last, I was talking to a police officer who had previously served with 40 Commando Royal Marines, also based in my constituency, and he appeared to be doing an extremely good job on behalf of the people of Somerset.

We are unambiguous—as are the public whom the police serve—that fighting crime should be the clear focus of our police, and that is why we are working so hard to free up police time to achieve that focus. We have already removed much of the centrally imposed bureaucracy on police forces, such as top-down targets, performance management structures, excessive regulation and inspection, but police officers still spend too much time on unnecessary bureaucracy and not enough time on their core mission of fighting crime. We will deliver transformational change to free up front-line officers’ time and will be focusing on ensuring that police forces understand and implement existing best practice, introducing transformational change for front-line officers and speeding up the criminal justice process. By 2015, owing to all the measures I have described, the police will be recognisably more modern, offering a more accessible service to the public.

[Graham Jones (Hyndburn) (Lab)]

The Minister says that he will free up front-line officers’ time from back-office responsibility, but at the same time huge cuts are being made to back-office support services. How does he square those two things? Do they not run against each other? Has he not contradicted himself in that one sentence?

[Mr Browne]

Shall we try again? I attend lots of debates in the House. I attend debates about education, and Labour wants to spend more money. I attend debates about health, and Labour wants to spend more money. I attend debates about whether multi-millionaires should receive child benefit, and Labour wants to give more child benefit to multi-millionaires. So far as I can work out, there is no area where Labour does not want to spend more money, which would be great if it had left us a massive budget surplus, but as the hon. Gentleman might not have heard me say at the beginning of my speech, for every £3 Labour raised in tax, it was spending £4. It was borrowing about £20 million an hour by the time the electorate called time on it. It was completely unaffordable—the economics of the madhouse—and we are now having to cut our cloth to fit. Nevertheless, he will be pleased that there is no precise correlation between spending more money and having better service outcomes. In fact, crime has fallen in his area.

[Jack Dromey]

rose—

[Mr Browne]

I will not give way. As I said, I will give way to any Labour MP who has seen an increase in crime since the general election.

[Jack Dromey]

rose—

[Mr Browne]

The hon. Gentleman has not seen such an increase. It has fallen by 13%. It is down in all their forces.

Let us move on. I have reached the final part of my speech. In the first two years of this Government, recorded crime fell by 10% and public confidence in the police is rising. This clearly indicates that our police reforms are working. The crime survey for England and Wales also shows big falls, with figures now at their lowest level since records began in 1981. Our remorseless focus on the front line, on value for money and on serving the public provides our motivation for slashing back the red tape that has kept police officers behind desks instead of on the streets. By scrapping targets, cutting paperwork and returning discretion to officers, we have saved 4.5 million officer hours.

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

Will the Minister give way?

[Mr Browne]

I will not.

This Government inherited the largest peacetime deficit in Britain’s history. We are now making the necessary positive reforms. However, the Government can only do so much, and the necessary change will also have to come from the forces themselves. I commend those in the police who have risen to the challenge and shown leadership in transforming the way in which they deliver services and protection for the public. There is more to do, but I am confident that, with our ambitious reform programme alongside transformational change, we will build police forces that are modern, flexible and responsive, fighting crime while delivering value for money for the taxpayer and reducing crime, as this Government have done since we came to office in May 2010. I commend the motion to the House.

13:59

[Mr David Hanson (Delyn) (Lab)]

Having heard the Minister’s speech, I am surprised that he has not just joined the Conservative party. Whatever has happened to him over the past three years, he appears to have been infected by the Conservative gene and gone completely native.

Let me start on a positive note, however. I want to pay tribute to the policemen and women across the country who do a dangerous and difficult job every day of the week on our behalf. Sadly, in the last year, as in every year, we have seen the deaths of police officers on the streets of Great Britain. They have given us great service, and we should pay them the tribute that they deserve. We should also recognise those police officers who are walking the streets on our behalf trying to keep us safe. Yes, they will help to reduce crime.

I want to take this opportunity to pay tribute to Paul McKeever, the late chairman of the Police Federation, who died in January. I was privileged to attend his memorial service in Southwark cathedral on Saturday, along with police officers from across the country and the Home Secretary and my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper). His integrity and the esteem in which he was held were clearly recognised across the board.

I do not think that we are going to be able to bridge the difference between the Minister and me during this debate.

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

Before my right hon. Friend leaves the subject of those police officers who have lost their lives—we also remember what happened in Manchester—does he agree that if the murderers of Yvonne Fletcher could be brought to justice, however long after the event, it would be most useful for her friends and family? She was shot down while carrying out her duties outside the Libyan embassy. She should not be forgotten, and the murderers should be brought to justice.

[Mr Hanson]

I entirely agree with my hon. Friend. It is important that all those who murder police officers are brought to justice. If there is evidence to enable that to happen, it should be presented.

As I was saying, there is a clear difference between the Government and Her Majesty’s Opposition on the proposals before us. The settlement continues on the path that Labour has opposed since 2010, and I shall give the Minister a little hint by saying that we shall do so again today. The proposals will result in a loss of about £2 billion from policing budgets in England and Wales over three years. The Conservatives—and, by association, the Liberal Democrats—are cutting police funding by 20% over that three-year period and 15,000 police officers are being lost by 2015; 7,000 have already been lost in the first two years of this Government. That is a higher number than the experts predicted, and a higher number than Her Majesty’s inspectorate of constabulary said would be safe. This is damaging morale in the police service.

[Dr Julian Huppert (Cambridge) (LD)]

The right hon. Gentleman has consistently opposed the Government’s proposals. Will he make it clear what he would suggest instead? What does he think is the right amount of money, and where would he get it from?

[Mr Hanson]

I will come to that in a moment. In 2010, in the debate on the policing grant, I was the policing Minister, and I stood at the Dispatch Box where the Minister has just been standing to propose a 12% reduction in police funding over three years. I know that the hon. Gentleman was not here at the time, but the former Liberal Democrat Member for Chesterfield criticised that budget proposal and reminded us that the Liberal Democrats, including the then Member for Cambridge, were going to go into the election promising 3,000 more police officers on the beat. Would the hon. Gentleman like to intervene on me again to tell me how 123 such officers have been lost in Cambridge? Is that related to the 3,000 extra officers or not?

[Dr Huppert]

I am happy to answer the right hon. Gentleman’s questions, and I hope that he will answer mine. I am sure that he will be delighted to know that further recruitment of police constables has been announced, and that there will be an increase in the number of police constables performing local policing in Cambridgeshire. I am sure that he welcomes that. He will also know from our manifesto that part of the money to pay for extra police was going to come from savings from the ID card scheme. However, we had not realised quite how much of that money had already been wasted by the Labour Government before the election.

[Mr Hanson]

I presume that the Liberal Democrats had also not quite realised how much money was going to be spent on tuition fees or on a range of other things. Let me put it this way: that represents one Liberal Democrat broken promise among many others.

According to House of Commons Library figures, 30,000 fewer crimes were solved this year, including 7,000 crimes of violence against the person. [Interruption.] The hon. Member for Cheadle (Mark Hunter) cannot have heard what I said. He is heckling from the Front Bench, and asking how much a Labour Government would spend. The Labour Government committed to a 12% reduction in police funding. The current Government, whom the Liberal Democrat Minister supports, are proposing a third year of a 20% reduction in spending on policing. The Minister and the Whip—the hon. Member for Cheadle—stood for election in their constituencies, as did other Liberal Democrats, on a pledge to put 3,000 more police officers on the beat. Will the Minister now intervene to tell me at what point during the election campaign in Taunton Deane he told people that he would preside over a cut in numbers of 345 in his own constituency’s police force?

[Mr Jeremy Browne]

What I should have said is, “Vote for me in Taunton Deane and crime will fall by 11% in two years”, but I was too modest to do so. I said in my speech today that the budget for policing was falling by 1.9% for 2013-14, compared with 2012-13, and that the central grant would be £8.7 billion. My hon. Friend the Member for Cambridge (Dr Huppert) has asked a straightforward question: what would the central grant figure be if Labour were in government today?

[Mr Hanson]

We gave a clear indication—[Interruption.] The Minister can say what he likes, but when we were in government, we gave a clear figure of a 12% reduction. We are now two years away from a general election, and we will have to look at these matters again at that stage. I made it clear when I was sitting where the Minister is now sitting that there would be a 12% reduction. Having pledged to introduce 3,000 more police officers, he is now proposing a budget cut of 20% on behalf of the Tory-Liberal Democrat Government. That is the clear difference between us, and I suspect that my right hon. and hon. Friends will recognise that.

If we were talking only about police numbers, perhaps we could have an honest debate, but this Government also are making it harder to get CCTV, reducing the use of DNA evidence to catch criminals and cutting crime prevention budgets. They also spent £100 million of taxpayers’ money on the elections for police and crime commissioners, which attracted a 13% turnout. They are weakening counter-terror powers, with the result that people such as Ibrahim Magag can drive away in a taxi while under a terrorism prevention and investigation measure—[Interruption.] The Minister accuses me of being right wing. If it is right wing to want to ensure that my constituents are safe on the streets, I plead guilty. If it is right wing to want those who commit offences to be put into jail or on community sentences to prevent reoffending, I plead guilty.

[Dan Rogerson (North Cornwall) (LD)]

I am interested in the right hon. Gentleman’s defence of a number of measures that the Government have said are not necessary, because, as the Minister has already pointed out, crime has actually fallen. We have swept aside some of the illiberal knee-jerk reactions brought in by the previous Government and crime has still fallen. If such measures are so necessary, why has crime fallen?

[Mr Hanson]

One police force where crime has not fallen happens to be that of Devon and Cornwall where, as I recall, the hon. Gentleman is a Member of Parliament. I may be wrong, but I think he is a Member of Parliament in Devon and Cornwall, and that is one area where crime has not fallen. When he stood on his election manifesto for 3,000 extra police officers at the last election, did he think that three years later he would go back to Devon and Cornwall police with a higher crime rate and 415 fewer officers? I do not think so.

Let me continue. The Government are scrapping antisocial behaviour orders and putting at risk crime-fighting tools such as the European arrest warrant. Yesterday in Committee we had a debate about the European arrest warrant and the Minister—who stood on a manifesto saying that he wished to keep that warrant—could not tell me which aspects of it he intended to opt back in to because he was fettered by nine Conservative Members. He has sold his soul to Government positions.

The Minister knows that the Labour party would have cut 12% from police budgets—I am honest about that. We would have cut £1 billion over the three-year period, including the year of this grant, because that is what we said we would do. During a debate before the general election, I recall the Minister debating police numbers with me. On 27 October 2009 he said:

“People like to see a visible police presence in their communities…I am genuinely astonished that the Conservatives want to make drastic cuts to budgets”.

In the same debate, the Minister spoke about his Conservative council in Somerset:

“The Conservative cut in funding for the police was kept secret before the county council elections in June.”

He promised 3,000 police officers but he is now promoting a 20% cut to the budget. His proposal cannot get much more secret than that.

In response to a debate that set the tone for this three-year budget, the then hon. Member for Chesterfield, who lost his seat at the general election to my hon. Friend the current Member for Chesterfield (Toby Perkins), said:

“Such cuts, should they snowball and continue in the next year or two, will be a tragedy.”—[Official Report, 3 February 2010; Vol. 505, c. 340.]

That was the then hon. Member for Chesterfield speaking from the Liberal Democrat Front Bench. I expect that the Minister will not listen to me and I accept that. We have had honest debates and I have seen more of him in the past three weeks than I have seen of my wife because we have spent lots of time in Committee.

[Keith Vaz]

I do not wish to interrupt this pre-Valentine’s day discussion between my right hon. Friend and the Minister, but did the Committee consider the budgets of the various organisations being set up by the Government? Does my right hon. Friend share my concern that the sums do not add up? Where has all the money gone, bearing in mind the responsibilities that will be transferred to the new organisations? Did he manage to elicit any more information than I received from the Minister today?

[Mr Hanson]

I am grateful to my right hon. Friend, and the Committee explored in some detail the differences between the budgets for the Serious Organised Crime Agency, the National Policing Improvement Agency and the new National Crime Agency. We shed light on the fact that there is a major gap in the funding, but we could not get answers on where that funding has disappeared. I am sure that my right hon. Friend, who so ably leads the Home Affairs Committee, will explore that in some detail over the next few weeks.

The Minister and I will not have a meeting of minds on this matter, but perhaps he will listen to a few voices from out in the community. For example, an individual who shall remain nameless for the moment said:

“I just want the public to understand how tight things really are because I think there’s a feeling out there that it’s OK.”

That was the Conservative police and crime commissioner, John Dwyer in Cheshire, complaining about the fact that he has to bring forward a budget axing 38 police officers and 25 back-office staff.

In a statement this week, Nick Alston, the Conservative police and crime commissioner for Essex, said that the force’s financial position is

“even more challenging than I suspected when taking office just over two months ago.”

The police and crime commissioner for Cornwall, Tony Hogg, again a Conservative party member, said that the Government’s offer of freezing council tax in exchange for a 1% increase in grant would leave the force facing a “fiscal cliff” in two year’s time and an annual shortfall of £1.8 million. He added:

“There would be a critical reduction in pro-active crime reduction, there would be a critical reduction in partnership, community and early intervention…and a critical reduction in police visibility and hence reassurance to the public.”

I look forward to the hon. Member for North Cornwall (Dan Rogerson), among others, voting for the budget today. The local police and crime commissioner thinks it will cause great difficulties in Cornwall.

In Gloucestershire, the police and crime commissioner—not Labour—said that

“we won’t be able to absorb the cuts the Government expects us to make next year and in subsequent years which could affect frontline services and our ability to reduce crime. If we use our reserves, which has also been suggested…we would have no money to replace…equipment or improve our infrastructure.”

The police and crime commissioner in Cumbria—again, not a Labour member—said:

“It is without question a challenging position with the financial forecasts indicating that £10.2 million of savings will have to be delivered between 2013/14 and 2016/17…in addition to the £12.1 million of savings already achieved.”

Those are police and crime commissioners, not Labour members, and they are all expressing concerns and having to raise money.

[Andrew Gwynne]

Is it not the case that we cannot take this debate in isolation from the next debate on the local government settlement and that a great deal of good work and progress was made by the various crime and disorder reduction partnerships, with local government, housing associations and police forces working in partnership? Is the real danger that all that will be unpicked?

[Mr Hanson]

That is absolutely right. The Minister asked how we would reduce crime, and I remind him that crime fell in every year of the Labour Government, as it did in the last two years of the Major Government, and as it has fallen now. Let me put on the record that I welcome that fall in crime and think it is a good thing. I do not want people in our constituencies to face criminal actions—a victim is 100% a victim. The key issue for the Minister to reflect on is that there are crimes that are starting to rise, including acquisitive crime, street crime, burglary, robbery and car theft. Areas of violent crime are starting to rise, and the Minister must recognise that policing is not just about discovering crime but about community reassurance, being visible and accessible, and carrying out many tasks such as football ground management that involve not solving crime but providing a presence and a community resource.

[Dame Joan Ruddock]

My right hon. Friend will know that we believe one great success of the Labour Government in reducing crime was through the Safer Neighbourhood partnerships and the neighbourhood teams that under Labour were at the strength of one sergeant, two PCs and three police community support officers. Is he aware that the London Mayor is now proposing that such teams will include one PC, one PCSO and no dedicated sergeant? Surely that is a way to reduce community confidence and possibly allow for a rise in crime.

[Mr Hanson]

Indeed, and statistics show that 31,163 officers are serving in the Met, which is fewer than the total number that Boris Johnson inherited from Ken Livingstone only some years ago.

[Mr Bob Ainsworth (Coventry North East) (Lab)]

In quoting police and crime commissioners from the Government parties, my right hon. Friend exposes the problems imposed by the Government on police forces the length and breadth of the country, but in the high-crime areas, the cuts are even deeper. Will he say something about how disproportionately the cuts are falling? For example, in the west midlands, which is a high-crime area, the cuts are deeper than they are across the nation as a whole.

[Mr Hanson]

Indeed, and I am grateful to my right hon. Friend for making that point. West Midlands police has lost 1,607 police officers over the past two years, which has a real impact. Bob Jones, the police and crime commissioner, is trying to address those issues, which are serious.

[Graham Jones]

When I speak to my chief inspector and the police in my area, they say that resources are being cut and that although crime is diminishing—it is reducing in some areas, but not all—that is only a short-term trend. The trend will be upward, because when the Labour Government introduced neighbourhood policing, we had crime mapping, and there is a latency. Crime maps enabled us to identify serious criminals and low-level criminals, but today crime maps are being eroded, because PCSOs and sergeants are being moved into other jobs. As my right hon. Friend has said, they are being forced to do back-office jobs and cover for other positions. We have a diminishing neighbourhood policing team and crime maps are diminishing, which is why there is a latency. Crime is falling, but soon it will start rising if we do not keep up neighbourhood policing.

[Mr Hanson]

I am grateful to my hon. Friend for raising that issue. His police force in Lancashire lost 413 officers over that period. [Interruption.] The Minister keeps chuntering from a sedentary position, saying, “What’s the impact of that?” I have told him that I welcome the fall in crime, but the key question that he needs to answer is whether that fall is sustainable and whether it was the result of previous investment. I simply say to him that the trends for acquisitive crime, violent crime, detection rates, recording of crime and maintaining a visible presence are going in a different direction, and he knows it. I genuinely hope that crime continues to fall, but we will have to make that assessment. Our concern is that it will be more difficult with £1 billion taken out of the budget over three years than it would be otherwise.

[Mr Jeremy Browne]

Given everything the right hon. Gentleman says, I just want to check that he is now committing to taking £1 billion out of other areas of Government spending—say, schools or hospitals—to fund this area. Surely he is not just making a completely empty speech to get a few cheers from his Back Benchers, but has the figures to back up his argument. We are spending £8.7 billion in 2013-14. If he were in government, what would he be spending? Just a number.

[Mr Hanson]

The hon. Gentleman must be—as well as many other things—not listening to what I am saying. This is the third year of a three-year budget proposal. We proposed 12% cuts; he is proposing 20% cuts. Next year and the year after, we will have a further debate—when a Labour Government are returned in two years’ time, we will have a further debate—but at the moment we are talking about a figure for the third year. I have given him a figure—a 12% reduction versus the 20% reduction. He needs to listen and to recognise that.

[Dr Huppert]

Rather than returning to that aspect of the discussion, I would like to ask the right hon. Gentleman how long he thinks the delay might be before we see crime going up—his premise is that there might be a delay—and for how many years crime will have to continue going down before he accepts that it is still going down, despite what has happened since 2010?

[Mr Hanson]

Historically, crime levels have fallen over many years. That has been continuous since 1995, throughout my time in the House of Commons. The key question for the hon. Gentleman is how we develop that in future. Policing is, in part, about catching criminals and solving crime, but it is also about community reassurance and many other areas—dealing with floods, policing football matches, crowd control and policing demonstrations. None of those is about policing crime. Part of the reason crime is falling is that the Labour Government did good work in bringing together probation, prisons and policing to look at reducing the number of serious offenders. The number of first-time offenders going into the system fell under Labour, as did the number of offences per person. There is a range of issues; I just worry about potential difficulties arising downstream.

Again, however, the hon. Gentleman does not need to listen to me. Earlier the Minister mentioned the new head of the College of Policing, so let me give him a quotation from the head of the College of Policing, from a BBC News story on 25 January, under the headline “Outgoing Hampshire Chief Constable Alex Marshall warns on cuts”:

“Hampshire’s outgoing chief constable has warned further cuts to budgets could seriously impact police services. Alex Marshall oversaw a reduction of more than 800 posts”

in his force,

“but said more major cuts would be ‘very difficult’.”

The Minister’s Government have just appointed that person to the College of Policing, so it is not just me and Conservative and Labour police and crime commissioners who are raising those concerns: it is professional police officers as well.

[Mr Winnick]

Is my right hon. Friend aware that when the West Midlands chief constable was pressed by the Select Committee on Home Affairs on whether there would be an adverse effect on the police force and police services in the west midlands, he had to agree? The cut over four years or so is somewhere in the region of 26%, and a number of senior and experienced officers have been forced to resign under regulation A19. We are facing an acute problem in the west midlands arising from the cuts. That should be recognised by the Government.

[Mr Hanson]

I am grateful to my hon. Friend for reminding me what Chief Constable Chris Sims has said. I have mentioned the former chief constable of Hampshire; let me turn to the chief constable of Kent, who has said:

“The cuts, if they are 20%, will take us back to 2001…that’s…a significant drawback into police numbers. Clearly there is a potential impact that crime will rise.”

Peter Fahy, the chief constable of Greater Manchester police, said that 2012-13 was

“the most difficult financial year for policing in living memory”.

The chief constable of Lancashire has said:

“Let me be…clear. With the scale of the cuts…we are experiencing…we cannot leave the front line untouched.”

The chief constable of Dyfed Powys, Ian Arundale, said last year that we are approaching a cliff edge on policing. These are serious people. [Interruption.] The Minister again shouts, “Where’s the money coming from?” I have explained to him, very clearly, the difference between 12% and 20% cuts in policing. This Minister is supporting a 20% cut in policing, having gone into the election arguing for 3,000 more police officers. This Minister is taking 15,000 police officers off the streets of Britain, when he promised at the election to put 3,000 more police officers on to the streets of Britain. I will let the British people judge on that in due course and we will argue about those issues in due course. [Interruption.]

If the Minister wants to have a discussion about Eastleigh, I can tell him that John O’Farrell, the Labour candidate, will certainly be able to campaign strongly, given the 295 police officers lost because of the votes of Conservative and Liberal Democrat Members today. I look forward to the Labour campaign in Eastleigh focusing on crime and punishment. I also look forward to reminding the people of Eastleigh that the Liberal Democrats proposed 3,000 more police officers, along with no rise in tuition fees and various other issues that they have broken their promises on. [Interruption.] The Minister appears to have been injected with something over the last couple of hours, because he is really quite frisky. He seemed to be hyper throughout his contribution; now that he has sat down, he still seems to be hyper. I do not know who will win the by-election in Eastleigh; the people of Eastleigh will choose their next Member of Parliament. The key question they need to ask is: who is going to stand up against the coalition Government? I suspect that neither a Liberal Democrat nor a Conservative MP will do that. Let the people of Eastleigh make that judgment.

[Dr Huppert]

rose—

[Mr Hanson]

I think the hon. Gentleman has had his fair share. I always like to give way to Members, but if he will allow me, I will try to finish and allow other Members to have their say.

There is much we can talk about, but one thing is clear. This settlement will damage policing yet further. It will damage the ability of police officers across the country to serve their communities. It is the wrong settlement—it is the third year of a very damaging settlement. I want to stand up for policing and for our communities and to fight and reduce crime. I urge my right hon. and hon. Friends to reject this tawdry settlement from the Government.

14:29

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

May I begin by associating myself with the remarks of the right hon. Member for Delyn (Mr Hanson) about Paul McKeever? I had the pleasure—and it was a pleasure—of working with him when I was the shadow policing Minister, and he was a very effective representative of the federated ranks, and one of nature’s gentlemen. He represented many brave police officers—men and women—and we should never forget that in the context of funding settlements and reforms to pay and conditions. We honour and respect what police officers do each day on our behalf.

It is worth saying something about the headline figures for the police settlement that we are considering today. The Home Affairs Committee calculated that there was a real-terms increase of 20% in police funding in the decade up to 2008. That was something that the Conservative Opposition supported and voted for, and it had the result of making the British police force one of the best resourced in the western world. So when we look at reductions in spending—which we are doing in this settlement, as no one doubts—we have to see it in that context. It is coming off a very high base.

The figures for 2013-14 represent, in total central Government funding—that is specific Home Office grants, the police core settlement grant, the Department for Communities and Local Government revenue support grant and other bits of money—£7.8 billion, which is only a 1.9% reduction. These are not staggering figures, and I repeat that the reduction is against a backdrop of very high increases, which we supported, in the decade to 2008.

[Richard Drax (South Dorset) (Con)]

I pay tribute to Dorset police in my constituency for the wonderful work that they do. My hon. Friend was talking about the relatively small reduction, but Dorset is at the bottom of the heap and that small reduction over many years will actually be a massive reduction. If we had even the national police funding average per capita in Dorset, we would have an extra £16 million, which would mean an extra 50 officers on the beat. For us, even a small reduction has an enormous effect.

[Mr Ruffley]

My hon. Friend makes an important point. My local constabulary area of Suffolk is not dissimilar to Dorset. People who were on the police authority and senior serving officers have made exactly the point that he has just made, which is why I am delighted to draw attention to the fact that the Home Secretary has announced a clear intention to review the formula that churns out the grants for each authority. However, she wants to do that once police and crime commissioners are bedded in, so that they can be consulted on how the formula can be tweaked. I would certainly hope—like my hon. Friend—that rural forces such as Dorset and Suffolk will get a better deal and a greater acknowledgement of the particular challenges of a police service that covers very strung out areas. I see that my hon. Friend the Member for Suffolk Coastal (Dr Coffey) is in her place, and I know that she endorses that point too.

[Mr Ainsworth]

Should I presume from what the hon. Gentleman is saying that he has an expectation that the review to be undertaken by the Home Secretary will lead to a further shift in resources from high-crime areas, which have already been hit the hardest, to low-crime areas? I am a great fan of Dorset, which is a wonderful part of the world, but it is not exactly the crime capital of England, is it?

[Mr Ruffley]

I am not suggesting that we do anything quite as crude as that: I am suggesting that those of us who represent rural seats think that sparsity factors are not being taken into account sufficiently. Clearly, the process must not direct resources willy-nilly. The needs of high-crime areas must be reflected in the formula, but the formula does need to be looked at, as the right hon. Gentleman will know as a senior Minister in the last Government. Indeed, the right hon. Member for Delyn will also know how incredibly difficult it is to strike the balance. Damping was a very controversial policy, but it was the best that one could do in the circumstances. We can have a serious debate about a review of the formula, but I—and other rural Members—will put our case for better and more equitable shares for rural areas.

We also need to thank the Home Secretary—at least those of us on the Government Benches who take an interest in law and order—for the doughty way in which she has fought the police service’s corner. She has been able—in a committed and forceful way—to ensure that the further 1% of departmental reductions that the Chancellor of the Exchequer announced in his December autumn statement do not apply to the police budget for 2013-14. She has also commuted the reductions that would have flowed from the Chancellor’s statement in November 2011 on public sector pay restraint, and she has protected the police budget from those strictures.

We are not saying that this settlement is the one that we would have liked: of course we would all like more money for the services that serve our constituents. But we cannot let this debate pass without saying once again that there is a national economic crisis—I shall not be party political about how it arose—and whoever was in government now, Labour, Conservative or any possible combination of parties in coalition, would have to make reductions. It is undeniable that in the modern age Governments need to do more with less. They need to get better results with constraints on public service budgets. That means not just worrying primarily or solely about the amount of money put into a service, but about how that service is organised. That is why the Home Secretary should be thanked, again, for the shot of adrenaline she has given to radical police reform—getting more for less.

My right hon. Friend is in the fortunate position of being able to do this at a time of falls in crime—it was declining under Labour and continues to decline under us, notwithstanding the tight budget settlements to which the police have been subject.

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

In Hull, we will lose 220 police officers off the beat. Does the hon. Gentleman accept that that will mean criminality on the street? Is not this debate about priorities?

[Mr Ruffley]

I do not accept that simple, direct correlation, as I shall explain.

In the 12 months to September 2012—the latest period for which crime survey figures are reported—we have seen an 8% decrease in overall crime against adults in England and Wales. We also have figures in that survey that show that since 1981 the lowest chance of being a victim of crime was in the 12 months up to that date. It should be a truth universally acknowledged that the effectiveness of a police force does not directly depend on the number of staff, but rather the way in which they are deployed.

We have already heard that the Home Secretary has scrapped central targets and energised the drive by chief constables to reduce unnecessary process—not just fewer forms, but a change in the way officers do things. There have been some encouraging examples of what the Chairman of the Home Affairs Select Committee, the right hon. Member for Leicester East (Keith Vaz)— I see him in his place—and I looked at: the so-called four-force pilot of a much quicker and sharper incident reporting regime by officers on the beat. We have seen a rolling back of statutory charging in respect of more triable either-way offences, giving more discretion to the charging sergeant in the station so that he or she does not have to hang around on the telephone or wait for a Crown Prosecution Service solicitor to fetch up to give the charging authorisation. There are other examples, but we know that as a result of this crackdown on bureaucracy, memorably reported on by Sir Ronnie Flanagan in the second half of the last Parliament, progress is being made. The results are already there for us to see.

The number of police officers in front-line roles is projected to increase by 2% between March 2012 and March 2013. The proportion of officers in front-line roles is expected to increase from the 83% we inherited in 2010 to 89% in 2015. I found another statistic through research. According to Her Majesty’s inspectorate of constabulary—fairly objective data there, I feel—in March 2010, 17% of officers were in non-front-line roles, while the Government are forecasting that their announced policy measures could bring this down to 10% by March 2015.

[Richard Drax]

From my experience in the armed services, I know that the so-called backroom boys and girls who were members of the armed services in my day were very useful to call upon in times of trouble. While I quite accept that backroom boys and girls should be reduced to a certain degree, getting rid of all serving officers in those roles would mean that there is no reserve when, dare I say it, the proverbial hits the fan.

[Mr Ruffley]

My hon. Friend makes a good point, but we should resist the temptation to believe that a Home Secretary or a policing Minister in Whitehall can make decisions about the mix between uniformed back staff, who would be able to perform at short notice the kind of reserve and back-up on the front line that my hon. Friend describes, and pure civilians. This has been a long-running debate in the world of police reform, but we know that it is for the chief constable to decide and to make dispositions accordingly. Whether or not my hon. Friend accepts that, any Government would have to have in mind reducing the number of the uniformed work force in non-front-line activity.

Let me repeat the statistic. According to HMIC, in March 2010 17% of uniformed officers were in non-front-line roles. It is our intention that measures put in place to reduce that will mean that only one in 10 of uniformed officers are in non-front-line roles. I would have thought that the Opposition spokesman, the right hon. Member for Delyn, who I thought was a worthy and dedicated policing Minister in the last Parliament, acknowledged that that should be a policy objective of Governments, chief constables and police commissioners.

I want to talk not just about reducing bureaucracy as part of police reform, but about getting more bang for our buck by doing more with less. That relates to what are undoubtedly difficult and controversial reforms to pay and conditions—the Winsor reforms. I remind the House that when we talk about funding settlements for the whole of the police service, a massive 80% of expenditure for most police forces in England and Wales goes on pay. Yes, we can mandate collaboration, which this Government are in the process of doing to make efficiencies in procurement, information technology, uniform, traffic and so on. But those and other heads of spending amount only to 20% of what a police force spends; 80% is spent on people. It therefore seems to me that it is incumbent on any Home Secretary, whether Labour or Conservative, to look afresh at how we can get a modernised pay system, crucially linking pay progression—the former Government indicated that they supported this concept—with higher levels of skills and with those who have undertaken higher professional training. This is not performance by results, but linking pay to the skills that officers have, paying less attention to progress up the pay ladder simply as a result of age.

The Winsor proposals are, of course, more complicated than that. Chief constables will have flexibility—and it is they, not Ministers in Whitehall, who will make these managerial decisions—and this will be done in conjunction with the locally elected police and crime commissioners. It will be for them to ensure they have the proper mix of ability within the uniformed ranks and they will also have to make decisions about civilianisation in regard to the allocations laid before the House today for each police force area, and make that money go further.

I close by saying something about accountability. This money will be voted for by Government Members, and I think the right hon. Member for Delyn suggested that the Opposition will vote against it. We must get away from the idea that Ministers will be held personally accountable. We vote for the money, and I want the message to go out that police and crime commissioners will have the prime job of driving through change to get more value for that money.

I know it is early days, but my experience so far of the elected commissioner in Suffolk, Councillor Tim Passmore, has been positive. He has put together a draft set of priorities; he has gone to the trouble of speaking to and meeting all the Suffolk MPs; and he has taken amendments to his first draft. My own view—I think most police and crime commissioners should look at this—is that a target should be set for the percentage of time that officers are visible to the Suffolk public. I think, too, that an objective should be set to move towards the 10% of uniformed officers—and it is only 10%—who should be on non-front-line activities, which as I outlined is the national objective, by March 2015. These commissioners should hold themselves to account by explaining—in my case, to the taxpayers of Suffolk, but to others in police force areas up and down the country—what they are doing to reduce bureaucracy, to get a higher percentage of officers on the front line and to ensure not only that there are more of them on the front line, but that during their shifts they spend a higher proportion of their time visibly out and about so that the public can see them.

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

I thank my hon. Friend and Suffolk neighbour for allowing me to intervene. I, too, pay tribute to Tim Passmore. Not only is he already sticking to his mandate of no rise in the precept, but he is applying a different perspective by opening cupboards and managing to understand where the money is going. I note his praise for operational police officers, but I also note his recognition that some external professional discipline can produce more for less—especially from the huge property estate, which he is working closely with the county council to try to rationalise.

[Mr Ruffley]

I think my hon. Friend’s point applies to every one of us whose area has a police and crime commissioner. The essence of localism, which I think, in its broadest sense, is supported by both major political parties and by the Liberal Democrats, is that we cannot for ever say that it is the Minister’s fault. We cannot keep on saying that the man or woman in Whitehall knows best. Those on the ground, the elected police and crime commissioners, must explain what they are doing in their forces, with their chief constables, to bring about greater visibility of policing—with manifestly constrained resources—and, if they are not able to hit their objectives, they must explain why.

Some people may think that we are doing ourselves out of a job—that we are just voting for the money and telling people to get on with it. That would be a crude gloss on what I am saying, but I think that the thrust of it is absolutely correct. We need local people, whether in Humberside, Suffolk, Dorset or the west midlands, to stand up and be counted. We need people to know how many hours have been saved in cutting red tape, because more red tape can certainly be cut: it can be rooted out. Assets are underemployed—estates are badly managed, for instance—and we need to get more value from those assets.

We face reductions throughout the comprehensive spending review period during the current Parliament, but I repeat that we started from a high base—a 20% real-terms increase over the 10 years of the Labour Government up to 2008—and the cuts should be seen against that backdrop. We do not support the cuts because we want to be beastly to public services, or because we think that the police should become more efficient and should therefore be paid less. We should all like to be in a position to look again at what we spend on the police once the economy starts growing again at trend or above, but in the meantime we must press on with reform.

We have had more resources over the past 20 years, but we have not had the reform that should have gone hand in hand with those increased resources. Under the current Home Secretary, that area of policy will not be neglected, because she knows that it is not just more money but the way in which we use our police that will enable us to reduce crime levels and keep our constituents safe.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. The winding-up speeches will begin at 4.6 pm. Five Members are trying to catch my eye. May I ask them to show time restraint in the speeches that they are about to deliver? Meanwhile, I may well introduce a time limit in order to protect Back Benchers and ensure that they are all able to speak—following the speech from Mr Keith Vaz.

14:55

[Keith Vaz (Leicester East) (Lab)]

It is a real pleasure to follow the hon. Member for Bury St Edmunds (Mr Ruffley). He speaks with enormous knowledge about policing issues, and, as one who has attended many debates on the police grant —both in opposition and supporting the Government—he has always come to the Chamber with good and fresh ideas. It is a mystery to me why he is not in the Home Office doing the job, because he knows so much about it.

I must say that I was a little disappointed by the Minister’s opening remarks. I like the Minister, who has appeared before the Home Affairs Committee and who is always very robust, but in a debate of this kind there is no need for knockabout stuff, because we are dealing with extremely serious issues. I am still a bit puzzled about why the Minister for Policing and Criminal Justice was not here to open the debate. He may have other important business to deal with, but I should have thought that he would be able to open a debate of this kind, as he has done in the past. Obviously a deal has been done on the Front Bench, however, and we are happy to hear the Government’s view.

