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Mr Speaker
Order. I draw Members’ attention to the fact that the book for entering the private Member’s Bill ballot is now open for Members to sign in the No Lobby. It will be open until the House rises today and when the House is sitting on Wednesday 15 May. The ballot will be drawn on Thursday 16 May, and a note setting out those arrangements and the dates when ten-minute rule motions can be made and presentation Bills introduced are published in the Order Paper.
BUSINESS BEFORE QUESTIONS
Sessional Returns
Ordered,
That there be laid before this House Returns for Session 2012-13 of information and statistics relating to:
(1) Business of the House.
(2) Closure of Debate, Proposal of Question and Allocation of Time (including Programme Motions);
(3) Sittings of the House;
(4) Private Bills and Private Business;
(5) Public Bills;
(6) Delegated Legislation and Regulatory Reform Orders;
(7) European Legislation, etc;
(8) Grand Committees;
(9) Panel of Chairs; and
(10) Select Committees.—(The Chairman of Ways and Means).
Oral Answers to Questions
(11 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Ann McKechin (Glasgow North) (Lab)
Q1. what fiscal steps he plans to take to stabilise the housing market.
The Chief Secretary to the Treasury (Danny Alexander)
My right hon. Friend the Chancellor is in Brussels today at ECOFIN, exercising the considerable influence that Britain enjoys as a full member of the European Union. The Government are committed to the vital reforms needed to address long-term structural issues in the housing market. They have already committed to investing £11 billion during the spending review period, and in the Budget we announced the Help to Buy scheme, a major new package to increase the supply of low-deposit mortgages for creditworthy households, which I hope the hon. Lady will welcome.
Ann McKechin
In evidence to the Treasury Select Committee, the distinguished commentator, Martin Wolf, described the Government’s mortgage indemnity guarantee as
“good politics and horrendous economics.”
Why are the Government pursuing a policy that is likely to increase the price of already over-inflated property, rather than financing affordable social housing that is needed by hundreds of thousands of people across the country?
Danny Alexander
The hon. Lady comments on affordable social housing, but I note that during Labour’s 13 years in office the amount of social housing fell by 421,000. This Government’s policies will increase the amount of social housing by 200,000—a record on which she should compliment us. On the mortgage indemnity guarantee, offering support to many households who cannot afford the large deposits now required is a thoroughly good thing, and by involving the Financial Policy Committee of the Bank of England in a review after three years we also have a guarantee of financial stability.
Mr Philip Hollobone (Kettering) (Con)
The Government’s fiscal and other policies have cut the deficit by one third, helping to keep interest rates low. What would happen to the housing market and domestic mortgage costs were interest rates to rise, even by just 1%?
Danny Alexander
My hon. Friend makes an important point, and he will know that if mortgage rates increased by 1% it would add more than £10 billion a year to the costs for British households—not a consequence any of us on the Government Benches would welcome.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
When the priority should be helping first-time buyers, will the Chief Secretary finally rule out the Help to Buy scheme being used to buy second homes—yes or no?
Danny Alexander
Actually, I have been very clear on this question throughout. It is not the intention of the Help to Buy scheme to aid people in buying second homes. The part of the scheme already up and running—the shared equity scheme—is available only for someone’s primary residence, and we will set out details of the mortgage indemnity guarantee as we go forward. The intention is not to help people buy their second homes.
Cathy Jamieson
Is it not staggering that two months after the Budget the Chief Secretary is still unable to rule out people buying a second home for themselves under this scheme? Let me try another question. With house building at its lowest since the 1920s and the housing benefit bill rising, why did the Government not use funds from the 4G auction to build 100,000 more affordable homes?
Danny Alexander
The hon. Lady will know that housing completions are 19% above the trough of 2010, numbers of housing starts are 58% above the trough of 2009, and she should welcome that improvement. In the Budget, we announced a £5 billion package to help the construction sector through the Help to Buy shared equity scheme, which will support the construction of 76,000 properties, as well as a massive expansion of the Build to Rent programme. It is staggering that the hon. Lady cannot bring herself to welcome those measures.
Harriett Baldwin (West Worcestershire) (Con)
Will the Minister welcome today’s figures showing that the number of first-time buyers increased by 20% this month? Will he also welcome the fact that the Department for Communities and Local Government has shown that 37,000 new homes for social rent were built last year, which is a record since 1997?
Danny Alexander
I welcome those figures. They suggest that the policies being pursued by this Government are having the desired effect.
Andrew Gwynne (Denton and Reddish) (Lab)
Q2. What assessment he has made of the effect of current fiscal policy on the level of youth unemployment.
The Chief Secretary to the Treasury (Danny Alexander)
The UK labour market is showing signs of recovery. More people are in work than under any previous Government.
Andrew Gwynne
The Chief Secretary says the economy is healing but he should take more seriously the fact that youth unemployment is growing again, with nearly 1 million young people unemployed for the last year. Will he explain why, in the past year, youth unemployment has grown by a staggering 355% since the Work programme was introduced? Is that not disgraceful? Should not the Government prioritise a compulsory jobs guarantee paid for from a bank bonus tax?
Danny Alexander
In this matter, a wee bit of humility from the Labour party would not go amiss, on the basis that youth unemployment has been a persistent problem in this country for many years—youth unemployment has been rising since 2003 or 2004. I note that, in the hon. Gentleman’s constituency between December 2010 and December 2012, youth unemployment fell by 11.8%. Through measures such as the Youth Contract and the Work programme, we are deploying considerable support for the task that he and I agree on, which is getting more young people into work.
Sir Peter Tapsell (Louth and Horncastle) (Con)
Did the Chief Secretary to the Treasury note that, while Finance Ministers seemed remarkably cheerful in Aylesbury last weekend, the Archbishop of Toledo was warning that their fiscal policies were threatening to cause social breakdown and the overthrow of democracy in Spain and much of southern Europe?
Danny Alexander
I am afraid that I had not noted the comments of the Archbishop of Toledo, but I did notice the successful G7 Finance Ministers meeting.
Chris Bryant (Rhondda) (Lab)
Fiscal policy is not the only thing providing a difficulty for young people. Welfare policies mean that they have to stay at home and cannot move to places where there might be jobs. The policy on youth services, which are being dramatically cut throughout the country, means that young people are not getting the skills that might make it possible for them to get into work. Is not the truth of the matter that the only people in this country who are doing anything to get young people into jobs are those in the Labour-run Welsh Assembly?
Danny Alexander
I cannot agree with anything the hon. Gentleman says. The truth is that this Government are creating more opportunities for young people to take steps towards work than any previous Government. Let me give an example from the Department of my right hon. Friend the Secretary of State for Business, Innovation and Skills. One million apprenticeship starts—a 50% increase on the previous Government—are creating valuable opportunities for young people to gain experience in the workplace and employment afterwards. The hon. Gentleman should welcome and support those efforts, not condemn them.
Stephen Williams (Bristol West) (LD)
The Archbishop of Toledo might well have been concerned about high rates of youth unemployment in Spain, which are much higher than they have ever been in this country, but does my right hon. Friend agree that, despite the fact that the problem, as he has just said, has been intractable for more than decade, the Deputy Prime Minister’s Youth Contract gives an opportunity for young people to have work experience in the private sector, from which most of the growth and job opportunities of the future are likely to come?
Danny Alexander
I wholeheartedly agree with my hon. Friend. The Youth Contract, which was launched in April, supports 500,000 young people into employment through a range of measures, including an in-work subsidy and access to work experience. Alongside the 1 million apprenticeships that my right hon. Friend the Secretary of State for Business, Innovation and Skills is starting during this Parliament, the Youth Contract offers a range of new opportunities for young people, which are necessary in getting more young people into work, which the House agrees is vital for the country.
Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)
Q3. What estimate he has made of the value of the reduction in the additional rate of income tax to 45% to a person earning £1 million a year.
The Exchequer Secretary to the Treasury (Mr David Gauke)
The cost of reducing the additional rate of income tax to 45% is estimated at around £100 million per year. That is set out in table 2.2 of Budget 2013. We have not broken down the impacts of income ranges because a significant behavioural response is associated with the additional rate of income tax. The behavioural response is estimated in aggregate and reflected in the costing.
Mr McCann
I am grateful for the Minister’s answer, but I can give him the answer to the question I asked: millionaires will get a cut of £42,000 under this Government’s policies. Does he think it right that those in receipt of tax credits are making a bigger financial contribution to the country’s coffers than millionaires?
Mr Gauke
Of course that is not true. As the Institute for Fiscal Studies has shown, the biggest contribution to reducing the deficit is coming from the wealthiest 10%. The hon. Gentleman might also wish to ask himself why, when his party was in office, it had a top rate of income tax of 40% for all but 36 days out of 4,758.
Jacob Rees-Mogg (North East Somerset) (Con)
The Minister will be aware that in 1978-79 the top 1% of taxpayers paid only 11% of total income tax. That is now nearer 30%, which shows that the Laffer curve works and we are better off with lower rates. May I therefore encourage the Government to cut rates further?
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
The Government should listen to people such as the deputy chair of Harlow Conservatives, who has said:
“The voters are disillusioned with Cameron…They don’t like the fact that he didn’t keep the 50p tax. That has really grated and people feel here that he is not working for them, he is working for his friends.”
No wonder the Conservatives in Harlow lost so many seats to Labour last month. Will the Minister explain again, for the people of Harlow and elsewhere, just why the Government have prioritised a tax cut for those at the top while ordinary taxpayers are struggling?
Mr Gauke
This is the Government who have raised the personal allowance that has taken millions of people out of income tax and resulted in tax cuts for some 26 million people. A tax rate that does not bring in revenue is a flawed tax rate, which I assume is why, despite everything we hear from the Opposition, they will not commit to returning to a 50p rate of income tax. They know that it does not raise revenue.
Charlie Elphicke (Dover) (Con)
Q25. Can the Minister confirm whether, all things considered, the richest people in this country are paying a greater or lesser proportion of their wealth in tax than they were under the previous Government?
Mr Gauke
They are paying a greater proportion of their income. If we look at what the Government have done across the board, including stamp duty, capital gains tax and the cap on reliefs, we see we are ensuring that the wealthy are paying more. The reality is that there are better ways to ensure that than the 50p rate of income tax, which was uncompetitive and failed to raise revenue.
Graham Jones (Hyndburn) (Lab)
Q4. What discussions he has had with the Secretary of State for Communities and Local Government on levels of construction output.
Dr Alan Whitehead (Southampton, Test) (Lab)
Q11. What discussions he has had with the Secretary of State for Communities and Local Government on fiscal incentives for the construction of affordable housing.
The Chief Secretary to the Treasury (Danny Alexander)
The Government are committed to supporting new housing supply while maximising value for money. The Government committed £4.5 billion to support 170,000 affordable homes over the spending review period, and we have added a further 30,000 to that figure through the guarantee programme that was announced last year and extended in the Budget a few weeks ago.
Graham Jones
In my constituency, that would ring hollow. I note that all three insolvency industry associations stated this week that nearly one third of construction companies in the north-west of England were at risk of financial collapse, which is a higher rate than in the non-construction sector of the north-west’s economy. Is not that an indictment of the Government’s record in the north and their failure to get growth going in the regions?
Danny Alexander
The hon. Gentleman should recognise that—while the previous Government presided over a decline of more than 400,000 in the number of affordable properties—the Government’s action to increase the numbers by 200,000 is a welcome support to the construction sector, as is the Help to Buy scheme that we announced in the Budget, which will produce a significant additional demand for properties to help the companies to which he refers.
Dr Whitehead
Does the Minister not recognise that the Help to Buy scheme will not produce a single new affordable home? It will simply enable people to buy other people’s homes. In my constituency, it costs eight times the average annual income to purchase a house in the city, so does the Minister not accept that action to improve affordable house building should have been taken in the Budget?
Danny Alexander
The Help to Buy shared equity scheme is available for the purchase of new build properties only. It is a multi-billion pound scheme that will help to fund an extra 75,000 or so construction sites in the next couple of years—a welcome boost to the construction sector. In the Budget, we announced funding to extend the guarantee scheme for housing associations to build new affordable properties, doubling its extent to ensure that 30,000 affordable homes are built over and above the 170,000 already announced. The hon. Gentleman is a close observer of these matters, and it will not have escaped his attention that the net number of affordable homes during Labour’s time in office fell by 421,000. That is not a record for him to be proud of.
Mr Christopher Chope (Christchurch) (Con)
Does the Minister accept that a tax on transactions reduces the number of transactions? Does he therefore agree that the current level of stamp duty is reducing the number of housing transactions, and as a result is disadvantaging the construction sector?
Danny Alexander
I have to say that I do not really accept that. The evidence of previous attempts to support housing transactions through stamp duty cuts is not all that positive. The Government have sought to make the stamp duty system more progressive, asking those with the largest properties to pay more. Indeed, I hope my hon. Friend welcomes the introduction, from the beginning of April, of a new annual charge for homes owned by offshore companies—a mansion tax for tax dodgers, as it were.
Sir Tony Baldry (Banbury) (Con)
New housing requires land for building, so it is good news that the Government are making significant sites available for new housing, such as the surplus Ministry of Defence land in Bicester. We intend to take advantage of that by building a new garden city in Bicester, because people need decent homes for the 21st century.
Danny Alexander
I wholeheartedly agree with my hon. Friend. I particularly welcome his comments on the potential for garden cities to add substantially to the housing supply, a matter on which the Government will make further statements in the next few months.
Chris Leslie (Nottingham East) (Lab/Co-op)
The Government have presided over a massive collapse of our construction sector. How can they maintain the pretence that they support the economy when just seven projects out of the 576 that were set out in their infrastructure plan are completed or operational? The director general of the CBI says:
“I have a queue of businesses at my door telling me the Government’s Infrastructure Plan needs speeding up.”
Will the Chief Secretary confirm that, so far, they have managed to deliver only two projects—less than one quarter of 1% of the underwriting guarantees authorised by his emergency legislation last summer?
Danny Alexander
The hon. Gentleman is stretching somewhat beyond the area of housing, Mr Speaker, but with your permission I would like to address his question. Some £10 billion worth of infrastructure projects prequalified for the guarantee scheme, bringing forward substantial investment in infrastructure. We are investing more in transport infrastructure in this Parliament than his Government managed during the economic good times. We are investing more in the railways than has been done since Victorian times. He should compliment the Government on our approach to infrastructure, because, whether in transport or communications and broadband, more is happening than his Government ever managed.
Hazel Blears (Salford and Eccles) (Lab)
Q5. What steps he is taking to implement the Public Services (Social Value) Act 2012 in his Department in relation to its procurement procedures; and what guidance his Department has given to its agencies on this matter.
The Economic Secretary to the Treasury (Sajid Javid)
Those buying services on behalf of taxpayers should be continuously looking for ways to maximise value for communities. As part of the sustainable procurement agenda, the Department and its agency already consider social factors when evaluating relevant tenders. The Cabinet Office guidance on the Public Services (Social Value) Act has been shared with all procurement staff in the Department and its agencies.
Hazel Blears
I thank the Minister for that reply, but as economic growth and job creation are proving somewhat elusive for the Government, will he now take practical steps to include in major infrastructure contracts—such as High Speed 2, defence procurement and house building programmes—social value clauses that promote local labour, apprenticeships, local supply chains and small and medium-sized enterprises? That is a practical measure that he could put into action now.
Sajid Javid
First, I hope the right hon. Lady will join me in commending the work done by my hon. Friend the Member for Warwick and Leamington (Chris White) to ensure that the 2012 Act reached the statute book. I also commend her for her work to promote and help its passage. However, I do not recognise her comment that jobs and growth have been elusive. We have seen 1.25 million jobs created in the past three years: one of the fastest rates of private job creation ever. Returning to her main point, it is important that social impact is taken into account in public procurement. The Treasury takes that very seriously, and we expect other Departments to do so too.
Jesse Norman (Hereford and South Herefordshire) (Con)
Will my hon. Friend join me in congratulating Hereford Futures on its new construction project in Hereford, which precisely targets drawing in local labour and local firms for the reasons of social value that the right hon. Member for Salford and Eccles (Hazel Blears) mentioned?
Sajid Javid
Yes, I join my hon. Friend in commending Hereford Futures. It is just the kind of procurement we want in promoting social impact.
Helen Goodman (Bishop Auckland) (Lab)
Q6. What recent assessment he has made of the performance of the economy in the north-east; and if he will make a statement.
The Financial Secretary to the Treasury (Greg Clark)
Last year, the north-east was Britain’s biggest destination for inward investment, after London and Greater Manchester, it doubled its trade surplus in goods to the highest in England and saw unemployment fall faster than in any other region of the country. The north-east independent economic review, published last month, shows the region’s further huge potential, which the Government are determined to support.
Helen Goodman
In fact, after the £2.8 billion of cuts that the Government have imposed, unemployment in the north-east is 10%, which is the highest in the whole country. I am pleased that the Minister mentioned the independent review, which recommended a doubling of apprenticeships, significant investment in transport infrastructure and the locating of major public institutions, such as the business bank, in the north-east. Have the Government put forward any resource to make any of those things happen?
Greg Clark
First, I congratulate the hon. Lady’s team of Spennymoor on, I am afraid, beating my team of Tunbridge Wells in the final of the FA Vase at Wembley 10 days ago. If she was there—I am sure she was—she will have seen that Spennymoor’s approach was characterised by very positive play, and she would do well to pay tribute to the efforts made in the north-east in much the same way. Exports are growing, employment is growing and the number of apprenticeships has doubled since we came into office. I will visit Newcastle in two weeks to discuss the implementation of the economic review, which I hope she will support.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
Will the Minister go a little further north when he goes to Newcastle and have a look at Northumberland, where we are proud of our record on exporting manufacturing businesses? Will he also continue the good work of Treasury Ministers in encouraging the Department for Transport to consider a properly dualled A1 to link us to the markets and places where we can do business in this country and abroad?
Greg Clark
I shall certainly do that. One of the bright spots in the north-east is its exporting of manufacturing goods, particularly in areas of high technology. Exports in specialised manufacturing were up 24% in the last year and power-generating machinery was up 20%. I shall certainly visit some of the businesses in the north-east, including in Northumberland, to encourage them to do more.
Pat Glass (North West Durham) (Lab)
Despite what the Minister says, the north-east’s unemployment is the highest in the country and continues to rise, with youth unemployment having reached dangerously high levels in constituencies such as mine. When will he introduce those recommendations in the economic review targeted at helping young people in the north-east?
Greg Clark
I welcome the hon. Lady’s support for the economic review and its proposals. She will know that under the city deal that we negotiated with Newcastle, which is already being implemented, sites are being prepared for new businesses to move in, creating valuable jobs. I hope that she will maintain that support for the proposals as we implement them.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
Q7. What fiscal steps he is taking to support private sector job creation.
The Chief Secretary to the Treasury (Danny Alexander)
More than 1.25 million private sector jobs have been created since the first quarter of 2010. At the Budget, we took additional steps to support job creation—for example, by further reducing the rate of corporation tax to 20%, through a new employment allowance for national insurance to encourage every business to create jobs in this country and by extending the seed enterprise investment scheme to encourage start-up investment in the UK.
Stephen Metcalfe
Will my right hon. Friend consider taking further measures? For example, the provision of cheap, easy-to-access finance remains an issue for many small and medium-sized enterprises. With more than 3 million SMEs in our country, will the Government consider creating their own easy-to-access, less risk-averse provision, which I think would seriously stimulate both growth and job creation?
Danny Alexander
I am grateful to my hon. Friend, who raises an important issue. We are all aware of the continuing difficulties of small firms in getting access to the finance they need. The business bank, which is being taken forward by the Secretary of State for Business, Innovation and Skills, is acting to address gaps in the financial offering for small firms. The funding for lending scheme is substantially expanding lending to small businesses, which is one of its objectives. The business finance partnership is investing £87 million through non-bank channels, such as peer-to-peer platforms, that can reach SMEs in a different way.
Geraint Davies (Swansea West) (Lab/Co-op)
Does the Chief Secretary agree that an EU-US free trade agreement would help private sector job creation and that the noise about EU exit is undermining such an agreement? We would get no benefit from such an agreement if we were out of the EU, so why don’t they shut up?
Danny Alexander
I agree, as do the entire Government, that an EU-US free trade area would be of substantial benefit to the United Kingdom and to the whole of the EU. I welcome the fact that the Prime Minister is in Washington this week precisely to advance that agenda.
Mr Brooks Newmark (Braintree) (Con)
The Government is to be congratulated on creating over 1.25 million private sector jobs, but youth unemployment is, as we have heard, still a sticky problem. Will the Minister join me in encouraging businesses to take advantage of the £2,000 tax break provided by the national insurance contributions Bill to try to hire one, two, three or even four young people?
Danny Alexander
First, I congratulate my hon. Friend on the work he is doing on the million jobs campaign to support young people in getting back to work. I echo his words on the employment allowance, which ensures that one person on an average wage and three on the minimum wage can be employed national insurance-free. That should be a substantial incentive, especially for small businesses, to take on more staff.
Jim Shannon (Strangford) (DUP)
On skills training and apprenticeships for young people, there is a two- pronged approach: employment opportunities through apprenticeships and skills training. What is the Chief Secretary doing to ensure that companies can provide skills training in conjunction with colleges?
Danny Alexander
I hope that the hon. Gentleman will have a look at the employee ownership pilot on apprenticeships, the purpose of which is to put much more of the funding, and more of the control over the way in which apprenticeships are designed and supported through colleges, in the hands of employers to make sure that the skills training that the young people get is suited precisely to the needs of the employers concerned.
Mr Alan Reid (Argyll and Bute) (LD)
Small businesses in remote areas such as Argyll and Bute have been greatly helped by the Government’s decision to freeze fuel duty and to introduce the island fuel duty discount. This means that businesses on the islands of Argyll and Bute benefit from fuel duty being 18p a litre less than it would be under Labour’s plans. I very much welcome the Government’s policy, and will the Chief Secretary make the case to Europe to extend the island discount to remote parts of the mainland, such as the Kintyre peninsula?
Danny Alexander
I am grateful to my hon. Friend. Every small business in the country is benefiting from the fact that fuel taxation is 13p a litre less under this Government that it would be under Labour’s plans. It is the coalition Government who are on the side of those firms. I will make the case to the European Commission to extend the discount to the most remote areas. We are working to build a case on that and I would welcome his support, and that of his local authority, in doing so.
Karl MᶜCartney (Lincoln) (Con)
Q8. what steps he is taking to secure economic recovery.
The Economic Secretary to the Treasury (Sajid Javid)
The Government’s strategy of deficit reduction, monetary activism and supply-side reform is designed to protect the economy and to lay the foundations for stronger, more balanced growth. There are encouraging signs that the economy is healing. The deficit is down by a third, GDP is growing and the private sector is creating jobs at a near-record rate.
Karl MᶜCartney
I commend the Government’s efforts to reduce the budget deficit. The Opposition are yet again advocating more spending to achieve economic salvation, but such expenditure in the past has left us with a current national debt of close to £1.2 trillion. Does my hon. Friend agree that the British public, and certainly my constituents in Lincoln, will not trust the Labour party with the nation’s finances as long as it continues to hold on to such reckless ideas and to a shadow chancellor who continues to peddle them?
Sajid Javid
I could not have put it better myself; I agree 100 per cent. with my hon. Friend. The economy is healing after suffering the deepest post-war recession this country has seen, which destroyed the hopes of many working families up and down the country. The deficit is down by a third, which has brought confidence and helped create jobs at a record rate: 1.25 million created in three years.
Sheila Gilmore (Edinburgh East) (Lab)
Is the Minister familiar with the universal jobmatch website created by one of his colleagues in the Department for Work and Pensions? If he has looked at the nature of the jobs being advertised there, he will have seen that in my area, 57 out of 76 advertised shop vacancies were for one company, operating all over the east of Scotland, which wanted people to work on a self-employed basis, distributing catalogues and selling things from them—
Mr Speaker
Order. I do apologise to the hon. Lady, but we must press on. There is a lot to get through. We need short questions and brief answers.
Sajid Javid
In the last decade of the previous Government, youth unemployment rocketed by more than 70%, so the hon. Lady is in no position to lecture this Government on jobs. In three years, 1.25 million private sector jobs have been created, more people are now employed in the private sector than at any other time in our history and we had a faster rate of job growth last year than the rest of the G7.
George Freeman (Mid Norfolk) (Con)
I congratulate the Government on having created six private sector jobs for every public sector job loss. Has the Minister seen the latest news from the CBI, which this week shows trend growth for this year running at 1.8%, and has he seen this quote from the CBI’s director of economics:
“We continue to expect UK economic growth to strengthen and become more broad-based over this year and next”?
Sajid Javid
I have seen the report to which my hon. Friend refers. I have also seen similar reports—for example, from the National Institute of Economic and Social Research—which also show encouraging signs. Together, all those reports show that this Government’s policies are working.
Mr Russell Brown (Dumfries and Galloway) (Lab)
In reply to a question I tabled, which eventually ended up with the Cabinet Office, I was informed that between June 2010 and September 2012, 741,000 private sector jobs were created. Can the Minister explain the discrepancy between that figure and the fanciful figures of 1 million, and now 1.25 million, private sector jobs that he and his colleagues use?
Sajid Javid
The numbers I tend to look at are those provided by the Office for National Statistics. Those numbers show not that 1.25 million jobs were created in the private sector since the end of the first quarter of 2010, but that 1.31 million jobs were created. If we allowed for transfers from the further education sector, which we do not, the figure would be 1.5 million jobs.
Andrew Stunell (Hazel Grove) (LD)
Q9. What plans the Government have to use the UK’s presidency of the G8 to tackle corporate tax evasion.
Stephen Gilbert (St Austell and Newquay) (LD)
Q10. What plans the Government have to use the UK’s presidency of the G8 to tackle corporate tax evasion.
The Exchequer Secretary to the Treasury (Mr David Gauke)
Tax evasion and tax avoidance undermine public revenues and the public’s confidence in the fairness and effectiveness of our tax system. The UK is pursuing action on both fronts through the presidency of the G8. We are promoting the development of new global standards on automatic information exchange and increased transparency of company ownership in order to better tackle tax evasion. We are seeking strong endorsement through the G8 of the importance of the work of the G20 and the OECD on tackling avoidance by multinationals.
Andrew Stunell
I thank the Minister for his reply. Does he think that it is now time to take a second look at the USA’s experience and its Foreign Account Tax Compliance Act to tackle the question of international tax avoidance?
Mr Gauke
My right hon. Friend makes an important point; indeed, we are doing that. We have signed an agreement with the US to implement FATCA as the new standard in tax transparency, and we are promoting that type of information around the world. We have reached agreements with the overseas territories and the Crown dependencies, while France, Germany, Italy, Spain and the UK have all agreed to exchange information based on the FATCA standard. That is very much the approach that we are taking in the G7, G8 and G20, and we have made remarkable progress so far.
Stephen Gilbert
Does the Minister recognise that, as well as capacity building in their domestic authorities, developing countries need better access to international tax information? Can that be part of the negotiations with the G8?
Mr Gauke
My hon. Friend makes an important point. It is important that we have better information that we can provide to developing countries. Whether we do that by exchanging information along the FATCA lines or by encouraging better global reporting to tax authorities by multinational companies, that information will prove very helpful for both developed and developing countries.
John Cryer (Leyton and Wanstead) (Lab)
The Minister will be aware that some employers are increasingly using payroll companies and umbrella companies to avoid paying tax and national insurance. What can the Government do to address that tendency?
Mr Gauke
We are taking measures to address this: the hon. Gentleman will be aware of the action that we took in the last Budget to close the loophole relating to offshore companies. We of course want a tax system that ensures that the tax is consistent with the economic reality, and that is what we intend to have.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
Do the Government believe that cutting £2 billion from HMRC’s budget will help or hinder its ability properly to address tax evasion and tax avoidance in this country?
Mr Gauke
This is the Government who have found £1 billion to support HMRC in dealing with tax evasion and tax avoidance. This is the Government who have provided resources in that area. Yes, we can find efficiency savings in HMRC—just as the previous Government did, to be fair—but we are putting more into those parts of HMRC that get the money in. We are making dramatic progress, with HMRC’s yield hitting record levels.
Katy Clark (North Ayrshire and Arran) (Lab)
Q12. If he will introduce a statutory code of conduct for the banking industry.
The Financial Secretary to the Treasury (Greg Clark)
The Parliamentary Commission on Banking Standards was established to consider and report on professional standards and culture in the UK banking sector. The Government look forward to considering the commission’s report and we will make decisions on the need for further action in the light of its recommendations, including on whether there should be a code of conduct.
Katy Clark
A recent survey by Which? showed that 87% of the public wanted an independent code of conduct for bankers. Does the Minister agree that such a code would restore trust? Does he also believe that he should look again at the amendments on banking reform tabled by Labour proposing a licensing system that would enable bankers who broke the rules to be struck off?
Greg Clark
As the hon. Lady knows—her colleague the right hon. Member for Wolverhampton South East (Mr McFadden) might also like to comment on this—the commission has been hard at work considering various representations, including those from Which? and the British Bankers Association, on whether there should be a code of conduct. I am sure that the House would expect us to wait for the commission’s recommendations and then to respond to them.
Mr Pat McFadden (Wolverhampton South East) (Lab)
Does the Minister agree that it was politically unwise for the Treasury to brief that it hoped the Parliamentary Commission on Banking Standards would endorse its politically motivated attacks on the previous Chancellor’s bail-out of the Royal Bank of Scotland? Does he further agree that the uppermost criterion for the reprivatisation of RBS must be the interests of the taxpayers who bailed it out, rather than any political or electoral timetable?
Greg Clark
It goes without saying that the interests of the taxpayer must be paramount, and I am not aware of any of the briefing that the right hon. Gentleman refers to.
Paul Goggins (Wythenshawe and Sale East) (Lab)
Q13. What assessment he has made of the obligations owed by Yorkshire bank to investors in Arck LLP.
The Financial Secretary to the Treasury (Greg Clark)
A Serious Fraud Office investigation into Arck is under way, and the Government cannot comment specifically on any ongoing investigations. However, lawyers acting on behalf of Arck investors have themselves announced that the Financial Ombudsman Service is investigating complaints about Yorkshire bank’s role as custodian to Arck LLP. If the FOS were to determine that there had been any regulatory breach or failure by Yorkshire bank, and that that had led to investor detriment, it would be able to set an appropriate level of restitution.
Paul Goggins
I am grateful to the Minister for that reply. A constituent of mine is one of the 750 investors who placed about £60 million of their pension funds and savings into a ring-fenced, segregated account at Yorkshire bank. When Arck LLP went into liquidation, it was discovered that there was just £25 left. The Minister must agree that Yorkshire bank has some serious questions to answer. Will he raise this case with the Financial Conduct Authority and do everything he can to ensure that those investors are properly compensated?
Greg Clark
I will certainly do that, but I happen to know that the Financial Conduct Authority is already well aware of the case, and it is obviously taking a close interest in the continuing police investigation.
Mr John Baron (Basildon and Billericay) (Con)
Q14. What steps he is taking further to reduce Government expenditure.
The Chief Secretary to the Treasury (Danny Alexander)
In the Budget this year, we set out the envelope for the spending round that will set budgets for 2015-16, looking to deliver a total of £11.5 billion of savings from departmental current expenditure, and that process is ongoing.
Mr Baron
The Government have done well to reduce the deficit by a third, but they know that much more needs to be done. Are they going to re-examine their spending priorities to ensure that Departments such as the Foreign and Commonwealth Office and the Ministry of Defence do not suffer disproportionately in comparison with other Departments that deal with international aid and welfare?
Danny Alexander
The Government have rightly put in place protections for the budget for the national health service and for schools. We have also made a strong commitment to reaching the 0.7% objective on international aid, which I think most Members would agree is absolutely the right thing to do. Of course we will consider submissions from all Departments throughout the spending round process, but in the end every Department will have to bear its fair share of the reductions.
Mr Graham Allen (Nottingham North) (Lab)
Q15. What steps his Department has taken to promote the growth of a municipal bond market in the UK.
The Financial Secretary to the Treasury (Greg Clark)
Under the prudential system, local authorities are able to borrow for capital projects, providing they can afford the borrowing costs. Local authorities can choose the source of these funds and they are free to use municipal bonds where they wish to do so.
Mr Allen
I thank the Minister for his warm welcome for my second report about the financing of early intervention, entitled “Early Intervention: Smart Investment, Massive Savings”. One of the report’s recommendations was to free up local authorities to issue early intervention social impact bonds in order to fund early intervention in the localities. Will he meet me to discuss how we can take this forward?
Greg Clark
I certainly will meet the hon. Gentleman, who has been a pioneer in these matters. I have been very taken with his report’s recommendations. He points to some initiatives taking place in the US to have social impact bonds, and the authorities in London are keen on this, too. I am sure that he will want to continue his campaign; he will find a receptive counterpart in me.
Ian Austin (Dudley North) (Lab)
Q16. What recent assessment he has made of the extent to which the rate of increase of average earnings has kept up with the rate of consumer price inflation.
The Economic Secretary to the Treasury (Sajid Javid)
The best way to deal with today’s cost-of-living challenges is to have paid employment. In the UK, the number of people employed has risen by 2.1% compared to a year ago—a faster rate of growth than those of our major competitors, including the US, France, Germany, Japan and the euro area as a whole.
Ian Austin
Instead of being complacent, the Minister should look at what the Office for Budget Responsibility says, which is that real wages will be lower in 2015 than when this Government came to power. A survey in Dudley shows that nine out of 10 families do not think they will be better off next year than this year, that eight out of 10 spent less at Christmas, and that a similar number have stopped saving. Can the Minister tell me why his Government are cutting taxes for millionaires instead of helping hard-pressed families in places such as Dudley?
Sajid Javid
I think that the hon. Gentleman joined the House in 2005, and he is probably scarred by his experience during his first term in government, when he saw unemployment in his constituency rise substantially, with youth unemployment going up by more than 100%. He will know that paid work is the best way to raise earnings. As I said earlier, this Government have helped to create 1.25 million jobs over the last three years—more jobs in the private sector than at any other time in our history. He referred to tax cuts; the tax cuts that have come through the personal allowance are for the lowest paid.
Mike Freer (Finchley and Golders Green) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Chief Secretary to the Treasury (Danny Alexander)
The core purpose of the Treasury is to ensure the stability and prosperity of the economy.
Mike Freer
Will my right hon. Friend advise us what assessment he has made of the effect of the £2,000 employment allowance on employment in general, and on small businesses in particular?
Danny Alexander
The employment allowance will reduce the cost of employment and will therefore support small businesses aspiring to grow by hiring their first employee or expanding the work force. In total, up to 1.25 million employers will benefit from the allowance, with over 90% of that benefit going to small firms with fewer than 50 employees.
Ed Balls (Morley and Outwood) (Lab/Co-op)
This is now the slowest economic recovery for 100 years, and the International Monetary Fund is in town and openly questioning the Treasury’s economic plan. May I remind the Chief Secretary of what he said in October 2009? He does not need to worry, as this is not the one where he reconfirmed the Liberal Democrat commitment to an EU referendum; it is a different article. He said:
“Cutting spending now would plunge us back into recession…The Tories claim…they can fix the country’s finances, but their plans are economically illiterate.”
He was right then, was he not?
Danny Alexander
The right hon. Gentleman mentions the fact that the IMF is in town; there are, of course, discussions going on, and we look forward to seeing the outcome of the proposals. I have to tell him, however, that given the situation that this coalition Government inherited in May 2010—the catastrophic mess that he and his colleagues made of the British economy—the measures we are taking are absolutely right. If we compare the progress this country has made with the forecast for our major European competitors, we see that on employment, for example, this Government are delivering the right policies for this country.
Ed Balls
The right hon. Gentleman also said in that article that
“at a time of crisis”,
the Tories
“have the wrong solutions and the wrong priorities…They claim to care about the poorest, but will only slash taxes for millionaires.”
He was right about that as well. Is it not the truth that the economy has flatlined, deficit reduction has stalled, living standards are falling and the IMF is saying that the Treasury is playing with fire? In January, the Prime Minister said that we should listen to the IMF, so why is the Treasury telling newspapers that if the IMF tells him to act to kick-start the recovery, the Chancellor intends to ignore it and plough on regardless with a failing plan?
Danny Alexander
The right hon. Gentleman talks of having the wrong solutions and the wrong priorities. That appears to be the verdict of many of his colleagues on his own approach as shadow Chancellor. I note that the former science Minister Lord Sainsbury has said:
“In retrospect the Labour government should have used the opportunity of a strongly growing economy to reduce the deficit.”
That would have reduced pressure on the Labour Government, but we are reducing the deficit now. I also note that The Sun quotes an anonymous shadow Cabinet Member as saying:
“Balls is a busted flush when it comes to economic competence because of his legacy with Gordon.”
I could not have put it better myself.
Mr David Ward (Bradford East) (LD)
T2. A recurring theme of yesterday’s debate on health and social care was the growing demand for social care against a background of declining resources. What commitments will the Chief Secretary make to provide extra funding for adult social care in the June comprehensive spending review?
Danny Alexander
That is an important question. My hon. Friend will have seen the statements published today by the Minister of State, Department of Health, our hon. Friend the Member for North Norfolk (Norman Lamb), and we will address the issue seriously in the spending round. I am not going to pre-announce what we will do, but my hon. Friend will know that in the 2010 spending round we ensured that additional resources amounting to £7.2 billion were available over four years to support social care services. If we are to deal with these important issues while also reducing the strain on the national health service, further such transfers will clearly be necessary.
Paul Blomfield (Sheffield Central) (Lab)
T3. In just over an hour, in an unprecedented move, the bishops of Sheffield and Hallam and a delegation of civic, community and faith leaders will present a petition to No. 10 from thousands of Sheffielders calling for a fair deal for our city. Will Ministers accept their argument that the unfair distribution of cuts is having a disproportionate impact on cities such as Sheffield, widening inequality, hitting those who have least the hardest, and weakening the capacity of the council and the voluntary sector to support them?
The Financial Secretary to the Treasury (Greg Clark)
The hon. Gentleman should support the Sheffield city deal, which has been enthusiastically endorsed by civic and business leaders in Sheffield. The point of the deal is to improve the city’s record for getting people into work, thus ensuring that the growing businesses there can access a high-quality labour force.
Damian Hinds (East Hampshire) (Con)
T4. In the light of the Government’s commitment to helping families to save for their futures, can the Minister tell us when we will see the details of the consultation on the measure announced in the Budget to allow the transfer of savings from child trust funds to junior individual savings accounts?
The Economic Secretary to the Treasury (Sajid Javid)
My hon. Friend has raised an important issue. The details of the consultation will be published today, and the consultation will close on 6 August. It will deal with the question of whether transfers should be allowed, and if so on what basis. The Government propose that voluntary transfers should be allowed if requested by the registered contact for an account.
Heidi Alexander (Lewisham East) (Lab)
T5. Can one of the Ministers here today explain exactly how publishing a Bill providing for a European Union referendum in four years’ time will first create jobs, secondly attract investment and thirdly secure Britain’s future in a global economy?
Danny Alexander
I do not think that it would achieve any of those objectives, which is why I do not support it.
