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Kevin Brennan (Cardiff West) (Lab)
1. What discussions he has had with the Chancellor of the Exchequer on removing VAT from the Severn bridge tolls.
The Parliamentary Under-Secretary of State for Wales (Stephen Crabb)
My hon. Friend the Secretary of State has regular discussions with the Chancellor of the Exchequer. Once the Severn crossings revert to public ownership at the end of the concession, which is anticipated to be in 2018, VAT will no longer be payable on the tolls.
Kevin Brennan
Will the Minister confirm that in their discussions with the Chancellor of the Exchequer, he and the Welsh Secretary have firmly taken this matter into account and that, should there be a continuation of this Administration, they are committed to removing this VAT, which is basically a tax on the south Wales economy?
Stephen Crabb
We in the Wales Office are very mindful of the concerns of businesses in south Wales, in particular, about the levels of tolls. No decisions have yet been made on what the tolling regime will look like at the end of the concession period after 2018, but we are hearing representations from Welsh business. As the Under-Secretary of State for Transport, my hon. Friend the Member for Scarborough and Whitby (Mr Goodwill), confirmed in a recent Westminster Hall debate, at the end of the concession period, VAT is no longer to be levied on the tolls.
Hywel Williams (Arfon) (PC)
Will the Minister also press the Treasury to look at VAT on the tourism business, which would be a great fillip to employment and to the rural economy?
Stephen Crabb
We have discussed VAT and tourism on several occasions at Wales questions. The fact remains that if we were to lower VAT on tourism and hospitality in the way that I think the hon. Gentleman is suggesting, somebody else has to pay the shortfall. Taxation will need to be levied elsewhere at a time when we have to bring in some revenue to make further progress on reducing the deficit.
Jesse Norman (Hereford and South Herefordshire) (Con)
2. What discussions he has had with the Department of Health and Ministers of the Welsh Government on facilitating access for patients from Wales and English border areas to hospital services in England.
Mr Mark Harper (Forest of Dean) (Con)
3. What discussions he has had with the Department of Health and Ministers of the Welsh Government on facilitating access for patients from Wales and English border areas to hospital services in England.
The Secretary of State for Wales (Mr David Jones)
I recently met the public health Minister, my hon. Friend the Member for Battersea (Jane Ellison), and my hon. Friend the Member for Forest of Dean (Mr Harper) to discuss cross-border health issues. It is essential that we continue to work with the Welsh Government to ensure that patients on both sides of the border have access to the best health services possible.
Jesse Norman
Over 20,000 English residents are registered with GP practices in Wales and have been denied access to hospitals of their choice in England. Does the Secretary of State share my view that NHS Wales has seriously overreached itself by denying patients living in England the right to choose where they receive hospital treatment? Does he agree that we urgently need to change the cross-border protocols to ensure that all patients have access to the highest standards of care?
Mr Jones
My hon. Friend will be keenly aware of this issue; as he says, many of his constituents rely on GPs from Wales. Similarly, Hereford hospital is an important hospital for patients from Wales. I entirely agree that the cross-border protocol needs to be made fit for purpose, and my office and the Department of Health are working closely together to that end.
Mr Harper
The Secretary of State will know—I am very grateful for his support at my recent meeting—that thousands of my constituents are forced to use the NHS in Wales rather than being able to access hospital services in England, as is their legal right. The Health Secretary has said he is going to fix that by the end of the year. In the meantime, is the Secretary of State as concerned as I am that some of the mortality statistics in Welsh hospitals are dangerously high? Has he discussed that in his discussions?
Mr Jones
I repeat that the cross-border protocol is of prime importance, and my office, the Department of Health and the Welsh Government are working closely on it. I am glad to see, however, that the Aneurin Bevan health board is allowing patients from England some element of choice. The issue of mortality is of course a concern, and it has been expressed not only by us but by the chief executive of the Healthcare Inspectorate Wales.
Mr Peter Hain (Neath) (Lab)
When I was Secretary of State, I was always keen to praise success in Wales. Would the Secretary of State care to congratulate the Welsh NHS on having a nurse-to-patient ratio that is a fifth higher than that of England, where his Government have cut the number of nurses by 7,000? Will he also congratulate the Welsh Government on recruiting doctors at a much faster rate than in England?
Mr Jones
I am always keen and ready to give praise where praise is due. Certainly, Welsh clinicians and nurses do a wonderful job. The fact remains, however, that outcomes in Wales are significantly worse than they are in England, which, to be frank, is something about which the right hon. Gentleman should join me in expressing concern. I also suggest that he have a word with his friend the Welsh Minister for Health and suggest to him that he might wish to take on board the recommendations of Professor Keogh.
Ian Lucas (Wrexham) (Lab)
Is the Secretary of State aware of the superb service provided for north Wales patients by the Midlands centre for spinal injuries in Gobowen, which carries out life-changing work? Specialist services are being changed by the Government, of which the right hon. Gentleman is the Welsh Secretary. Will he visit the spinal injuries centre and meet me to discuss the concerns about the specialist care proposed by his Government?
Mr Jones
I am always keen to praise the work of hospitals that offer such important services to Wales. I fully agree with the hon. Gentleman that the hospital in Gobowen is of world-class standard but, sadly, in terms of waiting times, the target time for English patients is only 18 weeks, whereas in Wales it is 26 weeks, which is unacceptable. Frankly, the hon. Gentleman should agree with me that it is not right that Welsh patients, who pay their taxes at the same rate as English patients, should have substandard care.
Roger Williams (Brecon and Radnorshire) (LD)
Powys local health board has just closed six beds at Knighton hospital because of recruitment problems. With Llandrindod hospital almost always full, that could cause bed-blocking in Hereford hospital. Will the Secretary of State work with the Department of Health and the Welsh Assembly to ensure that those beds are reopened as soon as possible, that Welsh patients can recover from their illnesses in their own community and that capacity is kept available in Hereford hospital?
Mr Jones
My hon. Friend illustrates an important point, which is that patients on both sides of the border are frequently reliant on care provided on the other side of the border. He makes a sensible point, because it is clear that Knighton hospital will be put under pressure if the current arrangements in the health care system in Wales continue to prevail.
Owen Smith (Pontypridd) (Lab)
The Tory war on Wales has reached a new low in this House today: four questions from compliant Tory Back Benchers, all suggesting that a higher proportion of Welsh patients are being treated in England when the reverse is the case. Would the Secretary of State like to correct the record and tell those Members the truth, which is that the proportion of Welsh patients being treated in England has fallen and the reverse proportion has risen?
Owen Smith
I am particularly surprised that the right hon. Gentleman should choose cancer as a topic of debate, because the truth is that, in cancer care, Wales is outperforming England. In fact, in the trusts of the hon. Member for Hereford and South Herefordshire (Jesse Norman), the numbers show that 81% of patients are meeting the 62-week target, which is worse than three quarters of all the trusts in Wales. We spend more on cancer in Wales and we have faster improving outcomes. This is a smear by a Secretary of State and a Tory party that used to speak for Wales.
Mr Jones
That is actually a smear from a Labour party which is in total dereliction of its duty to Welsh patients. Frankly, the Welsh Government cannot afford to be complacent when they have not met the urgent suspected cancer waiting time since 2008. Furthermore, there is no cancer drugs fund in Wales. Instead of reacting so badly to criticism, the hon. Gentleman might wish to criticise his own friends in the Welsh Government.
Stephen Mosley (City of Chester) (Con)
13. Despite the claims of the shadow Secretary of State, tens of thousands of people flee the Welsh NHS to seek treatment in Chester every year. Is that not a damning indictment of the Welsh Labour party, which has cut health spending in Wales by 8%?
Mr Jones
My hon. Friend is entirely right. We have protected the health budget in England, but the Welsh Government have cut their health budget by 8%. That is, to be frank, disgraceful and unsupportable. I suggest to Opposition Members that, rather than being in denial, they should criticise their own colleagues in the Welsh Assembly for their dereliction of duty to patients in Wales.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
4. What discussions he has had with the First Minister of Wales in the past six weeks on the implementation of the proposals of the Commission on Devolution in Wales; and if he will make a statement.
The Secretary of State for Wales (Mr David Jones)
The Wales Bill, which I introduced in this House last week, implements most of the recommendations made by the Commission on Devolution in Wales in its first report. I had proposed to discuss the Bill and the commission’s second report with the First Minister on Monday but, sadly, the meeting was postponed.
Mr Llwyd
It is absolutely disgraceful that it has taken the Government one year to respond to the first recommendations of the Silk report. Why does the Secretary of State not get a grip now and bring in the second tranche of recommendations in the new Bill that he has introduced? We have been treading water in Parliament for the past few weeks. There is plenty of legislative time. If the will is there, let us get on with it.
Mr Jones
I am surprised to hear that criticism from the right hon. Gentleman, as he knows that we will implement the recommendations of part I of the Silk commission in this Parliament. So far as part II is concerned, he should surely recognise that the recommendations will require significant consideration. Where those recommendations do not require primary legislation, we will look at implementing them in this Parliament, but we clearly cannot guarantee to do that.
Mr Llwyd
May I ask about zero-hours contracts? Does the Secretary of State appreciate that they are exploitative, and no more so than in the care sector, which the Resolution Foundation has said is
“where their use is most entrenched and where their impact on vulnerable workers and care recipients is most worrying”?
Does he not agree that to hear Labour carping about that matter here and voting against an amendment to delete it in Wales is a bit unfortunate? Does it appear at all on his radar, or is he above all this?
Mr Speaker
I am listening with rapt attention to the observations of the right hon. Gentleman, but I am struggling to ascertain the connection between the important matter he has just raised and the subject matter of the question, which is about the Commission on Devolution in Wales.
Mr Jones
That is extremely generous, Mr Speaker.
I do not recall that zero-hours contracts were subject to the recommendations of part II of Silk report. I will look again at the report more closely, but the right hon. Gentleman will know that, as a proportion, zero-hours contracts are only 2% of all contracts for work in Wales.
Guto Bebb (Aberconwy) (Con)
Does my right hon. Friend agree that it is difficult to see the justification for the devolution of further powers given that the Welsh Government are refusing any fiscal accountability?
Albert Owen (Ynys Môn) (Lab)
5. What estimate he has made of the number of jobs in Wales that depend on the UK’s membership of the EU.
The Parliamentary Under-Secretary of State for Wales (Stephen Crabb)
Businesses in Wales and across the UK are not satisfied with the current relationship with the EU, and want reform and renegotiation. That is what our Prime Minister is committed to achieving to boost our growth and competitiveness, and to secure new jobs.
Albert Owen
I am surprised that the Minister did not mention the number of jobs that are dependent on the EU. He will know that the business community wants both stability and certainty, and they want to see Wales at the heart of the United Kingdom and the European Union. Does he therefore agree with the CBI, which says that Labour’s policy of reforming from within is good for jobs in Wales and the United Kingdom?
Stephen Crabb
I am surprised by the hon. Gentleman’s question, because he should know that 77% of all British businesses support the position that this Government are taking on reform and renegotiation. That position is supported by the CBI, the Institute of Directors and the British Chambers of Commerce. There is widespread support within the business community for reforming our relationship with Europe to become more competitive, and to secure new investment and jobs.
Mr Mark Williams (Ceredigion) (LD)
The Government’s position is not, however, supported by the Farmers Union of Wales. Given that €400 million are pumped into the rural Welsh economy, convergence funding for west Wales and the valleys has had a huge impact. Will my hon. Friend be cheering on Nick or Nigel in this evening’s debate?
Stephen Crabb
The hon. Gentleman will forgive me if I say that I will be cheering on neither Nick nor Nigel in this evening’s debate. I hear what he is saying. I, too, speak to a lot of farmers in west Wales and they tell me that they do not want to be seen as just reliant on handouts from the European Union. They want to be regarded as business men and women in their own right, so they support our position to reform the European Union and to become more competitive.
Geraint Davies (Swansea West) (Lab/Co-op)
The Minister should be aware that 150,000 jobs in Wales and 25,000 jobs in the Swansea bay city region depend on trade with Europe. Does he accept that firms such as Unilever, Nissan and others are saying that even talk of a referendum is undermining investment and jobs in Wales today, and that if we do in fact end up outside Europe following a referendum, they will withdraw jobs and investment from Wales and Britain? Will he therefore oppose such a referendum?
Stephen Crabb
The hon. Gentleman’s position is not correct and is not supported by the facts on the ground. He should not scaremonger and use old figures to suggest that businesses are scared to talk about reform and renegotiation. Investment is coming into the United Kingdom and into Wales. The prospects for the Welsh economy are very positive indeed.
Alun Cairns (Vale of Glamorgan) (Con)
6. What discussions he has had with Ministers of the Welsh Government on NHS waiting times in Wales.
The Secretary of State for Wales (Mr David Jones)
As we have heard this morning, care standards in Wales are a matter of general concern. Long waiting times are just one aspect of that. As it is a devolved matter, it is for the Welsh Government to act.
Alun Cairns
Nearly 10% of urgent cancer cases wait more than 62 days for treatment. The target has not been met since 2008. Some 57% of urgent ambulance calls arrive within eight minutes. The target has been met only once in 22 months. Some 33% of patients wait longer than eight weeks for diagnostic services. Does the Secretary of State agree that that is completely unacceptable? Will he take the matter up with the First Minister in Wales, with the support of the Secretary of State for Health, to ensure that my—
Mr Speaker
Order. The hon. Gentleman should resume his seat. He has to work out his questions in advance. That question was far too long. He really has to practise.
Mr David Hanson (Delyn) (Lab)
My constituents and the constituents of the Secretary of State go to the hospital in Gobowen in Shropshire, the Countess of Chester hospital in England, Clatterbridge hospital in Wirral and the Christie in Manchester for cancer services, and the Royal Liverpool university hospital for heart surgery. Will he guarantee that the changes to the health service in England, which are very damaging, will not increase Welsh waiting times?
Mr Jones
I fully agree with the right hon. Gentleman about the importance of those hospitals to Welsh patients. In England, the waiting time for treatment is 18 weeks. In Wales, it is 26 weeks. That is completely unacceptable. I hope that he agrees that there is no reason why his constituents or mine should be treated worse than patients from England.
Charlie Elphicke (Dover) (Con)
10. Does the Minister not think, as a basic matter of principle, that it is incredibly unfair that waiting times in so many areas are so much longer in Wales? All of us, as British MPs, have a duty to take this matter seriously, particularly the right hon. Member for Neath (Mr Hain), whose constituents are affected. I agree entirely. Waiting times are a matter of huge concern. In most cases, the Welsh NHS is not meeting its own waiting time target of 26 weeks, which is considerably longer than the 18-week target in England. Frankly, that is unacceptable. I hope that the Welsh Government are listening carefully to the points that are being expressed in this Question Time.
Nia Griffith (Llanelli) (Lab)
We have heard some strange statements today. On cancer waiting times, the Secretary of State must recognise that, with 92% of patients in Wales starting treatment within the 62-day target, Wales performs better than three quarters of the NHS areas in England. What does he think the priority should be for English MPs: scrutinising the NHS in their own area or making ill-informed comments about the NHS in Wales?
Mr Simon Burns (Chelmsford) (Con)
Has my right hon. Friend seen the written answer that I received two weeks ago about cancer waiting times in Wales, which shows that the number of patients fleeing Wales to get treatment in England has increased dramatically in the last 10 years? Does he agree that that is a damning indictment of the administration of the NHS in Wales, and that Nye Bevan must be turning in his grave?
Mr Jones
I agree entirely. Anybody with a reasonable mind would agree that those figures are entirely unacceptable. Again, I suggest to Opposition Members from Wales that they should have a discreet word with their colleagues in the Assembly to ensure that Welsh patients get the standard of health care that they deserve and need.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
7. What discussions he has had with Cabinet Office Ministers and the Electoral Commission on administrative management of the forthcoming elections in Wales to the European Parliament.
The Secretary of State for Wales (Mr David Jones)
Wales Office Ministers have discussed the administration of the forthcoming elections to the European Parliament with both the Electoral Commissioner for Wales, and the cities and constitution Minister, my right hon. Friend the Member for Tunbridge Wells (Greg Clark).
Jonathan Edwards
As the Secretary of State knows, the chief executive of Carmarthenshire county council is not at his desk because of a criminal investigation following a damning Wales Audit Office report into unlawful payments. However, he retains responsibility for the forthcoming European elections as local returning officer. Indeed, if memory serves me correctly, he was a deputy for the whole of Wales at the last European elections. Will the Secretary of State discuss urgently with the Cabinet Office the need for statutory protocol for removing electoral duties from public officials who are suspended from their everyday roles?
Mr Jones
As the hon. Gentleman says, an investigation is currently being conducted by the police. The Government’s priority is, of course, to ensure the smooth running of the European elections. The Cabinet Office is responsible for that and is keeping a close eye on the situation.
Chris Ruane (Vale of Clwyd) (Lab)
14. There are currently 6.5 million people missing from the electoral register in the UK, and in the dry run, matching Department for Work and Pensions databases to local election registers, where others have an 80% hit, there are wards in Aberystwyth where only 18% of people are registered on the data crossover. What will the Minister do about that?
Mr Jones
I am sure the hon. Gentleman would support the principle of individual electoral registration. The recent confirmation dry run matched 78% of electors across Great Britain, 79.9% across Wales, and in the hon. Gentleman’s constituency of the Vale of Clwyd it was 81.4%. I have faith in the process and I am sure that he should too. [Interruption.]
Mr Speaker
Order. There is far too much noise in the Chamber and it would be good if it would quieten down. I encourage the Secretary of State, whom I am sure wants his answers to be heard, perhaps to speak up a little.
Mr Speaker
The hon. Gentleman is always heard; we do not need any more volume from him.
Michael Fabricant (Lichfield) (Con)
8. What discussions he has had with the Secretary of State for Education and Ministers of the Welsh Government on facilitating access by primary and secondary school students in Wales to schools in border areas in England.
The Secretary of State for Wales (Mr David Jones)
Young people in border areas of Wales can apply to attend schools in England, provided they meet the admissions criteria. It is essential that all young people have access to the best possible education and training, regardless of where they live.
Michael Fabricant
We have already heard how the Welsh Labour Government have let people down with the health service, but they are also letting people down on education, with scores from the programme for international student assessment stating that education levels in Wales are lower than in rural areas of Romania. What can my right hon. Friend do to have any influence at all over the Welsh Government, to ensure that school children in Wales get as good an education as they do in England?
Mr Jones
My hon. Friend is entirely right to identify the PISA results, which have declined progressively over the past few years. Indeed, the First Minister acknowledged that he had taken his eye off the ball. We are concerned about that and hope the First Minister is too, and that he will address the situation as quickly as possible.
Paul Flynn (Newport West) (Lab)
9. What recent discussions he has had with the First Minister of Wales on maximising tourism opportunities in south-East Wales.
The Parliamentary Under-Secretary of State for Wales (Stephen Crabb)
The Secretary of State has had a number of discussions with the First Minister, in particular on the opportunities that hosting the NATO summit will bring.
Paul Flynn
Newport’s magnificent Tredegar House trebled its numbers of visitors last year, and visitors to the city’s Roman baths, amphitheatre and museum are at a record high. What will the Minister do to encourage more people to have the unique, enjoyable experience of a visit to Newport?
Stephen Crabb
My right hon. Friend the Prime Minister is clear that hosting the NATO summit is a huge opportunity to showcase the best of Wales, and particularly south-east Wales. I am delighted to tell the hon. Gentleman that my colleagues in the Wales Offices have recently visited both those tourist attractions and are well aware of the opportunities they afford for visitors to the summit.
Mr Speaker
Na h-Eileanan an Iar is some distance from south-east Wales, but let us hear Mr Angus Brendan MacNeil.
Mr MacNeil
Surely tourism in Wales would be helped by action on VAT, as in the Republic of Ireland, and that would also help my constituency of Na h-Eileanan an Iar.
Stephen Crabb
Visitor numbers to Wales increased strongly last year and they are increasing faster than for visitors to England and Scotland. There is no evidence to suggest that VAT rates are a deterrent for visitors to Wales.
Mr Speaker
The principals are present and correct and we can proceed with questions to the Prime Minister.
Rosie Cooper (West Lancashire) (Lab)
Q1. If he will list his official engagements for Wednesday 26 March.
The Prime Minister (Mr David Cameron)
This morning, I had meetings with ministerial colleagues and others, and in addition to my duties in this House, I shall have further such meetings later today.
Rosie Cooper
What assurances can the Prime Minister give to residents in West Lancashire that localism will give them a fair chance against greed and profit when it comes to their wish to end hazardous waste dumping at Whitemoss landfill site? Given that there is no evidence of need and a promise that it would end in 1995, and that the community, including its MP, are saying “No more dumping” time and again, does the Prime Minister really believe in localism?
The Prime Minister
I do believe in localism. That is why we got rid of a lot of the regional spatial strategies and a lot of the regional organisations, and returned power to local government. We did a number of things that local councils had been asking for in terms of empowering them, not least giving them a general duty of competence so that they can act when they think it is necessary to act. I will look closely at the specific issue the hon. Lady raises and write to her.
Justin Tomlinson (North Swindon) (Con)
I know that my right hon. Friend will be as concerned as I am about potential job losses at Honda in my constituency, but will he work with me and my hon. Friend the Member for South Swindon (Mr Buckland) to help support those who are affected at this difficult time?
The Prime Minister
I completely understand my hon. Friend’s concern. We will be working with local partners to minimise the impact of the job losses. Honda has assured us that it is committed to the long-term success of the plant in Swindon, which I have visited—it is a remarkable plant—and the 3,000 people who work there. I know that Honda remains committed to the UK and committed to Honda. We will work with the local council and local people to ensure that Swindon continues to have a strong and successful economic future.
Edward Miliband (Doncaster North) (Lab)
This morning, we learned that the energy company, SSE, will be freezing its energy prices for 20 months. Would we be right to assume that the Prime Minister believes that the price freeze is unworkable, impossible to implement and probably a communist plot?
The Prime Minister
It is hugely welcome in our country that energy companies are cutting and freezing their bills. As ever with the right hon. Gentleman, he has failed to read the small print. This is what Scottish and Southern Energy says about why it has been able to cut bills in that way. It says today that “the decisions taken” by the Government
“to reduce the…costs of the ECO were a principal factor in SSE being able to make this price commitment”.
That is what is happening under this Government. What a contrast with the doubling of the gas bills and the 50% increase in electricity bills when Labour was in power.
Edward Miliband
So, over the past six months, we have obviously misunderstood the Prime Minister. He is the champion of the price freeze—that is what he wants us to understand. Week after week, he denounced Labour’s call for an energy price freeze to help families and business, but now—apparently—he supports the price freeze. Can he explain why a price freeze was wrong six months ago but the right thing to do today?
The Prime Minister
What we have done is reduce the costs of energy charges so that companies are able to cut their bills. Let me give the right hon. Gentleman the list of what has happened since I made the announcement about rolling back the costs of green charges—[Interruption.]
Mr Speaker
Order. We must be able to hear both the questions and the answers.
The Prime Minister
You are right, Mr Speaker. Opposition Members shout in support of the Leader of the Opposition in the Chamber and brief against him outside. That is what happens.
This is what has happened since I made that announcement. For dual-fuel users, British Gas has cut £50 off bills; Scottish Power £54 off bills; E.ON £50 off bills; EDF £65 off bills; and npower, Scottish Power and EDF have announced that prices will not go up further in 2014. May I therefore thank the right hon. Gentleman for the opportunity to demonstrate how that part of our long-term economic plan is as successful as all the other parts?
Edward Miliband
Once again, the Prime Minister shows how totally out of touch he is. The Office for Budget Responsibility itself says that energy prices are rising by more than double the rate of inflation. That is the reality. I am very interested in his position now on price freezes, because this morning the Energy Secretary said—[Hon. Members: “Weak.”] I will tell Government Members what is weak: not standing up to the energy companies. That is what they are not doing. The Energy Secretary, who I see over there, said this morning that he was calling on other suppliers to do the same and freeze their bills. Is it now the Prime Minister’s policy that we should freeze bills?
The Prime Minister
It is our policy that bills should be cut, and bills are being cut under this Government. That is what is happening. When we come to the small print, let us have a look at what Scottish and Southern said about the Labour policy. [Hon. Members: “Weak.”] I will tell hon. Members what is weak: weak is not having an economic policy; weak is not responding to the Budget; weak is having no long-term plan for Britain—that is what is weak. This is what Scottish and Southern says about Labour’s plans. It is worth listening to. It says that Labour policy
“does not appear to include a clear commitment or a long-term solution to reduce the costs of supplying electricity and gas…An externally-imposed 20-month price freeze would not reduce the costs of supplying energy.”
That is what Scottish and Southern says, and that is why, I assume, a Labour business supporter called John Mills said about Labour’s policy yesterday:
“I don’t think the Labour party would do that if it were in power”.
If Labour cannot convince its one business supporter, how on earth can it convince the country?
Edward Miliband
The right hon. Gentleman is not the Prime Minister at all; he is the PR man for the energy companies—that is what he is. Bills are rising and what is clear is that his argument against a freeze has been totally demolished today. A price freeze for households and businesses is feasible, workable and will happen under a Labour Government. All of this shows that he just does not get the cost of living crisis that is happening in this country. Will he confirm that the OBR itself shows that, over the course of this Parliament, living standards will be falling and that it is the first time that has happened since the war?
The Prime Minister
Is it not great that, after a week, we have finally got to the Budget? The right hon. Gentleman has finally got something to say about the Budget. If he is concerned about energy prices, he might want to explain why he voted against a Budget that has a £7 billion cut in energy prices for businesses and consumers up and down this country. Why did the Opposition vote against that? If he is concerned about the cost of living, why did they vote against a personal allowance of £10,500 for every single worker in our country? If they are concerned about the cost of living, why did they vote against giving pensioners the right to spend their own money as they choose? If they care about the cost of living, why did they vote against abolishing the savings tax, paid for by the poorest people in our country? They do not have a clue about how to help working people, no clue about how to run the economy and no clue about the Budget.
Edward Miliband
Not for the first time, “Calm down, dear, calm down.” Or should I say, for the benefit of the Chancellor, “Eyes down, dear, eyes down”? The truth is that living standards are falling over this Parliament. The Prime Minister talks about what the Chancellor did on energy, but it is classic “Give with one hand and take with another.” He introduced a carbon price floor and now he wants credit for giving part of it back to families and businesses. Let us try the Prime Minister again. Will he confirm that page 87 of the OBR document says that living standards are falling over this Parliament—yes or no?
The Prime Minister
The figures that the right hon. Gentleman quotes time and again at the Dispatch Box—[Interruption.]
The Prime Minister
Of course we were made poorer by the great recession over which the Opposition presided, but I am happy to compare our records on the cost of living any time. We are cutting income tax for 25 million people; they voted against it. We have taken 3.2 million people out of income tax altogether; they voted against it. We voted to freeze the council tax; they voted against it. We are freezing fuel duty; they voted against it. We are cutting spending so that we can cut taxes for hard-working people; they have voted against every single change. Their vote against the Budget last night will go down in the history of this Parliament as a massive own goal for Labour.