I, too, was present at the memorial service for Paul McKeever, and, like the shadow policing Minister, my right hon. Friend the Member for Delyn (Mr Hanson), and the hon. Member for Bury St Edmunds, I want to express my appreciation for a life that was dedicated to public service. He was the policeman’s policeman. Hundreds of people turned up at Southwark cathedral on Saturday, including the Home Secretary—who read the lesson very eloquently—the shadow Home Secretary, the policing Minister, the shadow policing Minister, and the entire hierarchy of the police service. That was because Paul McKeever was very special as an advocate of what the service does throughout Britain. I think it right for us to start our debates by paying tribute to the work of the police force in this country.

Let me now make some remarks about the new landscape of policing, and about the reduction in the overall police grant and how it will affect some of the important institutions that the Government have created.

Let me say first that I am a great fan of what the Home Secretary is doing in reforming the landscape of policing. I am attached not to particular organisations, but to the services that are provided for local people. However, as we approach the halfway point in those changes in the landscape, I am not entirely convinced that at the end of the day we shall meet the Home Secretary’s original objective. When she started the process in 2010, her aim was to unclutter the policing landscape, but I think that we may well end up with more organisations rather than fewer.

Secondly, I should like to know what is happening to all this money. Of course there cannot be an immediate transfer from one organisation to another. However, the Home Affairs Committee has been studying the matter for the last two years, and in the course of our latest inquiry, into leadership and standards in the police, we have been looking at the organisations that are being abolished or reformed and the new organisations that are being created. I am afraid that the sums do not add up.

Evidence was given to the Committee by the former policing Minister, the right hon. Member for Arundel and South Downs (Nick Herbert). When I asked him what the budget of the new National Crime Agency would be, the Home Office director of finance was sitting next to him, and he did not know what it would be. We do know that the combined budgets of the National Policing Improvement Agency and the Serious Organised Crime Agency amount to about £860 million. We also know that the budget of the National Crime Agency will be about £400 million. Yesterday, in his assured evidence to the Committee, Alex Marshall said he would have a budget of £50 million and a staff of 600.

I am not very good at maths. I will not reveal my GCSE grade to you, Mr Deputy Speaker, but I am sure that you did better than I did. However, I think that we are about £315 million short. We are not talking about a few bob here and there; we are talking about a lot of money, and in the context of the overall reduction in the police grant over a number of years, it is really serious money. I am not trying to put the Under-Secretary of State on the spot—I do not know whether he will be winding up the debate—but it would be great if those sums could be confirmed, either today or in writing to me or to the Committee.

[Richard Drax]

Is not one of the downsides of all these budget cuts, particularly in constituencies such as Dorset, which contains vast rural areas, the temptation to bring all the officers in from the rural areas and to close local police stations? I think that there is a loss of confidence, not in what the police are doing but in their ability to do it, because there is no one out there.

[Keith Vaz]

The hon. Gentleman is absolutely right. Because of his profession, he knows about these issues. I am sure he is an assiduous Member who works tirelessly on behalf of his constituents. One of the public’s first concerns is whether they can see their local police officer—the bobby on the beat—walking around, and whether they can go to the local police station and report crimes and feel safe as a result. Not all of us can have a Dr Who-type TARDIS—I certainly do not—but it is important that we give that visibility in respect of both the physical building and police officers.

Where responsibility for counter-terrorism will lie is not yet settled. The Government are ring-fencing its £563 million budget, and I support that, but there is to be a new landscape of policing, and a decision needs to be made soon as to whether it will stay with the Metropolitan police or move to the National Crime Agency. My distinguished colleague from the Home Affairs Committee, my hon. Friend the Member for Walsall North (Mr Winnick), will correct me if I am wrong, but I think we recommended in one of our reports that it should go to the National Crime Agency, as counter-terrorism is a national issue.

[Dr Huppert]

indicated assent.

[Keith Vaz]

Another Select Committee member, the hon. Member for Cambridge (Dr Huppert) is also present, and he is nodding in agreement. We suggested that in part because we were worried the NCA might not have enough to do, which is, indeed, the case at present. It has very few staff and it is not yet established to the satisfaction of the Government and the Select Committee. We need to have a decision on this matter soon, and we were promised a decision after the Olympics. I do not know whether the Minister wants to answer that question now, but if not, I am happy to wait until the winding-up speeches.

I am also concerned about the huge amount of money currently being spent on historical investigations. The Select Committee has asked witnesses about that on many occasions. At present we have Operations Alice, Elveden, Weeting. Tuleta, Pallial, Yewtree and Herne. We heard only yesterday from the Home Secretary that Herne—which has been under way for the past year, with a number of police officers involved, and at a cost to the taxpayer of £1.2 million—will now be taken over by the chief constable of Derbyshire. That operation deals with important issues involving undercover agents and the recent public revelations, and a lot of money is being spent on these matters. I calculate that £44.8 million is currently being spent on the police investigating other police officers who have failed to come up to scratch. A lot of money is going to the Independent Police Complaints Commission, too, to deal with past errors by certain police forces, such as at Hillsborough. In discussing the reduction of the grant to local police and crime and commissioners, we need to consider all the money currently being spent on all these operations.

The hon. Member for Bury St Edmunds is the spokesman on good procurement in this House, and we have had many discussions about the matter. I welcome the decision of the deputy mayor of London, Stephen Greenhalgh, to take a careful look at how the Metropolitan police have spent their procurement budget. He took evidence from Sir Bernard Hogan-Howe on the issue. When we commission companies to act if the public sector cannot act, we must choose only companies with a good track record. Only yesterday it was announced that G4S was going to have to hand back to the taxpayer about £70 million. We should take into account the expenditure from the police budget that goes on companies such as G4S. The Select Committee was very clear that, as a result of the big mistakes G4S made, it ought to have handed back all its management fee of £57 million plus all the other money it ought to have spent. My hon. Friend the Member for Walsall North became an internet hit with his famous “humiliating shambles” soundbite. He will always be remembered for uttering those words on the Select Committee—and for many other words uttered, too, of course—because it was, indeed, a humiliating shambles. As the hon. Member for Bury St Edmunds has said, we ought to be very careful about dispensing public money to private companies that do not come up to scratch.

Finally, I want to say a few words about the need to carry people with us. The Minister, who has responsibility for security matters, is an avuncular type who seeks consensus. We will see that when he comes to the Dispatch Box. I will not say he is the most courteous of the Home Office Ministers as the others might get upset if I were to do so, but he does not pick a fight. The current Home Office policy is, in effect, picking a fight with the people who have to implement the changes, however. Now is not the best time to be cutting police officers’ pensions, forcing them out under rule A19 and cutting their pay retrospectively—although I perfectly understand why we might need to make changes for new recruits.

I remember my last conversation with Paul McKeever on this subject. He passionately supported treating police officers with the respect, courtesy and dignity they deserve. My only real row with the former Prime Minister, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), was about police pay. He was quite robust with me when he asked me not to go on a demonstration under the last Labour Government in support of the police who were having their pay cut. I said to him then—and I say to the Home Secretary and Home Office Ministers now—that we must carry the work force with us. If we say we have the best police service in the world, the only way to express our admiration for what the police have done is to treat them with proper respect—to have a dialogue with them, to stop cutting their pay and conditions, to speak to them because they know best day in, day out. As we have seen recently in Manchester and other parts of the country, they lay down their lives for us. They go out in the morning and they do not know whether they are coming back at night, unlike all of us in this Chamber today. If we do not carry them with us, the world-class brand reputation that we currently have will be damaged for ever.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Four Members wish to speak and I want to confirm that my maths is better than that of Keith Vaz. If all Members speak for a little less than 15 minutes, everyone will get equal time and I will not need to impose a time limit.

14:59

[Dr Julian Huppert (Cambridge) (LD)]

It is a great pleasure to follow the Select Committee Chair, the right hon. Member for Leicester East (Keith Vaz), and I agree with the vast majority of what he said, as is so often the case.

I want to begin by joining many other Members in paying tribute to Paul McKeever. He was an impressive man and it was a great pleasure to work with him. He had a real sense of energy and great commitment to his cause. He was a great man, and it was a huge shock when I heard he had passed away. I look forward to working with his replacement, Steve Williams, and I hope he will bring similar energy to the task and articulate the police officers’ case for a long time. I also want to pay tribute to all the other police officers and the police staff, who do such a great job.

The report is detailed, and anyone who wants to know how complex Government funding formulae can be should take a look at it. There are some charming delights, including hyper-accurate figures that do not necessarily equate with reality—but that is how the formula works.

The key issue is the total sum and how it is allocated. The Minister of State, Home Department, my hon. Friend the Member for Taunton Deane (Mr Browne), outlined well that the sums are what was agreed in 2010. I share his pleasure at the fact that the cuts that have had to be made since in other areas of public expenditure have not been passed on to the police. We would, of course, like to spend more on policing. As with so many areas of the public sector, it would be great if there was more money to spend on everything, so this is a very easy thing to say. Would I like more money in Cambridgeshire? Yes, please.

The right hon. Member for Delyn (Mr Hanson) read out a number of quotes from chief constables saying that they would have more money—that is a shock! I would be concerned about any chief constable’s future if they were to say publicly, “I don’t want any more money. Frankly, I can’t think of any way I could possibly spend that extra cash.” We would all like to see more money in this area, but we know that we are in straitened times. We know that there was no money left when this Government took office and that of every £4 being spent £1 was being borrowed—that simply could not continue.

The right hon. Gentleman argued in favour of 12% cuts as opposed to 20% cuts. It is worth highlighting the fact that those figures apply to the amount of money that goes from Government to the police and do not take account of the amount generated locally, so the actual effects are rather smaller than that. Disappointingly, what he did not do was to answer my repeated question about where he would get the money from. If I had an extra spare billion quid, I, too, would love to spend it on a range of things. We could have a fascinating debate about how to spend it. He simply said that he was going to spend it without saying where he was going to take it from, and that is a cheap thing that should not be done by an Opposition.

I used to be leader of the opposition on Cambridgeshire county council. I insisted that we put together a costed budget and take it through the same scrutiny process as the administration’s budget, and Councillor Kilian Bourke has done that incredibly well this year. It would be fantastic if the Opposition in this place were to provide fully costed proposals and subject them to the same scrutiny as the Government’s proposals, so that one could see where they are just coming up with fanciful sums. I was disappointed not to hear that answer from the right hon. Gentleman.

We also have to deal with an issue about the future. It is fantastic that crime has fallen almost everywhere in the country, and everyone in this House should celebrate that, but it is easy to sound the alarm and to say, “It is a bit worrying. In the future it might go up.” It might do, because nobody knows exactly what will happen, but if someone does not put some sort of time scale on how long they think this will take—this was the point of my question to the right hon. Gentleman—they can keep saying that for ever. They can keep worrying people for ever that things might get bad. If they want to make a genuine prediction, they need to have some sense of when they would accept that they have not seen the level of crime going up.

Times are tight, so we have to prioritise spending on policies that reduce crime and achieve the goals of the police. The key is how we spend the money we do have. I am pleased that we are cutting spending on a list of things that the right hon. Gentleman was concerned about that. I am pleased that money is being saved by not having CCTV cameras across the entire country, with so little regulation. I am delighted that we are spending money on an excellent commissioner on surveillance cameras, who will make sure that CCTV is used only where it is useful and genuinely proportionate. I am extremely pleased that we are cutting the money that was spent storing the DNA of innocent people—in some cases, people who had never been even accused of any crime. I am very pleased that we are saving money in respect of internal exile without trial and on identity cards. I wish that we had saved more of the money that went on identity cards and that it had not all been blown.

I would still like money to be saved in other areas. I am very concerned about the increasing spread of Tasers. I am in favour of Tasers as a replacement for firearms—as a step downwards. However, if we believe in policing by consent, having more and more non-firearms officers with Tasers risks escalation. There are huge concerns about the use of Tasers, which, as hon. Members will know, have been misused in a number of cases.

This Government have made proposals in their draft Communications Data Bill and plan to spend £1.8 billion on them. They have already spent £400 million and the previous Government spent a huge sum on all their attempts to have the intercept modernisation programme—billions of pounds that could have been spent on more useful projects. I hope that no party in this place will spend money willy-nilly, without looking at how it is being spent and what the benefits might be.

In order to have better prioritised spending, we could do a lot about transparency. We need to be careful that the move to police and crime commissioners does not reduce that transparency. We could also learn a lot more, and I am pleased that the College of Policing is being established. The Liberal Democrats have a policy to go slightly further and have an institute for policing excellence, which would be linked with universities, to try to find out the best things that we could do. I hope that we will see a strong link between the College of Policing and universities, in order to find out what is happening, because we have many expert researchers. For example, Professor Larry Sherman, at the institute of criminology in Cambridge, is a world expert on how to police effectively and efficiently to achieve the goals that we want. Such an approach would allow us to find out how police time is spent and make sure that it is actually used effectively and efficiently. I am in favour of visible policing, but that is not measured by how many police officers are on the books; it is also about how much time those officers can actually spend out on the streets, rather than having to do all the bureaucratic work they have been doing when I have been to visit them over the past few years. They spend far too much time struggling with IT systems and with paperwork, whereas we would like them to be out on the streets delivering visible policing, just as they would.

We could make improvements in a number of other areas. I still believe that this country’s drugs policy does not make the best use of police time. It sucks up vast amounts of police time for very little benefit. We spend more than any other country in Europe but the incidence of drug use is among the highest. There are better alternatives, such as the Portuguese model. Earlier this week, I was talking to the chief superintendent in Brighton, Graham Bartlett, at the launch of “Breaking the Taboo”, a film by Sundog Pictures, which I recommend right hon. and hon. Members have a look at. He is doing some extremely good work in Brighton, reducing crime by having a far more enlightened, semi-Portuguese approach, and I recommend that to many.

There is also a lot to say about the police’s role, not just in detecting crime, but in stepping in much earlier. I have spoken in this place before about a police officer who was in my patch when I was a county councillor. He was then PC Nick Percival, but he has been promoted significantly since. He had a very effective approach, which he developed, whereby he used e-mail to chat to people and tell them where he was. People got the visible policing by getting a weekly e-mail from him saying where he had been and what he had been up to. He also focused on working with young people, who were often bored during the holidays, and set up a brilliant scheme of giving vouchers during the holidays to children who were seen by a police officer or a police community support officer playing well. Whichever class got the most vouchers got a £15 voucher for the local shops. The effect in the area was that kids were playing on the grass hoping a police officer would see them. That made for a better relationship between young people and the police, and it reduced the amount of crime. In his first year on that beat, PC Percival reduced the amount of crime and antisocial behaviour by 50%. He did not detect very much and he did not arrest many people, but he halved the crime rate. That is the sort of thing we want to see.

Far more can be done about information sharing with other agencies: We could get non-confidential information shared between hospitals and the police, a matter that the Select Committee on Home Affairs has examined before. We could provide public access to local crime statistics, so that local knowledge can be used. We could get neighbourhood watches more involved—more plugged in—and we could share some of the information with universities.

We could also share information and co-operate on a broader scale, too. I am very concerned about some of the Home Secretary’s proposals on opting out of co-operation arrangements with the European Union. On that, I do share the concerns of the right hon. Member for Delyn. I do not always agree with the Association of Chief Police Officers, but it has said that opting out of those arrangements would lead to

“fewer extraditions, longer delays, higher costs, more offenders evading justice and increased risk to public safety.”

I hope that the Home Office will reflect very carefully on that advice.

Good policing and policing by consent is not always just about the total amount of money—we should not always just throw more money at a problem. For example, stop and search was a huge issue under Labour. From 2008, an officer in the west midlands was 28 times more likely to stop and search a black person than they were to stop and search a white person, and there are similar figures for Greater Manchester and the Met. An officer was 10 times as likely to stop Asian Britons as they were to stop a white person. That was a big project. It was a bad project. It put a lot people off and it created a lot of hostility, and it was expensive. The level of stop and search under terrorism legislation fell by 90% between 2010 and 2011 under changes that this Government made. We restricted it, and that saved money and improved relationships. We do not want to do things that cost the police time and money, and turn young people against the police.

One key measure is that crime is down, and I hope that that will continue for many years to come. I hope that the money will be spent effectively. There was some discussion earlier about the Liberal Democrat manifesto, and I am delighted that so many hon. Members have read it. I only wish more of them adopted more of it. Its section on crime started off by stating one simple aim:

“We will focus on what works to cut crime.”

That is what we said then and that is what we will do now.

00:00

[Andy McDonald (Middlesbrough) (Lab)]

I hope to keep my remarks brief and not to trouble the time limit that you, Mr Deputy Speaker, might impose.

I too pay tribute to Paul McKeever. His passing was tragic. He was an articulate, intelligent and passionate speaker, who will be a great loss.

I refer first to the National Crime Agency. My right hon. Friend the Member for Leicester East (Keith Vaz) rightly highlighted concern about budgeting, following the change in the landscape that he described. In our Committee discussions, it seemed clear that there would be a nigh-on halving of the total funding for the NCA to discharge its functions in relation to the Child Exploitation and Online Protection Centre, the Serious Organised Crime Agency and the UK Border Agency. That needs further attention, and I am sure it will not escape my right hon. Friend’s notice.

I very much welcome the tone of recent exchanges in the debate; it is a marked distinction from some of the opening remarks. I do not want anybody to think that I, as a new Member, or anybody else on the Labour Benches has anything but the greatest respect and admiration for our police force, or that we want anything other than to celebrate the reduction in the crime rate. It has been established during the debate that since the days of John Major’s Government the trend is for a continued decline in the crime rate, but we stand by our record: we were the only Government in modern history to leave office with lower rates of crime than when we came in. Perhaps we can nail that issue and celebrate the reduction in crime, although we must for ever be on our guard.

It would be remiss of me not to thank the Minister of State, the hon. Member for Taunton Deane (Mr Browne), for the welcome assurance he gave in Committee about the preservation of regional organised crime units. I was concerned that the intelligence and successful operation of those units could have been lost in the changing landscape. I am very much aware of the success of my own regional organised crime unit in recently bringing to account a significant class A drugs crime ring.

For some time, the Opposition have been warning the Government that cutting police budgets by 20% will have an adverse impact on front-line policing. To say that such cuts can be imposed without impact is simply unrealistic. In Cleveland, the number of officers lost between March 2010 and September 2012 was about 234, reducing the total number of police officers from 1,724 to 1,490. According to Her Majesty’s inspectorate of constabulary, that translates into about 15,000 police officers nationally, which will result in the lowest number of police officers for more than a decade. As at September 2011, 11,500 officers had already gone.

All of that necessarily has an impact on the ability of officers to respond to emergency calls, and will result in less visible policing in our communities and on our streets. I took on board the comments of the hon. Member for Cambridge (Dr Huppert), who said it was not simply a question of numbers, but I respectfully suggest that it is self-evident: if the critical mass of police officers is too low, it will bite into effectiveness.

The people of this country do not expect politicians to go about their business by reducing the number of police officers. That is evident from the manifestos at the last election, which were couched in completely opposite terms. The Government will plead that crime is down, so the reduction in the work force is manageable, but that does nothing to address the fact that fewer crimes are being solved: 30,000 fewer crimes are being brought to justice, including 7,000 offences of violence against the person. This is the wrong moment to relax and take our foot off the gas. Pressures building in our society may lead us to regret scaling back our state of readiness.

The reduction in grant has consequences. In my constituency, the police and crime commissioner, Barry Coppinger, is doing what he can to mitigate the impact, but it still necessitates asking council taxpayers to pay more. None the less, the commissioner is determined to ensure that every community in the four districts retains its neighbourhood police team. That is a very welcome commitment.

The Government’s offer, which is equivalent to a 1% precept increase for the next two years, will only defer problems and pose significant financial problems down the track. The Cleveland commissioner advises:

“We know that we will be facing a potential funding gap of over £5 million by 2015-16. Finding the further savings…will be a tough challenge…if we were to take the grant for the next two years, it would mean that from 2015-16 onwards there would be a further shortfall of over half a million pounds…that’s equivalent to 11 police officers or 18 Community Support Officers.”

Total Government funding for police was reduced from £9.74 billion in 2010-11 to £8.66 billion in 2013-14. That is a cash reduction of nearly £1.1 billion, equivalent to 22,000 police officer posts. In Cleveland, the result is that savings of £24 million will have to be made. If there are then plans to cut a further £2 billion from police budgets over the next funding period, as discussed today, that is equivalent to 40,000 police officers. In my area, that would track down to a further impact on the £24 million savings figure. That is nearly 20% of the money Cleveland receives from all sources, and would be the equivalent of 480 police officer posts. Mention was made of where funding comes from; it is not all from a single source. It is interesting to put that into perspective. We would be talking about an increase in precept of between 90% and 95% to make up for the loss.

In conclusion, I urge the Government to think and pause. There is a real risk that the cuts will lead to problems in the months and years ahead, and that may challenge our front-line police officers too far. I urge the Government to revisit the Opposition’s proposal to limit the cuts to the budget to 12%, which Her Majesty’s inspectorate of constabulary thought workable without damaging front-line services.

00:00

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

Before I begin my contribution to this important debate, I pay tribute to a WPC Fiona Bone and WPC Nicola Hughes, both of whom were officers in the Greater Manchester police force, which is my local police force. They went to attend a routine burglary call at short notice, and they were both shot. It is a perfect example of what my right hon. Friend the Member for Leicester East (Keith Vaz) said about police officers who, perhaps unlike any other professionals, do not know what they are going to face when they leave home. We therefore owe them a great duty of responsibility to ensure that their best interests are looked after.

The Minister says that crime is falling. We agree: it is falling at this moment in time. If I understood him correctly, he is, in effect, trying to take credit for that, but crime began to fall just before 1997, when a Labour Government came to office. When we did so, the morale of the police force was at an all-time low. The Labour policy of increasing the number of front-line police officers; introducing thousands of bobbies on the beat, police community support officers and neighbourhood policing units; the record investment in rehabilitation centres for people addicted to drugs and alcohol; the fact that we funded various youth services and increased the number of drug rehabilitation centres; the policies of diverting young people from the criminal justice system: collectively, all those things led to a significant fall in crime. While crime was falling, no Opposition politician at the time, whether Liberal Democrat or Conservative, who appeared on television or radio or in the print media, ever acknowledged that crime was going down. In fact, every time they appeared on radio and television when Labour was in power, they argued that crime was rising. I am glad that finally that mindset has changed and that they recognise the true state of affairs.

We have been told that a 20% cut in the police budget will save money and decrease the budget deficit. However, figures show that that is not working. The deficit is £7 billion higher than it was in the same period in the previous financial year, which shows that austerity measures, which have been criticised by the International Monetary Fund, a conservative institute, are not working. Let me help the Minister: we should make cuts if, in the long run, we save money—to use a modern phrase, we should make smart cuts. What often prevents people from committing crime is the sight of a police officer, and what reassures people is the sight of a police officer. Many Members while knocking on doors in their constituency have heard their constituents say that they want to see more visible policing, as they are reassured when they do so.

Government cuts have already led to cuts in the number of police officers. For example, in the north-west region, in March 2010, police numbers were 19,649. In September 2012, they were 17,708, with a reduction of 1,986 police officers. Those cuts will continue for the next year, so by 2015 there will be 2,951 fewer police officers. I am sorry, but no one can convince me that that will not have an impact on policing and crime.

[Dr Huppert]

May I put to the hon. Lady a question that I put to the right hon. Member for Delyn (Mr Hanson)? Let us say that next year crime is still coming down, and the year after that, it is still coming down. At which point will she accept that crime is, in fact, continuing to come down and looks like it will keep going for a while?

[Yasmin Qureshi]

Let us see what happens in the next few years, because many austerity measures are under way. The cuts have only just begun to hit, and, in the next few years, they will really hit people. Everyone knows that because of economic difficulties certain crimes will rise, including lesser crimes such as breaking into vehicles, stealing small items and selling them for quick money.

Although crime is falling, fewer crimes are being resolved. This aspect has not been touched on. In the north-west, at least 2,296 fewer offences of violence against the person have been solved. Previously, a much higher number of such offences were resolved. In the coming years, once the cuts in police numbers are implemented and the full impact is felt, a rising number of crimes will be left unresolved.

The Minister boasted that recruitment was not a problem and that the Government were doing everything they could to encourage recruitment and create a better police force, but that is not the impression that I get from police officers on the front line. Let me tell the House about Police Constable Turnbull, who came to see me in my constituency office. He said that he had joined the police force many years ago, full of hope and with a high level of dedication to duty. I know that he will continue in that way, but he said that morale in the force, especially among younger police officers, was at an all-time low. Officers are unhappy with all the cuts that are taking place.

In particular, the constable talked about the police pension, to which my right hon. Friend the Member for Leicester East referred. New recruits know the terms and conditions on which they are coming in, and can decide whether to join the police force on that basis, but to take away people’s pension rights retrospectively, when they have spent 10, 15 or 20 years contributing towards their pension, is plainly unfair and will not help police morale. Morale affects performance—if people are happy, they perform better; if they are demoralised, their performance may be affected. I hope that will not happen, because we have an incredibly good police force, one of the best in the world. Sometimes we do not give the police enough credit for all the good work that they do.

I conclude by quoting two senior police officers. Peter Fahy, chief constable of Greater Manchester, said that 2012-13 was

“the most difficult financial year for policing in living memory”.

Things will only get worse, not better, so imagine what it will be like next year and the year after. Steve Finnigan, chief constable of Lancashire constabulary, has already been quoted, but it is worth reminding Ministers of what he said. As the Association of Chief Police Officers lead on police performance management, he was asked whether he would be reducing front-line policing in order to meet the Government’s budget cuts. He replied, “I absolutely am.” He has also said:

“Let me be really clear. With the scale of the cuts that we are experiencing . . .we can do an awful lot of work around the back office . . .but we cannot leave the front line untouched.”

Finally, I ask the Minister to consider this. Labour’s plan for cuts of 12% over the Parliament is a proportionate response to deal with the deficit. This is confirmed by Her Majesty’s inspectorate of constabulary, who said that this, as well as the work of the previous Government, would deliver front-line services without a great deal of impact on them. Like my hon. Friend the Member for Middlesbrough (Andy McDonald), I ask the Government to re-examine their proposed course of action and to consider the Labour proposal.

15:38

[Nic Dakin (Scunthorpe) (Lab)]

This has been an interesting debate. I share the view of my hon. Friend the Member for Middlesbrough (Andy McDonald) that the contributions to the debate improved once we got beyond the opening contribution from the Minister, who described himself as the very model of a very modest Minister. It was rather more vaudeville than a serious contribution to what is a serious political issue: how safe and secure people feel on the streets and in their homes across all parts of the country. It is a serious issue that deserves a serious debate. To be fair, I think that all hon. Members on both sides of the House who have since contributed to the debate recognise its seriousness, and there have been some excellent contributions.

Crime rates are down, which is to be applauded. As Members have said, crime rates have been going down for many years, from the end of the Major Government, throughout the lifetime of the Labour Government and into the current coalition Government. That is to the credit of all those Governments and the actions of politicians. Most importantly, it is to the credit of the police and their partnerships with other people to ensure that the effect of their work is to make people more secure.

It is pleasing that not only are crime rates going down, but people’s sense of being safe and secure is going up, as my hon. Friend the Member for Bolton South East (Yasmin Qureshi) has just said, so the fear of crime is falling. That is certainly the case in the villages and towns in my constituency. That does not mean that people do not have concerns, because they do, and sadly they still suffer crime, which ruins lives and affects people badly, but the overall level is coming down, which is to be applauded and welcomed.

Since becoming the Member of Parliament for Scunthorpe, I have been privileged to spend a lot of time with the local police. I have gone out with the traffic police and I have seen the partnership work going on at Shelford house on the relationship between drugs and alcohol and antisocial behaviour and crime. I have seen the police and the local authority working together, targeting crime and reducing it across the patch. I have also seen the work of the integrated offender management system, led by the probation service but supported strongly by the police and other partners, whereby high offenders are targeted effectively to reduce the impact of their behaviour on the community, thereby reducing the level of crime as well. I have also spent time in Scunthorpe town centre on a Saturday night seeing how the night-time economy is effectively policed. That involves partnerships between the police, the door personnel across the town and the street pastors, who do a fantastic job in that work.

Finally, I have spent time going out with the respect van, which is aimed at reducing the number of young people involved in crime in the area, and that, too, has been very effective. In particular, the respect courts, which are managed by Sergeant James Main and his team, are working with the magistracy locally to see how that has effectively impacted on the behaviour of young people involved in crime, reduced it and moved them away from criminal behaviour. Indeed, the quality of that work has been recognised nationally.

In all the examples I have given of having the privilege of being alongside the local police, it is important to recognise that none of the cases involves the police acting alone; they are acting in partnership with others. It is that partnership work, which has been built up over time, that has had a significant impact on the level of crime and the fear of crime across the piece.

As has been pointed out in the debate, it is not just police budgets that are under pressure. After this debate we will move on to look at the pressure on local authority budgets. We also know that health and social housing budgets are under pressure. The cumulative effect of all those budgets being under pressure is to put at risk the partnership working that has been built up and led to the great strides forward for policing in our country. It would be unwise to say that that is not a risk. I hope that in my local area and across other parts of the country, the imagination, energy and commitment of everybody working together will find a way to maintain the good quality partnership working, rather than imperil it, which can be tempting for people when they begin to look at budgets in silos. Let us hope that that will not happen.

I have regular meetings with the chief superintendent for North Lincolnshire and I am very impressed by the way in which he and his predecessors have led their team across the patch. He told me in our last meeting that cuts of 12% have now been made across the police force in the area. He said that it had been a challenge and tough, but that it had been doable without impacting directly on front-line policing. I asked him what would happen as a result of these further cuts. He looked quizzical before answering that it cannot be guaranteed that front-line services will not be affected by further budget cuts.

It is interesting, is it not, that the 12% cuts that have been made so far are in line with those that Labour said it would make and with those that Her Majesty’s inspectorate of constabulary identified as doable without affecting the front line? That is the point we have arrived at, but we need to look forwards, rather than backwards, because this debate is about further cuts that run the risk of having a really negative impact on policing and the safety of the neighbourhoods and communities that we represent. There are already 227 fewer police officers in Humberside and there will be fewer still when the cuts are made.

The Conservatives and Liberal Democrats are coming together to vote in favour of further police budget cuts of £2 billion over the spending review period. In effect, that means that 15,000 officers will be cut, but real cuts are already running ahead of that estimate, because 11,500 officers had already gone by September 2011. Those are significant reductions in police numbers.

We are already seeing fewer crimes being solved. The sanction detection rate is down, with 30,000 fewer crimes brought to justice, including 7,000 offences of violence against the person. It is interesting that, certainly locally, violent crimes are on a slightly upward trend. Trends in crime are complicated and it is a mixed picture. Although the general trend is down, within it there are spikes in neighbourhoods and in the type of criminal activity.

It is not just members of the public and Labour politicians who are expressing concern. As my right hon. Friend the Member for Delyn (Mr Hanson), the shadow Minister, has said, Conservative police and crime commissioners have spoken publicly about the need to raise their precepts to stop Government cuts harming their area. Many admit that despite precept rises, further officer reductions are likely. In the words of the Essex Conservative PCC, Nick Alston:

“Ultimately, there must be a risk that continued cuts in the number of police officers will make Essex more vulnerable to crime.”

Those are the words of people who have picked up the baton. They have looked at the books and the issues and that is what they are saying, because they are concerned to do a good job.

The danger and risk is that the cuts will mean fewer front-line officers, fewer officers responding to 999 calls, and the police being less visible and available under this Government. As my right hon. Friend said, police visibility and availability are very important commodities. They help to reassure the public, and they are essential to the health and well-being of individuals and communities across the piece.

Strangely, the figures are already worse than Her Majesty’s inspectorate of constabulary had predicted. They are part of this Government’s ill-thought-out reforms to policing that are making it harder to become a police officer and less rewarding once people have done so. That is a real worry, because we all recognise the great work that police officers do on our behalf. As my right hon. Friend the Member for Leicester East (Keith Vaz) pointed out, we need to have these people with us and support them so that they continue to do a great job for us into the future.

15:50

[Gloria De Piero (Ashfield) (Lab)]

We have had an interesting debate, and I will run through some of the speeches.

The hon. Member for Bury St Edmunds (Mr Ruffley) made a very fair speech in which he talked about the need for more effective procurement and noted Labour’s investment in policing. My right hon. Friend the Member for Leicester East (Keith Vaz), the Chair of the Home Affairs Committee, spoke as thoughtfully as ever about a number of matters. He raised the key issue of funding for the new National Crime Agency and dealt with the important subject of police visibility. The hon. Member for Cambridge (Dr Huppert) said that he wanted less CCTV and more transparency, and hoped that police and crime commissioners would not hinder that.

My hon. Friend the Member for Middlesbrough (Andy McDonald) said that he had the greatest respect and admiration for the police force, as we all should. He also noted the downward trend in crime and hoped that it will continue, as we all do, although there is no room for complacency. My hon. Friend the Member for Bolton South East (Yasmin Qureshi) rightly paid tribute to PCs Nicola Hughes and Fiona Bone. She also made a passionate defence of Labour’s record on crime when we were in office. My hon. Friend the Member for Scunthorpe (Nic Dakin) welcomed the long-term downward trend in crime. He clearly speaks with some authority on these matters given how much time he has spent out and about with his local force in Scunthorpe.

We are all constituency MPs, and we all hear those whom we represent say that local people want to see local police on their local streets. No wonder, then, that at the last general election the Prime Minister promised to protect front-line police officers. Less than two years ago, he told this House:

“There is no reason for there to be fewer front-line police officers.”—[Official Report, 30 March 2011; Vol. 526, c. 335.]

The Home Secretary said in October 2010:

“Well what I’m saying is that we know that it is possible for the police to make significant reductions in their budgets without affecting frontline policing.”

We have heard Ministers say countless times that front-line services will be protected despite budget cuts of 20% per cent, but they cannot cut budgets by 20% and expect those cuts to be found in administration. The Government have the fantasy that police stations are packed full of pen-pushers instead of police officers. If they cut costs, they have to cut staff, and those staff are the police officers the public rely on to keep them safe.

In preparing for this speech, I was bemused to find that in response to a freedom of information request last March asking for the definition of front-line policing, the Department said that it could not define it because

“There is no formally agreed definition”.

Never mind that the Government cannot deliver on the policy: apparently they do not even know what it means.

[Mark Tami (Alyn and Deeside) (Lab)]

Does my hon. Friend agree that the people who do not work on the front line do a vital job and that those on the front line would not be able to operate without them, yet this Government talk about them as though they can be discarded without any regard whatsoever?

[Gloria De Piero]

I absolutely agree with my hon. Friend’s comments.

The line now taken by the Government seems to be that it does not matter how many police officers there are. As some Members have noted, that is a far cry from the general election campaign, when Liberal Democrats were promising to recruit 3,000 extra police officers. We might be getting a little immune to the Liberal Democrats breaking election promises, but this one, like so many others, was not worth the ink on the “Focus” leaflet it was printed on. I will be interested to see the “Focus” leaflet in Eastleigh, where I am sure they will be explaining why there will be 295 fewer police officers on the streets in Hampshire.

We have heard from a lot of Members today, but it is also worth reflecting on the views of those we have been sent here to represent. Last month, ComRes conducted polling for ITV news that shows why there can be no room for the complacency that I fear we are seeing on the Government Benches. In the poll, 38% thought that crime had got worse in their area in the past three months and just 6% thought that it had got better. On antisocial behaviour, 22% thought it had got worse in the past three months, while just 8% thought that it had got better. We should all be concerned when more than one in five believe antisocial behaviour has got worse and more than one in three believe that crime has got worse in their neighbourhood. If the public express their concerns and believe that crime and antisocial behaviour are rising, we have a duty to reflect those concerns.

Last week, I spoke to a senior police officer who told me that the thing the public tell all of us that they value most—the bobby on the beat in our communities—is becoming harder and harder to provide. He said:

“The policing pledge forced us to up our game. Things like the requirement to spend at least 80% of time on the beat”—

I still have not been given an answer to why that pledge was scrapped—

“and responding to non urgent messages to the neighbourhood team within 24 hours—when we did that our satisfaction rates went through the roof. That customer focus has now gone.”