Glyn Davies (Montgomeryshire) (Con)
T10. Perhaps the most welcome policy announcement in the Gracious Speech was the announcement that Ministers would“prioritise measures that reduce the deficit”.Does my right hon. Friend agree that that Government priority is crucial to my Montgomeryshire constituents, because it will keep interest rates low for home owners and for businesses?
Danny Alexander
I agree wholeheartedly with my hon. Friend. Dealing with the deficit and repairing the mess that the Labour party made in the public finances must remain the No. 1 priority for the Government, and indeed for all Members of the House.
Graham Jones (Hyndburn) (Lab)
T7. The Government’s housing policy focuses on new build which is exempt from VAT, but in my constituency one in 13 properties is empty, and building companies tell me that they rely on refurbishments which are not VAT-exempt. They are really struggling. Do the Government recognise that building companies in areas such as mine are being penalised in that way?
The Exchequer Secretary to the Treasury (Mr David Gauke)
The difficulty is that if we were to reduce VAT on repairs and refurbishments, that would have a substantial fiscal cost. It would result in more borrowing and that is not something we can afford because of the circumstances we were left.
Richard Graham (Gloucester) (Con)
We now know there was no triple-dip recession and almost certainly no double-dip recession either. Of course there is no room for complacency, which is why I am holding my seventh jobs fair in the centre of Gloucester this Thursday. Does the Minister agree that it is time for the party of doom and gloom on the Opposition Benches to recognise that the economy is beginning to recover and that it is time to support British business—especially things made in Gloucester?
Danny Alexander
I welcome my hon. Friend’s efforts in trying to help his constituents to find employment—something that every Member of this House could be engaged in. On the deficit, the Labour party did seem disappointed when the triple dip did not materialise; no doubt it will be even more disappointed if, in due course, the second dip dematerialises. The one thing we can be sure of is that the biggest dip took place when Labour was in office.
Diana Johnson (Kingston upon Hull North) (Lab)
T8. On 25 June last year, the Secretary of State for Environment, Food and Rural Affairs told me that a new agreement was to be reached on flood insurance. I understand that the Chief Secretary, who has been heading up the negotiations, has blocked this deal. As the statement of principles is due to come to an end next month, can he tell me what assessment has been made of the effect on the housing market of hundreds of thousands of householders in this country not being able to get house insurance?
Sajid Javid
The hon. Lady raises an important issue; it is important that affordable insurance is available to people on whom flooding could have an impact. That is why this Government, led by DEFRA, are engaged in intensive negotiations with the Association of British Insurers. In Thursday’s DEFRA questions, she will have an opportunity to put this question to DEFRA Ministers.
Greg Mulholland (Leeds North West) (LD)
The latest dismal figures from the giant pub company Enterprise Inns show the disaster that the leased pub company model has been for the British economy. The boss paid himself nearly £1 million last year, while his tenants are struggling to make a living and are subsidised by the taxpayer, through tax credits, to the tune of millions of pounds. Will my hon. Friend conduct a Treasury study into just how many millions the taxpayer provides to subsidise this immoral business model?
Sajid Javid
My hon. Friend cares deeply and passionately about the pub industry, and has done great work to help, including welcoming this Government’s decision to cut beer duty for the first time in decades. He makes an important point. He will know that Ministers in the Department for Business, Innovation and Skills are looking at this issue, and I will bring it further to their attention.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
T9. The Chief Secretary was absolutely right on the question of the EU referendum Bill. He cannot speak for the Conservative party, but will he ensure that his party leader once again exercises his European veto and ensures that any such Bill does not come forward as a Government Bill and does not have Government backing?
Danny Alexander
The Government’s position was made very clear in the coalition agreement and was confirmed in the mid-term review document published at the beginning of this year: we wish to maintain British membership of the European Union and during this Parliament we will exercise our influence to the utmost to win the arguments in Britain’s national interest, in favour of jobs, investment and growth in this country.
Jeremy Lefroy (Stafford) (Con)
Research and development is key to current and future growth, and I welcome the Government’s support for it. What measures are the Government taking to ensure that we rise to the level of our major competitors on research and development?
Mr Gauke
One measure that I know my hon. Friend will be well aware of was the reform of research and development tax credits. We are making those more generous and bringing in a new above-the-line R and D tax credit. That is making the UK increasingly competitive in this sector.
Naomi Long (Belfast East) (Alliance)
Developing countries need assistance from the west with collecting the tax due to them from multinational companies. How will the Government use their presidency of the G8 to ensure specifically that the strengthening of disclosure standards takes place multinationally?
Mr Gauke
The hon. Lady is right to raise this issue, which we touched on earlier. One of our priorities for the G8 presidency is to bring forward measures on tax evasion and tax avoidance. It is worth pointing out what the Prime Minister said in an article in The Wall Street Journal yesterday; he wants to encourage
“better global reporting to tax authorities in both the developed and developing world”.
That could make a big difference.
Mr Brooks Newmark (Braintree) (Con)
Will the Minister join me in supporting Lord Young’s report on growing micro-businesses, which was released yesterday? It suggests a new package of support for starting and growing small businesses.
Danny Alexander
I strongly welcome that report. The Government have already introduced a package of measures, including start-up loans to support new small businesses. Lord Young has presented his findings to the Government and we will respond in due course.
Caroline Lucas (Brighton, Pavilion) (Green)
Given the increasing evidence, such as last month’s Carbon Tracker report, showing that so-called unburnable carbon assets pose a serious risk to the financial system, will the Minister look seriously at the proposal that companies should be required to disclose the carbon emissions potential of their fossil fuel assets?
Greg Clark
The first requirement is to assess the risk that the hon. Lady has described, and it is for the Bank of England to consider the systemic consequences. Should the Financial Policy Committee of the Bank of England conclude that investment in high-carbon assets poses a risk, it would have to report and explain that risk in its financial stability report.
George Freeman (Mid Norfolk) (Con)
Our banking sector is suffering the consequences of a state-sponsored boom in bad loans under the last Government. Has the Minister seen the news of the Co-op’s bad debts, including to the Labour party, and noted the withdrawal of Labour party funding from Lord Sainsbury? Does he agree that nothing better exemplifies the risks of Labour’s addiction to borrowing and trade union funding?
Greg Clark
I understand that the Co-op has lent more than £3 million to the Labour party. I would assess that as not being a particularly good credit risk; the Labour party has a toxic credit rating, and the experience has been that when it starts to borrow, it never pays the money back.
Mr William Bain (Glasgow North East) (Lab)
The youth employment rate is lower now than in 2009, with a shortfall of nearly 400,000 jobs, so why are the Government continuing to resist a tax on bank bonuses that would help put young people back into work?
Danny Alexander
As I said in answer to earlier questions, the Government have taken forward a package of measures. The Youth Contract, which is helping half a million young people, the massive expansion and improvement in the quality of apprenticeships, helping young people all around the country, and the Work programme make up a proper package of measures to do what the hon. Gentleman and I agree about—try to help more young people off benefits and into work. The problem has been building up for many years, and he should be a bit more humble about it.
Mark Durkan (Foyle) (SDLP)
Would a meaningful G8 outcome on tax evasion involve the Chancellor’s revisiting the controlled foreign company rules that he introduced? They incentivise the use of tax havens and deny revenue to the Exchequer here and, more so, to developing countries.
Charlie Elphicke (Dover) (Con)
If the Government were to go out and borrow £28 billion as some suggest, what would the effect be on fiscal stability and interest rates for homeowners?
Danny Alexander
My hon. Friend rightly draws attention to the figure of £28 billion—the extra borrowing in the alternative Queen’s Speech put forward by the Opposition. It confirms yet again that their approach is to borrow more and more, taking no account of the consequences. Perhaps that is one reason why the Leader of the Opposition, in a well-known radio interview, refused to accept that his party would increase borrowing and why his proposals have rightly been dubbed a “Milishambles”.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Research by the House of Commons Library shows that no peacetime Government since the 1920s have presided over fewer housing completions than this Government over the past two years. When will the Chancellor and his team stop tinkering with allowing a few people to buy new homes, and instead deal with the systemic problems by increasing housing supply?
Danny Alexander
The hon. Lady should study the figures more carefully. They show that the low points in housing starts and housing provision were in 2009 and 2010 respectively—both years in which her party was in office.
Access to Eculizumab
Sir Nick Harvey (North Devon) (LD)
I rise to present a petition on behalf of the sufferers of atypical haemolytic uraemic syndrome, known as aHUS, a rare disease that causes irreversible kidney failure. Until recently there was no effective treatment for this condition, which has 139 known patients in England, of whom 20 live in Devon. I am presenting the petition to press for aHUS sufferers’ access to Eculizumab, a new drug that has been proven to cause a dramatic improvement in kidney function and, indeed, in the quality of life of patients diagnosed with aHUS. The petition has received almost 30,000 signatures nationally and is presented on behalf of the national group, aHUS Action. It was brought to me by one of my constituents, Elena Lilley, who suffers from aHUS. She received Eculizumab as part of a clinical trial three years ago and it has transformed her life, avoiding the need for her to be put back on dialysis and enabling her to resume a full-time job.
The Advisory Group for National Specialised Services has recommended that Eculizumab should be nationally commissioned by the NHS, emphasising its life-saving potential and ability to improve the quality of life of all aHUS patients. However, earlier this year health Ministers decided to refer Eculizumab to the National Institute for Health and Clinical Excellence for a further review of its affordability. Some patients have already been waiting over 18 months for a decision, and an announcement is not expected until December. The petition urges that action should be taken to ensure that all aHUS patients, including those already on the drug, should be given access to Eculizumab without delay pending the outcome of NICE’s review.
Following is the full text of the petition:
[The Petition of Miss K Bazzichi and Miss E Woodward Trustee Officers of aHUSUK,
Declares that aHUS patients should be given access to Eculizumab when they need it, without delay, and not be disadvantaged by the Ministers' decision not to implement the AGNSS recommendation ahead of a review by NICE.
The Petitioners therefore request that the House of Commons issues instructions to the NHS CB to take such action, whilst waiting for NICE's decision.
And the Petitioners remain, etc.]
[P001176]
Keith Vaz (Leicester East) (Lab)
It is a pleasure to follow the hon. Member for North Devon (Sir Nick Harvey). The 500 signatures on my petition should be added to the 30,000 signatures on his. I was approached by my constituent, Trevor Murby, of Abbots Road, Leicester, because his grandson, Finley Murby, was having great difficulty in accessing this drug. As a result of the work of Trevor Murby and so many other people involved in the campaign, he was able to get the drugs that he needed. I concur with the hon. Gentleman that it is really important that everyone who needs this drug has access to it and that action is taken immediately to help those who are disadvantaged.
Following is the full text of the petition:
[The Petition of Mr T Murby and Mr Finley Murby Trustee Officers of aHUSUK,
Declares that aHUS patients should be given access to Eculizumab when they need it, without delay, and not be disadvantaged by the Ministers’ decision not to implement the AGNSS recommendation ahead of a review by NICE.
The Petitioners therefore request that the House of Commons issues instructions to the NHS CB to take such action, whilst waiting for NICE's decision.
And the Petitioners remain, etc.]
[P001177]
Operation Herrick
(11 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Defence (Mr Philip Hammond)
With permission, Mr Speaker, I would like to make a statement on troop rotations as we draw down our forces in Afghanistan.
First I would like to pay tribute to Corporal William Thomas Savage and Fusilier Samuel Flint, both from 2nd Battalion the Royal Regiment of Scotland, and Private Robert Murray Hetherington, a reservist from 7th Battalion the Royal Regiment of Scotland, who were tragically killed in action in Afghanistan on 30 April when their Mastiff vehicle was struck by an improvised explosive device on route 611. Their deaths are a stark reminder of the continued dangers our soldiers, sailors, airmen and marines face as they manage the transition of security responsibility to the Afghan national security forces. My thoughts are with their families and loved ones as they come to terms with their loss.
Although security in Helmand is steadily improving, with Afghan forces already responsible for the bulk of the province, the environment in which our troops operate remains dangerous. IEDs remain one of the greatest threats and present risks even to the very best-protected vehicles available, of which Mastiff is one.
As the House will be aware, at the height of operations we had around 9,500 military personnel in Afghanistan. Our troop numbers will be at 7,900 by the end of this month and, as the Prime Minister announced last December, they will reduce further to around 5,200 by the end of this year. This is a clear reflection of the international security assistance force campaign drawing to a close and the Afghan national security forces taking on increasing responsibility for their own security. Already the ANSF lead 80% of all security operations, covering nearly 90% of the Afghan population. By the summer, that figure will reach 100%. So after more than a decade in which fighting the insurgency has been a primary focus of the ISAF coalition, the campaign is changing and the UK’s military role in Afghanistan is evolving from combat to one of training, advising and assisting the Afghans; and, as the Prime Minister has made clear, UK forces will no longer be in a combat role by the end of 2014.
In the light of this, and of the changing nature of the operation, we have looked at how we can best deploy what will be declining numbers of troops and smaller amounts of equipment between now and then to deliver the best possible protection to our people while continuing to provide the Afghans with the support they need during this critical transition period. Brigades deploying to Afghanistan on Operation Herrick have routinely done so on a six-monthly cycle, with a relief-in-place occurring in spring and autumn each year. The phased nature of the rotation and the overlap of deploying and redeploying forces has meant individual tours of between six months and six and a half months for the vast majority of personnel. That pattern of rotation has worked well for the enduring deployment, but is judged not to be sustainable during the final months of the draw-down period. The Army has therefore decided that the brigade deploying in October on Herrick 19 will deploy for eight months from October this year until June 2014. The subsequent brigade, Herrick 20, will deploy for six months from June 2014 to December 2014 when the ISAF campaign concludes, but the deployment could extend to up to nine months for a relatively small number of individuals who may be needed to support final redeployment activity post-December 2014.
The rationale for this decision is clear and is based on advice from military commanders. First, it will better align the final tours with key milestones in the transition process such as the Afghan presidential elections in spring 2014. Secondly, it will help to maintain continuity in posts where we work closely with our Afghan partners at a time when retaining and bolstering Afghan confidence is critical, both for mission success and to ensure our own force protection. Thirdly, it removes the need to train and deploy another brigade at greatly reduced scale to cover the final couple of months of 2014. It will therefore minimise the total number of service personnel who deploy to Afghanistan over the next 18 months. That will allow personnel to focus on post-Afghanistan training, improving the general readiness of the Army as it reverts to a contingent posture for the future.
The Chief of the Defence Staff and I believe that extending Op Herrick 19 to eight months and allowing the possibility of some personnel on Op Herrick 20 deploying for up to nine months is the most effective way of maintaining force protection, meeting our commitment to the NATO ISAF mission, and supporting the Afghans until the end of 2014. Of course, as we have already made clear, the UK’s commitment as part of the international community’s assistance to Afghanistan will continue well into the future, beyond 2014, in terms of significant investment in development assistance and support to the ANSF, as well as UK-led military training.
The changed pattern of brigade rotations does not mean that all those deploying will do so for a longer time. I should emphasise to the House that, because of the expected steady reduction in numbers during Herrick 19 and 20, we expect that most personnel will continue to serve no longer than the standard six or six-and-a-half-month tour, while significant numbers will serve less than six months. At the same time, the amended tour rotations mean that some personnel will deploy for up to eight months, with a much smaller number potentially deploying for up to nine months. At this stage it is not possible to be precise about the total numbers of personnel who will be affected, although current estimates suggest that between 2,200 and 3,700 overall may deploy for more than six and a half months.
We have considered carefully how best to compensate affected personnel who serve extended tours and face increased uncertainty about their pattern of deployment and relatively more austere conditions which may be expected towards the end of the Herrick campaign as the redeployment of assets continues. Her Majesty’s Treasury has agreed the recommendation of the defence chiefs that a bespoke allowance should be paid to eligible personnel who serve more than seven and a half months in Afghanistan from September 2013. This Herrick draw-down allowance will be paid at the rate of £50 per day before tax and is payable on top of the standard operational allowance package. The new allowance will not apply to those personnel in the small number of established longer-term posts who are already compensated by the campaign continuity allowance. Service personnel who may serve longer terms and who may therefore be eligible for the new allowance have already been notified by their commanding officers.
As I said at the beginning of this statement, the campaign and the UK’s military role in Afghanistan are changing. During this period, it is critical that we retain the ability properly to protect our forces, as well as to maintain the confidence of the Afghans as our combat operations draw to a close and they take on full security responsibility. The number of UK forces in Afghanistan may be reducing, but they still have a vital job to do, and this initiative is the most effective way for them to do it successfully, while remaining as safe as possible. I commend the statement to the House.
Mr Jim Murphy (East Renfrewshire) (Lab)
I thank the Secretary of State for his statement and for providing notice of it, although unfortunately much of it appeared in this morning’s media.
I wish to start in the same way as the Secretary of State by paying tribute to those who lost their lives recently in Afghanistan: Corporal William Thomas Savage and Fusilier Samuel Flint, both from the 2nd Battalion the Royal Regiment of Scotland, and Private Robert Murray Hetherington form 7th Battalion the Royal Regiment of Scotland. Little we can say in this House can heal the hurt that their families feel, but they should at least know that they remain in our thoughts and prayers. Members on both sides of the House will always remember the remarkable individual acts of heroism and the collective acts of courage that define our armed forces. It is their sacrifice and bravery that is helping to make Afghanistan more stable and the UK safer.
It is essential that the progress our armed forces are making in Afghanistan becomes permanent and that full transition to an Afghan lead on security is successful. This remains a mission that is not just in our national interest, but in the interests of international stability.
The Opposition consistently commit to bipartisanship on Afghanistan and our support is, of course, complemented by scrutiny. Today is no different: we see the logic in the Government’s move, but many will be concerned about the impact on the individuals affected.
The enormous operation mounted over the past 12 years will require extensive and expensive effort as it is brought to a close. Recouping and reintegrating equipment, training the Afghan forces, facilitating inward investment and seeking a political solution are all essential elements of the international community’s task. As part of this, we see the merit in ensuring that there is not a destabilising changeover during the Afghan presidential election next year and that personnel are present to ensure that equipment is repatriated efficiently.
Could the Secretary of State say which regiments and units will be affected, how many of those expected to stay for longer he anticipates will be reservists, and why the Herrick draw-down allowance does not start from the beginning of the extended tour?
I say gently to the Secretary of State that there appeared to be a slight contradiction in his statement. He said that he was not aware of the exact number that will be expected to stay beyond six months, but towards the end of his statement he said that everyone who will be expected to stay for longer than six months has been informed by their commanding officer. There therefore seems to be a glitch, if not a contradiction, in the logic of his argument.
Many people will worry that a smaller force operating in Afghanistan after the withdrawal deadline may be subject to higher risk. Will the Secretary of State say whether all those who are planned to be in-country in 2015 will be combat troops with NATO-provided force protection?
Extended exposure to conflict increases the risk of physical and mental health problems. Research for King’s College London has shown the importance of adherence to the Harmony guidelines. Will the Secretary of State say how the Harmony guidelines will be altered for those affected by today’s announcement? Research for King’s College London also shows that if tours are longer than anticipated, servicemen and women are much more likely to report symptoms of post-traumatic stress disorder.
This is a one-off measure which, as I have said, has merit. However, many will note that the 2010 strategic defence and security review stated categorically:
“We need to challenge some of the fundamental assumptions which drive force generation, such as tour lengths and intervals”.
It stated that the single service chiefs would carry out the review,
“completing their work by the spring of 2011.”
Last year, that work was still ongoing. Will the Secretary of State say what work has been done internally on the wider application of longer tours of duty? If there is to be a shift to longer tours on a more regular basis in any future conflict, the military community will want a better understanding of the recommendations of the service chiefs.
Today’s announcement also raises the issue of the UK’s long-term commitment to Afghanistan. As part of an alliance presence, training and support for Afghan forces post-2014 will be essential. There is no word yet on the size and scope of such a force or the UK’s role within it. Who will be responsible for the protection of UK service personnel? Will any commitments that are made before 2015 be open-ended or time-limited? When does the Secretary of State expect more detail to be forthcoming?
Today we are focusing on the temporary extension of two tours. I want to turn, finally, to how we will mark permanently the contribution of all those who have toured and, in particular, those who have not returned. The Opposition believe that there should be a national memorial for all who have served in Afghanistan. We have also proposed that streets be named after fallen personnel, should their families and communities request it, and that veterans champions should be working hard in every local authority to help service leavers with the transition to civilian life. I hope that the Government will take this opportunity to support those and other measures.
As the operation in Afghanistan draws to a close, our nation is rightly showing huge support for those who have served. That public sentiment will prevail beyond any withdrawal timetable and so should the commitment of the Government, no matter who is in power. It is in that spirit that we want today’s announcement to be successful. We offer to work with the Government to achieve a fitting legacy in Afghanistan and to support our troops.
Mr Hammond
I am grateful to the right hon. Gentleman for reasserting the bipartisan approach that has prevailed on matters relating to Afghanistan. I welcome his pragmatic engagement with this announcement and his perfectly legitimate questions.
I should say at the outset that when I said that the people who were eligible and likely to be affected by the announcement had been informed, I should have used the military term warned off. Those in the pool from which the people will be drawn have been warned off that they may be affected. It will be some time before we can be clearer about who precisely will be affected. Although the next Herrick rotation is in preparation, we have not yet announced the precise composition of the next brigade. That will be determined by the practical evolution of things on the ground. I am afraid I cannot therefore give the right hon. Gentleman more detail today.
The right hon. Gentleman asked me why the Herrick draw-down allowance is not payable from day one of the tour. It is intended to compensate for the longer period of duty, the uncertainty and the austerity that may exist in the final part of the Herrick campaign. Normal allowances will be payable throughout the deployment. The Herrick draw-down allowance is an additional allowance payable from the seven-and-a-half-month point. That ties in with the current campaign continuity allowance and makes it fair and equitable among those who have served longer than six and a half months historically and those who will do so in the future.
Of course, the right hon. Gentleman’s points about additional risk and the additional potential for physical or mental health issues arising from longer tours are legitimate, and we have considered them carefully. It is worth pointing out to the House that as we draw down, a higher and higher percentage of the troops deployed will be deployed to main operating bases, where they will be relatively much safer than they have been in the forward operating bases, patrol bases and checkpoints that they have occupied in the past. Conditions will generally be significantly better.
The Harmony guidelines will not routinely be breached. Harmony is measured by the number of nights of separated service over a three-year cycle, and nothing that I have announced today is expected to have an impact on the armed forces’ ability to maintain Harmony. I should also say that this is emphatically not a systematic shift in policy with regard to tour lengths. It is a bespoke solution to deal with the final few months of the Herrick campaign and will not affect our standard deployment policy for the future.
On the two generic points that the right hon. Gentleman raised about the timing of our announcements on post-2014 deployment, he will know that discussions are going on with NATO literally right now, as we sit here, on the post-2014 configuration. We will continue to discuss the options with allies, and as soon as we have come to a conclusion we will of course inform the House.
Finally, I am pleased to say that we are in complete agreement on the question of a national memorial. My expectation is that the memorial wall in Bastion will be dismantled and recovered to the UK, probably for re-erection at the national arboretum in Staffordshire. My personal view is that we should also look at having a fitting memorial in central London to those who have given their lives both on Op Herrick and, before, on Op Telic. I would be happy to enter into a discussion with the right hon. Gentleman about that to see whether we can make it a bipartisan initiative.
Sir Menzies Campbell (North East Fife) (LD)
May I begin by associating myself with the remarks of condolence in relation to the three individuals who have recently lost their lives in Afghanistan? The Royal Highland Fusiliers is a regiment to which my family has a particular attachment.
It was never the understanding that bringing an end to combat operations would consist of turning the key in the lock and putting the lights out. Obviously, we need to employ rather more sophisticated means. In that respect, what the Secretary of State has said is entitled to receive the endorsement of the House, since it proceeds upon the military advice and has as its primary consideration force protection at a time when our forces might be particularly vulnerable.
Mr Hammond
I am grateful to my right hon. and learned Friend and should emphasise that our intention and objective is still to compete the draw-down by the end of 2014 if we can. We will certainly make every effort to do so that is consistent with proper force protection and the good order of our forces. However, today’s announcement gives us the flexibility to keep small numbers, primarily of logisticians, in Camp Bastion beyond the end of 2014 if they are needed to complete that draw-down.
Derek Twigg (Halton) (Lab)
There is obviously a difference between those who serve in the rear echelon at Camp Bastion and so on, who are important to the whole operation, and those who go outside the operating bases on to the front line. Does the Secretary of State envisage that personnel will be continually asked to do that throughout the whole of their deployment? In particular, what will happen to the medical teams that are sent out to Camp Bastion?
Mr Hammond
It is not our expectation that we will continue routinely to patrol outside the main operating bases beyond the end of this year. By then, we expect to be operating from only four main operating bases, and troops will routinely be operating within those bases. Of course, they will have to retain the ability to go out in support of the Afghans if that is necessary. We intend to maintain the role 3 hospital at Camp Bastion right through to the end of the operation.
Mr James Gray (North Wiltshire) (Con)
What the Secretary of State has announced this morning makes perfectly good sense from a straightforward operational standpoint, but does he not agree that if one is deployed for up to nine months, with a six-month pre-deployment training period prior to that—a total of up to 15 months away from the family—particular strains may come to bear on friends and family at home? What extra care will he take to ensure that those who are deployed for lengthy times are looked after from a compassionate standpoint? In particular, will he pay great attention to reservists, for whom those stresses and strains may be even greater?
Mr Hammond
First, I do not think my hon. Friend is absolutely correct to say that the six months’ training, together with a maximum theoretical deployment of nine months, would amount to 15 months away from home—certainly not all the training period will involve being away from home. However, I am quite certain that the chain of command will be sensitive to individuals’ circumstances in planning the next deployment.
My hon. Friend makes a valid point about reservists. A period of service that might be extended may clearly be more problematic for reservists than for regulars. Again, we will take that fully into account when planning for individuals to be selected for deployment.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
May I associate myself with the earlier expressions of condolence?
As one who voted against the incursion into Afghanistan, I am obviously pleased that the deployment is drawing to a close. As the Secretary of State knows, history shows that periods of draw-down are especially dangerous. There will be an increased risk of people suffering from conditions such as post-traumatic stress disorder and associated problems, as well as the possibility of increased periods in the field leading to fatigue and potential loss of life. I am sure he is aware of that and will do everything in his power to ensure that it does not happen.
Mr Hammond
I am grateful to the right hon. Gentleman and can tell him that not only those who voted against the operation but those who fully supported it are pleased that we are now drawing down and bringing our combat commitment to an end. He is absolutely right that the draw-down period is a critical phase of the operation with its own risks. One reason for the decision to change the rotation pattern is the importance of maintaining relationships with key Afghans as we have fewer of those relationships. Historically, we have been mentoring and partnering at battalion and company level, but we will not be doing that any more, so we will have fewer relationships with the Afghans. It is important for our own force protection and situational awareness that we maintain and build those relationships.
Sir Nick Harvey (North Devon) (LD)
May I thank the Secretary of State for his statement, the logic of which is straightforward? Having spoken socially to some of those who will deploy this October, I think it was widely anticipated that they would serve longer. Perhaps they were warned off, to use the Secretary of State’s expression.
Getting out of Afghanistan safely and steadily requires a great deal of meticulous planning. Does the Secretary of State agree that those who are prone to saying occasionally in the media that we should pack up and get out now are rather missing the point? In the months it would take to rip up the existing plan and devise another one properly, we would probably have got back on to the timeline for the existing plan.
Mr Hammond
My hon. Friend is of course right. We are packing up and getting out—we are actively in the process of recouping our equipment. Hundreds of containers, hundreds of vehicles and pieces of major equipment have already returned, and it is an ongoing process. To try to do it any more quickly, particularly at a time of significant transition in Afghanistan and through the period of the presidential elections, which can be anticipated to be a difficult period for internal security, would be reckless with Afghanistan’s security but also reckless with the protection of our own forces.
Jeremy Corbyn (Islington North) (Lab)
Will the Secretary of State explain why we are planning to keep more troops in Afghanistan after 2014, and say what purpose they will serve while in a place of enormous danger and huge political uncertainty? Would it not be better to say that the whole escapade has not been a great success and that we are bringing everybody out, according to a rapid timetable?
Mr Hammond
The hon. Gentleman’s views on this subject are well known. As I have announced, a small number of people—mainly logisticians—will possibly remain after 31 December 2014 to complete our redeployment from Bastion. In addition, we have committed to providing trainers and life support personnel for the Afghan national army officer training academy outside Kabul, which is a military training academy modelled on Sandhurst. Those are the only commitments we have made at the moment, amounting to a couple of hundred personnel on an ongoing basis. We judge that to be an effective and appropriate way for us to continue supporting Afghan national security forces, together with the £70 million a year cash support that we have pledged as part of the international community’s commitment.
Dr Julian Lewis (New Forest East) (Con)
Even before British troops have left, our brave Afghan interpreters have been threatened with assassination. How many of them must be killed before we do what we ought to do and offer those who wish to come to this country the opportunity to do so, as the previous Government rightly did for Iraqi interpreters?
Mr Hammond
The situation in Afghanistan is not the same as that in Iraq. Lessons were learned from the Afghan campaign, and the way that interpreters and other civilian employees have been recruited in Afghanistan has been modified accordingly to take those lessons on board. I assure my hon. Friend, however, that we will not turn our back on those who have served us in Afghanistan as locally employed civilians. We believe that Afghanistan has a future that will require skilled, capable people who are committed to building it post-2014. We want to explore all options for encouraging people, wherever they can, to be part of that future and help to build their country in which we have invested so heavily. We have and will continue to have mechanisms that deal with cases of intimidation or threat, including those that could, in extremis, allow for resettlement in this country.
Mrs Madeleine Moon (Bridgend) (Lab)
Employers of reservists who may be deployed in the next two brigades might feel great anxiety about losing staff from their day jobs for considerable periods of time. What discussions has the Secretary of State had with employers? If employers feel unable to release an employee for that period of time, what impact will that have on the reservist’s employment record in the military?
Mr Hammond
The hon. Lady raises a fair point, and through the employers advisory committee we are constantly in touch with the views of employers. As we come to the end of the Herrick campaign, we are likely to use fewer reservists in the last couple of rotations of that campaign, and we will be sensitive to the views of reservists and their employers if they do not wish to serve. It is unlikely that many reservists will be required to serve because of their particular skill sets if they express a clear wish not to do so.
Amber Rudd (Hastings and Rye) (Con)
Will my right hon. Friend confirm that these changes are based purely on military advice from service chiefs, and are not about cutting costs?
Mr Hammond
Yes, I am happy to do that, and it is not yet clear whether there will be any significant financial savings from the measures announced today. Clearly, we will not have to train a final, much smaller brigade for deployment to Afghanistan. That does not mean that the training will not be conducted;, it means that those troops will be training for contingent operations post-Afghanistan. That will present itself as a dividend to the military in terms of an increased readiness for return to contingent operations.
Nick Smith (Blaenau Gwent) (Lab)
Will the Secretary of State tell the House who will be responsible for UK forces force protection post-2014? Will it be the Afghan national army, and does the Secretary of State have total confidence in that?
Mr Hammond
So far, as I made clear to the hon. Member for Islington North (Jeremy Corbyn), we have committed only to providing trainers and life support personnel in the Afghan national army officer training academy outside Kabul. We are, of course, dependent on Afghan national security forces for overall security in Afghanistan after 2014, but we will be collocated at Qargha, at the Afghan national army officer academy, with US forces who will be running a similar academy on the adjoining site. Detailed force protection arrangements have not yet been agreed, but they are likely to include elements of UK and US forces, providing protection to the combined facility.
Dan Byles (North Warwickshire) (Con)
Having served a nine-month operational tour of duty in Bosnia, I can attest to how long that is to be away from one’s family. Will the Secretary of State confirm that this is a one-off change to the way we do business, and that it will not represent a slippery slope and a longer-term change in doctrine?
Mr Hammond
It will not represent a slippery slope and it is not a change in doctrine. I am hesitant to call it a one-off since my hon. Friend has just given an example of another occasion on which nine-month tours were served. There are already people in theatre who are serving tours of nine months or longer in specific posts, so it is not unknown, but there is no intention to make a general change to the operational deployment of six-month tours.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
I endorse tributes already paid across the House to the soldiers from the Royal Regiment of Scotland who were so sadly killed in Afghanistan recently. The Secretary of State spoke about packing up and getting out, but will he indicate the value of the equipment that will have to be left in Afghanistan and gifted to the Afghan forces?
Mr Hammond
The policy on gifting to the Afghan forces is NATO-wide and it is important that we adhere to it. Equipment should be gifted only if it is genuinely valuable to the recipients and within their capability and financial capacity to maintain and operate—in other words, it is a “no dumping” policy, and we will not just leave equipment behind because it is not convenient to take it with us. We have not finally decided what, if any, equipment will be gifted to the Afghans, but we will gift it only in accordance with that ISAF policy.
Mr Tobias Ellwood (Bournemouth East) (Con)
May I express a little disappointment that after a decade of involvement in Afghanistan, we never completed the railway line from Kandahar to Spin Boldak, linking to the Pakistani railway and the port of Karachi? It would have been a game changer for the city of Kandahar, and a more efficient and simpler way of getting our kit out. Perhaps it is not too late.
Will the Secretary of State confirm that today’s announcement about lengthening tours will mean that one fewer brigade needs to go to Helmand, which could lead to taxpayers’ money being saved?
Mr Hammond
I am sorry about the railway. If my history serves, we never completed the Cape Town to Cairo railway either, but such are plans. I prefer to focus now on High Speed 2—we should look to the future.
My hon. Friend is right. Today’s announcement will mean that it is not necessary to prepare and train a further brigade to deploy. It is not yet clear whether that will make any significant saving for the taxpayer because most of that deployment, had it taken place, would have been in the back of transport aircraft that would have been going out empty in order to come back with repatriated equipment.
Jim Shannon (Strangford) (DUP)
I associate my party with tributes to the soldiers who lost their lives in Afghanistan, and I thank the Secretary of State for his statement. He will be aware of the experience and training gained from Operation Banner in Northern Ireland. Will he confirm that the valuable skills developed through that operation will be made available to the Afghan army to the end of 2014, and indeed beyond?
Mr Hammond
I can confirm to the hon. Gentleman that we are training Afghan troops in various specialist techniques that will be of value to the Afghan security forces in maintaining security in future. Of course, that draws on all the experiences that British troops have gained over the years, including many valuable experiences in Northern Ireland.
Jason McCartney (Colne Valley) (Con)
I congratulate my right hon. Friend on the introduction of the Operation Herrick draw-down allowance. Last year, following a spate of so-called green-on-blue friendly fire attacks that resulted in casualties from, among others, the Yorkshire Regiment—my local regiment—a number of measures were introduced to remove the threat. Will he confirm that, as the draw-down gathers pace, that the threat from green-on-blue attacks will be minimised as much as possible?
Mr Hammond
As I have sought to emphasise throughout the statement, maintaining force protection during the draw-down period is our primary consideration; thereafter, it is maintaining effective support to the Afghans. The green-on-blue threat has not gone away. As we draw down into fewer and fewer bases and have less and less contact with the Afghans, the nature of the threat changes. In some ways it is diminished, because we have less contact; in other ways it is increased, because we have less awareness. However, I can assure my hon. Friend that the military commanders are extremely focused on how best to manage the situation to optimise force protection during that period.
Sir Bob Russell (Colchester) (LD)
The Secretary of State says that between 2,200 and 3,700 military personnel could deploy for more than six and a half months, and for up to nine months in some cases. In addition to the Herrick draw-down allowance, will personnel have additional home leave entitlement during that extra deployment period?
Mr Hammond
It is not intended that an additional R and R period will be incorporated. As with current practice, there will be a single 14-day period of R and R during a tour.
Sir Gerald Howarth (Aldershot) (Con)
May I congratulate my right hon. Friend on a sensible move to ensure that the transition is orderly? Does ISAF have any intention of retaining a continuing capability beyond the extra three months of 2015? Will the UK be prepared, beyond the support to the officer training academy, to contribute troops to ensure that the transition period to full ANSF control is achieved?
Mr Hammond
I am sure my hon. Friend is aware that a NATO chiefs of defence staff meeting at which that question will be discussed is taking place today in Brussels. No concrete proposal has yet been accepted, and the UK has made no commitments beyond the Afghan national army officer academy. However, we will consider what ISAF and our NATO allies propose to do in future. We will look at the requirements that any NATO plan involves, make a decision on what, if any, participation the UK should have post-2014, and notify the House as soon as any such decision is made.
Debate on the Address
Cost of Living
18:59 - The House having divided: - Ayes: 254 / Noes: 316 - Question accordingly negatived.
Mr Speaker
I inform the House that I have selected the amendment in the name of Edward Miliband.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
I am grateful for the opportunity to discuss the measures the Government are taking to help people and families who are struggling to make ends meet. No party in the House has a monopoly on compassion. We know that there are problems, and that families and people are struggling, not least because of increases in prices, including global energy prices. The issue is that the Government must tackle those problems with no money, as we were reminded by the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), the former Chief Secretary to the Treasury. We must create a better fiscal position while tackling that difficult problem to ensure that we help people. And we are doing just that. We are cushioning people from the impact of rising prices and protecting the most vulnerable. We are trying to make these big, difficult decisions in as fair a way as possible, to be fair to those who work hard while helping those who fall on hard times.
Geraint Davies (Swansea West) (Lab/Co-op)
On that very point, does the Secretary of State agree that food and energy comprise the highest proportion of expenditure for the very poorest—they are escalating out of all proportion—and that he is cutting money for those very people, namely those on benefits? Is not the harsh reality of this Government that they are hurting the poor most because of the bankers’ recklessness?
Mr Davey
The picture is rather more complicated than the hon. Gentleman says. We have a range of measures to help the most vulnerable with their energy bills, which I will come to during my speech.
One way to help people is to ensure that work pays. We must ensure that we are creating jobs in the economy and that there are links from benefits into employment. That is rightly one of the Government’s obsessions. We are introducing a range of policies to help people. Interest rates are at record lows. Income tax cuts are making a big difference: this year, 24 million employees will have an income tax cut of £600; next year, the cut will be £700. Some 2.5 million of the lowest paid will be taken out of income tax altogether. The income tax bill for people on the national minimum wage will be cut in half. That is a good record.
Pete Wishart (Perth and North Perthshire) (SNP)
The Secretary of State mentions Government obsessions. Does he believe that the lofty ambitions he describes will be better achieved in or out of Europe?
Mr Davey
It did not take long for someone to mention Europe. The hon. Gentleman will be shocked to hear that, as a Liberal Democrat, I strongly support Britain’s membership of the EU.
The Government are taking other measures. We are cutting fuel duty, we have capped rail fares, and we are helping the most vulnerable with their energy bills. We are extending free nursery provision and helping working parents with child care costs. The Opposition do not like to talk about the Government’s record on jobs. We have helped to create 1 million private sector jobs since we came to power. We have 1 million apprenticeships. That is a record we should be proud of, and one the Labour party was not capable of delivering.
Caroline Lucas (Brighton, Pavilion) (Green)
The Secretary of State says he is helping the poorest with their energy bills, yet this is the first time for 30 years that there is no taxpayer-funded energy efficiency scheme. The energy company obligation does not have enough money in it. It is also funded by a levy on everybody’s fuel bills, which is regressive—it pushes more people into fuel poverty than it draws out. When will he put in place measures that will protect the poorest?