Edward Miliband
The Prime Minister will go down in history as the Prime Minister who cut people’s living standards over the course of this Parliament, and he cannot deny it. He cannot solve the cost of living crisis because he does not think there is one. He will not freeze energy bills because he thinks that that is nothing to do with the Government. The thing on which we can always rely with the Prime Minister is that he will always stand up for the wrong people.
The Prime Minister
What is happening under this Government is that inflation is falling, unemployment is coming down, 1.3 million more people are in work, and there are 400,000 more businesses in our country. We are helping the economy to recover from the ravages with which it was left by Labour. That is the truth. Everyone can see that we have a plan for a better future for our country, and everyone can see that the right hon. Gentleman is flailing around, a man with no plan and, increasingly, no future.
Paul Burstow (Sutton and Cheam) (LD)
Children with cancer are being denied new life-saving drugs because out-of-date rules governing clinical trials allow companies to exclude children, even when the drugs could treat childhood cancers. Will the Prime Minister meet me, and members of the Institute of Cancer Research, to discuss how we can get the rules changed through the European Commission so that families can have hope and we can get those treatments to children?
The Prime Minister
I am very happy to listen to the right hon. Gentleman and his suggestions. He and I strongly support the cancer drugs fund, which has made a huge difference in getting cancer drugs to people in our country, including children. I shall be very happy to consider the suggestion that he has made.
Stephen Pound (Ealing North) (Lab)
Q2. A little calm, please.Beer and bingo may not exactly be the bread and circuses of our age, but, as leading lights of the coalition rush forward to express their love for them, will the Prime Minister dissociate himself from the snobbish and disdainful comments made by his party chairman?
The Prime Minister
I thank the hon. Gentleman for once again advertising the fact that this Government are cutting the tax on bingo operators, which is quite right, because their industry was decimated by Labour. I also thank him for drawing attention to the Chancellor’s approach of cutting beer duty because we want to back responsible drinkers, and because we back the pub trade. I am sure that the right hon. Member for Doncaster North (Edward Miliband) enjoys a game of bingo: it is the only time he ever gets close to No. 10. [Laughter.]
Stuart Andrew (Pudsey) (Con)
Yesterday the all-party parliamentary group on mental health heard a very powerful and moving account of the effects of post-traumatic stress disorder. Will my right hon. Friend join me in paying tribute to Simon and Louisa, who completed an epic run from Leeds to Parliament yesterday to promote their organisation which seeks greater research into the condition? Is it not the case that, as well as being one of the hidden costs of armed conflict, post-traumatic stress disorder affects thousands of people who have been victims of rape, sexual assault and other life-changing traumas?
The Prime Minister
I am happy to join my hon. Friend in paying tribute to those people, who achieved so much through their run and by raising and highlighting the importance of this issue. Organisations such as Combat Stress do an extraordinary job in our country. We must face up to the fact that because of the conflicts in Iraq and Afghanistan, there will be many more people suffering from post-traumatic stress disorder who will need our help and support not just this year and next year, but long into the future. That is why I think that the Chancellor’s decision to take the money from the LIBOR fines and use it to back military charities, including those that deal with this issue, is very far-sighted.
Derek Twigg (Halton) (Lab)
Q3. The 25th anniversary of the Hillsborough disaster is less than three weeks away and the fresh inquests are due to start. Does the Prime Minister agree that it is a scandal that some police officers who were on duty on the day of the disaster are refusing to co-operate with the investigation, and may I ask what he will do to stop such a situation happening again?
The Prime Minister
An important anniversary is coming up. As the hon. Gentleman knows, the Independent Police Complaints Commission is investigating all these complaints, and in addition the families can make complaints to the Investigatory Powers Tribunal. The Home Secretary has written to all police forces asking them to ensure they make available all the information they hold on Hillsborough, and in my view that should include police officers co-operating with this vital inquiry.
Duncan Hames (Chippenham) (LD)
After Dunlop’s departure, does the Prime Minister agree that we should assist investment in the most energy-efficient plants in order to ensure a competitive and sustainable future for tyre manufacturers committed to keeping jobs in Britain?
The Prime Minister
We should certainly do that. We have seen a huge recovery in our automotive industry. Obviously, Dunlop’s decision is disappointing, but we have some huge success stories in component supplies and manufacture for the automotive industry. The programme in the Budget for helping energy-intensive industries will clearly help some of the companies involved in this industry, but the broader help—the £7 billion I referred to earlier—will help all businesses, including those in automotive supply.
Jenny Chapman (Darlington) (Lab)
Q4. A month ago I asked the Prime Minister about ambulance response times and he read an answer from his folder that did not answer the question at all. Since then, an elderly Darlington woman was left for more than four hours vomiting blood before an ambulance arrived. This time, please may I not have a prepared answer; can we please have some action?
The Prime Minister
I am very happy to look at the case the hon. Lady mentions. She says she does not want that, but I think that is the right thing to do: to look at this individual case. In all our ambulance areas we have waiting time targets that ambulances are meant to meet in response times, and I am very happy to look to see what happened in this case and whether lessons can be learned for the future.
Mr Graham Brady (Altrincham and Sale West) (Con)
Q5. With consensus breaking out in support of Budget measures to help those providing for themselves, will my right hon. Friend join me in seeking a new consensus against imposing penal taxes on houses that have risen in value but whose owners may well be retired on modest incomes?
The Prime Minister
We want a fair tax system, and under this Government the rich have paid more in tax—specifically more in income tax—than they ever did in any year under Labour. We have made sure we have raised taxes fairly, not least through stamp duty, but we do not support a tax on the family home; we do not think that is the right step forward and we will fight it very vigorously.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
Q6. Seventy per cent. of stay-at-home mums say going back to work just would not add up because rising child care costs would leave them worse off. With maternal employment rates going down on the Prime Minister’s watch, why is he doing nothing before the general election to help with rising child care costs?
The Prime Minister
We are helping families with child care, not least by giving 15 hours—[Interruption.] That is happening before the election; it has happened under this Government in this Parliament—15 hours of free nursery care for three-year-olds and four-year-olds. [Interruption.] Opposition Members say it is not enough; it is more than Labour ever provided. [Interruption.] It is good to see the shadow Chancellor gesticulating in favour of his leader now; he will be outside in a minute briefing against him.
Mr James Gray (North Wiltshire) (Con)
The whole world has watched with grave concern events in Crimea and the massing of Russian troops on the eastern border of Ukraine. Coming on top of other instability in the world—in Syria, north Africa, the Central African Republic, Venezuela and elsewhere—is it not time that the Prime Minister re-examined the national security strategy and maybe, just maybe, thought about revising some of the recent deep and damaging defence cuts?
The Prime Minister
We will review the national security strategy on the four-year rolling basis that we established it—that is the right thing to do. On what we have done on defence spending, we still have a top five defence budget of any country in the world; we have removed the £38 billion black hole that we inherited; and we have set out spending of £160 billion over the next decade on defence equipment. But we would not be able to get that modern defence equipment—the things that modern defence forces need—if we had not taken difficult and long-term decisions at the start of this Parliament.
Andy McDonald (Middlesbrough) (Lab)
Q7. More than 80% of spending on transport infra-structure will be in London and the south-east—nearly £5,000 per head there compared with less than £250 per person in the north-east. That gross disparity does nothing to help constituencies such as Middlesbrough pursue their ambitions for growth. Should not such investment be more equitably distributed across all the regions?
The Prime Minister
This Government have spent £8 billion on transport in the north of England in the first two years of this Parliament, including: the modernisation of the Tyne and Wear metro; the new Tyne crossing; £380 million to upgrade the A1 from Dishforth to Barton; and we have committed to feasibility studies to improve the A1 north of Newcastle and between Newcastle and Gateshead. All those proposals were brought forward under this Government. We are rebalancing our economy, we are investing in infrastructure and we are making sure that the north of England gets its fair share.
Mel Stride (Central Devon) (Con)
Q8. Unemployment in my constituency has fallen by more than 20% in the past 12 months and with inflation recently falling, too, that is providing welcome upward pressure on living standards. Does my right hon. Friend therefore agree that we should take no lessons from the persistent negativity of the Labour party talking our country down, and that we should stick to our long-term economic plan?
The Prime Minister
An absolutely key part of our long-term economic plan is helping business to create the jobs that our country needs. We have got 1.3 million more people in work, and 1.7 million more private sector jobs than in 2010. So we are seeing a rebalancing of our economy. What that means for people is the safety and security of having a pay packet at the end of the week so they can support their families. That is what is changing in our country and that is why we will stick to our long-term economic plan.
Mrs Mary Glindon (North Tyneside) (Lab)
Q9. Despite what the Government have said about cutting energy costs, 71% of the people in North Tyneside I surveyed are still worried about their bills and want a full energy bill price freeze now. Will the Prime Minister listen to the people of North Tyneside and meet that demand?
The Prime Minister
The most important thing we can do is to help the energy companies reduce bills by rolling back the costs of these green levies and charges. Only since we have done that have we seen energy company after energy company reduce the costs of people’s bills. We also want to see a more competitive market and to see more players in this market. These are all things we are having to correct from the disastrous stewardship of the energy Department when the right hon. Member for Doncaster North (Edward Miliband) was in charge.
Mr John Baron (Basildon and Billericay) (Con)
Q10. Each year, thousands of lives are needlessly lost in this country because people’s cancers are diagnosed far too late. The all-party group on cancer and the wider cancer community have successfully lobbied the Government to make sure that the local and national NHS are measured by their one-year survival rates in order to encourage clinical commissioning groups to introduce initiatives to promote early diagnosis—cancer’s magic key. The Government deserve great credit for listening, but twice now, and at late notice, the publication of the one-year figures has been postponed. Will the Prime Minister do what he can to ensure that we meet the next deadline?
The Prime Minister
On the specific point that my hon. Friend raises, yes we will publish those figures—they are important figures and they should be published in June. What we are doing on cancer is backing the NHS with extra money—that is important; we have the cancer drugs fund, which I spoke about earlier and which has helped more than 44,000 people since this Government came to office. Of course, no cancer drugs fund is made available for people in Wales, but it is here in England, and we are spending £750 million on cancer services. But he is absolutely right about early diagnosis, which is why it is really important to make sure that we are doing everything with our GPs to diagnose and recognise cancer earlier.
Mr Nigel Dodds (Belfast North) (DUP)
The Prime Minister, and indeed the whole House, will be well aware of the contribution to the immense suffering of thousands of innocent victims across the United Kingdom made by the Gaddafi regime’s state sponsorship of IRA terrorism and the supply of arms and Semtex over many years to republican groups. Does he agree with what he previously said: the issue of compensation from Libya remains a priority for this Government? Will he agree to meet me to review the case and to discuss what further progress might be made?
The Prime Minister
I am happy to repeat what I said earlier. The Libyan authorities are in no doubt of the importance that we attach to their engaging properly with UK victims seeking redress. I raised it most recently with the Libyan Prime Minister last September. Of course the country faces huge challenges, which makes it difficult to make progress on this issue, but I am committed to doing that, and I am happy to meet the right hon. Gentleman.
Mr David Burrowes (Enfield, Southgate) (Con)
Q11. Does the Prime Minister welcome the change from the previous Labour Government, who talked loosely about British jobs for British workers but who saw 90% of new jobs going to foreign nationals? This Government let the success of their long-term economic plan do the talking, with nearly 90% of new jobs going to British workers last year.
The Prime Minister
My hon. Friend is absolutely right. Last year, employment in our country went up by 425,000—that is 425,000 more families with a breadwinner earning money for that family’s security—and 87% of those jobs went to British nationals. There is much more we need to do. We are aiming for 2 million apprenticeships in this Parliament. We have had excellent announcements this week, with Marston’s creating 3,000 jobs, Siemens creating 1,000 jobs in Hull and Barratt Homes creating 3,000 jobs in housing. We want to ensure that young people are available and trained for those jobs, which means improving our schools and our skills and investing in apprenticeships.
Angela Smith (Penistone and Stocksbridge) (Lab)
Westminster is awash with the rumour that the Government are considering an amendment to the Hunting Act 2004. Will the Prime Minister take this opportunity to quash that rumour by confirming his commitment to the coalition agreement, which allows only for a free vote on the repeal of the legislation?
The Prime Minister
There are always lots of rumours going around Westminster, and it is a good moment to talk about them. The hon. Lady will know, as I have said it before at the Dispatch Box, that proposals were made on a cross-party basis to the Environment Secretary about an amendment to the Hunting Act that would help in particular upland farmers deal with the problem of fox predation of their lands. That letter has been received and is being considered, but I regret to say that I do not think there will be Government agreement to go forward.
Mr Speaker
Order. Members are in a state of high excitement. One hopes that they are in a state of high excitement to hear the hon. Gentleman.
Mr Robertson
I thank the Prime Minister for visiting my constituency of Tewkesbury during the recent floods. We met in a village called Longford, which floods badly, yet there are plans to build 3,500 houses in that very area. Will the Prime Minister consider strengthening the planning guidance that he gives on flooding? Will he give stronger guidance to the Environment Agency, because there is a big difference, I am afraid, between rhetoric and what is happening in reality?
The Prime Minister
I know that my hon. Friend’s constituency has suffered repeatedly from flooding, and I have visited it twice in recent years to discuss it with him and with local people and businesses. Let me make two points. As he knows, any future developments have to comply with the national planning policy, which makes it clear that inappropriate development in areas at risk of flooding should be avoided. Secondly, and more importantly, in 95% of cases where the Environment Agency objects to planning on flood-risk grounds, the final decision is in line with agency advice.
Clive Efford (Eltham) (Lab)
Q13. When bankers’ salaries have gone up by five times the rate of ordinary workers’ salaries and the top 100 chief executive officers are earning 133 times more than the average worker in their companies, is it not right that those on the highest incomes contribute the most through tax? With that in mind, will the Prime Minister rule out any consideration of a further cut in the highest rate of tax for the richest 1%?
The Prime Minister
We have said that that is not our priority, but I agree with the hon. Gentleman that the richest should be paying more in income tax and making a bigger contribution. Under this Government, that is exactly what is happening. In a way, that is what is interesting about the Opposition’s argument. They cannot talk about jobs because there are more of them. They cannot talk about inflation because it has come down, and they cannot talk about the deficit because we are cutting it. They have one argument left, which is about fairness. If they look at the figures, they will see that inequality is at its lowest level since 1986: 1 million fewer people are in relative poverty and half a million fewer children are in child poverty than when Opposition Members were in the Cabinet. The facts show that the Government are not only delivering recovery but delivering it fairly, too.
Mr Adam Holloway (Gravesham) (Con)
Q14. I know that the Prime Minister is acutely aware that we are coming up to the 30th anniversary of the appalling carnage at the Golden Temple at Amritsar. What more can be done at last to bring someone to justice for the appalling events that followed across India?
The Prime Minister
My hon. Friend is right that what happened at Amritsar 30 years ago led to a tragic loss of life. It remains a deep source of pain to Sikhs everywhere and a stain on the post-independence history of India. We cannot interfere in the Indian justice system, nor should we. The most important thing we can do in this country is celebrate the immense contribution that British Sikhs make to our country, to our armed forces, to our culture and to our business life and celebrate what they do for this country.
Mr David Winnick (Walsall North) (Lab)
As the Prime Minister is so keen on boasting, is he proud of the fact that many elderly people in need are no longer able to get essential assistance because of the policies being pursued by this Government? Why is it that a Cabinet made up of so many multi-millionaires is so indifferent to the needs of the most vulnerable in our society?
The Prime Minister
I remember sitting on that side of the House when Labour gave pensioners a 75p increase. Do not think that we have forgotten about that. Do not think that we have forgotten about the abolition of the 10p income tax, either. This Government have taken 3 million of the poorest people out of tax and pensions have gone up by £15 a week. We are putting money into the social care system, because we have protected the national health service. That record compares very favourably with that of the Opposition.
Karen Lumley (Redditch) (Con)
Q15. In the week of my 50th birthday and the month of Redditch’s 50th anniversary as a new town, will the Prime Minister join me in congratulating Ken Williams, the head of the Kingfisher centre, for helping me to organise the anniversary as well as my first apprenticeship fair, from which we will get more apprenticeships on top of the 3,000 we have had since this Government came to power?
The Prime Minister
First, let me very publicly wish my hon. Friend a very happy 50th birthday and, at the same time, wish everyone in Redditch a very happy 50th anniversary and thank them for the kind present that she gave me of a Monopoly set with Redditch as its basis. That was a very kind gift. I do not think I have yet put it in the Register of Members’ Financial Interests, so I had better put that right after this exchange. My hon. Friend is absolutely right to be pushing apprenticeship fairs and job fairs. We are aiming for 2 million apprenticeships in this Parliament and we have 1.6 million already trained. That is one of the most important things we can do to provide a strong and secure future for our country.
European Council and Nuclear Security Summit
(10 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Prime Minister (Mr David Cameron)
With permission, Mr Speaker, I should like to make a statement on last week’s European Council and this week’s summit in The Hague, which included the first meeting of G7 leaders—without Russia—in almost two decades.
Before I turn to the subject of Ukraine, let me briefly update the House on discussions on the economy, on energy and climate change, on the situation in Sri Lanka and on efforts to combat nuclear terrorism.
First, our long-term economic plan is supporting the growth of a new trend, reshoring, in which jobs are starting to come back to the UK. A recent report from EEF, the manufacturers’ organisation, found that one in six firms had brought all or part of their production to UK suppliers over the past three years. That reshoring of jobs is vital because it means that more of the benefits of globalisation can be felt by the British people, so, with the support of the CBI and Business Europe, I argued at the European Council that we should do more to develop reshoring in Britain and across Europe. The Council agreed to encourage that by doing more to cut red tape, attract investment, stimulate innovation and pioneer more work on reducing energy costs, including shale gas.
Secondly, businesses need affordable energy prices to keep pace with their competitors, so we agreed to accelerate efforts to complete the internal energy market and we agreed to improve the energy flow across the continent with more interconnections. On climate change, we want the EU to play a strong leadership role in efforts to secure a global climate deal next year in Paris. That means swift agreement on a target for reducing greenhouse gas emissions in the European Union, and I fully support the 40% target proposed. At the European Council meeting we did not reach full agreement in the EU and further attempts will be made on that later in the year.
Thirdly, on reconciliation in Sri Lanka, President Rajapaksa has failed to address the issue of the past properly, so in the coming hours the United Nations will vote on a UK-sponsored resolution for an international and independent investigation into alleged war crimes. At the Council, I secured the full backing of all EU member states for this approach and it is reflected in the conclusions of the Council. At The Hague I urged leaders from countries as diverse as South Korea, Kazakhstan, Gabon and Japan to support this crucial resolution.
On combating nuclear terrorism, which was the subject of the summit in The Hague, the meeting reaffirmed our determination to push through reforms of global security systems to ensure that vulnerable nuclear material does not fall into the wrong hands. This initiative, launched by President Obama back in 2010, has led to a remarkable amount of nuclear material being secured and reduced across the world, which should be commended.
On Russia’s actions in Ukraine, I had four clear objectives at these meetings: to secure an increase in the number of people subject to travel bans and asset freezes; to agree specific measures in response to what has happened in Crimea; to develop more clarity on what would happen if Russia were to take further steps to destabilise the situation in Ukraine; and to join efforts to build support for a democratic, successful and independent Ukraine. I want to say a word about each.
First, as I made clear in this House two weeks ago, if Russia did not engage in dialogue with the Ukrainian Government, or if those talks did not start producing results, there must be clear consequences. As a result, travel bans and asset freezes have been imposed, and last week the European Council agreed to extend these measures to another 12 individuals, bringing the total to 33—broadly the same number as has been imposed in the US. We have cancelled the EU-Russia summit, agreed not to hold bilateral summits, and decided to block Russian membership of the OECD and the International Energy Agency. In The Hague, G7 leaders agreed that there would be no G8 summit in Sochi and no further participation in any G8 activities until Russia changed course. We agreed there would instead be a G7 meeting in Brussels in place of the Sochi summit on the same day.
I also pushed hard on the need to reduce Europe’s dependency on energy from Russia. The G7 agreed that energy Ministers would meet ahead of the Brussels summit, and the European Council tasked the Commission to produce a comprehensive plan for reducing Europe’s dependency on Russia by June. This work is long term but vital. It requires new gas pipelines, new liquefied natural gas terminals, more shale gas, more sources from outside Russia and greater connectivity. Above all, it requires political will and I am determined that, although the UK has almost no reliance on Russian gas, we should play our part in this important work.
Secondly, it was important to take specific measures in response to what has happened in Crimea. This was a sham and illegal referendum conducted at the barrel of a Kalashnikov. Both the European Council and the G7 leaders made very strong statements condemning the illegal referendum and condemning Russia’s illegal attempt to annex Crimea in contravention of international law and specific international obligations. Both meetings were clear: the international community will not recognise either. The European Council also agreed to implement economic, trade and financial restrictions on occupied Crimea, accepting Crimean goods only if they came from Ukraine, not Russia.
Thirdly, both the G7 and the European Council sent a very clear message to President Putin that it would be totally unacceptable to go further into Ukraine. The international community remains ready to intensify sanctions if Russia continues to escalate this situation, and I pushed hard at both meetings to secure greater clarity on what this should mean. The G7 agreed that this could include co-ordinated sectoral sanctions that would have an increasingly significant impact on the Russian economy; and for the first time, the EU Council tasked the European Commission to prepare measures that would have far-reaching economic consequences. Russia has a clear choice to make. It does not have to continue on this path. Diplomatic avenues remain open—and we encourage the Russian Government to take them.
Finally, both meetings reaffirmed the strength and breadth of international support for the Ukrainian Government and their people. It is clear what needs to happen. We need a broad and generous International Monetary Fund package of financial assistance to help the Ukrainian Government stabilise and repair their economy. We need a Ukrainian Government who reach out to the regions and respect the rights of Russian-speaking minorities. We need an association agreement between the EU and Ukraine; that is now signed, but it needs to be backed by reduced tariffs on Ukrainian goods. We need international support for free elections, which should enable all Ukrainians to choose their leaders fairly. Britain will support all of these things.
Russia’s violation of international law is a challenge to the rule of law around the world, and should be a concern for all nations. We have to be clear how unacceptable it is, and to see through these economic sanctions and consequences. Otherwise, we will face similar situations in similar countries with a similar sort of unacceptable behaviour. Britain must continue to play its part in standing up to Russia’s actions—pressing for Russia to change course, and helping the Ukrainian people in their hour of need. I commend this statement to the House.
Edward Miliband (Doncaster North) (Lab)
I start by welcoming the Prime Minister’s statement. I want to start where he did, on the formal substance of the EU summit and its conclusions.
We welcome the steps that were agreed in efforts to complete the internal energy market, to improve the energy flow across the continent, to strengthen EU tax rules on the exchange of information, and on nuclear proliferation. On climate change, I agree with the Prime Minister on the importance of the EU reaching agreement, if possible in advance of the UN climate leaders summit in September. The EU has shown leadership on this issue before. Some countries in the EU have doubts about the strength of the 40% target, but it is a target that we support and I know he supports, and he will have our support in pushing for maximum ambition on this issue.
On discussions regarding the vote at the UN Human Rights Council on Sri Lanka today, I am grateful to the Prime Minister for setting out the actions that have been taken. In the event of the UN resolution being passed, which is what we all hope for, will he say what he sees as the next steps to ensure that the inquiry we all want to see actually happens?
Let me turn to the main substance of the summit—Ukraine. The House is united in outrage at Russia’s annexation of Crimea. It is an action in direct violation of Ukraine’s territorial integrity and it is a clear breach of international law. Russia’s actions have created the most significant security threat on the European continent in decades. I believe that Members across the House will want to praise the measured response shown so far by the Ukrainian authorities in response to this terrible act of aggression. I also want to express support for the shared goals set out at last week’s EU Council meeting—of both isolating Russia for its actions and reassuring our allies and partners in the region.
I will take the specific outcomes of the summit in turn. First, I welcome the signing of the political chapters of the association agreement between the EU and the Ukrainian Government. It was that strengthening of co-operation with the EU, spurned by the former President, that partly sparked the current crisis. It is right that the EU should continue to make it clear that these agreements are not a zero-sum game between the EU and Russia—but it is also right that the EU now pushes ahead with similar pacts for Moldova and Georgia.
Secondly, it is vital, as the Prime Minister acknowledged, that the international community imposes real costs on President Putin and his key supporters. For that reason, we welcome the agreement at the EU summit on extending the list of individuals targeted by visa bans and asset freezes. But unlike the Washington list, the EU list avoided placing sanctions on certain senior Kremlin figures. Will the Prime Minister explain the reasons behind that, and say whether any specific proposals were put forward for consideration before the final agreement on the publication of the EU list?
Thirdly, given that the US has added sanctions on the Bank Rossiya and indicated that the economic sectors may be targeted as part of its approach, the Prime Minister said we would have a sectoral approach on these matters. Will he say what sectors are being looked at as part of the EU discussions?
Turning to the meeting of the G7 and the EU, we welcome the decision taken by members of the G7 to suspend the 16-year collaboration with Russia. It is absolutely right, not only that the Sochi summit does not go ahead, but that no future summits can be envisaged while the Russian action is outstanding. I note also, though, that this week the Russian Foreign Minister held talks with his Ukrainian counterpart for the first time since Russia’s move into Crimea. May I ask the Prime Minister what steps are being taken to ensure that such dialogue continues between Ukraine and Russia in the weeks ahead?
Finally, given that the Prime Minister said this week that Britain and its NATO allies would help to bolster the defences of the alliance’s Baltic members, which have Russian minorities and will be feeling particularly vulnerable at this time, will he tell the House what the nature of any such UK contribution would be?
The actions of the whole international community should be designed to strengthen Ukraine’s sovereignty and democratic transition, to impose real costs on the Government of President Putin, and to bring all sides together in a meaningful dialogue to de-escalate the situation and find a political solution. As we have said throughout this crisis, in taking this action, the Prime Minister will have our full support.
The Prime Minister
I thank the Leader of the Opposition for his response and for the points that he made in support of the approach that we are taking. Let me try to answer every point in turn.
On the Council communiqué, the right hon. Gentleman is right to mention the advances on tax transparency. This has been hard going, but there was a real breakthrough with Luxembourg and Austria now signing up to the approach. It means we have to put pressure on Switzerland to make sure it does that too, but we have made real breakthroughs in realising proper exchange of tax information, and I want to thank Austrian and Luxembourg colleagues for doing that.
On climate change, we agree that we need an agreement for the 40% reduction in carbon emissions. I think it will be achieved later in the year. We have to engage with the Polish Government and others. They do have an understandable concern, which is that if we are trying to control carbon and restrict supplies of Russian gas, that could lead to some countries burning coal. That does not help on the climate change front, and we need to work with them to find a solution.