He went on to say:

“Our first job is to keep people safe so the police service has fallen back to its core service. Neighbourhood policing has fallen back. The 999 stuff is still okay. The neighbourhood stuff, the fact that the community know us and who the local bobby is—that’s gone. You deal with demand, withdraw to your statutory responsibilities, but issues like antisocial behaviour where you need to build trust and confidence, you need people to know you so you can nip things in the bud—that’s gone. At the moment we are just ending up with bigger and bigger control rooms. We’re not doing the bobby on the beat stuff and that is storing up problems for the future.”

Like many in this House, I hear horrific tales from my constituents. Last week I received a letter from a constituent who told me:

“we have suffered…with antisocial behaviour around the property we live which is causing great unease and discomfort. We understand that staffing levels are low and they have to prioritise the workload”—

but that by the time the police arrived

“all of the offenders had left the area so no action was taken”.

My constituent went on:

“we now feel totally alone in dealing with this situation and think this is totally unacceptable”.

Police solved 30,000 fewer crimes last year as the number of officers was slashed. Detection rates fell for the first time in more than a decade. Fewer crimes are being solved, fewer criminals are being caught and fewer victims are getting justice. The police are needed to provide a reassuring, visible presence in our neighbourhoods. Have any Members been approached by a constituent and heard the words, “Thank you for cutting the number of police officers on our streets”?

[Mr Jeremy Browne]

As the hon. Lady has mentioned it, I have had a number of people coming up to me in the past two and a half years saying, “Thank God we have a Government who are willing to get to grips with the appalling deficit left behind by the previous Labour Government.”

[Gloria De Piero]

This is a debate about the police, but I will say this: borrowing is up.

The question today is: do we want to vote for budget proposals from the Government parties that guarantee the lowest number of police officers in a decade, or do we want to listen to the public and the police and call on the Government to change course and rethink next year’s police budget cuts and stop letting communities down?

15:59

[The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)]

I thank all right hon. and hon. Members for participating in what has been a lively debate on the police funding settlement. I recognise a number of the points about reductions in funding, but we are confident that they are manageable. The police are making the necessary savings and have transformed how they deliver the service to the public. That has been achieved along with reductions in overall crime.

We inherited the toughest fiscal challenge in living memory and are having to take tough decisions, but I recognise, as do the Government, that the police do an incredibly important and challenging job. Our reforms recognise and build on that. As right hon. and hon. Members have highlighted, this year again we have seen many examples of professional, selfless and brave front-line policing to keep the public safe and to fight crime. As the hon. Member for Bolton South East (Yasmin Qureshi) highlighted, our thoughts are particularly with the families, friends and colleagues of Fiona Bone and Nicola Hughes.

I would also like to recognise the work of the late Paul McKeever, with whom I had the pleasure of having a number of meetings and exchanges. He would have said—and I would agree—that we have the best police force in the world, and I pay tribute to the work they do, day in, day out, to keep us all safe. I also pay tribute to the work of our chief constables and senior officers in achieving savings, driving efficiencies and cutting crime.

Her Majesty’s inspectorate of constabulary has challenged forces to drive through efficiencies and has shown that about half of the savings required nationally can be achieved just by forces raising their performance to the average of their immediate peers. There are other areas, however, where the police can make, and are making, further savings, without affecting the level of service to the public—for instance, by adopting an increasingly national approach to buying equipment and services. My hon. Friend the Member for Cambridge (Dr Huppert) made the point about how efficiencies can be secured through such routes.

Forces are rightly prioritising front-line delivery. The number of officers working in back-office roles fell by 20.3% between March 2010 and March 2012, and we are encouraging forces to consider options for reforming support services, including collaboration. HMIC has stated that forces have plans to deliver 87% of the required savings by March 2015, indicating that police forces are working well towards the savings that need to be made. Its report also stated that the proportion of officers in front-line roles is due to increase to 89% in March 2015. Furthermore, its report found that, as well as crime going down, victim satisfaction was up and response times to emergencies had largely been maintained.

We have also made changes to how the police procure their goods and services. We estimate that the police can save up to £200 million per year by 2014-15 on commonly purchased police goods and non-IT services. We have continued our reform of the police. PCCs have now been introduced and are holding the police to account, while ensuring that the public have a say in how policing is delivered in their community. As we have heard, the College of Policing has also been introduced and the package of measures announced by the Home Secretary yesterday will further enhance the integrity of the police.

A number of important points have been made today, particularly by my hon. Friend the Member for Bury St Edmunds (Mr Ruffley), to whom I pay tribute for the work he did in opposition. He continues to highlight the need to focus on freeing up police time. The Government are clear that the police should be focusing on fighting crime, not paperwork. The work we have done to reduce bureaucracy could result in up to 4.5 million hours of police time saved across all forces every year—the equivalent of more than 2,100 officers back on the beat.

[Keith Vaz]

I welcome the way in which the Minister is conducting the debate from the Dispatch Box. Will he clarify one point in respect of the Home Secretary’s very good statement yesterday? Will the register of second jobs that police officers are now going to have to declare be held by HMIC or by the College of Policing?

[James Brokenshire]

That is one of the details relating to the most effective way to deliver on the type of register that is being established. I am sure that, given the very good scrutiny that the Home Affairs Select Committee provides, the right hon. Gentleman and his Committee will follow through on the important issues that will follow from the well-received announcement by the Home Secretary yesterday.

I want to comment on some of the points that have been raised today on the arrangements for damping and on the police allocation formula. The Government will conduct a fundamental review of the formula, as the Minister of State, Home Department, my hon. Friend the Member for Taunton Deane (Mr Browne) said earlier, and we will seek the views of police and crime commissioners across England and Wales. Determining how funding should be allocated to the police is a complex and important matter. It requires careful consideration and it will take time. In that context, it is important that that work is undertaken before we can consider the arrangements for damping.

The right hon. Member for Leicester East (Keith Vaz) highlighted the question of the National Policing Improvement Agency budget. He focused on the funding for the College of Policing but, in addition, the Home Office will be engaged in funding relating to the provision of Airwave and to the Police ICT Company Ltd. The right hon. Gentleman was trying to connect one element of funding to another, but there are other elements involved. I hope that this is a helpful explanation.

A number of points have been raised about police pay and conditions. My hon. Friend the Member for Bury St Edmunds said that pay accounted for a large proportion of police spending, and that the police pay bill was a key issue. Our aim has been to have pay and conditions that support forces in driving out costs and making the best use of their resources. That is why we have asked the police, along with the rest of the public sector, to take a two-year pay freeze, and subject to any decisions by the Police Negotiating Board and an agreement on staff pay, we expect the Government’s policy for public sector pay restraint also to apply to the police. We have also taken forward proposals relating to the Winsor review. The reforms from part 1 will save about £150 million when fully implemented and will give chief officers greater flexibility in how they deploy their officers and shape their work forces.

I was interested to hear the assertion from the Opposition Front Bench that Labour would be looking for 12% savings. However, the Opposition apparently also support reforms to overtime and shift patterns, the pay freeze and the police arbitration tribunal’s decision on police pay. They must therefore be talking about 12% plus all those elements. When we analyse that, we find that they are in substantially the same position as the Government, although they did not accept that. If they are saying that they would implement 12% savings, which of those elements do they not accept? They will need to consider that question carefully, and it is interesting that they have not responded to that question today.

The right hon. Member for Leicester East asked me whether the counter-terrorism element should be part of the National Crime Agency. He and his Committee highlighted that point in their recent report. I can tell him that there will be no wholesale review of counter-terrorism policing arrangements in England and Wales until after the NCA is up and running. We judge that to be the right time to look at that issue, although we recognise that it needs to be examined in the context of the changed landscape for policing. On the point about rural policing, the formula distributes funding based on relative work loads in an area, and apportions according to population sparsity to address the specific needs of rural forces.

The hon. Member for Middlesbrough (Andy McDonald) highlighted regional organised crime units, and in many ways he touches on the important issue of collaboration. I had the pleasure of going to the east midlands special operations unit last year, and I saw how special operations come together and how collaboration can make an important difference. The Government strongly support that model of forces coming together in that way.

The hon. Member for Scunthorpe (Nic Dakin) highlighted a point about partnerships, and I am sure that police and crime commissioners will focus on that when considering how they apply the community safety fund and budget. Yes, there is still more to do, but we are confident that with a clear focus on making the necessary changes, the police will continue to provide the service that the public deserve, alongside delivering value for money for the taxpayer. I pay tribute to the work of the police in doing that, and to their success in cutting crime and keeping our community safe, and I commend the motion to the House.

Question put,

16:11

Division 162

Ayes: 288

---

Conservative: 247
Liberal Democrat: 35
Democratic Unionist Party: 4
Independent: 1

Noes: 212

---

Labour: 206
Plaid Cymru: 3
Independent: 1
Green Party: 1
Social Democratic & Labour Party: 1

Resolved,

That the Police Grant Report (England and Wales) for 2013-14 (HC 876), which was laid before this House on 4 February, be approved.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I now have to announce the results of Divisions deferred from previous days. On the motion relating to the draft Social Security (Personal Independence Payment) Regulations 2013, the Ayes were 276 and the Noes were 196, so the Question was agreed. On the motion relating to the draft Universal Credit (Transitional Provisions) Regulations 2013, the Ayes were 284 and the Noes were 190, so the Question was agreed.

[The Division lists are published at the end of today’s debates.]

Local Government Finance (England)

Wednesday 13th February 2013 Commons Chamber

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

We will debate motions 3 to 5 on local government finance together.

16:25

[The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)]

I beg to move motion 3,

That the Local Government Finance Report (England) 2013-14 (HC 948), which was laid before this House on 4 February, be approved.

[Mr Deputy Speaker]

With this we shall consider the following:

Motion 4—Local Government Finance (England)—

That the Referendums Relating to Council Tax Increases (Alternative Notional Amounts) Report (England) 2013-14 (HC 928), which was laid before this House on 4 February, be approved.

Motion 5—Local Government Finance (England)—

That the Referendums Relating to Council Tax Increases (Principles) Report (England) 2013-14, which was laid before this House on 4 February, be approved.

[Brandon Lewis]

This settlement is a landmark for local government. After years of doffing their cap to Whitehall, councils throughout the country can now take charge of their destiny. That message has been in danger of being lost amidst the fog of deficit denial and doom-mongering coming mainly from Labour Members, who are mumbling right now. There are real reasons why people will soon see the benefit of this settlement as plain as day—despite the doom-mongering work of the Labour party.

[Julie Hilling (Bolton West) (Lab)]

It is generous of the Minister to give way at the start of his speech. He talks about councils being able to control their own destiny, but how can they do that when he is implementing these vindictive cuts, which are hitting the most deprived councils?

[Brandon Lewis]

I appreciate the hon. Lady’s intervention, as it gives me a chance to highlight exactly the Labour party’s problem with local government. It is not about how much is spent, but about how it is spent and about how local councils have the power to make decisions for themselves—something that local government never had under the Labour Government.

[Several hon. Members]

rose—

[Brandon Lewis]

Let me make a little progress and I will take more interventions later.

Change was inevitable, so let us not forget the mess we inherited and the size of our economic overdraft, with Labour spending £4 for every £3 they raised. In such circumstances, local government simply could not remain immune. It is one of the biggest players in the public sector, accounting for a quarter of public spending, and it has a budget twice as big as the defence budget and bigger than our budget for the NHS. This year it will spend £114 billion.

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

In response to the point put by the hon. Member for Bolton West (Julie Hilling), my hon. Friend was entirely right to say that it is all about the choices councils make. I commend to him North Lincolnshire council. It inherited from Labour in 2011 a council that was committed to reducing library services and to closing tourist information centres. In fact, it has done the opposite—built new libraries, extended library opening hours and saved the tourist information centres, as well as replacing mobile classrooms.

[Brandon Lewis]

My hon. Friend highlights exactly the point I was making—that good councils with good leadership making the right decisions are good for their local residents.

[Mr Frank Field (Birkenhead) (Lab)]

Let us assume that we accept the Government’s financial envelope for this settlement. Why, then, did the Government not award the grants in proportion to need or at least fairly in accordance with need? The local authority I partly represent had a £300 million budget, but £100 million of it is to go within three years. In those circumstances, how does the Minister envisage that local authority expanding services along the lines suggested by the hon. Member for Brigg and Goole (Andrew Percy)?

[Brandon Lewis]

There is a range of ways in which local authorities can make a choice. This is the key issue: it is about trusting local government, with good local leadership, to make decisions, such as those my hon. Friend outlined, for the benefit of their communities. I will touch on the fairness of the settlement in a few moments.

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

Will my hon. Friend give way?

[Brandon Lewis]

I am happy to give way one more time, but then I want to make some progress.

[Mr Ellwood]

I echo the thoughts coming from Government Members, which differ from those on the Opposition Benches. It is possible to balance the budget. It is possible to see increases in fire and police services, as we have seen in Bournemouth borough council. Will he join me in congratulating that council on freezing council tax for the third year in a row?

[Brandon Lewis]

My hon. Friend makes a very good point. There are some really good councils throughout the country, doing really good work in protecting and making the right decisions for their communities and freezing council tax. I congratulate Bournemouth borough council on doing just that.

Councils clearly have a part to play in reducing the deficit. Opposition Members should not kid themselves, residents or us about their position. They would not have done anything different. In fact, their party was planning to make spending cuts of £52 billion by 2014-15—and, given that they have opposed every single saving that the Government have made, they still have £52 billion of cuts to outline. I hope that they will do so today.

Another point that Members should consider, which is relevant to the question from the right hon. Member for Birkenhead (Mr Field), is that this is a fair deal. It is fair to north and south. Manchester, Liverpool, Nottingham and Newcastle all have more spending power per dwelling than the national average. They are all at least £500 better off per household than, for instance, Wokingham in the south-east. The settlement is also fair to all councils, even those that Labour left facing a massive financial cliff edge, such as Great Yarmouth and Pendle. Thanks to the new efficiency support grant, the seven authorities that face the biggest hit to their budgets—Burnley, Barrow-in-Furness, Bolsover, Hyndburn, Hastings, Great Yarmouth and Pendle—will be protected.

[Helen Jones (Warrington North) (Lab)]

Will the Minister explain why the Government took £573 million out of the relative needs block of the settlement to distribute it on a per capita basis? Is it not the case that they are taking no account of the differing needs of local authorities?

[Brandon Lewis]

That is simply not correct. The settlement does take account of needs. The areas that would have been most heavily affected—such as my constituency in Great Yarmouth, which would have lost more than £3 million a year thanks to the position left by Labour—have already benefited from a two-year transition grant, and now we are introducing the efficiency support grant.

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

Does my hon. Friend not realise that the fairness of the settlement is undermined by the damping system? Northumberland county council, which has kept its libraries and its Sure Start centres open under a Liberal Democrat administration, is being told, “You ought to have more, but we are not giving it to you this side of 2020.”

[Brandon Lewis]

There have been queries about damping in relation to some councils, but this year’s settlement is based on the results of consultation undertaken last year. No overwhelming desire was expressed then for a change in the damping arrangements, and we wanted to ensure that there was stability in the system for the business rate scheme. However, I appreciate that Members have a view, and I will continue to talk to them about it.

[Several hon. Members]

rose—

[Brandon Lewis]

I will take more interventions in a moment. Let me first finish what I was saying about the efficiency support grant.

Thanks to the grant, the councils that I listed will not face the cuts that the Labour Government left them to face. Councils that deliver extra efficiencies by the end of the financial year will not just receive the efficiency support grant money that was outlined in the provisional settlement of 19 December, but will gain an extra 25% on top of the money that they are expecting in year one.

[Graham Jones (Hyndburn) (Lab)]

I appreciate the effort that the Minister has put into the efficiency support grant. Hyndburn borough council faced a cut of 17% at a time when, according to the Secretary of State, the average was 1.2%, However, I am worried about the cliff edge that faces us. What will happen after two years? Will it be back to 17%? This sounds like a capital sum rather than a revenue payment.

[Brandon Lewis]

I thank that hon. Gentleman for his question, which gives me a chance to explain again why this came about. Because of the state in which Labour had left local government finance, 20 authorities faced a massive cliff edge. We introduced a transition grant which, during the last two years, allowed those authorities some leeway and enabled them to get into a position that would allow them to move forward. Seven are still heavily affected, including the authority in the hon. Gentleman’s constituency, as I know from an Adjournment debate that took place not long ago.

The efficiency support grant involves a two-year programme. As I have said, in year one councils will potentially receive 25% more than they were expecting from the provisional grants. In that first year, they will work with the Department to increase their efficiency across the board by means of, for instance, shared management and shared services, so that at the end of the two-year period they will no longer need the grant. We made the position very clear to the councils, and they have been sent information describing the kind of work that they need to do in order to receive year two money as a result of the efficiencies that they are achieving in year one.

In December we said councils were facing an average cut of about 1.7%. We now know the impact of the public health grant, however, because that figure has dropped to just 1.3%. People would expect us to say the settlement is even-handed—[Interruption]—and the mumbling from the Opposition Benches confirms that, but a report produced by this House concurs with our view. It says:

“Excluding London, northern regions have larger start-up funding assessments and revenue spending power per dwelling than their southern counterparts”

and

“the more deprived areas generally receive higher per dwelling allocations than less deprived areas”.

The heat maps we are publishing today back up the fact that this settlement is fair for all.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

It is hard to see the settlement as fair to all when there is a rural penalty, with 50% more per head going to support councils in urban areas than those in rural areas, where people on average earn less and have a higher council tax, and therefore have lower spending power. In the period up to 2020, we will need to move towards a more just settlement that genuinely reflects need, whether in the inner cities or rural areas.

[Brandon Lewis]

My hon. Friend makes his point as passionately as he and other colleagues did on Monday, and I know from the meetings I have had with him on this issue that he will continue to do so. I shall talk about rural funding shortly.

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

The Minister’s party colleague, the hon. Member for Beverley and Holderness (Mr Stuart), has criticisms, and so too does Baroness Eaton, Conservative former chair of the Local Government Association. She said of the Department, and specifically the Secretary of State, that in terms of the local government cuts he was

“detached from the reality councils are dealing with”.

Why did she say that?

[Brandon Lewis]

I will explain shortly exactly how we are in touch with local government. The previous Government were so busy doling out grants without a care in the world—handing out money hand over fist in different bail-outs—that they failed to pay attention to local people and local authorities. By contrast, we are listening, learning and improving. We have received 200 written responses to our consultation on the provisional settlement. I have met individual authorities, leaders, chief executives and treasurers, and the LGA, London Councils and other representatives, and I spoke to about 200 councillors in a telephone conference call the day after the provisional settlement. Because we are listening, we are going to do more to support rural areas and manage the extra costs of delivering services in those areas.

As well as confirming the increases to the sparsity weighting and top-ups proposed in the provisional settlement, we have announced £8.5 million of additional funding for 2013-14 in a separate new grant for areas with the sparsest populations to get some extra help to achieve the efficiencies they want.

[Mr Mark Spencer (Sherwood) (Con)]

Will the Minister explain why Nottingham city council is increasing tax but cutting its library services while the county council is not putting up council tax but is keeping its libraries open, investing in its highways department and improving the county’s infrastructure?

[Brandon Lewis]

My hon. Friend makes an excellent point that highlights how, with good leadership, a good Conservative-controlled county council is looking after its residents, while the Labour-controlled city council is simply lining its pockets.

Council areas such as Breckland, Mendip and South Lakeland will feel the benefit of the increased opportunities for rural areas in these changes, and I know Members representing rural areas will want to continue talking to us about the future over the summer.

[Sir Nick Harvey (North Devon) (LD)]

Is the Minister confirming to MPs representing rural areas that he is open to having further discussions about the perceived disparity between rural and urban funding? If he is inviting me to join him in the Lobby this evening, I will want to hear a clarification that he is up for such discussions.

[Brandon Lewis]

As I said in the debate on Monday, I have an open-door policy and am very happy to continue discussions, and I hope rural areas will be able to put together evidence—perhaps through their rural services network—to back up some of their figures and prove their case. I will happily continue to talk to my hon. Friend in the year ahead.

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

The Minister has been involved in a lot of discussions with various local authority representatives. Is he willing to reopen discussions with Liverpool city council? It covers the most deprived council area in the country, yet it has suffered the greatest cuts. How can that be fair?

[Brandon Lewis]

Actually, Liverpool has had a reduction of minus 1.3, so it is no different from anywhere else. However, I will happily meet people from Liverpool council, just as I will those from any other authority and any hon. Member who wishes to see me.

[Several hon. Members]

rose—

[Brandon Lewis]

I will make a little progress and then take more interventions.

As I said, areas such as Breckland, Mendip and South Lakeland will feel the benefit of this grant, and that brings me to my next point. This system now works in favour of local councils. Through the Localism Act 2011 and the financial reforms in this settlement, which mean that 70% of local authority income will now be raised locally, councils have more power than ever before. However, they need to understand the implications, act in their residents’ best interests and work hard on their behalf, as I know many authorities across this country do. That could be done by redesigning council tax benefit to cut fraud, promote local enterprise and get people back into work, or by redesigning services to make them more efficient and sustainable. Town halls should not be constructing Maginot line defences against the deficit.

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

The figure the Minister used of councils now raising 70% of the money they spend is obviously going around the Government, because the Deputy Prime Minister mentioned it in the Liaison Committee the other day. Is not the real reason for that percentage increase simply that the amount of money going from central Government to local government has fallen, and therefore the council tax money, which has remained basically the same in most authorities, has risen as a percentage? That is the only reason why that percentage has increased.

[Brandon Lewis]

The hon. Gentleman needs to look at the new business rates retention scheme, which I shall discuss in a moment, as it gives authorities the chance really to be in control of their destiny, and to drive economic growth for their communities and, as a part of their communities, for the country. I thank him for giving me the chance to highlight that we need to get control of the horrendous deficit left by the previous Government.

[Several hon. Members]

rose—

[Brandon Lewis]

I am going to make a bit more progress. We need to move away from what we have seen from local authorities such as Lambeth council, whose residents must have wondered what on earth it was doing with their hard-earned money when it wasted thousands of pounds on propaganda posters attacking cuts. Unfortunately that council is not alone.

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

Is not one way in which councils could quickly save a lot of money by reducing the astronomical salaries of some of their staff? More than 114 town hall chiefs now earn more than the Prime Minister. The chief executive of Essex is on £289,000 a year. The chief executive of Hammersmith and Fulham earns £281,000. Even in my constituency, the chief executive of Cannock’s council earns £113,000 a year, nearly twice what the hard-working MP who represents that area earns. Will the Minister explain why council chiefs up and down the country need to earn six times the salary of an MP?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. If the hon. Gentleman wanted to speak, he should have saved his speech and not used it in an intervention. What I am bothered about is that we have a lot of Members who wish to speak in this very important debate, so we need short interventions. Let us try to get through.

[Brandon Lewis]

My hon. Friend makes a good point. Authorities across this country, particularly small district councils, have to start looking carefully at how they structure their management and how they share management to get best value for their residents’ money. I will come back to that issue in a few moments.

[Several hon. Members]

rose—

[Brandon Lewis]

I will make a bit more progress, following Mr Deputy Speaker’s comment.

I have been appalled by things such as we have seen in Lambeth, especially where there are still savings to be had. Last year, local government showed commendable skill in reducing its budget in many areas while protecting front-line services; many residents actually reported that their services had improved. That goes back to this core point about how we spend money rather than just how much we think we can get from a begging bowl. It is not about how much we spend; it is about how we spend it.

Let us examine our approach to troubled families. Instead of having multiple people dealing with a family, we now have just one no-nonsense worker telling them how it is. For example, Barnet council has worked out that the cost of an effective intervention for an average troubled family has reduced from almost £100,000 to just £10,000, so through our community and neighbourhood budgets we are rewiring the system.

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

I thank the Minister for giving way on that point about how the cuts are having an impact on children and families. He may not agree with Baroness Eaton, although he was not clear on that point, but has he read the evidence from the Joseph Rowntree Foundation? It says that the

“evidence points to the distinctive impact of cuts on services for children and young people”.

What assessment has the Minister made of the impact of these cuts on children and young people, particularly the poorest?

[Brandon Lewis]

The hon. Gentleman is forgetting that most of these cuts are Labour cuts, and that this is about designing services. It is about moving away from the approach taken by too many authorities, including Corby’s, where they do something because they do it because they do it. They should be looking at the outcome they want for the residents and how best to provide it with the best value for money.

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

On behalf of the residents of Hastings, I warmly welcome the increase in efficiency grant, which is wisely accompanied by requirements for efficiencies from the council. Is there to be any increase in the efficiency requirements, or do they stay as they are?

[Brandon Lewis]

The requirements will stay as they are, and over the first year we will work with authorities to help them to deliver efficiencies for the benefit of their residents. The money is coming from residents in councils across the country, so we have a duty to make sure that it is well and properly spent on finding the efficiencies they need for the longer term.

[Several hon. Members]

rose—

[Brandon Lewis]

I want to make a little more progress.

Our community and neighbourhood budgets are rewiring the system and bringing people together across the board—local authorities, the police and the health service. They are a new way of looking at the public sector, and they stop duplication so that money is spent wisely for the benefit of residents across the country. They are making local savings in millions, which could nationally add up to billions. Ernst and Young said that the potential five-year net benefit of community budgets is between £9.4 billion and £20.6 billion. Community whole place budgets provide an opportunity to align the public sector and make it more streamlined and more efficient and, most important, to give a better service for our residents. We want to do everything we can to help councils to spend the cash of hard-working taxpayers more wisely.

[Bill Esterson (Sefton Central) (Lab)]

The Minister must understand that boroughs such as mine have had a 40% cut in their grant from Government. That is a reality. He cannot hide the fact that the money has gone, or is about to go, and that it will have an effect on front-line services. The Local Government Association graph of doom predicts that councils such as Sefton and many others will only be able to deliver adult social services and waste collection. Will the Minister tell me why the LGA’s figures are wrong?

[Brandon Lewis]

I hope that in his speech the hon. Gentleman will tell us about the cuts for local government of £52 billion that Labour have not even announced yet. How will they deal with that?

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

To put it as politely as I can, some of the figures the Minister has been using today are questionable to say the least. He emphasised his willingness to talk. Core Cities twice wrote to his right hon. Friend the Secretary of State to ask for a meeting. There was no response. The Secretary of State is sitting alongside the Minister. Will he tell us through the Minister whether he is prepared to meet Core Cities—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We have to get the message across. There are going to be short interventions. The hon. Gentleman has been here even longer than I have so he should know. Short interventions help the debate. The Minister is desperate to get on.

[Brandon Lewis]

Thank you, Mr Deputy Speaker. I am slightly surprised by the comments of the hon. Member for Birmingham, Northfield (Richard Burden). Not only is my right hon. Friend the Secretary of State happy to meet representatives from Core Cities, but I met them myself during the consultation process. They were part of it, so I am not sure where the hon. Gentleman gets his facts.

To help local authorities, we published 50 ways to make sensible savings. [Interruption.] As I might have guessed, the Opposition scoff at the idea that looking after the pennies will take care of the pounds. That is probably why they got us into an economic mess in the first place.

The Opposition should take a leaf from the book of an Olympic hero—Sir Dave Brailsford, the head of British Cycling. His philosophy is the aggregation of marginal gains; tiny changes across the board that add up to the difference between silver and gold. That is what we should be doing. We should not scoff at small savings, because they add up to large amounts.

Thanks to the autumn statement, which exempted local government from the 1% top-slice in 2013-14, councils have time to put their house in order and put people first. As my hon. Friend the Member for Sherwood (Mr Spencer) suggested, they should start by freezing council tax, as Nottinghamshire county council and many others are doing—we know of about 150 already.

Once upon a time under the previous Government, council tax rose exponentially: it more than doubled. We have put money aside to put tax rises on ice for a third successive year. Councils should take advantage of that for the benefit of hard-working people who can ill afford to pay more. Already, 150 councils are taking that high road—councils from Derby to Dorset, from Northampton to Norfolk and Wolverhampton to Watford; but if councils take the low road and put up taxes, they should be aware of the wrath of the taxpayer. We are setting a 2% referendum principle for all principal local authorities, police and crime commissioners and fire and rescue authorities. That is direct democracy in action.

If an authority wants to raise council tax by more than 2%, the local electorate will have the right of veto in a binding referendum. I am sure that some councils may have a case—personally, I cannot see it—but if they do they should put it to the vote. They should stand up before residents and state their case. If they win the argument, so be it, but we will take a dim view of democracy dodgers trying to sneak in under the democratic radar, especially those using levies as places such as Manchester and Rotherham are doing.

I urge hon. Members to think about what we are saying. The Government grant is equivalent to 1%, so councils that are seeking to increase council tax and avoid a referendum are doing so, in effect, for at most 0.99%. What a kick in the teeth for local taxpayers. Any council leader that cannot get their officers and members to work together to find 0.99 % of savings should look again.

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

Surely the Minister knows how council tax is calculated. The issue is not just about one year—it is about the erosion of the council tax base, which has had a devastating impact in local authorities such as Tameside.

[Brandon Lewis]

I respectfully suggest that the hon. Gentleman does a bit more research, because the Secretary of State stood at the Dispatch Box at an earlier date to say that it was in the base. The hon. Gentleman misses the point about the settlement. Council tax money is not about lining councils’ pockets—it is hard-working taxpayers’ money. Many councils already have more in reserve than they are losing through cuts. Liverpool, Manchester and Leeds have reserves twice the size of their spending power reductions.

[Mr Dave Watts (St Helens North) (Lab)]

Is it not the case that if councils take up the offer for the next two years they will face bigger cuts and higher council tax at the end of the period?

[Brandon Lewis]

Yet again, we see the difference between the Opposition and the coalition Government. We are protecting the pockets of hard-working taxpayers, and the councils that the hon. Gentleman is talking about should look again and freeze their council tax.

[Several hon. Members]

rose—

[Brandon Lewis]

I want to make progress.

This is a new dawn for local government. The local funding settlement used to be the end game, but this year it is just the starting point. Councils are no longer tied to the settlement figures, and they can earn their keep and retain £11 billion of business rates, which could deliver around an extra £10 billion to the wider economy by 2020. In recent years, Newcastle, Manchester and Liverpool all saw their business rates rise above the national average of 4.8%, but thanks to the old begging-bowl system, they missed out on the opportunity of making the most of that money. The old formula grant paid to fail, but from here on in, it will be what councils make, not what they take, that counts. If they bring in more business and more jobs, they will be rewarded. If they build more homes they will get the new homes bonus, worth more than £650 million this year and even more in 2014-15. Almost two thirds of authorities are expected to gain from the scheme in the first year alone.

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

Is that not a slight sleight of hand? The new homes bonus money is not new money; it has been derived from top-slicing local government funding at national level, as my borough finance officer confirmed to me yesterday.

[Brandon Lewis]

Yet again, an Opposition Member highlights the fact that they simply do not get it. This is about local authorities getting money for what they do; we are moving to a new way of working. Under the business rates scheme, they will get more money if they bring businesses and jobs in. If they build houses, they will get more money from the new homes bonus. The message to authorities that do not like it is that they should go out and build some houses. Two thirds of authorities are expected to gain, so the message to councils is clear: if they oppose the settlement, they oppose the opportunity for a brighter future. However, if they are self-reliant and ambitious, and work hard on behalf of local people, they will win the day.

This Government are keen to do everything they can to reward radical, forward- thinking councils, so today I am pleased to announce a new incentive for councils to join forces to bring management together, not just sharing the usual back-office functions and services that we hear of, but real front-line changes for the benefit of citizens as well. This is about looking at some of the excellent work done by great authorities and following in the footsteps of some—for example, the tri-borough initiative. Hammersmith and Fulham, Westminster, and Kensington and Chelsea are on track to save around £40 million by 2015-16. We are bringing in a new £9.2 million challenge award to help other councils to follow their lead.

I want councils such as West Somerset, which was mentioned on Monday—

[Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)]

May I thank my hon. Friend and the Secretary of State for making that possible? The House is well aware of the financial difficulties that we have there. A protocol was signed between Taunton Deane and West Somerset to alleviate the problems. This can now happen, at nil cost to either council. I am incredibly grateful on behalf of the people of West Somerset and the people of Taunton Deane. Thank you very much.

[Brandon Lewis]

I thank my hon. Friend for that intervention. I know that he has worked hard in Somerset to bring the authorities together and to get the right result. I hope that areas such as West Somerset will move forward and see this as an opportunity to help them to do the right thing. The same applies to other authorities as well, particularly small district authorities, which should be looking at bringing together their management to make sure that they are spending the money in the best way possible for their local residents.

[Andrew Bingham (High Peak) (Con)]

What my hon. Friend is suggesting is what we in High Peak did several years ago with Staffordshire Moorlands, when I was a councillor and the council was under Conservative control. The Labour opposition were not keen on it but now that they are in control, they have not rolled it back, so I am pleased with the incentive that he is introducing. May we have that fund back-dated, please?

[Brandon Lewis]

My hon. Friend makes a good point. Through the consultation process we were looking at how we reward councils that are doing the right thing for their residents and moving away from the begging bowl of the past, highlighted by some of the questions and interventions from the Opposition Benches. I am happy to look at bids and will be announcing details of the scheme next week for authorities which are doing this or have done it. It is an opportunity for small authorities that have done good work.

We want authorities to go further and faster so that residents see and feel the benefits. We want to help and reward those who are doing things right. The evidence shows that it is good to share. South Oxfordshire and Vale of White Horse have a joint chief executive and management structure. South Holland is sharing its chief executive and officers not just with Breckland but with Luton, showing that this works well across different counties without shared boundaries and across parties, despite the views of some Opposition Members. Babergh and Mid Suffolk are sharing not just a chief executive but service delivery across the whole range of their councils’ functions and looking to go further. Those who follow suit will now get extra credit—literally.

This settlement should silence deficit deniers. It is fair to north and south, fair to urban and rural, fair to poor and rich authorities. It is a settlement that rewards innovation, imagination and delivery for residents. It is a settlement that gives councils more power than they have ever had before. It is a settlement that captures a new ethos within local government, generating more income through the new homes bonus, business rate retention and a challenge fund. If councils are willing to put people above political grievance, as Luton has done—I hope Opposition Members will join me in supporting it—and if councils are willing to look to the future, not in the rear-view mirror, they have a once-in-a-generation chance to step out from the shadow of Whitehall, and to expand, energise and electrify their local communities and their local economies. I hope they will grasp the opportunity with both hands and deliver on it. I commend the motions to the House.

16:58

[Hilary Benn (Leeds Central) (Lab)]

I am sorry and surprised that the Secretary of State decided not to lead this debate. We know that there are many issues on which he is all too willing to express a view, and it would have been good to hear from him about the most important responsibility he has in the job that he holds—the funding of councils that help support the services on which all our communities rely.

That would have given us an opportunity to question the Secretary of State on why he told the Select Committee in December that the cuts to local government funding were “modest”, and that the Local Government Association’s fears for the future were “utterly ludicrous”. In effect, he told councils to stop complaining. I wonder whether he understands the anger and dismay that those comments have caused, or the great disservice he is doing himself by being in denial about what is happening in local government.

This is a time of rising pressures. In particular, as the Minister will know, the costs of looked-after children and social care are rising. The demands on local authorities are going up while income is going down significantly. That is why the much-debated “graph of doom” produced by the LGA does not, I think, cry wolf; it is what it says is its best assessment of where local government is heading if things continue as they are. If the Secretary of State does not like what I have to say, the LGA’s Conservative leader, the highly respected Sir Merrick Cockell, has called the cuts “unsustainable”, and the Tory leader of Kent county council says that his county cannot cope with further reductions and is “running on empty”.

Ministers know that local government is the most efficient part of the public sector, because that is what the Prime Minister said, albeit before the election, but they have decided to award councils for that efficiency by cutting more from them than from any other part of the public sector. A moment ago the Minister referred to “50 ways to save”, which is a combination of some things councils are doing already, some things that are pretty darn obvious and some things that are insulting. On value for money, will he explain why his colleague, the Secretary of State, decided, despite all these pressures, to take £250 million of public money in an attempt to persuade councils to change the way they collect bins, which resulted in only one council moving from alternating weekly collections back to weekly collections? Does he think that represents value for money when money is so tight?