Alec Shelbrooke (Elmet and Rothwell) (Con)
My right hon. Friend mentions the creation of 1.2 million private sector jobs. Does he agree that that is probably why, it has now been revealed, that the country avoided a double-dip recession?
Mr Davey
My hon. Friend is absolutely right. It is worth reflecting on the Government’s record on jobs. The Opposition do not like to talk about it, but the truth is that, despite the difficult circumstances—despite the Government having no money because we must pay down the deficit, and despite not having the growth that we would like in the world, European or UK economies—we have created jobs. That is a very good record.
Huw Irranca-Davies (Ogmore) (Lab)
Against the glowing backdrop that the Secretary of State paints, why do I now have a food bank in every single village in my constituency when there was only one three years ago? Why has there been a quadrupling of food banks under this Government? His record cannot be that good, given the backdrop of the inexorable rise of food poverty.
Mr Davey
People who run food banks are doing an extremely good job and deserve credit for their work. However, it is completely wrong to suggest that there is a statistical link between the Government’s benefit reforms and the provision of food banks. It is good that people are helping others. I hope the hon. Gentleman supports that.
I wish to make progress and to talk about energy and climate change policy. My Department has three major objectives. The Department wants to ensure that energy is as affordable as possible for consumers and business; that we keep the lights on with energy security; and that we decarbonise the power sector. With the Energy Bill, the green deal and many other policies, we have the most coherent energy and climate change policy of any Government in Europe—and indeed of any Government in this country for many, many years. Our approach also tries to maximise the jobs and growth potential from our energy and climate change policies. We also try to ensure that the impact on the bills of consumers and businesses is as low as possible, and we have policies to try to meet the climate change challenge.
David T. C. Davies (Monmouth) (Con)
The total increase in average global temperatures since we started industrialising is approximately 0.7° Celsius. How much of that is due to carbon emissions and how much is due to the natural warming that was going to take place anyway as the earth came out of a cool period?
Mr Davey
I am disappointed that my hon. Friend seeks to deny the science of climate change. He may have heard Sir John Beddington, the Government’s recently retired chief scientist and a very distinguished scientist, say that the science showing climate change was human-made was “unequivocal”. When it comes to science, I like to listen to the experts.
It is important that we gain jobs, especially green jobs, through our investment in low carbon. We also need to ensure that these are profitable enterprises in which people can invest. We need £110 billion of investment in our energy infrastructure over the rest of this decade. That will be in low carbon, in gas and in other energy security measures.
On prices, we have to drive a wedge between the rising global prices and the bills that people have to pay. We also have to rise to the climate change challenge. We need to recognise that the challenge is serious and that—contrary to what my hon. Friend suggests—the science tells us that we have to act.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
The Secretary of State talked about investments in our infrastructure. The green investment bank could be fuelling jobs in the green sector if it were also investing in SMEs that are developing and bringing to market technology in this area. Why are the Government failing to deliver on that?
Mr Davey
The Government have delivered on the green investment bank. The hon. Lady should know that investment banks are not controlled by Government. They are given a remit to make investments, and the green investment bank is doing so and is extremely effective. Indeed, it is world leading. I am sorry that the hon. Lady is criticising it and I hope that she will look at what it is doing and realise that it is making a big difference. Our performance on green growth and green jobs shows that we are delivering on the coalition agreement promise to build a new economy from the rubble of the old.
We have this massive infrastructure opportunity because nearly a quarter of our capacity will close over the next decade. We have to replace that to keep the lights on, but at the same time we can begin, and really go for, the transition to a low-carbon energy economy. We need to do that by investing especially in energy efficiency. I have stressed that from day one as Secretary of State. We have several policies already, such as the green deal and the energy company obligation, but in the last year we have developed some very interesting proposals on electricity demand reduction. We will publish the response to our consultation on that shortly.
Around 1 million people work in the green economy, and the support that we are giving to clean energy will fuel the rise in the area. Between now and 2020, the support we give to renewables will increase year on year to £7.6 billion—a tripling of the support for renewable energy and a record the Government can be proud of. We already have 110,00 jobs in the renewable energy sector directly, and 160,000 jobs in the supply chain. By 2020, we believe the sector will have more than 400,000 jobs.
We also have the prospect of a new generation of nuclear power stations. I am engaged in discussions with EDF for a proposed nuclear reactor at Hinkley Point C. If we reach agreement, it will result in more than 5,500 jobs during construction, more than 1,000 ongoing jobs at Hinkley Point C and more in the supply chain. Our proposals on carbon capture and storage—we have two preferred bidders, Peterhead in Aberdeenshire and White Rose in Yorkshire—will also result in lots of jobs and deliver a pathway to commercial CCS in the next decade, which will be very important in meeting our climate change targets.
We sometimes forget the oil and gas sector, perhaps because it is not as green as renewables, nuclear and CCS, but it will be essential as we make the transition from a fossil-fuel economy to a low-carbon economy. We will still need an awful lot of gas and oil during that process and in the next few decades. I am delighted to report to the House that investment in the North sea is booming. We are seeing record levels of investment in the North sea, which is good for our energy security as we do not have to import so much gas from other parts of the world. I hope that right hon. and hon. Members will welcome that.
I have made it clear that we will also support the development of shale gas. If it has potential—and we do not know that yet—it could be beneficial, especially to our energy security. We are going to need gas for many decades. It replaces coal, so it can help us to meet our climate change targets. At the moment, we have to import increasing amounts as the amount coming from the North sea is declining. If we can exploit shale gas commercially, that will make sense, and I hope that we can reach agreement on that. We are going about this in a way that is designed to keep the public with us. In other countries that have rushed headlong into it, the public have reacted very badly, leading to moratoriums and bans. We want to ensure that we think things through carefully, which will help us do it properly.
Derek Twigg (Halton) (Lab)
The oil and gas industry is well represented in the Heath business and science park in my constituency, which is one of the most important employment sites. If the Secretary of State is keen to promote jobs, why does his Department still have a planning recommendation before it that it has had since Easter? It is very simple, involving just the removal of an electricity line, but the delay is holding up investment, jobs and housing. Why has he not made a decision on that, given that he has had the papers since Easter?
Mr Davey
The House will not be surprised to learn that I am not aware of that particular planning application. Of course I will go away, look at it and write to the hon. Gentleman.
All our policies, whether on energy efficiency, renewables, new nuclear, CCS or oil and gas, add up to the proposition that my Department is about growth. We are seeing a lot of jobs created and we will see more in the future. However, I am also concerned about the bills and the cost of energy, and how those affect our constituents and industry. We have seen global gas prices increase dramatically. UK wholesale gas prices were 50% higher in the five years to 2011 than in the previous five, and they have continued to rise since then. That is the global context. People talk about the reduced price of gas in north America, but they forget to look at the price of gas in other markets, which has gone up significantly.
We need to provide a cushion or wedge between the prices going up in global markets and the bills that our constituents have to pay, and we have several policies to help. We have direct payments, including the winter fuel payment, the cold weather payment and the warm home discount. This last goes to 2 million of the lowest income households in the UK, taking £130 directly off their bills and helping 1 million of the poorest pensioners. We are trying to promote greater competition in the retail markets through our proposals on tariff reform and the work we are doing on collective switching. We are driving competition in the retail market, which is already having an effect for those who have benefited from the collective switching.
Through the Energy Bill, we are trying to ensure that we achieve wholesale market reform, and this will no doubt be debated on Report and in the other place. We welcome the fact that Ofgem is consulting on proposals to improve liquidity in the wholesale market. We look forward to its conclusions, and they will play a part in ensuring that competition can drive lower prices. When we talk about the cushion and the wedge between the global prices and the bills that people actually pay, energy efficiency is at the heart of the solution, whether in product standards, the green deal or energy company obligation. I am pleased that we are already seeing real interest in the green deal, and a huge number of assessments have already taken place.
John Penrose (Weston-super-Mare) (Con)
I am pleased to hear that my right hon. Friend is interested in promoting competition, particularly in the retail and wholesale markets. Does he agree that there may also be significant opportunities, not just in the energy sector, but more broadly across the other utility sectors too, in reducing the infrastructure costs of the transmission network—be they wires or pipes for water, energy or whatever—using investment more effectively and efficiently and trying to regulate down those costs in a much more determined fashion?
Mr Davey
I am sure my hon. Friend is right. In a previous incarnation, I was Minister with responsibility for competition and was extremely keen to make sure that the UK had the most robust and rigorous competition regime in the world. The changes going through this House have delivered on that. I am not an expert on every single utility sector, so I will be careful about making any particular points about the water industry, or any other industry, but I am sure he is right that competition has an important role to play.
The impact of our climate change and energy policies has been to reduce household bills by 5%. By 2020, bills will be 11% less than they otherwise would have been. We know, of course, that energy prices are going up globally, but we have the policies to try to cushion people. As a result, people will pay lower bills than they otherwise would have done.
Huw Irranca-Davies
I thank the right hon. Gentleman for giving way, and I will not abuse his graciousness any more. Against that backdrop, why is it that independent analysis from the Fuel Poverty Advisory Group shows that an additional 300,000 people went into fuel poverty last year, and the Hills review suggests that 200,000 will be driven further into fuel poverty in the next four years? Against the glowing backdrop he has set out, why is that happening?
Mr Davey
I agree with the hon. Gentleman that fuel poverty is a real problem. [Interruption.] Opposition Members, from a sedentary position, say that the number of those facing fuel poverty is going up. Indeed, with global gas prices going up we have a challenge to keep bearing down on fuel poverty, but we are completely committed to doing that. Later this year we will produce a fuel poverty strategy, the first to be produced for more than a dozen years. One reason why he can quote the Hills review is that the Government commissioned that review to look into the exact nature of fuel poverty to ensure that it is being measured correctly. It shows that the previous Government could not even measure fuel poverty correctly. We will ensure that we measure it correctly, so that our policies can be targeted far more effectively to help the fuel poor. Opposition Members are not the only people in this House who are compassionate about the fuel poor.
It is important that we are concerned about the high cost of energy for all businesses, and energy-intensive industries in particular. That has to come through greater energy efficiency and we have a number of programmes to deliver that. There also has to be compensation and extra help for energy-intensive industries. I am grateful for the work and co-operation of the Treasury and the Department for Business, Innovation and Skills to ensure that we have a package to address the problem, particularly for energy-intensive industries. We have not had one before.
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
The right hon. Gentleman was critical of the previous Government’s definition of fuel poverty and praised Professor Hills’ proposals. The problem is that no one can understand them. Will he please explain to the House the Hills’ definition of fuel poverty?
Mr Davey
The interesting thing is that that definition has two parts: it tries to measure overall fuel poverty in terms of energy efficiency; and, most importantly—it has not been done before—it looks at the depth of fuel poverty. If we consider not just fuel poverty statistics, but income poverty statistics too, we should be most concerned about those in poverty year in, year out—the grinding fuel and income poverty. Unless we have measures that show what is happening to deep fuel poverty and allow us to attack it, we will not be able to deal with fuel poverty. Our measures are more effective and more sophisticated than anything produced by the Labour party.
We must ensure that business energy costs are, through climate change policies, similar across the EU and the globe. One measure that the UK and the EU have pushed is the European carbon market, which is often known as the EU ETS. It is important that the EU ETS carbon price provides incentives and signals to the markets for investment in low carbon, and that it creates a level playing field for industries across the EU. I regret that the vote in the European Parliament on the back-loading proposals was lost by 19 votes. The proposals were part of the reform of the EU ETS. We need to do a lot better. I hope that the ENVI Committee in the European Parliament can come forward with another package so that we can reform the carbon market. That is in everyone’s interest, not just on climate change, but to ensure that we have competitive industries on a level playing field across the European Union.
I want to end by talking briefly about climate change. Some will say that we should put off action on climate change until we get to better financial times, and some will say that we should not be looking at this issue at the moment given our financial and economic problems. I reject those arguments completely. The science of climate change is unequivocal: we have to act now and we should have acted before. That is why we need to reform the EU ETS. It is about not just the back-loading proposals, but structural reform. I am working with fellow EU Ministers and have set up a like-minded group—the Green Growth group—to try to build a coalition at the European Council, so that we can achieve these vital reforms on climate change.
There has been a big debate during the passage of the Energy Bill—a carry-over Bill in the Queen’s Speech—on the proposal for a decarbonisation target, which has a role to play in tackling climate change. Of the general election manifestos from the Liberal Democrats, the Conservatives, the Labour party and even the Green party, guess how many mentioned a decarbonisation target for the power sector? Not a single one. When we published the draft Energy Bill in May 2012, it did not contain a decarbonisation target, and there was no decarbonisation target promised in the coalition agreement. Now we have one in the Bill. The Government have looked at the issue and put the target in the Bill. We are the first Government ever to do that, and it is a very strong move. We are an early mover. The Opposition want to carp at one or two details, but I am afraid that they fail to acknowledge what we have done and what we have delivered.
Alec Shelbrooke
Does my right hon. Friend agree that, whether or not people are sceptical about climate change, reducing our reliance on fossil fuels and carbon is equally as important to energy security as it is to climate change? This policy is very important in making sure that we have energy security in this country.
Mr Davey
My hon. Friend is absolutely spot on. I believe that the climate change science is unambiguous and that we have to act on that basis, but he is absolutely right: there are other reasons to invest in low carbon and energy efficiency. It is important that this country takes a lead on climate change by working with EU colleagues to reform the EU ETS and the European carbon market, by including the decarbonisation target in the Energy Bill, which we have done, and by taking various other measures. Other countries are looking at our measures on electricity market reform and our green deal because they believe that we are leading the way.
All those measures are critical in the run-up to 2015, which is when the climate change talks will take place in France, probably in Paris. During the climate change talks in Durban in 2011 the world agreed to sign a legally binding global treaty at the climate change talks in 2015. This will be a critical moment in the global battle against climate change. We need to ensure that our international legal obligations apply to everyone in the world, not just to Europe or the Kyoto protocol nations. Having agreed in Durban to do that in 2015, we now have to prepare the way to make it a success. Our work here and with the EU is critical because it will enable us to sign a treaty in 2015.
Whether we are trying to keep down costs for people or creating jobs, the package of measures introduced by the Government—not just my Department or the Department for Communities and Local Government, overseen by my right hon. Friend the Secretary of State—are focused on helping people in our country. On the longer-term challenges, we have rejected short-term fixes and the siren calls of vested interests. If we are interested in building a new and sustainable economy, we must make it a low-carbon economy and consider the long-term challenges.
I am grateful to the Opposition for how they have debated energy policy over recent months, particularly on the Energy Bill. I have seen a desire to build a consensus, which is really important, because investment to tackle our energy challenges and climate change are, by their very nature, long term, and the investment framework that one builds needs to span not just one Parliament or one Government, but several Parliaments and Governments into the foreseeable future. Building a consensus is critical for successful policies that are as cheap and effective as possible. I look forward to hearing what the right hon. Member for Don Valley (Caroline Flint) has to say. I am sure that she wants to add to that consensus.
Caroline Flint (Don Valley) (Lab)
I beg to move an amendment. At the end of the motion add:
‘but believe that the Gracious Speech offers no answers for squeezed households facing a cost of living crisis; regret that the economy is flatlining, unemployment is rising, borrowing is set to be £245 billion more than planned and the Office of Budget Responsibility has confirmed that by 2015 people will be worse off than they were in 2010; and call on your Government to take real action to get people back into employment, build more affordable homes, tackle rising energy and water bills, tackle the growing cost of getting to work and instability in private sector housing rents and tenancies and end extortionate letting agents’ fees and charges.’.
We debate the Queen’s Speech at a time of crisis for millions of people in our country. This was a golden opportunity for the Government to show that they were in touch with the nation’s concerns and that they would help with the rising cost of living and offer hope to families who are seeing their dreams evaporating with every year that passes. But this Queen’s Speech will not take the pressure off the squeezed middle, lessen the anger of commuters powerless to halt the relentless rise of rail fares or address the choice between heating and eating for our most vulnerable senior citizens. For the shop worker whose hours have been cut, putting them with the 1.5 million people who are part-time through no choice of their own, for the middle manager workless for the first time at 50, for the design graduate offered only unpaid internships and for the parents whose child is still living with them at an age when they should have a home of their own, this Queen’s Speech has only confirmed what they dreaded: jobs and growth will have to wait and living standards will continue to fall.
While the wealthiest 1% will see their earnings rise with the Chancellor’s spring bonus, everyone else will have to settle for less. They will be expected to make ends meet, cut corners, postpone the holiday and perhaps join the 5 million families who, according to Which?, use credit or savings to pay for food. The Queen’s Speech is not just a missed opportunity, but a denial of the power of Government to change lives for the better. I believe that Government can stimulate jobs, foster growth, encourage investment and skill a work force for today’s jobs and those of tomorrow, but not if the golden rule, at every turn, is to cut the deficit first, whatever the impact, cost and evidence.
Andrew Selous (South West Bedfordshire) (Con)
Of course, the right hon. Lady is right that the employment market is tough for many people, but in these difficult times, will she welcome the fact that there are now 750,000 more people in work than when her Government left office and that the UK’s overall employment rate is growing at twice the rate of the United States’ and is the fastest growing of any G7 country? That is not a bad record in tough times.
Caroline Flint
The Prime Minister promised change, but things have got worse, not better. He inherited an economy in which growth had returned, inflation was low, unemployment was falling and borrowing was lower than forecast. Today the economy is still flatlining, with more people out of work than when he became Prime Minister, the slowest economic recovery for more than 100 years, prices rising faster than earnings and real wages down £1,700 since 2010, while energy bills, train fares and the cost of a weekly shop have spiralled out of control.
Andrew Gwynne (Denton and Reddish) (Lab)
My right hon. Friend is right to mention train fares. The Government talk a lot about reducing the cap to 1%, but is not the truth that they have removed the ban on so-called flexibility, meaning that train companies can now increase their ticket prices by as much as 5% above the retail prices index, which was something the Labour Government removed?
Caroline Flint
My hon. Friend is absolutely right, which is why our amendment puts forward an alternative to the Government’s proposal that would help commuters.
Meg Hillier
Will my right hon. Friend add to her list the trap that many of my constituents find themselves in, not earning an £81,000 salary and unable to afford the £17,000 deposit on an average-priced property—generation rent trapped in an unregulated private rented sector? What comfort are the Government giving them?
Caroline Flint
They are offering them no comfort, and I will address that issue later, as too will my right hon. Friend the Member for Leeds Central (Hilary Benn).
Even by the Government’s own tests, they have failed to face up to the stark reality that whatever the intention, after all the cuts, pain and hardship, the plan is not working. The credit rating test was to ensure our triple A status, but that has been downgraded by not one, but two agencies. The borrowing test was to eliminate the deficit by the election, but that is £245 billion off course. Struggling families, pensioners and businesses cannot afford another two years of stagnation, so the challenge for the Government in this Queen’s Speech was to get our economy back on track, get people back to work and stop the slide in people’s living standards.
Jacob Rees-Mogg (North East Somerset) (Con)
Will the right hon. Lady tell us something that the Labour Front-Bench team have been reluctant to tell us, which is how much higher borrowing would be if Labour was in charge and what effect that might have on interest rates?
Caroline Flint
I am afraid to say that the Chancellor’s spending cuts and tax rises, which went too deep, too fast, have left our economy flatlining. As I said, the Government are borrowing £245 billion more than they planned. [Hon. Members: “Answer the question!”] I am going to. That is why we have called for infrastructure investment to be brought forward and for a temporary cut in VAT as part of Labour’s five-point plan for jobs and growth. These measures would lead to a short-term rise in borrowing, but getting growth and confidence back into the economy from a boost such as the VAT cut and investment such as in the building of affordable homes would increase our tax revenues, help reduce the welfare bill and see borrowing fall in the medium term.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Does my right hon. Friend agree that that much-needed boost to the economy is precisely the message of encouragement that young people in this country need? It is a damning indictment of the Government’s policies that more than 1 million young people are unemployed.
Caroline Flint
My hon. Friend is absolutely right, but we are not just about providing answers on jobs—we would expect something back too—which is why, under our jobs guarantee, if someone did not take a job, they would lose benefits.
Caroline Flint
I want to make some progress, because there are only six minutes per speech, and I am sure that many right hon. and hon. Members want to get in.
Let us take a closer look at the real lives of hard-working Britain. On energy bills, the facts speak for themselves. In just three years, bills have risen by more than £300, and, despite falling between 1997 and 2010, fuel poverty is now increasing sharply. There has been a doubling in the number of pensioners dying from hypothermia compared with five years ago. What have the Government done about it? The Secretary of State mentioned the energy company obligation, the ECO. But less than half the budget of that will go to people in fuel poverty. He has tried to claim credit for the warm home discount, but he will not want to talk about the hundreds of thousands of low-income families with children that are missing out on help. He mentions the green deal, which is going so well that the Government still will not tell us how many people have taken out a package.
But one thing I am sure he does want to talk about is the Prime Minister’s now infamous pledge to force the energy companies by law to put everybody on the cheapest tariff. I will not forget Wednesday 17 October 2012 when the Prime Minister said:
“I can announce…that we will be legislating so that energy companies have to give the lowest tariff to their customers.” —[Official Report, 17 October 2012; Vol. 551, c. 316.]
It sounded great; it is a shame his own Ministers did not know about this announcement until it happened. When the Government finally published their proposals in February, it confirmed what we knew all along; that this was an impossible promise from an out-of-touch Prime Minister making it up as he went along.
You do not have to take my word for it, Mr. Speaker. We can look at the Government’s Energy Bill, which categorically does not require the energy companies to put everybody on the cheapest tariff. All it says in clauses 121 to 124 is that the number of tariffs the energy companies are allowed to offer will be limited and that those tariffs may have to be standardised, and that customers will have to be provided with more information about cheaper deals. If the Secretary of State disagrees, I am more than happy to let him intervene to tell us that all energy companies will be required by law—as the Prime Minister promised—to put everyone on the cheapest tariff, the date on which the switchover will happen, how many of 22 million households will be affected and how much money on average they will save.
Caroline Flint
There we have it, Mr Speaker. They cannot explain it because it was a false promise. The Prime Minister told this House 12 times that his Government would legislate to put everyone on the cheapest tariff; that is just not going to happen.
Jim Dowd (Lewisham West and Penge) (Lab)
My right hon. Friend will be aware of the great potential of smart metering to reduce people’s bills. Is she as disappointed as I am, and the rest of the country, that the Government have now delayed the roll out of smart metering by 12 months?
Caroline Flint
Yes, further delays to that programme were announced last week. Whether it is smart metering, the green deal or changes to the feed-in tariffs, we have seen one mistake after another and bad handling of what should be very good policies not just for consumers, but for creating jobs and growth in this country.
Curbing the costs of energy for Britain’s households is very important, but the Government have introduced an energy market reform Bill that does nothing to reform the energy market. They have cut winter fuel payments for pensioners, despite promising not to. They have halved the fuel poverty budget while claiming it is bigger and better than ever. They have closed Warm Front, which helped well over 2 million households to insulate their homes. They stand proudly as the first Administration since the 1970s not to have a Government-funded energy efficiency scheme.
If this was our Queen’s Speech, we would be providing real help now for people and reform of the energy market for the long term. Here are three Labour policies that we would have included. [Interruption.] Well, we have been mentioning all these policies for the past year and this is another opportunity to confirm them again. First, elderly customers, who are most vulnerable to the cold weather and most at risk of fuel poverty, are among the least likely to be able to access the cheapest online deals or to switch supplier. We would put that right and put all those over 75 on the cheapest tariff for their gas and electricity. If we did that, as many as 4 million pensioners—including nearly 8,000 in the Secretary of State’s own constituency—could save as much as £200 a year off their bills. [Interruption.] The Minister of State, the right hon. Member for Bexhill and Battle (Gregory Barker), might like to listen, as I am offering him this policy to put in the Energy Bill. The energy companies know that that is our policy and they know that it can be done. The Government can have that policy for free; take it, put it in the Energy Bill and get help to those who need it most.
We also want everyone to benefit from a competitive and more responsible energy market. That means wholesale reform of the way in which energy is bought and sold. At the moment, no one really knows what the true cost of energy is. If energy companies were forced to sell the power they generate into an open and transparent pool, anyone could bid to retail energy.
But it does not stop with energy prices. Let us look at another basic need on which every household relies; water. Ofwat estimates that some 2.2 million households—one in 10—spend more than 5 per cent of their income on water and sewerage. As my hon. Friend the Member for Wakefield (Mary Creagh) has pointed out, despite Labour’s legislation, which allowed for new social tariffs to help people squeezed by rising water bills, the Government have washed their hands of any responsibility and are leaving it to water companies to decide whether to introduce social tariffs. We think that that is a responsibility that the Government should take on and deal with.
Mrs Eleanor Laing (Epping Forest) (Con)
The right hon. Lady is coming forward with all these ideas now, but why did her Government spend 13 years neglecting the country’s energy needs? Why did they not bring those matters to the House during that time?
Caroline Flint
I refute that accusation; investment in energy was up, there were more starts in terms of renewables, some of which will be completed under this Government—that is our legacy—and by tackling fuel poverty, the insulation programme through Warm Front and the decent homes programme we helped millions of households.
To answer honestly, I have witnessed things over the past three years that have made me challenge what we need to do for the future in terms of how the energy market works. It is up to all of us to reflect on where we are today and on what has happened in the past three years and try to put it right. That is why we believe that we need to encourage new entrants, increase competition and ease the upward pressure on prices.
One of our other proposals is to deal with Ofgem. Ofgem removed price controls a decade ago, so in the belief that competition had developed sufficiently and that privatisation had delivered a functioning competitive market. I believe it is clear now that that was a mistake. We need to create a tough new regulator that people can trust and ensure that the regulator has the power it needs to protect consumers. That is why we would abolish Ofgem and create a tough new regulator with a statutory duty to monitor the relationship between the prices that energy companies pay for their energy and the bills the public pay and the power to force them to cut prices when wholesale costs fall. We believe that that is very important.
Mr Davey
The right hon. Lady has explained to the House the Opposition’s policy to get rid of a regulator and to replace it with another regulator. Given that we need to attract £110 billion of investment in energy to this country, is she aware that one of the things that investors prize about the UK is regulatory stability and certainty? Will her proposal improve that or make it worse?
Caroline Flint
Investment in the renewables sector in this country has gone down; we are a less attractive place to invest. The Secretary of State makes much of the so-called “decarbonisation target” in the Bill. The truth is that there is no such target. Investors say to me that they need certainty, which is why we need to have strength behind a decarbonisation target to make sure that that investment comes forward.
I also believe that we cannot have a regulator that people do not trust. It has not been doing the job it was asked to do; it is not fit for purpose. To get our energy market and sector into a better place, we need consumers to have confidence in the regulator, which is why it needs to change. There is no point in trying to hold up a regulator that does not command confidence. We need a regulator that does just that and can move us to a better place, where energy has the certainty it needs for investment but also has the confidence of consumers.
Mr Anderson
That was very good decision by my colleague. Is not the truth that investors see this country as having stable regulation, but that they see it as wide open? That was the way privatisation was set up in the 1980s, so that companies can rip off the public and put bills up on a whim and do not care how they do that as long as they can get away with it. Ofgem has failed continually and it needs to be reformed; my right hon. Friend is absolutely right in what she says.
Caroline Flint
I thank my hon. Friend for that intervention. The truth is that we do not have a competitive market: six large companies dominate 99% of it, so we have to open it up. We need to make it more dynamic and more transparent, so that the public feel they are paying a fair price for the energy they buy.
Caroline Flint
No. I will make some progress; I have taken a number of interventions.
I have discussed energy and water, but what about those families who get up to do the right thing and head off to work each day? Among them are hard-working commuters forced to travel at peak time. Often, they have moved a long distance away from their workplace to stand a chance of buying their own home. Their reward for doing the right thing, day in and day out, is season ticket price hikes of up to 9.2%. What understanding have the Government shown them? How about squeezing them further by allowing new “super peak” fares? As my hon. Friend the Member for Garston and Halewood (Maria Eagle) has made clear, if we were in government and if this was our Queen’s Speech, we would put passengers first, not siding with the powerful private train operators. Our consumers Bill would cap fares at no more than 1% above inflation in each year of this Parliament and ban train companies from introducing even higher “super peak” fares.
Caroline Lucas
Would the Queen’s Speech of the right hon. Lady’s party include a Bill to bring the railways back into public ownership? Reports suggest that doing so would save around £1 billion a year in administration costs.
Caroline Flint
What we are clear about is that the rail companies must prove themselves when it comes to their franchises being renewed. On my local line—the east coast line—the operator has done a remarkable job. Unlike some of the other operators, it has paid premium payments back into the Government’s coffers to spend on other things. However, we must ensure that each rail company is fit for purpose, and where a company is not doing the job and we need to take action, we can make a decision on a case-by-case basis at the time.
On housing, as my right hon. Friend the Member for Leeds Central will set out in his speech later today, the Government are not just failing to tackle the housing crisis; their policies are making it worse. House building is at its lowest level since the 1920s, annual housing starts are down and housing completions were lower in both years of this Government than in Labour’s last year in power. As a result, more and more people are locked out of home ownership, stuck on local authority waiting lists or forced to live in the private rented sector. Whereas this Government sit back and do nothing, Labour would act now to change the private rented sector so that it works for all—landlords and tenants.
Mr Andy Slaughter (Hammersmith) (Lab)
In my constituency, both house prices and private rents went up last year by 8%, which is eight times the rate at which wages rose. It costs £650,000 to buy the average property in my constituency and £800 a week to rent a three-bedroom house, yet the Tory response is to sell off council homes when they become vacant and to put families into bed-and-breakfast accommodation, at a cost of £1 million a year.
Caroline Flint
My hon. Friend makes some important points. I seem to recall that we were told that the Government’s housing policies would not lead to an increase in private rents, but the opposite has happened. I, too, saw the headline—I think it was in the Evening Standard a few weeks ago—about private rents in London rising eight times more than wages.
If this was our Queen’s Speech, we would have had a housing Bill in it and we would be taking action to encourage landlords to offer families longer tenancies, so that they have security and stability. We would introduce a register of landlords and empower local authorities to strike off rogue elements, and we would end the rip-off fees and charges imposed by letting agents. However, this Queen’s Speech offers nothing to address those concerns. It is a no-answers Queen’s Speech from a tired, failing and increasingly fractious Government.
This Government promised change, but nothing is changing for hard-working Britons. Our country faces big challenges, but this Government and this Queen’s Speech are not equal to the task. The Queen’s Speech fails to provide a reboot for flatline Britain; it fails to address the rising cost of living; and it fails to listen to hard-working people. The big question that those people are asking of Government is: how can they afford to secure a roof over their head, heat their home, feed their family and get to work? However, this Queen’s Speech has no answers for them. The promise is that we will get there in the end, but like so much with this Government, it is wearing thin. Even the Government’s own independent Office for Budget Responsibility is saying that British people will be worse off in 2015 than in 2010.
I do not relish the rising levels of young people out of work, or the months turning into years among the adult jobless. I regret that our economy remains in the doldrums. None of us has all the answers, but our amendment shows that there are ways to help people through these harsh times. At no cost to the Government, we could cap train fares, put the over-75s on the cheapest energy tariff and stop private landlords ripping their tenants off. Labour’s amendment is about what is fair, what is reasonable and what is just, and I commend it to the House.
Mr Speaker
Order. Just before I call the first contributor from the Back Benches, I remind the House that in light of the number of right hon. and hon. Members seeking to contribute, I have had to impose a six-minute limit on each Back-Bench contribution.
Mrs Caroline Spelman (Meriden) (Con)
I support the Gracious Speech and commend the Secretary of State for Energy and Climate Change on the important measures that he has outlined, which will help the hard-working families in my west midlands constituency with the cost of living.
It is the rising cost of global energy that has had such a huge knock-on effect on household bills, not least the cost of travel to work. I therefore wish to speak about the proposed investment in high-speed rail, which will run through my constituency. We will get both the pain and the gain, as the first stop outside London will be Birmingham International, just 38 minutes from Euston. High Speed 2 throws a lifeline to the west midlands, which has been held back by a lack of transport investment down the years.
The principle behind high-speed rail is the lack of capacity on the existing railways. There is already a lack of capacity, which is why freight has had to be moved off the west coast main line, on to the Chiltern line or the congested west midlands road network. That lack of capacity means that I frequently have to stand when travelling at peak times to and from my constituency. Indeed, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) teased me as I read the contents of my red box standing up when I was a Minister, but I reminded him about his note to the effect that there was “no money left” for us when we took power.
The Opposition claim that the Queen’s Speech does nothing to tackle rail fares, but we are about to make a huge investment in rail infrastructure that will create jobs and growth. Without that extra capacity, the fundamental tool to meet rising demand will not exist. With a renaissance in west midlands manufacturing and the success of companies such as Jaguar Land Rover, demand for rail will only increase, so we must have a transport network to match the needs of the 21st century as we compete in the global race for jobs.
Jake Berry (Rossendale and Darwen) (Con)
Does my right hon. Friend agree that the Government’s commitment to rail travel is shown not only in HS2, but in the investment being made in Birmingham New Street station at the moment?
Mrs Spelman
I absolutely agree. That is an example to west midlands constituents of the Government’s commitment to growth, jobs and infrastructure, which is essential.
When I drive home up the M40, I frequently see transporter loads of newly made cars from Solihull, representing our export-led recovery, but would it not be so much better if there was capacity on our railways to take that freight straight to Southampton for export? Frequently, the motorway link between the M42, the M40 and the M6 is heavily congested, even with the innovative active traffic management system. There are strategic assets along the length of the M42—the Blythe and Birmingham business parks, Birmingham airport and the national exhibition centre—but what we need is connectivity. The evidence from France is that the towns that really benefited from high-speed rail were those that managed to put such connectivity in place, and we have a Government who are committed to rail infrastructure.
HS2 would also optimise the under-utilised runway capacity at Birmingham airport, which would make the travel time competitive with London’s airports. The runway at Birmingham is being extended to accommodate long-haul traffic, which reflects the preferred destinations in the Indian subcontinent of west midlands manufacturers and exporters and, of course, those of the region’s residents, many of whom have their origins there.
I cannot outline the potential gains of HS2 without touching on the real pain suffered by my constituents whose homes will be blighted by the route. Properties have lost approximately 20% of their value. I say “approximately” because it is actually hard to sell a property at all, given the level of uncertainty. There is a hardship fund, and I have helped many constituents to apply to it, but very few have received help. The blight compensation is to be calculated on a set distance from the rails, which can be harsh on those who are just beyond the eligible distance. This is why I introduced a ten-minute rule Bill calling for the use of noise contours, which might more accurately reflect noise nuisance. I hope that the paving Bill proposed in the Queen’s Speech will contain significant improvements to the compensation package.
I urge the Government to look again at a property bond scheme of the type proposed by Birmingham airport when a second runway was on the cards. A property bond would enable people blighted by HS2 to move on with their lives. The evidence from HS1 is that, if the Government were to buy up their property today, most of it would not lose value once construction was completed and the perceived blight had lifted. There might even be an uplift in value from the proximity to an improved transport network. I urge the Government to continue their efforts to improve and mitigate the impact of HS2. Just today, I have heard that a new tunnel will be constructed under Castle Bromwich in my constituency, but as yet I have had no response to my request for a deep-bore tunnel that would protect the Greenway and villages such as Berkswell and Hampton-in-Arden, as well as keeping the surface around the interchange station free of rigid structures.
The House would expect me, as a former Environment Secretary, to give consideration to the environmental impact of HS2, and of course there will be a loss of green space, but it is also possible to do something really beneficial to the environment through biodiversity offsetting. During my time at the Department for Environment, Food and Rural Affairs, we introduced a tool that allowed us to calculate what had to be done to compensate for the loss of nature where development occurred. With such credits, a big scheme for the restoration of the environment can be achieved either near to or where the loss occurs. For example, the university of Birmingham, in conjunction with the engineers Arup, has come up with a proposal to restore the Tame river valley, which was badly polluted by the industrial heritage of the west midlands. Biodiversity offsetting was one of the key tools in the natural environment White Paper, and the HS2 project provides a good opportunity to put it into practice.
I hope that Ministers will accept some of these suggestions for how to build on and improve the legislation for a high-speed railway, which will need to demonstrate clearly the gains to the community it serves economically, socially and environmentally in order to be sustainable and to expand public transport capacity to help with the cost of living.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
I often wonder on these occasions how Aneurin Bevan and Michael Foot would have got on, having only six minutes to make a speech, but I will do my best.
Last week, my right hon. Friend the Member for Dulwich and West Norwood (Dame Tessa Jowell) reflected on the current political dialogue, saying that
“our political narrative has been characterised by a view of the worst of national human nature rather than the best.”—[Official Report, 8 May 2013; Vol. 563, c. 28.]
I regret to say that she is right. She is right because history teaches us that when politicians—particularly those of governing parties—are prepared to stoop to the politics of blame and resentment, and when the fulcrum of politics shifts to looking to our communities, rather than to the international financial and banking fraternity, to see who can be blamed for our problems, that is when we see people turning on each other. That is what we are seeing now. People are looking at those on welfare as though they are living high on the hog, and looking at migrants as though they are responsible for what has happened to their living standards, even though they are not.
There is a danger that the current ridiculous debate on Europe could put our prosperity at risk. Today’s debate is about the cost of living. If the debate on Europe continues as it is doing at the moment, the ratio of the pound to other currencies internationally will worsen to the point at which our imports will be more expensive and our cost of living will rise. The uncertainty will reduce inward investment into our country and, as we have seen from the Prime Minister’s somewhat ill-timed visit to the United States this week, negotiations over international trade with China, India, the US and the Russian Federation which require a Europe-wide approach to achieve a scale that allows us to negotiate sensibly, will be put at risk.
I simply ask Members on both sides of the House to be big enough to address the real challenges that we face as a nation, rather than turning individuals against individuals and fostering the politics of grievance. Historically, we seem continually to rewrite the issue of migration to this country. There is nothing new about using the politics of insecurity and uncertainty and the fear of change and difference to turn one set of people against another—usually the poor against the very poor—and we are seeing it again today.
Let us compare properly organised, legal inward migration with the illegal migration that pushes people into the sub-economy, which would have happened had we not reached the agreement to allow people to work legally here and pay tax and national insurance from 2004. This is fact, not fiction: 40% of those people from eastern Europe who registered to work here in 2004 were already in this country. They were working in the sub-economy. Nobody wants that; we want secure boundaries and legal, open migration that is properly organised.
Richard Graham (Gloucester) (Con)
I could not help but note, when the right hon. Gentleman said it was ridiculous to blame migrants for our economic woes—I agree with him on that—that it might also be ridiculous to assume that they had nothing to do with our economic woes. At the weekend, Lord Mandelson said:
“In 2004 when as a Labour government, we were not only welcoming people to come into this country to work, we were sending out search parties for people and encouraging them, in some cases, to take up work in this country.”
Would the right hon. Gentleman care to comment on that?
Mr Blunkett
This talk of search parties is, frankly, risible. The fact was that we had a booming economy with enormous growth and we needed people to fill those jobs. We needed them to do so legally, rather than illegally. At the moment, however, illegal migration is growing and the message we are sending out, particularly to graduate and postgraduate students, is entirely wrong. Of course there is an issue about integration and about protecting people, but we need a sensible, rational dialogue, rather than one that fosters and engenders fear.