On Sri Lanka, I am very grateful for the support we have for this co-sponsored UK motion. We hope it will be carried. If it is, then it is mandated that the review has properly to go ahead.
On Ukraine, the right hon. Gentleman is completely right that we should not see this as a zero-sum game—either a Ukraine that leans to Russia, or a Ukraine that leans to Europe. We want Ukraine to be a bridge between the two. It should have a proper relationship with Russia, but also a growing relationship with Europe—if that is what its people want. He is right to say that we should push ahead with these agreements, not only with Ukraine, but with Moldova and Georgia. It would send a terrible message if, because of what Russia has done, we were to pull back from these agreements that we would otherwise be signing.
On the question about why the US is taking a slightly different approach to the EU in terms of the specific individuals targeted for asset freezes and travel bans, the approach we take in the EU is that the individual concerned should have a proper link with the action taken in Crimea. [Interruption.] The right hon. Gentleman asks why. I think it is because of the legal processes under which the EU has to act. There is a logic in saying that it is right to target those—including Russian MPs—who have played a role in this illegal act.
In terms of economic sectors and future sanctions were Putin to go further in Ukraine, because the EU talks about wide-ranging economic sectors, that would have to include areas such as energy, financial services, trade and arms. The breakthrough here was to get the Commission to start the work, because it is no good warning about economic sanctions if work is not under way to deliver what they should be. That was a real breakthrough at the meeting which Britain strongly supported.
The Russian Foreign Minister’s talks with the Ukrainian Foreign Minister are hugely welcome. I met Ban Ki-moon yesterday to encourage further such contacts and for the UN to do everything it can to bring together Ukrainian and Russian Ministers.
Finally, the right hon. Gentleman asked about NATO and what we were doing to help to provide certainty and security particularly to Baltic countries. We are increasing our help with their air policing and are making four aircraft available. We should do everything we can to reassure our friends and colleagues in Latvia, Lithuania and Estonia and in Poland that we really believe in their NATO membership and the guarantees that we have given to them, and that we will work together to secure the future of Europe, as we have in the past.
Sir Malcolm Rifkind (Kensington) (Con)
Does the Prime Minister agree that when the history of the Crimea crisis comes to be written, it will be found that there were no winners? President Putin has, of course, control of Crimea, but he has lost Ukraine and done much to unite the Ukrainian people. Will my right hon. Friend also accept that the international community—the United States and European countries—will not fare well in the judgment of history either? The response that we have made to the invasion of a European country by its neighbour and to the annexation of its territory in contrast to all its neighbour’s international legal obligations has resulted in a very timid and hesitant response, with no financial sanctions or sanctions that might influence future Russian behaviour. That surely is not the best way to deter future aggression.
The Prime Minister
My right hon. and learned Friend speaks with great force and a huge amount of wisdom on this issue, but I think it is too early for the history books to be written. What really matters is that the countries of the European Union, the United States and the international organisations, such as the UN, recognise that we need a long-term approach. When the history books are written, I hope they will show that Europe decided to become more energy independent, that the UN stood up for the importance of its charter and that Britain, America and our allies took a series of predictable and consistent steps to demonstrate to Russia that what she was doing was wrong. If we take a long-term approach, I think we will achieve an outcome that the history books might be kinder about.
Mr Jack Straw (Blackburn) (Lab)
I commend the Prime Minister and Foreign Secretary’s strategy. In the absence of sending gunboats, which I think few of us would recommend, a step-by-step, long-term approach is sensible. Ukraine is one of the very few countries in the world that voluntarily gave up nuclear weapons on its soil, and it did so in return for clear guarantees of its territorial integrity, including from Russia. Given the talks on nuclear security that he has been involved in, can he say what further steps need to be taken to ensure that Russia’s invasion of Crimea does not undermine the international strategy to reduce nuclear proliferation?
The Prime Minister
The right hon. Gentleman, who served as Foreign Secretary, makes a very good point. There was never an option of sending gunboats. There is not some military answer to this. The only approach is a considered, long-term, tough and predictable one so that Russia knows that if it goes further into eastern Ukraine there will be very significant economic consequences. He makes an important point about countries that have given up their nuclear weapons not fearing that they have made the wrong decision, because there were countries, such as Kazakhstan, represented at the conference in The Hague which made the point that they had taken those steps too. That only serves to underline the importance of taking a long-term and tough approach to Russia on this.
Sir Menzies Campbell (North East Fife) (LD)
Does my right hon. Friend agree that an unresolved question is whether the annexation of Crimea was opportunistic or part of a wider strategy? Against the possibility of the latter, is it not now time to reaffirm the transatlantic alliance, enhance defence and political co-operation in Europe and strengthen the capabilities of NATO?
The Prime Minister
My right hon. and learned Friend asks a very good question: whether it was opportunistic or part of a strategy. I think that one can argue that it is part of a pattern. If we look at Abkhazia, South Ossetia, Transnistria and other frozen conflicts, we see a pattern emerging. That reinforces the importance of not just the west—NATO, the EU and the US—but the UN and other countries recognising that if we reward that sort of aggression in this part of Europe, others in other parts of the world will draw lessons from that. With regard to strengthening NATO, we have the opportunity of the NATO conference in Wales this year to reaffirm and refresh NATO’s vows, and I expect there to be a good and strong conversation about how to ensure that it maintains its relevance in the modern age.
Mr Bob Ainsworth (Coventry North East) (Lab)
Does not the annexation of Crimea demonstrate the weakness of our strategic approach to the Putin regime over many years? I understand the need for short-term reactions and rhetoric, but surely the emphasis must now be on long-term measures, because the nature of the regime has been apparent for many years. Energy dependency, economic dependency and defence capability through NATO are where our emphasis needs to be with regard to this crisis.
The Prime Minister
The right hon. Gentleman makes some very good points. The UK is not reliant on Russia for energy; we use a very small supply of gas that comes from Russia. That contrasts hugely with some other European countries, many of which rely on Russia for 80% or more of their gas. I agree that we need a long-term approach, as I said in my statement and in answers to questions, but I take issue slightly with what he said, because I think that this Government, and indeed the previous Government, have tried to engage with Russia not on the basis of softening the real concerns we have—we did not water down the Litvinenko measures, for example—but by arguing very strongly about the importance of human rights, civil rights and democracy, and in meetings with President Putin I have raised things such as the importance of gay equality. So we engage, but in a hard-headed way. I do not think that that engagement was wrong, but clearly if Russia chooses to go down this path there will be big consequences for the way that relationship works in future.
Mr William Cash (Stone) (Con)
Will my right hon. Friend immediately ensure—this has not happened so far, either in this statement or in those made by the Foreign Secretary over the past few weeks—that the House, and indeed the European Scrutiny Committee, is given a full and formal report explaining the foreign security and defence implications for the United Kingdom of the whole of the association agreement between the EU and Ukraine, including the political chapters, and the implications of the Final Act endorsed by the presidency conclusions over the weekend, particularly given the crisis with Russia and the EU’s assertion that Ukraine still includes Crimea? What will the timetable and procedure be for parliamentary ratification of both, because it is understood that the political parts of the association agreement will take effect before parliamentary ratification?
The Prime Minister
The assurance I can give my hon. Friend is that the association agreement between the EU and Ukraine is a document that will be in the House of Commons Library, if it is not there already, and people can study it. It is important that we sign the agreement. Imagine if we got ourselves into a position in which we were prepared to sign it when Yanukovych was running Ukraine but, because of what has happened, decided as a country and as a European Union to walk away from it. That would have been an extraordinary decision, so I think it is right to sign the political chapter and then try to open Europe’s markets to help the people of Ukraine.
Mr Peter Hain (Neath) (Lab)
I agree with much of what the Prime Minister has said, but does he not agree that bluster and bombast by diplomats and military leaders is unlikely to resolve the problem? Instead, we need a negotiated solution in which Ukraine’s military neutrality is guaranteed by both Moscow and Washington and in which NATO does not engage in any further enlargement or encirclement of Russia’s border, in return for a clear guarantee that Russia will not conduct any more aggressive moves in Ukraine, Moldova or any of its other neighbours. It seems to me that unless we get a deal like that, we will not make much progress.
The Prime Minister
I certainly agree that we do not want bluster and bombast; we want a talked process. But we have to be clear that a really good offer of a talked process and a contact group was on the table and the Russians refused to engage with it. That is why I think that the action taken—limited to start with, but growing—is necessary to demonstrate that there are two paths Russia can take: one of increased international isolation, and one of talks. As for the extension of NATO, I hear what the right hon. Gentleman says, but there must be many people in Lithuania, Latvia and Estonia who, looking at their own country and the future they want, and because they have Russian minorities there, must feel glad that they have the protective cloak of NATO.
Sir Gerald Howarth (Aldershot) (Con)
By annexing Crimea, Russia stands in flagrant breach of its commitments under the Budapest agreement of 1994, to which the United Kingdom and the United States are signatories. I say to my right hon. Friend, whose leadership on this I salute—it is a shame that some other European countries have not been so resolute—that if we are to deter Russia from further breaches of that agreement, we need to do more than issue hollow threats of further measures that are as yet unspecified. At the risk of being accused of being slightly militaristic about this, I will add that this is what NATO is for. I suggest that we need to consider a NATO maritime force to deter Russia from going further and annexing eastern Ukraine, which would give it a land corridor to Crimea, and indeed to Odessa.
The Prime Minister
I thank my hon. Friend for what he says. There are two things we need to stress here. One is that NATO is a defensive alliance and we should now be working hard to reassure NATO members about our commitment to their collective security and all the things that means. That is very important, and President Obama was very clear about it at the G7 meeting. The second thing we need to do—here I part company a little bit with my hon. Friend—is to make clear what steps we would take if Russia were to go further in eastern Ukraine. Those would be economic steps, but do not let us doubt how strong and powerful they could be. My argument in the European Council has been, given we know that if Russia were to go into eastern Ukraine we would have to put in place pretty robust sanctions, that it is worth trying to set out some of the arguments in advance so that Russia can see the very serious consequence of these actions.
Frank Dobson (Holborn and St Pancras) (Lab)
Alexander Litvinenko died in University College hospital having been murdered by the agencies of the Russian Government. The British Government’s response to that so far has been to prevent the establishment of a proper inquest. Will the Prime Minister now demonstrate that he believes in the rule of law here and that that inquest should be started, and carried out thoroughly and completely?
The Prime Minister
The murder of Alexander Litvinenko was a dreadful act, it took place on British soil, and we should take the strongest possible exception to that. That is why the Litvinenko measures were put in place and remain in place. Yes, of course there needs to be a proper process of finding out what happened. My view has been that an inquest, properly constituted, should be able to deal with these issues, including dealing with sensitive information that will need to be taken into account, but I have always made it clear that if that is not possible and we need a different form of inquiry, that will have to take place instead.
Penny Mordaunt (Portsmouth North) (Con)
May I thank the Prime Minister and the Foreign Secretary for the role they have played in getting a united, strong response to Russia’s actions? Does he agree that it is vital that the situation on the ground in Crimea is properly monitored, and can he provide this House with reassurances that that can and will be done?
The Prime Minister
First of all, I thank my hon. Friend for what she says. It is sometimes difficult getting 28 countries to agree to the steps that are being taken, but that is what we have achieved at two European Council meetings so far, and these sets of measures have greater strength having all 28 countries behind them. Monitoring will be difficult in Crimea, specifically, because of what is happening right now. But what is even more important is to get the OSCE monitors into Ukraine, and we said very clearly at the European Council that if that is not possible, an EU monitoring mission should be sent instead. The importance of this cannot be overstated. It is very important that we reveal to the world what is actually happening in eastern Ukraine rather than simply believing the propaganda that the Russians are pumping out.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
Some time ago, it might have seemed a remote possibility that article 5 obligations would be triggered, but given the events in Russia and Ukraine, it is now more likely than it has been for a very long time. Has the Prime Minister talked to other NATO members about a capacity review so that we can not only be sure of the political will to respond, should the need arise, but actually have the military capacity on the ground?
The Prime Minister
The hon. Lady makes an important point. Building the capabilities of NATO is going to be an important theme of the summit, but NATO is holding its normal regular meetings to discuss how to respond properly to what is happening, and we have added to that by the offer that we have made to the Baltic states.
Sir Richard Ottaway (Croydon South) (Con)
The Prime Minister has made it quite clear that he considers that Russia’s behaviour and breaches of international law are a wake-up call to the west, but is it not time to reassess whether our capacity matches our aims and objectives? For example, with difficult situations in Iran, Syria, north Africa and now Ukraine, does he think it right that the Foreign Office budget is less than we spend on the winter fuel allowance?
The Prime Minister
I think we do a huge amount with the Foreign Office budget, if you look at what my right hon. Friend the Secretary of State has been able to squeeze out of the Treasury. He is opening embassies across south-east Asia and parts of Africa. He has reopened the foreign language school of the Foreign Office, and that is making a real difference. It is the capacity of what we are able to do that matters most of all. In terms of the defence reviews and strategic reviews we have carried out, I repeat what I said at Prime Minister’s questions, which is that if we make difficult decisions—for instance, about the number of battle tanks in Europe and the moving of forces back from Germany to Britain—and we make some long-term savings, we can then invest in the sorts of capabilities that we will need. Of course, those capabilities, as my right hon. Friend the Minister for the Armed Forces reminds me, include a brand-new aircraft carrier coming very soon.
Mr Ben Bradshaw (Exeter) (Lab)
President Obama’s sanctions are so much stronger, and they target directly members of Putin’s corrupt inner circle who have dirty assets in London. Why is the Prime Minister so reluctant to do the same?
The Prime Minister
I am not reluctant to do the same at all. As I said, the EU process is about finding people who have a connection with the decision in Crimea and making sure they are properly targeted. I do not think it is fair to say that the Americans have taken tough actions and the Europeans have been slow to follow. One of the things we agreed at the European Council was specifically to target goods and services from occupied Crimea that cannot now be sold in Europe unless they go through Ukraine. That is a step that the Americans have not yet taken and a point I made at the G7.
Sir Edward Leigh (Gainsborough) (Con)
Contrary to what some have said, particularly my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind), is the Prime Minister aware that many of us support his careful and proportionate response, and we think that he might be an arbiter, because there is no history between us and Russia in these matters? Is he aware that many of us welcome his remark today that Ukraine—Ukrayina, which means “borderland” in Russian—might become a bridge to peace, not a path to war, if we promote free trade for Ukraine both with the EU and with Russia?
The Prime Minister
I want us to promote free trade with Ukraine. That is why the association agreement—the political part of it that is signed—now needs to be accompanied by the European Parliament lifting tariffs so that we can see Ukrainian goods come into the EU. I repeat what I said: we would like Ukraine to be a bridge between the EU and Russia. We are not asking it to take sides—to choose one path or another path; it is the Ukrainian people who should determine the path that that country takes. It is obvious from the history, geography, economy and everything else that it needs to have a very strong relationship with Russia as well as with the European Union.
Mr Nigel Dodds (Belfast North) (DUP)
May I welcome the Prime Minister’s statement? These developments in Ukraine and Crimea certainly underline and emphasise the relevance of NATO in the modern era. I support what has been said about defence capacity. Will he undertake at the NATO summit later this year to raise with our NATO partners and Governments the need for everyone to step up to the plate in terms of their contributions towards defence capacity so that we can ensure that a proper and measured response is available if needed?
The Prime Minister
I agree with the right hon. Gentleman. This is always a difficult subject in NATO because people do not want to give up national capabilities and invest in capabilities that enhance NATO as a whole. There are some steps we need to take. We should continue to oppose the establishment of EU headquarters as unnecessary duplication. We should be working very closely with major allies that have similar capabilities, like the French, which is what the Lancaster House agreement is all about. We should encourage other countries to do what Britain is doing in matching our contribution of at least 2% of GDP and defence spending. If we did all those things, plus some more creative working together, we could enhance our capacities.
Dr Julian Lewis (New Forest East) (Con)
May I take it from what the Prime Minister has just said that there is then no question of the British defence budget dropping below 2% of GDP?
The Prime Minister
We currently meet the 2% threshold. These things are calculated by different countries in different ways, but I am confident that we will go on meeting our obligations to NATO.
Angus Robertson (Moray) (SNP)
Will the Prime Minister confirm that all the important security issues being discussed at the G7 and in the European Union are also being discussed within the context of NATO—an organisation currently going through a change in its general secretary? Will he confirm that he is supporting the candidacy of the excellent former Norwegian Prime Minister, Jens Stoltenberg?
The Prime Minister
I think Jens Stoltenberg would be an excellent candidate. I have worked very closely with him, and it is very good to have such a candidate who has filled such a high office in his own country. Obviously, if we want to be part of NATO, we have to remain part of the United Kingdom.
Rory Stewart (Penrith and The Border) (Con)
The lesson of Ukraine seems to be not just a wake-up call, but one in humility and a reminder of how unbelievably difficult it is to understand, predict or control events in places such as Ukraine, Syria, Libya, Afghanistan and Sahel simultaneously. The only solution has to be better deep country knowledge. Does the Prime Minister agree that we need to invest far more in the policy and linguistic capacity of the Foreign Office if we are to deal with this range of threats in the future?
The Prime Minister
My hon. Friend is completely right. The deep country knowledge that resides in our Foreign Office and diplomatic service is an immense asset for the Untied Kingdom. As Prime Minister, I see that all the time, particularly when dealing with some of the countries mentioned by hon. Friend that suddenly have a significance far beyond what they previously had. That is why we are opening embassies and investing in the language school and why the Foreign Office is a very important part of our soft power.
Mike Gapes (Ilford South) (Lab/Co-op)
NATO is based on extended deterrence. Russia has thousands of nuclear weapons and huge conventional forces. What discussions has the Prime Minister had with the United States and countries such as Poland and the Baltic states about reconsidering some of the approaches to ensure enhanced security for those countries that border Russia?
The Prime Minister
My right hon. Friend the Defence Secretary is in the United States at the moment discussing exactly those sorts of issues. As I have said, I think the most important thing is to reaffirm our NATO commitments, reassure our NATO allies and make sure that we are providing things such as aircraft to help with air patrols, so that the Russians can see that, on Latvia, Lithuania, Estonia and Poland, they are not just dealing with national forces, but international forces that are part of NATO. I do not agree with the suggestion that sending more troops to be stationed in Germany would somehow make an important statement. I think that the most important thing is the reassurance of NATO allies and a very clear message to Russia about the consequences of further action.
James Duddridge (Rochford and Southend East) (Con)
Does my right hon. Friend agree that there is a world of difference between the EU referendum the Conservative Government will offer in 2017 and the Crimean referendum, which has no basis in law and is totally illegitimate?
The Prime Minister
The important thing about using referendums in democratic states is to make sure that they are done on a legal, fair and constitutional basis. That is why I think the Scottish referendum is probably the best comparator to what is happening in Crimea, because there were proper discussions and negotiations between the Scottish Government and the Westminster Government and a proper agreement was put in place to have a fair, decisive and legal referendum. The referendum in Crimea was put together in a few weeks, at a time when there were troops all over Crimea and no proper electoral registration, and there was a complete mess as a result.
Keith Vaz (Leicester East) (Lab)
I warmly welcome the leadership role that the Prime Minister and our Government are playing in respect of Sri Lanka. It will be strongly welcomed by the thousands of Tamils settled in our country. The Prime Minister has himself travelled to Sri Lanka and heard the personal testimony of those who have been affected by the atrocities. The problem is that President Rajapaksa and his Government do not keep their word. If this resolution goes through and they do not co-operate, what will be the next step?
The Prime Minister
I thank the right hon. Gentleman for his remarks. I will never forget going to northern Sri Lanka and Jaffna and hearing some of that testimony for myself. The point is that we want to see proper reconciliation and a secure future for this extraordinary country, which could be a massive success story if it properly reconciles its past. The problem is that its Government are not doing enough to make that happen, and that is why the United Nations vote is so important. If the vote is positive, the human rights commissioner, Navi Pillay, can get on with setting up a proper inquiry. Far from hindering reconciliation in Sri Lanka, I think that will actually help.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
I commend my right hon. Friend’s calm approach to this diplomatic crisis and his determination to achieve a diplomatic solution. Will he tell us what Russia actually thinks of the EU-Ukraine association agreement, particularly title II, article 7, which states:
“The Parties shall…promote gradual convergence in the area of foreign and security policy, including the Common Security and Defence Policy”?
The Prime Minister
I think the truth is—we saw this when the association agreement was first promoted and Yanukovych could not make up his mind about whether to sign it or not—that the Russians would rather that Ukraine does not sign the association agreement. I think it is safe to assume that, but we should be explaining to Russia that association agreements between countries that were part of the former Soviet Union and Europe are good for those countries and, over time, can be part of a better relationship between the EU and Russia. EU-Russia summits have been happening twice a year up until now, so those are good relations. Frankly, the idea that all our foreign polices should converge in terms of other issues—not least that which we are discussing today—is not something we should be frightened of.
Jeremy Corbyn (Islington North) (Lab)
I welcome the Prime Minister’s recognition of the problem of nuclear fissile material and the need for it to be controlled, but could he assure me that the Government will support the humanitarian effects of war conference that will be held in Austria later this year and that, at the non-proliferation treaty prep com at the end of April, the Government will resolutely work to get a middle east nuclear weapon free zone conference under way as a way of reducing and trying to prevent any nuclear proliferation in that region?
The Prime Minister
I can confirm that we will be working towards that goal and will continue the excellent work the Foreign Office does on it.
Martin Horwood (Cheltenham) (LD)
Freezing a few bank accounts may look pretty feeble, but a strategy to reduce eastern Europe’s energy dependence on Gazprom could send a much stronger and much more painful signal to Russia. In that context, are we committed not just to the military defence of Estonia, Latvia and Lithuania, but, more importantly, to their economic and political defence as well?
The Prime Minister
My hon. Friend is absolutely right. We will not reduce Europe’s energy dependence on Russia overnight. Hungary is more than 80% reliant on Russian gas and some of the Baltic states have an ever greater reliance on it. The truth is that this a long-term piece of work that involves building liquefied natural gas terminals, having reverse flows through pipelines, exploiting shale gas, including shale gas in south-eastern Europe and in the Baltic states, and building pipelines from Azerbaijan and other countries where gas can be supplied directly to Europe. All of those things will make a difference, and they will make a long-term difference to the relationship between the EU and Russia in a way that will make the EU more resilient. Although we are not reliant on Russian gas, we should be helping to push that process.
Chris Bryant (Rhondda) (Lab)
One of President Putin’s vanity projects—there are many and some of them are very expensive—is the economic forum he intends to hold from 22 to 24 May in St Petersburg. Will the Prime Minister make sure that no British officials are going to that event, and will he urge British business representatives not to attend, either?
The Prime Minister
The hon. Gentleman raises a good point. I have asked for a complete review of all the engagement between Britain and Russia in terms of trade promotion events, diplomatic events and summit-style events, including the sort of thing the hon. Gentleman has mentioned, to make sure that we are not engaging in a business-as-usual relationship. It is very important that the Russians understand that.
Henry Smith (Crawley) (Con)
As mainland Europe seeks to minimise its dependence on energy from Russia, will my right hon. Friend assure the House that there will not be any unintended consequences, such as a loss of British sovereignty over energy policy?
The Prime Minister
I do not believe that would be the case. I made sure that somewhere in the EU Council conclusions it says very clearly that the energy mix that a country pursues is a matter for the country concerned. Obviously, we did not spend as much time on energy and climate change policy as we might have expected to, but I am very clear that, while it is one thing to have an EU goal for another renewable target, that should not be translated into national goals. These are important matters of domestic sovereignty and it is in our national interest to work with other European countries to make the whole of the European continent less reliant on Russian gas and have a more flexible energy market.
John Woodcock (Barrow and Furness) (Lab/Co-op)
The nuclear security summit was timely, given the real fears of NATO members on Russian borders. The Prime Minister knows that we increase global threat when we show weakness in the face of resolve, so will he rule out any downgrading to a part-time UK deterrent in this uncertain environment?
The Prime Minister
I can certainly give the hon. Gentleman that assurance. It is very important that we maintain Britain’s nuclear deterrent as the ultimate insurance policy. All the information I have seen and all the arguments I have had lead me to believe that that means a submarine-based deterrent based on continuous at-sea presence.
Mr David Nuttall (Bury North) (Con)
Given that there is no realistic prospect of Russia returning Crimea to Ukraine, how long does my right hon. Friend envisage that the sanctions so far taken will continue, and is this the end of the G8?
The Prime Minister
Whether or not this is the end of the G8 depends on what Russia does next. The G7—the seven other countries of the G8—has now met and decided to have a G7 conference on the same day that the Sochi conference would have gone ahead. That does not signal the end of the G8 if Russia rapidly changes her approach.
On sanctions, we have to be clear that because of what has happened in Ukraine, it cannot be business as usual, and that those sanctions need to remain in place because what has happened is illegitimate. We want a talks process between Ukraine and Russia to begin in which these issues can be resolved, but there is no sign of that happening so far.
Ms Margaret Ritchie (South Down) (SDLP)
In view of the fact that there is a need to mitigate the impact of nuclear terrorism, will the Prime Minister now consider revisiting the policy of returning plutonium to Sellafield’s customers, such as Germany, Japan and Switzerland, in the light of President Obama’s declaration that nuclear terrorism is one of the greatest threats to international security?
The Prime Minister
We agree with President Obama about the importance of this issue. Indeed, when he set up the first nuclear security summit, British diplomats did an enormous amount to help to realise the progress that there has been over recent years. We have seen 12 countries worldwide removing all highly enriched uranium from their territory, and 15 metric tonnes of highly enriched uranium have been down-blended to low-enriched uranium since 2012, which is the equivalent to approximately 500 nuclear weapons, so good progress has been made. The test for what we do at Sellafield should be whether what we do will lead to a safer world in terms of nuclear resources, and we should not do things unless we have such assurances.
Crispin Blunt (Reigate) (Con)
I welcome the Prime Minister’s support for travel bans and asset seizures as a symbolic statement, and as a vehicle for inflicting personal pain on those responsible for policy who depart from international norms. As he has referenced his work in relation to gay people in Russia, would it not also be an appropriate response by the United Kingdom and European Union to impose travel bans on the dozen or so people responsible for the promotion of the Anti-Homosexuality Act in Uganda?
The Prime Minister
We should take a robust approach in defending and promoting the values we care about wherever we engage in the world. We should not hold back from making our views clear, whether about the law on homosexuality in Uganda or the issues in Russia. On the issue of travel bans and asset freezes, they are focused on Russia and Crimea, and that is the right way to do it.
Dr William McCrea (South Antrim) (DUP)
Does the Prime Minister believe that the actions taken or proposed by the EU and the US will actually stop Russian aggression? If they do not stop Russian aggression, has he a clear understanding of what steps should be taken next to stop Russia invading the rest of Ukraine?