As the Institute for Fiscal Studies confirmed last year, the total cuts to local government spending will outpace those in the public sector as a whole up to 2014-15. Since then, of course, a further cut of £445 million to local government for the year after next was announced in the autumn statement.

[Mr Graham Stuart]

The Labour party strongly makes the case for more expenditure on local government and opposes the reductions that the Government feel are necessary. When we look across the Labour party’s policy announcements, it appears that the only firm promise of cuts relates to the NHS, so will the right hon. Gentleman confirm that he plans to cut the NHS to make up the money to be spent on local councils?

[Hilary Benn]

The hon. Gentleman clearly has not been listening to what I have said since taking up this post. I have said in this Chamber before that, were a Labour Government now in office, of course there would be cuts to local government, but they would not go as far or as fast as the ones the Government are making and they would not, as I will point out, be allocated to local authorities in such a fundamentally unfair way.

The truth is that the Secretary of State continues to lose in his battles with the Treasury, assuming, of course, that he tried to fight for local government in the first place. The truth, even if Ministers refuse to admit it, is that local councils are now facing—this is why the word “modest” causes such anger—the largest cuts in their funding in the political lifetime of every single Member sitting in the Chamber.

[Robert Neill (Bromley and Chislehurst) (Con)]

Does the right hon. Gentleman stand by the £52 billion of cuts for 2014-15 that appeared in his Government’s Treasury pre-Budget report in 2009? If not, what cuts would he make, and where?

[Hilary Benn]

I do indeed stand by the statement my right hon. Friend the Member for Edinburgh South West (Mr Darling), when Chancellor of the Exchequer, placed before the House and the country. I remind the hon. Gentleman that when he and his colleagues came into government the economy was growing—[Interruption.] It was. There is no good shouting about it. The signal achievement of the Chancellor over the past three years has been to put the British economy flat on its back, which is why we are in such difficulty.

The consequences of what is going on are these: first, local government is having to deal with cuts that are unfairly distributed; secondly, residents are having to come face to face with the consequences of those cuts; and, thirdly, the changes to council tax benefit are being made even worse by the effects of the overall cuts to council budgets. I want to address each of those in turn.

The Local Government Association says that

“funding for local government is projected to fall by 3.9% in 2013-14 and a further 8.5% in 2014-15. This means that the grant to local government will fall by 33% in real terms over the current spending review period.”

It is not possible, by any measure, to call that scale of reduction modest. The LGA goes on to say:

“Modelling work from the local government association shows a funding gap of £16.5 billion by 2019-20, if reductions in support continue on current trends.”

It is not modest; it is massive, and it is about time that Ministers started to recognise the truth of what they are doing.

If denial was not bad enough, the language that Ministers have used about those who are serving in local government has been, frankly, extraordinary and offensive. According to The Daily Telegraph, the Conservative council leaders of Derbyshire, Essex, Buckinghamshire, Wiltshire, Lincolnshire, Leicestershire, Kent and East and West Sussex wrote to the Prime Minister last month to complain about the Ministers on the Government Front Bench. They referred to “patronising language” and said that the nature and tone of constant criticisms of councillors’ work by Conservative Ministers is “most worrying”. They also highlighted

“ill-informed…criticism and sometimes highly inaccurate personal attacks.”

They—remember that these are Tory council leaders—concluded by saying:

“We believe it is essential to bring to your attention our concerns regarding some government policy affecting local government, the rhetoric that accompanies it and the effect it is having on our people.”

It is no good Ministers asking local government to take on an enormous challenge—which it is doing—if at the same time the people they expect to step up and respond are criticised, patronised and belittled.

Perhaps the Minister will explain why allowing councillors to save for a pension has, in his words,

“a corrosive influence on…independent thought”—[Official Report, 19 December 2012; Vol. 555, c. 105WS.]

Let us stop and think about that statement. If being able to save for a pension has a corrosive influence on independent thought, what hope is there for all of us in this House? That is an insult to councillors and it shows a fundamental lack of respect for people who are working really hard to cope in difficult circumstances.

[Mr Betts]

Is my right hon. Friend aware that the Communities and Local Government Committee produced a report recently on councillors and the community? We looked at the barriers experienced by people, particularly younger people in work, in becoming councillors. Many of them lose income because they give up work and have to attend council meetings. Is it not an absolute disgrace to suggest that they should give up their pension as well, so that their income suffers in later life, and a discouragement to people of working age from becoming councillors?

[Hilary Benn]

I agree completely. What makes it even more inexplicable is that elected mayors will be able to keep their right to save for a pension. That is what the Minister announced. Will his colleague, the Under-Secretary of State for Communities and Local Government, the right hon. Member for Bath (Mr Foster), explain when he winds up the debate the difference, in time, effort, commitment and dedication to the job, between an elected mayor and the leaders of Birmingham, Manchester and Leeds city councils, who also work full time and are dedicated and committed to their jobs?

According to the LGA, 19 December was the latest that a provisional local government financial settlement has ever been published. This has caused problems for councils trying to finalise their budgets for the forthcoming year. Council representatives to whom I have spoken talk of errors and double counting in the provisional settlement, which the Under-Secretary of State for Communities and Local Government, the hon. Member for Great Yarmouth (Brandon Lewis)—perhaps not surprisingly—did not mention and which does not inspire confidence. Will he explain how that came to pass and what steps he is taking to ensure that it does not happen again?

When the provisional settlement was announced, the Secretary of State said:

“Concerns that the poorest councils or those in the north would suffer disproportionately are well wide of the mark. The spending power for places in the north compares well with those in the south.”—[Official Report, 19 December 2013; Vol. 555, c. 874.]

I am afraid that the figures simply do not support that assertion.

Let us take a comparison between Wokingham, which the Minister referred to, and Leeds. The final figures in the Government’s documents show that spending power per dwelling in Leeds will be £1,874 in 2013-14, while in Wokingham it will be £1,815. The following year, it will be £1,800 for Leeds and £1,796 for Wokingham—a difference of just under £5. It is clear that the figures do not take account of relative need, because the percentage of children in out-of-work families in receipt of child tax credit is three times higher in Leeds than it is in Wokingham, the percentage of 18 to 64-year-olds claiming income-based benefits is more than three times higher in Leeds than it is in Wokingham, and the percentage of the population claiming incapacity benefit or disability living allowance is twice as high in Leeds as it is in Wokingham. How can that be fair?

[Andrew Gwynne]

I am sure that my right hon. Friend has seen the heat map produced by Newcastle city council. Was he as surprised as I was to notice that the only council in the midlands and the north, from the south-east right the way up to the borders of Scotland, to have a reduction of between zero to £50 per head was Cheshire East—the local authority of the Chancellor of the Exchequer?

[Hilary Benn]

My hon. Friend is absolutely right to point that out. I cannot say that I am surprised, given that the central point I am attempting to make is that the way in which the cuts have been allocated is fundamentally unfair.

If the Minister and Secretary of State do not accept that, then what about the Audit Commission? Last November, it produced a report called “Tough times 2012: councils’ financial health in challenging times”, which said:

“Councils in the most deprived areas have seen substantially greater reductions in government funding as a share of revenue expenditure than councils in less deprived areas.”

It could not be stated more clearly. That probably explains why the Secretary of State is so keen to get rid of the Audit Commission: how inconvenient that such an organisation dares to speak truth unto power.

The Secretary of State came up with the measure of spending power in 2010. Ministers now publish figures on spending power per dwelling but not on spending power per head of population. This is perhaps unsurprising given what the figures show. Taking into account this settlement, in 2014-15 the 10 most deprived local authorities in England will lose six times more spending power per head of population than the 10 least deprived local authorities, compared with 2010-11. No wonder Ministers did not want to present to the House figures based on population. The councils that will suffer the biggest cut in spending power over the two years are Liverpool, Hackney, Newham, Manchester, Knowsley, Blackpool, Tower Hamlets, Middlesbrough, Birmingham and Kingston upon Hull.

[Graham Jones]

Sat right in the middle of that list are the district councils of Burnley and Hyndburn, which are taking cuts of the same size but have a budget that is a fraction of those unitary authorities. The scale of the cuts is horrendous in those councils.

[Hilary Benn]

My hon. Friend is right. He anticipates what I am about to say, because how can that list be fair?

The Prime Minister says that we are all in this together, though less frequently these days because he gets laughed at when he attempts to do so. However, in this settlement, his local authority, West Oxfordshire, which is one of the least deprived in the country, ranking 316th out of 325 in the indices of multiple deprivation, is getting an increase in spending power of 3.1%, whereas some of the most deprived areas, such as Hastings, which we heard about earlier, and Burnley, which are respectively 19th and 11th out of 325 in the indices of multiple deprivation, are facing the maximum cut in their spending power, on the Government’s own measure, of minus 8.8%. How is that fair?

[Lilian Greenwood (Nottingham South) (Lab)]

Does my right hon. Friend think that Government Members are not even interested in protecting the most vulnerable? As the former local government Minister, the hon. Member for Bromley and Chislehurst (Robert Neill), who is in his place, put it:

“Those in greatest need ultimately bear the burden of paying off the debt”.—[Official Report, 10 June 2010; Vol. 511, c. 450.]

Is not that exactly what they are about? They are not interested in the people in Nottingham and elsewhere whom we represent.

[Hilary Benn]

My hon. Friend is right. That quote sums up wonderfully the philosophy the Government have brought to the cuts they are making.

[Mr Kevan Jones (North Durham) (Lab)]

What the Conservatives are doing does not surprise me; they are helping their own areas. Does my right hon. Friend recognise that in the recent announcement on support for rural councils, Durham county council was in but is now out for an unexplained reason?

[Hilary Benn]

We had a debate on Monday. Different areas have different needs and I acknowledge the particular challenges that local authorities serving rural areas face. The Government’s job is to balance all those things and come up with something that can be seen as fair.

[Graham Jones]

My right hon. Friend mentioned the small district councils of Burnley and Hyndburn, which are taking huge cuts that are almost the size of those in metropolitan areas such as Liverpool. The 8.8% figure he mentioned includes the efficiency grant, which is a two-year payment. After those two years, it is removed and they are facing a cliff edge that is far beyond 8.8%.

[Hilary Benn]

My hon. Friend makes the point about the circumstances his local authorities face extremely forcefully.

What does all this mean for the future financial sustainability of local government? The National Audit Office recently published a report that makes it clear that cuts to councils budgets are having a direct impact on front-line services, even though the former housing Minister went before the Select Committee, I think in 2010, and said that there should not need to be any cuts in front-line services. The Chair of the Public Accounts Committee, my right hon. Friend the Member for Barking (Margaret Hodge) was very direct in her response. She said of the findings from the National Audit Office on local authorities:

“I am alarmed to hear that 12% are now at risk of being unable to balance their books in the future, according to local auditors, with potentially disastrous consequences.”

It is worth reflecting on those words: more than one in ten councils are now at risk of being unable to balance their books in the future—that is what the NAO says. The Secretary of State may say that the graph of doom is scaremongering on the part of the LGA. Will he also say that this is scaremongering on the part of the NAO? If he does not say that, what is the Government’s answer to the picture unveiled by the NAO?

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

The mayor of Liverpool has invited the Secretary of State to our city to have a look at the books for himself, so that he can point to where the city council is not making the efficiency savings the Government believe it should be making. Does my right hon. Friend believe that the Secretary of State should take up that challenge?

[Hilary Benn]

I very much hope that the Secretary of State is willing to accept that challenge; it would be good for him to see impact of the cuts.

[Mr Watts]

May I warn my right hon. Friend that the Secretary of State’s record when he was a leader of a council does not stand up to any scrutiny? While people such as me were running three-star efficient councils, he was running an underperforming council.

[Hilary Benn]

I am grateful to my hon. Friend for reminding us. I do not know whether the Secretary of State will indicate whether he will accept the kind invitation he has received. There is no answer at the moment, but perhaps my hon. Friend the Member for Liverpool, Walton (Steve Rotheram) will find out subsequently.

One of the problems councils face is that there is some uncertainty in the system, because of the big change the Government are bringing in as a result of this statement. The truth is that it remains to be seen how local authorities will benefit from business rates localisation, particularly because the Government have given themselves so many ways in which they can take some of that growth in business rates for themselves. The business rate projection for each local authority has been averaged out over two years. Why did the Minister decide on a two-year period, rather than averaging out over a five-year period as his own consultation suggested?

On business rate appeals, although the Government have increased the adjustment of that to £593 million, will the Minister say whether he is confident that that will be sufficient given that the LGA says that appeals in the pipeline could be considerably larger than this, thus exposing local government to an unacceptable level of risk? Why did Ministers change the 2012-13 baseline to include cuts that would not take place until the next financial year? Was it to try to make the reductions in spending power look less than they actually were? I welcome the increased allocation for the public health grant, but because it is ring-fenced it does not really change the reduction being imposed on councils for all the other services for which they are responsible.

Finally—a lot of other Members want to speak—I turn to council tax benefit. Last year in this debate, I suggested to Government Members that they take a long, hard look at what this would mean for their constituents, including in areas where the proportion of pensioners was higher than average. Now that the change is almost upon us, many people in all our constituencies frankly have no idea what the coalition Government have in store for them.

[Andy Sawford]

May I draw my right hon. Friend’s attention to the evidence presented to the Communities and Local Government Committee on council tax benefit, including from councils such as Conservative-controlled Croydon, which is predicting a crisis when this comes in, particularly a huge rise in homelessness?

[Hilary Benn]

My hon. Friend makes a powerful point. As I was about to say, a number of families will be hit, not just by one thing, but by several of the changes. It is the accumulative impact that will be so striking.

In its briefing for today’s debate, the LGA wrote:

“Authorities will have to introduce council tax support schemes against the backdrop of a ten per cent cut in funding for this scheme. In practice this means that many councils will have no choice but to pass the cut on to the working age poor.”

The technical details are causing concern. London Councils, in its briefing on the settlement, wrote that it was disappointed with the lack of transparency around the funding for council tax in the future. It wrote:

“From 2014-15 the funding calculations for council tax support will be lost within the wider formula funding allocations and will be subject to the broader cuts to local government funding. However by including this funding within overall formula funding, it means that this already reduced sum could well be altered again”.

It wrote that it would become almost

“impossible to identify what a local authority actually receives for its local scheme”.

Will the Minister confirm that and explain the reasoning behind his proposed change?

We know that last autumn the Government panicked and announced their transition scheme worth £100 million, because they knew there was a car crash heading their way. Especially since councils finalised their council tax support schemes, which they had to do by the end of last month, it has become clear that a large number of councils, including the Secretary of State’s council of Brentwood, are not taking any of the transitional grant. Why is that? The report that went to Brentwood council made it clear that it would have cost it more to do so. It would have received just over £100,000 from the transitional fund, but it would have cost it an extra £300,000 to have taken it. That is not much in the way of help. It is more the economics of the madhouse.

We know that councils are trying to do their best to protect the vulnerable, but the 10% cut in funding, which comes on top of the further cuts announced in this settlement, leaves many with no option but to increase council taxes for the poorest. What does this mean for families? It is a tax rise on people who work hard—do not forget that some people receiving the benefit are in work—carers, the disabled and single mums, and it is happening because while the Secretary of State has spent a lot of time these past two years touring the country, pointing the finger at councils and saying, “You must freeze council tax”, all along he has been masterminding a council tax bombshell for those who can least afford it.

About 2 million people will remember April this year for the bills that will land on their door mats—bills that will tell them either that they have to pay council tax for the first time or that they face an increase. Why will those people, including those in authorities that decide to freeze the council tax, have a bill on their doormat? They are being singled out by the Chancellor and the Secretary of State because they have one characteristic in common: they do not have a lot of money. I say to the Minister that that is what I call a kick in the teeth.

Those same families will be looking at the TV and the papers and discovering that something else is happening in April. Bigger payslips will be dropping on to other doormats—those of people earning more than £150,000 a year, and those earning more than £1 million a year, because the Prime Minister, the Chancellor of the Exchequer and the Secretary of State have decided that those people really need a tax cut of £100,000 a year. How is that fair?

I will tell the House what this will mean in Leeds. According to the council, an estimated 41,000 families will be hit by this tax increase and by the Government’s equally unfair bedroom tax. In some cases, families will be hit twice over. In practical terms, it will mean that £9.4 million will be taken out of the pockets of people on the lowest incomes in Leeds to pay for higher rent and for higher council tax. Councils will be forced, once again, to start chasing people for money that they might not have—in some cases, small amounts of money—in a way that we have not seen since the days of the hated poll tax.

[Mr Kevan Jones]

Does my right hon. Friend agree that, in communities such as mine, the changes will have a dramatic effect on the local economy? The one thing that those people do is spend their money in the local economy.

[Hilary Benn]

My hon. Friend is absolutely right. The measures will take potential spending power and demand out of the local economy at a time when we have a crisis of growth. They are economically illiterate, as well as profoundly unfair. It is little wonder that the former Conservative Cabinet Minister, Lord Jenkin, who knows a thing or two because he was the man who designed the original poll tax, has called the Secretary of State’s plan—yes, it is his plan—the “poll tax mark 2”.

The settlement needs to be seen for what it really is. Despite the Government’s attempts to hide the truth, it is unfair and unjust. It is unfair to local residents who rely on their local services, and it is unjust in the way it hits the poorest areas and the poorest people hardest. That is why we will vote against the local government finance report today.

[Several hon. Members]

rose—

[Mr Speaker]

Order. Given the extensive interest in taking part in the debate, I have imposed a time limit of seven minutes on Back-Bench contributions. That will be subject to review, depending on progress.

17:27

[Robert Neill (Bromley and Chislehurst) (Con)]

The speech made by the right hon. Member for Leeds Central (Hilary Benn) reminded me of a certain type of popular film. It was technically proficient, but it really ought to have been transmitted in black and white, because it was so full of dated thinking. It was reminiscent of those films that we sometimes see at the British Film Institute or of the re-runs of 1970s sitcoms that we see on television at about 1 o’clock in the morning. That is a shame, because, in all the huff and puff, the seriousness and importance of the local government settlement was rather missed. That became apparent during the interventions on the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis), whom I congratulate on presenting the settlement admirably. There was a degree of collective denial that I have not seen since I used to visit clients in Wandsworth prison.

The reality is that Labour has never been able to understand that it was committed to making significant cuts in public spending, which would have kicked in in 2014-15, and that because local government accounts for some 25% of public expenditure, it was inevitable that those reductions would have to take place in local government. It is a bit rich of the Opposition to say that we have behaved in an unfair fashion, when we have essentially continued with their formula system—despite my having some thoughts to the contrary when I was the Minister responsible—with an emphasis on the equation of needs and resources.

We have updated their system to give more accurate population figures and to be fair to those in rural areas to the degree that a case could be made. The updating of population figures tends to work to the benefit of London and other metropolitan areas with more transient populations, and no doubt for that reason the helpful Library research paper states:

“Excluding London—”

we all know London has particular circumstances—

“northern regions will receive larger start-up funding assessments—”

that is, in effect, the successor to formula grant—

“than their counterparts. The South East, South West and Eastern regions will receive the lowest levels.”

On spending power the paper states:

“Excluding London, northern regions and the West Midlands will have larger spending power per dwelling than their counterparts.”

That reflects the fact that the Government accept that there are greater pressures in some parts of the country—I always accepted that as a Minister, just as my hon. Friends on the Front Bench do now, and it must be recognised. That is exactly what the Government have done and to pretend otherwise is, if hon. Members will forgive me, disingenuous in the extreme.

[Steve Rotheram]

Following the cuts to Liverpool, is the film the hon. Gentleman identifies, “A Tale of Two Cities”?

[Robert Neill]

That is a good try but the hon. Gentleman must realise that we have a persistent inheritance of underperformance by Labour Governments, and there is an unwillingness—demonstrated by his intervention and many others—to move on with the serious issues about how we deliver the best services for local authorities.

For example, it was significant that the right hon. Member for Leeds Central made no mention of the fact that we have created other funding streams for local government through the new homes bonus. That scheme accounts for the increase in receipts in some councils. They are meeting the housing deficit that Labour left behind and we are rewarding them—of course, Opposition Members have no concept that a local authority should actually be rewarded for efficiency and enterprise. That is alien to their culture, hence the criticism. No mention was made of the fact that the localisation of business rates is the first significant move of devolution in fiscal terms—the Treasury is giving up and forgoing revenue in favour of local authorities—since the second world war. I hope that in due course as the economy grows, the local share of that business rate will increase from its current level of 50%. That is 50% more than was available under local discretion when the rates were effectively nationalised and redistributed, usually under an extremely opaque formula of which the hon. Member for North Durham (Mr Jones) was one of the advocates.

[Mr Kevan Jones]

I am surprised that the Prime Minister sacked the hon. Gentleman; he obviously hopes he is in line for some honour or future preferment. He mentioned the new homes bonus, but councils that will benefit most from that are those in areas of housing growth. That does not include parts of the north-east and elsewhere where, because of the Government’s incompetence, the housing market is not only flatlining but declining.

[Robert Neill]

I have a lot of time for the hon. Gentleman but he does not do himself justice by that intervention. He is in no position to criticise given that we inherited the lowest ever level of housing starts in peacetime thanks to his Government. I do not think that works. Given the area he represents, I am tempted to suggest that he might like to take on board a further note from the helpful Library research paper on assessments of funding:

“For shire districts and single tier authorities controlled by the main political parties, average start-up funding assessments and spending power per dwelling will be lower amongst Conservative controlled authorities and higher amongst Labour controlled authorities.”

If that is not recognising the reality and fairness, what is? Of course, a similar comparison could not be made with county councils because there were no Labour county councils to compare the figures with.

[Mr Jones]

What about Durham?

[Robert Neill]

Durham is in the unitaries. I was glad to hear recognition of local authorities as among the most efficient parts of the public sector. That may have something to do with the political control of the majority of local authorities. In reality, this settlement is not just about the important level of funding for this year and next year, but about setting a course that rewards local authorities that think outside the box.

An important point to make about that is that it is slightly depressing to hear, in a number of interventions from Opposition Members, the mantra, “We are worried about the cliff edge; we need to rebuild the base.” With respect—I say this from my experience, for what it is worth, in local government and from my period as a Minister—that is a profoundly misguided approach to adopt. The world of public service delivery is changing. Simply rebuilding the base on its old basis is not the answer. The base will never be as it was before, because the way we do things will never be as it was before. We are seeking to give local authorities the flexibility in their funding arrangements to find new ways of using their budgets, not simply saying, “Let’s get back to the old levels of money and the old way of doing things.” That was the mentality that got us into this mess in the first place. On the contrary, through the initiatives announced by my hon. Friend the Minister to reward efficiency much more—I hope we can look at what more we can do in future—we are giving local authorities an incentive to work together. It is not about how much local authorities get; it is about how they use it.

To give one example, I have mentioned in the past the London borough of Tower Hamlets—that well known local authority—which, among other things, manages to spend £1.2 million on eastend life, its information newspaper, which contains restaurant reviews, the football scores and other things that are entirely germane to local council services in its area. No doubt Opposition Members will say, “Oh, what’s £1.2 million here or there?”—that is not the sort of money they are interested in—but let us contrast that with my borough of Bromley, which has never run a municipal newspaper in its life, but which, when it needs to, simply takes out an advertising wraparound with the free sheet. I can tell hon. Members that Bromley has been done: it is appointing a shared director of public health, because part of the important ongoing work on public health funding—to which the right hon. Member for Leeds Central referred—is aligning it more closely with social services and adult social care funding. That is what Bromley is doing: it is working with a Labour council next door on joint procurement of IT services. Bromley is also looking at joint working on its legal and library services.

Those are the things that sensible councils across the country are and should be doing. To sneer at that and say, “Oh, this is just ‘50 ways to insult people’” indicates a mentality that I have not seen in public life since King Charles X of France was evicted from the Tuileries by the mob in the warm-up for “Les Misérables”. At the end of the day, they have not moved on and they have lost—

[Mr Speaker]

Order. We are grateful.

17:37

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

Clearly these are difficult times. As my right hon. Friend the Member for Leeds Central (Hilary Benn) said from the Front Bench, there will have to be reductions in local government spending. Our task today is to examine whether the cuts that have been made are fair and reasonable.

Let us look at what the Local Government Association has said. It calculates that, over the four-year period of the comprehensive spending review, local council spending power will be reduced in real terms by a third. That is a significant reduction—indeed, a massive reduction. We are not just talking about local council spending; we are talking about the services that the money is spent on and the effect of the withdrawal of those services on our local communities. The Minister talked about hard-working council tax payers, and, of course, council tax payers are, by and large, hard working; but not once did he refer to hard-working recipients of council services. People will now lose those services, which in many cases they rely on. It seems as though the Government are saying to our country and the public at large that libraries, parks, environmental health and adult social care are, in some way, second-rate services that we should have less regard for, because they are prepared to make cuts of a third to those services, but cuts of only 20% across the board to other Government services. What they are really saying is that those local services, which our communities value so much, are worth less and should be esteemed less than other things the Government do.

I have to say that a little bit of me has started to wonder whether it is more comfortable for Ministers to see councils and councillors as something of a human shield—people they can hide behind or to whom they can say, “You’re the people to blame in your local council chambers.” They are the people the public can get at for making the cuts that are affecting them. There is someone between Ministers and the impact on local communities of the cuts they are making to council services. The councillors can always be blamed, and I am very concerned that it is easier for Ministers to make cuts in this area.

Councils have always been very good. Under the Labour Government, when we used to have increases in council funding each year, councils were always required to make 2% efficiency savings a year. It is interesting that in the latest MORI poll two thirds of the public said that they had not yet noticed any impact from council cuts on their lives. That will change, but it shows how good councils have been so far in absorbing the savings and achieving the efficiencies that have been requested of them. But people will be affected and, frankly, the Secretary of State’s 50 ways to save the world will not save our local service.

The Minister talked about the pennies being important. Of course saving pennies is important. When I went to a meeting at Sheffield council the other day I did not get tea or coffee and biscuits. They were not provided. When I do my surgery at Crystal Peaks library on Saturday morning, there is a private coffee shop in the foyer which the council has rented out. Those are the sorts of things that are being done. Sheffield has a brilliant record of collecting council tax—a 99% collection rate—although that is likely to change with the changes to council tax benefits, when it will have to try to get £2, £3 or £4 from people who cannot afford it. We have saved more than £2 million a year through going to an alternate-week bin collection, and I have not had a single member of the public write to me with a discarded chicken masala in hand saying, “Our human rights have been breached by this terrible change.” It has gone very smoothly, and recycling is now rising as a result.

Over a four-year period, Sheffield council will have to save £230 million. That is a reduction in spending power of £200 a head, but other councils—such as Windsor and Maidenhead, and Richmond upon Thames—have to make savings of less than £40 a head. That is five times more in Sheffield than other authorities. The Minister will say that Sheffield gets more grant, and because it has had more grant, there is more grant to cut. But Sheffield, like other cities, has had more grant because it has fewer resources and more need than other areas. Ministers are taking grant from areas that have traditionally had more grant, but those are the poorest, most deprived communities where the cuts are hitting hardest. That is simple reality.

[Dan Rogerson (North Cornwall) (LD)]

The hon. Gentleman is right to say that deprivation is a key part of the formula. It always has been and it always should be. But, as I understand it, a density factor was added to the formula by the previous Government for which there is no justification, as it is cheaper to provide services in areas that are more densely populated. That is the sort of issue that we need to resolve in coming years.

[Mr Betts]

There are lots of factors that have been put into the formula in the past. We can all make arguments about the details. For example, it is more expensive to provide services in Sheffield because of its topography. We have hills, so construction costs, such as for the tram, go up. But on the index of deprivation, the most deprived areas will get the biggest cuts. There is no argument about that—if there were, Ministers would be jumping up to the Dispatch Box to deny it.

The Secretary of State says, “It is all right, councils have got reserves. There is no need for cuts.” That is not true. Yes, Sheffield has around £150 million of reserves, but more than £25 million of it is held for schools, and it cannot spend that; £25 million is in the housing account, ring-fenced and dedicated; some £50 million is to be allocated for capital projects; and then there is the money that has to be used to match-fund a PFI scheme that the Government have just approved—I give credit to them for taking forward that Labour scheme. That leaves around £11 million of reserves, and it would be folly for the council to put that money into services next year and leave itself with no reserves. So the council is being prudent and appropriate, as are most councils, in how it deals with that issue.

[Mr Kevan Jones]

Does my hon. Friend agree that there is a sleight of hand in things like the new homes bonus? The Government are giving with one hand and taking away with the other. Newcastle, for example, will get £6 million for 2018-19, but will lose nearly £17 million. The 12 councils in the north-east will lose some £275 million over the period.

[Mr Betts]

There are smoke and mirrors all over the place. Ministers talk about the new homes bonus as if it were new money as well as new homes. It is not: it is top-sliced from the grant. In Sheffield’s case, the figures are very stark. For every 55p the council gets from the new homes bonus, it would have received £1 if the money had been allocated through the grants system. It is not that Sheffield does not want to build new homes. There is a reason. The market is flat in the private sector, the money for housing associations comes through the Homes and Communities Agency and the money for council housing is not there because the Government have capped the amount councils can spend from the housing revenue account. That is why not so many new homes are being built in Sheffield—it is not through want of trying or want of effort on the part of the council.

I note that the council was blamed by the Deputy Prime Minister the other day when he said that it was cutting front-line services. Yes, it is. There is a proposal to close the Don Valley stadium where Jessica Ennis trained because there is not enough money to keep it going. There are cuts to early-years provision because the council has lost more than £6 million in grant directly, so it cannot be kept going. There are cuts to the eligibility criteria for adult social care.

The Deputy Prime Minister ridiculed the council for cuts to libraries. What the council is doing is a very detailed and proper consultation, recognising that it simply cannot afford to keep libraries going in the way they were funded in the past. It is looking at 10 different models from 10 different authorities across the country. Those are out for public consultation on the different ways of doing things. That is a responsible way to try to approach a very difficult situation.

The council was also ridiculed by the Deputy Prime Minister for spending £2 million on council meeting rooms. No, it has not done so. It has had to make some essential repairs to a grade 1 listed building, the town hall, and it is putting money into reorganising the council accommodation to save £30 million in running costs over a 10-year period. It is not just Labour-controlled Sheffield that is doing that; many councils up and down the country and of all political persuasions are approaching things responsibly in that sort of way.

The Government should listen to the siren voices—Sir Merrick Cockell, Baroness Eaton, the leader of Kent county council. These are not just siren voices, but voices of reason. The graph of doom, whether it comes from Birmingham, Barnet or Sheffield, is a reality. The reality is that if we keep on cutting council funding and the demand for social care goes up, other council services are going to get squeezed out of existence.

Ministers are fond of saying that localism is not just about councils. No, it is not; it is about communities as well. At the end of the day, these cuts are not going to hit councils; they are going to hit communities, and they are going to hit the most deprived communities hardest. When the public, already sceptical, see these cuts become a reality, the anger against this Government will grow considerably in the coming months.

17:47

[Annette Brooke (Mid Dorset and North Poole) (LD)]

My starting point is to accept that the cuts are tough, but that as local government accounts for about 25% of all public expenditure, local authorities were always going to have to play their part in fixing the black hole in the nation’s finances.

I want to recognise the fact that local government has shown great skill in reducing its budgets. Committed local authorities have protected front-line services, and it is a credit to councils across the country that satisfaction in council services has gone up. It is important to recognise the positive leadership given by many councillors in responding to the challenges presented to them.

I welcome the fact that this local government financial settlement is moving away from an unfair and incomprehensible formula grant system. This will put more power into the hands of local councils by letting them keep more of what they raise locally in business rates. I am firmly in favour of the principle of localisation of business rates. Local authorities will directly retain nearly £11 billion of business rates instead of returning them to the Treasury. Allowing councils to keep more of the business rates they generate should encourage them to have a greater stake in driving growth in their communities. It is a move in the right localist direction.

I hope we will travel further, but I understand the necessity for safety nets and protections in the early days of this system. If councils really make the system work for them, they will bring in considerable extra funds. Whatever they do with the extra funds they bring in by their own actions, it means that they can protect their spending more, which is the important thing. This is the message—that authorities must get on and improve their local economies so that they can protect the front-line services people rely on so much.

We need to recognise, however, that uncertainty exists as we move to the new system. Looking further to the future, there are fears of more cuts to the local council tax benefit support grant. The current situation worries me. It will be interesting to see how different councils handle it. However, the future is potentially more worrying. The National Association of Local Councils has expressed concern about billing authorities’ passing 100% of the available parish grant to local councils this year and in the future.

We had a rather rushed debate about rural councils the other night, but I think that points were well made. Those of us who represent rural areas—including my hon. Friend the Member for South Dorset (Richard Drax), who cannot be present for the debate—feel that the extra cost of providing services in rural areas needs to be assessed. We need to be given some factual basis for it, and we need to look beyond one year. The £8.5 million provided by the Government shows that they were listening, but I think that, just as there was concern about a two-year grant, there is concern about a one-off payment of £8.5 million. I do not think that, in itself, will solve the problem, although it is very welcome.

[Andrew Bingham]

I, too, was present for the debate on the settlement for rural areas, and I share the hon. Lady’s concern, as does my hon. Friend the Member for Beverley and Holderness (Mr Stuart). Is she, like me, slightly heartened by the Minister’s assurance that he will listen and talk to us beyond this settlement, so that we can discuss future settlements and those of us who represent rural constituencies can perhaps rest a little easier?

[Annette Brooke]

I should certainly like that conversation to reach some conclusions before 2020.

I am glad that the Minister listens to representations, and that there will be more flexibility for shire districts and fire and rescue authorities in relation to the referendum that is required for council tax rises of more than 2%. The rule is being amended to enable shire districts with the lowest council tax rates this year to introduce rises above that level without a referendum, as long as the cash increase in the basic amount is no more than £5. That option will be available to Dorset’s fire and rescue service, which is acknowledged to be very efficient. Dorset fire authority will be given more choices when it sets its budget for 2013-14, although it will face some very difficult challenges.

Many councils are sharing services to cut costs. I have mentioned East Dorset and Christchurch, which have a single chief executive. However, they recognise that they must go much further, and they already have, effectively, a single planning department. There is scope for transforming the delivery of council services.

We should also acknowledge the Government’s provision of other funding pots for local government. The additional £2.4 billion provided for adult social care was extremely important. However, I would be remiss if I did not mention that Poole unitary authority—like so many other authorities—is very concerned about the continuing pressures on the overall budget for support for individuals needing care. The Local Government Association is pleased that the Government have listened to its concerns about the sector, and I note the increased funds that councils will receive for their new public health duties.

There are no two ways about it: we live in difficult times, and difficult decisions are having to be made. However, if there is flexibility and we really work with the local community, difficult times may be the right times in which to use our reserves when that is appropriate.

17:53

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

I should inform the House that my wife is a member of Tameside metropolitan borough council, one of the two local authorities in my constituency.

The Minister’s opening remarks beggar belief. Either he is completely out of touch or he does not understand, or does not want to understand, the impact that this settlement is having on local authorities such as Tameside, Stockport and many others represented by hon. Members. As was pointed out by my right hon. Friend the Member for Leeds Central (Hilary Benn), it is extremely unfair. That was expressed to me loudly and clearly at a budget briefing seminar that was arranged for my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) and me by Tameside council last Friday. To say that the budget seminar was thoroughly depressing would be a massive understatement.

The starting point is that the comprehensive spending review for 2011-12 to 2014-15 has outlined real-terms reductions of about 28% in central Government funds for public services. However, Tameside will experience an overall cash cut equating to a reduction in funding of 43%. That is massive in any terms.

[Mr Kevan Jones]

Also, does my hon. Friend agree that no matter how many pot plants councils get rid of—indeed, even if they were to cut all chief officers’ salaries—no organisation could absorb such a cut without there being an impact on front-line services?

[Andrew Gwynne]

My hon. Friend is absolutely right. Tameside council is an excellent, four-star local authority. It has been highlighted as having some of the best financial procedures of any local authority. It is well managed, and it has met the Gershon savings put in place by the Labour Government with commendation and improved services at the same time. These new cuts are too far and too deep for an authority such as Tameside, however.