What about the welfare state? In 2005, we set out our principles for welfare reform. Of course, earned entitlement is crucial. We all accept that work is the best form of welfare, but turning those who are struggling on welfare into victims and suggesting that they are responsible for the dilemmas that we face in these times of austerity is frankly unacceptable. My right hon. Friend the Member for Don Valley (Caroline Flint) mentioned the £1,700 cut in average earnings, but this Government have also frozen child benefit and cut tax credits. In-work benefits have also been cut, creating a disincentive rather than an incentive to work. Goodness knows what is going to happen when universal credit comes in later this year.
Above all, the Government are punishing people who are already struggling. The bedroom tax is the most iniquitous of the changes that the Government have brought in—[Hon. Members: “It’s not a tax.”] Does someone want me to give way?
Mr Speaker
Order. The hon. Member for Elmet and Rothwell (Alec Shelbrooke) cannot opportunistically spring up in that way. He is showing a considerable discourtesy to the House. The right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) should proceed unhindered with his speech.
Mr Blunkett
I am grateful to you, Mr Speaker.
I am talking about children under 10 who suddenly discover that their parents have to move and that they can no longer have their own bedroom, and about those with shared care not being able to look after their children at weekends. We could have provided incentives for people to move, but I am not sure whether the Government want them to move or whether they want to punish them for having a house with two bedrooms.
Alison McGovern (Wirral South) (Lab)
My right hon. Friend’s brilliant contribution is reminding us all of why he is such a towering force in politics. Does he agree that the bedroom tax—it matters little what we call it; it is what it is—is a precise example of the politics of division that he has been talking so eloquently about?
Mr Blunkett
I am very grateful to my hon. Friend for her kind words. I want to make the point that there were alternatives, including introducing incentives for people, including older people, to move. It is often older people who require smaller premises and who have larger premises that they can no longer manage. But we will not move them, will we? We will not tax winter fuel or assumed benefits for older people because older people vote in very much greater numbers than younger people. My message today is that politics—democratic politics—can be our solution and that people should engage with it as citizens in their community. They should engage with it through voting, but they should not be misled by organisations and parties such as UKIP that seek to obtain their vote by building on resentment and hatred, which history shows us has brought countries to their knees.
Yes, we need strong borders; we need welfare reform; we need a review of the European Union—but we need fairness at home, too. Today, Sheffield city council’s fairness commission, of all parties and no parties, has presented to Downing street thousands of names on a petition. I mean fairness, not just in respect of dealing with the recession and austerity, but fairness in the sense of what Barbara Castle used to call the social wage—the investment in our decent public services. That is the message we should be putting out today.
Sir Menzies Campbell (North East Fife) (LD)
It is a privilege to take part in this debate on the Gracious Speech, and it is a particular pleasure to follow the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett).
In view of recent events relating to the Government side of the House, I think I should make it abundantly clear that I intend to vote for the Queen’s Speech, that I will support the Prime Minister and the Cabinet, and that I will vote against any amendment, tabled or selected. The face that I should feel the need to make such an assertion at the outset will underpin some of the observations I shall make.
I continue to support the restoration of economic stability. That was the raison d’être of the coalition and it remains its overarching objective. To fulfil that commitment, I, like others, have had to subordinate my views on other subjects to that objective. I felt it necessary to do so because of the economic circumstances we have inherited and because of the very obvious difficulties that exist in resolving them. Some of the decisions that have been made have been very painful—to me and to others—but I believe them to have been necessary.
We continue to make progress towards the objective. We have reduced the deficit; we have maintained low interest rates; there has been no run on the pound—and although it is a volatile measurement, it is worth observing that the stock market, often seen as a barometer of confidence, has in recent days returned to its levels of five years ago. Between now and 2015, nothing should be allowed to distract the Government from that objective. It is impossible in the present context to ignore possible distractions.
Thankfully, the internal management of the Conservative party is nothing to do with me, but speaking as someone who was a not entirely dispassionate observer of the Major Government between 1992 and 1997, I say that there are surprising echoes of that period in the current turmoil of the Conservative party. It is worth remembering that that Government had very substantial economic achievements—to such an extent that the incoming Labour Government, with the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) as Chancellor of the Exchequer, accepted the public spending proposals of the outgoing Government.
If we undermine the authority of our Prime Minister, we will undermine the credibility of our Government. If we undermine the credibility of our Government, we will undermine the economic objectives of that Government. This is all the more the case when the coalition agreement contains a perfectly rational mechanism for a referendum if constitutional change is made. Is it rational to spend the next two years on a fractious and divisive debate over Europe when so much remains to be done? I simply cite the example of Scotland, in respect of which every decision, every policy and every political statement has for some time—and it will continue for some time—had to be seen through the prism of the referendum fixed for September next year.
If these events are a reaction to UKIP, let me offer a sporting metaphor. Teams that chase the game are rarely successful. That applied, of course, to the right hon. Member for Kirkcaldy and Cowdenbeath when he sought to outbid the current Chancellor on the question of inheritance tax, and as it did when he declined to call a further general election. Concessions rarely satisfy dissidents, who have the ghost of Oliver Twist among them.
Another issue—that of Syria—should not allow us to be distracted from these economic goals. I retain my previously expressed reservations about the proposals to arm the rebels. President Obama’s resistance to that is sometimes related to an inactivity—whether or not that is right is neither here nor there, but in my view his resistance is well founded. The objections are many, including the emergence of Islamist Jabhat al-Nusra as an increasingly influential part of the rebel forces, which raises the question of who would inherit any arms that we might deliver. The risk of a proxy war between the United States and Russia is another example, with each matching each other in armaments supply. Once we depart from non-lethal supplies, where would we stop?
Sir Menzies Campbell
I am about to finish.
Some have suggested a no-fly zone, but if we have one, we must be ready to shoot down the aircraft that intrude into it and accept the risk of the aircraft enforcing it being shot down. We must also be ready to suppress the air defences, many of which have in an entirely deliberate but cowardly way been situated among the civilian population.
I finish by noting that as Russia and the United States tentatively explore the possibility of a joint approach on Syria, this is no time to encourage the rebels to believe that they need not subscribe to any political settlement in the hope of outright victory.
Jim Dowd (Lewisham West and Penge) (Lab)
I am delighted to have the opportunity to make a few comments on the Queen’s Speech. This is the third anniversary of the formation of this particular coalition, and this Queen’s Speech is the penultimate one, with only one more to go—Hallelujah! What is most remarkable about this Queen’s Speech is how thin it is, and how it is dominated by two particular elements. The first is just how little the coalition parties can agree on—they seem to have spent most of their time deciding not what should go into this Queen’s Speech, but what to keep out of it. That explains its paucity to some degree.
The other element is the fear of the saloon-bar stage that is Nigel Farage and UKIP. It was said at the end of the 19th century that the spectre of communism was haunting Europe, but the spectre of UKIP now haunts the Conservative party to such a degree that it really does not know how to deal with it. There is widespread sympathy on the Conservative Benches for UKIP’s aims and objectives, and there is a degree of incomprehension, as I observe it, of the fact that the natural home for right-wing fruitcakes is within the Conservative party. The acts of UKIP have clearly led to some confusion.
The amendment tabled by the hon. Member for Basildon and Billericay (Mr Baron) and predominantly, although not exclusively, supported by Conservative Members is no amendment at all. I think the technical expression for it is “pious”—it just expresses a view and will have no impact whatever either for good or ill. If these Members were serious about voting against the Queen’s Speech, they could, of course, vote against the main motion, but they will not—
Mr Speaker
Order. I want to help the hon. Gentleman by gently saying that he would not think it right to start to debate an amendment that has not been selected. He is an experienced and wily old hand, and I feel sure that he will be able to frame his remarks in an appropriate way.
Jim Dowd
I am grateful for your guidance, Mr. Speaker, as, indeed, I always am.
I think that this also reflects the enduring resentment among Conservative Members, and their failure to appreciate that they did not win the last election. They try to behave as if they did, and they try to believe that they can simply have their way in this matter, but that is not the situation that the electorate gave them. I understand their resentment, because if there was one election that the Conservative party really ought to have won it was probably the one that took place in 2010, but they failed to do so.
The Prime Minister, of course, is away. He will not even be voting for the Queen’s Speech himself when it is put to the vote tomorrow. He has thrown just a few titbits to the fruitcakes by saying that while Ministers must not vote for the amendment, others can abstain. He is trying to draw up a strange pact, the “pax Cameron”.
Meg Hillier
Does my hon. Friend have the impression that the Prime Minister may be in power but not in control?
Jim Dowd
I see quite easily how a logical person could reach that conclusion.
I myself am in favour of a referendum on the question of Britain’s continuing relationship with the European Union, but I believe that it is a matter for the next Parliament. I hope that we can prevail on the Opposition Front Bench to include a manifesto commitment, but of course the manifesto for the next election is still two years away.
David T. C. Davies
Am I to understand that the hon. Gentleman is perfectly happy to support a referendum in the next Parliament, but believes that anyone who wants to give the people a chance to have a say in their future in Europe in this Parliament is a fruitcake?
Mr Speaker
Order. We must not pursue this exchange, whether in relation to fruitcakes or in relation to a prospective amendment which has not been selected. The hon. Member for Monmouth (David T. C. Davies) should not seek to divert the hon. Member for Lewisham West and Penge (Jim Dowd) from the path of virtue to which I think he had just about returned.
Jim Dowd
But I entirely understand that there may be those who would.
The argument needs to be heard. The other day I received a message from a constituent who was an avowed Tory voter at the last election—in the Bromley part of my constituency; there are not many Tory voters left in the Lewisham part—
Jim Dowd
A few.
My constituent resented the suggestions that were being made about the referendum, because no one had put the idea to the electorate at the last election. I expect the issue to be a key part of the next general election campaign, and I think that we should offer people a referendum on it.
Labour is the only party that has ever given people in this country a referendum. Back in 1975, under the Wilson Government, the referendum was on whether we accepted the revised terms under which we would remain in what was then the European Economic Community. Scottish and Welsh devolution, the forming of the Greater London Authority, the direct election of a Mayor of London and elected mayors in cities across the country have all spawned referendums, and all of them were instituted by a Labour Government. The closest that a Conservative Government have ever got was being forced into a referendum on electoral reform and the alternative vote by the terms of the coalition agreement.
Jim Dowd
No, I will not, tempted though I am. I have taken two interventions, and if I took another it would come out of my speaking time.
The deal over boundary reform, and not Lords reform, was another part of the coalition agreement, but the Liberal Democrats appear to have ignored that. Mind you, I am not complaining: both the boundary gerrymander and the equally ridiculous AV system were well worth kicking into touch.
Others speak of a “mandate referendum”, whatever such a thing is. A Government have a mandate; and what would be the question in this “mandate referendum”? “Should the Government seek every opportunity to protect and promote the best interests of the British people”? I believe that all Governments do that, although I do not agree with the way in which this Government do it. I believe that the mandate stems from the general election. Who on earth is going to vote “No”? It is ludicrous. This is merely a distraction, an attempt to confuse activity with action.
My right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) referred to the way in which we are isolating certain people. While we must provide fair access to public services, the Government must be careful not to fuel the flames of xenophobia. We should understand in this country that while there must be a genuine entitlement, and while a contribution must be made—according to people’s ability—the overwhelming majority of immigrants and their descendants have contributed mightily to what the country is today. We should not allow that to be put at risk by any obsession at the margins, or try to reduce what is a great record.
As I said at the outset, the Queen’s Speech is thin. It is clearly not up to the task of meeting the challenges that face Britain today. The sooner this Government go, the better.
Dr Julian Lewis (New Forest East) (Con)
It was kind of you, Mr. Speaker, to allow a segment of today’s debate to those of us who were concerned about the Opposition’s decision not to choose foreign affairs, defence or, indeed, Europe as the subject of one of the themed days of debate on the Queen’s Speech, so that we could refer to some of those matters. I suppose that I ought to get the words “cost of living” into my speech from time to time, and I shall endeavour to do so, but I hope that if I fail, they will be taken as read.
Although the right hon. and learned Member for North East Fife (Sir Menzies Campbell) and I serve closely together on the Intelligence and Security Committee, we are not best known for agreeing on issues such as the future of the European Union or that of the Trident nuclear deterrent. On one issue, however, we find ourselves in close agreement, and that is the question of whether or not we should arm the rebels in Syria, or become militarily involved in the civil war in other ways.
Dr Lewis
I think I am right in saying that my hon. Friend’s view is quite widely shared on the Back Benches, at least on this side of the House, and, I suspect, on the other side as well.
It is not a matter of wanting to do something less than we might in terms of humanitarian intervention. I certainly supported humanitarian military intervention in Sierra Leone, and I was one of the first to call for military intervention to topple Miloševic. I have supported military action in other theatres, such as Afghanistan and Iraq, and I even supported such action—albeit with considerable reluctance—in the case of Libya, given Gaddafi’s explicit threat to the citizens of Benghazi. We must, however, consider two aspects when thinking about undertaking military intervention. One is the humanitarian consideration, but the other is the question of who will take over if that military intervention is successful. What concerns me is the possibility that the people who take over will become dominated by a group allied to al-Qaeda who are even worse than the Assad regime—and that is saying something.
My mind goes back to the speech made by Tony Blair as Prime Minister in the run-up to the Iraq war. What did he say that so swayed the House in favour of intervention? He said that his nightmare was the prospect of weapons of mass destruction falling into the hands of al-Qaeda. We now know that either there were no weapons of mass destruction, or, if there were chemical or biological weapons, they were not there by the time the allied forces went in.
In this case, however, we know that there are weapons of mass destruction—chemical weapons; a big stockpile of nerve gas—in Syria. What the Foreign Secretary has admitted at the Dispatch Box, repeatedly, is that there are, to use his own estimate, several thousand al-Qaeda-linked militants fighting alongside the Syrian opposition. I have raised the question at least five times since last September, and I have had five answers, none of which has satisfied me on the point. The point is this: how do we prevent that stock of deadly chemical weapons, which in the hands of Assad and his regime poses no threat to the west, from falling into the hands of al-Qaeda-linked militants, who would undoubtedly use them against the west, with terribly adverse effects on our cost of living and on our being able to stay alive?
It is not beyond the realms of possibility that Carla del Ponte may be right, because it certainly does not make sense for the Assad regime to use chemical weapons—the one thing that would cause the west to intervene and overthrow him. If he did use them, why use them in such small quantities that they could not have a decisive effect? If the intent was to intimidate the opposition, why deny vehemently, as the Assad regime does, that it has used them? It does not make sense.
Alec Shelbrooke
What would be the direct effect on the cost of living in this country if an al-Qaeda-led Government in Syria got together with the Shi’a-led Government in Iran and took a direct look at the democracy in Iraq, which is diametrically opposed to their beliefs?
Dr Lewis
I am sure that my hon. Friend is right in his implication that there would have to be a huge uplift in public expenditure on all forms of counter-terrorist techniques, and there would undoubtedly be a deleterious effect on the freedoms of peoples in this country, which would have to be restricted considerably if we found ourselves under attack from deadly chemical weapons in the hands of an extremist group allied to our enemies.
The hon. Member for Lewisham West and Penge (Jim Dowd) quoted Marx, without attributing the words to him, when he said that the spectre of communism is haunting Europe. I am put in mind of a quotation attributed to Lenin:
“The capitalists will sell us the rope with which we will hang them.”
We would have to be out of our minds to assist in the overthrow of one shocking regime and the coming into place instead of a regime that was equally shocking and atrocious but hostile to us and armed with chemical weapons.
Mr Andrew Love (Edmonton) (Lab/Co-op)
I am sympathetic to much of the hon. Gentleman’s argument, but a humanitarian crisis in Syria has to be addressed. Given the difficulties between the Russians, ourselves and the Americans in relation to an international conference, how do we move a political settlement forward?
Dr Lewis
I am extremely grateful for that intervention, as it leads me to my final point. Whenever we talk to our Government spokesmen about this, they say that the answer is a peaceful transition. It is abundantly clear that either there will be something peaceful and no transition, or if there is a transition, it will not be peaceful. If our concern is, above all, to stop the killing, we ought to be working with the Russians not for a transition but for a cease fire. We ought to aim to freeze the situation, the effect of which would be to stop the killing but not to result in the transfer of the chemical weapons stocks to the hands of an opponent of western civilisation that is even more deadly than the people who currently hold them.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
I am honoured to speak in this year’s debate on the Loyal Address and to make some comments on Her Majesty’s Gracious Speech.
I join the sentiments expressed by other Opposition Members that Britain could and would have hoped for so much more from this Queen’s Speech. After three years of low growth, rising unemployment, increased borrowing and a rising cost of living, including fuel and food bills and transport fares, Britain deserved much more. We got no answers on tackling the rising cost of living, at a time when real wages have fallen by £1,700 since the election, and there was nothing to help the increasing number of Londoners struggling to afford food. It is clear that, after three years of failure and U-turns, this Government are out of touch, out of ideas and unable to bring the change this country needs.
Last year, I spoke in my first Queen’s Speech debate as the Member of Parliament for Feltham and Heston. I spoke of local unemployment and how Her Majesty’s Gracious Speech last year offered no hope to these local families and young people, but 12 months later the situation is worse. More than 550 local people in my constituency who were unemployed 12 months ago are still unable to find a job. More people are out of work now than there were when this Prime Minister took office, and a growing number of food banks are now opening across the country—these are the most visible manifestation of the growing crisis of food poverty in Britain. Food is the most basic of human requirements, yet in one of the richest cities in the world, local families and children cannot afford to eat and are going hungry. The Trussell Trust, which runs the largest chain of food banks in the country, fed more than 34,000 people in London in the past year. In my borough of Hounslow two food banks have opened in the past two months alone, with the local council, local charities, places of worship and volunteers doing all they can to help local families and a growing number of children in poverty.
Andrew Selous
Perhaps the hon. Lady would like to put on the record the fact that food banks increased tenfold under her Government. Will she condemn the fact that her Government refused to let Jobcentre Plus signpost people to food banks because they were worried about the political damage? That was a callous way of treating people in need.
Seema Malhotra
Yet again, we see how the Conservative Government are so out of touch and so complacent, not acknowledging any of the challenges—rising unemployment and a rising cost of living—that people in Britain are facing today; they are not taking any responsibility.
A recent report by the London assembly found that more than 95% of teachers asked in London said that children in their schools regularly went without breakfast—more than half of such instances were because families could not afford food. That is completely unacceptable in modern Britain. The health, educational attainment and life chances of these children are threatened by hunger, and the Government continue to do nothing to help with the cost of living.
Meg Hillier
Teachers and head teachers in my constituency have given me similar messages. One school has what it calls a “tack room”, where it takes in young people’s mobile phones or a deposit—little bits of money—towards a blazer or school equipment, because the children cannot afford that or their school lunches.
Seema Malhotra
My hon. Friend makes a moving contribution. We have seen how schools are increasingly picking up the pieces so that children can have something to eat and at least then be able to study.
The Government are even making things worse. A recent Institute for Fiscal Studies report into child poverty found that between 2010 and 2020 absolute child poverty will increase by 55%, with the IFS saying that the projected surge is a result of the fiscal and social security policies of this Tory-led Government. A great sign of weakness is not admitting when you have got it wrong, and it is a shame that the Government did not take the opportunity of this Queen’s Speech to put forward real solutions to meet the challenges our businesses and families are facing. As Labour’s alternative Queen’s Speech argued, the focus should have been on those matters that will make a real change: jobs; growth; tackling rising consumer prices; and banking reform to back our British businesses. Last month, the International Monetary Fund published figures showing that in 2012 the UK economy grew by just 0.2%. That was 0.7% less than Germany, 2% less than the United States, and 3.8% less than India. We are, of course, in a global race, in which Britain can lead, although not under this Government if the last three years are anything to go by.
The Queen’s Speech has been a missed opportunity—another chance missed to improve the prospects of Britain’s families. It is a no-answers Queen’s Speech from a tired and failing Government. They are out of touch, out of ideas and losing the global race for Britain. My constituents in Feltham and Heston deserved better. It is not too late for the Government to change course, and I look forward to the Minister’s response.
Mrs Eleanor Laing (Epping Forest) (Con)
It is a privilege to support the Gracious Speech. Although I appreciate that it is unfashionable to talk about conviction politics, I suggest to the House that there is nothing wrong with having principles, talking about principles and sticking to principles. The principles underlying the Queen’s Speech are those of freedom, choice and individual responsibility as well as rights. Through those principles, Conservative Governments throughout the ages have brought prosperity to Britain and improved the lives of British people.
The Labour party does not work on principle. It works—[Interruption.] Labour Members are shouting; if they have a principle to tell me about, let them get up and tell me the principle on which they oppose the Queen’s Speech. They work not on principle, but on short-term party political popularity.
Debbie Abrahams
On principle, could the hon. Lady say how the Government’s statement on and commitment to fairness in the Queen’s Speech relates to child poverty, which my hon. Friend the Member for Feltham and Heston (Seema Malhotra) has just been talking about?
Mrs Laing
The hon. Lady makes my point for me. The Queen’s Speech is all about fairness, to which I am coming in a moment. Child poverty has arisen not because of the content of the Queen’s Speech but because of 13 years of economic mismanagement by the last Labour Government.
Mary Macleod (Brentford and Isleworth) (Con)
Does my hon. Friend agree that the Queen’s Speech is fair to women, through its raising of the personal tax allowance and doing so much for child care?
Mrs Laing
Indeed it is. I thank my hon. Friend for that point. It is important that we treat women fairly, and much in the Queen’s Speech will make it easier for women to go to work and look after their families and do the two important jobs of being a mother and being active in the economy and the workplace. It is through measures such as reforming how we organise child care that that will be done. That is fairness and how we eradicate child poverty and improve the position of all families throughout the country.
Andrew Selous
On child poverty, did my hon. Friend note, as I did yesterday, that the Institute for Public Policy Research, a left-wing think-tank, has now disowned Labour’s approach to priority and is backing ours in dealing with the causes of child poverty? That is good news, as I am sure my hon. Friend will agree.
Mrs Laing
I did indeed, and my hon. Friend makes the point extremely well.
There is something that has not surprised me, but let me draw it to the House’s attention. The hon. Member for Feltham and Heston (Seema Malhotra) and many of her colleagues get excited about food banks because they believe that it is in the power of the state to do everything to help people. We believe, as a matter of principle, that power is with the people and it is up to individuals to help each other, voluntarily, if they so wish, in times of need. Food banks are not about entitlement. Entitlement and benefits are one issue, but food banks are about relieving short-term need. It is important that we should be able to do that voluntarily.
It is not nasty to make difficult economic decisions, but necessary. It is not nasty to tell the truth about having to cut public spending, but necessary. It is not nasty to reduce the nation’s debt to secure the future for our children, but necessary. It is right to construct a taxation and public spending regime that makes work pay. That is what fairness is all about—taking people on lower incomes out of taxation and not requiring them to pay benefits for those who can work but find that there is no point because they are better off not working. That is what Labour brought about, and it was wrong.
By reforming benefits and immigration laws, we are putting Labour’s mistakes right. It is wrong that people who have worked and saved all their lives have to sell their homes to pay for care in later life, and we are putting that right. It is wrong that enterprising people should be held back by the dead hand of an overbearing state. That is what Labour believes it in and it is one of the reasons made such a mess for 13 years. It was wrong and, again, we are putting it right.
Something else is wrong. Most of us appreciate the benefits of the European single market. However, it is wrong that unnecessary rules and regulations from expensive institutions are hindering our businesses and restricting our freedom. We must, as a nation, renegotiate the terms of our membership of the European Union. I am not going to mention any hypothetical amendments, Mr Deputy Speaker.
Mrs Laing
Indeed. We are today debating the cost of living, an issue fundamental to the lives of everyone in Britain today. On these Benches, we care about the prosperity of our country and the well-being of our people, so we want the freedom to run our economy and the institutions of our country in a way that benefits the people of Britain.
I hope that the Queen’s Speech will be augmented by a Bill that might come through the private Member’s Bill route and that such a Bill will pave the way for a referendum on our relationship with the European Union. I fully understand, although some appear not to, why such a Bill cannot be a Government Bill. We have to appreciate that we are in the most unfortunate situation of being in a coalition, and one part of that coalition does not want a referendum on or a renegotiation of the terms of our membership. However, many of us do want those things. We need a renegotiation and then a referendum for the simple reason that there is a silent majority of people out there who get on with their everyday lives, work hard, look after their families, contribute to their communities and look to this Parliament to hear their voice and give them the freedom to do the best for their country.
Ian Paisley (North Antrim) (DUP)
I want to speak about the three Fs—fags, farmers and fairness. From time to time, fruitcakes may also creep into this speech; perhaps some will want to intervene, although I hope they will not.
I turn first to fairness and the cost of living. Today is the start of carers week, so it is an appropriate time for us to think about fairness for the most important people in our society—people who give back, who care for others and who are in need. It is important that we make sure that the measures that will be presented to the House during this term of Parliament do most to deliver for those most in need, particularly carers or those in receipt of benefit.
There are 214,000 carers in Ulster, and they desperately need assistance. I look forward to the measures that will be introduced to assist them.
David Simpson (Upper Bann) (DUP)
Child poverty has been mentioned in this debate. We all understand that finances are very tight, but does my hon. Friend agree that it is vital that the cuts that the Government have imposed do not penalise children? The Children’s Society estimates that 200,000 more children could go into poverty, and that should not be allowed to happen.
Ian Paisley
My hon. Friend hits the nail on the head.
The people who most require fairness are the most vulnerable in our society, such as families in the low-income bracket. One of the ways we can help to address that is through the cost of fuel. Sixty per cent. of fuel costs are duty or VAT. The Government could do something to deal with that, and I look forward to them taking measures to do so over the course of the year. I welcome the increase in the personal allowance for income tax, because that is focused on the low paid.
Job creation is really where the Government’s attention should be directed. Over the past few days, many people have expressed concern about things not being in the Gracious Address, and one such thing is a change to corporation tax levels in Northern Ireland. I am disappointed about that, because such a change would have allowed us to create additional employment and stimulate the economy in the way it needs to be stimulated.
However, I pay tribute to the Government for listening to us on some of the welfare reform issues. They have allowed Northern Ireland to develop its own flexibilities, such as direct payment to landlords, twice-monthly payments to claimants, and the splitting of the single household universal credit payment between two people. That is very welcome because it helps families in Northern Ireland, especially those on low incomes, to manage their money better.
Mr Anderson
The hon. Gentleman is making a very detailed speech. I agree that those are good concessions for his part of the world, but is there any reason why they could not apply in the rest of the country, because people in the north of England have similar circumstances to those in the north of Ireland?
Ian Paisley
Like the hon. Gentleman, who is also a great Unionist committed to the Union, I believe that the same benefits should flow whether in the north of England or the northern part of Ulster. [Interruption.] That includes Donegal; we will get it back into the Union at some point soon.
Families with a person who suffers from cancer may face difficulties. Macmillan Cancer Support recently produced an interesting report showing the significant impact on the cost of living of cancer sufferers, which could amount to as much as a year’s mortgage payments. The Government should focus their attention on what additional support they can introduce to assist those people.
Ian Paisley
Not at the moment, but I will shortly.
A disaster is coming to our farming community that will dramatically affect the cost of living through the rising cost of food. We have had one of the harshest winters ever. That is affecting, and will affect, the price of foodstuffs to feed our cattle and our sheep in the countryside. If next winter is equally harsh, I predict that this time next year the cost of food could be as much as double what it is this year. A bale of hay to feed cattle can cost as much as £60 in Northern Ireland—almost triple last year’s price. That will have a knock-on effect on the cost of living of ordinary households up and down the United Kingdom because it will affect how much a person can purchase to feed their family. The Government had better be warned about this now so that they can try to address the needs of the farming community across this country.
The impact of the cost of living in our rural communities is leading to an increase in suicide. For example, there was a very saddening episode last week in the Republic of Ireland, in County Monaghan, where a farmer shot 40 of his livestock because he could no longer afford to feed them, and then turned the gun on himself. This is a diabolical situation that is starting to affect our economy and will see the price of food increase.
I want to deal briefly with fags. Over the past few days people have talked about the impact of not having something in the Queen’s Speech. I want to commend the Government for taking a stand by not including measures on plain packaging, because that would have driven people out of employment, and not only in Northern Ireland; it would have affected shopkeepers up and down the United Kingdom and destroyed people’s opportunity to make a living.
In addition, it is a giant con trick. I am a non-smoker and I have four children who I never want to see smoking. If I thought for one moment that plain packaging would stop them smoking, I would have been in favour of it years ago. Indeed, the Labour party had the chance to introduce this measure in 2008 and did not do so. I am glad that 18 members of the Labour party signed my open letter to Her Majesty’s Government to support my campaign to stop plain packaging because of the impact it would have on smuggling, on counterfeit trade, and on all sorts of other aspects that would not affect the health of the nation in any way.
Alec Shelbrooke
As a reformed smoker, perhaps it would be helpful if I told the hon. Gentleman that the branding of cigarettes did not make me start smoking. Smoking became an addiction and unfortunately I got hooked, but what was on the packet had nothing to do with it whatsoever.
Ian Paisley
Let me say on this very important issue that I was delighted that 18 members of the Labour party signed my open letter to the Government, as did a former Labour Cabinet Minister, the current Chairman of a Select Committee, and three other former Ministers of the Crown. They did so because they were concerned about the impact that the introduction of plain packaging would have on crime, including smuggling and counterfeiting. It would drive young people—over 18-year-olds—to smoke the illicit cigarettes that are smuggled over a country’s borders. I welcome the fact that the Government have taken a stand on this. Very few people have been prepared to stand up to encourage and defend them, but I certainly will.
Mr David Ruffley (Bury St Edmunds) (Con)
It is always a pleasure to follow the hon. Member for North Antrim (Ian Paisley).
Our membership of the European Union affects, one way or another, the living standards of our constituents and the prosperity of our people. Membership of the European Union has primarily been founded on an economic case that membership is in our economic interests. In 1973, the argument was principally that we wanted to join a common market because it would raise living standards in this country. More recently, proponents of our membership of the EU say that one fifth of all EU direct inward investment comes to the United Kingdom, representing a source of jobs.
What our membership of the EU has never been, in the eyes of the British people, is, to use the treaty language, a project for
“ever-closer union among the peoples of Europe”
Since 2010, this Government and their Ministers have been engaged in pushing back against the onward march of greater economic integration and the attendant political integration that follows from that. We saw that when our Ministers ensured that we did not contribute to the bail-out mechanism for sovereign states in difficulty. In the banking union proposals, where the rules of the European Central Bank could have seen banks dancing to the tune of a European regulator, they ensured a double majority system to protect UK financial services.
We have also had to push back on greater justice and home affairs integration. The Home Secretary has sensibly entered a reservation on 130-odd justice and home affairs measures, including the European arrest warrant and DNA fingerprinting.
Mr Ruffley
I will not at the moment because time is short.
It is also the case that, historically, we have been against greater integration. Why else did we secure an opt-out from the euro—that disastrous project that we did not want anything to do with at the outset and that we will not, I trust, wish to join in the future? We were also, of course, one of the few EU countries to say that we would have nothing to do with the Schengen arrangements, whereby many of the other EU members decided to throw their borders wide open.
The question of whether UK membership of the EU is in the national economic interest is being asked with increasing urgency. Telling interventions have been made in recent days by Lords Lamont and Lawson and Michael Portillo, who have asked a question that has for too long been ignored: what are the costs and what are the benefits? They have come to the preliminary conclusion that the costs probably outweigh the benefits, but it is not just the words of Conservative politicians of the past that we should take into consideration.
Some important work has been done by Goldman Sachs. Jim O’Neill, who to my knowledge is not a card-carrying member of the Conservative party, has calculated that trade patterns are very much in flux. He says that if we look at German trade patterns from 2000 to 2012 and extrapolate to 2020, we will find, interestingly, that Germany will export 25% of its exports to the BRIC countries—Brazil, Russia, India and China—and a falling proportion of only 30% to the EU, and that 15% of them will be to China alone and just over 8% to France. The world economy and its trade patterns are in flux, and the idea that we have to be wedded, as an article of faith, to the single market deserves serious scrutiny and examination.
I regret the absence of a referendum Bill in the Gracious Speech. In the case of any hypothetical amendment so regretting that omission, I will gleefully and proudly support it for this reason and this reason alone: we have to have a rigorous and well-informed national debate about the costs and the benefits to our people of membership of the European Union.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests.
The cost of living in my constituency, as in others up and down the country, is a real concern. Wages have been depressed, unemployment is still too high, and many of the new private sector jobs that the Government like to trumpet are zero-hours contracts or part time, with no opportunity for increased hours. I will not repeat the comprehensive list that my right hon. Friend the Member for Don Valley (Caroline Flint) gave from the Front Bench about the challenges that face our nation.
I want to focus on housing, particularly private rented housing in my constituency, where the social rented sector accounts for 44% of households. Around 26% of my constituents are owner-occupiers and 29% are in the private rented sector, which has increased exponentially. The number of people in the private rented sector is projected to be double the number of people who own and occupy their own home in the next 15 years or so. Rents are high and growing.
On Saturday I hosted the Hackney housing summit, bringing together a range of people who are experts in their field and on living in Hackney. We said that enough is enough. We in Hackney think that the Government should listen to some of our solutions, but sadly the Queen’s Speech did not include any of them.
My constituency epitomises the challenge facing private sector renters—generation rent—who have no opportunity to get on the housing ladder, if that is what they want, and are trapped in an endless cycle of poor housing and high increases in rent, evictions or the like through extortionate rent increases. As a percentage of London rent, my constituency, across nearly all the quartiles, has more than 100% the average rent for properties of every size in London, except for the highest priced four-bed properties. All my constituents pay more than the average and the cost is going up. Costs are high, rents are increasing without limit and housing supply is woefully low.
This Government have a poor record: house building is down, homelessness and rough sleeping are up, people are struggling to get mortgages and to get on the housing ladder, and the rapidly growing private rented sector has so little security, with people having to pay increasing rents at a record high—not just in my constituency, although it epitomises the worst of it—and suffer poor quality accommodation.
On Saturday we heard very moving testimony from Rosie about Digs, a private rented sector body in Hackney that has been set up to campaign against the challenges. In nine years living in Hackney, she has had to move nine times and only one of those moves was voluntary. She also spent £50,000 on rent during those nine years. In order to buy an average sized home we would need an income of £81,000 and a deposit of £17,000. There are, however, many Rosies out there; she is not alone.
The Government must look again at the issue. I urge them to look at Treasury borrowing rules. A strong message from Saturday’s summit was that they should give local authorities the freedom to invest in new homes. It would provide construction jobs and homes in the private rented sector. Why not allow a good local authority to be a private rented landlord? The assets could ultimately be cashed in to pay off the initial investments, or they could be sold to the individuals, thus increasing home ownership, or, in boroughs such as mine, I would like to think that they could be turned into socially rented properties at affordable rents for local people so that those on the lowest incomes are not driven out of my borough.
In addition to those housing costs there is the huge challenge of paying for child care. This Government have reduced tax credit and child benefit for those on higher incomes, as well as other work-related benefits. No wonder there is a high turnover of population in my constituency, and no wonder young families are priced out of the area. We have to take a serious look at what sort of balance we want in our inner cities. People must not be driven out. We need an increase in housing supply, on which the Government have a woeful record. Their record on new starts over the past two years is the worst of any peacetime Government since the 1920s. In the past year alone there has been an 11% decrease in housing starts.
The proposed consumer rights Bill, which has not yet been mentioned, is a real opportunity to improve the rights and the lot of private tenants. Their rights should increase, including a right to repair and protections against landlords who evict or who increase rents exponentially after reasonable requests for basic repairs. We should also tackle the practices of unfair letting agents, particularly with regard to fees taken at source, not just after the event, which has been addressed by a welcome amendment that was agreed to the other week. The decent homes standard should be applied to the private rented sector. We also need to see the licensing of landlords and to look again at section 21 notices, which are not fit for purpose, because they frequently are misused by landlords to evict people on spurious grounds.
I also call on the Government to look at rents. We need to grapple, on a cross-party basis, with the issue of spiralling rents in the private sector without any notice of the impact on tenants and their homes.
Jim Dowd
Does my hon. Friend accept that another facet of the spiralling cost of rent, particularly across London, is the increased pressure it is putting on social housing and local authorities? I am sure that she, like me and many other MPs for London and for other parts of the country, is visited by more and more people asking for assistance with regard to social housing on the grounds of cost.
Meg Hillier
Absolutely. Without the supply, none of those issues will be solved. One man who came to see me was a kitchen porter struggling to support his family—he had two children. The jobcentre asked him to go for jobs further afield, but the combined cost of extra travel and child care meant that he could not afford to travel a couple of boroughs away. That is the reality of the cost of living and life in constituencies such as mine. This Government’s Queen’s Speech was detached from the lives of people who want to work hard but who often cannot get the extra hours and of private renters who cannot ever hope to earn in the required bracket.
Justin Tomlinson (North Swindon) (Con)
I would add to the hon. Lady’s list of housing costs the practices of some leasehold management companies, which trap tenants with ever increasing service charges while not allowing them the access they should to the right to manage.
Meg Hillier
Absolutely. Although there has been good cross-party work in the House to reform leasehold management, there is much more to be done. It is no wonder that there is a demand for home ownership in this country, because it gives people greater control. However, that is now out of the reach of so many people that reforming the rights of tenants is long overdue across all sectors, but particularly in the private rented sector, including leaseholders.
I call on the Government to look seriously at rents and at the growing housing benefit bill. The £45 billion a year that is spent on housing benefit could, if capitalised, provide a huge opportunity for bodies such as local authorities, housing associations and perhaps others to invest in building new homes at affordable and intermediate rents, which would provide homes for the very people in my constituency who are being driven out by high costs.
Finally, I want to touch on the Government’s policy of providing new social housing at 80% of local private rents. I will give the private rents in my constituency to give the House a flavour. A two-bedroom flat in my constituency in the lower quartile costs £300 a week. One in the upper quartile costs £400 a week. For a three-bedroom, family-sized property, the average rent in the lowest quartile is £388. Even if only 80% of those rents is paid, how affordable are they?
We need to tackle what affordability means if we are serious about helping people into work and getting the economy moving. If people are in work and have disposable income, they will spend. At the moment, they are struggling to survive and the Queen’s Speech does nothing to help them.
Mike Crockart (Edinburgh West) (LD)
It is a great pleasure to speak in support of the Queen’s Speech.
The Government recognise that household budgets are under extreme pressure. I am happy that we are taking action to support households with the cost of living. In the little time available to me, I will concentrate on one aspect of those costs: the cost of energy. The consumer group Which? recently found that 82% of consumers list the cost of energy and fuel as a top financial concern. It matters not just to fuel-poor households, but is a key issue for millions throughout the UK, including many small businesses. That is why I am glad that the Energy Bill will introduce radical new measures to make energy tariffs fairer and to make energy suppliers more accountable to consumers by strengthening Ofgem’s role.
By giving statutory backing to Ofgem’s retail market review proposals, we will ensure that customers receive the best deal on their energy tariffs, which will mean a radical reduction in the number of energy tariffs that are offered to consumers. That will be a huge improvement on the old regime, in which the hundreds of complex tariffs have led to confusion and a complete lack of transparency. Under the reforms, energy companies will be legally obligated to place households on the cheapest tariff for their individual payment and tariff preferences, and to provide households with relevant personal information.