The Prime Minister
The hon. Gentleman makes an important point. What has changed is that the European Council, which had previously resisted the idea of saying that we should prepare economic sanctions, has now agreed—all 28 countries, including those that have quite strong relations or energy relationships with Russia—to task the European Commission with preparing a range of economic sanctions to be put in place if Russia goes into eastern Ukraine. That is an important change. I am obviously at the front end of pushing harder for clarity, because the best way to ask Russia to take the right path is to be clear about the consequence of its taking the wrong path.
Mr Jonathan Djanogly (Huntingdon) (Con)
The Prime Minister’s friend Mrs Merkel and our nation’s very good friend Germany are dragging their feet against countering Russian aggression. I recognise the sterling work done by my right hon. Friend to date, but does he agree that history shows that short-term appeasement of dictators leads to longer-term problems, which means that we should insist on tougher sanctions on Russia and those close to Mr Putin right now?
The Prime Minister
I thank my hon. Friend for what he says. It is absolutely clear that if we do not take robust, predictable and firm long-term action, we will pay the consequences for many years to come, and not just in Europe, because other countries in the world would see the resolve of the international community and of the UN as weak and would draw the conclusions. We are working well with the Germans in trying to agree a common position. So far at European Councils, we have been able to agree some robust measures.
Toby Perkins (Chesterfield) (Lab)
People remember the Prime Minister, when he was Leader of the Opposition, taking a very robust line on Russian aggression in Georgia, and they may well contrast that with the position that the EU has taken against Russian aggression in Ukraine. What does he consider to be the reasons for the different approach? Is he happy with the overall approach taken by the EU at this moment, or does he think that it should be stronger?
The Prime Minister
I have taken a robust approach against this sort of Russian action whether, in opposition, with respect to Georgia or, in government, with respect to Ukraine. What has changed is that, while I have been in government, the EU has been able to go further, not least because Britain has pushed firmly, consistently and clearly for the sort of action that is required. When we look at Georgia, we see a good example in the two frozen conflict states of South Ossetia and Abkhazia. We did not take action against Russia with respect to those areas in the way that we have with respect to Crimea.
Mr Ben Wallace (Wyre and Preston North) (Con)
In the past, President Putin has used his intelligence services aggressively not only to undermine his neighbours, but to suppress dissent at home and abroad. In the light of the annexation of Crimea, will my right hon. Friend look again at whether our intelligence services have the correct level of funding and capabilities required to counter Mr Putin’s FSB and to make sure that we are in a good place to resist any of the so-called consequences, as Mr Putin and his Russian friends have described them, of European sanctions?
The Prime Minister
I strongly support the work of our intelligence services. Obviously, we never comment on the specifics of their work, but I can tell my hon. Friend that they got a good outcome from spending rounds and reviews of the national security strategy in terms of ensuring that we maintain and in certain ways enhance their capabilities.
Nia Griffith (Llanelli) (Lab)
I very much welcome the Prime Minister’s expression of full support for the 40% emissions reduction target, but notwithstanding the important issue of sovereignty, the UK should really lead by example. Why will he not endorse the target of decarbonising our UK energy sector by 2030, given that a commitment to that target would give industry the certainty that it needs to invest?
The Prime Minister
I am grateful to the hon. Lady for what she says about Britain’s support for the 40% carbon reduction target. It is important to get the EU to sign up to that deal, so that the EU can provide global leadership at the Paris summit.
The reason why I do not support total decarbonisation of our energy sector—[Interruption.]—our electricity sector is that until we can prove that carbon capture and storage is a workable and deliverable technology, setting such a target could mean the closure of every gas-fired power station in the country, which is not a sensible approach. I know the green movement pushes this, but, frankly, until we have worked out carbon capture and storage properly, it would not be a sensible thing to do.
George Freeman (Mid Norfolk) (Con)
I welcome my right hon. Friend’s statement and his continued diplomatic success at EU Councils, which suggests that his leadership of the EU reform agenda is strengthening the UK’s hand, while our reliance on economic sanctions makes that drive for a more competitive Europe all the more important. I also welcome the steps to reduce our energy dependence on Russia. Does he agree that UK geopolitical energy security should now be the No. 1 feature of our energy policy for the next Parliament?
The Prime Minister
My hon. Friend makes the important point that in looking at considerations within energy policy—security of supply, making sure that there is capacity, contributing to the decline in carbon emissions, and national security—there is no doubt that the national security part of the picture for Britain and for Europe has become a much more pressing issue. We have good, diverse supplies of electricity; we are reinvesting in nuclear; we have the world’s leading offshore wind industry, which I saw for myself in Hull yesterday; but we obviously need to help Europe to diversify away from Russian gas, and we should recognise our strategic interests in helping it to do just that.
Mr Jamie Reed (Copeland) (Lab)
I welcome the Prime Minister’s statement and the answer that he gave earlier that related to my constituency. Away from diplomatic processes and soft power, our efforts on nuclear security must be underpinned by an effective plutonium disposition strategy. We have the potential to lead the world in that regard. To that end, will the Prime Minister commit to funding fully and commissioning the National Nuclear Laboratory, and will he commit to a timeline so that the plutonium that is stored in my constituency, which I believe is the biggest stockpile in the world, can be utilised as nuclear fuel, thereby helping us to meet our non-proliferation objectives, secure our energy supplies and fight climate change?
The Prime Minister
What I say to the hon. Gentleman, who has an important constituency interest in this matter, is that the National Security Council has met specifically to consider how to make progress on Britain’s plutonium supplies and the work that we want to see on energy generation. Perhaps I could write to him to update him on that work and on the decisions that we are taking.
Dr Phillip Lee (Bracknell) (Con)
In light of the recent events in Ukraine, the ongoing instability in the middle east, the significant energy price differential between the US and Europe, and the broad analysis of the latest “World Energy Outlook”, does the Prime Minister agree that one of our strategic challenges is to develop a coherent UK energy policy that concentrates primarily on how we use energy, and not on the generation of energy? Put simply, energy price is linked directly to GDP. If we use less energy, it means smaller bills for businesses and domestic users, and less dependence on the increasingly unstable wider world.
The Prime Minister
Where I absolutely agree with my hon. Friend is that we need a strategy that focuses on how we use energy, so that we have greater energy efficiency. We should have smarter grids and smart meters to ensure that households and businesses do not waste energy. We are making big technological breakthroughs on that. However, it is important that we have a diverse range of supplies, so the generation of electricity does matter. We should not be too reliant on any one fuel or any one part of the world. That is why the capacity mechanism for gas, the nuclear refreshment and renewables are important.
Ian Austin (Dudley North) (Lab)
The Prime Minister threatens tougher measures if the Russians go into eastern Ukraine. Many of us think that those tougher measures should be introduced right now. Will he look again at targeting Putin’s inner circle? What consideration has he given to freezing the assets of and denying visas to members of the Duma who voted for military action in Ukraine? What consideration has been given to seizing the UK assets of state-owned Russian companies and the Russian central bank?
The Prime Minister
It is easier and better to do that through the European Union, with all 28 countries deciding who to designate, whose assets to freeze and whose travel to ban. I have tried to explain that the process for doing that focuses on the people who played a part in the illegitimate decision. That includes members of the Duma, some of whom have been sanctioned. I agree with the hon. Gentleman that we should take other measures in respect of what happened in Crimea. That is why the measures on goods and services that come from occupied Crimea, which America has not taken but Europe has, are significant. Finally, it is important to be clear about the next steps that we would take if Russia went into eastern Ukraine. Those steps should be reserved for if Russia goes into eastern Ukraine and should not be brought in before that happens.
Rehman Chishti (Gillingham and Rainham) (Con)
I very much welcome the statement by the Prime Minister. Paragraph 23 of the conclusions of the European Council, which relates to Cyprus, states:
“The European Council supports a comprehensive and viable settlement of the Cyprus problem within the UN framework”.
What steps are we taking to resolve that problem?
The Prime Minister
We continue to talk with the Cypriot Government. I had meetings with the President of Cyprus in the UK this year and I continue to speak to him at European Council meetings. There is a talks process that has made some progress. As one of the guarantor powers, we should continue to support that process.
Geraint Davies (Swansea West) (Lab/Co-op)
The level of state pensions in Crimea was just 10% of that in Russia until the Russians increased it to the same level by cutting benefits in Russia. Major construction work has also been moved out of Russia and into Crimea. Both those moves are very popular in Crimea and very unpopular in Russia, as is the fall in the rouble. Will the Prime Minister stir up further resistance to Putin in Russia by clarifying what economic sanctions there will be if further steps are taken into Ukraine, to bring him into line with international law?
The Prime Minister
I agree with the hon. Gentleman that we should aim to be clear and predictable about the sanctions so that Russia knows what will happen if eastern Ukraine is threatened in any way. We made progress on that in the European Council. I hope that we will make further progress when we meet again. It is good to try to secure the agreement of all 28 countries, because then such moves will have greater power.
Julian Smith (Skipton and Ripon) (Con)
As well as leading the way on EU reform, the Prime Minister has been a fantastic backer of the trade negotiations between the EU and the US. Does he agree that now, more than ever, we need to get that deal signed, sealed and delivered?
The Prime Minister
My hon. Friend is absolutely right. The trade deals that Europe has signed with the Republic of Korea and Singapore are hugely influential in European trade and are beneficial for Britain. The transatlantic trade and investment partnership between the EU and the US dwarfs all the other potential deals. Meetings have taken place in the past few days between the EU and President Obama. I hope that we can make further progress.
Gavin Shuker (Luton South) (Lab/Co-op)
The Prime Minister is right that getting the EU to speak with one voice on decarbonisation going into next year’s Paris meeting is hugely important. Does he accept that it will be deeply problematic if we fail to get a deal at this point, before the make-up of the European Parliament changes and before the trade and other Commissioners change?
The Prime Minister
There will be changes in Europe and a new Commission after the European parliamentary elections. It is important for the European Council to set a clear work programme for the new Commission. The headlines that I would set for the work programme would definitely be deregulation, more reshoring, and cutting the costs and bureaucracy of Europe, but we must also ensure that Europe plays its role in getting a good outcome from the Paris talks next year.
Glyn Davies (Montgomeryshire) (Con)
In his measured statement, the Prime Minister reminded us of the impact on energy security of a dependence on Russian energy supplies. Does he agree that we have a duty to move as quickly as is safely possible to establish the potential of shale gas to strengthen the UK’s energy security and that of our European partners?
The Prime Minister
I really do think that my hon. Friend is right about that. We have quite a lot of shale gas deposits in the UK and shale is also available in Europe, particularly in south-eastern Europe, the Baltic states and Poland. We have 75% of the capacity of shale gas that the United States has, but whereas the US has dug 10,000 wells, we have dug closer to 100. It is not written that Europe has to have higher gas prices and energy prices than the US. If we have the political will, we can deliver this safe and secure technology for our future.
Ian Paisley (North Antrim) (DUP)
The charge levelled at President Rajapaksa that he has failed to address the issues of the past properly is frequently levelled, in slightly different circumstances, at politicians in Northern Ireland. That being the case, why is the Prime Minister being inconsistent? He steadfastly opposes the internationalisation of our internal affairs. Surely he should also oppose the internationalisation of the internal affairs of a trading partner such as Sri Lanka and urge it to sort out its own problems.
The Prime Minister
I would give two answers to that very incisive question from the hon. Gentleman. First, here in the United Kingdom, including in Northern Ireland, we have taken major steps to disinter the past and to discuss it and deal with it. The Bloody Sunday inquiry is one such example. That has not happened in Sri Lanka. Its lessons learned exercise is not going into the detail that is needed about the appalling events that happened, particularly at the end of the war. Secondly, although we guard our independence and sovereignty jealously, we did call upon friendly nations, including the United States, to help us with our peace processes. Frankly, in confronting one’s own past and one’s own problems, other countries can sometimes help. I think that Sri Lanka should take the same approach.
Mr Robert Buckland (South Swindon) (Con)
Institutionalised corruption is a key source of power for the Putin regime, but at the same time it is its greatest long-term weakness. What more can we do to extend visa bans and sanctions to deal not only with those implicated in the Crimean issue, but also those responsible for scandals such as the Magnitsky killing?
The Prime Minister
I do not want to say anything new about the Magnitsky case today, but I agree wholeheartedly with my hon. Friend that the scourge of corruption lies at the heart of much of the crisis in Ukraine, just as it lies at the heart of so many countries today that are not getting the economic growth, prosperity and fairness that their peoples yearn for. As we go forward in these endeavours, we should do everything that we can to help ensure a non-corrupt Government for Ukraine in the future.
Huw Irranca-Davies (Ogmore) (Lab)
I welcome the agreement of the European Council to fast-track the completion of the internal market in energy, which I am sure the Prime Minister would not refer to, although others do, as the “Europeanisation” of energy. What part do renewables play in that? The Prime Minister has gone big on shale today, but we have also heard a great announcement from Siemens about offshore wind energy development in the UK. I am sure he will want to pay tribute to the fact that that process was set in place by the Labour Government’s £60 million ports investment.
The Prime Minister
All I can say is that, three and a half years into this Government, I feel that I have lived and breathed the Siemens investment, making frequent calls and trying to unlock the investment. I am sure others have played their role in that as well.
The Prime Minister
Well, it was a lot more generous than anything my predecessor ever said about anything done by any previous Government. For once, silence. Yesterday I worked very hard with Hull city council, and local MPs. We do not have to talk too much about renewable energy today because Britain has the biggest offshore wind market anywhere in the world, and we should be proud of that. We do not have the largest shale gas market anywhere in the world; indeed, we have barely started. I give so much emphasis to shale gas because I think it can be an important part of our future, and I am sure that that will have all-party support.
Mark Menzies (Fylde) (Con)
The Prime Minister has set out the role that shale gas can play in UK and European energy security, but can he assure me and my constituents that we will not develop shale gas unless we are sure that it is safe, with safety enshrined in a robust regulatory framework?
The Prime Minister
I absolutely agree with my hon. Friend. I am convinced that we can develop shale gas in a way that is safe, and in a way that provides useful supplies of gas and can benefit local communities. I think we should look carefully at what has happened in the United States. The overwhelming lesson from the United States is that this can be done, and it can be a real bonus for local communities and for our country.
Jim Shannon (Strangford) (DUP)
I thank the Prime Minister for his statement. Will he tell the House what progress has been made to address human rights and war crimes in Sri Lanka, including accountability for those who have committed murder and rape, and the issue of the disappeared? What discussions did he have with the Sri Lankan Government about the persecution of the Christian Church there, which is a big issue?
The Prime Minister
I have not had any recent discussions with the Sri Lankan Government about that issue because they were not present at the conference at The Hague. I raised Sri Lanka in the House today simply because the European Council briefly discussed it and reached conclusions that mean that every member of the Human Rights Council will vote for our motion. I raised the issue at The Hague because there were other undecided countries there that I was able to lobby, hopefully moving one or two of them into the right camp. If this happens, it will be a much better way of investigating the human rights abuses that have taken place.
Jason McCartney (Colne Valley) (Con)
As a proud Yorkshireman, I, too, welcome the huge investment by Siemens and Associated British Ports in east Yorkshire and our renewables sector. Will the Prime Minister confirm that we are talking about offshore wind investment, and that my constituents in beautiful places such as Slaithwaite do not have to worry too much about huge industrial turbines blocking their beautiful views of the Pennine landscape?
The Prime Minister
I can confirm that. Yesterday I went to see the Siemens investment, and the extraordinary scale of development, for myself. An entire port area is being cleared out and extended to take two enormous factories, including one that will make the turbine blades. The development is at a port because it is not just for the offshore wind market in the UK; there will be a real opportunity for export as well. That is what the investment is all about. It will provide 1,000 jobs, but much more than that, it will bring a whole new industry to Humberside and Hull because of the massive opportunity for the supply and component part of the industry to locate in that area.
Illegal Importation of Dogs (Fixed Penalty)
(10 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
I beg to move,
That leave be given to bring in a Bill to provide for a fixed penalty charge for those caught smuggling dogs into the United Kingdom; and for connected purposes.
I am grateful for this opportunity and wish to thank Clarissa Baldwin and Laura Vallance of the Dogs Trust, and David Bowles from the Royal Society for the Prevention of Cruelty to Animals, for their help in preparing for today. I also thank my researcher, Tom Evans, and the Table Office and Public Bill Office for their assistance. Members from both sides of the House have indicated their support for this Bill. I stress that this motion is not a criticism of the officers and staff who do so much to protect us; this is about policy. I am grateful to see the Minister and the shadow Minister in their places, and I hope that after today we might be able to follow up the issues I will raise over the next few minutes.
I wish not only to outline the problem that the Bill seeks to address, but explain why the present arrangements do not appear to be working and make some suggestions that could be pursued. The problem is threefold: the risk of rabies and other diseases; the criminal smuggling for profit in breach of regulations; and the animal welfare issues of puppies being transported with minimum food and water to prevent or reduce any mess they might make in the vehicles transporting them.
The problem is partly caused by the harmonisation of European Union rules and the relaxation of our quarantine controls, because—perversely—of the successful management of the risks. It is now easier to import dogs into the United Kingdom if they are microchipped, vaccinated and—most importantly—not for commercial sale. Here is my first interesting statistic: before the relaxation of our rules in 2010, 26,000 dogs were imported for non-commercial purposes; in 2013, 53,000 dogs were imported for non-commercial purposes. From 26,000 to 53,000 is quite a significant leap in a short period.
I hope I am not regarded in this place as a cynic, or—usually—as a sceptic, but I find some things difficult to believe: Elvis lives, West Ham United will win the premiership, and 53,000 dogs were imported into the United Kingdom in 2013 and none was for sale—not a single one. No doubt there are thousands of legitimate pets travelling, but it is a stretch of the imagination, to say the least, to believe that that includes all those dogs—I see a smile on the Minister’s face and I suspect there might be an element of understanding and agreement.
Here are a few more statistics that will add to the doubt that exists. Between 2011 and 2012 there was a 400% increase in illegal entries. Trading standards seized 127 dogs in 2011, but 417 in 2012. Some 2,800 dogs were refused entry in 2011, and 3,700 in 2012—another 40% increase. My final statistic is that in 2011 the number of puppies from eastern Europe—for example from Poland, Romania, Hungary and other countries—was 2,000, but it was 12,000 in 2013. That is a sixfold increase in two years, yet none of them—not one—was for commercial sale. Really? Those are the declared dogs, and it is believed that a lot more is going on under the radar than the data suggest.
Current penalties are severe: prison, and/or a fine of up to £5,000 for smugglers. However, I have no information about any prosecutions, and the suggestion is that the deterrent is simply not working. This Bill, which highlights the issues and offers another way to tackle the problem, will, I hope, make a difference. The fixed penalty provides another tool in the box, and could be introduced flexibly with higher penalties for more puppies smuggled, in the same way that smugglers of cigarettes can be fined more, the greater the number of cigarettes they carry.
There are other suggestions. We could increase spot checks at Dover and Holyhead; transfer the pet travel scheme monitoring responsibility from ferry operators to the UK Border Agency; and monitor internet sales to help target offenders. We could have better liaison with the European Commission and eastern European veterinary authorities to reduce the use of fraudulent passports and certificates. We could have better liaison with the Irish authorities—the Republic supplies so many dogs to the UK. We could have new risk modelling to scope the depth of the problem, create a new central database and have more quarantine spaces. The Minister answered a parliamentary question from my hon. Friend the Member for Ogmore (Huw Irranca-Davies)—the shadow Minister—this morning on the number of dogs licensed into quarantine in Great Britain in the past four years. In 2010, 89 dogs were licensed into quarantine. In 2013, 376 dogs were licensed. That is another 400% increase—there are repeated 40% and 400% increases.
Rabies and diseases such as Echinococcus, Leishmaniasis and parvovirus must be stopped because they are a risk to domestic and well animals, especially in the light of rabies reports in western France and Holland last year in which the disease was suspected to have come from eastern European imports.
In conclusion, we are a nation of animal lovers, whether through rescuing abandoned animals or paying between £500 and £750 for rare-breed pups. However, there are unscrupulous individuals and organisations out there, prepared to take advantage and make money at whatever cost to humans or animals. They also undermine legitimate businesses that play by the rules. Not only are the regulations open to abuse, but the monitoring appears to be too light touch. We need a review to assess the size of the problem.
The Bill will not solve all the problems and it might not resolve any of the them—hon. Members know that it will not go anywhere after today—but I hope that raising the matter today might improve the protection we need to ensure against the spread of disease, raise animal welfare standards, and act as an additional deterrent to criminals. I therefore commend the Bill to the House.
Question put and agreed to.
Ordered,
That Jim Fitzpatrick, Robert Flello, Andrew Rosindell, Mr Adrian Sanders, Mark Pritchard, Sheryll Murray, Angela Smith, Sir Peter Bottomley, Mrs Mary Glindon, Miss Anne McIntosh and Sir Roger Gale present the Bill.
Jim Fitzpatrick accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 4 April and to be printed (Bill 189).
Mr Deputy Speaker (Mr Lindsay Hoyle)
The hon. Gentleman is claiming he is 21, but we are not quite that convinced.
Charter for Budget Responsibility
(10 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
15:23 - The House divided: - Ayes: 520 / Noes: 22 - Question accordingly agreed to.
The Chancellor of the Exchequer (Mr George Osborne)
I beg to move,
That the modified Charter for Budget Responsibility, which was laid before this House on 19 March, be approved.
I am putting before the House today a charter for budget responsibility updated to include a new cap on welfare spending. I am conscious that this is a time-limited debate and will keep my remarks brief so that others can speak. The welfare cap marks an important moment in the development of the British welfare state. I believe the public back a welfare system that provides fair support for those genuinely in need and that supports those who have a disability and cannot work; those caring for others; those on maternity or paternity leave; and those who have lost a job and are trying hard to find work. The public, through their taxes on that hard work, are willing to pay for that support. It is a level of support that a country such as ours—we now have a growing economy—can afford to give.
However, that is not the welfare state we inherited in 2010. That welfare state was not fair and not affordable. It was not fair that some received £50,000, £60,000 or up to £100,000 in housing benefit, paid for by taxpayers who could never dream of affording homes with rents that big, so we capped housing benefit payments at just over £20,000 a year.
Mr Osborne
I will give way in a moment.
It was not fair that many out-of-work families received more as an income in welfare than the average family got from going out to work, so we capped the total benefits that one family can receive at £26,000. Thirty-six thousand households are now subject to the cap.
Sheila Gilmore
How many families received housing benefit at the level he first mentioned—the £50,000-plus mark? Is he aware that, of the families covered by the benefit cap, nearly half are in temporary accommodation provided by councils because they owe them the statutory duty?
Mr Osborne
First of all, 21,000 people have been affected by the housing benefit cap, so 21,000 people were receiving housing benefit more than that. Secondly, the hon. Lady seems to be suggesting that she is against the cap on benefits. That points to a wider truth that we will discover today about the welfare cap, and specifically whether the Labour party is committed to the cap we are setting out today, with the list of benefits in it. We will discover whether Labour is committed to the cap at the level we have set—not just the principle of a welfare cap, but the practical application of it.
Mr Osborne
We will explore that point later, but let me take my hon. Friend’s intervention.
Robert Halfon
Is my right hon. Friend aware that a person on average wages pays roughly £1,200 a year in taxation just to pay the welfare bill, not including pensions? Does he agree that the welfare cap is fair on lower earners?
Mr Osborne
It is absolutely fair. That is what the cap is about—building a welfare system that is fair to those who need it and fair to those who pay for it.
Mr Osborne
I will take a couple of interventions in a while. I have only 15 minutes for my opening remarks because we want lots of contributions later in the debate.
It was not fair that benefits were unlimited. We have introduced a cap. It was not fair that those looking for work faced marginal tax rates as high as 96%, sapping the incentives to find a job. We are addressing that through universal credit. It was not fair that benefits were rising much faster than wages; not fair that people who could never afford a place with a spare room subsidised the spare rooms of others; not fair that people who did not speak English could receive out-of-work benefits without even trying to learn it; and not fair that the long-term unemployed were cycled and recycled through the new deal. That was not fair, but it was the welfare system we inherited. It was unfair to those trapped in poverty and to the millions of people who paid for it. It was a perverse distortion of what William Beveridge had conceived. In the face of opposition to each and every measure we have introduced, we are removing those distortions, restoring the work incentives and creating a fair welfare state.
Mr Osborne
I will take an intervention from the hon. Member for Rhondda (Chris Bryant).
Chris Bryant
Will the Chancellor confirm that, since his initial spending review, he has had to spend £13 billion more on welfare than he predicted? He has had to put it up by £1 billion this year and another £1 billion next year, so if the cap he envisages had been in place during this Parliament, he would have had to come to the House and apologise on four occasions?
Mr Osborne
For a start, welfare spending is £3.7 billion lower than I set out in my first Budget. It is also £10 billion less than the Labour party proposed. Labour Members cannot have it both ways. They keep claiming that we are cutting the welfare system and then complain that the cost is too high. That is one thing that we will explore in the debate—what exactly is the Labour policy.
Mr Osborne
I will give way to my hon. Friend the Member for Rochford and Southend East (James Duddridge) and then make progress.
James Duddridge (Rochford and Southend East) (Con)
If we had followed the policies of the Labour party, we would not have created 1.3 million jobs and those people would have been on benefits.
Mr Osborne
My hon. Friend is absolutely right. We have also created the right incentives so that work pays. Alongside supporting business—by the way, extraordinarily, the Labour party last night voted to increase taxes on business—we are creating an environment in which jobs are being created.
We are creating a fairer welfare state.
Andrew Gwynne (Denton and Reddish) (Lab)
Will the right hon. Gentleman give way?
Mr Osborne
I will give way in a little moment, but let me make some more progress.
We are creating a welfare state that the country—
Ed Balls (Morley and Outwood) (Lab/Co-op)
Will the right hon. Gentleman give way?
Mr Osborne
Of course I will give way, but will the shadow Chancellor confirm, so that we know the terms of this debate, whether he is committed to the specific welfare cap, the list of the benefits included and the level to which the Government have committed? The shadow Work and Pensions Secretary, the hon. Member for Leeds West (Rachel Reeves), said on the radio that Labour would do things differently. Perhaps he could confirm that.
Ed Balls
I will make my speech on the welfare cap in a moment. I want to go back to the remark the Chancellor just made about last night’s vote. We have said that we do not think we should go ahead with the next cut in corporation tax and instead use all the money for a freeze in business rates for small businesses. Is the Chancellor really saying that large companies are business, but small businesses do not count? [Interruption.]
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Just to remind everybody, shorter interventions would be helpful. We have 11 speakers to follow and I know the Front Benchers are desperate to hear the Back Benchers.