Using the Government’s own notional spending power methodology, Tameside’s funding cut will be 1.7% in 2013-14 and 4.9% in 2014-15, amounting to 6.4% over the two years, which is higher than the England average of 5.5% for that period. Those calculations exclude specific grants, of course, such as capital grants, grants for funding education and ring-fenced grants. However, this analysis does not reflect reality for a number of reasons. First, the starting point is taken as the adjusted start-up funding position used in the calculations for the 2013-14 grant, not the actual amounts received in 2012-13. Secondly, the cost of the council tax support scheme is included in both the council tax requirement figures and the start-up funding level, which distorts the reported position.

As was mentioned earlier, further analysis has shown the reduction in spending power, and as I mentioned in an intervention on my right hon. Friend the Member for Leeds Central, it is telling that no council in any region outside the south, with the exception of Cheshire East, has a reduction in spending power of between zero and £50 per person.

[Fiona Bruce (Congleton) (Con)]

As a Cheshire East MP, may I ask the hon. Gentleman whether he is aware that grant funding means that Manchester has three times more per head than Cheshire East? If Cheshire East had the same funding it would not need to charge council tax at all and would have £30 million left over.

[Andrew Gwynne]

There we have it! That highlights just how much Government Members do not get it. I am not here to speak for Manchester. I am a Tameside and Stockport MP, and the reduction in spending per head of population in Tameside is £160.98, yet Tameside is the 56th most deprived area in the country with real social needs. That is why this reduction is so unfair, and the hon. Lady just does not get it.

The savings requirements are £26.5 million for 2013-14, £13 million for 2014-15, £31.94 million for 2015-16 and £46.685 million for 2016-17, amounting to a total of £118.125 million over the next four years. That is just wrong—it is not fair in any sense of the word.

Let me briefly run through the kind of savings—cuts—that Tameside’s council is having to make. On adult services, the council is having to: redesign day services for adults; reduce home care packages; streamline care pathways; reduce voluntary sector grants by 20%; withdraw financial support from luncheon clubs; reduce employment services; outsource further homemaker services to the independent sector; and cut health and well-being services. We are talking about £3.485 million of cuts in 2013-14 and £1.388 million of cuts the year after.

On neighbourhood services, the council is putting in place: new operation structures for district assemblies—that means reducing grounds maintenance, and making cuts to parks, street scene and litter removal functions; an amalgamated parks and countryside service; efficiencies in third sector funding; a new, single, risk-based highways function—that means filling in pot holes; and more savings from the libraries review.

[Mr Kevan Jones]

Does my hon. Friend agree that his local council not only faces pressure on employment and other things, but has about 25% more looked-after children than Cheshire East council?

[Andrew Gwynne]

My hon. Friend makes an important point, which brings me on to what is happening to children’s services. Next year, cuts to children’s services in Tameside will be £4.636 million and the year after the figure will be £6.509 million. This just is not right; the services being cut are for some of the most vulnerable people, both young and elderly, in our society.

Let me briefly mention the issue of reserves, because it has been raised before. My hon. Friend the Member for Sheffield South East (Mr Betts) rightly says that most of the reserves are tied up for schools and capital schemes in any case. By 2015, Tameside’s council will have £12 million in reserves. That is not enough to deal with the equal pay claims, because they continue to be major areas of risk for the council, not least in view of the judgment made against Birmingham city council in its case.

Stockport faces the same situation; Stockport metropolitan borough council is losing £96.59 per person over these four years. Stockport’s council is much more affluent than Tameside’s, but this settlement is still unfair to it and worse than the settlement anticipated by its Liberal Democrat council. Come the end of this week, that council, too, will be looking at huge cuts to park services, to libraries and to support for children. This is just not fair. It is not fair on places such as Greater Manchester, it is not fair on most of the north of England and it shows that this Government just do not get it.

[Several hon. Members]

rose—

[Mr Speaker]

Order. In order to try to accommodate the remaining colleagues who wish to contribute, the time limit on Back-Bench speeches has now to be reduced, with immediate effect, to five minutes.

18:03

[Dan Rogerson (North Cornwall) (LD)]

I am very grateful to you, Mr Speaker, for calling me to speak in this debate. I had hoped to be called in the debate that was held a couple of days ago on the specific issue of rural funding, so many of my remarks will concentrate on that issue and how it affects places such as Cornwall.

It is a pleasure, in a sense, to follow the hon. Member for Denton and Reddish (Andrew Gwynne), who made a passionate plea on behalf of his constituents, as we would expect from any MP. However, I get frustrated with hearing time and again how deprivation is in urban areas; how all the indices, which have been around for some time, to pick up on the real deprivation in urban areas are the only justification for spending; and how we should be looking at this formula and the settlement, and tilting it even more towards urban areas. Those areas have, in fact, historically done much better than areas such as mine.

Cornwall is not what some people might think it to be; it is not a leafy playground full of people wandering around with huge amounts of cash in their back pocket. In reality, it is one of the most deprived parts of the country. Wages are lower than they are in most parts of the country. Even after the accession countries joined the European Union, we are still receiving structural funds to try to help our economy get out of the state it is in. The objective 1 programme existed in many other parts of the country, such as south Yorkshire, but its successor, the convergence programme, is still delivering in Cornwall. After what the Prime Minister told us on Monday, it looks as though it will continue.

Cornwall needs support and investment, but the formula is stacked against it. We often discuss sparsity, on which the hon. Member for Beverley and Holderness (Mr Stuart) has done a great deal of work. The hon. Member for Workington (Sir Tony Cunningham), the hon. Gentleman and I have worked with many other Members on both sides of the House to raise the issue with Ministers.

The funding formula is a very involved beast, but sparsity is one of the factors that has not been fairly reflected over the years. To the Minister’s credit, he has listened to us, and the Under-Secretary of State for Communities and Local Government, my right hon. Friend the Member for Bath (Mr Foster), has also looked at the issue. I hope we can make progress.

The issue is compounded by similar formulae in other areas of public spending. We are rightly looking for ways for local government and health to come together to share costs and investment in services, whether social care or health, but those formulae also clobber areas such as Cornwall. Even when the formula shows underfunding, we have the wonderful damping process, so we never get to where we should be.

I understand the reason for damping. Everybody understands that if an area is shown to be overfunded for whatever reason—population changes, for example—compared with some point previously, and another area is underfunded, we need a period of transition to get things right. What seems to have happened over the years, under the previous Government and before, is that the process never achieves what we set out to do; damping is at such a high level that we do not move in the right direction to resolve the problem.

Cornwall has done what it can to be more efficient. We adopted the unitary local government model, which was painful because there was a lot of cultural and structural change to get seven local authorities down to one, and there were job losses too, but if we had not been through that process we would have been far worse off. We have good local town and parish councils that are taking on responsibility for some services that the county council provided—the things that visitors to Cornwall expect, such as public toilets—but without much revenue.

Council tax has historically been higher in rural areas, while there is also an additional element levied by local councils. In areas such as mine, we have low wages, historically high council tax in some parts—

[Mr Speaker]

Order. I appreciate that the hon. Gentleman is happy to be speaking, but a number of Members have withdrawn from the debate, so I am putting the limit up again. The hon. Gentleman has a couple more minutes if he wants them. He is not obliged to use them, but he can if he wants.

[Dan Rogerson]

I hope my contribution did not put off so many Members that they left the Chamber, Mr Speaker.

Local councils will face pressures too, so we need to look at the amount they add to council tax. There are particular pressures on rural areas, as the Government acknowledged in their consultation last summer, but although they looked as though they were moving in the right direction we have yet to see the fruits of that labour.

[Mr Graham Stuart]

I congratulate my hon. Friend on his work representing rural areas. Does he agree that starting from next year’s settlement we must see an unwind of the rural penalty whereby 50% more per head goes to urban areas? We must see that figure reduced to no more than 40% by 2020. It can be done without major impact on other areas, and it will bring justice and fairer outcomes for people in rural areas who have suffered too much, too long.

[Dan Rogerson]

The hon. Gentleman is absolutely right. There is a penalty—a disadvantage—for people who benefit from living in a rural area, and the gap should gradually be narrowed. We are not saying that it should be entirely eroded. Members from urban constituencies have made the case for their areas of need, but the gap has widened. If the direction of travel is right, we will be much happier.

On public spending, public sector jobs in national Government are another way of making sure that the public sector pound is reaching all parts of the country. In rural areas, the number of jobs in the Government sector has gone down, because Her Majesty’s Revenue and Customs, for example, has got rid of smaller tax offices and jobs have been combined in city areas. It should not go unnoticed that there is a concentration of public spending in urban areas, and that it is leaving rural areas.

[Andrew Percy]

What is incredible about this debate is the lack of understanding among Opposition Members of rural areas. I represent the most deprived part of the rural East Riding, which is as deprived as much of Hull, with a life expectancy of 73. However, local pupils and elderly people receive much less in care and services than they would in areas such as Hull or Doncaster, which are as deprived as Goole.

[Dan Rogerson]

The hon. Gentleman is right. We need to make sure that we get the formula right so that it captures all those factors.

Another factor that is particularly acute for health, but also for social care and the provision of other services, is the ageing demographic. There is an inward migration of older people and an outward migration of younger people, who go to live in urban areas. What particularly dismayed us was the idea that the large element of damping would be frozen for a number of years. The best message that I have taken away from today is that that is not set in stone, and that we will have an opportunity to review it. I can assure the Minister that rural Members will continue to campaign for a fairer settlement for rural areas in years to come, and we look forward to hearing just what can be done to put this injustice right.

18:11

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

I am grateful for the opportunity to speak, and for the additional time to present a deeply concerning issue for the people of Newcastle upon Tyne.

The coalition Government talk about localism and devolving power, but they are clearly trying—and they are fooling no one—to shift the blame, claiming to give power and responsibility to councils while savagely and disproportionately slashing their budgets and ability to do what they do best. That is exemplified by changes to council tax benefit, which devolve responsibility for administering the benefit while cutting funding by 10%, which is effectively 11% in Newcastle, forcing local authorities into the invidious position of having to pass that cut on to local people who are struggling with the rising cost of living. It is also exemplified by the bedroom tax that is coming, as councils will be forced to absorb that into their budget or pass it on to people who are struggling, having been hit by the Government’s economic mismanagement.

I want to focus on the disproportionate cuts imposed on local authorities such as my own, Newcastle city council. My right hon. Friend the shadow Secretary of State referred to the comparison between his local authority, Leeds, and Wokingham, but we are all familiar with the comparison often made between Newcastle upon Tyne and Wokingham. Over the period of the 2010 spending review, the Department will see a 33% cut in real terms in funding. True to form, Conservative and Lib Dem Ministers have passed those cuts on to the most deprived and vulnerable areas in the country. Those who can least afford it are shouldering the greatest reductions in funding.

As hon. Members may be aware, I have raised this with the Minister both in an Adjournment debate and yesterday in Deputy Prime Minister’s questions, because my local authority, Newcastle city council, is in a dire financial position as a result of a combination of ever increasing cost pressures and hugely disproportionate reductions in funding from the coalition Government, which has created a budgetary black hole. The city treasurer has revealed that the funding gap in Newcastle by the end of 2014-15 will not be £90 million, as originally thought. Following further announcements by the Secretary of State at the end of last year, that will increase by an additional £10 million, so the black hole will now be as large as £100 million over the next three years. Around half of this is a direct reduction in central Government grant funding, with the rest being unavoidable cost pressures that the council must absorb. Based on the Department’s own figures, the cut in Newcastle’s spending power between 2012-13 and 2014-15 will be £218 per person, compared with a national average cut of £134 per person. At the same time, as my right hon. Friend the shadow Secretary of State set out, the Prime Minister’s own local authority is getting an increase in spending power of 3.1% in its local government finance settlement for 2013-14. The claim that we are all in this together would be laughable were it not such an insult to the reality that people are facing.

The most deprived areas where the needs are higher are once again being punished by this Government, willingly assisted by Liberal Democrat colleagues. Newcastle city council has produced research that reveals that the 50 worst affected councils will receive a reduction of £160 per head on average, with the 50 councils least affected receiving a cut of £16 per head. Yet the 50 most affected have, on average, a third of children living in poverty, whereas the 50 least affected have child poverty rates of 10%. It is truly shameful.

The excellent heat maps produced by Newcastle city council clearly and easily illustrate where the Government are aiming their cuts: at the most deprived northern areas and inner London boroughs. Put simply, the areas that are being hit hardest are the areas that are most in need and require the most support—the areas where more children are taken into care, the areas where fewer adults are able to fund their own social care, the areas with higher levels of statutory concessionary travel, areas with more specialist housing need and higher levels of homelessness.

When we raise the situation currently faced by Newcastle and many cities like it, Ministers are fond of touting the tired comparison between my city and the town of Wokingham. Let me continue in that vein. By 2015 Newcastle will receive funding cuts of £218 per head. In the same period Wokingham will receive cuts of just £27 per head.

[Brandon Lewis]

Will the hon. Lady give way?

[Catherine McKinnell]

I will gladly give way if the Minister can explain how that is fair.

[Brandon Lewis]

Will the hon. Lady acknowledge that her authority will have a spending power cut of just 1.1%? That is below the national average.

[Catherine McKinnell]

The Minister is well aware that he is talking at cross purposes with what I am setting out, which is the impact over the next three years, not in the next financial year. I hesitate in case it is out of order to say that it is very disingenuous for the Government to present these figures in a way that does not match up—

[Mr Speaker]

Order. The hon. Lady should not attribute an unworthy motive to the Minister. Therefore I feel sure that through her dextrous use of language she can find another word to make her point.

[Catherine McKinnell]

Thank you, Mr Speaker, for keeping me in order. There is clearly a difference of opinion about the impact of the cut and the period we are talking about.

Yes, Newcastle still has spending power per household of £2,522, which is over £700 more than the £1,814 per household in Wokingham, but Newcastle is more deprived and has higher needs. Newcastle has 550 looked-after children, compared with 70 in Wokingham. That is 101 looked-after children per 10,000 children in Newcastle and 20 per 10,000 in Wokingham. Newcastle has nine times the cost of statutory concessionary travel owing to high numbers of poorer pensioners travelling in the city, and Newcastle has fewer people able to fund their own social care, greater homelessness needs, higher council tax support needs and a lower council tax base.

I am sure many of my hon. Friends have already highlighted similar differences between the settlement in their authority and those in other—predominantly Conservative—local authorities, which are not seeing the same level of spending cuts. Local authorities are having to slash front-line jobs and close Sure Start centres, libraries and many other vital services as a result of these unfair and disproportionate cuts.

I must return to a point I raised with the Deputy Prime Minister yesterday regarding some Liberal Democrats in Newcastle who are campaigning against the impact of the cuts. Once again, I would extend a welcome to any Liberal Democrat MPs who want to join us in the Lobby tonight and vote against this unfair settlement. Otherwise, they have no place campaigning against the impact that will result if it goes through.

18:19

[Mr Graham Stuart (Beverley and Holderness) (Con)]

It is a pleasure to take part in this debate on the local government settlement for 2013-14. I start by paying tribute to the Minister, who has gone out of his way to make himself available to those of us who are concerned about the impact of the settlement and to listen to us. I appreciate the way in which Front Benchers have engaged with this.

I will speak mostly about funding for rural areas. The Rural Services Network, which brings together not only local government in rural areas but all sorts of health bodies and others, has analysed this year’s settlement and found that, at first look—I do not want to repeat too much of the debate we had on Monday night—the effect of damping in the eventual settlement is to increase the rural penalty, which already sits at 50%. Urban areas, as defined by the Government, get 50% more per head than rural areas.

Opposition Members should try telling the hon. Members for Workington (Sir Tony Cunningham), for Bishop Auckland (Helen Goodman) or for Copeland (Mr Reed) that rural areas are all leafy and wealthy. They should come to my constituency, visit Withernsea and the areas there and see whether everyone is wealthy. They are not. We need to ensure that allocations are fair, based on need.

[Neil Parish (Tiverton and Honiton) (Con)]

Does my hon. Friend agree that the rural penalty, which he is describing so eloquently, is getting worse, not better? Although we are absolutely delighted that Ministers are listening to us, I believe that we can mobilise the yeomanry in the countryside if we need to in order to make our point, because we want Ministers not only to listen, but to act.

[Mr Stuart]

I am grateful to my hon. Friend, who led the Back-Bench business debate on Monday. He is absolutely right. The test for the rural fair share campaign, which I chair with my hon. Friend the Member for North Cornwall (Dan Rogerson) and the hon. Member for Workington, is to have an urban-based Labour MP, moderate and reasonable—quite a number are—if not exactly getting out the bunting and cheering at the prospect, then recognising the strength of the argument in favour of fairness and meeting the needs in rural areas.

It is not some sort of grab. I think that it was perhaps too easy under the previous Government, with a Labour majority, to use deprivation and the cry from the big urban areas to keep skewing the funding more and more. It was both politically convenient and the deprivation provided a kind of moral veil. The position we are in now, with a rural penalty of 50%, is indefensible. If it is defensible, will someone please stand up and make the case?

Age is also a key driver of cost. In rural areas such as the one I represent, we have both an elderly population and a great number of people on low incomes. That combination needs to be addressed, as does the cost of service delivery, because it is more expensive to deliver many services, although not all, in the rural East Riding than it is to deliver them in north Hull. The last thing I want to do is talk down the residents of north Hull or of any other part of the country, urban or otherwise, but we need to have another look at need and ensure that we, preferably with a broad consensus across the House, can have a settlement that is fair to all, even at a time of reductions in public spending, as we are seeing now.

[Andrew Percy]

I agree with what my hon. Friend has just said. Will he confirm that what we have actually heard today from Opposition Members is that they do not understand the argument about deprived communities, such as mine in Goole and across north Lincolnshire? They are continuing to defend a system that works against the interests of people in rural communities such as mine.

[Mr Stuart]

My hon. Friend is right. The Opposition have made it absolutely clear that they wish to maintain the unfairness that impacts on the services provided to his constituents day in, day out. That is their message. Further to that, every single Opposition Member who says that they do not want this level of reduction in the overall amount spent on local government is calling for that money to come from cuts to the NHS. That is the truth. The Labour party has made it clear that it will not protect the NHS. It is only the Government who are committed to doing so and Labour Members, in every impassioned speech they make, are calling for reductions in spending on the NHS—real-terms cuts in health—so that councillors’ pensions can be protected alongside services.

[Catherine McKinnell]

Will the hon. Gentleman give way?

[Mr Stuart]

Perhaps I have been so provocative that I owe it to the hon. Lady to give way.

[Catherine McKinnell]

I thank the hon. Gentleman for giving way. Some of the cuts that are being driven through in many of our cities will increase NHS costs because of the lack of support for vulnerable children and elderly people. The general lack of public services will ultimately be detrimental to people’s health.

[Mr Stuart]

I cannot help noticing that the hon. Lady absolutely refuses to rule out cutting the NHS, because that is her party’s policy. Most parties that go into opposition split—they start to divide. The unity of Labour in its commitment to cutting the NHS is, from the point of view of party loyalty, admirable. The hon. Lady, like other Opposition Members, has made it clear that the NHS can pay so that local government will not have to be asked to be more efficient and make savings.

Rural areas have long been poorly funded compared with urban areas, and they start from a significantly lower base. Talking about cash reductions in areas that receive much higher amounts of money does not give a fair and balanced picture. I agree that we should see the argument from all sides with regard not only to cash reductions, but to percentage cuts. The hon. Lady heard the Minister say that the percentage cut in Newcastle, which has a vastly greater budget than rural and deprived areas of the East Riding, is experiencing lower levels of reduction. To make out that it is the opposite and that this is an unparalleled assault on cities such as Newcastle misrepresents the settlement.

As I have said, the costs of delivery in sparsely populated areas are often higher than those in urban areas and, overall, rural residents earn less on average than people in urban areas. Labour Members have made out that everybody in an urban area is in the most terrible, deprived state, but most people in the cities are not and lots of people who live there earn more. They have higher average earnings than those in rural areas. Council tax in rural areas, where incomes are lower, is £75 a head higher. If we apply that across the household, we will see that the spending power in rural areas is lower. I sympathise with Labour Members on the closure of cultural centres in their areas, but my area does not have any because we do not have the money—the distribution is not fair.

Fair-minded people should recognise that reality. For too long, strident, sectarian interests have been allowed to dominate the debate. I call on Ministers to do more to understand the real costs of delivery across different service areas and make sure that we have a more informed debate than the political mud-slinging of those who represent urban areas as being entirely deprived. I do not want to be guilty of that in a rural sense.

The Department’s consultation in summer 2012 promised some improvement, but 75% of it was damped away. Since then, in meetings with the Minister, who, as I have said, has been most generous with his time, we have tried again and again—it is interesting to see Department officials present—to get the numbers so that we can all agree on them. I have brought along with me, especially for the Minister—I will hand it to him—the official governmental criteria of classification of councils, because Ministers have told me that they are not sure precisely how it works. Will the Minister who winds up the debate tell us what is happening to rural areas? I know this is not how money is allocated, but will the Department please do the assessment, if it has not done so already, of where the money is going to councils?

The official criteria of classification were agreed across Government in 2009. The document defines areas as rural-80, local authorities, rural-50, significant rural, major urban local authorities, large urban and other urban. Does it say that it is impossible to classify them? It does not—it is not true. It has been done by Government and the least that Ministers owe us is to tell us how those numbers work out across those particular designations.

18:29

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

Having listened to what Ministers have said this afternoon I really think that they are living in a world of fantasy and make-believe.

For Liverpool, and for similar places, this is a harsh settlement. It is part of the Government’s onslaught on local services and local government. Beyond that, it is part of a toxic package of Government cuts to local services, housing benefit, council tax benefit and welfare, together with the introduction of the bedroom tax. The combined effect of all these measures is to inflict severe hardship on local communities and, in particular, on children. When my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg) raised this issue a couple of months ago and received the Government’s response, it became very clear that they had not paid any attention whatsoever to the cumulative impact of these savage cuts. That is shameful. The Government seem to be ploughing ahead with their cuts to deprived areas such as Liverpool as though they do not have a care in the world. That says more about their attitude, ideology and philosophy than it does about their competence.

Let us look at some facts. According to the indices of deprivation, Liverpool is the most deprived local authority in the country. Next year, it will be forced to cut £32 million from its local government budget, on top of the £141 million it has cut over the past two years, and there is more to come. Indeed, over a four-year period it is being asked to cut more than 50% of its controllable budget. It has been shown that for every individual in Liverpool the cumulative effect of four years of cuts is a cut in spending of £329.54 per head. So Liverpool is not only No. 1 in terms of deprivation but right at the top of the list for the amount of spending cuts per head that this Government are inflicting through local government cuts alone.

Liverpool city council is a very responsible council, and it has done what it can to protect local people against Government cuts. One of the first things it did when faced with the challenge of these cuts was to review how the whole council operated. It has slashed £30 million from its administration and cut out a half of its senior management. It has also done what it can to protect services. I will give one indication of what it has achieved over the past two years. Last year, the Sure Start centres were under great threat because their budgets had had to be reduced by over 50% due to the cuts in funding, but as a result of changing how those centres operated, in some instances affecting services adversely, they have remained open.

Now, we in Liverpool face the Government demanding even more cuts of the city. The council is continuing to review how it delivers its services, and it is looking for new ways of providing funding, but it will not be possible to protect public services. It is also an entrepreneurial council, engaging with business to bring investment into Liverpool. At the same time as fighting against these unwarranted and unjust cuts to local services and local people, it is holding its hand out to businesses to try to support investment and maintain jobs and employment in the city.

It is a simple fact that people in the most deprived area of the country, where 22% of the 100 very poorest local areas are found—the super output areas—require public services. Indeed, a decent society requires public services. The Government’s actions in relation to local government cuts and cuts to other services in Liverpool are unwarranted and unjust, and I call on the Minister to think again.

18:34

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

I have listened carefully to the debate and I have to say that the Government are out of touch with what is going on in many parts of the country. I want to talk about what is happening in my home city, because the disproportionate nature of the cuts in Hull needs careful examination.

In the past two years, Hull has lost £163.50 per person, compared with a national average of just £74 per head. From the cumulative figures that have been provided by Newcastle city council, it appears that, over the four-year period, the figure for Hull will rise to £228.36 per head. Hull is taking a much larger share of the Government’s council funding cuts than many wealthy areas. When I looked through the figures, I was particularly struck that West Dorset district council was losing only £2.70 per head.

We know that, from April onwards and up to 2015, Hull will lose a further 7.2% in what the Government are now calling “spending power”. As has already been said, the Prime Minister’s West Oxfordshire council will be receiving a rise, even though it is the 316th least deprived local authority area out of 325. Hull is the 10th most deprived area and is taking a much larger cut. That is not fair, and I think that that unfairness forms the basis of the objections of many Labour Members—the lack of fairness in the distribution of the cuts that are taking place.

[Annette Brooke]

Will the hon. Lady clarify whether she was comparing like with like, given that West Dorset is a district council and Hull, I presume, is a unitary council?

[Diana Johnson]

That is an interesting point. One of the issues the Government have to face is that they are using all sorts of different terms and ways of describing the funding that is going to local authorities. What I know is that in Hull the cuts are much deeper than they are in many wealthier areas. The citizens of Hull know jolly well that, with a Liberal Democrat-Tory Government, areas in the north are being disproportionately impacted.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Don Foster)]

rose—

[Diana Johnson]

I will not give way to the Minister because I only have a few minutes and he will have lots of time to peddle his view of what he believes is happening. It is clear that areas such as Newcastle, Manchester and Birmingham are being disproportionately hit.

[Julie Hilling]

These figures are calculated as a per capita cut. My hon. Friend may be interested to know that the citizens of West Dorset are getting only a £47.44 cut.

[Diana Johnson]

I am grateful to my hon. Friend for providing that figure. As I said, that compares with the cumulative figure over four years of £228.36 for Hull residents, and that is just not fair. The case that I am putting to the Government is that they need to think again if they want to rebalance the economies of the north and the south. This is just another hammer blow to economic regeneration in the north, and to cities standing up and paying their own way. It will not help my city of Hull, which is struggling at the moment. Just before Christmas we saw 1,200 job losses in the local area from the private sector.

I pay tribute to the work of Hull city councillors who are trying to work with the budget they have been given by the Government. They have been put in a very difficult position. My hon. Friend the Member for Sheffield South East (Mr Betts), the Chair of the Communities and Local Government Committee, set out clearly the important work that local councils do on environmental health and trading standards, and in looking after some of the most vulnerable and damaged young people in our society—looked-after children, and elderly and disabled people who need social care. The councillors in Hull are doing their best to make sure that they can cover as much of those services as possible, but the Government are making it completely impossible to provide the kind of services we need in an area with such disadvantage.

[Andrew Percy]

rose—

[Diana Johnson]

I will give way to the hon. Gentleman. As a former Conservative councillor in the city —just one of two—he often spoke up for his constituents, but I am surprised that he now feels that the cuts being imposed on his former constituents are fair.

[Andrew Percy]

What I clearly remember from my time as a Hull councillor is that, at the end of the last Labour Government, we had fewer jobs in the city than we had at the beginning. I also remember Labour frittering away the KC money. Public health funding in Goole will be £27 per ahead, but in Hull that figure is four times greater. Is the hon. Lady defending the fact that people in Hull, which has a similar demographic profile to Goole, have four times as much spent on their public health as somebody in my constituency?

[Diana Johnson]

I am sure that the hon. Gentleman would not argue that people in Hull should lose the money they need to deal with health inequalities and that that money be given to the people of Goole. Surely, he should fight his corner for the people of Goole and ensure that the Government provide the necessary funding.

I am reminded of the 1920s and the dispute involving Poplar borough council. We had a Liberal-Tory coalition then, and the good councillors of Poplar had to fight their corner then, because of the nature of the cuts being imposed on poorer areas of the country. It was generally accepted after a High Court ruling that richer areas should subsidise poorer areas, but of course the Government are rowing back completely on that and reverting to the idea that everywhere has to cope on their own, as a result of which the wealthy areas do well and the poorer areas sink without trace.

The new homes bonus will not help areas such as Hull. It is the wealthier areas that benefit from new homes being built. The Liberal Democrats like to talk about the pupil premium, but in 2011-12, Hull city council had £6,516 per pupil to spend on education and support services, whereas Kensington and Chelsea could afford to spend £8,920 per pupil. My constituents know jolly well what the Government are doing to the funding available to them and other northern cities.

This is a time for people in Hull to come together, and that includes the Liberal Democrats. There was a brief flirtation with the Liberal Democrats in Hull, but I think that most people there now recognise what they really are—Tories. People in Hull now recognise that this is not a fair settlement from the Government. We need to stand united in Hull, just as people in Newcastle and other parts of the country are standing united, and say, “Enough is enough.” The bedroom tax, council tax benefit—they cannot keep doing this to cities that are already struggling. I call upon the Minister to address the inequality in the cut given to Hull in particular and to explain it to my constituents, because they do not understand why they are being so penalised. They are doing their very best, living on limited incomes, working as hard as possible and looking for extra work when possible, yet the Government, time after time, seem hellbent on making the poorest pay the most. It is not fair.

18:42

[Julie Hilling (Bolton West) (Lab)]

I do not know how the Government and Government Members can justify what they are doing to local government finances. It is rare that I agree with a Tory, but I absolutely agree with the hon. Member for Bromley and Chislehurst (Robert Neill), who is no longer in his place, who said that those in greatest need ultimately bear the burden of paying off the debt—perhaps that is why he is no longer in post. That attitude is apparent in the cuts to local government spending—cuts that disproportionately affect the poorest communities.

Newcastle city council research shows that Bolton, the 36th most deprived borough, will receive a cut of £178.26 per head over the four years, while Epsom and Ewell will lose £15.18 per ahead. It is not fair and it is not right. Why did the Secretary of State sign up for the biggest hit across Whitehall? Why did he sign up to £5.6 billion of cuts to local authority spending—a higher percentage than other Departments? If it is to pay down the deficit and debt, well it is clearly not working, because both are increasing because of those savage cuts. [Hon. Members: “No they’re not!”] The poor are paying the price of an economic crisis not of their making.

[Catherine McKinnell]

The debt is going up.

[Julie Hilling]

The deficit is going up too.

The Government will not even take responsibility for these cuts, because they simply try to pass on the responsibility to hard-working councillors up and down the country. They are masters of the politics of passing the buck. They try to say that it is the fault of Wigan and Bolton that services are reduced, that libraries are closing and that youth workers are being made redundant. How dare they? They like to paint a picture of profligate local authorities wasting taxpayers’ money, but that is not true of the councils in my constituency.

One of the senior officers in Bolton told me that he had worked in local government for 24 years and never known a year in which the council had not had to make savings of £3 million or £4 million from the main budget area. However, he went on to tell me that he had never seen anything like what is happening now. Bolton has already had to find cuts of £60 million to its budget since the election, and it will now have to find an extra £43 million over the next two years, out of a controllable budget of £178 million. Of course services will be affected; it would be ridiculous to suggest otherwise.

The Secretary of State has told us all to go and challenge our local authorities on the cuts, so I did. I took his list of 50 ways to save, and asked people on my council what they were going to do about it. Their response was illuminating. They asked me what on earth I thought they had been doing over the years. They also said that most of the changes would save only pennies, in comparison with the £43 million savings that they needed to find. As Members would expect, however, I did not accept that. I went through every one of the 50 suggestions with them. They said that they already share back-office services and, where possible, procurement and IT. They pointed out, however, that those things could not be achieved overnight because contracts came up for renewal at different times in neighbouring local authorities. They control spending, they have transparency and they take cheats to court. Their reserves are already committed. The Yorkshire Purchasing Organisation was set up 30 years ago to enable combined procurement. They collect 99% of the council tax due, which is a great achievement in the 36 most deprived areas.

[Andrew Gwynne]

I am sure that Bolton and Wigan councils will be really concerned, just as Tameside council is, that their collection of council tax will start to drop as a result of the council tax benefit changes.

[Julie Hilling]

My hon. Friend makes an important point. The changes are creating real concern among local authorities. They are wondering how on earth they are going to collect extra money from people who already have incredibly squeezed budgets.

I will continue with my list. The council has already closed all the cash offices except the central one. It shares buildings and is centralising its staff, who already hot-desk. The canteen breaks even. The council stopped using posh hotels and holding glitzy award ceremonies years ago. It opened a coffee shop in the library, but it did not work. It has got rid of more than half the senior posts in the authority. It considered sharing the chief exec post, but realised that that simply would not be feasible for a local authority the size of Bolton.

The people I spoke to laughed at the suggestion of a recruitment freeze, because they have not been recruiting for four years. Like my right hon. Friend the Member for Leeds Central (Hilary Benn), they thought that getting rid of councillors’ pensions was a disgrace and that it would work against fulfilling the need for younger councillors, as well as the need for cabinet members to have real oversight of their departments. The council does not have consultants, and it uses agency staff only to cover the changes that it is being forced to make.

[Andrew Percy]

I declare an interest, in that when I was officially Hull’s most popular councillor, I did not take a pension. I was the only one on the council who would not take one. Is the hon. Lady saying that councillors should not make any savings at this time in the cycle? My councillors in North Lincolnshire took a cut in their expenses so that they could employ apprentices. Does she not think that councillors should lead by example?

[Julie Hilling]

I do not think the hon. Gentleman has been listening. I am saying that Bolton council is already looking at every one of the points on that list. On pensions, it is a disgrace to say that councillors should not be able to pay into the pension scheme—[Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We cannot have challenges about each other’s pensions at this stage—[Interruption.] Order. Mr Percy, you should know better. I am not worried about your pension; I have no interest in how much your pension is worth, and the House does not want to know either. We want to hear the hon. Member for Bolton West (Julie Hilling).

[Julie Hilling]

Thank you, Mr Deputy Speaker.

The only time my council uses agency staff is when it is forced to do so because of the changes it has had to make. The people I spoke to pointed out that agency staff were often cheaper because they did not have pensions or sick pay, but we want local authority workers to have those things. The council does not send people on leadership courses, and it certainly does not waste money on head-hunters or adverts, because it has frozen all posts. Absenteeism is low, and it invests in physiotherapy to get injured employees back to work. It releases staff only for trade union duties; because of the scale of the changes that the Government have wrought, that is essential for effective consultation with staff. Of course, trade union reps are incredibly busy at this time.

The council does charge for check-off and has never employed a lobbyist. It does private advertising, including on roundabouts across the borough, and has service level agreements with the voluntary and community sector projects to which it gives money. It stopped free food and mineral water years ago, and now provides no tea or coffee at meetings, including all-day planning meetings. There is no first-class travel. Travel is paid at nationally agreed rates, but the top two bands have been cut. It uses videoconferencing when it can, but as the borough is compact there is no money to be saved on travel. It uses the voluntary sector and has had multifunctional printers for years. It does not produce glossy leaflets and makes questionnaires only when it consults on Government cuts.

The council sells the services that it has not already had to get rid of, and the town hall has been hired out for years. It may be able to lease a few more works of art if that makes financial sense, but it thinks that will bring in only a few pennies. It already leases out the Egyptology collection, which raises a lot of money. It saves money on computer software where it can, and asks staff for suggestions.

The Minister will, of course, have been listening very carefully and knows that I have missed two areas. Bolton council wanted me to ask how the Government think it can inform residents about changes to services if it does not communicate with them, and it finds the Secretary of State’s point about scrapping the “town hall Pravda” very insulting. In fact, the newspaper that the council produces four times a year is virtually self-funding.

The Secretary of State says that councillors can issue their own ward newsletter using party political funds—what nonsense. Anyone who has read a Lib Dem leaflet will know that it is not an organ for unbiased truth, and they and I fundamentally disagree with the Secretary of State’s proposal to stop translating documents into foreign languages. Would it not be wonderful if all our residents were fluent readers of English? In the real world, however, in which Labour Members live, people do not. What absolute nonsense to propose that translation undermines community cohesion. Translation enables all our citizens to play a full part in society and find out essential information. Without such information, there are higher costs to the state in terms of health and dealing with problems.