Jim Shannon
Does the hon. Gentleman feel that competition provides the motivation to reduce prices? In Northern Ireland, where there is not the same competition, energy costs for industries and businesses are 30% or 40% higher. That is an example of where competition could bring prices down.
Mike Crockart
I agree entirely. I would add that unfair competitive practices are being used, especially where businesses are concerned. Small businesses are being locked into long-term deals and are missing windows to change to different suppliers. They are penalised by higher charges—sometimes 60% or 80% higher. Energy for small businesses is a serious concern that needs consideration in the Energy Bill.
Jackie Doyle-Price (Thurrock) (Con)
There is another side to the energy market, which is the supply side. Does my hon. Friend agree that after the rapid closure of our coal-fired power stations because of EU regulation, the new supply is not coming down the track fast enough, which will add to higher fuel costs?
Mike Crockart
I agree with the hon. Lady to a point. I believe that the Energy Bill will help to ensure that extra power generation of a cleaner and greener nature will come further down the track. I will say a little about that later, if I have time.
The Energy Bill will ensure that the changes for energy companies become legally enforceable from summer 2014. We are working with the companies and urging them to implement the changes voluntarily ahead of that date, but the signs of such voluntary change are patchy. When I met one of the big six energy companies recently, it spoke animatedly of its plans for the future, but the talk was not of simplification. Instead, it talked about personalising the tariff to my individual circumstances and tailoring the charges to mirror my lifestyle and work pattern. To put it another way, it made it so complex and confusing that the chances of me understanding it and switching my energy supplier were minuscule. That is not the way forward. We want to empower energy customers by untangling the maze of tariffs. The Bill will do just that and make energy suppliers more accountable and more focused on the needs of their consumers.
We are raising awareness of and supporting collective switching schemes. That is one way in which customers can save money on their energy bills. DECC allocated £5 million to 31 successful projects in the Cheaper Energy Together competition, which spans 94 local councils and eight third sector organisations in Great Britain. One of the successful bids came from South East Scotland Together, which is delivered through Changeworks. It received more than £400,000 to help people in my constituency to save money. Such measures to ensure that consumers get the best deals on their energy prices reflect our determination to tackle rising energy bills.
Energy education for consumers is also key. I have spoken in previous debates about the necessity of reducing energy use. Reduction is the one step that will not only help households to reduce their bills, but help us to achieve a greener future. To quote from the report by the Energy and Climate Change Committee,
“Demand-side measures…are potentially the cheapest methods of decarbonising our electricity system…reducing overall demand”.
Knowing how we use energy in our homes and workplaces is key to reduction. That is why the single largest infrastructure project on which the Government are embarking in this Parliament is to roll out smart meters by 2019.
As was acknowledged in a written ministerial statement on 19 December last year, smart meters are the best tool that we have in energy reduction. They have the potential to give customers accurate, real-time information about how much energy they are using and how much it costs. In my constituency, British Gas has installed 837 smart meters. With the average home saving 5% through the use of a smart meter, that is a potential saving of £54,405 in my constituency alone. More importantly, that is 5% of their energy use that we no longer have to generate. It is essential that smart meters have the capacity for real-time management, as well as the ability to record the energy that is fed back into the distribution network from co-generation sources, such as wind turbines and solar panels.
Unfortunately, the pressures on wholesale energy prices mean that household energy bills will probably go up in the medium to longer term. We must be clear that wholesale energy prices are a reason to increase our investment in renewables, which will increase our energy security and help to insulate this country from the unpredictable wholesale market, rather than a reason to run headlong towards the mirage of cheap shale gas. Our commitment to a diverse, low-carbon energy mix is radical and positive. Our reforms will ultimately ensure that people get the best value for money by shielding them from the volatility of global fossil fuel prices.
While we have been building a stronger, greener economy and a fairer society, our support for the people who need those things has not wavered. In government, the Liberal Democrats are helping millions of low-income and vulnerable households with the cost of living through the warm home discount, which is available to about 2 million households. That includes 1 million of the poorest pensioners, who are eligible to receive a rebate of up to £130 on their electricity bill during the winter. There is the winter fuel payment for more than 12.6 million pensioners in 9 million households, and additional cold weather payments, which during this year’s cold snap helped the most vulnerable people in my constituency to keep their homes warm. Last winter, 5.2 million individual payments were made in the UK, worth a total of £129.2 million. That level of support for our most vulnerable is available only because, in 2010, the coalition Government reversed Labour’s plans to reduce the payment to £8.50 and instead made it £25 permanently.
I do not have time to talk in detail about the green deal, our Government’s flagship—[Interruption.] I am astounded that Members seem to find something funny about the possibility of saving hundreds of pounds every year on their constituents’ bills.
Mike Crockart
No, I will not, because I have only one minute left.
Nor do I have time to talk about the UK Green Investment Bank, the excellent Edinburgh institution that has already invested £635 billion in green projects, leveraging the overall figure up to £2.3 billion. That investment will ensure that there is enough secure, indigenous, low-carbon energy to provide for more than 2 million homes in the United Kingdom.
The Government have a once-in-a-generation opportunity to decarbonise and ensure that there is a more competitive energy sector in the future. I am proud that we are seizing that opportunity while delivering policies to help families with the cost of living and investing in the future of our economy.
Clive Efford (Eltham) (Lab)
This Queen’s Speech has generated more debate about what is not in it than about what is, and it has highlighted the Government’s dysfunctionality. As we heard from my right hon. Friend the Member for Don Valley (Caroline Flint), the Prime Minister made a big announcement about putting people on the lowest energy tariff, a promise that has proved completely worthless. There is nothing effective in the Queen’s Speech to protect consumers from the cost of energy bills.
The Institute for Fiscal Studies published a report just before the Queen’s Speech showing that all the advances that had been made in tackling child poverty would be wiped out by the benefit changes that the Government are introducing. There was nothing to deal with that in the Queen’s Speech. Yet at the same time, there is a millionaires’ tax increase. Those millionaires share £27.4 billion of income, but they apparently deserve a tax cut while child poverty increases.
There are no coherent proposals for growth or job creation.
Jim Shannon
Is the hon. Gentleman alarmed by figures that seem to indicate that because of the changes to benefits, some 200,000 children will be added to the list of those in child poverty?
Clive Efford
I think the IFS puts the increase at 1 million children, but I take the hon. Gentleman’s point.
There are no proposals in the Queen’s Speech to stimulate the construction industry and build social housing. It is worth remembering that the Government inherited the biggest council house building programme for more than two decades, and then scrapped it as part of their austerity measures. In London, there were 11,328 social rented housing starts in 2010-11. That figure plummeted to 1,672 in 2012-13. That is a time bomb hitting young people in London, and the problem goes right up the social scale. It does not just affect people on low incomes who are in desperate housing need. People on above-average incomes who have children cannot afford to rent or buy in the private sector in London. That time bomb will not go away, and the Queen’s Speech does nothing to address it.
David T. C. Davies
I cannot comment on the London statistics, but I know that social house building has fallen off a cliff over the past two years in Wales, an area that is run by a devolved Labour Government. What does the hon. Gentleman say to that?
Clive Efford
I say that we need to build more houses. I said that when we were in government, I am saying it now and I will continue to say it consistently.
There is nothing in the Queen’s Speech on sport. We have just had the greatest year for sport that this country has ever known, but the Government have not come up with a coherent strategy across the whole of Government that will deliver sport in our communities and use the armies of volunteers up and down the country who are working hard in sport. We need a coherent strategy that will allow them to plan ahead for the long term and deliver the elusive sporting legacy, but there was nothing of that in the Queen’s Speech.
All that we have had is the Government parties falling into warring factions over different parts of their own Queen’s Speech. It started with the Deputy Prime Minister saying within 24 hours of the Queen’s Speech that he was not happy about the changes to child care ratios in nurseries. We have heard from several people who have been advising the Government on the matter, such as Professor Cathy Nutbrown, whom they commissioned to conduct an independent review of child care qualifications, and Dr Eva Lloyd and Professor Helen Penn, two more experts whom they commissioned. Professor Cathy Nutbrown said:
“Watering down ratios will threaten quality. Childcare may be cheaper, but children will be footing the bill.”,
and Dr Eva Lloyd and Professor Helen Penn said:
“Deregulation in the UK would lead to a reduction in quality.”
Clive Efford
I hope my hon. Friend will forgive me, but I do not have time to give way.
These things were known before the Queen’s Speech was written, so it is incredible that the Deputy Prime Minister then discovered that he did not support the measure included in it. He said:
“When we as a government consulted on changing the number of little toddlers that each adult can look after, the response from experts, from parents, from nurseries was overwhelmingly negative…They felt that the risks outweighed the benefits and it wouldn’t necessarily reduce costs. So that’s what I still have reservations about, about this change.”
That is the Deputy Prime Minister within 48 hours of the Queen’s Speech to which he put his name.
We are told that there is no reference to a referendum on Europe in the Queen’s Speech because the bullying Liberal Democrats stopped the Conservative party including it. That may be so, but what about the little toddlers to whom the Deputy Prime Minister referred? If he has a veto on a referendum on Europe, why did he not veto the measure on little toddlers and staff ratios in our nurseries? It seems to me that more than one party on the Government Benches is obsessing about Europe, and that is the Liberal Democrats. They have clearly got their values wrong on this issue.
All Governments face rebellions—I have even rebelled myself in the past—but I have never heard members of the Cabinet say that not only will they abstain on something, they will abstain on their own Queen’s Speech right at the start of the parliamentary Session. Can that be right? Is that the way we expect our Governments to behave, by falling apart almost immediately? The Secretary of State for Defence has effectively issued a warning to his leader that unless a change in the deal with Europe is achieved, he will vote against us remaining in the European Union. The Secretary of State for Education has said that he intends to abstain if a motion is put before the House on the matter of regretting the absence of a referendum on membership of the European Union in the Queen’s Speech.
While that is going on—this, in my opinion, is where the public start to fall out of love with politicians—the Prime Minister is in the USA promoting on behalf of the UK a trade agreement that will be negotiated directly between the USA and Europe. He is enthusiastically supporting that agreement over there, while at the same time his party over here is falling asunder on whether to vote against its own Queen’s Speech because there is no reference to a referendum on membership of the European Union. No wonder the public are wondering what we as politicians are about.
The word “omnishambles” has often been mentioned in relation to this Government, and I think it will enter the vocabulary of the UK, just as “Fergie time” will. I say to the coalition that it is playing in Fergie time, and people out there are blowing their whistles and calling time on this Government.
Mary Macleod (Brentford and Isleworth) (Con)
The Gracious Speech by Her Majesty the Queen gives us a programme for the year ahead in Parliament, and today’s motion on the cost of living is immensely important and integral to the world we live in today—especially, I would argue, in the wonderful, creative capital city of London. The UK is ranked 18th in the world for the cost of living. Norway tops the ranking followed by Switzerland and Australia, and Japan and France are also above the UK. Real household income has almost doubled in the past 55 years, and living standards have been transformed. In 1970, fewer than one in three houses had central heating, but that is now 96%; just one third of people had a telephone, but that is now 87%; and 65% of people had a washing machine, which is now 96%.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
The hon. Lady cites interesting statistics, but is she aware that figures came out today showing that Britain has dropped seven places down the world family income table to 12th, which shows the squeeze that the Government are putting on hard-working families?
Mary Macleod
If the hon. Gentleman bears with me, I will come shortly to what the Government are doing to help hard-working families.
The consumer prices index is steady at 2.8%, which is less than half its peak rate of 5.8% in September 2008. However, it is true that, in recent years, consumers are paying a higher percentage of their household income for essentials such as energy, fuel, child care and housing.
The right hon. Member for Don Valley (Caroline Flint) could not answer the question about borrowing, and nor did she apologise for leaving the country in the state she left it when the current Government took over in 2010. What are this Government doing? First, they are dealing with the budget deficit to ensure low interest rates and stability. Interest rates are at an historic low, benefiting all those who pay a mortgage. Mortgage rates are about 3.5%; in 2000, I was paying 7%.
Secondly, the Government are putting money back into people’s pockets by lowering tax. As I have said, they are raising the personal allowance to £10,000 in April 2014, and taking 2 million people out of tax altogether. That will mean that 4,900 Brentford and Isleworth residents in west London have been lifted out of tax by the Conservative-led Government since 2010, and that 49,000 people in my constituency will be more than £700 better off each year.
Mary Macleod
I completely agree with my hon. Friend. In addition, more women are in work than ever before.
Thirdly, the Government are taking action on the things that impact most on the cost of living. On energy bills, they are ensuring that providers let consumers know the best tariff by simplifying bills to make them easier for people to understand. The Government have cut fuel duty. Fuel is 13p cheaper than it would have been under the Opposition. It will cost the average family in my constituency £159 less to fill up the car.
I mentioned child care, which has been one of the main barriers to women in the workplace and in creating new businesses. The changes will make an impact on helping women to set up new businesses and to create growth and jobs in the years ahead. The Government are extending free child care to women who work fewer than 16 hours a week, and increasing entitlement to free education and care for three and four-year-olds to 15 hours a week. We have also increased the free entitlement to early education to two-year-olds from lower-income households, which is helping the poorest in society. From 2015, the Government will meet 20% of the first £6,000 in child care costs per child for working families with children under 12.
On housing, I welcome the Help to Buy package—a £5.4 billion package to tackle long-term housing market problems. I also welcome the mortgage guarantee scheme to help first-time buyers and the funding for lending scheme. Genworth Financial in my constituency proposes private sector involvement in the scheme. I look forward to working with it and the Treasury to see whether we can make the scheme a success.
Fourthly and importantly, the Government are boosting business and encouraging aspiration. Ultimately, building growth in the economy by encouraging aspiration and supporting business to grow is how to address the cost of living. What have we done? We have lowered corporation tax so that it is the lowest in the G20. We have national insurance breaks for businesses. We have deregulation of businesses and less red tape. We have scrapped the beer duty escalator. Fuller, Smith and Turner, which is based in my constituency in Chiswick, says that scrapping the escalator is excellent for British brewing, British farming, British pubs and British jobs.
Nearly 600 new businesses were founded in Brentford and Isleworth in 2012, putting us in the top 10 of the entire country. We have worked with women in my constituency to help and encourage them to set up their own businesses. The hon. Member for Feltham and Heston (Seema Malhotra) gave unemployment statistics from her constituency. I am not sure which statistics she was looking at. Her constituency is next door to mine and has the same London borough of Hounslow. Jobseeker’s allowance claimants fell by 4.4% and youth claimants fell by 10% in the past year. Youth unemployment in my constituency is down by nearly 15% since last year and unemployment by 5.5%. We have done more to help by having events such as the west London jobs and apprenticeships fair, which I led in my constituency.
West London is a hub for great business, and I am glad that my right hon. Friend the Secretary of State for Communities and Local Government is in his place, because I want to appeal to him on permitted development rights and change of use from offices to homes. We really wanted the Great West road in west London, which is right next to Heathrow, to be exempt and protected, because we want to build businesses there. I invite him to come to the Brentford golden mile and see what we can do for businesses and job creation for the future.
Britain is a great country for so many reasons. We have won 76 Nobel prizes for science and technology. We are the No. 1 location for European headquarters. We have the largest creative sector per head in the world. We are home to four of the world’s top 10 universities and the world leader in offshore wind energy production and research. The Government are standing up for business, for people who want to own their own homes and for people who work hard and aspire to get on in this great country. The Government are standing up for Great Britain, and the Gracious Speech will help us to deliver in that task.
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
I intend to focus, as many other hon. Members have done, not on what is in the Queen’s Speech, which is one of the thinnest in recent memory, but on one of the most serious omissions. I refer not to Europe, but to the absence of adequate measures to stimulate growth and improve housing output, and by doing so improve people’s living standards.
As I propose to speak about the vital importance of increased housing investment, I should at the outset draw attention to my interests as recorded in the register.
The figures speak for themselves. Housing starts last year totalled just 98,000, 11% down on the already hopelessly inadequate level of 111,000 the year before. Those two years, 2011 and 2012, represent the worst output figures from any Government since the 1920s. Why has this happened? Clearly, the financial crisis which erupted in 2008 had a huge impact. Before that, housing starts totalled 183,000 in 2007—a level that was not sufficient, because a larger output was necessary to meet the forecasts, but it was massively ahead of anything we have seen since.
With the impact of the global meltdown, starts fell to just 85,000 in 2009, the nadir, and then recovered to some 110,000 in 2010. Since then, housing starts, like the economy, have been flatlining. We have seen no growth and no further recovery. The telling figure is that new starts in the second quarter of 2010—the quarter in which the Government changed hands—were the highest that have recently been achieved. No quarter since then has matched the level of output in that second quarter of 2010. That reinforces the point about the housing market flatlining, like the economy.
The case for doing something about the level of new starts is not just about meeting housing needs—although that is a powerful case. It is also about the economy, because the housing sector has a huge economic benefit. Not only is it labour intensive, but there is a considerable multiplier effect. It has a long supply chain, with all the manufacturers and material suppliers who contribute to house building, and all the firms involved in manufacturing the white goods, furnishings and fittings that go into finished homes. Stimulating house building has real scope to create new jobs and create growth in the economy. So why are we not doing it?
To be fair to the Government, they have been almost obsessive about trying to find ways in the past year to get the house building market going again. We have had endless announcements and proposals, some of which have been reasonably, if modestly, effective. Schemes such as NewBuy and First Buy, which were of course modifications of the previous Government’s homebuy schemes—I may have got the names wrong, because they change all the time, but the Minister knows what I am talking about—have made a modest but useful contribution. Others, however, have not. I am afraid that the new homes bonus has proved to be an extraordinarily expensive and ineffective measure, as the National Audit Office report devastatingly reveals. There has been no measurable sign of real advances in stimulating local authorities to grant planning consents.
Similarly, the Government seem to be tinkering obsessively and endlessly with the planning system to no demonstrable benefit whatsoever. The level of planning consents for new housing in the past two years has been the lowest on record for a very long time. That has not been successful, and nor is it likely that the mortgage support scheme announced in the Budget will be of great benefit. Acting to help to support demand when supply is absolutely inadequate is, as the Treasury Committee has highlighted, likely to stimulate house price inflation. We need to act on supply.
The Government need to focus on two areas, the first of which is the private house building sector. The big house builders are doing pretty well at the moment, but are doing so on the back of very low volume. They are seeing their balance sheets recover and their stock market valuations rise, but they are not building many new houses. Their model is very much geared towards high-value, low-volume development. The small and medium-sized house builders are suffering desperately, yet they are the people capable of providing greater volume and meeting the middle market.
The affordable and social housing sector is an even greater priority. The Government were responsible, with their ill-judged 60% cut in investment at the very start of their time in office, for undermining disastrously the affordable and social housing programme. Reversing that and investing in building new homes is a key priority. I regret that that is not in the Queen’s Speech, but I hope the Government change their mind and recognise its importance.
David T. C. Davies (Monmouth) (Con)
May I turn to the comments made earlier about our energy policy by the Secretary of State for Energy and Climate Change, the right hon. Member for Kingston and Surbiton (Mr Davey)? That policy will have an impact on the cost of living for all householders and anyone who buys manufactured goods. I do not accept his premise that the science on climate change, on which our energy policies are based, is settled.
The theory is pretty simple: ever since we started industrialising at the end of the 1700s, we started pouring CO2 into the atmosphere. As a result, the temperature across the world has warmed up and we must do something about it—that is the basic theory our energy policy follows. There are various flaws in that argument. The earth has always gone through cycles of warming and cooling. Coincidentally, at a time when we started to industrialise, we were coming out of a very cool period—a time referred to as a little ice age—when even the Thames used to freeze over. What is the total increase in temperature on which we are basing our policies and fears about climate change? According to all the statistics, it is just 0.7° C, yet some of that is clearly due to the fact that the earth was coming out of that cool period. Nobody can answer this simple question: how much of that 0.7° C is not down to CO2, but down to the natural warming that would have taken place anyway?
Then there is a problem with correlating CO2 levels with temperature increases in the past 300 years or so, because there is no straight line between the amount of CO2 in the atmosphere and temperatures going up. Between 1940 and 1970, temperatures were going down, and that was at a time when we were putting enormous amounts of CO2 into the atmosphere. Nobody can explain why that is. Since 1998, there has been no increase in average global temperatures—it has completely tailed off. Again, nobody can come up with a convincing explanation for that. Yet despite all that, and many other queries too, we are embarking on policies that will put up costs for householders, through the use of subsidies for solar and wind-powered energy, and put up costs for manufacturers, through the various taxes on carbon that we are levying.
The most serious point is that we are doing so unilaterally: Britain is taking steps that nobody else in the world is taking. Our carbon emissions are actually not that great compared with the rest of the world, yet we are unilaterally punishing manufacturers, forcing them to take their factories elsewhere, where they will continue to emit exactly the same amount of CO2, taking their jobs and forcing us into foreign exchange deficits as we buy goods that were originally made here.
Alec Shelbrooke
My hon. Friend is eloquently putting the case for those who doubt that global warming is down to climate change, and I am sure that many support his views, but does he agree that moving to a more renewable energy environment is important for energy security as much as anything else?
David T. C. Davies
My hon. Friend makes a good point, because there is a lot that we can do to generate electricity without CO2 and one would think that the Greens would be the first to support it. We had a proposal recently for a Severn barrage that could generate 20% of Britain’s electricity. It was an interesting proposal and one for which I would want to see more costings, but it was totally opposed by the environmentalists. We know that we can generate large amounts of electricity on demand and relatively cheaply from nuclear power without emitting CO2, but where do the environmentalists stand on it? They are totally against it.
In the United States of America, by exploiting shale gas, I understand that they have halved electricity prices and created a wonderful environment for manufacturers—so much so that they are returning to the States. More importantly for the environmentalists, however, that has also reduced American CO2 emissions. One would think that the Greens would be jumping for joy, but instead they are doing everything they can to prevent the Government from encouraging those companies to get in there, drill and exploit the cheap shale gas that we know we have and which could do so much. I question what their beliefs really are.
I hear the environmentalists saying to me, “The most important thing to do is reduce our CO2 emissions”, but whenever anyone puts solutions in front of them that would reduce CO2 emissions and deliver the cheap electricity that we all need, they do not want to know. They are the same people who march against globalisation and capitalism, who totally opposed any form of nuclear deterrent in the 1980s and who a few hundred years ago would have been the Luddites smashing up the spinning wheels. These people live in a fantasy world, believing that if we could just get rid of technology, we could go back to living in wonderful grass huts and things in some Tolkienesque world, like the hobbits before the evil one started attacking them. They are totally opposed to the high standards of living that globalisation and capitalism have delivered in the west and are delivering across the whole world.
It is high time that the Government realised that these people will never support anyone in government. Only recently, Friends of the Earth ran a big campaign against increased energy costs, but one reason energy costs have increased is that the Government have been trying to follow policies recommended by that same organisation—policies of supporting wind farms and solar panels that are bound to increase energy costs. It is ludicrous for the people who have been advocating policies that will increase energy costs to demand that we bring them down.
Caroline Lucas
I really did not want to intervene, because I did not want to encourage the hon. Gentleman and give him an extra minute in which to continue coming out with this rubbish. I thought that the discussion on Europe was where we found the fruitcakes, but I am finding them this afternoon as well. Is he really suggesting that it is not rising gas prices that are increasing people’s fuel bills right now? It is not renewable energy, but the gas imports that are the problem.
David T. C. Davies
It is not rising temperatures that the hon. Lady ought to be concerned about, but rising tempers among the vast majority of the public, who are fed up with paying higher fuel bills and bills for manufactured goods for a problem that simply does not seem to exist.
I say to the Government that we need a proper cost-benefit analysis of our climate change policies before we embark on measures that will drive manufacturing elsewhere in an effort to solve a problem that quite possibly does not exist, and I say to the hon. Member for Brighton, Pavilion (Caroline Lucas) and to the hon. Member for North Antrim (Ian Paisley), who is no longer in his place but who also referred to me as a fruitcake, that it was the fruitcakes who warned against the euro 10 years ago. We were accused of being fruitcakes then, but the fruitcakes were right. Fruitcake is a cheap and reliable source of energy. I am for the fruitcakes. I am proud to be a fruitcake. Long may fruitcakes continue.
Mr David Anderson (Blaydon) (Lab)
Follow that!
Eleven hundred days into the fruitcake Parliament, we have the mid-term report. How did we get here? Everybody knows that the cost of living is going through the roof, while the standard of living is going backwards. The Government obviously have a narrative; they say it is all the Labour party’s fault. I agree with them to some extent. I agree that my party, when in power, was far too lax with the banks. Its light-touch regulation was far too light. The Conservative party then said that we were too severe, so how can they now say we got it wrong?
The truth is that it was working. In 2007, the net debt in the UK was only 38% of GDP—the second lowest in the G7 and almost the lowest in our history. Obviously the whirlwind that hit the world when Lehman’s collapsed affected everybody, but the Labour Government at the time did not become paralysed in the way that the current Government have. We went for growth. We cut VAT to 15%. We introduced the car scrappage scheme. We brought forward capital schemes, some of which were still going after the election only to be stopped by the Government, including £80 million-worth of new school building in my constituency which could have put people into work and given kids better schools.
We have gone from growth at 1.8% when we left power, to the Government breathing a huge sigh of relief over the past three years just because we have not gone into a triple-dip recession; they were even happier with only a double-dip recession. The best that we have had is stagnation. It is clear that the programme put forward by the Government has not helped this country and we need to see changes. Why do we need change? Who is paying? It is the same people who always pay: the poor, the weak and the vulnerable.
Let us look at what has happened in the past three years to affect the poor, the weak and the vulnerable. VAT has gone up. The child trust fund has been taken away. The education maintenance allowance has been taken away. Working tax credits have been frozen or cut. Pensions and benefits have been changed from RPI to CPI. Child tax credit has been cut and child benefit frozen. The sure start maternity grant has gone. The health in pregnancy grant has gone. Child benefit has been cut for better-off earners. We now have the bedroom tax and cuts in council tax benefit. There is lots and lots more. This is not about scroungers; it is about working people who are trying to get on in the world and who are struggling.
On top of that, almost 750,000 public sector workers have been sacked. They have been taken out of income tax all right: they have been sacked and are not paying it. They have been taken out of good, strong and stable jobs. People have been put into 1.25 million poor-quality jobs where they are underemployed and underpaid. Pensions have been cut, wages frozen and increments stopped. Why is it right to incentivise the rich but not the workers?
The worst thing is that the strategy has failed; it has flatlined. Even worse, the Government knew that it would fail, because it has always failed. It has been tried before and has always failed. Martin Wolf said last year:
“What is clear from UK history is that growth is a necessary condition for successful management of public debt. The...cuts of the early 1920s failed to lower the debt…the economy then collapsed.”
Nobel prize winner Paul Krugman said that the infuriating thing was that, half a century ago, any economist could have told policy makers
“that austerity in the face of depression was a very bad idea”,
and millions of workers are paying the price for that mistake.
Barack Obama, the absentee Prime Minister’s new friend, said that some people would say that
“The market will take care of everything…if we just cut more regulations and cut more taxes…our economy will grow stronger…And that theory fits well on a bumper sticker. But here’s the problem: it doesn’t work. It has never worked.”
Another Nobel prize winner, Joseph Stiglitz, said that
“austerity as the solution is just wrong. There won’t be a return to confidence—quite the contrary. So the direction Europe is going is…I think the wrong direction.”
There we have it: three Nobel prize winners—but they are wrong, aren’t they, because our Chancellor thinks that he is right? He ignores what happened in this country the last time we had a major recession. Keynes proved that you could not win with austerity and Roosevelt proved it in the United States. But we have a Government whose arrogance is matched only by their ignorance and now, as a result of his posturing, the Chancellor—even if he thought he was wrong—cannot back off. He has painted himself into a corner and he knows that if he puts in place plan B, he will be skewered by the shadow Chancellor. Pig-headed obstinacy, pride and ideology have combined to the detriment of this country. The job is far too big for the Chancellor. Now the Government are paralysed not only by their ideology and obstinacy, but by their internal fighting yet again about Europe.
We are seeing the people of this country struggling to get by, with tax cuts for the wealthy and tax hits for the poor. The poor are getting poorer and the rich are getting richer. It is, sadly, the same old Tories.
Andrew Selous (South West Bedfordshire) (Con)
I think that all of us on the Government Benches absolutely recognise the increase in people’s bills, whether it is their gas bill, their electricity bill, the bill to fill up their car with petrol or diesel when they go to a garage, or their weekly food bill. We absolutely recognise the squeeze that our constituents are experiencing and the fact that wages have not gone up to compensate, and in many cases we have been extremely clear about that.
Nevertheless, because of the decisions that the Government have taken, it now costs people £7 less to fill up their cars than it would if we had gone ahead with all the price increases that Labour legislated to introduce before they left office. Also, we heard from the Secretary of State for Energy and Climate Change that our energy bills are 5% lower than they would have been, again because of the decisions we have taken. We know that Labour would have added £193 a year to our energy bills, because they would have funded the renewable heat incentive and carbon capture and storage through levies on people’s energy bills, whereas we are funding those things from general taxation.
Council tax is another area where the Government have done fantastic work to reduce the impact of the cost of living. Under the previous Government, council tax more than doubled—it went up by 109%. Thanks to the excellent stewardship of my right hon. Friend the Secretary of State for Communities and Local Government, we have managed to freeze council tax—certainly for principal authorities—for three years in a row. I remember that pensioners regularly came to see me in my surgeries, and some would complain that they were spending up to a third of their income on their council tax. I have not had pensioners coming to see me about that in the last three years, because in real terms we have cut council tax by 10%. In fact, my own council tax bill has gone down in cash terms in the last two years, thanks to the excellent stewardship of Central Bedfordshire council and Studham parish council. We are talking about a council that has taken £52 million out of its budget and improved services. We now have a better leisure centre in Houghton Regis, the gutters are sprayed three times a year rather than twice a year and more potholes are being filled, despite £52 million being taken out of the budget, which shows that it can be done.
We have an immigration Bill in the Queen’s Speech, which is absolutely necessary. I am sorry that the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) is no longer in his place, because I would have liked to remind him that the Migration Advisory Committee—an independent body from the UK Border Agency that advises the Government—has pointed out that the 2 million extra net migrants who came to this country under the previous Government decreased wages for working people and meant that fewer UK citizens went into jobs. That is something that we need to be mindful of when many of our constituents are looking for work. Only two days ago, one of my constituents wrote to tell me that on the construction site he was on in London he was virtually the only British worker; all the others were Albanian. I am not sure why they were there, given that Albania is not a member of the European Union. These are genuine issues for our constituents. The people of this country are speaking to us loud and clear, and we would do well to heed what they are saying.
I hugely welcome the national insurance contributions Bill. We are talking about a tax off jobs. Up to 2.5 million employers will benefit and 450,000 of our smallest businesses will no longer pay national insurance contributions. That means that every business could take on one extra employee on a salary of up to £22,400 or four more on the minimum wage without paying any more national insurance contributions. That is just the thing that we should be doing.
Sheila Gilmore (Edinburgh East) (Lab)
How many businesses benefited from the Government’s previous attempt to use national insurance to stimulate the economy? My understanding is that very few did so. Why does the hon. Gentleman think that the current proposal will be any more successful? He is talking about the future, but what about the past three years?
Andrew Selous
All I know is that employers and employers’ organisations up and down the country have strongly welcomed the employment allowance. It is a tax off jobs. I remind the hon. Lady that the Labour Government were going to increase national insurance, had they got back into power. We believe in trying to get more people into work by taking costs off employers.
The Pensions Bill will help savers by ensuring that they get the benefit from everything that they save for their pension. That has not been the case in the past. The Care Bill will also help people by ensuring that they do not have to sell their homes to fund their care in old age.
The Opposition have said that this is a thin Queen’s Speech, but it is not; it contains 19 Bills. Labour Members need to be careful not to confuse legislative activity with the real business of government. A by-pass in my constituency was announced by the right hon. Member for Edinburgh South West (Mr Darling) when he was Transport Secretary in 2003. In the following seven years of the Labour Government, however, not a shovel hit the ground. Nothing was done. All Governments like to announce things, but the delivery mechanisms and speeding up the ability to get things done are what matter. The planning system takes far too long to achieve finality and get results in this country. We also need to look into the matter of judicial reviews. In 1998, there were 4,500 judicial reviews, but the number trebled over the following decade. It is absolutely right that the Prime Minister and the Secretary of State are looking at those issues to ensure that we can get things done more quickly.
What we are doing on training and apprenticeships is absolutely right: 520,000 apprenticeships have been brought into being by this Government. I am particularly pleased by what is happening on the higher apprenticeship route and by the technical baccalaureate announced by the Secretary of State for Education, which will be a type of vocational A-level. Those are very welcome indeed, as are the university technical colleges. It is also vital that we export more. We have increased our exports outside the European Union by 33% since the 2007 peak. We have done well in that regard, but there is clearly much more for us to do in those growing world markets.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
Without doubt, the rising cost of living, combined with stagnating—or worse, falling—income, has to be one of the biggest worries for many people up and down the country. There is little sign of light at the end of the tunnel. People rightly feel that they are working hard and putting in the hours, but they are at best standing still and some are going backwards. Others have found themselves out of work, and the little support that they get when that happens is dwindling every day.
I find my constituency surgeries ever more heart-wrenching, given the number of people coming to see me not only because they have become unemployed, which is clearly a tragedy for those affected, but because they need help with the situation that they find themselves in after that. Some might be looking for help to start up on their own but are unable to get past first base. Others might be hoping for a more reasonable approach by the jobcentre that insists they pay the £3.60 return fare to travel to town rather than go to the centre that they could walk to in an hour. They would rather do that than spend £3.60 of their dwindling weekly budget. Others may fear that they are being discriminated against because they are over 50 and, having worked all their life, now find themselves unemployed and having to compete with graduates for jobs. Others might fear bankruptcy because of the loss of their home; they have been out of work for a year and the support they have received is now drying up. Those people are the victims of this Government’s economic mismanagement.
That is why it is even more galling that the only people who seem to have been given a break by this Government are those fortunate enough to earn more than £150,000 a year. They will benefit from the 50p tax cut. They are the very last people who should be getting such a break right now.
Andrew Selous
Does the hon. Lady not recognise that the rich are going to pay more in tax in every single year of this Government than they did in any year under the last Labour Government?
Catherine McKinnell
That is a spurious statistic. We know that the deficit needs to be paid down, but this Government have made a choice to give a tax cut to those on the highest incomes while leaving other people to pay. It is not just me who thinks that. Conservative voters and, indeed, Conservative party members up and down the country are frustrated by the choices this Government have made.
Debbie Abrahams
Does my hon. Friend agree that it is an absolute disgrace that while there are commitments to fairness in the Queen’s Speech, the 40% lowest-income households will be worse off, with an average of £891 lost by each household?
Catherine McKinnell
My hon. Friend makes a powerful point. Another point to remember is the disproportionate impact that this Government’s tax and benefit changes have had on the lowest earners—and on the middle earners, too.
Let me get back to members of the Conservative party. Linda Pailing, for example, the deputy chair of Harlow Conservative party—I see the hon. Member for Harlow (Robert Halfon) in his place—put it very starkly, targeting her criticism squarely at the Prime Minister. She said:
“The national swing took us down and that is purely to do with what Cameron and his cronies are doing with the national party. The voters are disillusioned with Cameron himself. They don’t like the fact that he didn’t keep the 50p tax. This has really grated and people feel here that he is not working for them, he is working for his friends.”
I could not have put it better myself.
There could have been some acceptance of the Government’s approach—at least among their own supporters—if the 50p tax cut policy had boosted confidence and stimulated economic growth, which is the only thing that could turn the situation round for those feeling the squeeze, yet it has done precisely the opposite. The approach has not only failed to address the lack of confidence in the economy but compounded the lack of confidence in this Government. What kind of right-minded Chancellor or Prime Minister would turn a blind eye to the suffering of the vulnerable and those struggling to make ends meet, slap on a VAT hike and impose a bedroom tax, cuts to tax credits and in-work support while dishing out tax cuts to those who need them least.
Robert Halfon (Harlow) (Con)
Will the hon. Lady acknowledge that this Government have taken 3,000 low- income people in Harlow out of tax altogether and cut taxes for 40,000 low-income Harlow residents? Why did she and her party vote against those tax cuts for lower earners?
Catherine McKinnell
I anticipated Members raising the issue of personal allowances, but the fact is that the Institute for Fiscal Studies has clearly shown that the overall impact of the Government’s changes to tax, credits and benefits has left the very people for whom the change to personal allowances was supposed to help worse off. People will be worse off under this Government in 2015, too.
Then comes the ultimate betrayer of the Government’s true intentions. First, someone claims Britons have never had it so good, completely downplaying the impact of the recession on those hard hit. Then, after resigning on the back of it, this person is reinstated and can now be heard extolling the virtues of starting a business in a recession on the basis that
“labour can be cheaper and higher quality, meaning that return on investment can be greater”.
I was both alarmed and enlightened to read the report in The Daily Telegraph of a leaked discussion between pollsters and the Government’s key advisers. When asked what kept them awake at night, those advisers replied “Nothing” at first, and then admitted that it was their kids’ school fees that bothered them most. If that is the main issue affecting the lives of the Government’s key advisers, that is quite indicative. Lord Young’s comments, cited above, are quite startling, showing him to be revelling in the strain that the jobs and wages squeeze is putting on people’s finances. There are 2.5 million people out of work at the moment, and nearly 1 million young people out of work, with 500,000 out of work for two years or more. That is the highest number since the end of the last Tory Government in May 1997. Since 2010, the number of unemployed people has risen. Lord Young should reflect more on that.
Catherine McKinnell
I am afraid that I cannot. If I do, I will run out of time.
Living standards have come under increasing pressure. Average earnings are rising at the lowest rate since the end of 2009. More worryingly, according to recent analysis of figures from the Office for Budget Responsibility by the Resolution Foundation, that squeeze on average incomes is set to continue for many years. The foundation estimates that, given the OBR’s projections, the gap between what people earn and what they would have been earning had their wages risen in line with inflation will have risen to £3,200 by 2017.
The squeeze on living standards has had a disproportionate impact in my region in the north-east. Analysis carried out recently by the northern branch of the TUC drew attention to the pay gap in the north-east in particular. It showed that since 2010, real wages had fallen by £23 per week and £1,196 per year in 10 out of 12 north-east local authority areas, and that the north-east is the poorest region in the United Kingdom. Some households have been squeezed by £4,000 more than was the case a year ago, given wage freezes, below-inflation pay rises and public sector job losses throughout the region.
What hope did the Queen’s Speech offer to the millions of people across the country who have been affected by the Government’s policies? We needed a Queen’s Speech that would create jobs and growth and give people enough confidence in the economy to invest, but the Government offered nothing. The British people deserve more.
Jacob Rees-Mogg (North East Somerset) (Con)
This aspect of the Queen’s Speech—the issue of the cost of living—is essential to the Government’s fortunes, and, in my view, goes to the heart of what they are trying to do. I am in a good deal of agreement with what was said earlier by my right hon. and learned Friend the Member for North East Fife (Sir Menzies Campbell). It is what brought the coalition together in the first place.