Chris Ruane (Vale of Clwyd) (Lab)
Both the Chancellor and the Prime Minister have used the line that people on benefits are getting £60,000, £70,000, £80,000 and £90,000 a year. I have tabled parliamentary questions and freedom of information requests on this point. Will the Chancellor tell me how many people are receiving more than £100,000 a year?
Mr Osborne
None, because we have capped housing benefit payments. [Interruption.] Just to clear up the previous point, Labour is going to say to the country, “Elect a Labour Government and business tax will be higher and corporation tax will be higher.” That is a terrible message to send to the rest of the world. [Interruption.]
Mr Deputy Speaker
Order. I want to hear the Chancellor. All the howling behind the Chancellor is not helping me, or other people who want to listen to him. I want to hear the Chancellor as, I am sure, do those on his own side.
Mr Osborne
If the right hon. Gentleman has something useful to say, let us hear it.
Mr Deputy Speaker
Seriously, I could not hear the Chancellor and I want to hear the shadow Chancellor. I want a little bit more respect to both sides.
Ed Balls
We are proposing that all the money from deferring the cut in corporation tax goes to small business in a business rates freeze. That is not a rise in the taxes on business, unless the Chancellor thinks that somehow small businesses are second class and do not count. Is that really what the Chancellor is saying?
Mr Osborne
We have cut the corporation tax rate for small businesses. We have capped rates for small businesses. We are giving a £1,000 discount to high street stores. Those are the measures we are taking for small businesses, and we are also cutting the corporation tax rate. The truth is that Labour is now committed to higher business taxes in Britain with a high corporation tax rate.
Mr Osborne
May I just say to the shadow Chancellor that he does not need to talk to me? He needs to talk to the business community of Britain, which knows that he is anti-business. His party is anti-business, anti-job creation and, as I am about to explain, it is the welfare party, too. If he waits a little, he can intervene and answer the question that we need answered.
Mr Osborne
I will give way in a moment. Let me make progress with my speech. [Interruption.] All right, I will give way if the right hon. Gentleman answers this question in his intervention: is Labour committed to a higher rate of corporation tax? Yes or no?
Mr Deputy Speaker
Order. I think we have heard enough noise. I want to hear the question that has been posed to the Chancellor of the Exchequer and I want to hear the reply. If people do not want to hear, I can explain where the door is. Somebody will be going through it if we do not have calm.
Ed Balls
The Chancellor must not mislead and misrepresent on the welfare state or on business taxes. Labour is not committed to an increase in business tax. He has said that three times. Every time he has said that, he has misled this House. I am saying that all the money from the corporation tax rate will go back to small business. That is the right position. Every time he misleads this House I will correct him, Mr Deputy Speaker.
Mr Osborne
This is desperate stuff from the shadow Chancellor. If Labour had had its way in the vote last night, business taxes would be higher—yes or no?
Mr Osborne
Yes, they would be, because corporation tax would be higher and businesses would be paying more. No wonder Labour does not have a clue about how to fix the economy or how to deal with the welfare system. That is evident from its period in office, when welfare spending, which will be contained by the cap, went up 42% in real terms. Housing benefit went up by £7.6 billion alone, as a real increase—bigger than the entire police budget. Every single one of the pounds the Labour Government spent on working age welfare was not earned, but borrowed—borrowed because Britain could not pay its way in the world. Rather than using valuable public resources to pay for apprenticeships, science, roads and railways, money was spent on an unaffordable, unfair and out-of-control benefits bill. That economic insecurity is being addressed and control is being re-established. We insist that welfare is affordable and we insist that it is fair: fair to those who need it and fair to those who pay for it.
Mr Osborne
I will make a bit of progress and then take some interventions.
Today, we take another important step towards the goal. We seek the support of Parliament not just for the principle of this welfare cap—important as that is—but its practical application: the list of benefits in it and the cash limit we set out today. I have noticed, in the past 24 hours, a change in the language being used by those on the Labour Front Bench. A day or two ago it was, “We are going to vote for the Government’s welfare cap.” Clearly, Labour MPs did not like that, so this morning the shadow Work and Pensions Secretary, said that Labour will sign up to something called a welfare cap, but that
“We would do it in different ways”.
What different ways? Does that mean different benefits would be included? [Interruption.] Will the shadow Chief Secretary, the hon. Member for Nottingham East (Chris Leslie), explain Labour’s welfare cap? Does that mean different levels of benefits? Does it mean a different level of spending? Every time the Opposition are faced with a difficult decision and asked to prove their fiscal credibility, they buckle because they are weak. We know what has happened. They have read the polls and seen the focus groups. They are being told not to vote against the welfare cap, but everyone knows what their instincts are. Everyone knows what gets them a cheer at the Labour conference: more spending on welfare paid for by more borrowing. Indeed, their only welfare policy is a £500,000 increase in housing benefit. The shadow Work and Pensions Secretary gave it away last week, in a private left-wing meeting. She said this, in private:
“it will be much better if we can say that all of the changes the Government have introduced we can reverse and all benefits can be universal.”
At least those Labour MPs voting against the welfare cap today are being true to what they believe in. No one thinks that of the shadow Chancellor and the Labour leadership today.
Time is short, so let me set out briefly how the cap will operate, first by enforcing public expenditure control where there was none previously. Welfare spending was called annual managed expenditure by the previous Government—no doubt a term dreamt up by the shadow Chancellor when he was running things so badly—but it was expenditure that was neither managed nor set annually. Now it will be. The Budget document sets out the 26 different benefits that will sit under the cap. They include almost all transfer payments from tax credits, housing benefit and employment and support allowance to statutory maternity pay, carer’s allowance and disability living allowance.
Some of those benefits, such as statutory maternity pay, have relatively stable and predictable costs, while others, such as housing benefit, have consistently grown much faster than forecast; but each one involves many hundreds of millions, often billions, of pounds of spending, and deserves the same careful management and scrutiny as items in the defence budget or the education budget. Some of those benefits, such as disability living allowance, help some of the most vulnerable citizens, but that is not an excuse for failure to manage their budgets. After all, our national health service also cares for the most vulnerable, but that does not prevent us from giving it an annual budget.
Mr Nigel Dodds (Belfast North) (DUP)
Will the Chancellor spell out the implications for devolved regions such as Northern Ireland, where welfare spending is devolved? What is the implication for the block grant if there is a rise in welfare expenditure through no fault of the Northern Ireland Executive?
Mr Osborne
Many benefits apply universally throughout the United Kingdom, but some areas of welfare spending are devolved. I know that there are specific arrangements with Northern Ireland, and we have been having discussions with the Northern Ireland Executive. I am well aware that the right hon. Gentleman represents only one party in the power-sharing arrangement, but we are keen to see the Executive make progress on welfare reforms and help to control the bills, and, as he knows, we are discussing that with him and his colleagues. However, I shall be happy to sit down and work out with him how some of the principles of the welfare cap here can be used to control welfare spending in Northern Ireland.
Mr Osborne
Let me make a few more points first. I will give way in a second—or a minute, perhaps.
The only benefits that we are excluding from the cap are the most cyclical ones which track the performance of the economy directly, such as jobseeker’s allowance and the housing benefit that is passported with it. They are the basic automatic stabilisers. By excluding only those benefits, we ensure that the economic cycle does not drive permanently higher spending on, for instance, sickness and disability benefits. We have also excluded the state pension and the additional pension. I know that the shadow Chancellor wanted to include them, but I would think it pretty unfair if a Chancellor who, for example, lost control of tax credit spending responded by cutting the basic state pension. That would not be sensible, and it would certainly not be fair. I think that adjusting the pension age is the best way to control expenditure on pensions over the long term as life expectancy rises.
In the Budget, we set the cash limit for the benefit cap at £119.5 billion in 2015-16—
Mr Osborne
I shall now ask the hon. Member for Denton and Reddish (Andrew Gwynne) whether he supports that cash limit.
Andrew Gwynne
In one breath, the Chancellor talks of fairness to taxpayers and the need to impose budgetary control on welfare spending. Can he perhaps explain to the House why setting up universal credit has cost taxpayers about £161,000 per claimant?
Mr Osborne
This is a huge system that will apply to millions and millions of people. Let me tell the House what we are going to do. I know that this will come as a complete shock to the Labour party, but we are going to take our time, get it right, and make sure that we do not put everyone on to a new credit with which the system cannot cope, which is exactly what the Labour party did with tax credits. All of us who were Members of Parliament at that time remember people coming to our surgeries who had been treated shockingly by a Labour Administration who had not got their administration right.
As I was saying, we will set the cash limit for the welfare cap at £119 billion. If inflation is higher than forecast, the Government cannot wash their hands of that either. Public services such as the police and transport have to absorb higher inflation, so why should welfare budgets be different? [Interruption.] I am sorry, Mr Deputy Speaker; there is a private conversation going on. My right hon. Friend the Secretary of State for Work and Pensions has done more to reform the welfare state than any of that lot.
The charter makes clear what will happen if the welfare cap is breached. The Chancellor must come to Parliament, account for the failure of public expenditure control, and set out the action that will be taken to address the breach. Then the House of Commons—the ultimate guardian of the people’s money—
Mr Osborne
No; I am going to end my speech now. [Interruption.] Well, I want to make sure that all these Labour Members have a chance to stand up and say exactly what they think of the welfare cap, and tell us that they support it, and that they should have introduced it when they were in office. They look such a cheery bunch. I want to make sure that they have a chance to explain what they are voting for this afternoon—or perhaps some of them will not.
I could set out more of the details, but much of that has already been done in the Red Book. This is the key point that I want to make to Labour Members. The welfare cap brings responsibility, accountability and fairness. Those who want to undo our welfare reforms will now have to tell us about the other cuts that they will make, or else come clean and admit to the public that what they really want are higher welfare bills. The phoney argument that welfare can be magically cut by a Government’s spending more and borrowing more will run into the brick wall of the OBR’s independent assessment. The phoney argument that a Government can spend half a billion pounds of taxpayers’ money on a spare room subsidy and pay for it with a cut in winter fuel payments worth a fifth of that will be exposed by an inevitable breach of the welfare cap. The “welfare party” will have to make its case for more welfare spending in the plain sight of the British people.
Our welfare cap ensures that never again can the costs spiral out of control and the incentives become so distorted that it pays not to work. From now on, any Government who want to spend more on welfare will have to be honest with the public—honest about the costs—and secure the approval of Parliament in order to breach the cap. Twenty-six benefits will be controlled by the welfare cap as part of our long-term economic plan to restore sanity to the public finances. This is a system that is affordable and fair, and I commend it to the House.
Ed Balls (Morley and Outwood) (Lab/Co-op)
Labour Members support the capping of social security spending, a policy advocated by the Leader of the Opposition last year. With welfare spending now £13 billion higher than the Government planned in their spending review, Labour will make different and fairer choices to get the social security bill under control and tackle the root causes of rising spending. On that basis, we will support the motion.
I shall come to the welfare cap in a moment, but let us first be clear about the background to the motion and the charter for budget responsibility. In the charter, the Government have set out their fiscal targets and reforms, and have also included the welfare cap details. Four years ago, the Chancellor promised to balance the budget in 2015. The Prime Minister said:
“In five years’ time, we will have balanced the books.”
But because they choked off the recovery and flatlined the economy, they are not going to balance the budget at all.
Ed Balls
I am going to speak first about what is in the charter, and then about the welfare cap. I will give way in a moment.
Last week, the Budget revealed that the Government were not balancing the books. The deficit is set to be £75 billion. In this Parliament, partly owing to rising welfare costs, it will be £190 billion more than they planned.
Ed Balls
I will give way in a moment. I want the House to know what is in this document first.
The Chancellor pledged to get the national debt falling. Page 7 of the charter says that
“the Treasury’s mandate for fiscal policy is supplemented by: a target for public sector net debt as a percentage of GDP to be falling at a fixed date of 2015-16”.
So the charter says that the national debt should be falling in 2015-16, but the OBR said in respect of last week’s Budget that it expects the national debt to be rising next year. The national debt is not falling according to this charter, and it is rising according to the OBR. I want the House to understand what is before us. I have to ask the Chancellor this: how on earth did he end up putting before the House a week after his Budget a motion that puts up in lights the fact that he is failing his own target to reduce the national debt? What an own goal! Is he going to blame the chair of the Conservative party for that one, too?
It gets worse for the Chancellor. The charter goes on to say—[Interruption.] Government Members should listen—[Interruption.] They should listen to this:
“The Treasury’s mandate for fiscal policy lapses at the dissolution of this Parliament.”
Lapses! It has already collapsed. It has expired; it has ceased to be; it is an ex-mandate. The charter goes on to say:
“The duty to set out a fiscal mandate will require the Treasury to set out a revised mandate for fiscal policy as soon as possible in the life of the new Parliament”.
That is what we will do: we will balance the current budget and deliver a surplus in the next Parliament. We will get the national debt falling. We will do those things as soon as we can in the next Parliament, but we will do so in a different way, starting by reversing the Chancellor’s £3 billion tax cut for people earning more than £150,000. That is what we mean by doing things in a different and fairer way.
Julian Smith (Skipton and Ripon) (Con)
Will the right hon. Gentleman confirm his announcement earlier that Labour will be raising taxes on British business?
Mr Deputy Speaker (Mr Lindsay Hoyle)
It was not aimed at an individual; it was aimed at the speech, I presume.
Ed Balls
We have said, Mr Deputy Speaker, that all the money from not proceeding with a further cut in corporation tax will go to small business with a business rates—[Interruption.] When the hon. Member for Skipton and Ripon (Julian Smith) and the Chancellor say that is a tax rise for business, that is only true if they do not think small businesses are proper businesses, which is a bit like saying, “If you didn’t go to Eton, you didn’t go to a proper public school.”
Mark Pritchard (The Wrekin) (Con)
I know the shadow Chancellor always wants to be accurate. Not everybody on the Government Benches went to private or public school, unlike many on the Opposition Benches, including him.
On the specific point, I believe the shadow Chancellor is a fair and reasonable man, so will he join me in welcoming the fact that in the last 12 months 4,000 jobs have been created in Shropshire? Surely that is good news for everybody to celebrate, whatever our party affiliation.
Ed Balls
First, I went to an even lesser private school than the Chancellor of the Exchequer. [Interruption.] Neither of us went to Eton, unfortunately. [Interruption.] I agree with the hon. Member for The Wrekin (Mark Pritchard) that the rise in employment is good news, but I am concerned that in his—[Interruption.]
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Mr Shelbrooke, we missed you on Budget day, but I am not missing you today, am I?
Ed Balls
The thing I am concerned about—this relates directly to the welfare cap—is that in the constituency of the hon. Member for The Wrekin long-term youth unemployment has gone up by 129% since 2010. I presume the hon. Gentleman would agree that that rise, based on the jobseeker’s allowance claimant count, is a real concern. I think he should be backing our welfare reforms. The fact is—[Interruption.] If the deputy Chief Whip, the right hon. Member for Chelsea and Fulham (Greg Hands), is saying that because the hon. Member for The Wrekin has got a large majority, he does not have to worry about youth unemployment, that would be rather revealing. I hope he was not saying that.
Let me get on to the subject of the welfare cap. The Chancellor has failed to balance the books, he is contradicting his own charter by increasing national debt when it says he should be reducing it in 2015, and he has failed to control welfare spending. We have had plenty of tough talk and divisive rhetoric from the Chancellor, but his failure to tackle low wages, to deal with the cost of living crisis and to get more homes built means that he is spending £13 billion more than he planned in the spending review of 2010, and in last week’s Budget that was revised up by £1 billion in social security spending next year and the year after.
I want to explain where we are. We support the welfare cap. We support what is in the welfare cap. We agree that long-term bearing down on the costs of ageing is a good idea, but it should not be in the welfare cap in the next Parliament; we have agreed with that all along. We have also said we would match the Government’s spending in 2015-16, and the welfare cap over these five years, which we support, would rise on that basis. Although we support that, however, we will make different—
Mark Pritchard
On a point of order, Mr Deputy Speaker. I said that the shadow Chancellor is a fair and reasonable man, and I know he would not want, even unintentionally, to mislead the House. He has got a lot of figures before him, so I have a great deal of sympathy for him, but the fact is that in my constituency of The Wrekin there has been a fall of more than 27% in youth unemployment over the past 12 months.
Mr Deputy Speaker (Mr Lindsay Hoyle)
That is a point of correction, rather than of order.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Mr Burns, I think you need to relax as well. No hon. Member will mislead this House, and I am sure that is not what the shadow Chancellor intended to say and I am sure he will be happy to withdraw it.
Ed Balls
Let me answer the hon. Member for The Wrekin and then I will come to the soon to be ex-hon. Member for Dover. [Interruption.] If hon. Members quieten down, I will answer the point. Since 2010 there has been a 129% rise in long-term youth unemployment: that is young people on the claimant count who have been out of work for more than 12 months. That figure has gone up by 129%. That is the truth. It is a fact, and I will place the information in the House of Commons Library. There has been a 129% rise since 2010 and I think the hon. Member for The Wrekin should support what I am about to say.
Ben Gummer
I thank the right hon. Gentleman for giving way. He chooses his words carefully, but he should know that youth unemployment is lower than it was in 2010, and not only that: it is lower than it was before the crisis partly caused by his Government.
Ed Balls
In the constituency of Ipswich there has been a 140% rise in long-term youth unemployment over 12 months, and long-term youth unemployment is a real problem. I am glad the hon. Gentleman intervened because I was reading his Hansard remarks from 2012 when he said that asking the Office for Budget Responsibility to audit the parties’ manifestos at the next election was the right thing to do. He said there was no reason why that could not be done. I will come back to him in a moment on that one.
We support the welfare cap. We will make different and fairer choices to keep the social security bill down and tackle the root causes of higher welfare spending. Let me explain—
Mr David Burrowes (Enfield, Southgate) (Con)
Will the shadow Chancellor give way?
Ed Balls
No, I am not going to give way until I have made these points. I will give way to both hon. Gentlemen, but if they shout “Give way, give way” at me in the middle of a sentence, I am not going to do so.
We will do things in a different way. We will introduce a compulsory jobs guarantee to get young people who have been out of work for more than 12 months—up by over 129% in The Wrekin and 140% in Ipswich—and the long-term unemployed all back to work, and we will sort out the shambles of the universal credit. As for the idea that the Chancellor should say to the Work and Pensions Secretary, “Take your time to get universal credit right. Have as much money as you want,” how irresponsible is that?
We will stop paying the winter fuel allowance for the richest 5% of pensioners; we will scrap the bedroom tax, which is not only unfair, but may end up costing more money than it saves; we will get more houses built; we will restore the value of the national minimum wage; and we will tackle the low wages which the OBR has said have pushed up the bill for housing benefit. We will make different and fairer choices to keep the social security bill under control and tackle the root causes of higher welfare spending.
Mr Burrowes
Now that the shadow Chancellor has explained that he is going to support the welfare cap, will he also clarify whether he will increase housing benefit? If so, where will he make the welfare savings to keep within the welfare cap? When he finds the statistics on Enfield, he will be able to get confirmation that the youth unemployment claimant count is at its lowest since 1997.
Ed Balls
As we and many others have pointed out, including the National Housing Federation, the Government’s bedroom tax is pushing people on to housing benefit in the private sector—on higher rents—so there is a grave risk that it is going to cost money, rather than save money. We will abolish the bedroom tax, within the welfare cap set out on page 87 of the Red Book. That is our very clear position. I have to say to the hon. Gentleman that in Enfield, Southgate there has been a 500% rise in long-term youth unemployment, and he should be backing our compulsory jobs guarantee.
John Woodcock (Barrow and Furness) (Lab/Co-op)
Will the Chancellor take this opportunity to confirm that he will never follow the shameful record of the Conservative party, which in the 1990s took people off jobseeker’s allowance and actively put them on the sick? We still bear the scars of that policy today.
Ed Balls
It started in 1986 under a Conservative Prime Minister and social security Secretary, it was called “restart” and it actively moved people from JSA— unemployment benefit—on to long-term sickness and invalidity benefits. It meant that very many people then spent many years out of work. It was a shameful policy.
Stephen Doughty
I am glad that my right hon. Friend has mentioned the compulsory jobs guarantee, because is it not an absolute contrast with the manifest failures of the Work programme? Does he agree that the Government ought to be learning from, rather than smearing, the Welsh Labour Government and the success of the jobs growth Wales programme?
Ed Balls
All the evidence shows that action to get young people back to work, especially the long-term unemployed, pays real dividends. It is what we mean by tackling the root causes, and it is the right way to implement a tough welfare cap. That is the approach we will take.
Charlie Elphicke
Is the shadow Chancellor committed to a welfare cap on the same benefits and of the same numbers as this Budget—yes or no?
Ed Balls
Yes.
Let me end by discussing the role of the OBR, because that is also set out in this charter. Page 5 states:
“The Coalition Government’s major reform to the fiscal framework has been the creation of the Office for Budget Responsibility”.
We agree with that, which is why we have proposed a reform to enhance the OBR’s role and allow it, as the hon. Member for Ipswich has advocated, independently to audit the tax and spending commitments in the manifestos of the main political parties. Why has the Chancellor not used the opportunity of this updated budget responsibility charter to make that reform? If he were to think again, he would be joining not only me, but the Chair of the Treasury Committee and the Chief Secretary to the Treasury, who have both supported this reform. We need legislation in the Finance Bill to make that happen.
Ed Balls
I will not give way. We know from the head of the OBR that if an agreement is reached by this summer, this reform independently to audit all tax and spending commitments, including all issues referring to social security spending, can be done in time for next year’s general election. It is a matter of political will. The Chancellor seems to be happy to spend his time, and that of the House, trying to set political traps—traps that keep backfiring on him—but he does not seem happy, and neither do other Government Members, to join the hon. Member for Ipswich and allow the OBR to audit the Conservative party manifesto or our manifesto, so that we can have a proper, open and transparent debate at the next election. Why does the Chancellor not join this cross-party consensus and let the OBR play that role? What has he got to hide? This is really not a trap—it is just the right thing to do.
Mr Deputy Speaker (Mr Lindsay Hoyle)
May I just announce that we will start with a five-minute limit and see how we go from there?
Ben Gummer (Ipswich) (Con)
This is an important moment in the way that we run Budgets in this country, it is an important moment for the accountability of politics and it is an important moment for the way we deal with the welfare crisis we were left by the previous Government. It is an important moment in the way we run the Budget in this country because most people would be astounded by the notion that we do not already have a managed expenditure limit on welfare. What most people, even in this Chamber, will not be aware of is that last year, for the first time in the history of setting Budgets in this country, unmanaged expenditure rose above managed expenditure—51% of Government spending came within annually managed expenditure, or AME, and not within departmental limits. So for the first time we are, in effect, writing a larger portion of the Budget on a blank cheque, rather than on the basis of the limits set by the Chancellor at his Budget every year. That, in itself, is astounding, but in five and 10 years’ time people will look back and wonder why on earth we had not come to this point earlier.
The reason, as we have heard so often from Opposition Members—they prefer to pretend that it is not their position now, because the shadow Work and Pensions Secretary said in private a few days ago that they would prefer all the Government’s reforms on welfare to have been reversed—[Interruption.] It is down there in the transcript. She would prefer all the Government’s reforms to be reversed—not only that, she would prefer all existing benefits to be made universal. She is very welcome to intervene on me to deny in the House that she made those comments. I am open to have that discussion with her. She has been given that opportunity before, she is not doing it and the House will draw its own conclusions. The fact is that what the Opposition say in private is very different from what they say in public.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Mr Burrowes, you have nothing to hide, and I certainly do not want to hear you shout again—I want to hear Mr Gummer. You may not. If you do, you know where to go. Mr Gummer, you have the Floor.
Ben Gummer
Thank you, Mr Deputy Speaker. To return to the core of the matter, this is important because it will hold both Governments and Oppositions to account. The shadow Chancellor might have wished to misconstrue the purpose of my private Member’s Bill. It is a pity he does that when he claims he is trying to forge a cross-party consensus, because it is wrong—
Ben Gummer
I will give way, but does the right hon. Gentleman want to let me finish my point before he intervenes? [Interruption.] I will say merely that I was proposing a fiscal rule on the Swedish model in which, as the Swedes have, there would be an opportunity for all parties’ budgets to be judged. That clearly is not possible under the existing settlement, not least because the head of the OBR said it would not be.
Ed Balls
I most certainly would not want to misrepresent the hon. Gentleman, so let me read out the quote from Hansard. He said:
“I…further suggest that the Office for Budget Responsibility be required to assess the major parties’ manifestos at election time, at the request of those parties…A similar role is performed by the Congressional Budget Office in the United States, and there is no reason why it cannot be so here.”—[Official Report, 25 January 2012; Vol. 539, c. 305.]
I agree, and so does the head of the OBR, and this can be done before the next election. In no way have I misrepresented the hon. Gentleman—the problem is that he disagrees with the Chancellor.
Ben Gummer
Actually, I do not. If the shadow Chancellor reads further, he will find the key point. There is an entire portion beforehand suggesting something, which his colleague, the hon. Member for Leeds West (Rachel Reeves), said that the Opposition disagreed with. Here we come to the crux of the matter. The fact is that people will not believe the Chancellor when he talks about sticking to a cap—[Interruption.] I mean the shadow Chancellor—[Interruption.] Yes, it is as close as he will get. He was the author of the golden rule, which claimed that there would be no excess debt over the economic cycle of his Government. None the less from 2002, the Government were running a deficit—[Interruption.] Will he deny that the Government were running a deficit from 2002?
Ed Balls
We said that we would balance the current Budget over the cycle, which is exactly what is in the mandate before us. It says that there will be
“a forward-looking target to achieve cyclically-adjusted current balance by the end of the rolling, five-year forecast period.”
That is the golden rule. If the hon. Gentleman is attacking the golden rule, it is the second thing on which he is attacking the Chancellor today.
Ben Gummer
The shadow Chancellor is again digging himself into a hole. He wrote a golden rule that claimed that there were would be no deficit over the cycle. He ran a deficit and he is now proposing that there should be a cap on welfare spending. I wish to pin him precisely on the terms of his agreement with the Government. What he has told his Back Benchers in private seems to be rather different from what he is saying in public. [Hon. Members: “Ah.”] Let me list what we have within the frame of the welfare cap proposed by my right hon. Friend. If the shadow Chancellor disagrees with any one of these items, he should stand up and intervene, and his own Back Benchers can draw their own inferences. We have the attendance allowance, bereavement benefits, carer’s allowance, Christmas bonus, disability living allowance, employment and support allowance, financial assistance scheme, housing benefit, incapacity benefit, income support, industrial injuries benefit, in-work credit, maternity allowance, pension credit, personal independence payment, return to work credit, severe disablement allowance, social fund, cold weather payments, statutory adoption pay and statutory maternity pay, statutory paternity pay, universal credit, winter fuel payments, personal tax credits, child benefit and tax-free child care. Is there any single element of that that he would change in the next five years?