The Government are trying to put up a smoke screen and say that despite the most savage cuts ever known, local authorities do not need to cut services. Cutting more than £100 million from Bolton, the 36th most deprived local authority in the country, is wrong and will mean that my constituents suffer. The Government should hang their heads in shame.

18:52

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

As the Under-Secretary of State for Communities and Local Government, the hon. Member for Great Yarmouth (Brandon Lewis) who opened the debate moved to the apotheosis of a speech that, sadly, was rather shot through with bombast and self-satisfaction, he delivered the stirring words that putting councils in charge of their own destiny was the centre point of this local government statement. In the time allowed I would like to look at one council—my own council in Blackpool—and see what it has done to put itself in charge of its own destiny and how it has been affected by the way the Government have dealt with it.

As a small unitary authority, Blackpool is entering a difficult situation and difficult narrative due to Government cuts over the past two years. According to the multiple deprivation index, it is the sixth most deprived council in the country, and in that respect resembles a number of other seaside and coastal towns that have pockets of severe deprivation—such as the Minister’s council in Great Yarmouth, for example. Most of those areas, including many in the north, were hit badly by the removal of area based grants, which, as we have heard, were famously defended by a former Minister because most must be cut from those who have received the most.

Blackpool does not benefit from any dedicated funding because of the level of transience, and there is no acknowledgement in its health funding of the extra burdens placed on services by visitor numbers. On the heat register, Blackpool will lose an average of £215 per person over four years, and £83 over two years. My council has had funding cuts of 19.2% for the past two years. It has lost £40 million over the past two years, with approximately £14 million of further cuts in 2013-14 and approximately £20 million more over the next two years. I noticed that the Minister waxed lyrical about profligate councils sitting around with big reserves, but Blackpool council’s current reserve stands at £4 million, out of a proposed net expenditure budget for 2013-14 of £150 million.

Like many other councils we have heard about this evening, Blackpool has done many of the things that Ministers have preached should be prudent for local government to do. It has worked on ways to cut waste in a major way and cut a whole level of senior officers. Sadly, it has had to lose hundreds of posts and hundreds of jobs over the last two years, with 300 posts proposed to go this year. Blackpool has also frozen the council tax, but—of course, the Minister did not tell us this—that is on the basis of a grant of only 1% this year as opposed to 2.5% for previous years. Despite all that, Blackpool council has gone ahead with progressive measures, including moving towards a living wage for its workers and free breakfast clubs, so it does not need to take any lessons from Ministers about that. The cash reduction in this year’s Government settlement is £3 million. The council tax freeze grant, to which I have referred, means a further loss of £1.5 million, with demographic pressures from children’s social care of £1.1 million.

Let me turn to the council tax changes and the basis on which they are taking place. As we heard from my right hon. Friend the Member for Leeds Central (Hilary Benn), the shadow Secretary of State, millions of people in England on low incomes face rising council tax this year, including those who will now have to contribute to council tax who have previously been exempt. What will that figure of £410 million and a 10% cut in funding do for people in Blackpool? In Blackpool, it means a tax rise on a large number of people on low incomes. Like most seaside and coastal towns, we have people doing two or three part-time jobs, many of them women. We have larger than average numbers of older people and disabled people, which has specific implications for the amount that my council will now be forced to charge those who are not exempt, because this Government have decided that pensioners should be exempt from contributing to the council tax support scheme.

However, the more pensioners and older people an area has—it is a well known and established fact that large numbers of old people move into seaside and coastal towns—the higher the level of account that has to be placed on other people. Who are those other people? They are not the millionaires, who will receive a tax cut; they are people working hard on low incomes—carers, the disabled and single mums. They are people who are already being hit by the Government’s cuts in the uprating of benefits and working families tax credit. They are the people who will suffer and whom my council will not be able to protect from the depredations of this Government.

The Minister who opened this debate comes from a seaside town. He knows of some of these issues. Perhaps if he were to move away from the distorting mirror that he has had inserted in his little red ministerial box—

[Mr Foster]

It is a big ministerial box.

[Mr Marsden]

Well yours might be, but I am not sure about the Minister who opened this debate.

If the Minister got away from that distorting mirror and went back to his constituents in Great Yarmouth—to some of the houses in multiple occupation, the people living in bad private housing or some of those groups of his constituents who will be most affected—perhaps he would not come to this House with a speech so full of complacency and smugness.

[Brandon Lewis]

I wonder whether the hon. Gentleman is talking about the same people who will now benefit from the £7 million transitional grant or the next £4 million to £5 million of efficiency grant that the council will get, following the cliff edge left by the last Labour Government, leaving them without that money.

[Mr Marsden]

I am interested that the Minister has turned to the transitional grant, because in percentage terms the average transitional grant will cover only a quarter of the original 10% cuts. It just so happens that my council in Blackpool will receive the lowest proportion of the transitional grant, so I am afraid the Minister will win no plaudits from Opposition Members or, I suspect, from many of his own constituents for the settlement he has imposed on them. The reality of this settlement is that it is unfair and unjust for some of the poorest people who are working hard as carers, part-time workers and single mums. Such people in Blackpool and many other places can ill afford to pay this money, and the Government should be ashamed of the incoherent and unequal settlement that they have put before the House.

19:00

[Helen Jones (Warrington North) (Lab)]

This has been a very interesting debate, with some thoughtful and well informed contributions from my hon. Friends, and even from Members on the other side of the House, especially the hon. Member for North Cornwall (Dan Rogerson). He made some sensible points about the needs of rural areas, and also managed to nip out to attend mass on Ash Wednesday.

I do not have time to go through all the contributions from my hon. Friends, but they have highlighted the unfair nature of this settlement, and how shambolic it has been. It arrived late, and different grants dribbled out at different times, making it very hard for local councils. The Government could not even get basic calculations right. They miscalculated spending power, because they double-counted. They came out with alternative notional amounts that would not only have meant some councils holding a referendum if they wanted to increase council tax by less than 2%, but some having to do so if they wanted to freeze it—and the Government lecture councils on efficiency.

There is no doubt that this is a very difficult settlement for local government. It is so difficult that even the Minister’s friends are starting to complain. Councillor Bob Banks from Wychavon council has said:

“The general thrust is that we’ve been given a lousy funding settlement by the Government which will affect us very badly.”

The Local Government Association, which is Conservative-controlled, estimates that the funding gap will be £16.5 billion by 2019. We have heard about the Secretary of State’s 50 ways to save, but even he cannot think that sacking the chief executive and putting a coffee shop in the library will raise £16.5 billion.

We heard from the Minister—I think someone described his statement as rather bombastic—who said that the settlement was fair. A settlement that ensures that the 10 most deprived authorities in the country are taking spending cuts six times higher than the 10 least deprived is not fair by anyone’s estimation, however much the Government try to use smoke and mirrors to cover it up. That is indeed what they have done. First, they changed the base—the 2012-13 funding base—by including in it cuts that do not start until the next financial year, including cuts to council tax support, to early intervention grants, and to grants for preventing homelessness. Then they added in the public health grant, but that is not only ring-fenced, it is a grant for new burdens on local authorities, so it cannot be used to calculate year-on-year changes.

The reason for those changes is very simple: they want to make it look as though the cuts in spending power are less than they are. But we know what they are. There is a 33% cut in funding for local authorities over the spending review cycle. For some authorities, of course, it is much worse. The Secretary of State has taken to giving out spending power cuts per dwelling now, rather than per person, but even on the Government’s own figures the unfairness is clear. Over the next two years, Knowsley will lose £206 per dwelling, Surrey will lose £14, Camden will lose £200, Wokingham—our favourite council—will lose £43, Liverpool will lose £184, and Windsor and Maidenhead will lose £46. At least we can grant the Tories the merit of being consistent: they always take money from the poorest people, whether it be through a bedroom tax for the very poorest and a tax cut for millionaires or attacking the poorest local authorities in the country. We can rely on them to be consistent.

Perhaps it is not quite the same for the Liberal Democrats, whose leader said in the local elections last year:

“We stand for the whole country not just parts of it”.

Well, if he looks at the heat maps for where the cuts fall, I doubt whether he would say that in the north-east, in the north-west, in inner London boroughs or in our big cities—even in what he used to call “my city of Sheffield”. His city of Sheffield is taking a £50 million cut on top of the £140 million it has already taken. Of course, it will not affect him, because he does not live there.

Then we have the smoke and mirrors applying to the rest of the grant. We have heard about the new homes bonus. In fact, the money for that bonus is taken out of the formula funding by a straight percentage cut, but its distribution is related to council tax bands, which means that local authorities with a higher tax base gain more than those with a lower tax base. That is why Newcastle will lose £6.4 million and get back £3 million; and why Knowsley gets only 15p for every pound it is top-sliced. “To them that hath shall be given” seems to be the mantra of this Government. That is why in this settlement, the relative needs block has been cut by over £500 million. It is because this Government are not interested in funding for need.

The same is true if we look at the early intervention grant. Money in the settlement has been top-sliced supposedly to account for nursery places in schools for two-year-olds. In the autumn statement of 2011, however, the Chancellor promised that that would be new money. It is not new money; it is money taken from some of the most deprived children in the most deprived areas of this country. By the end of next year, the funding gap will be £488 million—and it will go on rising. I do not know how any Liberal Democrat who has trumpeted the need for support for the poorest children can possibly vote for such a settlement.

Let us look at the other part of the settlement—the localisation of business rates. The Government have determined local councils’ allocation based on a two-year average, but their own consultation recommended a five-year average. The reason is very simple: it was to reflect appeals over a full cycle. Now under great pressure, they have put money back in for appeals, but it is nowhere near the costs that local councils will face. What will happen when the appeals come in? Councils will have no choice but to cut services yet again to fund backdated appeals.

The Government have, of course, come up with a figure by which they expect business rates to grow. No one knows quite how they have reached that figure. I think that they have probably plucked it out of the air. The Office for Budget Responsibility has been wrong in every estimate it has made of business rate income since it was set up. It has always overestimated it. So, local authorities are then told to grow their business rates. They must bring in more jobs and businesses, but they are facing a flatlining economy and a double-dip recession. The Government have no plan for growth, yet they lecture local authorities on promoting it. It is like King Herod lecturing people on child care. What is more, they make it more difficult for the poorest economies because of the amount of money they are taking out of them.

Let us consider the reductions in council tax benefit funding. Birmingham alone will lose at least £10 million. Newham will lose £3 million, and Gateshead £2.9 million. Only a fraction of that will be returned in transition grants. Then there are the benefit cuts. Liverpool will lose £7.3 million per annum in bedroom tax alone, and Knowsley will lose £3.4 million. Newcastle estimates that the incomes of 27,000 families will be cut as a result of the Government’s tax and benefit changes. That money would otherwise be spent in local shops and businesses, funding the local economy. The Government take money away from the local economies that are struggling most, and then lecture authorities on how to grow those economies.

[Mr Graham Stuart]

Will the hon. Lady give way?

[Helen Jones]

I am sorry, but I must end my speech in a minute.

Nothing could better illustrate the doublethink that prevails in the Department, and that is why we will vote against this settlement tonight. It is unfair. It takes money that they need from the local economies that are struggling most. It does not help them to grow, because it is economically illiterate, divisive and ill-conceived. I urge my hon. Friends to join me in voting against it.

19:11

[The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Don Foster)]

I agree with two things that were said by the hon. Member for Warrington North (Helen Jones). First, I agree that we do not have an opportunity to respond to all the contributions that have been made. If I do not manage to answer all the questions that have been raised, I will write to those who asked them, if that is possible. Secondly, I agree that this has been a passionate and largely well informed debate, which has demonstrated the existence of genuine interest in, and support for, the work done by all our local councils.

I fear, however, that the hon. Lady tended to be somewhat selective in her use of data. For example, she expressed concern about the education of less well-off pupils. What she failed to mention was that outside the local government funding settlement, the Government are providing significant additional funds through the pupil premium, and that the current amount will rise to £2.5 billion.

[Helen Jones]

Will the Minister give way?

[Mr Foster]

No; others may wish to intervene.

I suggest that the hon. Lady is wrong in her analysis. I genuinely believe that the settlement is fair, but I also believe that it represents a watershed moment for local government. We have made it clear that it arms authorities with an average spending power of £2,216 per dwelling with which to protect services. We have also acknowledged that that is a reduction—a reduction in spending power of, on average, 1.3%. The hon. Member for Kingston upon Hull North (Diana Johnson) questioned which figures we should use. We are using the spending power figure because it is the figure that the Local Government Association asked us to use.

Concerns that the poorest councils would suffer disproportionately as a result of the settlement are simply wide of the mark. Hackney, for example, receives £1,700 more spending power per household than Windsor and Maidenhead.

[Helen Jones]

Will the Minister give way?

[Mr Foster]

No, I will not.

In connection with last year’s settlement, the shadow Secretary of State was keen to cite the Audit Commission’s report “Tough Times 2012”. The report specifically states that “after the cuts”,

“Deprived areas in the north…the Midlands and inner London…still receive more government funding per resident than less deprived areas.”

I know that many in local government have shown great skill in reducing budgets. Committed local authorities have protected front-line services, and it is to the credit of councillors throughout the country that satisfaction with their services has risen, as is shown by a recent LGA survey. Some 72% of people polled were very or fairly satisfied with the way their council was being run. That is a tribute to the many town halls up and down the country that are working hard on behalf of their local people, and it shows what determination and innovation can accomplish in trying times.

My hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) made an excellent and thoughtful speech, and I join her in praising those councils. Those are the qualities councils will need in the months to come, because we all acknowledge that there are big hurdles ahead. It will be a challenging time. That is why today we have announced an additional fund of £9.2 million—the challenge award—to help those councils who wish to be even more innovative.

There will always be some who make cynical, politically motivated cuts to services rather than look to alternative approaches. Newcastle council announced it will slash its arts budget by 100% and shut down a swimming pool, yet neighbouring Gateshead—also Labour-run—and nearby Lid Dem-run Northumberland are both facing bigger percentage cuts but are not doing anything so draconian. Let us be clear, therefore: anyone who sacks a member of staff or shuts down a public service for political purposes is a disgrace to politics and a disgrace to Britain.

The truth is that the majority of authorities are doing their best in challenging circumstances. Portsmouth council, for instance, has invested £4.5 million over the past two years in adult social care, while keeping libraries, play centres, youth centres and museums open, and it has also played a key role in building more affordable homes. I note in passing that in the last two years every Liberal Democrat-controlled council has frozen its council tax, because helping council tax payers, whose council tax rocketed under Labour, is crucial.

[Several hon. Members]

rose—

[Mr Foster]

I will not give way now.

Not only are this Government helping people by reducing their income tax; we are also helping them by keeping their council tax down. Interestingly, the shadow Secretary of State did not mention that issue. As my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) said, the right hon. Gentleman’s speech was full of huff and puff and dated thinking. It was the same old mantra from Labour: nothing about protecting council tax payers from the huge rises they suffered under the Labour Government; nothing about finding more efficient and effective ways of delivering services, as many authorities are now doing; and nothing about the real opportunities provided by the business rate retention scheme. Helping local economies to grow means more money will flow into the local council.

The shadow Secretary of State asked a number of questions. He asked why the business rate baseline had been based on two years, not the five years we originally proposed. The answer is simple: we consulted and that is what the Local Government Association asked us to do. He asked what we are doing to help councils with the potential impact of business rate appeals. Again, we listened to local government, and then agreed that the costs could be spread not over one year, but now over five years, and we reduced by 8% the anticipated income and we have introduced a safety net for those whose income falls below 7.5%.

I was surprised that the shadow Secretary of State again attacked what he called the bedroom tax and failed to mention that the same approach was adopted for 13 years by the Labour Government. [Interruption.] He failed to mention that 390,000 households—[Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We must have a little more order. It is very hard to hear the Minister, and it is important that all Members can listen to what the Minister has to say.

[Mr Foster]

My point is that the shadow Secretary of State failed to mention that 390,000 households have two or more spare bedrooms, while 278,000 households are overcrowded. However, I will give him some credit for getting up to date in one area. Last September, he came out in support of Manchester council spending nearly half a million pounds on a single Alicia Keys concert, so he is at least ahead of the Secretary of State in that he knows who Alicia Keys is, and I give him credit for that.

The Government have already done much to help local councils by giving them increased freedoms to help them meet the needs of council tax payers. In Monday’s debate, the hon. Member for Derby North (Chris Williamson) said that

“Labour’s policy is to give a fair deal, a new deal, for local government and to allow local government on the ground to determine the shape of local government, rather than it being imposed from the top.”—[Official Report, 11 February 2013; Vol. 558, c. 676.]

That certainly was not the policy of the Labour party when it was in power. Central Government’s stranglehold over local government got ever tighter then, but perhaps he is right and Labour has seen the error of its centralising ways. While the Opposition debate a new approach, we are delivering a new approach. We have already provided greater borrowing flexibilities, a general power of competence, the removal of numerous ring fences, and increased flexibilities in the decision-making process.

[Mr Graham Stuart]

Will the Minister please give us an answer to the questions on rural funding?

[Mr Foster]

I am happy to do so, and I congratulate my hon. Friend on his lobbying campaign. The Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis) has given a clear answer to him, to my hon. Friends the Members for North Devon (Sir Nick Harvey) and for North Cornwall (Dan Rogerson), and to others: we are a listening Government, the Under-Secretary’s door is open and he will continue to listen.

The key change that has occurred in this budget which has almost totally been ignored is the one to allow local councils to retain a key proportion of business rate, giving them the real opportunity, for the first time, that if they work with the local business community to help get growth in that community, they will get a real-terms reward. This is a fair settlement and it is a settlement about opportunity. We are talking about opportunity through the new homes bonus, through the business rate retention scheme and now through our new challenge fund. We believe that the majority of local councils are up to the challenge, and those who take on that challenge will have our full support.

Question put.

19:23

Division 163

Ayes: 274

---

Conservative: 241
Liberal Democrat: 31
Independent: 1

Noes: 196

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Labour: 187
Democratic Unionist Party: 3
Plaid Cymru: 3
Independent: 1
Green Party: 1

Resolved,

That the Local Government Finance Report (England) 2013-14 (HC 948), which was laid before this House on 4 February, be approved.

19:20

More than six hours having elapsed since the commencement of proceedings on the motion on police, the proceedings were interrupted (Order, 6 February).

Mr Speaker put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Order, 6 February).

Ordered,

That the Referendums Relating to Council Tax Increases (Alternative Notional Amounts) Report (England) 2013-14 (HC 928), which was laid before this House on 4 February, be approved.—(Brandon Lewis.)

Ordered,

That the Referendums Relating to Council Tax Increases (Principles) Report (England) 2013-14, which was laid before this House on 4 February, be approved.—(Brandon Lewis.)

deferred divisions

Motion made, and Question put forthwith (Standing Order No. 41A(3)),

That, at this day’s sitting, Standing Order No. 41A (Deferred divisions) shall not apply to the Motions in the name of Secretary Iain Duncan Smith relating to the draft Jobseeker’s Allowance Regulations 2013 and the draft Employment and Support Allowance Regulations 2013.—(Joseph Johnson.)

Question agreed to.

[Mr Speaker]

I have to announce a correction to the result of the deferred Division on the draft Universal Credit (Transitional Provisions) Regulations 2013. The Ayes were not, as previously stated, 284, but 280. The Noes were 190s, so the Ayes have it.

Pensions and Social Security

Wednesday 13th February 2013 Commons Chamber

[Mr Speaker]

We come now to motion 6 on pensions, with which we will debate motion 7 on social security.

19:38

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

I beg to move,

That the draft Guaranteed Minimum Pensions Increase Order 2013, which was laid before this House on 28 January, be approved.

[Mr Speaker]

With this we shall consider the following motion, on social security benefits uprating:

That the draft Social Security Benefits Up-rating Order 2013, which was laid before this House on 28 January, be approved.

[Steve Webb]

The guaranteed minimum pensions order is a routine and technical order which provides for contracted-out defined benefits schemes to increase their members’ GMPs that accrued between 1988 and 1997 by 2.2%, in line with inflation. I assume that this will be uncontentious. The order paired with this is the Social Security Benefits Up-rating Order 2013.

I shall begin with the basic state pension. Despite the tough fiscal context, the Government remain committed to protecting those who have worked hard all their lives, which is why we have stood by our triple lock commitment to uprate the basic state pension by the highest of earnings, prices or 2.5%. This year the third element of our triple lock comes into play for the first time—our 2.5% minimum commitment. That means that we shall be increasing the basic state pension by more than inflation for millions of pensioners.

[Mr Alan Reid (Argyll and Bute) (LD)]

I congratulate my hon. Friend on the work he has done as pensions Minister to drive through the triple lock, which means that pensioners will get an above-inflation increase this year. The days of 75p increases, which happened under the previous Government, are long gone.

[Steve Webb]

I am grateful to my hon. Friend for pointing that out. He will know that we have set a minimum increase of 2.5%, which is what we are having this year. Under that policy, it would now be impossible for us ever to go back to the days of 75p increases.

[Stephen Timms (East Ham) (Lab)]

Will the Minister confirm that the order contains a real-terms cut in the amount of the basic state pension?

[Steve Webb]

The right hon. Gentleman is well aware that the Government increase benefits in line with inflation in the year to September, as did his Government. He will know that inflation under the consumer prices index in the year to September was 2.2%, and we have increased not in line with inflation, but by more than inflation, at 2.5%.

[Stephen Timms]

rose—

[Steve Webb]

I have obviously dealt with the point, but I am happy to give way again.

[Stephen Timms]

The Minister will have heard today’s announcement that CPI is currently at 2.7%. Last year he claimed that he was introducing a substantial real-terms increase in the level of the basic state pension. On precisely the same terms he used last year, this order has a real-terms cut. Will he confirm that the order contains a real-terms cut in the level of the basic state pension?

[Steve Webb]

I well remember our exchanges last year, and I seem to recall that the right hon. Gentleman rejected that way of measuring things.

Our above-inflation increase will be £2.70 a week, taking the new level of the basic state pension to £110.15 a week. That means that from April 2013 the basic pension is forecast to be around 18% of average earnings. My right hon. and hon. Friends might be pleased to know that that is a higher share of average earnings than at any time in the past 20 years. Our triple-lock commitment means that the average person reaching state pension age in 2012 with a full basic pension can expect to receive an additional £12,000 in basic state pension over the course of their retirement.

Let me turn to additional state pensions, often referred to as state earnings-related pension schemes. This year SERPS pensions will rise by 2.2%, which means that the total state pension increase for someone with a full basic pension and average additional pension will be around £3.33 a week, or £175 a year. Unlike the Labour party, which froze SERPS in 2010, the coalition Government will, for the third year in a row, uprate SERPS by the full value of CPI.

Let me turn to pension credit. As I announced in my statement on 6 December, we have taken steps to ensure that the poorest pensioners will benefit from the effects of our triple lock. Each year the standard minimum guarantee must be increased by law at least in line with earnings. That means that the minimum increase this year would be 1.6%. However, we decided to increase the value of the standard minimum guarantee credit by 1.9% so that single people will receive the full increase of £2.70 a week, which is equal to the increase in the basic state pension, while couples will receive £4.15 a week. Consistent with our approach last year, the resources needed to pay that above-earnings increase to the standard minimum guarantee have been found by increasing the savings credit threshold, which means that those with higher levels of income will see less of an increase.

[Jim Shannon (Strangford) (DUP)]

Although the increase in pension credit is welcome, what steps are the Government taking to ensure that those who do not take up pension credit are enabled to do so? A vast number of people in Northern Ireland—somewhere in the region of 100,000—are not taking advantage of pension credit, and I am sure that the same applies across the whole United Kingdom.

[Steve Webb]

The hon. Gentleman is right that non-take-up of pension credit has been a persistent problem. Over the past year or so we tried a pilot scheme in which we took a sample of people we thought, based on our records, might be entitled and put the money in their bank account. We then wrote to them to say, “We’ve put some money in your bank account. Would you like to claim pension credit?” The experiment failed. Incredibly, people did not claim it, or decided that they did not want or need it, or thought that they were not eligible. Even putting money into people’s bank accounts, based on our records, did not succeed. However, I have some good news for the hon. Gentleman. As a consequence of the universal credit reforms, whereby housing benefit for working-age people will be merged with universal credit, we will be merging housing benefit for pensioners with the pension credit.

The reason that is relevant to the hon. Gentleman’s question is that we know that some people claim their housing benefit and not their pension credit, and that some claim their pension credit and not their housing benefit, but when we combine the two in a single payment each group will claim both and we anticipate several hundred million pounds of extra benefit expenditure to low-income pensioners as a result. I think that that will be the most tangible thing that any Government have done in many years.

[Michael Ellis (Northampton North) (Con)]

Will the Minister confirm that that will also save administrative costs to the state, because we want as much saved in such costs as possible?

[Steve Webb]

My hon. Friend is right that placing the housing element in a single benefit—the pension credit—rather than it being a separate claim through a local authority will reduce administrative costs and increase take-up as well.

On disability benefits, this year the coalition will ensure that those who face additional costs because of their disability and who have perhaps less opportunity to increase their income through paid employment will see their benefits increased by the full value of CPI. Therefore, disability living allowance, attendance allowance, carers allowance and the main rate of incapacity benefit will all rise by the statutory minimum of 2.2% from April 2013, as will the employment and support allowance support group component and those disability-related premiums paid with pension credit and with working-age benefits.

[Stephen Lloyd (Eastbourne) (LD)]

Will the Minister make it absolutely clear for the record that, despite some noise in the media, disability benefits are all going up by the higher rate?

[Steve Webb]

Yes. My hon. Friend is right. The specific benefits for the extra costs of disability are all rising by the full 2.2%.

[Stephen Timms]

Will the Minister tell the House by how much the benefit paid to people in the ESA support group will go up overall under the order?

[Steve Webb]

As the right hon. Gentleman knows, the main rate of ESA will rise by 1%, which is just over 70p a week, and the addition that people in the support group receive will go up by 2.2%.

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

What message can I give to one of my constituents whose doctor has notified me that she has terminal cancer and is on a syringe drive and whose disability living allowance has been taken from her?

[Steve Webb]

I sympathise with the hon. Gentleman’s constituent, whose individual circumstances I do not know. Disability living allowance has not yet been reformed by this Government, so we have changed nothing about DLA. If his constituent believes that she has been wrongly assessed, I hope that she will have his support in appealing against that decision.

On working-age benefits, as the International Monetary Fund has said, strong fiscal consolidation is under way, and reducing the high structural deficit over the medium term remains essential. As we continue to face pressure on our national economy, we have had to take some tough decisions. There was, as my hon. Friend the Member for Eastbourne (Stephen Lloyd) has suggested, speculation about benefit freezes. It is true that we cannot afford to be as generous this year as we have been in the past. However, in the exercise of his discretion in the uprating of certain benefits, having regard to the national economic situation, the Secretary of State has found sufficient money to pay a 1% increase to those of working age on the main rate of jobseeker’s allowance or income support, as well as for housing benefit and the main rate and work-related activity component of employment and support allowance.

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

Has today’s news that inflation is set to stay very high for the next few years encouraged the Minister to rethink in any way this real-terms cut in working benefits?

[Steve Webb]

The rate of CPI has been 2.7% for four consecutive months. We were aware of the level of inflation when we made these judgments about 2013. Clearly, there are things we can do to help ourselves with the cost of living. For example, the cost of petrol is 10p a litre lower than it would have been if we had implemented the previous Government’s escalator; council tax bills, which are a huge cost of living for many people, have been frozen in many places for three years; and people in low-wage work will receive a substantial income tax cut in April. Those measures will all help people with the cost of living.

[Sheila Gilmore (Edinburgh East) (Lab)]

It is interesting that the Minister should mention council tax, because in large parts of the country many working-age people, working and unemployed, will be paying substantial sums in council tax, and that will have a big effect on their standard of living.

[Steve Webb]

The unprecedented three-year freeze in council tax in many areas is a huge boost not only to those on the lowest incomes but particularly to those whom one might describe as not rich and—

[Sheila Gilmore]

rose—

[Steve Webb]

I wonder if the hon. Lady would allow me to finish replying to her previous point before she intervenes with the next one. The three-year freeze will help particularly those whom I would describe as not rich and not poor—not poor enough to get benefit and not rich enough not to care. We meet them all the time; they have saved a bit, worked hard, and feel penalised. Our freeze will benefit those people in particular.

[Sheila Gilmore]

It may be an unprecedented freeze in England, but it is not unprecedented in Scotland. It is a very regressive form of assisting people, because the higher their level of council tax banding, the more advantage they get from it. Someone who is already in receipt of council tax benefit gets no benefit from the freeze, and the effect on councils is to lead them to raise the cost of many fees and cut services. In fact, therefore, the poorest and most vulnerable do not benefit from a council tax freeze.

[Steve Webb]

In responding to the hon. Lady, I occasionally lose count of the logical flaws in her argument. However, I will take one in particular. The Government have made available for this coming year, 2013-14, an additional £100 million to help local authorities to dampen down the effect of the council tax benefit changes. Many local authorities have reduced the subsidy given on empty homes and on second homes—which are not generally associated with poverty, I would add—and many have damped, or reduced to zero, the impact on council tax. Some Labour authorities have chosen not to do that, which is an unfortunate political decision.

I remind those who might consider voting against the order—the interventions that we have heard suggest that the Opposition are considering it, or perhaps they want to give that impression—that they would be voting against an above-inflation increase in the state pension, a full increase in line with CPI for disability benefit, and any increase in any benefit this coming April.

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

I am sure that the Minister will be reluctant to penalise with his uprating measures people who are in employment, so why is statutory maternity pay encompassed within the 1% freeze? Has he seen the letter in The Guardian today from six mums who have written to complain about this measure and point out that having a new baby costs families money?

[Steve Webb]

Statutory maternity pay applies to those who are leaving work to have a baby and who often return to work, and for those in work our income tax cut in April will be a very substantial benefit. It is true that the 1% figure applies to SMP. It also applies to in-work benefits such as tax credits, which are not within the scope of the order. That is a consistent approach, particularly given that many people in work, such as those in the public sector, are also getting a 1% increase.

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

The Minister says that we cannot vote against the 1% figure without opposing the uprating of pensions and the rest. That may well be so, and no doubt he is pleased about it, but the fact remains that whether we vote against it or not, some of us feel very strongly about it because we believe that it is hitting the most vulnerable, and I look on it with loathing and contempt. Only a Tory-led Government could carry out such a measure.

[Steve Webb]

I do not know whether the hon. Gentleman’s Front Benchers share his loathing and contempt, but they have a vote to cast and they can use it if they want to.

[Mr Russell Brown]

Will the Minister give way?

[Steve Webb]

No, I am going to conclude; there will be plenty of opportunity for people to contribute.

At a time when the nation’s finances remain under real pressure, this Government will be spending an extra £2.8 billion in 2013-14 to ensure that those people who are least able to change their regular income are protected against increases in the cost of living. Of this, about £2.1 billion is for the state pension, including an above-inflation increase for the basic pension; nearly £500 million will go to disabled people and their carers; and nearly £300 million will go to people of working age. We have protected the triple lock, we have helped our poorest pensioners, and we have protected the key benefits for disabled people. Even as we face the need to make savings to rebalance our economy, we have still found money for a 1% increase to help to support those who are not currently in work. I have set out our ongoing commitment to ensuring that even in these difficult times no one is left behind. I commend the orders to the House.

19:54

[Stephen Timms (East Ham) (Lab)]

I thank the Minister for his explanation of the measures, albeit that it was brief. He reminded us, correctly, that this is the third year since the announcement of the triple lock for the basic state pension. There is absolutely no doubt that the triple lock has been a great success as a rhetorical device. The term has entered the lexicon, and I note that the Minister’s right hon. Friend the Secretary of State for Culture, Media and Sport has gone one better and announced a quadruple lock for the Bill that she recently placed before the House.

While in rhetorical terms the triple lock has undoubtedly been successful, I am afraid that the reality has been rather different, because once again the increase in the state pension is less this year than it would have been if the uprating method previously used was still in place. In retail prices index terms, for the second year this is a real-terms cut in the value of the basic state pension, as well as—I made this point earlier—a real-terms cut in today’s consumer prices index rate.

[Mr Reid]

Will the right hon. Gentleman clarify what his party’s current policy is on uprating? Should it be CPI or RPI?

[Stephen Timms]

We have made it plain, in all the three uprating debates since the election, that in our view there would have been a case for a temporary move from RPI to CPI uprating, as a contribution to reducing the deficit. Unfortunately, the Government decided that this should not be a temporary move, but a permanent move—or so we thought. Now it turns out that they are not even uprating in line with CPI for a large part of the benefits, but the position is the one that I have set out.

[Richard Graham (Gloucester) (Con)]

Will the right hon. Gentleman confirm whether the change from RPI to CPI, for the pension indexation of Labour party agents, is temporary or permanent?

[Stephen Timms]

I think the hon. Gentleman is asking me a question about the administration of the Labour party on which, I am afraid, I am unable to assist him.

It is worth reflecting on the history of the triple lock. In its first year, it was announced but not actually implemented. If it had been implemented, it would have produced, from the Government’s point of view, an embarrassingly small pension increase. The Minister, sensibly, chose to override it and instead apply a larger increase that in that year was in line with RPI. At its first outing, therefore, it failed. In its second year—last year—it was actually implemented, and delivered an increase in line with CPI, along with working-age benefits. This year it is being applied again, and for the first time it is delivering something better than CPI uprating—a point made by the Minister.

The increase in CPI, as measured last September, was 2.2%, and the uprating amount in line with the triple lock is 2.5%. So that is it: in comparison with the CPI uprating, which until recently was the Government’s policy for working-age benefits, the triple lock has delivered a higher pension by a paltry 0.3%. Of course, if it had been applied in the first year, it would have been less than the CPI uprating. The triple lock has delivered a higher pension of 0.3% over three years—a rather derisory achievement. It is clear that the triple lock has been something of a damp squib. Of course, if it was something other than a damp squib, the Chancellor would have vetoed it long ago.

[Stephen Lloyd]

I have a lot of respect for the right hon. Gentleman’s honesty generally, and in particular in this area. Will he therefore agree with me that it is unfortunate that the Government in which he served as a Minister did not have a triple lock, otherwise pensioners all those years ago would not have received an uprate of only 75p?

[Stephen Timms]

Had the previous uprating RPI mechanism been in place, there would have been a larger pension increase this year and last year than has been delivered. I am grateful for the hon. Gentleman’s comments about my honesty, so let me pay a tribute to him. As a man who is also frank, he will recognise that the last Government did an enormous amount, particularly through the introduction of pension credits, to reduce the extent of pensioner poverty. In the past, pensioners were always more likely to be poor than the population as a whole, but that ceased to be the case under the policies of the last Government. Indeed, pensioner poverty was halved, as my hon. Friends have said.

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

The right hon. Gentleman highlights the pension credit, but if he truly believes that all pensioners should receive that extra money, why does he not support the Government’s idea to move towards a higher pension rate for all?

[Stephen Timms]

I am sure we will have an interesting debate on the Government’s proposals when the time comes, but there is no doubt that pension credits made enormous inroads—thankfully—into pensioner poverty in Britain.

[Mr Winnick]

Shortly after we were elected in 1997, did we not introduce both the non-means-tested winter fuel allowance, which the previous Tory Government had refused to do, and the free television licence for pensioners, which I had tried to introduce in a private Member’s Bill on Friday 16 January 1987, when the Tories opposed it with a three-line Whip?

[Stephen Timms]

I congratulate my hon. Friend on his foresight in pushing for that change. I am delighted that, partly thanks to his work, the previous Government were able to deliver it. It is greatly appreciated by pensioners.

In my view, the triple lock has been a triumph of rhetoric, but a damp squib in reality. One can only hope that the quadruple lock delivers rather more for those following the Marriage (Same Sex Couples) Bill than the triple lock has done, but perhaps we should be a bit kinder to the triple lock. Perhaps we should credit it at least with saving pensioners from the fate of strivers. The order locks in the strivers tax to working-age benefits for the coming years. Strivers are being hammered.