The essence of dealing with the cost of living is, first of all, getting fiscal and monetary policy right, and I have every confidence that we are doing that. Bearing down on the deficit is the key to ensuring that we have low interest rates, and it is low interest rates that allow people to pay their mortgages, remain in their homes, and cope with the financial difficulties that they face. Many hon. Members have raised housing issues, but the key to affordable housing is for people to be able to afford their mortgages, and that is dependent on interest rates. The singular success of this Government lies in ensuring that there is confidence in the fiscal plan laid out by my right hon. Friend the Chancellor, which has ensured that interest rates have remained low and stable.
The hon. Member for Newcastle upon Tyne North (Catherine McKinnell) attacked the change in the highest tax rate payable, but that was, without question, the right thing for the Government to do. It is not a question of tokenism. It is not a question of saying “We will have high rates in order to punish the rich, because we disapprove of their lifestyle.” It is a question of deciding what rate of tax will raise the most revenue for the Exchequer.
Let us look back at the history from 1979 onwards. When the highest rate of income tax was 83% and the highest marginal rate on unearned income was 98%, we saw that the top 1% of taxpayers contributed only 11% of the total income tax revenue. When the rate was cut, the income generated for the Government increased. Exactly the same happened following the further cut introduced by Lord Lawson in 1988.
Debbie Abrahams
Is it not also the case that families with low incomes are more likely to spend their money in the local economy and thus to stimulate it? There is strong evidence to that effect.
Jacob Rees-Mogg
I entirely accept the evidence that people with low incomes are more likely to spend the money that they receive. However, money flows within the economy are not limited to expenditure. The saving of money increases deposits at banks and eases their loan-to-deposit ratios. It therefore ensures that the banks can lend more money both to prospective home owners and to businesses.
There is a view among Labour Members, which was also expressed during the Budget debates, of a very closed financial system, but that is quite wrong. There are flows within the financial system. There is a rule of money, that money must find a home. [Interruption.] It is very welcome to come to my home. If hon. Members would like to send it in that direction, I shall not say no. That is the sort of tax I could do with. However, money does find a home, and that is in generating economic activity.
Katy Clark (North Ayrshire and Arran) (Lab)
Does the hon. Gentleman believe it is right that the rich are getting richer while the living standards of the vast majority of the people in this country are going down?
Jacob Rees-Mogg
The important thing for the Government to do is to lift the living standards of everybody, but we do not improve the standard of living of the poor by impoverishing the rich. That is what Labour tried when in government before and it singularly failed. If everybody gets richer, the whole standard of living of this country improves, and Government revenues increase when rates of taxation are reduced. It is thought that the ideal rate to maximise the amount of revenue for the Treasury would be 37%, so I would be keen for the Government to do this. It is a great error, for those on all sides, to put short-term political advantage or debating points above the economic benefit of this country. Therefore, we should be bold about rates to make sure that we get the revenue we need for the Government to be able to afford to do what they want to do, to keep taxation overall as low as possible, to pay down the deficit and, ultimately, to reduce the national debt. So on the fiscal side, the Government have got it right.
The other aspect of prices is the monetary side, primarily handed over to the Bank of England, but none the less with a Government target set in relation to inflation. If the monetary side were to get out of control, as we have seen historically that it can, the cost of living increases because of the monetary effect on prices. So there is a careful balance for the Government to have. This Government, unlike our continental partners, have got it right by having a tight fiscal policy and a loose monetary policy, so that liquidity is available within the economic system, but the Government part of it is bearing down on the Government’s deficit and, ultimately, on the debt. That is the right balance, and it will encourage price stability. If we did things the other way around—with tight fiscal and monetary policies—we would have a degree of austerity that is unsustainable, as our continental friends have. If we have both loose money and loose fiscal policy, we will end up with inflation that has pretty much disastrous consequences for the cost of living.
Jacob Rees-Mogg
I will not give way any more because I do not get any more bonus points, so I must plough on, with apologies to the two hon. Ladies.
That deals with the fiscal and monetary side. The other part of keeping prices down is regulation, and we have heard a good deal about energy price regulation and how it affects households across the country today. My view is that the priority for my constituents is that they should have cheap energy, not that we should insist on large subsidies for theories that some people find attractive and others do not. I am more with my hon. Friend the Member for Monmouth (David T. C. Davies) than I am with the hon. Member for Brighton, Pavilion (Caroline Lucas), even before I have heard her speak, although I look forward to that. So the issue of regulation is key and, of course, that ultimately comes down to Europe.
On Europe, I will make one aside, which is that we are negotiating a free trade agreement with the EU and the United States of America. Singapore, not the largest country in the world, managed a free trade agreement with the United States in 2004. The United Kingdom would have managed to do it a good deal quicker had we not been tied in to the negotiating sloth of the European Union. Had we been doing it for ourselves, that would also have helped to bring down the cost of living, because free trade ensures that there is more competition in this nation.
Finally, on the constitutional issue of some amendments that have been proposed, I am fascinated by the idea that there is to be a free vote on the Queen’s Speech. Previously, a Queen’s Speech not being carried has effectively been a confidence vote in the Government. These constitutional innovations are extremely dubious—it would have been better if they had not happened—but as that free vote has been made available, I shall of course vote a Eurosceptic ticket.
Caroline Lucas (Brighton, Pavilion) (Green)
I should like to concentrate on the final two words of the Gracious Speech, which, unfortunately, give the impression of having been tagged on the end, almost as an afterthought. Those words are “climate change”; I am sure that I will not disappoint the hon. Member for North East Somerset (Jacob Rees-Mogg) in what I am about to say.
The forthcoming legislative programme shows that the Government are failing in their first duty—to protect citizens—precisely by failing to address the causes of the worsening climate crisis. They are ignoring warnings, even from conservative bodies such as the World Bank, that without far more urgent and radical cuts in emissions, global temperatures will rise by an average 4° or more by the end of the century, with devastating impacts as a result.
If the throwaway line at the end of the Gracious Speech really does mean that progress on climate change will genuinely be part of the UK’s G8 presidency, then of course I welcome it, not least following reports that the Government have been blocking the attempts of the French and German Governments to give the issue a high priority.
However, for the Prime Minister to suggest that the Government are successfully taking sufficient action to deal with climate change is simply dishonest. I do not use that word lightly, but if we are to have a chance of avoiding the worst of climate change, politicians of all parties and countries will have to get a lot more honest—honest about the scale of the threat that we face and the scope of the changes that we need to make.
Just last week, for the first time in human history, the concentration of carbon dioxide in the atmosphere passed the milestone level of 400 parts per million. The last time so much greenhouse gas was in the air was several million years ago, when the Arctic was ice-free, savannahs spread across the Sahara desert and the sea level was up to 40 metres higher.
The difference between 399 and 400 parts per million may be small in its impact on the world’s living system, but it is overwhelming in its symbolism of our collective failure to put the future of the natural world and its people above immediate self-interest and to tell the truth and admit that reliance on fossil fuels is not compatible with the urgent action needed on climate change. Given the role that fossil fuel lobbyists play in influencing policy, including being seconded into Departments to draft it in the first place, I am also deeply disappointed that the Bill to introduce a register of lobbyists has been dropped from the Government’s plans.
If coalition Ministers are comfortable in their state of denial about the climate crisis and their cosy relationships with the fossil fuel industry, whose core business models are incompatible with keeping global warming below 2°, let it be on the record that young people in particular certainly are not. We can see that in the reaction to the Education Secretary’s attempts to remove climate change from the curriculum for the under-14s and we saw it last week when the fossil fuel divestment movement came in the shape of huge opposition to a new partnership between Oxford university and Shell—a partnership that would have been about getting yet more fossil fuels out of the ground. We see it, too, in the concern that I am sure is manifest in many hon. Members’ inboxes from people still lobbying for there to be a clear decarbonisation target in the Energy Bill, not just promises that that might be looked at in 2016.
If I am disappointed that we heard only one mention of climate change in the Gracious Speech, I am even more disappointed by the lack of meaningful action on fossil fuels. Ministers must be honest with themselves and the public and admit that, if we are serious about avoiding the worst impacts of climate change, the vast majority of fossil fuel reserves must be left in the ground.
David T. C. Davies
Is the hon. Lady going to address the issue of why environmental groups will not support methods of generating electricity that do not produce carbon dioxide emissions, such as nuclear power?
Caroline Lucas
If the options were either nuclear or more and more fossil fuels, obviously nuclear would be the least worst option. But that is a false choice that we are not facing. There are plenty of technologies out there that need further support—solar, wind, geothermal and many others that are now coming to be equal in terms of price parity. We do not need to go down the nuclear route, which is hugely expensive as well as dangerous. We do not need to go there, so why would we? Why not use the technologies that we know will get our emissions down and keep the lights on much more cheaply, effectively and safely?
I turn to a report published last month by Carbon Tracker. It makes the point that we cannot go on using more and more fossil fuels. As Lord Stern explains in the foreword,
“most fossil fuel reserves are essentially unburnable because of the need to reduce emissions in line with the global agreement”
to keep temperatures below 2° warming. That 2° warming is the first critical number in the Carbon Tracker report. Governments around the world have agreed that we should not exceed that level of warming. There is already an increase of 0.8° in the atmosphere, so we are getting close to 2°, and 0.6° is locked into the atmosphere. If we are not careful, we will get to 2° very fast, and many people believe that 0.5° would be a safer threshold.
The second number is the 2,795 gigatonnes of carbon dioxide that industry figures indicate are locked up in the known, proven coal, oil and gas reserves around the world. Finally, the figure of 565 gigatonnes is the amount of CO2 that research by the Potsdam Institute for Climate Impact Research identifies as remaining in our carbon budget for the period 2011 to 2015. In other words, we can safely burn only one fifth of known fossil fuel reserves and still keep within the global carbon budget, as the International Energy Agency confirmed in its recent report.
Many people will suggest that carbon capture and storage is the way out of this problem. However, even if CCS were deployed in line with an idealised scenario by 2050, that would extend fossil fuel carbon budgets by only about 125 gigatonnes, which is equivalent to only 4% of the total global budget. CCS is not likely to come online in any serious way until at least 2030, by which point the carbon budget may well have been used up.
The implications of all this are clear. First, the decarbonisation target needs to be in place. We need to make sure that we do not have a second dash for gas. Most crucially, Ministers must require extractive companies to include the greenhouse gas emissions potential of fossil fuel reserves as part of an update on company reporting regulations. If they do not, there is a real risk that our financial markets will have a carbon bubble worth an estimated $16 trillion globally. Because we are so over-exposed in the UK given the global role played by London, our financial centre, in raising capital, there is great concern that companies are inflating their worth because of these reserves.
Alec Shelbrooke (Elmet and Rothwell) (Con)
I rise to support the Gracious Speech.
Without any shadow of a doubt, we live in a global economy. We have heard many speeches about the cost of living based on the domestic policies that are set nationally, and there is indeed an important debate to be had about that. However, like my hon. Friend the Member for New Forest East (Dr Lewis), I regret the fact that we will not discuss international affairs during the debate on the Gracious Speech.
An escalation of issues in the middle east would have a very detrimental effect on the cost of living in this country. Many hon. Members have talked about the cost of energy—oil and gas—in this country and the increase in fuel poverty. The stark truth is that that could increase only if we were to move towards a more militarised conflict across the middle east. There are serious concerns about Iran’s nuclear ambitions, but that does not mean that we should take a unilateral decision, or a decision with any other nation, to take military action against that country. The mere suggestion of moving forward there could result in oil price rises across the world that would have a deep impact on the people of this nation, without a single bullet being fired.
We do not get any oil from Iran; we got only 2% before the EU embargo came in. However, a vast majority of the oil coming into this country comes through the Straits of Hormuz, and if the oil traders believe that there is a threat to those shipping lanes, oil prices will inexorably rise. We must remember that oil is bought three months in advance of when it is sold. If the oil traders believe that there may be difficulty in getting that oil out of the Gulf and into our country, oil prices will increase, and that will affect every aspect of the cost of living in this country. It is not just about the straightforward issue of fuel prices. If we are on a bus we have to get a bus ticket, or if we are on a train the electricity has to be generated to run it. The price of oil affects the price of food in our shops, which has to be transported there using fossil fuels. That shows why we should have discussed the effects of international affairs on this nation during our debates on the Gracious Speech.
I do not think I am the only Government Member who seriously questions the wisdom of relaxing the EU arms agreement on Syria. If history has taught us anything over the past 10 years, it is that picking a side and arming it will rarely lead to a useful outcome for world stability. If we side with the opposition in Syria, who are we actually siding with? Many companies in this country that employ many people are now banking with Israeli banks, and that has a direct influence on their strategic fiscal capability. Do we seriously want to empower an opposition that has some, let us say, interesting people on the Islamic fundamentalist side who are right next door to a country that the vast majority of Arab countries would like to see removed from the face of the map? That instability, linked with Iran talking to Hezbollah and a change in the dynamic in Syria, could have a direct consequence on the ability of companies to operate in this country.
Dr Julian Lewis
Would my hon. Friend also like to make an observation on whether the task of humanitarian intervention has been made that much more difficult by the way we went about it in Libya? We said that it would be a very limited, no-fly-zone-type intervention, but we ended up intervening much more directly on one side, and in a strictly military way, in a civil war?
Alec Shelbrooke
I am grateful to my hon. Friend for raising that point. That is a recent example of a country that we helped to liberate, but it led to issues for our embassy and that of the US. That paints a picture. However good the intentions to solve a crisis may be, the question is: what comes next?
That is not to say that we should shirk our responsibilities towards humanitarian aid. More than 1 million refugees are flooding out of Syria into Jordan alone, a country that is ill-equipped to deal with that number. We will eventually be called upon to help with that humanitarian crisis and it is important that we will, again, be there for our fellow man. I come back to the point that, when we debate the cost of living in this country and the Government’s programme over the next year, we should also discuss international issues, because, importantly, they are interlinked with everything we do.
In 1983, when I was a child of just six or seven years of age, the film “Threads” was made. I watched it recently and am sure that a number of other Members have also seen it. It is set in Sheffield in the 1980s in the aftermath of a nuclear holocaust. It is a sobering film and it should be watched. What struck me about it is that those who made the decisions that caused the wars to take place did not feature in the film. Indeed, given that it was set in Sheffield, the decisions were being made 190 miles away in London and elsewhere in the world. That is the point I am trying to make: we have to take notice of the innocent people on the ground and of the impact of our decisions.
We live in a highly volatile world and have to be very careful about how we move forward, and it is regrettable that the debate on the Gracious Speech has not given us the opportunity to address these issues, which could have such a fundamental impact on our cost of living.
Geraint Davies (Swansea West) (Lab/Co-op)
It is a pleasure to follow the hon. Member for Elmet and Rothwell (Alec Shelbrooke), although I do not think that the spot price of oil should be the determining factor in whether we intervene in a country where 70,000 people have been slaughtered and 1 million more have been made into refugees. That should not have been a consideration in Libya either.
The centrepiece of the Queen’s Speech, with respect to the cost of living, should have been a strategy for growth. That was sadly missing from the rag-bag of old ideas that we have seen before. Contrary to what was said by the hon. Member for North East Somerset (Jacob Rees-Mogg), who is no longer in his seat, under this Government, the debt to GDP ratio will have gone up from 55% in 2010 to 85% in 2015, debt is rising by £245 billion and we have lost our triple A rating. The idea that all is rosy in the garden is farcical.
What we need is growth. To his credit, the Prime Minister is in Washington trying to negotiate an EU free trade deal with the United States. At the very same moment, the Eurosceptics—or should I say Euroseptics—are busy undermining that prospective agreement with a great trading partner. That is very sad.
Catherine McKinnell
My hon. Friend is making a powerful point about our international position. Does he share my concern over the figures from the Office for National Statistics that came out today, which show that the UK has plummeted to 12th in the league table of household incomes? That shows that not only are people suffering, but we are falling behind our international neighbours and competitors.
Geraint Davies
That is a key point.
We are always hearing that everything is all right in the UK and the problems are someone else’s fault. The EU does have problems, but there are emerging opportunities in China, India, Brazil and elsewhere. The Queen’s Speech should have provided a strategic platform for international trade to help us access the newly emergent and massive middle classes who want to take our consumer goods and who form the basis of inward capital investment. But no, we are busy being the one nation, fish and chip shop, Eurosceptic Britain—the nation of shopkeepers that Napoleon described us as. It is frankly pathetic. The Conservatives are not fit to be in government.
Between 1997 and 2008, we saw growth of 40%. Not enough Labour Members stand up and defend that. If our debt to GDP ratio is going from 55% to 85%, how can we sort it out? One way is to cut debt and to stamp on the poor for the recklessness of the bankers, which is what the Tories are doing. The other is to increase GDP so that the ratio goes down. Under Labour, GDP went up by 40% up to 2008. In 2008, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) and President Obama put together the fiscal stimulus. The EU’s fiscal stimulus was 2% of GDP. In the United States, it was 5% of GDP. Indeed, the United States put in $2 trillion of quantitative easing, whereas the EU put in nothing. Britain did put in something, but we still have the economics of austerity here and in Europe. In the United States, where the economy was stimulated, growth is projected to be 3% in the next year. In the EU, it is projected to be 1%. Why was nothing done about that in the Queen’s Speech?
We have seen the emergence of massive youth unemployment. In Greece, the rate is more than 60% and in Italy it is 38%. In Greece, people are moving towards the Nazis and extreme communists. In Italy, 25% of people voted for a comedian. I notice that that is the same percentage of people who are voting for UKIP here. The British National party’s support has gone up fourfold from 1% to 4%. The response of the Tories is to run for the hills and emulate UKIP.
Why has support for UKIP gone up? The first reason is that the Prime Minister has given it credibility by saying that he will hold a referendum. People who used to say to me when I knocked on their doors, “You must be joking. We’ve got millions of jobs involved in trade with Europe. It’s the platform into China, India and the United States”, are now thinking, “Hold on. Cameron’s offering us this option, so it must be a credible choice.” That gives oxygen to UKIP.
Alec Shelbrooke
What is the hon. Gentleman’s reaction to the hon. Member for Lewisham West and Penge (Jim Dowd), who said that their party should support a referendum on Europe?
Geraint Davies
Obviously, I disagree with that. I do not agree with a referendum, but if the overwhelming majority of people in Britain want one, I accept that we should have one. I am simply saying that the case for a referendum has been whipped up because of the Conservatives’ fear of UKIP. They have fed it red meat, and it is coming back for more.
It is the same with immigration. Everyone is going, “Oh no, there’s too much immigration. It’s terrible, isn’t it?” However, immigration was part of the reason for our economic growth. We prematurely let in some of the people from Poland who would have been able to come here anyway, and meanwhile Germany is saying that it needs more immigrants to pay for the generation that is growing old. We obviously need to manage immigration properly and carefully, but we should consider that 6% of immigrants are on benefits compared with 16% of indigenous people.
We are providing ammunition for people to blame immigrants, and what was in the Queen’s Speech? Private landlords and health providers will have to find out whether someone is an immigrant and whether they are legal. What will be the easiest test of that? “Are you white or are you black?” It is institutional racism. We are feeding the UKIP voters by saying, “The austerity problems aren’t Tory austerity problems, they’re because of all the immigrants.” Is that helping anyone and creating a united and strong Britain with a one nation future? No, it is creating a weak, divided nation of people who are being crushed by the Tories, and the poorest are blaming the immigrants. It stinks.
Geraint Davies
I had better give way to the hon. Member for Monmouth (David T. C. Davies), because he is likely to say something more ridiculous, as a fruitcake.
David T. C. Davies
I am grateful to the hon. Gentleman, not least because I am married to an immigrant and fully support the Government’s policies.
The hon. Gentleman mentioned a statistic, but 100% of indigenous people in Britain are entitled to receive benefits. What percentages of those who have emigrated here are entitled to receive them? I do not know, but it is much lower than 100%, so the statistic that he gave is inaccurate.
Geraint Davies
I certainly do not accept that. My basic point about the cost of living, which is what we are talking about, is that the bottom 10% of people in Britain spend 37% of their money on food, energy and housing costs, whereas for the top 10% it is less than half that proportion at 17%. As basic costs escalate, benefits are squeezed and the overall amount of money that people have is crushed, including their working tax credit and the like, and the people right at the bottom can barely survive while the people at the top are laughing. It is all very well saying that the rich are paying more, but the wages of the top 10% have gone up by 11% in the past two years.
I am not even talking about the 5% tax giveaway, but what a laugh that is, with the Government saying, “Oh, we’ll raise more from a 45p rate than a 50p rate.” People on the top incomes can move their income between tax years, so that is why there will be a lower take. There will be a behavioural change. If the 50p rate was ongoing, we would raise more. Indeed, some people already pay 50%, because those who pay 40% also pay 12% in national insurance, so their marginal rate is already 52%. The only difference is that they do not have accountants. It stinks. The reckless bankers, who were two-thirds responsible for the deficit in 2010, are being rewarded in their pay packets while the poorest are being squeezed and we are giving a bit to the squeezed middle.
James Morris (Halesowen and Rowley Regis) (Con)
As I have knocked on doors around Halesowen and Rowley Regis over the past five years, a common theme has come up time and again. My constituents, and I suspect those around the country, have been looking for reassurance that the Government are on their side as they go out to work and try to do the right thing and take responsibility for themselves and their families.
Many families in my constituency are starting to see things get better. There are now 3,000 more of my constituents in work than there were before the general election. For many, however, things are still a struggle. They want to see evidence that the Government understand that things are tough for them and their families. They want action to make things a little easier, and they want to have confidence that, at the very least, their Government will not make things unnecessarily difficult.
I am pleased that the Energy Bill has been carried over. It will give legislative force to the requirement on energy companies to put customers on the cheapest tariff to meet their needs. When the Prime Minister announced that the Government would ensure that energy consumers were put on the cheapest available tariff, the Opposition’s reaction was that it could not be done, presumably because they knew that when they were in government they had lacked the political will to make it possible. They then changed to arguing that it would not be done—presumably because they knew they would not have done it—and they now seem to argue that it is not worth doing. The truth is that it could be done, it is being done, and it will benefit many of our constituents, particularly the most vulnerable.
As a humble Back Bencher, I hesitate to pick faults in the way Ministers choose to communicate the Government’s achievements, but the message that a series of freezes in fuel duty represents help for drivers tells only half the story. Motorists will, of course, be the most obvious direct beneficiaries of getting fuel costs under control, and drivers in my constituency will, on average, be £170 better off than they would have been had the Government gone ahead with the increase in fuel duty planned by the Labour party. However, I cannot help but think that that message sells the Government short. Transport costs are a significant part of the cost that families pay in shops, particularly for food, and they have a real impact on the cost of living for motorists and non-motorists alike. Poor grain and fruit harvests last autumn have created significant pressures on food prices globally, and the Government’s action to prevent fuel costs from needlessly rising and adding to those pressures will help to stop spiralling food prices that could hit hard-working families hard.
Huw Irranca-Davies
What does the hon. Gentleman make of the National Farmers Union’s repeated call over the past few months for an extension to allow seasonal agricultural workers from beyond EU borders—places such as Moldova and Bulgaria—to come to the UK and pick the crops in the fields because of that issue of affordable food? How does that tie in with the Government’s thinking on immigration?
James Morris
I thank the hon. Gentleman for his intervention but my constituency contains, I think, half a farm, so I am not qualified to speak on the matter he raises. Like the measures contained in the Budget, the action the Government are taking will provide significant help for families in my constituency, and I shall be proud to support them.
I understand that it is this year’s fashion to talk about matters that we wish had been included in the legislative programme, and if I may make one plea to Ministers, it would be to add my voice to those of right hon. and hon. Members—led by my hon. Friend the Member for Harlow (Robert Halfon)—who are calling for measures to stabilise fuel prices to be taken further. With wholesale prices having fallen from their peak, it would be a good time to revisit the idea of a fuel duty stabiliser to protect families and businesses from some of the damaging effects of volatile fuel prices. Should the Government return with such plans, I am sure they would enjoy not only the support of the House but—more importantly—they would make a real difference to our constituents.
The positive action that the Government are taking to address the cost of living stands in stark contrast to the record of the previous Government, although that is hardly surprising. Why would a party that had convinced itself that it had abolished boom and bust worry about rising prices? A Government who believed that the benefits of boom would not be followed by the crisis of bust were happy to assume that they could go on handing out enough in benefits and tax credits, and that a policy of uncontrolled immigration would provide enough cheap labour to keep service costs low. The Leader of the Opposition may have started to talk about energy costs, but he cannot hide from the fact that when he was the Cabinet Minister responsible for such matters, he stood by while the margins of energy suppliers soared.
I am pleased to support the Government’s legislative programme, and in particular actions to keep the cost of living under control. People in Halesowen and Rowley Regis who work hard and want to get on but who have been finding things tough can see that these measures will help to make things a little easier. They can see that this Government are on their side.
Sheila Gilmore (Edinburgh East) (Lab)
I should like to address housing, which hon. Members on both sides of the House must start to take seriously. In 2012, the Institute for Public Policy Research showed that, in the current spending review, nearly £95 billion will be spent on housing benefit compared with just £4.5 billion on building affordable housing. That means that for every £1 spent on affordable housing, £19 will be spent on housing benefit. We should therefore not be surprised that the housing benefit bill has been rising. We accept that, but the problem is that the Government have not analysed the reasons for it, and have decided to address housing benefit spending by trimming bits of money off recipients of housing benefit here and there. For those individuals, those bits of money are not insubstantial. For somebody on £71.70 a week, losing £12 a week because they have to pay it towards their rent is extremely significant in their cost of living. The policy does not make sense for the country or for those individuals.
In the 1970s, 80% of housing expenditure was for building houses—very little was spent on rent subsidy. As a result, many working people, including people in relatively low-waged jobs, had affordable housing in which to live. They therefore did not need to claim benefits. No wonder people say, “Too much goes on benefits.” The money is going in at the wrong end.
The previous Labour Government did not address the problem in the way that I, as a councillor active in housing, would have liked. Many Labour Members have said that for some time. I was pleased that the shadow Secretary of State for Work and Pensions said recently in an article in the Evening Standard that one principle of the next Labour Government would be to redress that.
Geraint Davies
My hon. Friend will know that the cost of housing benefit has doubled in the past 10 years to about £20 billion, but is she aware that 70% of the increase is because of private sector rent increases? Does that not make her case for building more affordable housing, not just crushing the poor?
Sheila Gilmore
As recently as February 2009, about 1 million private rented tenants claimed housing benefit. By October 2012, that number had risen to 1.7 million. Far more people in the sector need to claim housing benefit, largely because they are on lower wages or have lost working hours because they are on poor contracts.
Damian Collins (Folkestone and Hythe) (Con)
Does the hon. Lady believe that mass immigration has contributed to the massive increase in demand for social rents and housing benefit?
Sheila Gilmore
No, I do not believe that. In fact, the number of recent immigrants who are housed by councils and housing associations is very small. The problem is the lack of building of affordable housing.
Government policy is about to stoke that problem further. They have decided to say that affordable housing is housing built at 80% of market value. They can therefore say, “We have replaced housing. We have built affordable housing.” However, that will stoke the problem further, because more people in that form of housing will have to claim benefit to afford it. The policy does not make sense. In 10 years’ time or even five years’ time, if that continues—hopefully it will not continue, because there will be a change of Government—people will turn around and say, “Why did the Government do that? Why did they yet again put all the onus on revenue and give us an even bigger benefit bill?”
As it turns out, the problem is happening not just in England. There is also a cut in the amount going for affordable housing in Scotland. We are building far more mid-rent housing, as it is called in Scotland. It is about 80% of market value. That is the only way in which housing is being built. I do not see any reason for not having some mid-market rented housing as a supplement to what is there already, but when it becomes a substitute for truly affordable housing, we are storing up problems with the balance of what we are spending.
Much has been made by this Government and the previous Government about the importance of making work pay. The cost of housing is one of the essential determinants of whether work pays or not. People get trapped by the lack of cheap, affordable housing. As my city is so short of housing, we introduced a scheme which solved the crisis for some people. I recently met a constituent who had separated from her husband two years ago. She had two children and no home to go to, so she applied to the council as homeless. She was in a crisis—the relationship had been violent—so she accepted a property under a private sector leasing scheme, in which the council leases properties from the private sector. It was a relief to her at the time, because she had a safe home for herself and her daughters. She was not working at the time; her life was in such a crisis that she had had to give up her job as well as her home, so she was receiving housing benefit to pay the very high rent.
Two years on, my constituent is ready and anxious to get on with her life. She wants to get a job, but she is stuck with a rent that is more than double the rent of a council or housing association house. She has been advised that if she got a job she would still get some housing benefit to help pay the rent, but she would still have to pay as much rent—from a fairly average wage—as she would have to pay on a council property. Everybody would lose out. My constituent would lose out, because it might not be worth her while to get a job, and taxpayers would lose out because they would still have to pay half the rent for her to live in a property that she does not now particularly need or want to live in.
We have to solve this problem and we have to do so quickly. The best way is to start investing directly in the building of affordable housing. If we do not do that, we will never be able to tackle the housing benefit bill. If that had been in the Queen’s Speech, we could have made some real progress for many people. My constituent is not alone, she is just a recent example of how people can get stuck. In fact, that is her word—she is stuck and she would have welcomed some progress from the Government in the Queen’s Speech.
Damian Collins (Folkestone and Hythe) (Con)
Several hon. Members have touched on the initiatives that the Government have put in place to try to address the cost of living. I am pleased that my local authority, Shepway district council, has frozen council tax for three years in a row—as Kent county council did this year too. Measures to stop increases in fuel duty have had a direct impact on the lives on millions of people in this country, and I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on his campaign on that issue. The Government have also taken the first steps any Government have taken to bring in measures to guarantee that consumers receive the lowest energy prices. I welcome all those measures.
One issue that has not been addressed in this debate is the Labour party’s commitment to increase borrowing—it says in the short term—as part of its programme for government. It is very reluctant to be drawn on this, but it should be drawn on it, especially in a debate on the cost of living, because of the consequences it would have. The country direly needs to live within its means and reduce its debts and deficit. If it deviates from that track because of the Labour party’s desire to spend more money—money that it does not have—we have to wonder how the money will be raised. Will it be raised in taxation—by asking people to pay higher taxes—or by higher borrowing, which will be passed on to consumers in higher mortgage rates? We have been down this track before and we have seen the consequences, which is why the Opposition are so reluctant to be drawn on the consequences of their policies and what they will mean for people’s lives.
Huw Irranca-Davies
This morning I was at a breakfast meeting with a contingent from the Civil Engineering Contractors Association, which has published a report that advocates increasing expenditure on infrastructure, not necessarily through the public sector but through imaginative use of private sector investment, including being underwritten by the Government at a time when interest rates are at a record low. Does the hon. Gentleman approve of that?
Damian Collins
I am grateful to the hon. Gentleman for his point, because it provides a neat segue into what I want to talk about next. Of course, the Government welcome investment in major infrastructure projects that improve the competitiveness and underlying strength of the economy, and there are numerous schemes where that is taking place. If I look at investment in jobs in my own area through the work of the regional growth funds, I see that £35 million is being spent in east Kent to create new jobs. Businesses such as Wooding in Hythe in my constituency have already received £1 million and they are hiring people on the basis of that investment. Of course we welcome that type of investment, but we are hearing from the Labour party a desire for a short-term, temporary cut in tax to act as a stimulus to the economy, with no real sense of where that money will come from or how it will be costed and paid for. My concern in this debate on the cost of living is that the people who will end up paying for those policies will be the consumers. People will pay through higher taxes, and higher interest rates on their mortgages if they are homeowners.
I will come back to the point made by the hon. Member for Ogmore (Huw Irranca-Davies) on imaginative partnership with the private sector to increase investment, which also touches on the speech made by the hon. Member for Edinburgh East (Sheila Gilmore) on the housing sector. One of the biggest elements of the cost of living is housing. Rent, servicing a mortgage or finding the money in the household budget to try to save and buy one’s first home are all significant costs. I am attracted to schemes where local authorities seek to work with institutional investors to fund the building of new homes that will be run by arm’s length management associations and councils, effectively producing a private partnership with a local authority to build new council houses and to borrow money from an institution over a 40-year to 50-year period. That is a sensible thing to do, and is what any organisation would do. If it is ultimately responsible for paying the rent through housing benefit, why would it not seek to control the end product too? That will give us more opportunities not only to provide people with lower cost homes to rent, but, in time, for even more people to benefit from the right to buy scheme, and for the money to be reinvested into providing new, high-quality homes. That would a good thing: it would reduce some of the costs of renting and be a good thing for the housing market as a whole.
Such a policy would also help to do something to address the scandal of the poor quality of many homes in the private rented sector which are offered to tenants claiming housing benefit but are not fit for habitation. Local authorities should use powers, which they already have, to take action against those landlords. I welcome, in part, the measure in the Queen’s Speech that will create an obligation for private landlords to ask whether people seeking accommodation are qualified to receive it. That will ensure that they are in the country legally and not in breach of the law. That is a good thing, because we will probably find that it is the rogue landlords who are happy to take the money and not ask any questions, and who are making money not out of people who are here illegally, but from some of the poorest people in our society. We should clamp down on that, because it is public money, paid out through housing benefit, that they are profiting from, and we should take firm action against it.
Geraint Davies
Does the hon. Gentleman agree that most landlords have a single property and rent it out themselves? They simply do not have the resources to verify whether a prospective tenant is an illegal immigrant. Making those landlords illegal is outrageous, quite apart from promoting racism.
Damian Collins
I disagree with the hon. Gentleman. I think it is very easy to ask those questions and for those checks to be made. Most landlords will probably say that they are paying very large sums to agents to act on their behalf to make these checks. Hundreds of pounds are paid on every transaction by both the tenant and the landlord in managing the private rented sector, so I do not see why those questions would not be asked. Legitimate landlords have nothing to fear. It will be the rogue landlords, who rip people off and exploit the illegal status of some of the people they give accommodation to by keeping them in cramped and unpleasant accommodation, who will have something to fear. It is good for the country that those people fear such intervention.
Many people, particularly young people saving to buy their first home, find the size of the deposit required prohibitively large, and the attempt to save that extra money undoubtedly bears on their cost of living. The Help to Buy scheme, which will support people’s deposits when they buy a new home, must be welcomed as a measure to help many people on to the housing ladder and to give them a far better standard of living and accommodation. This positive initiative will also have a beneficial legacy for the construction sector, giving people greater confidence to build on the property sites currently held in land banks that have planning permission, but which are not being built on because people are concerned that there are not enough people to buy. This scheme will give them the confidence to build, knowing that people will be able to afford the homes because their deposits will be covered.
Finally, on a subject linked to housing towards the end of people’s lives, the Care Bill will end the requirement on people to sell the property for which they have worked and saved all their life in order to meet their care costs in later life. It is unfair that people who have made sacrifices throughout their lives are asked to make the final sacrifice of selling their home to pay for some of their care costs, when others are not put in that position. It is right to cap those contributions: it will reward people’s hard work and aspiration and send out a positive message about the sort of country we are and how we want people to make those sacrifices, work hard and put something by for themselves and their family to have and use later in life. The Care Bill is a positive step in that direction.
I welcome and commend the Queen’s Speech and today’s debate.
Ms Margaret Ritchie (South Down) (SDLP)
At the heart of this debate are two fundamental questions: what is the economy delivering for people and why does it seem to be delivering more for some than for others? A functioning economy needs to work not just for those at the top but for all those who contribute to our businesses, industries and public services. We should all be concerned by the income gap and the disparity between those at the bottom and those at the top, and we have a responsibility towards those who put in so much but currently get little of the reward. Since the 1970s, wages have grown twice as fast for the top 10% as for those earning medium incomes.
Such inequality is not just an abstract economic problem; it fosters division and can be linked to several serious social problems. This should elicit not some glib response about the politics of envy, but a realisation of interdependence in our economy. The Government’s proposed consumer rights Bill is to be welcomed, and I await the details with interest, but there is little in this sparse legislative agenda to tackle the fundamental economic problems we are facing. What message is being sent out when remuneration is clearly no longer tethered to economic worth and input, and what message are the Government sending out when they cut the top rate of tax while introducing a 1% cap on benefits that will hurt children and families?
Currently people are having to work longer hours, pay more at the pump, pay more for their weekly shopping and struggle to budget for the increased cost of keeping the heating on. Every day can become a struggle. We have an economy with high inflation and record fuel, food and energy prices, combined with high unemployment and wage stagnation. That is the real pain that people are feeling in Northern Ireland. Growth has been non-existent under the coalition Government, which again is not an abstract consideration, but is being felt by people on a daily basis. A recent poll by the Consumer Council for Northern Ireland found that nearly 50% of people were extremely concerned about their ability to make ends meet and that people in their 30s and 40s were most concerned that they might lose their job, while those in their 20s were concerned that they could not find one. This paints a picture of a population that has lost faith in the economy and no longer believes that it will meet their aspirations.
Many Members have today discussed the pressing problems of rising fuel, food and heating costs, and this is especially the case in Northern Ireland where we have experienced the highest fuel prices in the UK and Ireland every month in 2013. The latest AA report for April 2013 indicates that Northern Ireland is the second most expensive place to buy diesel in the EU. The cost of filling up an average saloon car with a 50 litre engine is now £75, and 90% of customers report that they are spending more than they did two years ago, despite consciously trying to use their cars less.
It is a similar with energy costs. The cost of gas has risen by 38% and the cost of heating oil by over 68% since 2009, meaning that consumers face annual bills that are over £600 more expensive than five years ago. Many of those people are also facing deepening levels of fuel poverty. In the supermarket, consumers are faced with a £20 rise in their weekly food shop. These factors—filling a car to drive to work, paying energy bills and feeding a family for a week—are all compounded, leaving people constantly feeling under pressure.
I see very little evidence from the Queen’s Speech that the Government grasp the fundamental challenges that they face to restore growth and confidence to the economy. The Government should be creating investment, not insecurity. There needs to be an economy to which everyone feels connected, one that is grounded in a degree of fairness.
More specifically and more immediately, I support measures such as the sectorally targeted VAT reduction on tourism and hospitality products, which has been successful in other European countries. I also call on the Government to deliver on the peace dividend that was promised for Northern Ireland back in 2007 in order to pump-prime devolutionary measures, as well as to ensure that our standard of living and rising unemployment no longer create those social divisions that have been relevant for some time. In that regard, I urge Cabinet Ministers to sit down with the Northern Ireland Executive to put a proper long-term economic deal in place.
Robert Halfon (Harlow) (Con)
I welcome this debate because I believe that the Government’s record should be welcomed for a number of reasons. First, despite a number of factors outside their control, they have taken measures to help families—for example, with the cost of fuel and utilities. Secondly, the Government have recognised that tax is the biggest brake on the cost of living and have cut tax for low earners. Thirdly, the Government have realised that, besides tax, the best way to reduce the cost of living is to encourage people to move from welfare to work by increasing their skills.
Before I look at these things, however, we should look at how Labour has undermined the cost of living. As some Members have commented, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) has said that the wages of our constituents have fallen by £1,700 a year since the election and that our constituents are getting poorer. But as the Resolution Foundation made clear, median real wages stopped rising in 2003, a full seven years before the coalition came to power. We should not forget that Labour left office with 2.5 million people unemployed.