Ben Gummer
Not at all. Now his Back Benchers may wish to draw their own inference from that. In private, the shadow Chancellor has been going round saying that he would change it. He would put one in and take one out. [Hon. Members: “Ah.”] Even in the House, he will say that he will supplement one benefit—withdrawing the winter fuel allowance from richer pensioners will raise £100 million and he would use it to pay for the reversal of the under-occupancy charge, which will cost £500 million. How does he make up that £400 million difference? He has been forced to come to this House to explain his maths. That is precisely why this cap is important. It forces a degree of accountability on the shadow Chancellor in making him explain to the British public how his sums add up, when it is clear that they do not. How does he account for the £400 million difference between the two? [Interruption.] I wish to know the answer as does the British public. [Interruption.]
Mr Deputy Speaker
Order. The hon. Gentleman has only 30 seconds remaining. Stop shouting him down. I want to hear him.
Ben Gummer
The cap is good for Government finances and it is good for accountability because it forces the Opposition to be honest, even though they are seemingly unwilling to be so. It is also important in terms of how we deal with this welfare crisis. It will force Governments to deal with the underlying causes of welfare dependency rather than just jacking up the bill every time they are faced with a difficult problem.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
Any member of the public watching this debate this afternoon and listening to people jeer, laugh, smirk and joke might imagine that some Members of this House were playing a game. Well, I am rising to say to the House that this is not a game; this is about people’s lives. Whether they be elderly people who are dependent on some of the age-related benefits that will fall under the cap, the disabled or people in low-paid work who depend on the system of tax credits, this is not a game; this is people’s lives. If it is really the position of Government Members that poor people should be made to live on even less, they should at least have the grace to be dignified about it, and not turn it into a game. I put it to Government Members and to those on my own Front Bench that social security and people’s lives should not be made a matter of short-term political positioning.
Everyone in the House wants to bring down welfare spending, because welfare spending is the price of Government and social failure. The Chancellor talked as if he were some brave warrior wreaking vengeance on an army of “Benefits Street” layabouts. The reality for British people is very different. Just this week, we saw 1,500 people queuing for three hours for a low-paid job at Aldi. The picture Government Members like to paint of the British people and what is happening in the benefit system is false, misleading and derogatory, yet it is feeding through to public attitudes. The public thinks that 41% of the benefits bill goes to the unemployed. In fact, it is only 3% of the benefits bill. The public thinks that 27% of benefits are claimed fraudulently. In fact, only 0.7% is so claimed. The truth is that 80% of the people who claim jobseeker’s allowance—those so-called “Benefits Street” layabouts—only claim it for less than a year. There is no credit to MPs if they constantly talk in a derogatory way about people who claim benefits when, at any given point in our lives, we may be dependent on social security—be it child benefit, benefits for the elderly or in-work benefits.
This benefits cap is arbitrary and bears no relationship to need, as our benefits system should. It does not allow for changing circumstances—rents going up and population rising—and will make inequality harder to tackle. There are ways to cut welfare. We could put people back to work, introduce a national living wage, build affordable homes and have our compulsory jobs guarantee. An arbitrary cap is the wrong way in which to go and sends out the wrong message. The Chancellor does not say many things that I think are correct, but he is correct to say that voting for this cap locks us into the coalition’s cuts. I say to the House that the issue of social security should not be about political positioning. As the months turn into years, people will be coming to our advice surgeries wanting explanations for totally arbitrary and counter-productive cuts. Will we say that it was a game we were playing with the Chancellor one afternoon in March? Our welfare system should be based on the facts and on need. Whatever short-term political advantage people think is gained by voting for this cap, it is far outweighed by what is problematic, so, no, I will not be voting for this cap in the Lobby tonight.
Mark Reckless (Rochester and Strood) (Con)
We have to make these cuts because the expenditure has been unmanaged. As my hon. Friend the Member for Ipswich (Ben Gummer) says, for the first time there will be more within the supposed “annually managed” category than the amount that is subject to departmental expenditure limits. The measure that the Chancellor has brought before us today will mean that for the first time this £120 billion of public spending will be properly managed annually by the Treasury and will be subject annually to a vote of this House.
Imagine the Home Office or the Department for Transport letting it slip out that it was spending £1.5 billion more than previously planned. The first thing a Minister must do if a budget is exceeded is bear down on it, find out why, do something about it, and, if necessary, find another area of the departmental budget where savings can be made. If absolutely necessary, they must go to the Chancellor and see whether they can make a case for a proportion of the strictly limited contingency reserve.
Mr Mark Harper (Forest of Dean) (Con)
I listened carefully to what the hon. Member for Hackney North and Stoke Newington (Ms Abbott) said and at no point during her speech did she think about the other side of the coin: the people who have to pay the bills. They were the people referred to by my hon. Friend the Member for Harlow (Robert Halfon) and the Chancellor. They have needs and requirements. Many low-paid people have to pay the bills, but she never mentioned them once.
Mark Reckless
As we learnt in the Budget, the amount we will spend on benefits for the disabled—as the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Wirral West (Esther McVey), will know well—is £1.5 billion more than was estimated in the autumn statement just three and a half months ago. In the past, we would have just ignored that and borrowed the extra money without even debating it in this House, but at least now we must have a debate.
The OBR expects that that money will be clawed back over the next couple of years—we will spend a similar amount extra next year, but not the following year. If that estimate is not right, however, surely we as MPs, representing the taxpayer and those who benefit from other benefits and from the NHS, must look into that and ask what we can do about it. Many people who are applying for the personal independence payment or employment and support allowance come to my surgeries and I see cases to which I am sympathetic and in which I think a misjudgment has been made in the assessment. The OBR might be right about what the spending will be—I am not saying that we should reduce eligibility for those benefits or that that is where the reductions must fall—but if it continues to increase we must either borrow the extra money, raise taxes, as the Opposition might wish, or find savings elsewhere.
Constituents of mine who, if they were lucky, were getting a 1% wage increase earlier in this Parliament were seeing people on benefits getting increases above 5%. In the five years since 2007, benefit payments increased by 10% relative to increases for those people who were in work. This year, for the first time, we have a 1% limit. Inflation has come down: it is now 1.7% rather than nearly 3%, as it was when we introduced this measure. I do not want to make further reductions to welfare benefits, but if payments to people who are disabled are £1.5 billion more than we thought they would be this year and if that continues to rise, we must make a decision about the priorities and where we want to make savings. Alternatively, should we just have more taxes and more borrowing, as the Opposition would like?
The other important principle of the measure before us is that the Chancellor is returning the control of spending to Parliament. Parliament used to debate the Government estimates in detail, but now the last thing that we debate on estimates day is anything to do with spending. Between the wars, Parliament lost that power and since then we have seen an explosion in state spending. We are spending £120 billion. It would be good news if spending came in below that, and the Treasury would not have to come to us for permission to spend more taxpayers’ money. But if spending is more than 2% above the projected figure there ought to be a debate and a vote in this House about whether to accept that.
George Freeman (Mid Norfolk) (Con)
My hon. Friend is making an extremely elegant point. Is it not true that the Labour party’s positioning of itself as the welfare party has betrayed those who depend on the welfare system in two ways? First, it has meant that money required for those most in need is spent on those who are not most in need and, secondly, it has entrenched and locked hundreds of thousands of the most vulnerable families into dependency on welfare, which is the great tragedy of the welfare state that the Opposition have supported.
Mark Reckless
My hon. Friend is completely right. The Labour party used to be the workers’ party, but it has become the welfare party. It has become the defender of the public sector. When Parliament discussed these matters 90 years ago and before, the radicals were those who were trying to control Government spending and who were standing up for the taxpayers—the people in their constituencies—and trying to reduce the amount of money that Ministers were spending on their behalf. Today, all we see from the Labour party is a defence of welfare spending and of whatever is paid in the public sector while our constituents, who have to pay for all that and who are often on very low incomes, are ignored. For the first time, we are considering the comparison between what we are spending on welfare and what we need to do with that money elsewhere.
I wholeheartedly support this House’s having its say on spending. There is an excellent precedent for such a debate in Parliament. The Government came to the House with a motion saying that we should freeze spending within the European Union, but the House looked at the motion, decided that that was not good enough and that we wanted a cut. We voted for one, and the Government went out and delivered it. Parliament took control of spending.
Previously, spending in the welfare area covered by the £120 billion has gone up and up, and people have said, “Oh well, there is a problem and we will have to spend more on these disabled claimants, but we are sympathetic to them so that is fine. We will just borrow the extra money.” For the first time, we will be forced into making a decision about what we can do to get proper control of public spending, represent our constituents and stand up for the taxpayer. Not only has the Chancellor brought in the fiscal watchdog and reformed pensions, but, in this third area, he will be remembered for restoring control of spending to Parliament.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
This welfare cap is a reprehensible and regressive measure that once again puts the most disadvantaged people in our communities on the front line. The cap that has been proposed is a crude blunt instrument. It is arbitrary and it simply will not be flexible enough to respond if the economy or our changing democracy drive greater structural need.
The Government recognise implicitly that the drivers of welfare spending are largely structural and they have excluded the most obviously cyclical benefits from the cap, notably jobseeker’s allowance and pensions. Other benefits also have a cyclical component, however, and the Government persist instead in pursuing an agenda that victimises and stigmatises people on low incomes and punishes them for the shortcomings of Government economic policy.
In the short time we have to debate the motion today, I want to address the impact of the welfare cap on sections of our society that are likely to be affected. State pensions have been excluded from the cap, but it does not exclude pension and savings credits. The very poorest pensioners, those who have spent their working lives in low-paid private sector jobs or who have spent years caring for others, will potentially be hit. That could affect 300,000 pensioners in Scotland, most of them women.
The second group I want to mention is children. We already know that as a consequence of the UK Government’s welfare cuts 100,000 more children in Scotland will be growing up in poverty by 2020. We also know that the majority are the children of parents in low-paid work. The cuts to tax credits and the below-inflation uprating of child benefit, housing benefit and other forms of support for families are already expected to drive up child poverty, and the arbitrary welfare cap just puts a tin lid on it.
The Child Poverty Action Group points out that child poverty places a huge burden on our economy, not least through the £15 billion spent on addressing its consequences through social services and extra educational support. The group makes the point that in the medium to longer term, the Government’s approach will hinder deficit reduction and we will all pay for the costly long-term legacy of low skills and poor health associated with childhood deprivation.
Disabled people and their unpaid carers are also in the firing line, again. We need to understand the structural challenge as the baby boomer generation develop more health problems and disabilities associated with old age. We need to support family carers, who are the backbone of our community care system. It is a wholly false economy to subject the benefits paid to carers to the welfare cap.
Underpinning the circumstances of all those people is the UK’s pernicious combination of low pay, wide labour market inequality and high housing costs. Housing benefit remains one of the biggest ticket items in welfare expenditure. Increases are driven by chronic shortages of affordable homes, soaring private sector rents in areas of high demand—most notably in London and the south-east—and the failure of Governments to address that. The welfare cap will not address those underlying structural problems and the scandal is that people in good jobs cannot afford to pay rent.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Will my hon. Friend give way?
Dr Whiteford
I will not, because other people need to speak.
The best way to reduce and manage welfare spending is to restore the economy to a state of health and that is exactly what the Government are failing to do quickly enough. If the Government were serious about reducing welfare spending, they would be creating more job opportunities in sectors that pay a living wage, investing in child care to enable parents to work or increase their hours, and building more affordable homes and taking action on housing costs.
In Scotland, we spend a lower proportion of revenue and GDP on social protection than the UK as a whole. We have invested heavily in affordable housing and in child care and we have increased apprenticeships. That has enabled more people to work full time, which is why our child poverty rates have fallen more quickly. Those long-term efforts to address the drivers of welfare spending, not just the symptoms, stand in sharp contrast to the Government’s ill-conceived, punitive and counter-productive approach.
I intend to vote against this measure today and I hope that Scottish MPs from all parties will do so too. To acquiesce in this nasty Tory nonsense that piles yet more pain on our poorest pensioners, carers, disabled people and low-income families would be an abject failure of leadership and a betrayal of the people of Scotland who elected us and who, frankly, deserve better.
John Hemming (Birmingham, Yardley) (LD)
It is often said that a week is a long time in politics, but in one sense that is wrong. Dealing with Government finance and the economy takes multiple years, so the problem that we had in 2010 will take at least eight years to resolve. People who interview me every so often say, “Oh, we have more cuts this year,” but those decisions were made in 2010 and they were driven by Government policy in the previous years.
I shall quote a few comments about Government policy from 2005 to 2010 because they are relevant to this debate and the issue of budget responsibility in the long term. One person said in his memoirs:
“However, we should also accept that from 2005 onwards Labour was insufficiently vigorous in limiting or eliminating the potential structural deficit.”
That was Tony Blair, who was Prime Minister at the time.
Lord Turnbull, who at one stage was the Cabinet Secretary, the chief civil servant, noted that excessive borrowing started to be a problem from 2005. He said:
“It kind of crept up on us in 2005, 2006 and 2007, and we were still expanding public spending at 4.5 percent a year”.
His argument, essentially, was that the Labour Government should have been aiming to put money aside in the good years. He cited examples of other places that began to accumulate surpluses for a rainy day—places such as Australia.
The Government were borrowing £2,500 on behalf of every person in the country so that, in effect, a baby would have borrowed £45,000 by the time it reached the age of 18. That had to be brought under control, but it cannot be done immediately. It is important that we properly manage Government finances. If anyone can be bothered to read the charter for budget responsibility March 2014 update, they will find on page 10 that if the welfare cap is found to be breached, there are three options, one of which is to
“explain why a breach of the welfare cap is considered justified.”
Members can vote against the motion only if they do not believe in the Government managing and knowing what they are doing. I would be worried if there was a scheme whereby somebody came and said, “I need benefits. I’ve got no money,” and the Government said, “We’ve run out of money. We have no money to give you jobseeker’s allowance.” People will still have entitlements, but if we spend more than we intend to spend, the Minister will, as an absolute minimum, have to explain why.
I worry still about how the Government manage finances. I have asked questions, for example, on tax credits, to try to work out how many effectively fraudulent self-employed schemes there are, often run by people who are recent migrants. People set up nonsense scrap metal businesses that exist not as businesses, but to qualify for tax credits, but the Government cannot give that information. That is bad. We should be able to analyse the figures.
We need a good benefits system that ensures that there is a solid and straightforward safety net so that if people end up in difficulty, there is a way of rescuing them and keeping them from destitution. However, to argue that we should not try to manage the total costs is nonsense. Hence, I am not surprised that the official Opposition are backing the motion. Anyone who believes in having the money available to look after people believes in managing the accounts and knowing what is happening, and if we spend more than we expect, as an absolute minimum the Minister should explain why.
Jim Sheridan (Paisley and Renfrewshire North) (Lab)
If my hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott) did nothing else in her contribution, she exposed the behaviour of the Government during this debate, reminding us that this is about people. The experience today shows that the Tories are at their happiest and their loudest when they are attacking the poor and the vulnerable. I was reminded that the reason I came into politics was to take on such people.
Events shape our lives and our experiences. I say this as someone who was a recipient of benefits for three years, through no fault of my own. I was unemployed, and when I did get a job, it usually lasted a week before the Economic League, which funded the Tory party, caught up with me and I was blacklisted and out of a job again. I was not lying in my bed waiting for the next girocheque to come in; I was desperate for work.
The vast majority of people on benefits are desperate for work, but they are forced into low-pay zero-hours contracts and it is the fault of the employers. Not one single Tory MP today has mentioned the fact that employers are lucky if they are paying the minimum wage and that therefore people are dependent on taxpayers and their handouts. That is what we should be attacking — the employers who are paying the minimum wage and sometimes even below it and forcing people on to benefits.
I was horrified to see the performance of Members on the Government Benches, none more so than our own Mrs Brown, epitomised by the hon. Member for Elmet and Rothwell (Alec Shelbrooke), whose behaviour was somewhat disappointing, shall we say. The Government will argue that a welfare cap is needed to keep social security under control, but they do not understand the root causes of that spending. I have great difficulty even with the position of my own Front Bench on the welfare cap.
Yesterday I spoke about tax avoidance. I draw a parallel. If I were to call the tax office and report Mrs Brown down the road for not paying her tax or wrongly receiving welfare benefits, an official would probably be at her door the next day. Yesterday I highlighted the disgraceful behaviour of Alliance Boots and its tax evasion, and not one single Member on the Government Benches or on the Government Front Bench has asked what Boots was up to. That is a sad reflection of where our priorities lie.
The welfare cap is portrayed by the Tories and the Lib Dems as a fiscal policy. It is a trap laid by the Conservatives to suck in the Labour Front Bench, and I am extremely uneasy about the position we are taking. I recognise a bear trap when I see it and I hope I will not be seduced into falling into the trap set by the Tories. It is a campaigning slogan which seems to demonise the poor and those on benefits.
As I said at the outset, I am probably one of the few people in the House who has been a recipient of benefits. There certainly are none on the Government Benches, and very few on the Opposition Benches. I was proud to get a job and proud of the company that gave me a job and got me back into work. I was not a benefits cheat, as some would have us believe.
Stephen Phillips (Sleaford and North Hykeham) (Con)
When this Government came to office in 2010, they faced immediate and terrifying problems. Listening to some of the contributions from Opposition Members, that seems to have been forgotten. The prudence of the policies that have been pursued by the Government over the past four years has done much to make us forget what we knew at the time—that this country had been brought to the brink of bankruptcy by a Labour Government who, in their 13 years in office, borrowed more money than all their predecessors put together since the foundation of the Bank of England.
If we are never again to repeat the mistakes of the past, we must not forget where this country found itself in 2010, as we should not forget that the authors of the crisis that this country faced are now sitting on the Opposition Front Bench and who would again be king, notwithstanding their clear demonstration in their handling of the British economy in their time in office, that they are unfit to hold it.
Guy Opperman (Hexham) (Con)
Given that the Opposition have opposed every budgetary and welfare cut throughout this Parliament thus far, why should we ask the public to believe them now, particularly given what the shadow team say in private?
Stephen Phillips
I do not know what the shadow Chancellor and his Treasury shadow team say in private. I do know that when I talk to people in my constituency, they have not forgotten that the authors of the troubles that we found ourselves in and that we are still recovering from and will be for a considerable time are those who again want to hold the reins of power.
Mrs Anne McGuire (Stirling) (Lab)
In the hon. and learned Gentleman’s historical and economic analysis, when is he going to factor in a little thing such as an international financial crisis that did not start in Britain?
Stephen Phillips
He is going to factor it in right now, and he is going to tell the right hon. Lady the truth. The truth is that this country was in a much worse place to weather that financial crisis because of the fact that we had borrowed more money than any other developed economy. Indeed, we had borrowed just about as far as we could possibly go. The truth of the matter is that we would have weathered the financial crisis, which I quite accept was an international crisis, if the last Government had done their job properly, fixed the roof while the sun was shining and had not over-borrowed—if they had not done all the things that led to the difficulties that this coalition Government have had to pick up.
It is quite apparent that the hubris of Opposition Members knows no bounds. There is no plan. They have no plan for the British economy other than the plan that they had during their time in office: spend, spend, spend. That is one reason why it is important that this measure comes before the House today.
Let us recall precisely what we are talking about. This is a prudent measure from this Government, and it updates the charter that was previously laid before the House, and which the House approved. When history comes to look at the record of this Government and the things that they have done, it will see not just that the Government have taken steps to cure the British economy of the malaise from which it was suffering in 2010; they have in addition taken the necessary measures to address the structural changes that were required so that we can go forward. The establishment of the Office for Budget Responsibility—obviously, four years ago—means that we can never again see economic and fiscal forecasts of the type that enabled the previous Government to spend so foolishly the money that we simply did not have.
The charter comes before us again today, and in part it does so because of the announcement, quite correctly, by my right hon. Friend the Chancellor of the Exchequer that we need to take action. We need to take action to stop benefits running out of control as they ran out of control under the previous Government. The figures have been quite startling, and they have been given in this debate. The simple fact of the matter is that this charter, with its cap on benefits, is something that the House should support. I am pleased that the Opposition are going to support it; they should all be supporting it, because it is the right thing to do.
Chris Leslie (Nottingham East) (Lab/Co-op)
The debate has been all too short, so let me briefly reiterate to the House that the Opposition support capping social security spending—an approach that my right hon. Friend the Leader of the Opposition first proposed in June 2013. Welfare expenditure is the largest part of total Government spending and it is now £13 billion higher than the Chancellor planned in his first spending review in 2010. We must get a grip of these rising costs but do so in a fair way—tough on welfare inflation but tough on the causes of welfare inflation as well.
The Government might not realise it, but low wages and job insecurity are pushing the welfare bill higher and higher. The collapse in earnings during this cost of living crisis has hit the taxpayer too. Rising rents and the lack of housing supply push up the housing benefit bill. We need action on house building and a help to build scheme far more urgently than ever before. And long-term youth unemployment has doubled under these Ministers, costing the taxpayer more in benefits but also losing revenue to the Exchequer.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Will the hon. Gentleman give way?
Chris Leslie
I am afraid I will not give way because we have very little time. I have to give the Chief Secretary some time to try to make some sense of his proposals.
It is no wonder, I say to the Ministers, that in just the four months since the December autumn statement, they have had to revise their projections for welfare spending. In the Budget on Wednesday, they had to revise up predicted social security spending for next year by a further £1 billion and revise up the expected bill for the year after that, 2015-16, by another £1 billion. Controlling welfare inflation will mean tough decisions, such as ending the winter allowance for the richest 5% of pensioners, but we cannot afford the waste and ineptitude of the current Secretary of State for Work and Pensions, who cannot even be bothered to come back into the Chamber for the end of this debate. That Secretary of State has squandered £34 million by scrapping the Department for Work and Pensions inquiry service, in an astonishing waste of taxpayers’ money. He has written off millions of pounds of universal credit IT spending at an alarming rate. He has failed to tackle fraud and tackle the error and overpayments made by his Department of £700 million last year. The country and the taxpayer need protecting from the failures and the incompetence of this Chancellor and this Tory-led Government.
On the modified charter before us, why have the Government not taken the opportunity to revise the OBR’s mandate to allow the independent audit of policy costings and commitments in the manifestos of the main political parties? Perhaps the Chief Secretary can explain why the Government withdrew their first version of the motion last week, which could have allowed an amendment on that matter, and then hastily retabled a fresh version, which was not amendable. I wonder why they did that.
On the wider set of fiscal targets, will the Chief Secretary explain why the Treasury want to reiterate, in their charter today, the particular points on which they fail? If they want to restate the promise that they originally made to get the national debt falling by next year, be our guest. The motion before us today serves to remind the world of their failure to get the national debt down in 2015-16, and as the OBR said last week,
“We expect public sector net debt”
still to be rising in that year.
So the fiscal mandate is already in tatters. It had expired even before today’s debate. Is the Chancellor even aware of what he is doing? In his Budget speech on Wednesday he used the phrase,
“as a nation, we are getting on top of our debts”.—[Official Report, 19 March 2014; Vol. 577, c. 781.]
Does he not even realise that he has increased the national debt by a third—£1.2 trillion?
A new fiscal mandate will be needed in the new Parliament and we will obtain just that. We will balance the books and get the current budget into surplus as soon as possible in the next Parliament—a fairer approach to deficit reduction and tough on the causes of welfare inflation. We need long-term recovery and long-term growth, not the same old short-term politicking from the Chancellor. Sound management and stronger control are necessary to prove to taxpayers that the important safety net of social security for the vulnerable and those in need is sustainable for the longer term, so we will support the motion, should the House divide.
The Chief Secretary to the Treasury (Danny Alexander)
I am grateful to the shadow Chief Secretary for his support for this measure, albeit that from him and the Chancellor we heard another two flatlining speeches from a flatlining political party.
Danny Alexander
Shadow Chancellor. I am glad he agrees that he is flatlining.
This has been an important debate, and I agreed with the hon. Member for Hackney North and Stoke Newington (Ms Abbott) in one respect. She was right to say that this was an important debate on an important subject and should be treated as such. However, it is for precisely those reasons that I support the cap that we are debating, as does my party. Let me explain why. During the debate a few myths have grown up about the cap, which I want to tackle. Fundamentally, as my hon. Friend the Member for Birmingham, Yardley (John Hemming) made clear, the motion is about accountability to Parliament and about the transparency of public expenditure decisions.
Danny Alexander
I do not have much time; I intend to make some progress.
Fundamentally, the motion is about ensuring that we have greater control over public expenditure in this country, and that where a Government wish to deviate from the plans they set out to this House, they must return to the House to explain why they want to make a change, or what action they will take to deal with the pressures that have emerged.
One of my priorities when I came into office as Chief Secretary was to increase the amount of public expenditure that is under the direct control of Government, and indeed under the direct control and accountability of this House.
Danny Alexander
I will not give way.
When we came into office, only 53.8% of public expenditure was under a direct mechanism of control—departmental expenditure limits. That means that nearly half of public expenditure was simply beyond control—it was so-called annually managed expenditure, which in practice meant annually unmanaged expenditure. Progressively, over the course of this Parliament, we have put in place additional mechanisms to control an ever-rising amount of public expenditure. The pension reforms, which mean that in future the state pension age will be linked to life expectancy, bring greater control over the costs of the basic state pension. The reforms of public service pensions, which include a cap on the costs within public sector pension schemes, bring that source of expenditure, which had ballooned out of control under Labour, much more directly under the control of Government.
In total, when the measures in the welfare cap are included, we will have increased the amount of expenditure under direct control and directly accountable and transparent to this House from around 50% at the start of the Parliament to 77% at the end of it. From the perspective of every Member in the House, that ought to be a welcome change, because it means that this House has more say and more ability to scrutinise and hold accountable the Government for changes in public expenditure that take place on their watch.
A number of hon. Members mentioned unemployment benefits and jobseeker’s allowance. The hon. Member for Paisley and Renfrewshire North (Jim Sheridan) referred to his experience in receipt of unemployment benefits. He is right that most people in that situation are not there through any fault of their own. That is precisely why jobseeker’s allowance is excluded from the scope of the cap. The benefits that are the so-called automatic stabilisers that fluctuate with the state of the economy—jobseeker’s allowance and the benefits that are passported from it and, in due course, those elements of universal credit, too—will not be in the scope of the cap, precisely for the reasons that he described in his speech. That perhaps ought to reassure him and encourage him to vote for the measure.
Fundamentally in the end, I think those people who are speaking against the cap betray their own lack of confidence in their ability, should they wish to, to come to the House transparently and accountably and persuade the House—
Danny Alexander
I have one minute left. No, I am not going to take any interventions; I am going to make progress.
Those people who speak against the cap betray an enormous lack of confidence in the ability of those who think that, in response to circumstances, welfare spending should be increased above the cap, to come here and persuade the House that that increase in expenditure would be necessary. The truth, over many years, has been that where there have been changes in forecasts, and where decisions have been made that have led to increased costs, they have been sneaked in through the back door, through the forecast, without any direct accountability to this House.