It is worth looking back at what the Minister said last year about working-age benefits. It is hard to believe now, but last year he announced a 5.2% increase in working-age benefits:

“These increases will ensure that the most vulnerable people in society are protected and that those looking for work get the support they need to move into the labour market.”—[Official Report, 23 February 2012; Vol. 540, c. 1046.]

How different is the picture today! After another 12 months of failed economic policy in which the economy has hardly grown and the Government’s forecasts for unemployment and borrowing have risen sharply, the most vulnerable are no longer being protected; they are being hammered and are paying the price for the failure of the Government’s economic policy and the Chancellor’s inability to deliver the steady growth and falling unemployment that he promised.

Let me remind the Minister of something else he said last year. He said that

“there were siren voices from some quarters suggesting that we could not afford, or that we should not go for, this inflation figure. He is absolutely right that the coalition parties decided that it was a priority. That is something that I am proud to be associated with.”—[Official Report, 23 February 2012; Vol. 540, c. 1045.]

I think we can safely assume that he is not proud to be associated with the shabby treatment of working-age people in the social security system. This year, the siren voices have won. This year, the coalition parties have decided that safeguarding strivers is not a priority. This year, and for the next two years, the most vulnerable are being kicked in the teeth. The measures will come into effect at the beginning of April, on the same day as the introduction of the tax cut for everyone earning over £150,000 a year.

[Steve Webb]

The right hon. Gentleman will have noticed that I did not use the word “strivers”. Will he clarify who he means by “strivers” and who he is excluding from that definition?

[Stephen Timms]

The term “strivers” refers to those who are working, who are often struggling to make ends meet and who are going to find things a good deal harder because tax credits are being uprated by only 1%. That is being done on exactly the same day as every one of the 8,000 people earning over £1 million a year will get a tax cut averaging over £2,000 a week. Let me remind the Minister that that will happen on the same day as the employment and support allowance paid to a single person aged over 25 goes up by 70p a week. The hon. Member for Eastbourne (Stephen Lloyd) reminded the House a few minutes ago about the 75p a week pension rise some time ago. This order will give the people I have just described a 70p a week increase, and that is a disgrace.

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

Will my right hon. Friend confirm that, although strivers are the very people the Prime Minister has said he wants to protect, he will ultimately be damaging them as a result of the new regulations?

[Stephen Timms]

That is undoubtedly the case. The rhetoric and the reality are quite different.

[Dame Anne Begg (Aberdeen South) (Lab)]

Does my right hon. Friend acknowledge that the bedroom tax will also come into effect on 1 April? That means that a large group of people whose income has not gone up by very much will have to subsidise their housing costs to a far greater extent than they are doing at the moment.

[Stephen Timms]

My hon. Friend is absolutely right. It is fair to say that the bedroom tax is increasingly being seen as a hated tax across the country, as its impact becomes clearer and the date on which it will be applied approaches. It will make life a great deal harder for those people who have no option to move into a smaller place because there are no smaller places available in the council or housing association stock.

I commend to the Minister the speech made by the Bishop of Leicester in the other place in the Second Reading debate on the Welfare Benefits Up-rating Bill on Monday. He said of the Bill:

“It will depress hard-working families even further, remove much needed support for the vulnerable and unable to work, and potentially take us in the wrong direction for a generation, condemning countless children to poverty. It is a proposal that I cannot support.”—[Official Report, House of Lords, 11 February 2013; Vol. 743, c. 471.]

He was speaking for Britain. The Resolution Foundation has pointed out that the measure is a strivers tax, and that well over half the savings from uprating working-age benefits by just 1% over three years will be taken from people in work, because tax credits are being cut in real terms.

My hon. Friend the Member for Stretford and Urmston (Kate Green) has pointed out that the provisions will hit women particularly hard. The House of Commons Library has calculated that two thirds of those hit will be women. The real-terms cut of £180 to statutory maternity pay has already been dubbed the “mummy tax”. Taking into account all the cuts that will affect a woman during pregnancy and the first year of her baby’s life, including maternity pay, pregnancy support, tax credits and child benefit, the loss adds up to an average of £1,700. So, on the day when the highest paid are getting a massive tax cut and the rich are getting a £3 billion tax giveaway, people who are striving will be hammered.

[Steve Webb]

The right hon. Gentleman’s words in Hansard will show that he is very concerned about all this. Will he therefore tell the House whether it is his intention to reverse any of these measures?

[Stephen Timms]

The hon. Gentleman knows that we have demanded not only an inflation-level rise this year but a similar rise for both the two years covered by the Welfare Benefits Up-rating Bill. As to our policies for beyond the next election, he will have to await our manifesto, just as the whole country is eagerly awaiting it. It will tell him how we will put these problems right.

[Ian Murray (Edinburgh South) (Lab)]

Is my right hon. Friend as surprised as I am—I asked the Secretary of State for Scotland this question this morning—that it is a Liberal Democrat Minister who is about to give the biggest tax cut to millionaires the country has ever seen, while at the same time ensuring that people trying to do the right thing are worse off?

[Stephen Timms]

My hon. Friend is absolutely right. That does surprise me very much because in opposition the Minister’s party used to champion reducing child poverty. In government, however, it has surrendered and is cutting in real terms the incomes of the poorest in what is frankly a craven surrender to the Tory party at its worst. It is implementing policies that even Mrs Thatcher did not dare propose.

[Kate Green]

My right hon. Friend is right. This order will simply make poor people poorer. Is it not absolutely cynical that, rather than face up to the fact that more children will be in poverty as a result of these miserable measures, the Government decide instead to change the definition of child poverty?

[Stephen Timms]

That appears to be what they are going to do, and it was striking that the impact assessment for the Welfare Benefits Up-rating Bill did not tell us what the impact on child poverty would be. After the election, the Minister and his colleagues started well and said, “Yes, we are serious about tackling child poverty; here are the figures.” They have stopped that now and it is difficult to get an answer out of them even with a parliamentary question. My hon. Friend is absolutely right—they apparently want to change the definition of child poverty, but they will not get away with it because we will be able to tell what is going on.

[Mr Winnick]

My right hon. Friend is being very generous with his time. Is he aware that, as someone who from time to time did not always agree with every aspect of the Labour Government during their 13 years—although I certainly did in the vast majority of cases—one of the things that most pleased me were the measures that lifted so many families out of poverty? Both Tony Blair and his successor as Prime Minister can be proud of that.

[Stephen Timms]

My hon. Friend is right. There was dramatic progress on reducing child poverty but, as I shall explain in a moment, all that ground will sadly be lost under the current Government’s policies. Those policies are hitting the disabled because, as the Minister said, although disability living allowance is being raised in line with the consumer prices index, employment and support allowance is not. On Second Reading of the Welfare Benefits Up-rating Bill the Secretary of State said that he was protecting people in the ESA support group. In fact he is not and, as the Minister confirmed, their benefit will be uprated by less than inflation—I know the hon. Member for Eastbourne has taken a close interest in that matter. Those people will see their income rise by less than inflation; they will have a real-terms cut.

As we have discussed, child poverty will rocket. The Institute for Fiscal Studies, where the Minister once had the task of compiling the statistics on child poverty, was already predicting on the basis of Government policies an increase in child poverty of 400,000 by 2015 and 800,000 by 2020.

[Stephen Lloyd]

I appreciate the right hon. Gentleman’s generosity in giving way. He mentioned the Institute for Fiscal Studies. Does he agree with its director, Paul Johnson, who said that

“the 1% uprating of welfare would start to put benefits back in line with earnings after welfare has grown twice as much as wages in recent years.”?

[Stephen Timms]

It would be particularly interesting to see a revised child poverty forecast from the Institute of Fiscal Studies, which I expect to appear before the Budget. We now know—as I say, these figures had to be dragged out of reluctant Ministers—that this order plus the Welfare Benefits Up-rating Bill will increase the number of children growing up below the poverty line by 200,000, including 100,000 in working families.

[Kate Green]

I am grateful to my right hon. Friend for allowing a further intervention. When Government Members say that the uprating of benefits is in line with the uprating of wages, including in the public sector, are we not talking about the exactly the same people who are facing a double whammy? Those receiving the 1% benefits uprating are the same as those receiving the 1% pay uprating.

[Stephen Timms]

My hon. Friend is absolutely right, and we are talking about a large group of people. Indeed, the hon. Member for Eastbourne and I were on the radio together when somebody rang in whose total income was £71 a week. She was going to get an increase of 70p a week as a result of this order and she asked, “How am I supposed to manage?” To their credit, the hon. Gentleman and his friend from the Conservative party, the hon. Member for Camborne and Redruth (George Eustice), could not give her an answer.

[Stephen Lloyd]

I recollect that radio programme. I am sure the right hon. Gentleman will accept that the point was that surviving on £70 a week is a challenge for anyone in any circumstances, with or without a benefit uprate.

[Stephen Timms]

The hon. Gentleman is absolutely right, but what was clear from that contributor was the despair at the prospect of a rise of only 70p a week. At a time when inflation is running at more than 2% and is likely to increase, according to the Bank of England inflation report published today, that is a very alarming prospect indeed.

[Mr Reid]

The right hon. Gentleman is being generous in taking interventions. I have been sitting listening and wondering what the Labour party’s policy is. If my memory is correct, he said earlier that CPI was currently 2.7%. Will he tell the House by how much all these benefits would have been increased if a Labour Government were in power?

[Stephen Timms]

I answered that point earlier. I was hoping the hon. Gentleman was going to tell us why, after he attacked us a few moments ago for the 75p pension rise of many years ago, he is this evening supporting a 70p increase for people such as those who are dependent on employment and support allowance in the work-related activity group. If he explained the conflict between the two positions he has taken, I would be very grateful to him.

[Mr Reid]

I am sure the right hon. Gentleman will recall that I spoke in debate in support of an amendment to the Welfare Benefits Up-rating Bill to increase benefits in line with average earnings, and that is still my view. As he knows, the order is not amendable, so either we vote for the whole thing, including the triple lock for pensioners, or we vote against it, but my views are on the record.

[Stephen Timms]

I am grateful to the hon. Gentleman for clarifying that he opposes what the Government are doing in this order.

I was talking about the impact on child poverty. We are expecting the revised projections from the Institute for Fiscal Studies ahead of the Budget. On the basis of the numbers that Ministers have reluctantly given us for the impact of this measure on child poverty, we will see a projected increase in child poverty of more than 500,000 by the expected date of the next election and 1 million by 2010. That is a shameful record indeed, undoing so many years of progress made in reducing child poverty by the previous Government, as my hon. Friend the Member for Walsall North (Mr Winnick) pointed out.

[Mr Reid]

I have put my views on the record, but the right hon. Gentleman has not answered the question I asked in my second intervention. What percentage increase does he think should be in the order this evening?

[Stephen Timms]

I will give the hon. Gentleman the answer I gave a few moments ago. We think there would have been a reasonable case for the Government to make a temporary change to the uprating methodology, from RPI—the previous methodology—to CPI, but unfortunately they did not do that. They came up with a proposal for a permanent change to the methodology, using CPI only, but now they are not even sticking to that and have reduced the figure further to 1%.

What if inflation rises sharply in the next few years? The Governor-designate of the Bank of England has suggested that there should be greater flexibility in the inflation target used by the Monetary Policy Committee. If inflation rises sharply, the consequences for working families—for strivers, struggling to get by at the moment and lumbered with a 1% rise hard-wired into law for next year and the following two years—do not bear thinking about. The Bank of England inflation report published today places a probability of 39% on inflation being over 3% before the end of this year. The fan chart shows possible figures of 5%. What would the consequences be for people who will see a 1% rise in their incomes for the next three years if inflation rose in that way?

Why are the Government doing this? Why have the siren voices won this year? It is because the Government’s economic policy has failed. Let us look at the three years covered by this order and the Welfare Benefits Up-rating Bill. Compare the spending on unemployment benefits over those three years, which was predicted in the Budget last year, with the spending predicted in the autumn statement, just a few months later. The forecast spending on unemployment benefits over those three years went up, just between the Budget and the autumn statement, by the same amount that this order and the Bill will save over those three years. That is what is happening—the Government are clawing back the increase in unemployment benefits resulting from the failure of their policies from those who receive those benefits.

[Stephen Lloyd]

The right hon. Gentleman talks about the failure of the Government’s economic policies. Does he accept two absolute facts—that this is the worst economic recession since the great depression, and that since the general election the coalition Government have generated 1 million extra private sector jobs?

[Stephen Timms]

The hon. Gentleman is undoubtedly right that this is a very serious financial crisis, although I do not remember Government Members making that point before the election. I ask him to justify to the House why, on the very day that these measures will take effect, millionaires will all get a tax cut averaging more than £2,000 a week.

[Stephen Lloyd]

Under the coalition Government, people on higher incomes will pay more tax than they did during the entire 13 years—except for 30 days—of the Labour Government, during one of the strongest and most powerful booms we had had for 40 years. Can the right hon. Gentleman defend that record?

[Stephen Timms]

What would the hon. Gentleman say to the woman we spoke to on the radio, who will get a 70p per week rise as a result of this order? How would he defend to her the fact that the Government whom he supports will give a tax cut of £2,000 a week to everybody who earns more than £1 million a year? For me, that is completely indefensible, although he may have a defence—

[Stephen Lloyd]

Does the right hon. Gentleman accept that the IFS and other bodies have said that under the coalition’s tax policies the wealthier will actually pay more tax than they did before?

[Stephen Timms]

It is the people at the bottom who are being clobbered by this measure, and that is clear from the analysis. The hon. Gentleman has not defended the tax cut—I do not blame him as I do not think it can be defended that millionaires should get this enormous tax cut on the very day that people such as the woman on the phone to us on Radio 5 Live will get a 70p per week rise.

[Ian Murray]

I think what the hon. Member for Eastbourne (Stephen Lloyd) is trying to say is that the 50p tax rate created £7 billion of tax avoidance, so rather than going after the tax avoidance the Government have reduced the rate.

[Stephen Timms]

My hon. Friend is right: if it is an avoidance problem, the Treasury should address that.

Strivers will pay the price for the Government’s economic failure. The most vulnerable are being hammered and the rich are getting a tax cut. The solution is to get Britain back to work. That is why we have argued for our compulsory jobs guarantee. It will cost about £1 billion a year. We will pay for it by restricting the tax relief on pensions saving for those earning over £150,000 per year. We will guarantee anyone over 25 who has been in receipt of jobseeker’s allowance for two years the offer of a choice of jobs or a training position, and after that the payment of jobseeker’s allowance will cease.

The case for our compulsory jobs guarantee received a welcome boost from the Minister’s Department when it published an evaluation of the last Government’s future jobs fund. I am grateful to both Ministers who are in their places on the Front Bench for the publication of this helpful and informative evaluation. The evaluation pointed out just how successful the future jobs fund was in getting young people back to work. It estimated that the net benefit to society as a whole was £7,500 for every participant in the future jobs fund, and that is after taking account of all the costs of the initiative. Of the gross cost of some £750 million for the future jobs fund, over half was recouped by the Treasury in additional tax payments and reduced benefit payments. Our compulsory jobs guarantee will repeat that success for the over-25s. We will get Britain back to work; we will end this punishing spiral of increasing struggle for strivers and for the most vulnerable in order to fund, as the Government find they have to do, the price of ever-increasing unemployment.

The proposals in this order for working-age benefits are a disgrace, although the Minister made a perfectly fair point in his speech earlier—that an increase is better than no increase at all. The proposals for pensions uprating are worth having—I put it no more strongly than that—but the proposals for working-age benefits are shameful and quite contrary to everything the Minister’s party argued for when in opposition. I hope that in the course of this evening’s debate we will be able fully to expose that.

20:26

[John McDonnell (Hayes and Harlington) (Lab)]

It is unfortunate that the order cannot be disaggregated, which would allow us to vote for its individual elements—supporting the increases at the rate of inflation and opposing those with a 1% increase. The breaking of the historic link between inflation and social security benefits, which has lasted over a generation on a political consensus, is a significant step, so it is important for us to judge it issue by issue in respect of the people affected by it.

I have looked at the Government’s impact assessment, which says that we are affecting one in eight households. The households most affected—those most likely to receive a cut—will be those further down the income scale, families with children and women who are heading lone parent families. I think that when we take decisions such as this, it is important to assess the position of those whose benefits are at stake and to look at their plight. The Institute for Fiscal Studies said that 2.5 million workers’ families will lose an average of £215 a year; 7 million in work will lose £165 a year; and, to reiterate what was said in previous debates, 68% of those affected by the order will be in work.

An assessment undertaken by the House of Commons Library showed that these families are already facing higher inflation because they spend more on food and utilities. Their experience of low income is quite startling. Children born in families with low incomes already have a birth weight 130 grams lower on average than children in social classes 4 and 5. These families are more closely associated with infant mortality and chronic disease later in life, yet these are the ones whose benefits and income we are cutting. Before their second birthday, a child from a poorer family is already showing a lower level of attainment than those in professional families. By six, a poorer child will already have been overtaken in terms of attainment by a child of lesser ability from a professional family. Children aged up to 14 from unskilled families are five times more likely to die from an accident and 15 times more likely to die from a fire at home than a child from a professional family. Such children also leave school with fewer qualifications.

Last year, according to the figures, 130,000 people—and they will be the people whom we are discussing tonight—including 20,000 children were fed by the Trussell Trust through its food banks. That is the reality of what is happening to the people whose benefits we are cutting tonight—for that is effectively what we are doing.

I pay tribute to Save the Children for two pieces of research that it conducted. One was a survey of parents, and in the other it talked to children directly, which I think was quite a significant thing to do. It is important for the voices of children to be heard in the House. As the survey of parents showed, what families are currently experiencing is shocking; and, as I have said, those are the families whose benefits we are cutting.

In response to the survey, well over half the parents on low incomes—more than 60%—said that they were having to cut back on food, while more than a quarter said that they had skipped meals in the last year. One in five families said that their children had to go without new shoes when they needed them. A large number of the children in poverty said that they were missing out on things that many other children took for granted, and one in five specified school trips. One in five parents in poverty said that they had had to borrow money to pay for essentials such as food and clothes in the past year. Those are the families who are in the most poverty, and they will be impoverished even further as a result of what we are doing tonight.

[Mr Russell Brown]

My hon. Friend is entirely right. Organisations such as Save the Children, Barnardo’s and the Children’s Society have produced the cold hard facts that Labour Members all know about. I should like to think that Government Members would get a grasp of the facts as well.

Does my hon. Friend recognise, as I do and as, I think, many people do, that a mother who is trying to prepare a meal and put it on the table often says that she will eat something later, when in fact she is skipping that meal in order to feed her children, knowing full well that they need food in their bellies to get through the rest of the day?

[John McDonnell]

Indeed. According to the survey, half the parents questioned had gone without food themselves at some time in the past year to ensure that their children were fed.

We sometimes forget that children have views as well, and that those views can permeate a whole family. When a family is living in poverty, the children understand what is going on. They have a glimpse of what is happening, and they realise what their parents are going through. I found the survey of children shocking as well, and quite startling. Save the Children said that

“the most striking finding from the survey is the extent to which children are aware of the financial strain their parents are under. Parents are stressed by lack of money and”

—whatever they do—

“many children are sharing this burden.”

It said:

“The majority of all children (58%) think it is getting harder for their family to pay for everything.”

Those children understand. It also said:

“Over half of children in poverty (52%) agree that not having enough money makes their parents unhappy or stressed.”

[Kate Green]

My hon. Friend is advancing a powerful case. I am glad that the Secretary of State is present. He often says that debt is a route to poverty, but is not the situation that my hon. Friend is describing proof that, in fact, poverty will drive those families into debt?

[John McDonnell]

That is true, and I shall say more about it shortly. There is a wider debate to be had, but the pressure on parents that forces them into debt eventually has implications for their children.

According to Save the Children,

“Over a third of children…say their family struggles to pay the bills….4 in 10 children… ‘agree’ or ‘strongly agree’”

—that phrase is typical of surveys—

“that their parents are cutting back on things for themselves, such as…clothes and food.”

The children witness their mums and dads not eating properly.

Let me leave the last word to the families themselves. A number of parents were quoted extensively by Save the Children. It is worth reading quite a few of those quotations, because they hit home and reveal what people are really experiencing. One parent said:

“ I regularly leave the heating off and use blankets and jackets to keep warm so that we have more money towards the food bill... I buy the cheapest brand foods so that I can afford the right amount of fruit and veg for the children. Missing a meal or two a week is not uncommon for me so that my children can eat. My children never go without what they need, but I sometimes have to.”

Brendan is 13. He says:

“I had shoes that were all broken up and full of holes. People at school laughed at me…I saved up my own money for my own shoes, but I don’t care about the brand or the make.”

They are the people who will be driven further into poverty as a result of the decisions we take tonight. We now have 3.5 million children living in poverty, and as a result of the last Budget, the autumn statement and today’s measures, we will probably have another 400,000 or 500,000 children living in poverty by 2015. We are blighting a generation.

Those children will never forgive us, and nor should they forgive us, because we are currently redistributing wealth from the poor to the rich, not from the rich to the poor so that we can tackle poverty and child poverty. That is why I wish I could vote against tonight’s orders. We are in a bind, however. If we vote against this order, we vote against the CPI increases as well. I hope lessons will be learned so that in future years we will properly consider each element of any such proposals.

Any Member who votes for this order tonight should feel a weight of guilt on their shoulders. Individuals and families are suffering greatly. The Save the Children survey findings reflect what we see in our constituencies. People say to us in our advice surgeries every week that they cannot survive on the income they have, whether they are in work because of low wages, or out of work because of low benefits, or—that dangerous combination—in work and on benefits at the same time. They cannot survive on their incomes.

Poverty is not just about income, of course. There is a range of other interventions that need to be discussed and debated, but those other interventions do not work if people cannot put food on the table. They do not work if people are cold at night and do not have shoes or a coat to put on their children. That is why we must halt this cutting of benefits.

We must instead start to look at how we can create a fairer society. We had a consensus for at least two generations after the welfare state was established that when inflation took hold, we would increase social security benefits in line with inflation, so that the poorest would be protected. I agree that we occasionally had rows in this House—both between and within parties—about what form that protection should take. I refused to support the shift from RPI to CPI. That was a debate worth having, and even under the new definition at least people on social security benefits were protected. Now we have torn up that consensus and the people who suffer will not be those who take part in party political debates, but the sort of people who were surveyed by Save the Children, and most of them will be children. That is a total disgrace.

We cannot vote against the Government tonight because of the nature of the order before us, but we can campaign against these measures, and that is what we will do. We will take our argument into our constituencies. We will mobilise people, and I think this generation of children will remember who forced them further into poverty. Any Member who votes for this order tonight will pay for it in the long term—even if they end up paying for it in history. Those Members will be taking part in the impoverishment of a whole generation—kids who cannot afford coats, school shoes and school trips and whose parents have to go without food. That is unacceptable in 2013 in the seventh richest country in the world.

20:38

[Sheila Gilmore (Edinburgh East) (Lab)]

It is a shame that if we talk for as long as many of us would like to talk tonight, we will probably be slightly unpopular with some. However, people who will be affected by these changes will be watching these proceedings, and they will be dismayed to see that this important debate has been tacked on to the end of the parliamentary day and not a single Conservative Back Bencher is sufficiently interested to want to take part in it. When I was standing for election in 2010, the Liberal Democrats used to like to position themselves, at every hustings I was at, somewhere to the left of Labour, but it is their Back Benchers who are defending the Government’s choices—for they are choices. The public have to be well aware of that.

One regrettable thing about what has been happening for nearly three years now is the constant pitting of one group against another: older people against younger people, and people in work against those not in work. That is not helpful because it provides no analysis of the real roots of the problems facing us. The hon. Member for Eastbourne (Stephen Lloyd) has been doing a good job of defending the Government. He made the point about how out-of-work benefits have risen by more than earnings in the past five years, using it to justify the 1% rise. However, he knows that if we look at a different time period, we come up with a very different figure. Since 1979, unemployment benefit and its successor benefit, jobseeker’s allowance, has fallen from 22% of average earnings to 11% of average earnings. We are starting from a very low base indeed, and it is not right or fair therefore to say that 1% is adequate for people who are struggling.

Why are we in some of these spending positions? The irony of all this is that so many of the policies we are facing will drive up spending, be it on some of the benefits under discussion today or on the related benefits—the ones that would come under the tax system at the moment, such as tax credits. Some 90% of new housing benefit claimants in the past couple of years have been people in work, and that has been because of the level of wages and because these people are in part-time work. That has been driving up the housing benefit totals, which the Government are very concerned about, as I am. I am not comfortable with the fact that, as we are told repeatedly, the housing benefit bill has risen so much in the past 10 years, but we need to examine the reasons for that. The major reason is that so many people on low incomes are finding themselves with no other housing choice but the private rented sector, the cost of which in housing benefit is very high. If we do not tackle that underlying issue, in one way or another, be it by creating more affordable housing or by dealing with the issue of private sector rents, the housing benefit bill will still creep up and up, and in a couple of years’ time we will not have made any progress in reducing it.

In the meantime, many of our constituents living in low rent housing are about to have their income cut substantially. I have a constituent in her 50s who lives in a house that is not grand—it is a two-bedroom house, where the second bedroom is small and the kitchen opens off the living room. That removes the notion that she could have someone in to share—one of the Minister’s fondest examples. At her age and stage of life, why should she be expected to live in that way? She will be losing £50 a month in April, and I can assure the Minister that in my city the choices of where to move to are very limited, even if she wanted to move or should move.

When we are looking at a figure of 1%, we have to consider what is happening in the wider sphere. If just one thing—one change—were happening, it would not be quite so painful for a lot of families, but these things are happening to the same people. I give the example of a lady who is on employment and support allowance in the work-related activity group. She will be suffering from the 1% rise as well as from the £50 knocked off her housing benefit. People such as her have to deal with the cumulative effect of what is happening. She did not want to be claiming benefit. She did not want to fall ill in her 50s, but it is something that, after a working life, has happened to her and to thousands and thousands of people like her up and down this country.

Instead of dealing with the issue in this rather rushed way, perhaps the Government could do as some organisations have asked and make a cumulative impact assessment of the effects of the change on disability. Why do we not have that, and why do we not make time available for a proper debate? We need to see what is happening. Some people may see the change as relatively small, but a whole package of measures is coming in.

I am seeing a big change. A couple of years back, people would say that the Government’s welfare reforms were all about “those terrible scroungers—it’s not me and mine, it’s somebody else.” Now, people come to my surgeries and ask, “Why is this happening to me? I’m not a scrounger. How come this is happening? I’ve worked hard all my life, so why is it happening to me?” People are not inherently either workless or working. People move in and out of work, particularly at the lower-paid end of the spectrum.

We know why the measure had to be brought in this year. It was because the Government’s economic policies had failed. I am glad the hon. Member for Eastbourne decided to raise the question of jobs. It is frequently said in this place that 1 million private sector jobs have been created, and therefore our economic policy is working. The Prime Minister says it all the time. In January 2011, within a short time of coming into office, the Government told us that half a million new private sector jobs had been created. Presumably that was the true figure at the time. Many of us think that one of the reasons for the increase in jobs was the economic stimulus applied by the previous Government; it was certainly very soon for the coalition Government’s policies to have taken effect. If that figure was correct and the figure of 1 million is correct, since then—two years ago—apparently only half a million jobs have been created. But—it is a big but—in that period, 170,000 jobs in colleges were reclassified from the public to the private sector, and 100,000 jobs appear to be unpaid work placements. At the last Department for Work and Pensions questions, the employment Minister, the hon. Member for Fareham (Mr Hoban) admitted that unpaid jobs were being counted in the total. Apparently, the Prime Minister does not know, because he still talks about his million jobs and how wonderful it all is.

[Ian Murray]

I am delighted that my hon. Friend has allowed me to intervene to point out that the other big contributors to the million new jobs total are people on short and zero hours contracts. They are classified as employed when they are not being paid.

[Sheila Gilmore]

I thank my hon. Friend for that point. I was about to say that many of the jobs are exactly of that nature, which ratchets up the support payments. People on low earnings or who work very part-time hours are the very people who depend on housing benefit and, in many cases, tax credits. When we look at that situation, we see that the wonderful recovery in jobs is really not so wonderful. Indeed, some of the jobs are so part-time as to be almost invisible.

Life is very difficult for people who work in those kinds of jobs. They often have to start work at very difficult hours. A constituent who came to see me was desperate to work, and she found a job, but it meant that she had to get from Edinburgh to Livingston, which is about 20 miles. Without a car, it is quite a long way—it may be 18 miles; my figures might not be quite right. She had to get there for 7 o’clock in the morning. How can someone do that when they do not have a car and public transport is either non-existent or very expensive? That job did not last long, because she could not keep it up.

Another constituent was told by a large department store, for which she had worked for a number of years in a job that fitted with her children’s school hours, that that option was no longer available to her. She now had to work for just 12 hours—she had previously managed to work for 20 hours—or she had to go on a flexible contract so that she could be called in whenever the shop wanted her. That was difficult—in fact, virtually impossible—for her because of things such as child care arrangements. She could not just suddenly come in on a Saturday or come in of an evening. The job had suited her needs, and it had brought a reasonable income that enabled her to support her children. Now she was told, “Well, if you don’t like it, there are plenty of people looking for these jobs and we can fill them very easily. If you do not want the new contract you can simply leave.”

That is the kind of job offer that many people are getting. If, on top of that, tax credits, which have been frozen for the past couple of years, go up by only 1%, and housing benefit payments are limited, those people will indeed suffer.

[Julie Hilling (Bolton West) (Lab)]

Has my hon. Friend made an estimate of the number of people who have to juggle two, three or more part-time jobs? How many of the new posts that have been created are occupied by just one person who is trying to juggle different jobs and doing just a few hours in each one every day?

[Sheila Gilmore]

That is a good question. We need to know far more detail about those figures. We know from the people who come to see us, the people we talk to and the people we meet when we go around our constituencies exactly what is happening: if people can get more than one part-time job they will do so in order to make up their income, but it can be difficult for them.

That is the backdrop to these provisions. That is the bigger picture that the public will want to understand, as they realise that this will actually happen over the next few years. It has begun to hit many people hard, and it can only get worse. We must make it clear that if we are to be part of a society that is truly one in which we are all in it together, we should not go down that road.

20:52

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

It is a pleasure to follow the other Back-Bench contributions in this somewhat sparsely attended debate, particularly the hon. Member for Hayes and Harlington (John McDonnell), who always speaks with consistency and clarity on these issues. Like him, I very much regret that the motions have been grouped in such a way that voting against the egregious real-terms cut in working-age benefits would potentially jeopardise the essential support to some of the most disadvantaged people in our society. I regret that it is not possible to vote against part of the measures.

When we debated the issue a few weeks ago, I raised a number of concerns. What I have heard this evening has done nothing to assuage those concerns. A below-inflation rise and a real-terms cut over three years will do nothing except pile on the pain for low and middle-income households that are already paying the price of the recession. The cap of 1% on the uprating of working-age benefits will drive low-income families into real hardship, increase levels of deprivation, and accentuate the gross inequalities that plague our society. It will hit parents especially hard, particularly those in low-paid or part-time work. Given the extremely short time that we had to debate this a few weeks ago, with strict time limits, it would be utterly wrong to allow this debate to end without challenging those points and reiterating the key issues.

It is fair to say that low-paid workers have already borne the brunt of the economic downturn. Many people have seen their working hours cut. Increasingly, we find people, especially women, working part-time when they really want a full-time job. Those who have child care and caring responsibilities, as the hon. Member for Edinburgh East (Sheila Gilmore) mentioned a moment ago, often find themselves in seasonal, temporary, part-time, insecure and sometimes zero hour contract work. It is extremely difficult for them to juggle the competing demands on their time if they have caring responsibilities or children to look after.

We should not forget that unemployment is still unacceptably high and concentrated geographically in certain parts of the UK. It is neither fair nor accurate to lay responsibility for high unemployment solely on people who are unemployed. Although it may be easier for us to abdicate responsibility for economic policies and political decisions and blame unemployed people for their own plight, we should acknowledge the role of the wider economy, the climate we are living in, our political response to it and the inadequacies of that in creating the present high levels of unemployment.

The key point is that it is not just the unemployed who are hit by a freeze and a cut in working-age benefits—it is people in work who will pay the highest price. The Resolution Foundation has said that around 60% of the cuts will fall on people in work. It is important to see the impact of the autumn statement in the round, looking at the freeze on benefits alongside other measures. According to Citizens Advice, a family of two parents both working in full-time low-paid jobs, with two children, paying a modest rent of £130 a week, will be more than £12 a week worse off by 2015. A similar family with one full-time earner on minimum wage will be about £13 a week worse off by 2015.

A disabled lone parent of two children receiving the support component of employment and support allowance will see a comparable net loss of income in real terms. This does not take account of the cuts that such families have already experienced through last year’s changes to the tax credit system and child care support. The distributional analysis of the Government’s own impact assessment shows that the Government’s reforms will hit the lower half of the income spectrum hard. The analysis by the Institute for Fiscal Studies shows that the pain of the austerity measures is being felt in the lower five income deciles, with the biggest losses in the lowest deciles.

The point that I have made previously in debates on this subject is that although these distributional analyses can be helpful, they do not tell the human story. More than that, they do not show the disproportional impact that the rising cost of living has on low-income households. In the context of today’s inflation forecasts that show that high inflation is set to be with us for several years, this point becomes even more acute. Whether it is hikes in domestic fuel prices or rises in the price of staple foods, it is the things that lower income households most depend on that are going up in price most quickly. I have said before that I do not think the retail prices index or the consumer prices index is a particularly good measure for assessing the experience of inflation in lower-income households, but the CPI for sure underestimates the real impact of those real-term cuts in support.

This is not just abstract economic theory. We are talking today about the difference between a 1% rise of about 71p and an inflationary rise of a meagre £1.50 a week. It is important that we bear in mind what we are doing. Abandoning any link with earnings or prices sends a strong signal that the Government are abandoning any support for citizens going through tough times. It undermines the social contract that most of us thought we had.

The 4% cut in real terms to low and middle-income families will have material consequences for thousands of families right across the UK. These are deeply regressive measures. They are mean and miserable. They will affect 30% of all households in Scotland. They will affect the vast majority of families with children. Given the importance of the issue, the consequences that it will have for our constituents, and the lack of time that we have had to debate it, it is a scandal that the Government Benches are so empty this evening. No one has risen from the Back Benches to defend this egregious policy. I urge the Government to think again.

[Karl MᶜCartney (Lincoln) (Con)]

Will the hon. Lady give way?

[Dr Whiteford]

I am just concluding, and the hon. Gentleman was absent for most of the debate, so I do not think it is fitting that he should try to get in at the last gasp.

20:59

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

I had not intended to speak this evening, but my hon. Friend the Member for Hayes and Harlington (John McDonnell) has somewhat inspired me. He spoke on a subject that I want to say one or two things about. It is extremely saddening that we are taking both orders together, because we on the Opposition Benches—[Interruption.] Well, we can support one order, but we have severe difficulties with the other. We will see what happens.

[Steve Webb]

Just to clarify, for the convenience of the House, we have three hours to talk about both orders. One is uncontentious, so the hon. Gentleman can talk to his heart’s content about the other and vote against it if he wants to.

[Mr Brown]

We are taking one vote, and the Minister knows that.

[Kate Green]

Is not the problem that there is a single order dealing with the uprating of a whole range of benefits, including disability living allowance, which is going up by more than 1%, and other working-age benefits that are limited to only 1%? The problem is that a single order is dealing with a combination of benefits within it.

[Mr Brown]

Exactly, and that is the difficulty we face this evening.

I have raised the point about the 1% freeze on benefits before. I have asked Ministers in both the Department for Work and Pensions and the Treasury what kind of impact assessment has been done and what consultation there has been between the two sets of Ministers, but I have never had a straight answer. What we will be witnessing over the three-year period, according to the Government’s figures, is almost £6 billion being saved or, as I would put it, £6 billion being taken away from the lowest income households. The Minister must surely know that that £6 billion would have been spent in the local economy.