I believe that the Government are listening and I welcome the action they have taken to ease the cost of living, particularly the cost of fuel: they have frozen fuel duty for three years and cut it by 1%. All these measures were opposed by Labour. Yet 800,000 families still lose a quarter of their income at the petrol pump, and the average cost of unleaded petrol has risen by 60% since January 2009. Fuel duty is not just a tax on fuel; it is a tax on everything. It pushes up the cost of public transport and of food. With 71% of us still driving to work, fuel is an essential.
It is also right that we should have transparency. I have argued that the Government should make it compulsory for receipts to display how much of what the customer pays for fuel is tax. That would show that, despite the fuel duty freezes and the decrease in the cost of oil internationally, oil companies continue to increase the cost of fuel. News is emerging today to suggest that major oil companies have rigged the oil market. This is being investigated by the European Commission, and if it is true, I believe—I argued this last year in a debate in this House—the Government should not only fine the oil companies but consider imposing a windfall tax on them and passing those tax receipts back to the consumer through lower fuel duty.
I am pleased that there is a water Bill in the Queen’s Speech. Water companies are making big profits. In 2011, they paid out £28 million in bonuses, yet for families feeling the squeeze, water bills have risen by 82% over the last 10 years. I asked the Government to take further action to break the monopolies and to increase competition between water companies, which would allow for reinvestment in the water system that would keep bills low in the long term. A windfall tax should also be considered so that money could be handed back to consumers.
I welcome the fact that the Government recognise that the biggest brake on the cost of living is taxation. I am pleased that they are making progress in reducing taxation, including taking 3,000 lower earners out of tax altogether in my constituency of Harlow. I have urged the Government to reintroduce the 10p tax band that Labour scrapped in 2008 for those earning up to £12,500, which is the level of the minimum wage. That would give a cash boost to minimum wage workers of £250 a year.
One of the biggest problems in meeting the cost of living is the bill for the taxpayer from the welfare state. The average taxpayer on lower earnings pays £1,220 a year on welfare from the tax they pay. The Government are right to build an economy in which those who work are rewarded. It is right that the welfare bill is reduced. The reality of Labour’s policy to increase the welfare bill is that it would increase the tax bills of millions of lower earners across the country.
The final way to address the cost of living is to deal with the skills problem. It is no accident that those with the lowest skills are those with the lowest pay. The Government are tackling that by investing in half a million apprentices—the number of apprentices in Harlow has increased by 78% in the past year alone—and the building of 24 university technical colleges. We have also talked about the technical baccalaureate and other measures that the Government are making to improve vocational training. These are all the kind of things that will help with the cost of living in the long term.
I end with a quotation from a former Labour Prime Minister, Jim Callaghan, who understood that to reduce the cost of living the deficit had to be brought under control. He said:
“We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting Government spending. I tell you in all candour that option no longer exists.”
Alison McGovern (Wirral South) (Lab)
I want to raise two matters in this debate on the Queen’s Speech that are of serious concern to my constituents: food prices and the price of public transport.
However, although we are talking about the cost of living today, it is important first to recognise that people are facing a significant amount of insecurity in their working lives. The Department for Work and Pensions has recently been rapped for the way it uses statistics. Nowhere is that happening more than in its communication about what is going on in our labour market, as people face the prospect not only of employment but underemployment. To be frank, many people in my constituency face a perfect storm of not getting enough hours to get money coming in and prices increasing at the shops.
Global food price inflation is serious and significant; we have seen two large price spikes recently, in 2008 and 2011. These high, volatile prices are causing serious problems at home and around the world. As a global issue in countries without systems of social protection for the poorest people, they are a total, unmitigated disaster, but the problem of food prices is also troubling every community in Britain—not only the classic poor areas, however we might define them, but every town in our country.
I pay tribute to the people who volunteer their time and effort, and their own cash, to help the charities that are trying to put a sticking plaster on the wound. Their efforts are welcome, but the long-term solution must be to support small agricultural producers to help them to grow, and to ensure that we have a system of social protection that works well to support people’s incomes, so that they can afford the food in the shops. I would also add that, from a global perspective, we need to support measures such as fair trade. Locally in Wirral, we are not going to stand by and let people face those rising food prices on their own, even if the Government are adding insult to injury with their economic management. Wirral council is coming up with a food plan, which will help farmers and producers as well as helping people to access nutritious, affordable meals. I look forward to adopting that approach on my patch.
On transport prices, bus prices are high in Merseyside. This particularly hurts young people trying to get to college or to work. Whenever I meet groups of young people in schools, at youth clubs or at scouts or guides, I consistently hear about the difficulties they face in getting to work, to college or to after-school activities because of the price of public transport.
As we have seen in recent years, cities offer a real chance for growth. Places such as Liverpool and Manchester are progressing and their populations have risen as they have successfully built themselves up as part of our new economy. Connections within and between our cities must improve, however. We need to look not only at capital infrastructure costs but at the day-to-day costs for people who are just trying to get around. Labour’s policy, which we have put forward as an alternative to the Queen’s Speech, involves bus deregulation exclusion zones and represents the right approach to getting more accountability in the provision of public transport. Such a policy would ensure that my constituents could afford to get around.
We know that, when people are thinking about their job options, they factor in not only the length of time it will take to get to work but the cost involved. I find that people on the lowest incomes who are thinking about moving into work or changing to a better job are often rightly risk-averse on account of the transport costs involved. That is why it is incumbent on all of us here to ensure that people can get around.
The hon. Member for Harlow (Robert Halfon) has just quoted James Callaghan, in a kind of parody of what Keynesian economics is all about. I would say to the hon. Gentleman that, although it has occasionally been a challenge for me as a progressive politician to get the paradox of thrift on to leaflets, I think that everyone now understands that this Government have gone too far and too fast.
Graham Evans (Weaver Vale) (Con)
It is a pleasure to follow the hon. Member for Wirral South (Alison McGovern). It was interesting to hear what she had to say about James Callaghan. Growing up on a south Manchester council estate during the Labour years is one reason why I am on the Government Benches and not on the Opposition Benches. Callaghan’s was a complacent Government who were totally out of touch; as we all know, he was replaced by a certain Margaret Thatcher.
I rise to support the Gracious Speech, and I am pleased to be able to make a short speech on the cost of living and people’s ability to save for their retirement. When we consider the nature of our roles in this place, it is extraordinary to look at our society now and in the future, as no real reform to pensions has been made in generations. The world around us has changed so much and our expectations of living standards and life expectancy exceed anything that could have been imagined when the first state pension of five shillings for those over 70 was introduced in 1909—in the famous “People’s Budget” introduced by the then Liberal Government. The pension age remained at 70 until 1928, when the Conservative Government under Stanley Baldwin reduced it to 65. Conservative Governments have always been reforming Governments, particularly when it comes to pensions. Back then, there were limits on what one’s private income could be and having too much furniture could prevent people from being eligible for the state pension.
This House has tried time and again to keep pace with changes to the average person’s working life, but instead of there being a clear, logical plan to make sure that every person in this country can look to a retirement where there is certainty and continuity, the issue has become complicated and confusing. As the relative worth of the basic state pension has dropped, additional payments have been tacked on, which have led to a generation heading to retirement age without knowing what to expect from their pensions, how they need to save or what the cost of living will be.
The increased dependence on means testing, with all the complications that result from it, has meant that a third of pensioners do not claim the pension credit to which they are entitled because they have not received the information they need. That is not to say that Governments have not tried to take steps to reach them, but the confusing nature of eligibility means that many people simply have no idea of what they are entitled to receive. Some of the criteria for eligibility may seem just as odd as the furniture requirement of the 1909 state pension. What is clear, however, is that when the safety net fails to support the most vulnerable, we know something must be done.
Equally, there is no such thing as a job for life. I remember growing up in a south Manchester council estate in the 1970s. My neighbourhood had three industries—the textile industry, the aerospace industry and the growing pharmaceutical industry—and most people worked within them. Forty years later, there is no textile industry, there is no aerospace industry and the pharmaceutical industry is consolidating by moving abroad. That means communities have to reinvent themselves, just as we as individuals have to reinvent ourselves and just as our country has to reinvent itself to compete in a highly competitive 21st century world.
With the rise of new technologies, we should be encouraging entrepreneurs to take their own initiative and build their own businesses. That is why I welcome the inclusion of the self-employed in these reforms, based on national insurance contributions. We can thus encourage business and growth, while guaranteeing a pension for those young entrepreneurs as well.
These reforms are not about our future, but are about our children’s future—and, indeed, our children’s children’s future. We are setting up a system whereby this country’s under-25s will have the security of knowing exactly what to expect from their state pension. They are safe in the knowledge that the new, single-tier pension will be uprated in accordance with higher earnings and will always be above the escalating cost of living. Government Members are safe in the knowledge that we acted in the national interest, took the long-term view and are making the big changes necessary to secure our children’s future. That is why I welcome the Queen’s Speech and the underpinning objective of this Government—that it always pays to work and it always pays to save.
Huw Irranca-Davies (Ogmore) (Lab)
It is a delight to speak in this Queen’s Speech debate, focusing on the cost of living. It is also a delight to follow the hon. Member for Weaver Vale (Graham Evans), who referred back to sunny Jim Callaghan, who was a Cardiff MP. I would like to pick up on the hon. Gentleman’s theme of pensions. He says that what happened under sunny Jim and subsequently made him end up on the Conservative side of the House. One of the reasons for my ending up on the Labour Benches was the fact that before I came here in 1997, the state pension was £64 and there were searing, scandalous levels of pensioner poverty. I say to the hon. Gentleman, with all due respect, that it was clear that something had gone horrendously wrong when people were literally dying of hypothermia in their homes. We do not see that nowadays, and it is something to which we cannot return.
As my right hon. Friend the Leader of the Opposition has said, the pension reforms that will introduce a more contributory basis are very welcome. It is good that it will be possible to lift everyone out of means-testing so that people can have what should be theirs as of right, including carers, and mothers can stay at home and contribute to family life. However, when Labour came to office we responded to a very real crisis in the country.
Earlier today, a Member asked my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) what Nye Bevan would say about something. Everyone goes back to Nye Bevan quotations: what would Nye Bevan be saying if he were speaking here today? There is a tremendous panoply of such quotations, but I recall that when his party was in opposition he said, facing the then Prime Minister across the Dispatch Box,
“The Prime Minister has an absolute genius for putting flamboyant labels on empty luggage.”—[Official Report, 3 November 1959; Vol. 612, c. 870.]
That is what this Queen’s Speech is. It is indeed a flamboyant label—it is the Queen’s Speech—but the Queen is travelling very light indeed in the new parliamentary Session.
Alison McGovern
While we are wondering what the great Nye Bevan might have said, may I ask my hon. Friend whether he thinks that, if Nye Bevan were around today, he might have said “Vote Labour”?
Huw Irranca-Davies
Nothing but, and never anything else!
I should have liked to see, in the rather light luggage that we are carrying, a consumers Bill to tackle rising energy costs, train fares and so forth. I should have liked to see a housing Bill that would take action against the real scandal in housing: rogue landlords and extortionate fees and charges in the private rented sector. At present, when people come to my constituency office and complain about that, I have to say that we can do little about it.
The Bill that I should really have liked to see, however, is a jobs Bill that would have given the long-term unemployed a duty to go to work, but would also have guaranteed that jobs would be there for them. That would have been a good way to tackle an unemployment rate of 2.56 million—or whatever the figure is now—and the massive youth unemployment that we see in my local communities.
Let me make a point that I suspect Nye Bevan would have made if he were here today. Let me give the House a reality check. For many people in my constituency—not all of them, because some are weathering the storm very well—the main problem is under-employment. They cannot secure the hours of work that they want so that they can put food on the table. Wage reductions are forced on them, or they have to accept them because of the economic climate.
I had thought that the scandal of zero-hour contracts had disappeared a decade ago, but they are back. People are being told “We will pay you when you are on the till; but then you must go home and sit in a corner, and we will pay you when a customer comes through the door again.” It is an utter scandal. We did not crack down sufficiently on the abuse of the national minimum wage ourselves when we were in government, but my goodness, we need to crack down on it now. Yes, we are seeing jobs being created, but my goodness, we are seeing jobs being lost.
A Government Member of the House of Lords, who claims that he was misreported, recently said, in effect—in the context of that long litany of problems, such as the driving down of pay and conditions—that this was a good time for someone to take the opportunity presented by those problems and set up a business, because it could now be done on the cheap. Let me say this to Government Members as well as those on the Opposition Benches: yes, let us encourage start-up enterprises—we rely on small and medium-sized enterprises in this country—but let us not do it on the backs of others. Let us ensure that people are properly rewarded. Let us consider those who, if they had the right jobs and the right pay in their hands, would be spending money like there was no tomorrow, because they would actually have to.
Andrew Gwynne
Is it not an absolute scandal that since the Work programme was introduced long-term youth unemployment in this country has risen by 355%? That is disgraceful, is it not?
Huw Irranca-Davies
It is an absolute scandal, and if we had a Labour Government now, that would be on the front page of the papers every single day—and it should be, because that is the real scandal. We all want to see people in jobs, so let us get them those jobs and put them into those jobs. We can attach conditionality to welfare to ensure that they take those jobs if they have been unemployed, but give them the jobs, for goodness’ sake.
A Welsh Government study published in February estimates that the benefits changes—and two thirds of the people affected are in work—will suck nearly £600 million out of the Welsh economy in 2014-15. The impact will be felt not only on wages and standards of living, but on public health, on levels of debt—thousands of people must now be flooding through MPs’ constituency offices every week—and on overcrowding and housing; there will also be an increased demand for emergency bail-outs and emergency services. It really is a tragedy.
Although we were not on track—we were slightly slipping—Labour in government lifted 1 million children out of poverty. Unsurprisingly, the Child Poverty Action Group has already forecast that 1 million children will be put back into poverty because of the benefits changes. Not only are Labour Members giving this message, but the Institute for Fiscal Studies, the Rowntree Trust and others are repeating it. Everyone is saying that we are going backwards at a rate of knots.
In debates in this Chamber, Members of Parliament have a duty to stand up not only for people in their constituencies who are managing, but for those who are suffering. I will finish with a quote, because what we should be doing today is discussing the cost of living and what is missing from this very light Queen’s Speech; Nye Bevan said:
“This is my truth, tell me yours.”
This is my truth, and it is the truth for my constituents. In all of this debate, all the good things being applauded by the Government Members are not being seen by my constituents, who are struggling. They are struggling in food banks and struggling to pay the bills—it is not everyone, but it is a large and growing proportion. Can we not work together to deal with that, as well as with all the good things that the Government Members have been applauding?
Richard Graham (Gloucester) (Con)
It is always a pleasure to follow the hon. Member for Ogmore (Huw Irranca-Davies), who reminds us of the quality of rhetoric from Wales.
I welcome the Queen’s Speech because, above all, it focuses on the core issues that will make a real difference to the cost of living for my constituents. Let me quickly highlight four key points. First, the National Insurance Contributions Bill will, through the employment allowance, provide £2,000 and should therefore eliminate entirely national insurance bills for 450,000 small businesses throughout the country, encouraging them, and, above all, small employers in my city, to take on more employees. The hon. Members for Ogmore and for Denton and Reddish (Andrew Gwynne) commented on the absence of jobs, but let us not forget that 750,000 more people are in work today than there were at the time of the last general election. Let us hope that there will be more after the National Insurance Contributions Bill takes effect.
Secondly, the Immigration Bill will ensure the deportation of dangerous foreign-national criminals, with appeals only after they have been deported, and will prevent immigrants from having access to public services to which they are not entitled. As Lord Mandelson said yesterday, Labour’s overseas search parties for immigrants meant that
“the entry to the labour market of many people of non-British origin is hard for people who are finding it very difficult to find jobs”.
The hon. Members for Ogmore and for Denton and Reddish should reflect on those comments.
Thirdly, we are all agreed that the cost of energy has risen significantly and is a hard burden for many poor and older constituents especially, and the Energy Bill will enable all our constituents to have clearer information and get on to the best energy tariff. That will be a significant and necessary achievement to help them combat the rising costs of living.
Fourthly, I turn to pensions; I declare an interest as chair of the all-party group on pensions. I absolutely support the Pensions Bill’s new flat rate from April 2016. Above all, it will reward women who took time out of the workplace to look after their children and will now, rightly, get a full state pension at a much higher rate than the basic state pension today.
Lastly, there is the Care Bill, which will guarantee that none our constituents will have to sell their homes during their lifetimes and puts a cap for the first time on the cost of care. Many of us who have had parents with dementia, for example, realise how difficult that situation can be.
I now give way to the hon. Member for Oldham East and Saddleworth (Debbie Abrahams).
Debbie Abrahams
I want to ask the hon. Gentleman whether he is aware that the employment rate is lower now than in 2008; that relates to a remark he made earlier.
Richard Graham
I am afraid that I do not share that view at all. The statistics are clear—there is less unemployment now than there was.
Jobs, immigration, energy, pensions and care—those are the core themes of the Queen’s Speech and they address issues that need to be addressed in tough times for all our constituents.
Let me now share with the House some of the journey that my city has gone through in the past few years. During new Labour’s time in government, 6,000 business jobs were wiped out in my city of Gloucester. The symbol of the city’s failure were the many hectares of wasteland at its entrance, known as the railway triangle. Cheltenham and Gloucester, a well known and respected former building society, was a casualty of the disastrous Lloyds-HBOS merger, which was encouraged, if not engineered, by the previous Government. One of our secondary schools, Bishops college, sunk to having the second worst GCSE results in the country. Our specialist engineering training company was on its knees, with only 25 apprentices a year. Perhaps saddest of all was the closure of the profitable Kingsholm post office, which meant that 500 pensioners had to walk one and a half miles to collect their pensions.
Today, our businesses are in much better shape. The independent Dupont survey shows that in 2012 Gloucester was having its fastest ever growth in new businesses. Our manufacturers are thriving and expanding. Gloucestershire Engineering Training is in new premises, with four times as many apprentices, and the new railway triangle light industrial park is on schedule to provide up to 1,000 new jobs, with half starting later this year.
Most important of all, perhaps, is the new Gloucester academy, a merger of two underperforming schools improving every term and later this year moving into new buildings funded by a £15 million Government grant. That demonstrates what investment in education, our young and aspiration, and giving everyone the chance to succeed, can achieve.
Let me not pretend that everything in the country or my city of Gloucester is rosy. There is much regeneration left to carry out, especially in the city centre and Blackfriars. However, we have exciting plans and ideas to take forward. I would like our social housing manager, Gloucester City Homes, to play a role in housing regeneration and to fund new social housing. The help of the Department for Communities and Local Government and the Treasury in debt write-off is critical. We have traffic issues at the C and G roundabout off Barnett way and our application to the Department for Transport for pinch-point funding is vital. Above all, we have to continue to help people get into jobs. That is the crucial task that we are focused on. As I mentioned earlier, I will host my seventh jobs fair this Thursday.
It is true that some good things happened under new Labour. But one that was disastrous for many of my constituents was the doubling of council tax. They are now paying more than £700 more than in 1997. We have frozen council tax for three years, yet at the end of the process the Leader of the Opposition has said simply that freezing council tax involves a small amount of money that will not make a huge amount of difference. A £700 increase represents a huge amount of money to my constituents.
The right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) said that we needed welfare reform, but what welfare reform do the Opposition believe in? They have opposed every welfare reform that the Government have proposed. By contrast, the Government are focused on rebuilding the economy, stimulating businesses to create jobs, cutting back Labour’s fuel duty by £5 a tank, lowering income tax for 44,000 of my constituents and taking almost 4,000 out of tax altogether. They are introducing free care for 1,200 two-year-olds in my city later this year.
We are tackling living costs in difficult times, rebuilding public finances, mending the economy, raising skill levels and encouraging more apprenticeships. That is the right way forward. We must keep the focus on helping our constituents and strengthening our country. I welcome the measures in the Queen’s Speech.
Madam Deputy Speaker (Dawn Primarolo)
Order. I inform the House that eight Members still wish to speak in this debate and we have to start the wind-ups at 20 minutes to 7. That means that people should speak for six minutes or less, which includes any interventions they take. Otherwise some Members will be unable to speak despite the fact that they have sat in the Chamber all afternoon.
Nic Dakin (Scunthorpe) (Lab)
It is a real pleasure to follow the hon. Member for Gloucester (Richard Graham), whose optimism I greatly admire. I respect him for recognising that not everything in the garden is as rosy as he sometimes sees it.
Many people in my area are struggling to make ends meet as the economy continues to flatline. Having inherited an economy with slow but steady growth, the Government immediately took action to depress demand and deepen the recession by hiking VAT, cutting services and taking spend out of the economy. Sadly, I see nothing in this Queen’s Speech to put more demand back into the economy. MPs in all parts of the House are saying, like my hon. Friend the Member for Lewisham West and Penge (Jim Dowd), that it is a thin Queen’s Speech, the thinnest they can remember—light luggage, as my hon. Friend the Member for Ogmore (Huw Irranca-Davies) put it. It certainly looks pretty anorexic to me. There is nothing on tackling the crisis in youth unemployment, nothing on housing when new home completions are now at their lowest level since the 1920s, nothing to stop the undercutting of wages by tackling the exploitation of immigrant labour, nothing to back small businesses struggling to get credit, and nothing on living standards while families see the costs of energy bills and train fares rise out of their reach.
The Children’s Society draws attention to the Government’s own impact assessment estimating that as a result of not uprating benefits in line with inflation, 200,000 more children will be pushed into poverty, including 100,000 in working families. This should not be happening in one of the richest countries in the world in the 21st century.
Lindsay Roy (Glenrothes) (Lab)
Would my hon. Friend like to add that there is nothing to tackle the mushrooming of food banks, which is calamitous in a society such as ours?
Nic Dakin
I was about to come to food banks. My hon. Friend is exactly right. There were no food banks in the Scunthorpe area when I was elected, and now three have opened up across north Lincolnshire. That illustrates the needs of people locally, and it is matched across the country. Although we recognise the excellent work that volunteers and trusts do, it is a shame on us that it is necessary in the 21st century in one of the richest countries in the world.
Some 1.2 million young people living in poverty do not receive free school meals because their parents are in work. The Queen’s Speech should have taken the opportunity to ensure that everybody who needs a free school meal can have one, including 16 to 18-year-olds who attend colleges and are not eligible for free school meals even though they would otherwise meet the criteria. That is a huge shame, especially when the scrapping of education maintenance allowance has made life so much more difficult for those 16 to 18-year-olds in continuing their education.
This year, according to the debt charity StepChange, there has been a dramatic rise in the number of families seeking help with their utility bills, council tax and rent arrears. Over a third of those seeking help from the charity are in arrears on at least one household bill. That is staggering. At the same time, the charity has seen the number of people seeking help with payday loans double. In 2012, it helped 36,413 people with payday loan debts, almost 20,000 more than in 2011. The payday loan debts of those seeking help from StepChange were, on average, £1,657, up from £1,267 the previous year. One hopes that the consumer rights Bill announced in the Queen’s Speech will take action to tackle the outrage caused by the payday loan industry. It should also provide an opportunity to tackle energy prices, rail fares and unsolicited phone calls and text messages from companies up and down the land. All those measures should be included in the Bill, and I hope they will be.
In the meantime, the capacity of trading standards bodies throughout the country to tackle such things locally has been decimated, which is a cause of real concern. There is also chaos as a result of how the Government have dealt with Consumer Focus: they scrapped it three times before appearing to rebadge it recently as Consumer Future. I hope that the consumer rights Bill will tackle the issues raised by Which? and other organisations that know what they are talking about, such as competition abuses and damages.
I will finish now because, despite what Madam Deputy Speaker said, I appear to have been given an extra minute after taking an intervention. All in all, the consumer rights Bill gives us an opportunity to make much needed changes as soon as possible.
Pat Glass (North West Durham) (Lab)
I have sat through the entire debate and have been increasingly frustrated by the contrast between the contributions made by Members from opposing sides of the House. I am genuinely delighted at what the hon. Member for Gloucester (Richard Graham) had to say about how well things are going in his constituency, but that contrasts starkly with what is happening in constituencies such as mine. Surely a Government should govern for all the people, not just some, and improvements in one area should not be made at the expense of others.
I want to discuss the impact of the Government’s failure to get growth moving and to create jobs. In particular, I want to discuss the impact of the rising cost of energy on people’s lives. My hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) referred to a report in last week’s Observer which said that Lord Young, a former Cabinet Minister and now the Prime Minister’s adviser on enterprise, has told the Cabinet that the current economic downturn, which is causing so much pain and damage to people in this country, is an excellent time for businesses to boost profits, because labour is cheap and can be driven down further.
Pat Glass
No, I am not going to take interventions.
Those comments came from a man who has already been forced to resign once for downplaying the impact of the recession on people and who, it appears, only opens his mouth to change feet. I want to tell Lord Young and his ilk about the reality of a recession and the effect that it and the policy of driving down wages has on the lives of real people.
The gap in wages in the north-east is growing. Weekly wages have fallen on average by £23 a week and by almost £2,000 a year at a time when all other costs are increasing. I have spoken many times in this Chamber about energy prices and their impact on people’s lives and about how the Government are systematically failing to put in place safeguards to prevent the big six energy companies from manipulating the market to achieve massive profits at the expense of the consumer and at virtually no risk to themselves.
Last October, the Prime Minister, under pressure, promised that the Energy Bill would force energy companies to offer the lowest tariff to all their customers, but I have looked carefully at the Bill and cannot see that it delivers anything like that. I was amazed to hear the hon. Member for Halesowen and Rowley Regis (James Morris) speak positively about it. We have clearly not been reading the same Bill.
The Energy Bill was hailed by the Government as a new way forward that would reform the market, deliver a better deal for customers and curb energy company profits, but my reading of it is that it fails on all those objectives. It fails to put in place safeguards to prevent energy companies from manipulating the market to achieve massive profits at the expense of consumers. In fact, the Bill’s proposed energy auction gives yet more opportunities for energy companies to manipulate the market by decommissioning and mothballing stock, holding it back to create shortages and then demanding greater prices at future auctions. That is happening now; we just have to look at Scottish and Southern Energy to see it mothballing stock for those purposes. It is wrong, it is blackmail and it will hit consumers desperately hard. The Government know that it is happening and are doing nothing to prevent it.
The Bill will fail to prevent situations such as the one that occurred last year, when the big six companies followed one another in announcing huge increases in energy prices. British Gas went first, increasing its gas prices by 18% and its electricity prices by 16%. It was quickly followed by Scottish and Southern and the other four. British Gas attempted to defend its massive price increases by saying that the bills were driven up because 50% of its energy is bought on the international wholesale market and it had been selling it at a loss to consumers in this country. That is simply not true. We all accept that capital has to make a fair return on its investment, but this is not a fair return; it is daylight robbery of the British consumer while the Government stand back and do less than nothing. Some even argue that the Energy Bill will make it easier for energy companies to rip off customers.
I will finish because others want to speak. I simply want to say that the Government’s record on energy is not good and the Energy Bill will make the situation worse. It will make energy companies richer and consumers poorer. I ask the Government to look at it again while they have the opportunity. Energy companies are using blackmail and the Government have the ability to stop it.
Mr Iain McKenzie (Inverclyde) (Lab)
As we have heard throughout this debate, times are hard and the cost of living across the country seems to keep rising. The Queen’s Speech is further evidence, as if we needed it, that the Government are increasingly incapable of making positive changes to the cost of living for hard-pressed families.
Prices are still going up faster than wages for those who are fortunate enough to be employed and we are all aware of the unacceptable levels of unemployment across the UK. Yet we continue to witness banks paying out bonuses while families struggle. It is therefore not surprising that most people feel that nothing is changing for them, and the Government seem intent on following a failing economic plan—a plan that, bizarrely, asks millions of families and pensioners to pay more, while 14,000 millionaires are given a tax cut of more than £40,000 each. Many of my constituents find that quite unbelievable in the face of plummeting living standards for most people in the country.
Across my constituency, families, pensioners and businesses are struggling. They have told me so time and again. People tell me of their shock during their weekly visit to the supermarket, when they find less in their basket and more money going into the till. I witness more and more families having to go to greater lengths to keep within their budget for food, desperately shopping around to track down bargains on the most basic of food items. Those who cannot make it from week to week have the food banks. Frighteningly, the number of people going to food banks continues to rise.
Families are losing their tax credits. Some 84,000 families in Scotland are set to lose an average of £511 a year. That is money that they would have spent in the local economy on essentials such as food and clothing. Families across Scotland will lose £43 million a year from cuts to tax credits. That is an enormous amount to take out of the Scottish economy. Fuel bills are horrendous. An increasing number of people are having to choose between food and fuel because they cannot afford both. Families in this country are facing an unprecedented assault on their living standards.
The granny tax will hit hundreds of thousands of pensioners in the UK and 400,000 pensioners in Scotland. Pensioners will face an average income tax hike of £83 a year by 2015-16. We all know the impact that will have.
To date, there is little in the Government’s programme that will help those who need it most. It has been pain all the way, hurting working people, families, pensioners and even the disabled. They are all finding it difficult to make ends meet. Since the last election, average energy bills have gone up by £300 a year, and the Government need to address the soaring cost of living, particularly rising electricity prices. Families are under severe pressure to afford the basics in life, such as heating their home. During the past year most bills have ballooned, such as gas, which is up by 17%, electricity, which is up by 10%, and food, which is up by 3%, and it is still too expensive to fill up a car with fuel.
If the Government do not take action, what is the alternative? It is debt. Debt experts warn that many families are facing extreme difficulty in managing their finances, and that they have seen an increase in the number of people coming to citizens advice bureau on the subject of debt. As I have said before, the Government should help families immediately by taking measures that would address the cost of living crisis and stop rip-off prices for power and fuel.
Labour supports measures that would help families and offer practical, affordable ways to help people right now and get our economy moving again. The country needs a Government who are in touch with families during the recession, and the Government clearly need to make different choices and set different priorities. A start would be to stop handing over £40,000 tax cuts to millionaires and to stop the raid on families’ tax credits by reversing the pension tax break for those earning more than £150,000. They should help pensioners by forcing energy firms to cut gas and electricity bills for the 4 million over-75s, and they should use the money raised by a tax on bank bonuses to create real jobs with a living wage, which would provide young people with a decent standard of living.
This country needs a change in economic direction now if it is to raise the living standards of hard-working families. For many people in the UK, things have got worse, not better in the past three years. Last Wednesday, the Government set out their programme for the coming year and told us what we already knew: that they are a tired Government who have run out of ideas for working people, young people, families, pensioners and even the disabled—in fact, it would seem, for everyone except millionaires.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Last week’s Queen’s Speech was delivered at a time when most people’s wages are being frozen or cut and both measures of inflation—the consumer prices index and the retail prices index—are above the Bank of England’s target of 2%. The sad fact is that many people, in work as well as out of work, are struggling. We have heard examples from my colleagues, and I have regularly had people in my surgeries in tears at their plight. Last week, I had somebody who had just had a heart bypass operation and had been made homeless. She had been living on her in-laws’ couch for the past three months. Such is the plight of many people across the country.
With energy prices increasing by 20% since 2010, nearly 8,000 households in my constituency—nearly one in four—live in fuel poverty. Given that there was no change in economic and social policy in the Queen’s Speech, the situation is set to get worse. Nationally, it is estimated that by 2016, 9 million households will be living in fuel poverty. The knock-on effects will be felt particularly by our health service and social carers.
My local Oldham council is doing all that it can to address the problem, through the fair energy campaign. It is getting households to sign up to a collective energy deal, using people power to negotiate with energy companies for the cheapest energy tariff for consumers. That contrasts starkly with what the Government are doing. We know that the Warm Front initiative, which we introduced many years ago, closed in January, and the new scheme that the Government have introduced provides less than half the support that Labour provided. On top of that, the Government have cut the winter fuel payment for older people by £50 for the over-60s and £100 for the over-80s, in the full knowledge that every winter tens of thousands of older people become seriously ill or die as a result of the cold. In 2010-11, there were 25,000 excess winter deaths just as a result of cold, and there are fears that the number will be larger as energy prices rise.
The warm home discount scheme, which is meant to help households at risk of fuel poverty, has been shown to help only a fraction of those intended—25,000 families, instead of the 800,000 it was supposed to help. As some of my constituents have already discovered, the Government’s green deal is another white elephant because the interest payments alone are set to exceed the cost of the energy efficiency measures they are meant to support.
I wish to raise a couple of other points in the few minutes remaining, the first of which is food banks. A number of colleagues have already mentioned increased demand for food banks, and the Trussell Trust recently reported that demand has exceeded its estimations by 170% since last year. My constituency of Oldham has had a food bank for the first time in its history. In the past three months, demand exceeded that of all the previous year, and it is set to get worse. Figures I have just received indicate that the number of people accessing food banks has increased by nearly 100 times in the past two years. When I visited my food bank recently, I was told that it is desperately in need of people to contribute, and that is the sort of thing we have to contend with in different ways.
Debbie Abrahams
I am sorry but I cannot.
A week or so ago I took up Oxfam’s Live Below the Line challenge, living on £1 of food a day. From my experience, that makes it incredibly tough not only to get the necessary nutrition, but to get food that will sustain someone for the day—I certainly will not be eating baked beans for a while.
With the benefit changes introduced last month the situation is expected to get much worse. In addition to the bedroom tax, the abolition of crisis loans for living expenses and other so-called reforms of social security are driven by the Government’s ideologically led cuts. Ministers are fond of making unsubstantiated and misleading claims about the effects of their so-called welfare reforms or the level of health spending, but they are far more reticent about data that reveal the cumulative effect of their changes to tax, tax credits and benefits, and which mean—as I mentioned earlier—that the 40% lowest-income households are worse off. The average household is estimated to lose £891 per year, with millionaires gaining an average of £100,000. There is nothing fair about that.
The Queen’s Speech mentions the need to ensure that every child has the best start in life, but how can increasing absolute child poverty by 55% between 2010 and 2020, and relative child poverty by 34%, be said in any way to give children the best start in life? More than 1.1 million children are set to be living in poverty by 2020, which is completely unfair—
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
As a new Member in my first Queen’s Speech debate, I was naively looking forward to having a busy and meaty legislative programme to discuss. How wrong I was. Instead, we have a Queen’s Speech that clearly demonstrates the disagreement, division, lack of vision and lack of ambition of this sorry Government. Not only are they running out of business, they are running out of reasons to exist.
Many of my constituents will be looking at the chaos over Europe this week and asking why the Government are having to spend so much time fixing divisions on their own Benches, instead of fixing the stagnating economy and taking action on jobs, prices, and the concerns of small businesses. They will be asking why the Government are not taking action over the increasing squeeze, not only on the poorest and most vulnerable in our society, but on hard-working families across my constituency and the country, who are increasingly struggling to get by.
Figures from the House of Commons Library show that wages in Wales have fallen by £1,700 since 2010—the biggest fall among the UK nations and equivalent to an 8% cut. Real wages are forecast to decline even further due to rising inflation over the coming months. The consequence, as Office for National Statistics figures show, is that Wales has the lowest household disposable income of any UK nation.
That is why my constituents will be amazed to have heard Lord Freud’s evidence to the Select Committee on Welsh Affairs this morning. When asked how my constituents and people throughout Wales should pay the bedroom tax, he said they should go out and make some money. How out of touch can he be? People in my constituency work hard, but many find well-paid work or any work at all difficult to find, thanks to the Government’s stagnating economy and the slowest recovery for 100 years.
People are not only struggling with low wages; many find it extremely difficult to cope with rising transport, food, fuel and energy bills. Some 420,000 families are in fuel poverty in Wales—I am sorry to say that the proportion is higher than in any English region—and yet the Minister of State, Department for Environment, Food and Rural Affairs told a Committee a few months ago that food poverty was not a useful concept, which was extraordinary.
The Secretary of State for Energy and Climate Change was unwilling to make a causal link between Government policies and food banks, but I will make that case and underpin it with evidence. Food banks in Wales trebled in the past year, and their use has increased by 118%. A survey by the Trussell Trust, which asked people why they accessed food banks, revealed that 45% did so because of benefit changes and delays; nearly 20% did so because they were on a low income; and one in 10 did so because they were in debt. My hon. Friend the Member for Swansea West (Geraint Davies) spoke earlier of the terrible increase in the use of payday loans. In Wales, from 2007 to 2012, payday loans rose from 17,000 to 30,000. What a sorry indictment.
Those statistics are reflected in the stories of constituents who come to see me in my surgeries and whom I meet on the streets of Cardiff and Penarth every week. One constituent was subjected to a break-in the other night. I asked her about security lighting and putting on lights to deter would-be burglars. She told me that she often had to sit in the dark to save on her electricity bills. A middle-aged man hit by the bedroom tax told me he would consider stealing food from the shops. Another constituent was looking hard for work, but had to cut back on their travel, fuel and internet usage at exactly the wrong moment in their job search.
The tragedy is that we could have had an alternative Queen’s Speech—one with a jobs Bill featuring a jobs guarantee; tough measures on energy prices; and measures properly to enforce the minimum wage and stop the undercutting of wages. The Government could have focused on the concerns of people throughout the country, and not on divisions on the Government Benches.
I shall conclude on one other disappointment with the Queen’s Speech. In 2010, the Prime Minister promised that he would not balance the books on the backs of the poor. Thousands of campaigners up and down the country are looking to him to hold to that promise. Rob Green, from my constituency, works with Results. He makes the case forcefully for the Government continuing their investment in tackling hunger and under-nutrition in the poorest countries of our world. Where is the 0.7% Bill in the Queen’s Speech? Why has the Department for International Development underspent by 8% this year? Why is No. 10 briefing sweet words to disgruntled Back Benchers via the Daily Mail that the aid promise will be met, but only through a cash-grab by other Departments? What do the Liberal Democrats have to say for themselves? They back the Government, but that was a key promise of theirs. Hollow promises, smoke and illusions are just not good enough. Like the rest of the Queen’s Speech, that failure is symptomatic of a weak Prime Minister, a weak Deputy Prime Minister and a weak and discredited Government.
Katy Clark (North Ayrshire and Arran) (Lab)
It is a pleasure to follow my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty). Oppositions often say that the Queen’s Speech is a missed opportunity. As has been said many times in the debate, there is not a huge amount, or a huge amount of legislation, in the Queen’s Speech. My view is that there is a huge need for Government action, whether by legislation or other means.
Many Government Members are resistant to the state having a role in solving the challenges we face. They often say that they wish to roll back the state, but the challenges that we face are so massive that only state intervention can get us out of our economic predicament. Anyone listening to speeches by Government Members would think that we do not have many problems, but the Office for Budget Responsibility has downgraded the growth figures in every Budget that the Chancellor has given, and we have appalling growth figures—if we have any growth at all. We are seeing real cuts in living standards, with real wages down £1,700 since the election. We are living through the longest lasting slump since the 19th century. The economy is flatlining and we have a real problem, particularly in constituencies such as the one I represent, with youth unemployment and long-term unemployment.
In the past year, pay has gone up by 1.2% while prices have increased by 2.8%. I am pleased that so many speeches by my hon. Friends have focused on the real challenges that ordinary people face. For example, over the past five years the cost of food has increased by 30%. Energy bills have increased by more than £300 since the Government came to power—and I use the words “came to power” rather than elected, because neither coalition party was elected with a mandate to do what the coalition Government have been doing over the past three years. Bus fares have gone up by 32% in the past five years, while the operating profits of bus companies have increased by more than 7% each year. I wish the Queen’s Speech had contained legislation to address some of those issues. We should regulate bus services and bring them back under public ownership, because the current model simply is not working. Train fares have also risen nearly three times faster than wages since the recession. All those factors are having a major effect on the economy.