The people who say that the cap involves expenditure cuts are also wrong. The cap starts at around £120 billion and rises over five years to £127 billion, in line with inflation, so we have set it at a reasonable level. In this House, we should never again go back to the situation we had under the previous Government, where public expenditure was uncontrolled, and where debt and the deficit were allowed to balloon uncontrollably. This is part of clearing up the mess that was made of the public finances, and I commend the motion to the House.
Question put.
Gambling (Licensing and Advertising) Bill
(10 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mrs Helen Grant)
I beg to move, That this House agrees with Lords amendment 1.
The Lords amendment gives the Secretary of State reserve powers to extend the horserace betting levy to all bookmakers holding a remote operating licence from the Gambling Commission after the remote gambling Bill has been enacted. The amendment is fully in keeping with the context and purpose of the Bill, which is about levelling the playing field for bookmakers engaging with British punters.
Subsections (1) and (2) are broadly drafted to ensure that the Secretary of State can make all the changes necessary to secure extension compatible with the UK’s obligations under European Union law. Members may recall that we resisted previous levy amendments because we believed they failed to offer that necessary scope.
Subsection (3) provides that secondary legislation introduced under this amendment will be subject to affirmative procedure in both Houses of Parliament. Subsection (4) makes it clear that existing provisions to abolish the levy once a suitable replacement has been found are unaffected by the amendment.
We have tabled our own amendment because we are persuaded that a statutory levy should be applied fairly, but we remain firmly of the view that the need for genuine levy reform cannot be satisfied through extension to offshore remote bookmakers alone. That is why this amendment is part of a wider levy reform package, which was announced by the Chancellor a week ago in the Budget. We will now move forward very quickly on two concurrent pieces of work.
On extending the levy, we will seek to complete all of the necessary work in time for the 2015 negotiations on the 55th levy scheme, which will apply from April 2016. The timing will, of course, be subject to the outcome of discussions with the European Commission, which began last Friday. We hope to launch a consultation in May on the mechanics of extension.
Guy Opperman (Hexham) (Con)
Does my hon. Friend agree that this announcement and today’s developments are very good news for racing, which provides tremendous support for jobs and local tourism, and that it is good that the Government are now beginning to work properly with British racing?
Ian Swales (Redcar) (LD)
Following on from the intervention of the hon. Member for Hexham (Guy Opperman), is the Minister aware of the damage that has been done to racing by bookmakers moving offshore and not paying the levy, and will she join me and Redcar race course in welcoming the fact that racing will be more healthy as a result of these measures?
Mrs Grant
My hon. Friend makes a very important point. We have to look after racing. It is an important industry that provides many jobs. This is a sensible move, making a level playing field for all operators.
At the same time, we will develop wider levy reform options and publish a consultation in the summer. The consultation will seek views on a range of options, which are likely to include commercial arrangements, modernising the existing levy and a horse race betting right. The amendment is about collecting the horserace betting levy in a fair and consistent way.
Mr David Nuttall (Bury North) (Con)
Will the Minister confirm that it would not be possible to extend the levy to offshore bookmakers without the approval of the EU and that we are totally dependent on receiving that approval in order to be able to do it legally?
Mrs Grant
My hon. Friend makes a fair point. Certainly, the levy scheme amounts to state aid and, because of the terms, we need to let the EU know if there is any substantial change in state aid and get permission for it.
The amendment is reasonable and I believe it commands widespread support. It signals the Government’s commitment to modernising the levy and it is, of course, part of, but not a substitute for, a wider reform programme.
Clive Efford (Eltham) (Lab)
We welcome the Government amendment and their change of heart on the alteration that we proposed both in Committee and on Report.
We pay tribute to the Members of the House of Lords who took up several of the issues that we raised during the Bill’s passage through this House. They have been very successful in gaining Government support for our amendments, notably in relation to sport spread betting, pre-watershed gambling advertising and its impact on children, a one-stop shop for problem gamblers and financial blocking. On all those areas, the Government said that change was not necessary or desirable, but it is very welcome that they have now changed their mind.
We welcome the Lords amendment on the horserace betting levy. There are two key issues: the application of the existing levy to online gamblers, and a consultation on the levy’s replacement in the long term. It is worth putting in context why the levy is necessary to support the horse racing industry.
British horse racing is a major sport. It is the country’s second most popular sport, with 5.68 million attendees, according to the British Horseracing Authority. It is also the second largest sporting employer. British racing supports a predominantly rural industry that makes a significant contribution to the British economy. It generates £3.45 billion in annual expenditure, provides direct and associated employment for 85,000 people and assists in leveraging billions of pounds of inward investment.
Horse racing is inextricably linked with gambling like no other sport, with the exception of greyhound racing. As online gambling has grown, betting operators have moved offshore, which has contributed to a fall in revenue from the levy from an average of about £106 million between 2003-04 and 2008-09 to £66.7 million now. The industry says that that has led the number of horses in training to go down by 14.2% between 2008 and 2013, and foal production to go down by 25.3% during the same period. The Lords amendment is therefore very important. We welcome the Government’s about-turn and their support for our position on the levy.
The Minister has accepted our position, but a review may take a very long time. What does she think is the time scale for the review? When will the end date be for a major review of the betting levy?
In Committee, I warned the Minister that she might face more tenacious support for the horse racing industry than comes from most Members of the House of Commons. After I had told her that she might face more fanatical opposition in the House of Lords, she said:
“I am not sure that I understand quite what the hon. Member means by the horse racing fanatics in the other place, but I look forward to finding out.”––[Official Report, Gambling (Licensing and Advertising) Public Bill Committee, 19 November 2013; c. 141.]
She well and truly found out when the Bill arrived in the Lords.
When I moved the amendment on Report, the Minister said:
“First, I do not believe that we should assume that genuine levy reform lies in merely extending the existing levy scheme… Secondly, as I have said previously, any extension of the levy to offshore bookmakers as a result of the new clauses”—
the ones I had tabled—
“would require EU Commission approval because the levy is a state aid scheme. I will not implement the proposals, for which we do not have EU approval in respect of state aid.”—[Official Report, 26 November 2013; Vol. 571, c. 195.]
When the Bill reached the Lords—following some to-ing and fro-ing between the Opposition, Cross Benchers and the Government—Lord Gardiner of Kimble moved an amendment, and said:
“We agree with the view that while we still have a statutory levy, it should be fairly applied. Furthermore, we are persuaded that including a clause about extending the levy to offshore remote operators is fully in keeping with the context and purpose of the Bill.”—[Official Report, House of Lords, 4 March 2014; Vol. 752, c. 1301.]
Will the Minister explain to the House—I will allow her to intervene—exactly what changed between our discussions in the House of Commons and those in the House of Lords? There has been a complete about-turn in the Government’s position on this issue.
It is important that there are no delays. The Minister said that she hoped that the consultation would start in May. Will she clarify whether it will conclude before the annual review of the levy terms, which will take place in October?
I know that there is concern about the horserace betting levy. My noble Friend Lord Lipsey spoke of his opposition to it in the other place. I share some of his concerns. If we go ahead with extending the levy and it generates an additional £20 million for the horse racing industry, what exactly will the Minister do to ensure that it benefits the wider horse racing industry and not just the haves at the expense of the have-nots? That investment should benefit the low-paid workers in the industry, generate economic activity in rural areas, and perhaps even support struggling race courses to become viable and keep people in their jobs.
The amendment will provide a great deal of support to the industry and could mean £20 million of investment. The industry must use it wisely. If it is used not to provide those wider benefits, but to inflate prizes at the expense of lower-paid workers in the industry, the support for the levy in the House might dissipate and the industry might lose important income. We all have a duty to pay close attention to what the money is used for when it finally reaches the industry.
I pay tribute to the Members of the House of Lords who supported the amendments that we tabled, not least the amendment before us. I pay particular tribute to Lord Stevenson of Balmacara, Baroness Jones of Whitchurch and Lord Collins of Highbury. I would not go so far as to suggest that someone should name a racehorse or even a stakes race after each of them. However, I received an e-mail of gratitude from the British Horseracing Authority, expressing its appreciation for my support, which said:
“I hope that we can get you along to a race meeting in the near future, potentially for the inaugural running of the ‘Clive Efford Cup’”.
I am sure that that was said in jest, but I will not stand in anyone’s way if that is what they want to do.
This is a welcome about-turn from the Government. We certainly support the amendment. I hope that the Minister will give an assurance about the time scales, because we do not want there to be any delay that could be avoided in implementing the levy on online gambling because, in the meantime, the industry will be missing out on significant income that could be put to good use, as I have set out today. I hope that the House will support the amendment.
Mr Nuttall
I want to raise two matters. Both have been touched on, but I want to expand on them.
First, as the hon. Member for Eltham (Clive Efford) rightly said, a new clause very similar to the Lords amendment was tabled on Report. I, along with other Government Members, voted against it. Of course, it was not the same clause, but it was very similar to the amendment we are being asked to support today, and if I am anything, I like to be constant and consistent in my position.
Clive Efford
May I point out to the hon. Gentleman that the outcome is the same? We will apply the existing levy—assuming we get European Commission approval—to online gamblers, and the Government will consult on a future levy for the longer term. The outcome is the same whether the amendment has been mildly adjusted or not.
Mr Nuttall
I appreciate that the aim might be the same, but as I understand it, the Lords amendment creates a reserved power straight away—
Mr Nuttall
I thought it was to do it straight away, which is slightly different.
Clive Efford
In Committee we tabled two amendments, one of which would have done what the hon. Gentleman has set out. We also offered the Government the opportunity to consider taking the reserved power in the longer term. That was the amendment we brought to the House on Report, and he voted against the reserved power, which is again set out in this amendment.
Mr Nuttall
This is a very time-limited debate and I do not want to spend all my time on a preliminary point. The substantive point is that, whether or not the amendment is identical or slightly different to the previous one, this new clause certainly does provide for a reserved power. That is somewhat confusing given what the Chancellor said in his Budget statement last Wednesday:
“We will also extend the horserace betting levy to bookmakers who are based offshore, and we will look at wider levy reform and at introducing a ‘racing right’ to support the sport.”—[Official Report, 19 March 2014; Vol. 577, c. 791.]
That makes it apparent, or gives the impression, that it is going to happen, and that the reserved power will not be kept for a rainy day but is something that the Government definitely want to proceed with. We must assume that that is the case; otherwise, why introduce it in the first place?
That leads neatly to my second point. I will not quote word for word what the hon. Member for Eltham said on Report, because he mentioned some of it in his speech. On 26 November last year, when new clauses 10 and 11 were being considered, the Minister stated:
“Nor am I convinced that we should seek EU approval for an extension of the current levy when we do not know that it will satisfy the need for proper reform. I am not prepared to act in a way that could jeopardise the stability provided by the recent voluntary arrangement.
I have also been urged to take a power to extend the levy at a future point, but that assumes that all that we might wish to do is extend the existing system, and that would not be genuine levy reform. Even if we took such a power, we could find that it was too narrowly scoped to enable us to achieve what we wanted—for example, to meet the EC—”
I presume that means the European Union—
“requirements for any reform scheme to be state aid compliant.”—[Official Report, 26 November 2013; Vol. 571, c. 195.]
There are therefore two matters of confusion. First, what is the Government’s position on the proposal? Is it simply to have a reserved power, or is it to seek to introduce a measure at the earliest opportunity? Secondly, for what will the Government seek approval from the EU? Will they simply seek approval to extend the levy, or will they seek a wider reform, which was the reason given on 26 November for the delay?
Essentially, those are the two points that I would be grateful to the Minister for addressing when she replies to this brief debate.
Jim Shannon (Strangford) (DUP)
I want to make a few quick comments on holding a remote operating licence from the Gambling Commission. I will also comment on those based overseas who will be required to obtain a remote operating licence from the commission as a result of measures in the Bill.
I bring that to the Minister’s attention because of the changes that will be introduced off the back of the Bill. Currently, remote gambling operators in only 31 jurisdictions can advertise in the UK. As a consequence of the Bill, the scope for advertising will widen sixfold to 196 jurisdictions, as long as providers get the operating licence. Providers from, for example, China and Brazil cannot advertise in the UK, but under the Bill, they will be able to do so for the first time if they get a Gambling Commission licence under Lords amendment 1. I make that point because, between 2006 and 2012, advertising on TV increased by 600%. With the licence comes the advertising. Perhaps the Government will give the House an indication of how they intend, through the licensing grant, to ensure that advertising does not spiral out of control.
I thank the Minister and the Lords for making the changes. Two welcome and important commitments were made in the other place. I divided the House on the introduction of a one-stop shop self-exclusion mechanism and got support from Labour colleagues to make that happen. I am pleased that those changes are included in the Bill because they will strengthen player protection. Put simply, a customer need ask only once in their local betting shop and their exclusion will apply to all shops in that chain and to all chains in the UK. That, too, is good news. The concept of a one-stop shop is to help to deliver an important tool to assist problem gamblers to take back control over their lives, as it is often described. That is good news.
I am pleased to see the financial transaction blocking amendments, which are good news. I am also pleased to confirm that the Gambling Commission has reached agreement with major payment systems organisations, namely MasterCard, PayPal and Visa Europe, to work together to block financial transactions with unlicensed operators that seek to use payment systems for illegal purposes. That is good news for the Bill and for the good work put into the process by Members of the House, and those in the other place especially, who made that happen.
I want to ask the Minister two questions. On the voluntary approach to the fixed odds betting terminals, there is an indication that there will be regulations. Will she indicate whether it is the Government’s intention to put the situation right in the Consumer Rights Bill? If so, we are probably at the stage where those measures need to be included in it. Consumer protection is also important. Is it the Government’s intention to provide for the FOBT voluntary approach regulations in the Consumer Rights Bill?
Lastly, I want to ask the Minister about a technical point. I would welcome any clarification she can give on how, prior to legislation, the voluntary approach to financial transaction blocking will apply to Northern Ireland. I ask because, as I understand it, the Gambling Commission, which does not have jurisdiction in Northern Ireland, will play the key mediating role. Will she indicate how that will work? Will it be done through the Northern Ireland Assembly and an amendment there, or will it be done through further UK Government changes?
I am very pleased that, at long last, the amended Bill seems to be going in the direction we want it go in. That is down to the hard work of Members in this Chamber and in the other place. In particular, I thank the hon. Member for Eltham (Clive Efford) for his hard work. I thank the Minister, too.
Guy Opperman
I started out aged 14 as an apprentice stable lad. I worked my way up through a racing stable and then became a jockey at various stages of my life. I am lucky enough and privileged enough to have ridden upsides Tony McCoy, who famously asked me what my real job was. I am also very fortunate to be the Member of Parliament for Hexham, which is one of the finest racecourses in the country. It will strongly welcome the Bill as demonstrating support for smaller racecourses, as more money goes back into the racing community.
Any interpretation of the Bill will show that it is right that bookmakers now support the industry from which they benefit so much. I have met many bookmakers over the years as this matter has gone through the House. This is not an anti-bookmaker measure; it will produce a level playing field where bookmakers make a proper contribution to the racing community.
I welcome the announcements in the Budget. It is worth reminding the House that it is right that the LIBOR fines, paid for by those who demonstrated the worst of values, should now be supporting those who demonstrate the best of values. I support LIBOR fines going to St John Ambulance—I have certainly used its services in point-to-points and the like—and the VAT relief on fuel for air ambulances. We cannot have racecourses without those facilities. The Chancellor’s decision, ably set out by my hon. Friend the Member for Bury North (Mr Nuttall), to extend the horseracing betting levy to offshore bookmakers and to consider wider levy reforms—something that has been a nirvana for so many people involved in racing—is fantastically good news. I will come on to the racing right to support the sport, which we need to address and expand on, in a moment.
In addressing the comments by the hon. Member for Eltham (Clive Efford), it is important to understand that the Gambling Act 2005, introduced by the previous Government, effectively introduced the system that we have had to amend, control and change. The Act was far from helpful. As someone who was working in racing throughout the period of the previous Government, I can assure the House that they were deeply unsupportive of horseracing.
I welcome the introduction of the racing right, which is fantastic. After all, racing is key to tourism, local jobs and the rural package that several small towns offer. I have been lucky enough to ride at all the big tracks, such as Cheltenham and Kempton Park. I am not denigrating, in any way, those tracks—their fences are a bit bigger and stiffer, and when one falls one certainly falls quite hard—but it is the smaller tracks, the Towcesters, the Ludlows and, of course, the Hexhams that are the true lifeblood of racing. They are vital to its future. The Bill will introduce the support that we want.
It is important to understand and make the wider point that some have touched on, which is that without support for racing there will be no bloodstock sales, no breeding, no studs and no veterinary support. I, for one, broke several bones. Without racing, I would have put various orthopaedic surgeons in the NHS in fewer situations. All those people will benefit from an enhancement of racing.
We need more from the Minister on what constitutes the racing right. We accept and acknowledge that this is a good Bill and that we are heading in the right direction, and we accept and acknowledge that wider levy reform is for the benefit of one and all in racing, but we need to understand what exactly the racing right entails. That needs to be expanded on to a greater degree, because British racing is a wonderful institution and it needs all our support.
Mr John Leech (Manchester, Withington) (LD)
I do not intend to detain the House for long, but I want to put on record the Liberal Democrats’ support for the Lords amendment. This change has been campaigned for by Members in all parts of the House, but particularly by my right hon. Friend the Member for Bath (Mr Foster). I found it rather frustrating that we could not deal with it in the House of Commons rather than expecting the Lords to improve a Bill that is generally considered acceptable. However, the amendment will help to level the playing field between onshore bookies and offshore gambling providers, which I think is in line with the overall aims of the Bill, and I am happy to support it.
Mrs Grant
With the leave of the House, Mr Deputy Speaker. I thank all Members for what they have said today about this important issue, and for their contributions during the Bill’s earlier stages. I shall be fairly brief, but I want to deal with some of the points that they have raised.
The shadow Minister, the hon. Member for Eltham (Clive Efford), accused us of performing a U-turn. I certainly do not accept that accusation, and I am a little surprised that he made it. I have said time and again—and the hon. Gentleman has heard me say it—that the extension on its own does not equate to genuine levy reform. The amendment is part of a wider levy reform programme, which is essential and which will involve our looking at all the various options.
The shadow Minister rightly asked for further details about time scales and delay. Delay is the last thing that I want: we need to move ahead. I can tell the hon. Gentleman that we will seek to complete all the necessary extension work in time for the 2015 negotiations on the 55th levy scheme, and that we will begin consultation on wider levy reform this summer. We hope to complete that consultation by the autumn. We want to get on with this, but it must be done properly, and there are a number of practical considerations that prevent us from doing it any earlier. As the hon. Gentleman will know, any significant change beyond extension would require primary legislation.
Clive Efford
A review of the levy terms will take place in October. We are pretty clear about what we want to consult on in relation to the extension of the existing levy. Why can we not complete the consultation in time for the review, so that we can aim for earlier implementation? The longer we delay, the more the horseracing industry will miss out on potential income.
Mrs Grant
I hear what the hon. Gentleman says. Of course no one wants delay, which is why we want to take this power. However, as I am sure the hon. Gentleman appreciates, things must be done properly and carefully, and that is indeed how they will be done.
The hon. Gentleman also asked about the benefits of the levy. The levy contribution is likely to constitute a considerable sum, which, as he knows, will fund integrity, veterinary and breeding activities. As was pointed out earlier, the prize money from what we hope will be an increased levy will support the maintenance of quality racing at all the different kinds of courses throughout the country.
My hon. Friend the Member for Hexham (Guy Opperman), who I know has considerable knowledge of the industry, referred to the “racing right”. It is not a foregone conclusion that there will be a racing right, but we will certainly consider it during the consultation.
Inheritance and Trustees’ Powers Bill [Lords]
(10 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Ministry of Justice (Simon Hughes)
I beg to move, That the Bill be now read the Third time.
I am happy to be able to inform the House that the consensus that clearly prevailed in the last debate on the previous piece of proposed legislation will, I believe, prevail here. I am very happy to bring for the first time on to the Floor of the House a Bill which is small, perfectly formed, but very important and which will affect a very large number of people.
The Bill reforms certain aspects of the law of inheritance and the law relating to trustees’ statutory powers. The purpose and effect of the Bill will be to modernise and simplify this area of the law to create a fairer and more comprehensible set of rules and to make the process of administering an estate faster and easier for people at what will always be a difficult time.
The Bill gives effect to most of the recommendations made in the Law Commission’s report “Intestacy and Family Provision Claims on Death”. It will modernise and simplify not just the law of intestacy to make it fairer, but the process of administering an estate to make it faster and easier for all concerned. The Bill also makes some important technical improvements to the family provision legislation and to the statutory powers of trustees, to make sure that they, too, are clearer, more consistent and easier to apply.
A considerable amount of consultation was undertaken on the Bill—as the Law Commission would do—so it came to Parliament built on a broad consensus of support, and having been through the Lords, it now comes to the Commons. That support is very welcome. I wish to refer to the Bill’s two core proposals, briefly address the four bits of the background “scenery” to it and deal with some of the details. Slightly unusually, I am doing so on Third Reading, because as the hon. Member for Barnsley Central (Dan Jarvis), who leads for the Opposition, and others will know, the Bill has come through a procedure which has been used only a few times in Parliament. When we deal with proposals from the Law Commission which are regarded as matters not likely to cause great controversy in the House, we have a procedure that predominantly takes place upstairs, so we have not looked at these matters in the Chamber of the House of Commons before.
The two significant proposals are that in future surviving spouses will be the sole beneficiary of an estate where somebody dies leaving no will and there are no children. Not only do we believe that is right, but the Law Commission’s research showed that a majority of people in the country favoured giving priority to a surviving spouse in those circumstances. The Bill therefore reflects public expectations by making the surviving spouse the sole beneficiary in such circumstances.
The other key issue is what happens when a person who dies intestate has surviving children. The Bill seeks to simplify the sharing of assets on intestacy in a way that is fair to those who have been closest to the deceased—so first comes the surviving spouse or civil partner, and next come any children or their children. We think that the Bill ensures that all those people will be adequately provided for in future. Removing the current requirement that there be life interest trusts will reduce costs and make the law easier to understand and apply.
Of course, we would probably never be able to pass a law that everyone in the country thought right or fair, but we hope we are legislating for the occasions when people do not leave a will in a way that most reflects what we believe they would have intended, given that we have no written evidence of what their wish would be. We hope we are reflecting the real life expectations of what somebody would want for their partner and children.
That leads me to the four short background points about why the Bill is important. Obviously, making a will is and remains the best way to make provision for loved ones and others after we have gone, but the figures are surprising. In 2011, just under 50% of the registered deaths in England and Wales were those that might be classified as intestate: where there was no written provision. First, therefore, it is important to say to people that making a will is really important. Many people do not do it and we hope that this debate and the consideration given to the Bill will remind people of the benefit of making a will.
Making or updating a will is not a complicated process. Some 480,000 people died in England and Wales in 2011, with 220,000 of those deaths leading to the personal representatives obtaining a grant of probate in respect of a valid will and 40,000 leading to letters of administration being granted. We do not know for sure whether that means that the remaining 220,000 did write anything, or even thought about writing anything. None the less that was the figure. Nearly a quarter of a million people died without any evidence of written arrangements. Therefore, with the support of colleagues and the hon. Member for Barnsley Central, with whom I am meeting formally to discuss how best to proceed, we want to add to the work already done in the voluntary and legal sectors to encourage people to make their wills.
The Government provide information on a number of websites, including gov.uk and the probate services website, to help people who are considering making a will. Other organisations also provide advice. “Dying Matters” runs an annual awareness campaign about planning for old age and death. This year it is planned for 12 to 18 May, and the theme is, “You only die once”. That was not my title, but it seems a good one.
There is also a free wills month for those over 55. It is running this month, so people need to get on with it because there are not many days left. In November, there is a scheme called Will Aid. I make no apologies for wanting to encourage people to make wills. It is the one way that we can be certain that what is done with people’s assets is what they intended to be done. It is fundamental to the law of England and Wales that the person who writes the will decides what he or she wants to happen to their property after their death, and where the law applies it will give effect to those wishes, subject only to one qualification, which is that, under the Inheritance (Provision for Family and Dependants) Act 1975, there is a safety net for people who should have been provided for in wills but were not.
My second point has become topical in recent days, so I want to make the Government’s position and the legal position clear. There has been some press coverage on whether Islamic law or sharia law trumps English law in relation to these matters. There was certainly a headline and a lead story in one of the Sunday papers last weekend that may have alarmed some people. People in this country are free to leave their property in accordance with their preferences and beliefs. The Law Society issued to its members a practice note on sharia law succession—it was the subject of the article in the Sunday press—which indicated that there has been a demand from some solicitors and their clients for information on how to plan ahead for death in a way that complies with English law. Far from promoting sharia law as an alternative jurisdiction within our country, the Law Society is clear that it is promoting English law and English legal services. Let me say this clearly. To suggest, as one newspaper did, that the guidance means that,
“Islamic law is to be effectively enshrined in the British legal system for the first time”
is both wrong and misleading.
If people wish to arrange their last will and testament in accordance with the principles underpinning Islamic law or any other faith or belief tradition, then of course they are entitled to do that, provided they comply with the law of England and Wales. They can write down how they want to dispose of their assets according to their faith view, but it is within English law, in a will that then gets implemented and is subject to rules that allow people who should have been included but have been left out to apply.
Mr David Nuttall (Bury North) (Con)
I declare my interest as a non-practising solicitor and as someone who has drawn up thousands of wills in the past. Does the Minister agree that there has been no change in the law? It has always been possible for solicitors to draw up wills in accordance with their instructions under English law. If they want, they can draw them up under laws of other countries, as long as they make it clear that they will be applicable in that other country, but not under English law. In so far as wills that are meant to be controlled by English law are concerned, there has been no change whatever in the law.
Simon Hughes
The hon. Gentleman is absolutely correct. He knows from his practice outside the House and from his time in this place that that is exactly the position. The law has not changed. The guidance does not change the law, it has not been changed elsewhere and it is not about to be changed. The Government have no plans to change it. We are simply reinforcing the clear view, implied by his question, that if somebody goes to their solicitor and says that they would like their will to be drafted in a way that reflects their beliefs about how they want to dispose of their assets, they can do so, subject to the overarching rule of English law. That often applies to the Jewish tradition, and might be the same for some Christians and people of other faiths. The law has not been changed and I want to knock on the head the assertion that the Law Society was somehow facilitating a change. The Law Society was simply ensuring that when it had had enquiries from its members about how to proceed they were given guidance, but that does not change the law one jot.