When I first arrived in this House, in 1997, the then Labour Government decided to introduce a national minimum wage, which effectively put money into people’s pockets. The impact assessment at the time was based on £1 million being given to the poorest households, which clearly would then be spent in the local economy. For every £1 million spent in the local economy, 40 jobs were created.

If the Minister is able to do his work—I think that he is an intelligent man—he will see that taking £6 billion out of local economies over three years will have a detrimental impact. My hon. Friend the Member for Edinburgh East (Sheila Gilmore) is telling me that yet another high street outlet is on the brink this evening, so more jobs might go.

[Julie Hilling]

Does my hon. Friend agree with the International Monetary Fund, which states that the cuts to welfare benefits will cost the UK economy £40 billion, almost double the cuts to welfare?

[Mr Brown]

I do not know whether it will be £40 billion, because I have not seen the figures, but I trust what my hon. Friend says. There is no doubt that it will have a severe and adverse impact on the economy.

I come now to the point that my hon. Friend the Member for Hayes and Harlington made about families and children. If we do not give the next generation the right start in life when they are children, we give them the wrong start. I must say to the Minister that even now we see across our country the struggle that my party had in government to undo some of the damage from the previous 18 years. The damage can be done in a short period, but it takes an awful lot longer to recover from. We struggled in government to try to get things back on track. What the Minister is doing today is not what he said he would do when he was in opposition.

When he leaves this place tonight, I implore the Minister to pick up a copy of a documentary called “Poor Kids”. I have seen it a couple of times and it is heart-breaking, to say the least. As a father and grandfather, I say to the Minister that what the documentary shows is not beyond belief, because it does happen. It happens in many towns and cities across this country where families are living on basically nothing. Children as young as eight, nine or 10 years old have become worldly wise: they know about not having money and what debt is, and they understand how trying to put a meal on the table can result in other elements of poverty. That is not how children in this country should be spending their early years. They survive on hand-me-down clothes, not necessarily from older brothers or sisters but from other family members. Despite what many people think, charity shops on our high streets are an absolute godsend for such families, because sometimes they are the only way children can be clothed.

Parents sometimes sacrifice their own meals to feed their children. Perhaps I have led a sheltered life, but it was only when it was drawn to my attention that some mothers will prepare a meal for their children and tell them, “I’ll get something to eat later,” that I realised—I take no pleasure in saying this—that I witnessed that as a child in my household. I was part of a family of five and I know only too well now—perhaps I was naive when I was younger—that that was going on in my household. I witnessed my mother having nothing to eat while the rest of the family sat waiting for my father to come home from work.

[Ian Murray]

My hon. Friend is making an incredibly impassioned speech. The stories from the documentary and those that we all hear in our constituency advice sessions—one family in my constituency has been living off the cheapest white bread and jam for the past few months—are happening now, before the impact of any of these changes is felt, and the inflation of energy and food prices, the bedroom tax and the 1% uprating will make the situation not just worse but much worse.

[Mr Brown]

My hon. Friend is spot on. It is very difficult for families at the moment and it is about to get worse. The Minister mentioned the housing benefit changes. Some places are under-occupied and we all have families coming to us regularly—almost weekly—saying that they need an extra bedroom. Surely the Minister and other Government Members know, however, that to marry up families who are under-occupying and those who are overcrowding is a mammoth task.

[Sheila Gilmore]

Not only is it a mammoth task, but, in fact, if it was possible to reshuffle people into the right-sized houses within a reasonable time scale, there would be no saving to the Government; and yet they have a saving in their budget.

[Mr Brown]

My hon. Friend is correct. I worry about some of the figures that the Government are working with in terms of savings. Only time will tell, two or three years down the road, whether all this has been worth it.

We need to give children a proper start in life. We really do. As my hon. Friend the Member for Edinburgh South (Ian Murray) said, we are already witnessing difficult enough times for many families.

[Julie Hilling]

What does my hon. Friend have to say about the fact that we are the seventh richest country in the world and yet last year 200,000 people had to go to food banks? In that context, what does he think we should be saying to the Government?

[Mr Brown]

My hon. Friend makes the same point as my hon. Friend the Member for Hayes and Harlington. We are the seventh richest nation but this is how we are treating families—treating children—in this country. Two food banks are about to start in my constituency. I hate the idea, but I recognise that it is the only way some families are going to survive. My wife volunteers and works alongside the local church providing meals for homeless families. In reality, there are very few homeless families, but there are families who are in great need of a hot meal a couple of times a week. It is right that she does that, and I suspect that if at some stage I ever retire from this place she will have me in there helping her—because it is going to that long before we throw off what we are witnessing at the moment.

I mentioned to the Minister earlier the case of the lady who has lost her disability living allowance and I told him what her GP said to me. The GP also said that his practice is now coming under real pressure because aspects of the welfare reform are starting to bite. He has patients with fluctuating conditions, mental health problems and stress-related illnesses that are leading them back in to see him. People are going back to their GPs to look for help, support, guidance, and even help with completing forms. Some GP practices are beginning to creak at the seams in having to deal with people they should not really be seeing—people whose conditions will never, in all honesty, get any better medically. It is a real worry when the professional people in our communities are beginning to see, to recognise and to understand that life is really going to get tough for some.

Let me finish by saying to the Minister that if he has not watched the documentary “Poor Kids”, I suggest that he and many others do so, because it is quite frankly heartbreaking. This is not how people should be living in the seventh richest country in the world, and things are only going to get tougher for these families.

21:09

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

There are two major issues at hand in these orders. The second order is uncontroversial, as the Minister explained at the outset, but inside the controversial order on social security benefits uprating are two issues in particular. First, there is the nature and extent of the uprating of pensioner incomes; and, secondly, there is the Government’s decision to cut in-work and out-of-work benefits. It would be better if those two things had been separated to allow for a proper debate on both, but the Government have taken the decision to place one inside the other.

The debate began with the Minister taking the Floor, and he was followed by my right hon. Friend the Member for East Ham (Stephen Timms), who forensically dissected the impact of the Government’s policy on hard-working families, strivers and the most vulnerable. Further contributions came from only one side of the House—the Opposition side. We heard from my hon. Friends the Members for Hayes and Harlington (John McDonnell) and for Edinburgh East (Sheila Gilmore), the hon. Member for Banff and Buchan (Dr Whiteford), and my hon. Friend the Member for Dumfries and Galloway (Mr Brown). All their contributions were characterised by an emphasis on and an interest in how the Government’s decision to cut in-work and out-of-work benefits will affect families—not only families in what we might call the squeezed middle but families who are looking for work. I will return to the issue of what we might call the strivers tax, but let me first deal with the nature and extent of the uprating of pensioner incomes.

We have heard much from the Minister about the triple lock. I do not know if he is aware, but the original triple lock was a handgun produced by Smith & Wesson in 1908. Like the Minister, it had such high hopes for its triple lock. It claimed it was the best gun it had ever made and yet, just eight years later, the triple lock was redundant: it was a triumph of rhetoric over reality. The same might be said of the Government’s triple lock. This is the third year it has been in operation, and we know that the increase in the state pension is less than it would have been if the uprating method used by the previous Government was still in place. My right hon. Friend the Member for East Ham eloquently dissected that aspect of the case.

It is worse than that, however. The triple lock this year has produced a real-terms cut in the value of the basic state pension. The Minister shakes his head, but listening to his exchange with my right hon. Friend, one could only feel that the Minister wants to have his proverbial cake and eat it. Last year, the Minister trumpeted that he had delivered the highest real-terms increase in the state pension for about 10 years. Having in all seriousness claimed that credit, it is difficult for him now to avoid the blame for the very same mechanism that is producing a real-terms cut in the state pension.

I took a look at the Minister’s website this evening, just to see whether there was any further evidence of his liking to have his cake and eat it. What did I find? The Minister is calling and campaigning for his local citizens advice bureau to be protected from council cuts. Earlier in the debate, however, he defended strongly the council tax freeze as an important contribution to improving family income. I will let the House make its mind up on this second case of having cake and eating it.

[Mr Reid]

The pension increase is higher than both the rate of inflation and the increase in earnings. The hon. Gentleman seems to disagree with the 2.5% figure that the Government are putting forward. Will he tell us what the percentage increase in the pension would be if Labour were in power?

[Gregg McClymont]

Is the hon. Gentleman aware that inflation is now 2.7%, and that the pension is to be uprated by 2.5%? I do not have my abacus with me—maybe the hon. Gentleman should have one—but that seems like a real-terms cut to me.

[Mr Reid]

I am grateful to the hon. Gentleman for being generous in giving way. He knows perfectly well that under the previous Government and under this Government the rate of inflation in the previous September is used to calculate the pension increase for the following year. That has not changed, and this pension increase is higher than the rate of inflation at the standard time at which it is calculated.

[Gregg McClymont]

As far as I could take from that further intervention, the hon. Gentleman still maintains that inflation is less than 2.5%, when in fact it is 2.7%. [Interruption.] The Minister makes a comment from a sedentary position. If he wants to intervene I will be happy to let him, but before he does so let me deal with the hon. Member for Argyll and Bute (Mr Reid). It is clear that CPI inflation is currently 2.7%. The basic state pension is to be uprated by 2.5%. Is that, or is that not, a real-terms cut? It obviously is. Would the hon. Gentleman like to intervene again?

[Mr Reid]

I still have not got the answer to the question I asked the right hon. Member for East Ham (Stephen Timms), and I am now asking the hon. Gentleman. If Labour was in power, what would the pension increase be?

[Gregg McClymont]

I am still waiting for the hon. Gentleman to confess that he was absolutely wrong to suggest that this is an above-inflation increase. That leads to some questions about the ability of the Liberal Democrats to devise economic and financial policy when they do not know the current rate of inflation and how it relates to the basic state pension.

[Steve Webb]

Understandably, the hon. Gentleman would like to be sitting where I am sitting. If he was, by how much would he have put the pension up?

[Gregg McClymont]

The Minister is determined to tease out from the Opposition what will be in our next manifesto. Our position is clear, and he is obviously trying to deflect attention from this real-terms cut in the pension.

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

Come on, Greg, you can do it. Just tell us!

[Gregg McClymont]

The Secretary of State must be less exuberant from a sedentary position.

I shall move rapidly on to the strivers tax. It is clear that strivers have been hit by a tax to pay the cost of the Government’s economic failure, while at the same time millionaires have received a £107,000 tax cut.

[Ian Murray]

Does my hon. Friend share my deep concern that this does not really have anything to do with economic policy or the deficit, but is driven by ideology?

[Gregg McClymont]

My hon. Friend makes a good point. The Chancellor thought that he could play clever politics and draw dividing lines between different sections of society, but he did not take it into account that this would hit those in work above all else. I am afraid that he has been too clever by half.

Let us be clear. One of the groups that will be particularly hard hit will be women. House of Commons Library analysis is clear that two thirds of those hit overall by the real-terms cut in benefits and tax credits are women.

[Steve Webb]

indicated dissent.

[Gregg McClymont]

The Minister shakes his head, but that is House of Commons Library research.

There has built up a picture of a Government who, having failed miserably on the economy, want to make working people and those seeking work pay the price for their economic failure. Labour’s alternative is clear: get Britain back to work, introduce a compulsory jobs guarantee and bring down the unemployment bill—the price of failure that the country is paying.

To conclude, the proposals in the order for working-age benefits are an affront to hard-working people—although an increase is better than no increase, of course. If the Government want to plug the hole in their failing economic plan, they should cancel their tax cut for millionaires this April, not hit millions of working people on modest incomes. That is the reality of the situation. The pension proposals are, of course, worth having. Pensioners depend on these upratings every year to maintain their standard of living, so I will urge my hon. Friends to abstain on this order, but to campaign for a new set of economic policies as we move towards 2015.

21:22

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

This has been an interesting debate. We have heard heartfelt contributions from the hon. Members for Hayes and Harlington (John McDonnell), for Banff and Buchan (Dr Whiteford) and for Dumfries and Galloway (Mr Brown), the latter of whom described his own experience of childhood poverty. I would describe those two hon. Gentlemen—I am not sure the hon. Lady would accept this term—as socialists and so would clearly not be where we are, but would be taxing the rich far, far more to avoid the sorts of things we are having to do to reduce the deficit. Their Front-Bench team do not share their view, however, so although I respect their position that they would rather tax the rich, that is not the position of their Front-Bench team.

The right hon. Member for East Ham (Stephen Timms) was the classic personification of Labour now—a vacuum where there should be a political party. When asked what they would do now, both he and the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) said, “Well, if this had been done, we might have done that, and in some years, we will produce a manifesto, but we’re not saying.” The hard-working folk who write Hansard could have simply inserted, “Vacuous twaddle here”. The House has a right to know what the official Opposition would do, but answer came there none.

The hon. Member for Edinburgh East (Sheila Gilmore), among others, asked for a cumulative impact assessment. Occasionally, when the Government produce such figures, they are met with some scepticism. The Institute for Fiscal Studies chose to analyse the cumulative impact of all the fiscal consolidation from the start of this Parliament through to the end, and it has stated this month in its “Green Budget” that

“those on the very highest incomes have clearly been hit the hardest”.

[Mr Russell Brown]

Finish the sentence.

[Steve Webb]

I will finish the sentence. It goes on to say

“when looking at the fiscal consolidation as a whole.”

In other words, when looking at everything, which is what we were asked to do.

[Sheila Gilmore]

The other half of what the IFS said referred to the people in the lowest income deciles and the losses that they will incur. The cash reduction for people on the highest incomes will not impinge on their well-being in anything like the same way as these measures, including the 1% increase, will impinge on the poorest.

[Steve Webb]

In fact, the IFS figures are based on the percentage increases and, as we have been reminded repeatedly in the debate, the cash amounts for the very highest income earners are far higher for any given percentage figure. So, even taking percentages instead of cash amounts, the highest earners have, in the IFS’s words, been “hit the hardest”.

[Ian Murray]

Will the Minister give way?

[Steve Webb]

No, I want to make some progress.

The right hon. Member for East Ham referred to the triple lock and the increase of 2.5% over inflation, compared with 2.2%, as derisory. I remind him that the extra 0.3% cost the taxpayer £150 million. I remember the funny-money days of Labour when £150 million was considered a mere rounding error. He dismisses it as derisory. When his party was in office, it was borrowing £150 billion a year, so I appreciate that for him £150 million is small change, but I still have the naive feeling that that amount is a lot of money. He and others derided our triple lock as though it were a trifle and of no consequence, but had Labour implemented the triple lock between 1997 and now, we would be spending an additional £3 billion on the state pension. So if Labour had applied the triple lock that he derides as inconsequential throughout their term in office, we would be spending £3 billion a year more on pensions. But perhaps he thinks that that sum is derisory, and a frippery, as well.

We have also been hearing about strivers. This is the classic dog-whistle politics of the Opposition. They accuse us of trying to divide people, yet they suddenly divide people—[Interruption.] It is not our side that has used that language.

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

It was your Prime Minister.

[Steve Webb]

The Opposition have tried to divide people into “strivers” and “somebody else”. I am not sure who the “somebody else” is—a non-striver, perhaps. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) is shouting out, but he is the man who said in his conference speech that Labour was on the side of the strivers, not the shirkers. We know who uses that language.

Why is it necessary to have the fiscal consolidation? It is because of the Labour party’s debts. There was £150 billion of borrowing in the final year of the last Labour Government. Labour takes no responsibility for that but, had the previous Chancellor’s plans been put into operation, it would have had to implement substantial spending cuts on public sector pay—which it has finally now agreed—and on benefits. Have we heard a single suggestion from the Opposition today on how they would make savings? They simply oppose every cut, pretend to be on the side of the poor, and never accept responsibility for how we got into this mess in the first place.

[Ian Murray]

Will the Minister give way?

[Steve Webb]

No.

A number of people have said that we are the seventh richest country in the world, in terms of our gross national product per head, but we are of course also the country that was brought to the brink of bankruptcy by the last Labour Government. That is what we have had to deal with.

The hon. Member for Dumfries and Galloway mentioned people having their disability-related benefit reassessed. I would gently remind him that reassessing the millions of people on incapacity benefit, many of whom had been parked on benefit for a decade or more, was begun, rightly, by the last Labour Government. That process has been carried on. That is why people are being reassessed. We think it right not to park people on incapacity benefit for decades, only for them to retire and find that they have no pension either. So the reassessments are right. I entirely accept the point that they have to be done well, but they were begun under the last Government and they continue under this one.

[Mr Russell Brown]

Surely the Minister recognises that for people going through assessments it is almost like a revolving door. People with long-term and fluctuating conditions are losing benefits, eventually getting them reinstated, and then six months pass and they are back losing their benefits again. The system is not working for about 40% of people who have to go through a process time after time, making them even more ill.

[Steve Webb]

The Government fully accept that Labour’s work capability assessment was not working when we came into office, which is why we commissioned Professor Harrington to undertake a series of reviews. We have implemented his recommendations to make the test better, and that will continue under a new assessor.

[Ian Murray]

rose—

[Steve Webb]

No. We have heard a lot of handwringing from the Opposition Front Bench, but no alternative proposition. We have been told that this measure will be devastating and cost the poorest people in the land billions of pounds, so surely we can have a commitment from the Labour party to reverse it. I think the hon. Member for Stretford and Urmston (Kate Green) said this measure was “egregious”, and we have heard how evil and unkind it is, so the Labour party is clearly committed to reversing it. However, those on the Front Bench know that they will weep crocodile tears and try to persuade people that they actually care about this stuff, but they will not find a penny to reverse any of it. That is the truth.

[Ian Murray]

rose—

[Steve Webb]

No, I am reaching a conclusion.

We are bringing forward regulations that will increase the pension by more than the rate of inflation, taking it to the highest share of average earnings for more than 20 years. We are uprating key disability benefits by the rate of inflation, and ensuring that even in these straitened times we are able to increase benefits for people of working age. I commend the order to the House.

Question put and agreed to.

Resolved,

That the draft Guaranteed Minimum Pensions Increase Order 2013, which was laid before this House on 28 January, be approved.

Resolved,

That this House takes note of and approves the draft Social Security Benefits Up-rating Order 2013, which was laid before this House on 28 January.—(Steve Webb.)

Business without Debate

Wednesday 13th February 2013 Commons Chamber

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Social Security

That the draft Jobseeker’s Allowance Regulations 2013, which were laid before this House on 10 December 2012, be approved.—(Stephen Crabb.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Social Security

That the draft Employment and Support Allowance Regulations 2013, which were laid before this House on 10 December 2012, be approved.—(Stephen Crabb.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Road Traffic, Wales

That the draft Civil Enforcement of Road Traffic Contraventions (Representations and Appeals) (Wales) Regulations 2013, which were laid before this House on 19 December 2012, be approved. —(Stephen Crabb.)

Question agreed to.

Business of the House (26 February)

Motion made,

That at the sitting on Tuesday 26 February, notwithstanding Standing Order No. 20 (Time for taking private business), the Private Business set down by the Chairman of Ways and Means may be entered upon at any hour, and may then be proceeded with, though opposed, for three hours after which the Speaker shall interrupt the business.—(Stephen Crabb.)

Hon. Members: Object.

Child Care

Wednesday 13th February 2013 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Stephen Crabb.)

21:32

[Lucy Powell (Manchester Central) (Lab/Co-op)]

Thank you, Mr Deputy Speaker, for granting this debate on the important subject of future child care policy. As a pregnant mum, I am only sorry that this debate has ended up at the slightly non-family-friendly time of 9.32 pm, but that should not take away from the importance of the issue and the child care crisis facing many families in my constituency and across Britain today. I wanted to bring this matter to the Floor of the House as the Government have made several important announcements on this issue that they have yet to bring it to the House.

Why is debate so important now? First, families are being hit by a triple whammy of the Government’s making: rising costs of child care; reduction in financial support; and, for many, a financial disincentive to work. I will say more about those issues shortly.

Secondly, not only were the Government’s recent announcements on changes to child care regulation—a loosening of ratios between carers and children, and a greater requirement for qualifications—not brought to the House for debate, they have been widely derided by parents and providers and are confused and dangerous. What is more, there is little evidence that those proposals will have any impact on costs whatsoever.

Thirdly, for many weeks now we have read in the papers and heard from Ministers—not least in the mid-term relaunch of the coalition by the Prime Minister and Deputy Prime Minister—about a new package of financial support for parents to help to meet the costs of child care, yet these proposals raise many questions. I would like to put them to the Minister this evening.

Finally, I would like to begin a broader debate—it is an important one for this House to have—about what the shape of future child care policy should be. It is vital to the economic future of the country that we enable as many women as possible—and, in some cases, men—to return to work at the level and pay they were receiving before having children. Not only would that pay for itself, but there would be wider social benefits to society from more early years development.

First, let me address the crisis currently facing the majority of families—a crisis of this Government’s own making. It is a triple whammy. Families with small children are seeing the costs of child care soar. Recent reports suggest that fees have gone up by 6% in the last year. Costs are set to increase further with the severe reduction in available places owing to this Government’s slashing of funding. Some 401 Sure Start centres have closed since the Government came to office, despite the Prime Minister’s pledge to “back Sure Start” during the election. Many more, such as those in my constituency, have ceased to offer any day-care provision at all. In addition, cuts to local authorities’ early years budgets have meant school nursery places falling. The choice for families has dropped greatly and, with the shortage of supply, costs are going up and up. On top of that, the Government are slashing financial support for most families, especially those on low or middle incomes. For those on the lowest incomes, the maximum allowance of child care costs that can be claimed through tax credits has been reduced from 80% to 70%.

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Lady for bringing this important issue to the House. Not everyone can call on grandparents, uncles, aunts or other family members to provide care—that is true right across the United Kingdom, including in my constituency of Strangford—hence the importance of the child care systems that are already in place. Does that not underline the point that an extra tax allowance should be available for those who are working, to enable them to take full advantage of child care services?

[Lucy Powell]

I thank the hon. Gentleman for that. It is a good point that many people rely on paid child care, not the support of their families, which is why this evening’s debate is so important.

The allowance of child care costs that can be claimed through tax credits has been reduced from 80% to 70%, losing a family with two children £30 a week or £1,560 a year. With the introduction of universal credit in April, things are set to get even worse for the lowest-paid families. A recent report by the Children’s Society, “The Parent Trap”, found that the lowest-income working families will have to pay up to seven and half times as much towards their child care costs under universal credit, leaving many unable to continue working. Over the coming years, the 1% uprating of tax credits and maternity pay will leave all recipients worse off in real terms. Many middle-income families have seen tax credits cut completely or their child benefit cut.

The third element of the triple whammy for families is that the crisis is creating disincentives either to work or to work more. Moreover, the introduction of universal credit builds in even greater disincentives, especially for lone parents. A recent report by the Resolution Foundation, “Counting the Costs of Childcare”, found that for lower to middle-income families, the extra income generated by a second earner is almost entirely lost on child care costs, leaving lower or middle-income-earning households no better off in work than out of work. That just cannot be right. With the introduction of universal credit, Barnardo’s has calculated that a lone parent family—with two pre-school children—working 16 hours a week would be zero pounds—yes, zero pounds—better off if they increased their hours to full time. This is a perverse situation that needs looking at urgently. This is a real crisis for many families—who in turn are opting to work fewer hours or not work at all, which in turn is costing our economy and costing the taxpayer—and it is a crisis of this Government’s making.

One of the Government’s flagship policies to address the triple whammy was announced a couple of weeks ago, yet the Minister’s plans to loosen the ratios of childminders to children—to 1:4 for under-twos and 1:6 for over-twos—have been met with anger and derision by parents and providers. What is more, there is little or no evidence that these plans will have any impact on costs at all, yet there is evidence—especially from France, which the Minister is so keen to look to—of quality being compromised. Parents are overwhelmingly against these proposals. A recent survey by Mumsnet found that 94% are happy with the current arrangements. I have been contacted by many anxious parents. If parents are not happy with the quality and care options they have, they are more likely to opt to stay at home and look after the children themselves.

Providers are also united in their opposition to these proposals. Some 94% of respondents to a Pre-school Learning Alliance survey of members said that the quality of care would be compromised if ratios were relaxed in this way. I have been contacted by many working in the sector. Their comments are damning. Neil Leitch from the Pre-school Learning Alliance said:

“We are absolutely appalled by this fixation to alter ratios...This is a recipe for disaster.”

June O’Sullivan, chief executive of the London Early Years Foundation, one of London’s highest rated providers and providers of the excellent and well-used nursery we have here at the House of Commons, said:

“It beggars belief that a minister can wreak havoc on a sector that has explained the negative consequences of her actions....France is now the country with the highest sickness level in Early Years in Europe.”

Kids Academy, which operates in the north-west, contacted me to say:

“We oppose these changes and believe they are fundamentally wrong.”

Even the Minister’s own child care adviser, Professor Helen Penn, has described the plans as “grotesque”.

As reported in The Independent recently, a report commissioned by the Minister’s Department, but which has yet to be published, is believed to conclude that these plans will lead to a “deterioration” in the quality of care and will not reduce the costs to parents. Perhaps the Minister will take this opportunity to tell the House if and when she will publish this important report that she commissioned. The evidence from France is sketchy too, with many believing that quality has been compromised.

As the Minister failed to come to House at the time to debate the proposals, I hope that she will take the opportunity this evening to answer a few questions. Which stakeholders, parents and providers has she found to support these changes? What evidence does she have that the changes will do anything to reduce child care costs? Will she publish the evidence that she has received on quality and costs?

I turn now to the issue of additional financial support, on which the Government have provided a running commentary in the newspapers. Perhaps in recognition of the effect of the Government’s own policies on places and funding as well as their severe cuts to tax credits and family support, they have been briefing for some time now about a new package of financial support. However, on the face of what they are proposing it appears that not everyone will benefit, and how it will be delivered remains a mystery.

We are led to believe that the Government, if they can agree among themselves, are to offer a tax break of up to £2,000 a year per child to each household. This would be paid for by scrapping the child care voucher scheme and only

“a bit of extra money”.

By my reckoning, many families who currently benefit from the voucher scheme, especially dual-earning couples who currently get nearly £3,000 a year of tax breaks each, would be worse off under this proposal. Can the Minister today guarantee that no family in receipt of child care vouchers would be worse off under her new proposals?

Will the Minister explain how the tax-break scheme will work? Many people in the sector, and leading experts, think that there are only three different options for how it can work—through the employer, which places an extra burden on them; via self-assessment; or through providers, who would need to claim it back and then supposedly pass it on to parents. So which of these unappealing options does she favour? Will she say more about when these long-awaited proposals will be brought forward?

I am conscious that it is getting very late, but I would finally like to set out what I would like to see as the scope and framework for future child care policy, as I believe the scale of the crisis we face—and its impact on the economy—requires more radical thinking. The Government’s proposals are just tweaking at the edges. Before we even get into this debate, it would be useful if the Minister clarified what the current Government spend is on child care and child care support. I have heard her use different figures, ranging from £5 billion a year to £7 billion. Which is it? How is she calculating it? The OECD figures that she is fond of quoting, indicating we spend more than most, do not compare like with like, as children start school younger here than in many other European countries, a cost that is included.

Starting with what we currently spend on child care, we then need to look at how much the economy would benefit from more women returning to work immediately following maternity leave. All the evidence shows us that women—I am afraid it is still women—who take a break from work and their careers suffer a pay gap for the rest of their lives, very rarely returning to the level, hours and pay they were on previously. In many cases, they work part time on low pay for years after having children and do not return to their previous job.

So, we not only need to eradicate the disincentives to work, as outlined earlier, but we need to make the case to the Treasury of the long-term added value to the Exchequer of the tax revenue from women returning to their existing jobs. The recent Institute for Public Policy Research report “Making the case for universal childcare” argues that point extremely well. It argues that over a four-year period, there would be net return to the Exchequer of over £20,000 per parent from a returning mother, even when 25 hours a week of free child care is provided over that same four-year period.

Once this case is made, I believe we should look at investing up front the extra tax generated from parents earning more and working more, through more radical child care support. In my view, that should be focused on the points at which parents make decisions about how and when to return to work, especially when their maternity leave comes to end or when they have had their second child. These are critical moments of choice, but too often child care policy is centred on older children; by then, the parent might either have chosen to return to work or already have managed to struggle along with the extra support—however welcome it is when it comes. We need a parent-centred child care policy.

Critical to this parent-centred approach is parental leave and flexible working. I welcome the Government’s bringing forward proposals for parental leave to be shared between both parents—as Labour would have done. This is an important component to changing the nature and culture of workplace attitudes to having children, and I believe it will enable more parents to stay in the work force.

I know I have raised a number of big issues in this evening’s debate, and that we can only scratch the surface in half an hour. I hope, however, that this will help to develop some of the issues on the table.

21:46

[The Parliamentary Under-Secretary of State for Education (Elizabeth Truss)]

I congratulate the hon. Member for Manchester Central (Lucy Powell) on raising this important topic and I congratulate her, too, on being a working parent in the House of Commons. It is important to have wide representation, so it is great to see more working mothers and more working fathers in the House. I am delighted to reflect on the fact that the hon. Lady’s future children might benefit from our developing policies on this issue.

My aim as Minister with responsibility for child care is to try to make life easier and better for working parents and their children. Every parent who goes out to work wants to have confidence that their child is receiving the best possible early education and child care. I think we can achieve that—and achieve it by using the existing system and resources as well as, hopefully, future resources in due course.

Sadly, that is not the case for parents at the moment, as there are issues about availability, cost and quality, which is variable. There was a recent worrying report from Policy Exchange, which suggested that quality is lower in deprived areas, where we need it to be of the highest quality. One thing we have done in the new two-year-old programme we are launching, which will benefit 260,000 two-year-olds by 2014, is to state that those two-year-olds should go to good and outstanding providers. I think that is an important measure.

The hon. Lady mentioned the cost to parents, and she is absolutely right that our parents face some of the highest costs in Europe—on average, 27% of income is being spent on child care. I have met many parents who are struggling with the financial burdens they face.

As for Government spending, there is a debate about the OECD figures, and it is often difficult to get to the bottom of these international comparisons. The evidence suggests, however, that although we do not spend as much as the Nordic countries, we do spend as much as countries such as France and Germany. Yet, despite the high parental input and the high Government input, we have people on the front line in child care who are earning an average of £6.60 an hour. That is simply not good enough for the important job being done by those charged with bringing up and educating the next generation.

All the evidence about brain development now suggests that the quality of staff is of paramount importance. Qualifications are also important, as is demonstrated by the study carried out by the Effective Provision of Pre-School Education team, and also by the OECD’s recent “Starting Strong” report. The Department’s first report, “More great childcare”, focuses on the need to improve quality and qualifications. We are working on the cost issue, and will have something to say about it in due course, but unfortunately I cannot say anything at present.

There are currently more than 400 child care qualifications, and parents and people in the child care industry do not know what they mean. We are creating a single qualification at level 3, called the early years educator. People entering that course will need to have C grades in GCSE English and maths, which I consider very important. We are also creating the early years teacher programme, which will confer teacher status. Recruits to that programme will pass the same tests as teachers have to pass on entry.

As the hon. Lady said, we are giving high-quality providers more flexibility, but only when they invest in high-quality staff, and only if they want to use that flexibility. There is nothing compulsory involved; we are merely giving additional flexibility to providers who meet high-quality requirements. That is, I think, an incentive for providers to upskill their work forces, and it gives them headroom in which to do so.

As we have established, many staff are paid barely more than the minimum wage. We want to emulate high-quality countries where pay is much higher. The Nordic countries tend to pay their staff more than £20,000 a year, while France and Germany pay between £16,000 and £18,000. Here in England, we pay £13,000. All those other countries pay considerably more to their early education staff, and all of them have larger allowances in terms of ratios than we do. Indeed, Scotland and Ireland have higher ratios than we do. At present we have the lowest ratios in Europe, and I do not think that that gives providers enough headroom to hire high-quality staff. As I have said, however, it is for providers to make the decision, and we will only allow them to do so if they invest in high-quality staff.

The hon. Lady asked me who supported these changes. One supporter, I believe, is the shadow Education Secretary, the hon. Member for Liverpool, West Derby (Stephen Twigg). He has suggested that we should adopt the Danish or the Swedish model. Neither Denmark nor Sweden sets mandatory ratios at national level. They believe in paying people well, and in employing high-quality professionals who make judgments at local level. That is the kind of system that I want to see. I want to see a more diverse system, in which we trust professionals to make those local judgments. Two-year-olds or three-year-olds may be at different stages of development, and may have different needs. I think that we should allow nursery staff who are properly qualified and trained to make the judgments about the best support that is available to those children.

[Julie Hilling (Bolton West) (Lab)]

Will the Minister give way?

[Elizabeth Truss]

I am sorry, but I have a limited amount of time, and I want to press on.

The hon. Lady asked me who else supported the changes. They are supported by Sir Michael Wilshaw of Ofsted, and by Andreas Schleicher of the OECD, who produced an important report called “Starting Strong” about the impact of improved qualifications on the attainment of children. Providing a teacher in an early years setting and providing high-quality staff can have a massive effect. A number of leading providers in the child care industry also support our proposals. I admit that not everyone is supportive. I can only say that we are giving people the opportunity to offer more places, it is not compulsory, and it is certainly not something that we will allow providers who do not invest in high quality to do.

We are also simplifying the system to make much more funding reach the front line. That is another important part of the proposals. Under the present system, local authorities and Ofsted are both responsible for quality, and quality assurance in different areas is at different levels. We are investing in Ofted and in more front-line inspectors from Her Majesty’s inspectorate to ensure that inspections are of genuinely high quality and focus on what is important. We have just changed the Ofsted framework so that it is much more focused on outcomes and the quality of engagement with children. There will be more emphasis on qualifications and the outcomes for the children.

All parties agree that the current system is not working. There are issues with the availability of child care. We want there to be more childminder agencies to help us provide more child care. Over the last 20 years the number of childminders has halved. They are a vital source of flexible child care for parents who do not work normal hours—MPs are one such group. We want childminders to be more widely accessible. Childminder agencies will be required to provide training, and they will be regulated and inspected by Ofsted. They can be set up in schools or nurseries. There will be great opportunities to expand the number of childminders and the amount of care available.

We will also allow good nurseries who hire high-quality staff to have more flexibility and to expand, again helping parents with availability. If a provider—a childminder or a nursery—shows that they are good quality according to Ofsted, they will be able to offer Government-funded places. There will no longer be a separate gatekeeper role for local authorities, which will also help us to expand the amount of child care available.

We need to go through a culture change in this country. Child care has been a low-wage, low-status profession. That is wrong, as it is an important profession in which lots of dedicated people work. Unfortunately, they are not rewarded sufficiently. We must look at what other countries do well in terms of remuneration and training. We are currently devising our early years educator qualification, and we are looking at the best practice in other countries and how we might adopt it.

The hon. Lady asked about funding proposals. I will consider the points she made about how we might improve the funding system. We must make sure we get the best value for money from the £5 billion we currently spend. The hon. Lady asked about the various different figures. They vary because the child care element of the working tax credit is a proportion of the spend that parents have. That must be tracked and estimated and it is not always the same from year to year because the budget is not fixed; it is a reimbursement of what parents pay. Therefore, there are various difficulties in calculating the total amount we spend and there are variable estimates. We do know, however, that we spend a lot through the system.

Interestingly, former children Minister Baroness Hughes of Stretford admitted that the funding had not been set up in an ideal way, as there are three separate funding streams that all feed into nurseries in different ways. She said that not enough of it goes through to the front line. We are looking at ways of fixing that. It is a complicated system, so it takes a while to do that, but I am working on it now. I would be very happy to continue this discussion with the hon. Lady after this debate.

Question put and agreed to.

21:58

House adjourned.

Deferred Divisions

Wednesday 13th February 2013 Commons Chamber

Division 160

Ayes: 276

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Conservative: 242
Liberal Democrat: 33

Noes: 196

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Labour: 180
Scottish National Party: 6
Democratic Unionist Party: 5
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Independent: 1
Green Party: 1

Division 161

Ayes: 280

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Conservative: 242
Liberal Democrat: 32
Democratic Unionist Party: 5

Noes: 190

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Labour: 179
Scottish National Party: 6
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Independent: 1
Green Party: 1