Britain has the second largest share of low-paid workers in the developed world. Only the United States is ahead of us. The Resolution Foundation estimates that if employers paid their work force the living wage, the Government would save £3.6 billion a year. The number of people sleeping rough has gone up by more than 30% in the past two years and 75,000 children were homeless last Christmas. The Queen’s Speech addresses none of those issues.
I am on the Business, Innovation and Skills Committee, and there is a cross-party consensus that we want to see our banks lending to business, but we all know that local businesses in our communities cannot get loans. Lending to business is still falling, when we all know that unless we invest, we will not get growth. The Financial Services (Banking Reform) Bill will do nothing to address those issues. Companies in Ayrshire, of all places, are now going abroad to bank, because our banks will not respond to the need.
The Queen’s Speech should have been about jobs and growth. Instead, the political debate is dominated by an internal political squabble in the Tory party about a referendum on Europe, and no doubt we will hear more about that tomorrow. Many of us will remember stock markets tumbling and the near collapse of the banking system in 2008. Few in this country would have thought at that time that the response to that challenge, and the real predicament we face now, would be to make the rich richer and to attack the living standards of the poorest in the country. These policies of austerity are not restricted to the UK, but wherever they are being implemented they are not working. We are seeing real cuts in the living standards of ordinary people in this country.
There has been much discussion in this Chamber about public sector cuts and the Government’s so-called welfare reforms. There is no doubt that those policies are having a big effect on the unemployed and those who stay at home, but they are also having a massive effect on those who work, and living standards are plummeting. Government Members say that they want to see people stand on their own two feet, but to do that people have to have jobs to go to, with pay that they can live on. If we pursue the policies outlined in the Queen’s Speech, that will not happen; the rich will continue to get richer and the poor will get poorer.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I now have to bring in a five-minute limit so that I am able to call those on the Front Bench at 6.40 pm.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
It is a pleasure to follow my hon. Friend the Member for North Ayrshire and Arran (Katy Clark) in this important debate on the Gracious Speech. You will of course keep me in order, Mr Deputy Speaker, if it is not appropriate to call it the Government’s Queen’s Speech, given that so many Government Members seem already to be regretting it. They say that success has many parents, but failure is an orphan. Given the number of Government Members who are distancing themselves from it, it seems that the continued failure of the Government to deliver on living standards is absolutely certain, and it is about living standards that I wish to speak.
It was reported this week that when policy advisers in No. 10 were asked what was keeping them awake at night they said, “School fees.” Now, I know what keeps far too many people in Newcastle awake at night: the cost of living. The TUC recently compared actual wages in 2012 with what they would have been had they increased in line with inflation, to discover a localised pay gap. In the north-east, it is more than £1,100 a year, or £23 a week. In Newcastle, it is £7 a week. Not much, some might think—a couple of café lattes, and nothing in comparison with the private school fees keeping the Ministers’ advisers awake. However, for those getting by it makes all the difference between security and despair. That is something the Government do not understand. Indeed, the Prime Minister’s adviser on enterprise thinks that this is an excellent time for businesses to boost their profits on the back of falling wages. Such crass comments highlight the fact that the Government are a narrow clique with no idea of the real issues facing real people.
The hon. Member for Hereford and South Herefordshire (Jesse Norman) said recently that the Prime Minister’s chumocracy should be made up of old Etonians, because they have a unique “commitment to public service” that is not found in other schools. It is the voices of those experiencing this unprecedented squeeze on living standards that should now be heard. Instead of blaming those struggling to get by for not having jobs that are not there, the Prime Minister should listen to what they have to say.
The Government argue that by attacking the public sector, giving tax breaks to millionaires and reducing tax credits for working people, we will liberate individual entrepreneurship. I can testify to the entrepreneurship of many Geordies. As the birthplace of the steam engine in the 19th century and ScreachTV in the 21st century, we have a long history of innovation. However, crushing poverty crushes creativity, as I know both from my own childhood and from my surgeries. When every waking moment is spent worrying about making it to the end of the week; when the electricity bill means borrowing to buy food—as one in 10 people in Newcastle have had to do; when 50p on a pound of margarine means not being able to afford the bus to the library to e-mail CVs to prospective employers; when the bedroom tax means that the kids are not able to stay and there is a worry about how they are growing up, then unleashing one’s own inner market forces is next to impossible.
If the Government had advisers with that kind of experience, they would not have produced a Queen’s Speech so devoid of help or hope for those working hard just to get by, and who need only a helping hand to succeed and thrive. The Prime Minister should overlook the accents of his old school tie and invite the hard working and struggling to write a new Queen’s Speech.
Mr Andy Slaughter (Hammersmith) (Lab)
Given the time, I shall confine my comments to the biggest cost-of-living issue facing my constituents, which is the cost of housing, an issue that illustrates just how out of touch this Government of millionaires are from the lives of ordinary people.
I said earlier in an intervention on my right hon. Friend the Member for Don Valley (Caroline Flint) that the average price of a house in my constituency was £650,000 and that renting a three-bedroom house would cost £800 a week. Well, it might as well be 10 times those figures—£6.5 million—because no one, not just people on benefits or low or average incomes, can afford them. No one can afford market housing in west London, unless they are a City or foreign investor, and yet Government policies are actually increasing prices, with an 8% rise in the last year. An independent study last week showed that the Help to Buy scheme could push up house prices by another 30% by the end of 2015.
At the same time, Shelter says that two thirds of Londoners are either falling behind or struggling to pay their rent. The estate agents, who love all this of course, say that prices are
“going like a steam train”,
while the National Housing Federation says:
“Rents will continue to rise in London until we start building enough affordable homes. That won’t happen while this Government spends over £100bn on housing benefit in five years but only £4.5bn on building new homes.”
I know which of those versions I prefer. We thus have policies actually fuelling the rise in house prices, the lowest number of housing starts since the 1920s, and a 68% cut in the number of affordable homes being built. This is not just neglect; these are active steps. In my constituency, 10% of affordable homes that become vacant are immediately sold off at market prices, while whole blocks of council flats are kept empty until private developers can take them over and develop them and whole estates are knocked down. Some 20,000 new homes will be built in Hammersmith and Fulham over the next 10 years, but not one will be affordable to local people.
I briefly left the debate earlier to talk to Jobcentre Plus, which is busy tracking down the 800 households in Hammersmith and Fulham whose incomes will be reduced by £100 or £150 a week, in many cases, because of the benefit cap being introduced. We have families being forced out of their homes, therefore, and hundreds of flats standing empty. At the same time, according to the results of a freedom of information inquiry I received today, 365 families are in bed-and-breakfast accommodation, costing local taxpayers £860,000 last year. The Government are not just out of touch; they are following quite extreme policies. How can they leave hundreds of good quality affordable homes standing empty, while, at huge cost to the taxpayer, putting families in bed-and-breakfast accommodation and forcing others out of their homes and out of London entirely?
My right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) made an excellent speech about the demonisation of migrant communities, which is another feature of the Queen’s Speech. Yesterday, the former Prime Minister, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), said this about the Conservative party:
“A party which was once pro-Europe is now anti-Europe, a party which was once anti-Powellite on immigration is now becoming very close to being Powellite on that issue. The party once for the welfare state now appears to be against it in so many aspects of the welfare state.”
That is how the Conservative party has changed within my lifetime, and there is no better illustration of that change from a mainstream to an extremist party—long before the rise of UKIP and completely unrestrained by the Liberal Democrats—and nothing bites deeper than the fact that the Government are no longer prepared to provide or invest in decent affordable homes for thousands of my constituents and millions of our fellow citizens across the country.
Hilary Benn (Leeds Central) (Lab)
I draw the House’s attention to my indirect interest, previously declared and recorded in Hansard.
We have had a good debate in which my right hon. Friend the Member for Don Valley (Caroline Flint) made a powerful and forensic opening speech, in sharp contrast to the contribution of the Secretary of State for Energy and Climate Change. By my reckoning, 40 Members have contributed to the debate. I suppose that traditionally one would say it has been a wide-ranging debate, but certainly that term has been given new meaning by some of the contributions we have heard today. The right hon. Member for Meriden (Mrs Spelman) referred to High Speed 2, and we heard about UKIP from my hon. Friends the Members for Lewisham West and Penge (Jim Dowd) and for Swansea West (Geraint Davies). We heard two very contrasting speeches on climate change from the hon. Member for Brighton, Pavilion (Caroline Lucas)—who is, I think, right; 400 parts per million is a significant moment—and from the hon. Member for Monmouth (David T. C. Davies), who railed against environmentalists in general.
The hon. Member for North East Somerset (Jacob Rees-Mogg) was, I think, at one point inviting us to send our tax contributions to him at home, but I do not think he will be very successful because he forgot to give us his address. We heard serious contributions on Syria from the hon. Members for New Forest East (Dr Lewis) and for Elmet and Rothwell (Alec Shelbrooke), as well as from the right hon. and learned Member for North East Fife (Sir Menzies Campbell), who also touched on Europe and said, rather plaintively, that if we undermined the credibility of our Prime Minister, we undermined the Government. I would simply observe that it seems to me that the Prime Minister is doing a pretty good job of that himself.
We have also heard powerful testimony about to the impact on living standards of what is happening at the moment, most notably from my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) who represents many people who are affected in that way and warned us of the dangers, especially in tough times, of those who would point the finger at others and try to blame them for their troubles.
We also heard strong speeches from my hon. Friends the Members for Feltham and Heston (Seema Malhotra), for Eltham (Clive Efford), for Newcastle upon Tyne Central (Chi Onwurah), for Newcastle upon Tyne North (Catherine McKinnell), for Blaydon (Mr Anderson), for South Down (Ms Ritchie), for Wirral South (Alison McGovern), for Ogmore (Huw Irranca-Davies), for Scunthorpe (Nic Dakin), for North West Durham (Pat Glass), for Inverclyde (Mr McKenzie), for Oldham East and Saddleworth (Debbie Abrahams), for Cardiff South and Penarth (Stephen Doughty) and for North Ayrshire and Arran (Katy Clark), all of whom spoke with feeling about the experience of their constituents, as did Conservative Members, particularly the hon. Members for Harlow (Robert Halfon) and for Halesowen and Rowley Regis (James Morris).
Given what we have heard, it is perhaps not surprising that there is a crisis of confidence in politics in this country. People are wondering if, as politicians, we have the answer. Are we on their side? Are we doing things to help make a difference? That is why there is a particular responsibility on Government to do the right things, to show that they are helping people in very difficult times. People want to see an effort being made and some action, even if all the problems cannot be solved immediately. It is precisely because of the absence from the Gracious Speech of any practical help with living standards—the “empty luggage” that my hon. Friend the Member for Ogmore described in quoting Nye Bevan—that we have tabled our amendment.
A number of Members referred to the housing crisis. We have had plenty of housing announcements over the last three years: 300 of them, and by my count four classed as major housing launches. If we look at the record, whether of starts or completions, we see that the story is the same: both are down. The rate of homeownership is falling and, as we have heard—particularly from my hon. Friends the Members for Hackney South and Shoreditch (Meg Hillier) and for Hammersmith (Mr Slaughter)—private rents have continued their relentless rise, made worse by some letting agents charging very high fees. On lettings agents, a redress scheme is welcome. I suppose that in the end the Minister for Housing realised that he could not argue with himself and against the points that he had made previously when calling for regulation. But redress helps only after one has been ripped off—we should be stopping it happening in the first place.
On housing supply, my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) and my hon. Friend the Member for Edinburgh East (Sheila Gilmore) made a powerful case, not least because of the economic benefit that would be felt, for house building. We have called for the proceeds of the 4G auction to be used to build 100,000 affordable homes. What has been the Government’s contribution? They have cut the affordable housing budget by 60 per cent. No wonder starts and completions are down.
There have been lots of promises, but precious few delivered. On the Help to Buy scheme, I said at the time that we welcomed steps that would make a difference, but the Treasury Select Committee was not terribly impressed by it, was it? It found the Chancellor’s argument—that it would lead to an improvement in supply—unconvincing. The Secretary of State was asked in the Budget debate who would be eligible and particularly whether foreign buyers would be able to benefit from the Help to Buy scheme. He could not have been clearer in his reply. He said:
“This scheme will not be available for foreign buyers; this is a scheme to help people from this country.”—[Official Report, 25 March 2013; Vol. 560, c. 1311.]
When my hon. Friend the Member for Glasgow North (Ann McKechin) and I both tabled a written question to the Secretary of State on this matter—in particular, asking whether foreign nationals from the EU would be eligible for assistance from the Help to Buy scheme—we did not get that straight answer. Instead, we got a reply that frankly could have been drafted by Sir Humphrey:
“In our approach to revising the rules on access to such schemes, we are carefully taking into account the restrictions and obligations that stem from EU directives. We will be making a further statement in due course on the steps we will be taking.”—[Official Report, 25 April 2013; Vol. 561, c. 1126W.]
That reply is eloquent, but as clear as mud.
I have a very simple question to put to the Secretary of State, and I will happily give way to enable him to answer it. Will EU nationals who have come to the UK to exercise their treaty rights be eligible for assistance from the Help to Buy scheme—yes or no? I will happily give way to him. [Interruption.] The reason I keep doing it is that the Secretary of State shows a remarkable propensity to be unable to answer the simplest of questions. If he cannot answer my question, I wonder whether the Minister for Housing can. [Interruption.] Perhaps even the planning Minister, who is so voluble, could come to the Dispatch Box and aid the House by giving a reply. Those watching will notice that there is no reply.
That brings me to the big question in this debate: are those with the broadest shoulders bearing the cost of dealing with the global crash, or is it those in society who have the least? A couple of weeks ago, I sat down with the hard-working staff at the local advice centre in Burmantofts in east Leeds to hear about the impact of the council tax benefit cuts and the bedroom tax. We talked about the estimated 41,000 people in Leeds who will be affected. There are eight constituencies in Leeds, but 30% of those 41,000 people live in one constituency, Leeds Central—12,600 of the least well-off families struggling to get by. What are the Government doing to help them? They are sending them letters telling them that they have to pay more council tax and letters telling them they have to pay higher rent, and that they must hand over £2.8 million from their pockets and purses to pay for those council tax bills and those rents. [Interruption.] The planning Minister finds that funny, but it is not very funny for my constituents who are in that situation.
What will be the consequences for those people? They will have less money to spend on food and heating and they will be at greater risk of ending up in debt to payday lenders or, even worse, loan sharks. There will also be rising council tax and rent arrears because, as the workers in the advice centre know better than almost anybody else, a lot of these people are desperate because they do not have the money. The Secretary of State for Energy and Climate Change said in his opening remarks that the Government were about protecting the vulnerable, but those are words that will ring very hollow with my constituents.
What the Government are doing to my constituents fails the basic test of fairness. It will not help their living standards. When someone says to them, “These are tough times; we have to make tough decisions,” I point out that the number of poor people being hit is 12,600, which is almost exactly the same as the number of millionaires—13,000—who will benefit from the cut in the top rate of tax. That choice, which is the wrong choice, has defined the values that lie behind what the Government are doing, and it fails—
Hilary Benn
No, I cannot give way; I would love to, but time is short.
What the Government are doing fails the fundamental test of what a Government should be doing in hard times, which is to help those who have least. We see that in the biggest cuts falling on the most deprived local authorities, in the lack of action in this Gracious Speech to help the rising number of long-term unemployed young people, in the lack of action to cap rail fares and in the Government’s failure to deal with the energy market, as my right hon. Friend the Member for Don Valley said. That is the judgment that will be made of the Gracious Speech. It does not rise to the challenges that we face, it will not restore confidence in the Government, it will not help those who need help most, and it reminds us why this coalition, as it ekes out its remaining two years in increasing disharmony, was not the answer to the crisis of confidence in the first place. I urge the House to support the amendment.
The Secretary of State for Communities and Local Government (Mr Eric Pickles)
As the right hon. Member for Leeds Central (Hilary Benn) has said, this has been a full and wide-ranging debate, covering energy prices, climate change, housing policy, heavily fruited confectionery and a brief excursion into the world of J. R. R. Tolkien. The debate was opened by the Secretary of State for Energy and Climate Change, my right hon. Friend the Member for Kingston and Surbiton (Mr Davey) who, among other things, gave the House a masterclass on Professor Hills’ theory of fuel poverty. That clearly demonstrated that my right hon. Friend is completely on top of the job.
The right hon. Member for Don Valley (Caroline Flint) announced three Labour policies. Just like buses—you wait around for ever, then three come along in quick succession. She rather dampened the House’s excitement, however, when it was discovered that she was merely reheating some old policies.
My right hon. Friend the Member for Meriden (Mrs Spelman) spoke knowledgeably about the need for biodiversity offsetting. My right hon. and learned Friend the Member for North East Fife (Sir Menzies Campbell) reminded the House why the coalition was formed: it was to deal with Labour’s poor record in Government. He went on to speak with great knowledge about the current situation in Syria, as did my hon. Friends the Members for New Forest East (Dr Lewis) and for Elmet and Rothwell (Alec Shelbrooke).
My hon. Friend and neighbour, the Member for Epping Forest (Mrs Laing), spoke about conviction politics. My hon. Friend the Member for Bury St Edmunds (Mr Ruffley) warned about an ever-closer union. My hon. Friends the Members for Brentford and Isleworth (Mary Macleod) and for North East Somerset (Jacob Rees-Mogg) spoke of the effect of interest rates on the cost of living. My hon. Friend the Member for Monmouth (David T. C. Davies) spoke about climate change and the lack of sustainable development in Middle Earth. My hon. Friend the Member for Halesowen and Rowley Regis (James Morris) made some telling points about the impact of fuel duty on the cost of living, and my hon. Friend the Member for Folkestone and Hythe (Damian Collins) talked about the need for co-operation between the private sector and local authorities.
We must congratulate my hon. Friend and neighbour, the Member for Harlow (Robert Halfon), on being perhaps one of the most influential Back Benchers and on the marvellous work he has done on fuel duty. He spoke about the effects of taxation. My hon. Friend the Member for Weaver Vale (Graham Evans) said that he had grown up on a council estate under the James Callaghan Government, and that that was why he was a Conservative. I am slightly older than him, and I grew up on a council estate under the Harold Wilson Government. That is why I am a Conservative.
As my hon. Friends the Members for South West Bedfordshire (Andrew Selous) and for Gloucester (Richard Graham) said, council taxes more than doubled under Labour, taking bills up to £120 a month for a band D home. The coalition Government have worked with councils to freeze the council tax, and bills have fallen by 10% in real terms. The freeze was opposed by Labour, however. The leader of the Labour group in the Local Government Association, Councillor David Sparks, said that councillors were wrong not to increase their taxes. Labour’s local government spokesman in the Commons, the hon. Member for Derby North (Chris Williamson) said that the freeze was
“nothing more than a gimmick”.—[Official Report, 17 January 2011; Vol. 521, c. 531.]
The Leader of the Opposition dismissed it as involving a “small amount of money”. Actually, the freeze has resulted in a cumulative saving of up to £425 on average band D bills over the last three years. For most people, £425 is a lot of money, but I recognise that, for Labour members, it is nothing. For the right hon. Member for Leeds Central, it is probably just an average morning’s takings in the tea room at Stansgate Abbey.
We have reformed council tax support as well. Spending on council tax benefit doubled under Labour, but we are getting it under control. Such benefits cost taxpayers £4 billion a year, which is equivalent to roughly £180 a year per household.
Mr Pickles
I wish I had time, but I cannot give way.
Welfare reform is vital to tackle Labour’s budget deficit. Under the last Administration, more taxpayers’ money was being spent on benefits than on defence, education and health combined.
Mr Pickles
I am sorry, but I do not have time. I always give way, but not when I do not have time.
Labour is not short of ideas on new taxes. Labour councillors such as Barnsley’s leader Steve Houghton or the Local Government Association’s Labour leader Councillor David Sparks have lobbied the Government to abolish the single person’s discount on council tax. This would increase tax bills on 8 million people—from elderly widows to young professionals. A Bridget Jones tax is not what I call one-nation government; it is the politics of division.
Mr Pickles
No.
The Local Audit and Accountability Bill, as part of this Queen’s Speech, will further help deliver value for money. The abolition of the Audit Commission regime will save taxpayers up to £1.2 billion over the next 10 years. The Bill will help defend an independent free press from corrosive town hall pravdas that harm local democracy and waste taxpayers’ money.
Mr Pickles
No.
These measures will save taxpayers’ money, cut waste and help keep council tax down.
Mr Pickles
The Deregulation Bill will promote the right to buy by further extending eligibility and undoing John Prescott’s cuts. This complements our £20 billion affordable housing programme, our £10 billion programme for rented sector guarantees and our new help-to-buy scheme to help people up the housing ladder. By contrast, Labour’s alternative Queen’s Speech called for more red tape and would add costs to housing. The party that gave us home information packs now wants a £300 million a year tenants’ tax in the form of compulsory registration of all landlords. Those costs will be passed on to tenants in the form of higher rents.
This is the party whose Labour councils for years turned a blind eye to exploitation by rogue landlords building “beds in sheds”. It is a party that intentionally let immigration rip. Those buildings have been propped up overnight, with Labour councils such as Ealing and Newham doing nothing until it was too late to solve the problem. This Government have given councils clear guidance on the use of their already extensive legal powers to clamp down on rogue landlords, and have provided extra funding to target the problem areas.
What do we think of the alternate Queen’s Speech?
Mr Pickles
Perhaps the hon. Member for Ogmore (Huw Irranca-Davies) would like to think about this. We do not need an alternative speech; we need to look only at Labour in government in Wales. Let us look at Labour’s record on housing there. Labour has failed to boost house-building starts by a mere 1% as compared to 19% in England.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. As the Secretary of State has pointed out, he does not have time to give way. Voices can be saved for tomorrow.
Mr Pickles
I am most grateful, Mr Deputy Speaker.
Labour in Wales hit the housing market with extra red tape, adding £13,000 to the cost of building a new home in comparison with England. Labour has cut the right to buy, abolishing it completely in parts of Wales. Labour has failed to introduce support for new home buyers. Their new-buy scheme will not start until next year.
Whether it be in England or Wales, Labour’s economic policy could be summed up, to paraphrase Ronald Reagan, as “If it moves, tax it; if it keeps moving, regulate it; if it stops moving, subsidise it”. Labour wants to tax enterprise and hard-working people to pay for the same old borrow-and-spend policies. It wants to regulate small business, high streets and landlords—
Mr Alan Campbell (Tynemouth) (Lab)
claimed to move the closure (Standing Order No. 36).
Question put forthwith, That the Question be now put.
Question agreed to.
Question put, That the amendment be made.
The House proceeded to a Division.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I ask the Serjeant at Arms to investigate the delay in the No Lobby. There seems to be some type of blockage that he needs to remove.
PetitionS
Sir Nick Harvey (North Devon) (LD)
I rise to present a petition on behalf of the sufferers of atypical haemolytic uraemic syndrome, known as aHUS, a rare disease that causes irreversible kidney failure. Until recently there was no effective treatment for this condition, which has 139 known patients in England, of whom 20 live in Devon. I am presenting the petition to press for aHUS sufferers’ access to Eculizumab, a new drug that has been proven to cause a dramatic improvement in kidney function and, indeed, in the quality of life of patients diagnosed with aHUS. The petition has received almost 30,000 signatures nationally and is presented on behalf of the national group, aHUS Action. It was brought to me by one of my constituents, Elena Lilley, who suffers from aHUS. She received Eculizumab as part of a clinical trial three years ago and it has transformed her life, avoiding the need for her to be put back on dialysis and enabling her to resume a full-time job.
The Advisory Group for National Specialised Services has recommended that Eculizumab should be nationally commissioned by the NHS, emphasising its life-saving potential and ability to improve the quality of life of all aHUS patients. However, earlier this year health Ministers decided to refer Eculizumab to the National Institute for Health and Clinical Excellence for a further review of its affordability. Some patients have already been waiting over 18 months for a decision, and an announcement is not expected until December. The petition urges that action should be taken to ensure that all aHUS patients, including those already on the drug, should be given access to Eculizumab without delay pending the outcome of NICE’s review.
Following is the full text of the petition:
[The Petition of Miss K Bazzichi and Miss E Woodward Trustee Officers of aHUSUK,
Declares that aHUS patients should be given access to Eculizumab when they need it, without delay, and not be disadvantaged by the Ministers' decision not to implement the AGNSS recommendation ahead of a review by NICE.
The Petitioners therefore request that the House of Commons issues instructions to the NHS CB to take such action, whilst waiting for NICE's decision.
And the Petitioners remain, etc.]
[P001176]
Keith Vaz (Leicester East) (Lab)
It is a pleasure to follow the hon. Member for North Devon (Sir Nick Harvey). The 500 signatures on my petition should be added to the 30,000 signatures on his. I was approached by my constituent, Trevor Murby, of Abbots Road, Leicester, because his grandson, Finley Murby, was having great difficulty in accessing this drug. As a result of the work of Trevor Murby and so many other people involved in the campaign, he was able to get the drugs that he needed. I concur with the hon. Gentleman that it is really important that everyone who needs this drug has access to it and that action is taken immediately to help those who are disadvantaged.
Following is the full text of the petition:
[The Petition of Mr T Murby and Mr Finley Murby Trustee Officers of aHUSUK,
Declares that aHUS patients should be given access to Eculizumab when they need it, without delay, and not be disadvantaged by the Ministers’ decision not to implement the AGNSS recommendation ahead of a review by NICE.
The Petitioners therefore request that the House of Commons issues instructions to the NHS CB to take such action, whilst waiting for NICE's decision.
And the Petitioners remain, etc.]
[P001177]
Council Sport Provision
Charlotte Leslie (Bristol North West) (Con)
I want to raise the issue of councils inflicting an enforced monopoly, run by a private sector provider, on the community, often crushing successful and voluntary provision. The specific case that I will discuss relates to sport—specifically swimming—which is relevant to my constituency and others, including that of the right hon. Member for Doncaster North (Edward Miliband). I would be interested to hear of any other such cases. The Minister responded to yesterday’s Adjournment debate, so I am particularly grateful to him for his presence for the second day running. I reassure him that this debate is not about sport as such—although the subject has a powerful impact on sport—but is far more about procurement and tendering practice.
I declare an informal interest in this subject, which centres on the crushing of swimming club provision, in that I used to be a swimmer, but sadly I am not as fit any more. As a youngster I ploughed up and down swimming pools at silly o’clock in the morning for four hours a day—and sometimes 10 times a week— in my unfortunately thwarted hope of becoming an Olympian. My skin would smell of chlorine when it rained and I had perpetual goggle marks. For many years I swam under the excellent supervision of one of Bristol’s finest coaches, Eric Henderson.
Being part of a club was part of my identity when I was growing up. It was a proper community and I am still proud of and treasure my first swimming club tracksuit from Thornbury swimming club. It was very much part of what has made me who I am, and it all started when my mum took me to a club to learn to swim.
Learning to swim and making progress with clubs is not for everyone, but it is a vital part of a choice of provision. It is particularly vital for producing our next generation of competitive swimmers, and it is also important—as illustrated by the Portway swimming club in my constituency, which will feature heavily in my speech—for non-competitive swimmers who want to swim slightly more than is possible under council or private provider provision.
The good news is that clubs are generally thriving and many have waiting lists for their Learn to Swim programmes, particularly those for beginners. That is why the phenomenon of some councils acting to stifle successful club provision is so perverse, as the situation in Bristol illustrates.
In 2007, Bristol city council secured a contract with Sports and Leisure Management to run eight leisure centres in the city for 10 years. So far, so good. That was supposed to be done in partnership with the city council, which, despite the fact that it had outsourced provision to a private provider, still took it upon itself to prescribe in some detail how the provision was to be made.
Swimming in Bristol has not had a particularly happy history, as a Google search or a trawl through newspapers from the mid-’90s will reveal. A recent attempt to reshape the city’s swimming came in the form of the now slightly notorious—in Bristol swimming circles—Rick Bailey report. One recommendation was that the council provider’s chief responsibility should be to provide levels 1 to 7 of the Amateur Swimming Association’s Learn to Swim pathway. Again, so far so good.
However, Bristol city council interpreted that recommendation—I believe perversely—as meaning that only the private provider should provide levels 1 to 7 of Learn to Swim. That recommendation did not have the support of the local swimming clubs, but they were pushed into accepting it largely because they did not have any choice or voice to change the decision, despite rather cosy talk in all the documents of “partnership working”.
Jim Shannon (Strangford) (DUP)
I thank the hon. Lady for bringing this matter to the House. In my constituency, Ards borough council has a very good relationship with the local swimming club. They work together to ensure that everybody has an opportunity to swim. The council owns the premises and Ards amateur swimming club does the renting. Does she agree that that is a prime example of what can happen if a council and a club work together for the benefit of all, so that some young people can become champions, whether provincial, Commonwealth or Olympic?
Charlotte Leslie
I thank the hon. Gentleman for his intervention. What is so sad about this case is that, as he said, when clubs, councils and private providers work together, they can become more than the sum of their parts and there can be huge success stories. All parties should have the interests of children and swimming, or whatever sport it is, at their centre. What is so tragic about this case is that for some reason that I am yet to fathom, Bristol city council has been stubbornly determined to stifle good provision and not to work in partnership with clubs. When any objection is raised, it says that the clubs should know better and that it does work in partnership. However, as we know, partnership is not just a word in a report, but involves communication, liaising and understanding from both sides. This situation does not need to exist and we should all be thinking about the good of the swimmers.
The council and SLM set about ensuring that even clubs that had been providing a successful and valued Learn to Swim programme, with high demand and waiting lists, no longer did so in council-run pools. That has led to an extraordinary situation at swimming clubs such as Portway in my constituency that hire an agreed amount of pool time from SLM in which intermediate and Learn to Swim swimmers both train. Following the ruling that came into force on 1 April, the club is forced to vacate the area of the pool that is used for Learn to Swim. The children, many of whom have older siblings in the more advanced swimming lessons, are forced to sit on the side and not enter the water because they cannot be taught to swim, even though the qualified volunteer teachers are present and the pool space is not being used by anyone else. If the young children were doing another activity, such as attending a children’s party, and were not being taught to swim, it would be okay for them to use the pool. That does not seem very sensible.
The club has been forced to take its Learn to Swim programme to a pool in a neighbouring local authority, South Gloucestershire, which has a slightly less perverse and draconian attitude towards Learn to Swim. That means an extra journey for parents to a pool that is much further away, which is very difficult for single parents. That may also clash with the commitments of other siblings, swimming or otherwise, and many parents are forced to choose which of their children’s commitments to honour.
The key thing to note is that the small number of children who are being taught to swim in a club environment, which cannot be replicated by a private provider in terms of the continuity and focus that are provided by the teachers, does not impact on SLM’s market share of Learn to Swim children. The number of children in Bristol is increasing and there are certainly more than enough children who need to be taught to swim to go around.
Nobody is suggesting that clubs should have a monopoly on provision or even preferential treatment, only that they should be allowed to meet the significant demand for their services, which they have hitherto met very successfully. The result is that children are denied the choice of the benefits that club swimming at an early level provides, such as community and continuity of teaching. One club coach put it well in saying that the two lessons a week at the club not only give children the ability to swim, but inspire them to become a swimmer.
Of course, the impact on competitive swimming will be significant, too. To put it in perspective, in a recent Bristol schools competition, it was estimated that despite there being about 3,000 children who were taught by SLM compared with only 200 who were taught in clubs, club swimmers made up about 50% of the finalists. In other words, if my maths is correct, club swimmers were about seven times more likely to be finalists than non-club swimmers, which is significant.
There are other impacts. Many coaches come through a club system and then go on to coach either in their parent club or in other clubs, or with private providers such as SLM. Clubs are also vital social and community hubs, raising money for charity and, as I have said, providing youngsters with a sense of special identity and pride, as Thornbury, Southwold and City of Bristol swimming clubs did for me.
However, the Minister will be pleased to hear that this debate is not specifically about sport. It serves to demonstrate to him the possible perversity of a council monopoly that is imposed with such odd determination. Indeed, the clubs, the provider, a representative of Gloucester ASA and the councillor with the relevant cabinet brief had a meeting about the matter, at which the councillor, Simon Cook, was extremely good. He brokered a proper, common-sense solution to allow one of the clubs to keep offering Learn to Swim in a council pool until some kind of common-sense compromise had been reached. I was alarmed that his decision was completely ignored, which shows us something about the accountability there. It was ridden roughshod over, particularly by one council officer, Colleen Bevan, who I understand has now gone off to work for a private leisure provider. The private providers told the club that contrary to what had been agreed in the meeting, it could not continue with its pool time. I should mention that we have set up a petition at www.keepclubswimming. bristolpetitions.com, in case anyone wants to sign it.
I finish by saying to the Minister that we all believe in localism, but this case demonstrates some of the perverse behaviour of councils that, instead of facilitating the big society, are crushing it. I am pleased that our new elected mayor, George Ferguson, who inherited the difficult situation, is sympathetic to the clubs’ plight and fully understands the perversity of such a council-enforced monopoly, whether in sport or any other service. I look forward to working with him on this extraordinary situation.
I ask that the Department examines such instances in which smaller providers of any sort, not necessarily in sport, are literally bullied out of existence by local councils that act in every way contrary to any conception of the big society.
The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)
I am grateful to my hon. Friend the Member for Bristol North West (Charlotte Leslie) for securing the debate, and I congratulate her on putting her case so clearly and succinctly. She not only outlined the specific issue of the club in Bristol but gave us a chance to highlight a wider potential problem with how local authorities deal with procurement, which is important for us to note. I will try to touch on both issues.
My hon. Friend set out the case involving the Portway swimming club, which feels that it has been frozen out of opportunities to teach beginners’ swimming lessons at Bristol’s public pools due to the contract that she mentioned. I know that she is an accomplished swimmer herself and feels passionate about sports provision, and I know that her community will appreciate all that she is doing to support the local swimming clubs.
I understand that guidance on who should teach Learn to Swim lessons has been issued by the ASA, and that it is recommended that clubs seek support from their county and regional ASA boards on how the scheme operates locally. The boards will be keen to support the sustainability of their clubs and offer support for the relationships between clubs and operators. In time, that can serve to protect their future membership income.
I understand that my hon. Friend also has more general concerns about how local authorities use their procurement practices to create monopolies of service provision with private providers. My Department holds policy responsibility for local government, including promoting best practice on commissioning and procurement processes and strategies. I would expect any procurement exercise to engage effectively with and examine the impact on community groups and the voluntary sector. Indeed, the best value guidance published in September 2011 set out clearly how councils should work with the voluntary sector when facing difficult funding decisions.
Statutory guidance states that local authorities should actively engage with organisations in the community on the future of a service and any knock-on effect on assets, and allow them to put forward options on how to reshape the service. Good local authorities will therefore work with their local voluntary sector at all stages of service design and delivery, to make best use of their local knowledge and influence.
Overall, local authorities are having to reduce costs and we encourage them to follow the example of leading councils that are taking the opportunity to think creatively, re-design their services, and commission intelligently and co-operatively with all sectors of their local community, not just large private providers. Local areas need the freedom and flexibility to innovate and commission services that best fit the needs of their communities. We cannot, and will not, prescribe from Whitehall how individual local authorities should conduct each procurement exercise, because it is not a one-size-fits-all situation. Neither will we intervene in local issues or specific contracts, which, as I am sure hon. Members will appreciate, is simply not appropriate.
We believe that local authorities can and should use their procurement processes to improve efficiency while also achieving better outcomes for service users. We know that poor practices and long-held myths can slow down the procurement process and lead to bad decisions, costing taxpayers money and affecting the standard of service. Councils such as Bristol must be sure that they are doing everything they can to remove those barriers, in consultation with local providers. I am pleased to hear that the new mayor is going down the road of working with the community, as my hon. Friend outlined. In my meetings with him he has been keen to do that, which is a good sign for Bristol in the future, and probably a real endorsement of how the local accountability of a directly elected mayor can work for a city.
Opening up procurement practices to all local providers can make a massive difference, and councils have a duty to their residents to act now. Councils should publish their tenders and contracts online, which would allow everyone to see clearly the procurement opportunities available and helps councils to get better deals with taxpayers’ money. Contracts Finder is one way of doing that, and as a secure, central and well-recognised website it is already accessed by hundreds of thousands of businesses and organisations. Bristol city council uses an e-procurement portal, Twitter, and a blog to advertise contracts and engagement opportunities. That is a positive step and I encourage more councils to be as open and transparent as possible with all data and procurement decisions.
Myths often surround European Union procurement rules, but those rules apply only once a contracting authority has made a decision to procure goods or services. Such rules are often used or misunderstood to prevent any form of communication, but they do not and should not. Council officers can still work with all sectors and providers prior to the bidding process, and support diversity in the supply chain by skilling-up and improving potential tenders. The Government would always encourage local authorities to procure wherever they can and wherever is appropriate locally. That can create new jobs and sustain existing ones, support the creation of new businesses and clubs, help to tackle worklessness and low skills by supporting apprenticeships, and boost spending locally, as well as help develop and build a community through its clubs and organisations.
Contrary to popular myth, councils can support local growth at the same time as delivering efficiency savings and improving services—those things are not mutually exclusive. Council officers should embrace transparency on spending, tenders, contracts and property assets. That can help clubs and businesses better understand the services being tendered, thereby allowing them an opportunity to submit better proposals.
I would always encourage local authorities to hire the best—not necessarily the biggest—firms, and they should assess organisations on their ability to get the job done for the benefit of the community, rather than on their turnover. Markets can be narrowed, as my hon. Friend outlined, by contracting only with big organisations, because that puts those organisations in control, rather than the council. A diverse supply side promotes competition between suppliers and gives the council and—importantly—its residents, more choice. Breaking up contracts into smaller bite-sized chunks, or sub-contracting, can open up procurement by introducing more competition on price and attracting smaller firms. That can lead to even more local job creation, specialisation and innovation in service delivery.
I appreciate my hon. Friend giving me the chance to outline general aspects of procurement and what councils can do to involve local community organisations and small businesses. However, I want to be clear that localism means doing everything at the most direct possible level, with residents fully involved in making decisions about their areas. Central Government should be involved only when absolutely necessary. The Government’s approach to localism is to pass power down to citizens—greater power to hold local authorities to account and to help them to make a difference in and for their communities. As we have seen recently, local communities hold their councils to account ultimately through their voting power in local elections. In voting for a directly elected mayor, the community in Bristol has hopefully made a decision that will mean Bristol has a better future, with direct, clear local accountability.
The Localism Act 2011 introduced the community right to challenge, which enables communities and the voluntary sector to question how services are provided, to have the ambition to challenge that, and to make plans to take services over. As my hon. Friend will realise, I am unable to comment on the specifics of a contract—as she has said, I have not seen the specific details. Hopefully, I have taken this chance to set out the Government’s approach. I hope I have outlined how local authorities can act to ensure that such situations do not happen. I support her concern. Local authorities should embrace local community groups and the voluntary sector during any procurement process, and in their policy on sports provision and access. I congratulate her on raising the issue in this debate.
Question put and agreed to.