A third general point, which is important, is that people are living longer—and thank God for that. We are very lucky to have in this country a great, and growing, life expectancy. The Office for National Statistics tells us that nearly 14.5 million people in the UK are over 60, but with old age comes an increasing incidence of dementia and Alzheimer’s. According to Alzheimer’s UK, 800,000 people in this country have dementia. The Government are keen that it should be known that there is a legal facility open to people to make what is called a lasting power of attorney—an LPA—that gives an individual the opportunity to plan ahead for the time when they might lack the capacity to deal with their own affairs. We are talking not about after death, but about when people are still alive but might not have the physical or mental capacity to deal with their own affairs.
People can appoint somebody of their choice to make decisions on their behalf about their property and financial affairs or health and welfare. They can do that online through a facility introduced last year by the Office of the Public Guardian. The process is relatively simple: people are guided and prompted through each page so that the form is completed correctly. It can be printed off for signature and the LPA can then be applied for, and the fee is currently £110. It is registered as a document recognised in law.
There are 51 million adults in England and Wales, but the number of people who have made such an arrangement is small, and I hope the Bill will also remind people that one way of dealing with their affairs, for not just after they have left this earth but before, is to make provision now. The lasting power of attorney is the way to do that.
Jake Berry (Rossendale and Darwen) (Con)
I declare my interest as a solicitor. A worrying number of people are still dying intestate. What further steps will the Government take to encourage them to make a will? Will the Minister also take this opportunity to encourage initiatives such as will week, in which people can make a will and the solicitor will donate the fee to charity? Rossendale hospice takes part in that with great effect.
Simon Hughes
I was going to deal with that later, but as it has been raised it seems logical to do so now. I am very clear that although the Government cannot make people do such things we have a duty to lead. At the moment, if people go on to the Government website they will be directed to places where they can receive advice about such matters, but clearly the numbers are still surprisingly low. A lot of people of all levels of intelligence—this is not a matter only for people with fewer exams and qualifications—have not written anything down, as their families discover when the time comes for them to leave.
Such programmes are run, by different organisations, across the year, and I have referred to three already. We want to make them more effective and I have started to engage with officials and my colleague in the other House, Lord Faulks, who leads specifically on wills in the Ministry of Justice, to work together with him—[Interruption.] He does other things as well, but, bizarrely, lasting powers of attorney and inheritance come to me and wills go to him for reasons that are above my pay grade.
Lord Faulks and I have had a conversation. We are working together and we hope to work with our colleagues in the Department of Health, because the other part of the planning-ahead system is thinking about organ donation, and I know that the Secretary of State for Health is keen that that, too, should be better promoted. I hope that by the end of this year we will have a co-ordinated approach so that from this year on, we will have an annual, regular, clear promotion for people to make their will, to arrange lasting powers of attorney if they need to do so, and to arrange to donate their organs if they wish to do so. One of the reasons why the hon. Member for Barnsley Central and I are to meet is to try to get maximum agreement, the best ideas, the most effective systems and the easiest use of the internet so that it is as easy as possible for somebody to find the right place and use it. I am sold on the idea that this is an area in which the Government need to do more and will do more.
Jake Berry
I thank my right hon. Friend for that answer. Will he say specifically what steps he will take to encourage charities to increase the take-up of wills? I have seen for myself that it is a hugely successful fundraising activity for local charities in Rossendale and Darwen. It is also a big public service that they are providing to people who live locally. Often, the hospice movement, which will be managing the end-of-life journey for so many people in this country, can be a good place to find that information. There is surely a role for Government to support such charities in their work to encourage the take-up of wills.
Simon Hughes
I apologise for not dealing with that specifically. It is a very good idea and one that the Government support. I will take on board my hon. Friend’s idea. Perhaps he would like to come and have a cup of coffee, a cup of tea or even something else, and share his experience. The more people can be encouraged, the more charities can be helped and the more organisations can feel part of owning the process to the benefit of the community, the better, so I will be as helpful as I can. That is the backdrop. I hope everyone has got the message that we would rather people did not die intestate, but we must provide for those who do so.
I said that the Bill came from work by the Law Commission. Following a consultation paper that it published in 2009, it issued a report in 2011 entitled “Intestacy and Family Provision Claims on Death”, which included the draft Bill. The Ministry of Justice then carried out a public consultation. We published our response in July 2013, explaining the changes we proposed to make to the Bill. As a result of that consultative process, we are largely in agreement today.
There was a proposal to deal with the rights of cohabiting couples in intestacy. The Government have decided that it would not be appropriate to take those matters forward at present. They are not uncontroversial and raise other, wider issues. The Law Commission recognised that its work on cohabitation raised issues that do not apply specifically to the matters in the Bill. The Ministry of Justice is in the middle of a very large programme of reform of the family justice system, which I believe will be hugely beneficial, and we do not want to be distracted from that. The new family courts come into operation next month and we want to concentrate on sorting out and getting a much better service there, and on the issue of inheritance and trustees. Therefore there is no proposal to deal with cohabitees’ rights in this Session or in this Parliament.
The Bill started in the Lords on 30 July last year. The Lords took their job very seriously and I am grateful to them for being so attentive. It underwent detailed scrutiny and was amended three times in the other place. It then came to us in the Second Reading Committee upstairs and from there to the Public Bill Committee, where I believe we gave it adequate attention, although there were no further amendments.
There are two aspects to the Bill—intestacy rules and family provision. The first part deals with the division of property when somebody dies without leaving a will. The second part allows family members and dependants to apply to the court to vary the distribution, either under the intestacy rules or under the terms of a will.
Clause 1—this is the core and simple but important proposition—deals with the situation where the intestate leaves no children and has no other direct descendants. From the time the Bill receives Royal Assent—in a few weeks’ time—the surviving spouse or civil partner will be the sole beneficiary of the estate. That changes the current law. Under the current law, a surviving parent or full sibling or sibling’s children are entitled to share, after the spouse or civil partner has received the deceased’s personal effects and what is commonly called a statutory legacy—a lump sum, in this case the first £450,000. The clause will change those arrangements. The estate will go to the surviving spouse.
Clause 1 will also mean that where the intestate does leave children or other descendants, the surviving spouse or civil partner will be absolutely entitled to the deceased’s personal chattels, to a statutory sum of £250,000, and then to half of whatever remains on top of that. The other half will be shared between the children or other descendants. That also changes the current arrangements, because at the moment a surviving spouse or civil partner has only a life interest in the rest. That is complicated and it will go. Life interest trusts are really only an area of benefit to lawyers and are often a source of confusion, so they have gone. I hope that is clear. Spouses will know where they stand; children will know where they stand.
Clause 2 and schedule 1 deal with the way that the statutory legacy—the fixed net sum—is decided. It is the amount that the surviving spouse will receive where there are children or other descendants. The Bill will implement a new system whereby the Lord Chancellor will be obliged to make an order raising the level of the legacy if the consumer prices index rises by more than 15%, or at least every five years. So there is an automatic trigger when my right hon. Friend the Lord Chancellor will address whether we ought to have more given as a lump sum to the surviving spouse. That was the result of a Government amendment on Report in the other place. As to the actual level to be set—this was debated in Committee—the Bill provides that unless the Lord Chancellor decides otherwise, the level will be set according to the procedure in the Bill. It will index the statutory legacy by an amount that reflects any increase in the CPI measure of inflation. The legacy can only increase; it cannot be reduced, so in the event of no inflation or deflation, it will not go down but will stay the same.
Clause 2 gives the Lord Chancellor the power to set the level of the statutory legacy without using that mechanism, and he is at liberty to set a level equal to, or even lower than, the pre-existing figure if he wants to. If he does want to do so, he must come to Parliament and explain why he has not used the mechanism in the legislation. We hope that the benefit of that is that spouses and civil partners will have an inheritance that does not slip behind in real value with the changing value of money in this country.
Clause 3 deals with what are called personal chattels. Under the current law, the surviving spouse or civil partner is entitled to all of the personal chattels that are not disposed of in the will. That has not changed as a principle, but it is updated by the legislation. We have defined personal chattels in the Bill as “tangible movable property”—the lawyers will know exactly what I am talking about—but with three defined exceptions. The first is money, and securities for money. That is not new. The second is property used at the death of the deceased person solely or mainly for their business purposes. The words “solely or mainly” have been added, and they will ensure that, for example, if there is a vehicle, such as a van, that was used by the individual and for their business, it is treated as something that is personal as well as a business asset. The third exception, which is new, relates to property held at the death of an intestate person solely as an investment. That is a narrow exception, which would apply only to property owned as an investment and which had no personal use. We are trying to be very clear about those things that go to the spouse because they are the personal assets of the deceased person. Again, that is what the public would expect and we want to make sure that what is reasonable and normal and to be expected is what the Bill does.
The numbers in clause 4 are small in significance, but as we agreed in Committee, the clause is important as a principle. It seeks to protect the position of children who are adopted after the death of a parent. Madam Deputy Speaker, you and all colleagues will know that, very occasionally, there are tragedies in which one or both parents of youngsters are killed, and they are then often brought up by aunts, uncles, godparents, or whoever it might be. However, the will may have made arrangements on the basis that the parents will be alive indefinitely, and certainly for many years after the children become adults, or there may be no will, because it will have been a sudden event that afflicted the family. The general rule is that after adoption, a child is regarded as the legal child of the adoptive parents and has no other legal parents.
Clause 4 ensures that a child whose parent has already died before adoption will not lose, as a result of adoption, any of the rights that they had before, in terms of interest in their natural parents’ assets. It is relevant where a child is adopted as a result of the birth parents’ death. That is normally a fairly speedy process, and it is not a secret one. We are clear that we want to do what common sense and justice would want us to do, which is to make sure that no orphan child should lose the inheritance from their parents. We are sure that that is what the parents would have intended. At the moment, that is not what would happen. We are changing the law to make sure that children in that very particular circumstance are better protected. It only affects children who are adopted after the death of a birth parent, which is obviously an important distinction.
Clause 5 disapplies section 18(2) of the Family Law Reform Act 1987 in certain circumstances. Again, that is a small point, but we feel it is important to correct and modernise the law. At the moment, when somebody dies intestate and the parents were not married to each other at the time of their birth, rights do not follow in terms of inheritance. Under the proposal, the administrators of the estate may presume that the parent died first, as did any other person to whom they may be related only by virtue of the father—that might be somebody who is another parent by virtue of the Human Fertilisation and Embryology Act 2008, in very unusual circumstances. The rule discriminates against unmarried fathers. In practice, it makes it less likely that the deceased’s estate will pass under intestacy rules to such a parent.
Nowadays, it is quite usual for both unmarried parents to be identified as the parent of a child. Both are often on the register of birth so there is no longer any reason for both parents not to have equal entitlement in law. Therefore, we will disapply the presumption if a person is recorded as the intestate’s father, or as a second female parent in the specified formal register of births. In that case, the estate’s administrators will have the same responsibility to the deceased’s father or other parent as they would to any other relative entitled under the intestacy rules. The change clarifies that where somebody is recognised as a parent, irrespective of whether there is a marriage certificate, that parent should have the same right as an unmarried counterpart.
Clause 6 amends various provisions in the Inheritance (Provision for Family and Dependants) Act 1975 by way of schedule 2 in the Bill. The Government’s original intention was to create an additional ground of jurisdiction for family provision claims to enable claimants who are habitually resident in England and Wales to bring such a claim, irrespective of the deceased’s place of domicile. Scottish colleagues raised concerns about how that would operate in practice across the border, and particularly, if it could displace Scots law. The Government therefore decided that we would not proceed with the proposal. We amended the Bill in the other place and therefore, there is no change that would impact adversely on Scotland or on any other jurisdiction.
The remainder of clause 6 makes a number of changes to the procedure for family provision claims, including some amendments to the categories of people who can apply to the court for provision. There is already a rule that allows someone to go to the court and say, “I’m a family member. I need some financial help.” The Bill modernises the law so that a “child of the family”—someone who might have been adopted in practice but not formally, for example—would be treated the same as any other child brought up in the same family. Therefore, the relationship between the parent and the “child of the family” would allow the inheritance rules to apply to the benefit of that child. We believe that it would be wrong for a deserving child who was brought up by the family not to be able to inherit in the same way as someone who was formally their child, either biologically or by adoption.
Clause 6 also amends the wording of the 1975 Act, which defines a person who may make a family provision claim because they are considered to be a dependant of the deceased. Under the current law, the court has to balance the deceased’s contribution towards the needs of the applicant against any benefits flowing the other way before deciding whether the applicant can be assisted. If the applicant is found to have contributed more to the deceased than the deceased contributed to the applicant, the applicant is not regarded as a dependant. We think that this “balance sheet test” is technical and inappropriate in a modern society. Of course there has to be a link, but we understand that dependency is often mutual and that therefore someone should not be debarred from applying because there has been some benefit in the other direction.
Clause 7 makes various amendments to provisions that require certain types of grant to be left out of account when deciding the date when representation with respect to the estate of the deceased was first taken out. They are technical changes, so I do not intend to elaborate on them for the House.
The last few clauses are highly relevant to a large number of people. Clause 8 concerns a situation in which a trustee is able to use income from a trust for the maintenance, education or benefit of a beneficiary under the age of 18. It is common for a trust to be set up and for applications to be made for school fees, medical attention or for sending a child on a holiday or arranging an apprenticeship. The Bill provides that in future the amount of income that can be used for such purposes should be entirely a matter for the trustees’ discretion. Currently, there has to be an objective test of reasonableness, together with a proviso listing all the factors that trustees must consider and a specific restriction on the amount that can be paid out. We do not think that those are necessary, so clause 8 removed them. Trustees will still be governed by the need to fulfil their fiduciary duties, so beneficiaries will not lose out, but they will, following a request, have the flexibility to give to meet the need.
Clause 9 deals with a similar situation in which trustees are able to use their powers of advancement to make payments of capital to beneficiaries where that is thought necessary. Such payments are limited by the current law to one half of the beneficiary’s future share. We believe that this limit should go. In future, trustees will, if they think fit, be able to pay out the whole of a beneficiary’s share under the power of advancement. That gives trustees the flexibility they would certainly have if they were acting under a professionally drafted will or trust. Of course, payments cannot amount to more than the beneficiary’s future share. The clause was amended in the other place to make it clear that if trustees have exercised their power of advancement, the money or property given to the beneficiary can be treated either as a percentage of the overall value of the trust or according to its monetary value at the time of advancement. Trustees may expressly exercise their choice to treat advancement in that way, for example by writing it in the trust deed or by dividing up the trust fund.
The Bill is expected to receive Royal Assent next month. We intend all its provisions to come into force simultaneously later this year on a common commencement date of 1 October. The date is to be confirmed by an order made by the Lord Chancellor.
Of course, the provisions will apply only to deaths that occur after the Bill comes into force, because it is not retrospective. It is an England and Wales Bill, not a United Kingdom Bill, except for one part that repeals some technical matters. The only exceptions to its forward-looking nature are in clause 4, which deals with adoptions of children that take place after the death of a parent. The relevant date in that case is that the adoption has to take place after the Bill has come into force.
Clauses 8 and 10 also make changes that do not have the same timetable application. These are changes to trustees’ powers rather than arrangements for dealing with the deceased’s property, and they will apply only to trusts or trust interests that are created or arise after the Bill comes into force. The exception is the clarification of the powers in clause 9 that allow trustees to make non-cash advancements and to treat an advancement as a percentage of the overall value of the trusts. This provision is not governed by the timetable rule. It will apply to all trusts, including those created before the Bill comes into force, because it is a clarification of powers that exist in current law.
Some of that sounds technical, but the fundamental purpose of the Bill is to rid the law of a lot of technical restrictions. Hundreds of thousands of people still die without writing their will, and we believe that, for their families, this Bill will make life simpler and easier and lead to less conflict, less tension, and less cause for dispute. It will still be better for people to make a will, and we hope that they will, but where they do not, as I hope the House agrees, this Bill makes the law much clearer and provides for families where there is no will a much better, safer and simpler future.
Dan Jarvis (Barnsley Central) (Lab)
I thank the Minister for laying out in some detail the Government’s position on the Bill. As he outlined, it introduces a number of logical and constructive changes to the current laws on intestacy and family provision that apply in cases where a person dies without having made a valid will. As I have said in our previous debates, these are sensible reforms and Labour Members welcome them. The Bill simplifies what is, in practice, often an over-complicated area of family law. It revises legislation that has not been reviewed for over 20 years, in some instances amending laws dating as far back as 1925. It updates rules better to reflect the circumstances of families living in 21st-century Britain, and it irons out a number of minor technical issues.
I thank the Minister for the way in which he has steered the Bill through the House and engaged with Labour Members during this process. I also thank those in the other place and all the other Members of this House who have helped to scrutinise and improve the Bill, as well as the officials, officers and staff of the House who have helped to facilitate matters. I pay particular tribute to the Law Commission. The changes we are considering today are ultimately the culmination of a project it began in 2008 and the draft Bill it published in 2011. I thank it for its work over the past five years in helping to bring us to this point.
Let me turn briefly to the substance of the Bill. I have two general comments to make and one very brief question to put to the Minister. Both my points are reflected in the case of Pablo Picasso, with whom right hon. and hon. Members will be familiar as one of the great artists of the late 19th and early 20th centuries. Forty years ago, Picasso died at the age of 91. As well as a glittering career and a substantial artistic legacy, he left behind a significant estate that included much of his artwork, five homes, and a small fortune in cash, bonds and other assets. This would become the subject of some dispute, because what Picasso did not leave behind was a valid will. It would take six years before his estate was settled. It was eventually divided up between six different heirs, and the whole case cost some $30 million.
That is not a unique case and right hon. and hon. Members will know of other, more contemporary examples, but, even though Picasso was born in Spain and died in France, the lesson is just the same for us considering laws here in the UK. In essence, matters of intestacy and family provision claims can be long and complicated processes. There are numerous cases every year and, although some of them are unavoidable, the law should be as simple and straightforward as possible and we should encourage people to avoid them altogether by making a valid will.
As I said on Second Reading, the Law Commission stated in its 2011 report on intestacy that there are
“many instances where the current law is outdated, confusing or places unnecessary obstacles in the way of those with a valid claim to share in a deceased person’s assets.”
I know that the Minister will agree that that simply is not acceptable, especially when the people who have to manage the distribution—or unsatisfactory distribution—of an estate will also be coping with the loss of a loved one at the same time. Therefore, although these are largely technical changes, we should be mindful that even the most minor of improvements to the way in which the system works could make a world of difference to those families affected. The Opposition are hopeful and confident that this Bill will resolve many of the issues and we will be looking closely at the situation.
The Minister and I are united in recognising the importance of encouraging people to make wills. As has been acknowledged many times during our debates on the Bill, its proposals will come into effect only when someone has sadly passed away without having made a will or some other sort of binding declaration. If I may restate the figures, roughly 220,000 people died in such circumstances in 2011 and the Law Commission estimates that as many as two thirds of the UK adult population do not have a will. According to a survey carried out by the National Centre for Social Research, that includes as many as a fifth of people over the age of 75 and more than 90% of young adults under the age of 25. The Law Commission has also stressed that those who need a will most are the least likely to have made one. We need to do all we can to reach out to all sections of society on the importance of this particular issue.
Discussing what to pass on after one dies is not the easiest thing to talk about, but we need to get much better at it. I know that the Minister agrees with that. As he has said, we will meet shortly to discuss that and I look forward to continuing this debate with him over the weeks ahead.
May I ask the Minister to clarify one issue? The Government have accepted almost all of the Law Commission’s recommendations for reforming the intestacy laws. However, they have not adopted rules that would have applied to the surviving partner in a co-habiting couple. The Minister has said that there are no immediate plans to address that, but it is an issue, because will-making is far less common among couples who live together but are not married. More than 2 million couples live in such circumstances, but only about 13% of them have made a will and many do not appreciate that they have no automatic right of inheritance if one of them dies without leaving a valid will.
The Law Commission set out proposals to address the situation in its draft Inheritance (Cohabitants) Bill, but the Government previously indicated that the changes would not be implemented during this Parliament. In 2011 the then Minister, the hon. Member for Huntingdon (Mr Djanogly), informed the House that they had no intention to focus their efforts on them at that particular time. I am mindful of the Minister’s earlier comments, but given that the Inheritance and Trustees’ Powers Bill is so close to receiving Royal Assent, will he reconsider and agree to look at that specific area prior to the next general election?
Let me conclude by repeating that the Opposition welcome the action that is being taken and we are ready to work with the Minister to help to get the reforms right, because if we can save just a few grieving families from having to go through the intestacy procedures and make life a little easier for those who have to, that will make a real difference.
Simon Hughes
With the leave of the House, I rise briefly to answer the question asked by the hon. Member for Barnsley Central (Dan Jarvis) and to wind up the debate.
I absolutely understand the hon. Gentleman’s point about the very many people who cohabit or live together, but are not married. I am grateful to him for his prompt, because it is very important to send out from this debate and from the work that we will do later in the year—this ties in with an intervention—the message that people who live together but are not married should understand that, under the law of the land, there is no automatic transfer to the surviving partner and that they do not have the same rights. In our constituencies, we have all heard the old phrase about being married by “common law”—“a common law husband” or “a common law wife”—but it has no legal status at all.
People can perfectly properly make a decision that they do not wish to get married—that is entirely up to them—but it is much more important for them to write a will to make the appropriate provision. If they want their partner to inherit everything, they need to say so, because that does not necessarily follow under the law of the land.
On the specifics of the process, I have said that the Government have no plans to legislate on the matter in this Parliament, and that remains the case. The reason is that we are putting this Bill through Parliament to be in force by the end of the year, our reforms of the family courts are to start in April and there are many other reforms to the legal system. However, I am very conscious of the need for the Government not to run away from the issue, and for parties in the run-up to an election not to run away from it in our manifestos. It will be an issue for whoever forms the next Administration. The law is already different in parts of the United Kingdom; for example, cohabitation rights north of the border are different from those here. I accept that we must not ignore this business.
I end by thanking the Law Commission, which does an extremely good job for us in this country. I add my tributes to it for the work that it does all the time to present us with considered and measured proposals for legislation. On behalf of the Ministry of Justice, I repeat our thanks to the members of the Law Commission in general, and to the lead commissioner in particular, as well as to the staff. I also thank our staff in the MOJ and others who have made sure that the Bill is a very good piece of legislation—agreed across the House—which will stand many people in good stead. We are indebted to many people for the work that they have done. I hope that the House will now give the Bill a Third Reading.
Question put and agreed to.
Bill accordingly read the Third time and passed, without amendment.
Electoral Commission
(10 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Deputy Leader of the House of Commons (Tom Brake)
I beg to move,
That an humble Address be presented to Her Majesty, praying that Her Majesty will appoint as Electoral Commissioners:
(1) Ms Bridget Prentice for the period ending on 30 September 2018; and
(2) Mr Alasdair Morgan for the period ending on 30 September 2016.
The Electoral Commission was established by the Political Parties, Elections and Referendums Act 2000 as a body independent of Government. The chair of the Electoral Commission and the other electoral commissioners are appointed by Her Majesty the Queen, following an address from the House of Commons.
The procedure for appointing electoral commissioners is put in place and overseen by the Speaker’s Committee on the Electoral Commission. Candidates’ names are put before the House with the agreement of the Speaker. The Speaker’s Committee follows best practice guidance from the Office of the Commissioner for Public Appointments in relation to commissioner appointments.
Section 5 of the Political Parties and Elections Act 2009, which inserted new section 3A into the Political Parties, Elections and Referendums Act, states that four of the electoral commissioners should be persons put forward by the registered leader of a qualifying party for consideration for appointment. Those commissioners are described in the statute as “nominated Commissioners”. A qualifying party is one with two or more Members on the Floor of the House of Commons.
The motion before the House asks Her Majesty to appoint Ms Bridget Prentice as the electoral commissioner nominated by the leader of the Labour party to succeed Lord Kennedy of Southwark, and Mr Alasdair Morgan as the electoral commissioner nominated by the leader of the Scottish National party to succeed the right hon. Sir George Reid. Lord Kennedy and Sir George Reid have served the Speaker’s Committee and the House diligently. I know that Mr Speaker and the other members of the Speaker’s Committee would want me to place on the record their gratitude for the dedication of those commissioners to the work of the Electoral Commission.
Ms Prentice’s term will end on 30 September 2018 and Mr Morgan’s term will run until 30 September 2016, as has been the practice for such appointments. Given that both posts are vacant, the terms of both candidates will commence following Her Majesty’s decision to appoint them.
The candidates who are named in the motion have extensive political and electoral experience, as is highlighted in the report that was published by the Speaker’s Committee, which has been tagged as a document relevant to this debate. Ms Prentice served as the Member of Parliament for Lewisham East from 1992 to 2010, and as a Minister in the Ministry of Justice from 2005 to 2010. As a Minister, she was responsible for 14 areas of policy, including electoral administration. Mr Morgan was a Member of the House of Commons and the Scottish Parliament. He has demonstrated a deep knowledge of electoral processes and regulations. He also has a record of building consensus through chairing and convening a number of parliamentary Committees, including the Justice and Home Affairs Committee in the Scottish Parliament.
The statute requires that the motion be tabled with the agreement of the Speaker. I confirm that Mr Speaker has signified his consent. I trust that the House will approve the motion, and I commend it to the House.
Angela Smith (Penistone and Stocksbridge) (Lab)
I will make a few brief comments and broadly echo the contribution of the Deputy Leader of the House.
It is clear that the procedure laid down by the House for the appointment of the commissioners has been followed thoroughly and rigorously, and that the nominations have gone through all due processes. The parties that were involved in making the decisions are clearly confident about the two nominees, and those who have been consulted are content with them.
The Deputy Leader of the House made a few remarks about the capacities of the two nominees. Mr Morgan clearly has a great deal of experience in the matters that concern the Electoral Commission, as has Bridget Prentice. Bridget Prentice was known to many Members of the House. She was a Member of the House for 18 years and I think most Members would agree that she gave distinguished service. She was a Whip and a Minister at the Department for Constitutional Affairs and then the Ministry of Justice. As the Deputy Leader of the House said, she was responsible for the reform of electoral administration. She was a very well regarded Member of the House. The Opposition are happy to endorse her nomination and that of Mr Morgan.
Question put and agreed to.
Business without Debate
(10 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text
Madam Deputy Speaker (Mrs Eleanor Laing)
With the leave of the House, we shall take motions 7 to 10 together.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Representation of the People, Northern Ireland
That the draft Anonymous Registration (Northern Ireland) Order 2014, which was laid before this House on 24 February, be approved.
Competition
That the draft Enterprise Act 2002 (Protection of Legitimate Interests) (Amendment) Order 2014, which was laid before this House on 3 March, be approved.
That the draft Enterprise and Regulatory Reform Act 2013 (Competition) (Consequential, Transitional and Saving Provisions) Order 2014, which was laid before this House on 3 March, be approved.
Pensions
That the draft Financial Assistance Scheme (Qualifying Pension Scheme Amendments) Regulations 2014, which were laid before this House on 5 February, be approved.—(Mr Evennett.)
Question agreed to.
Willenhall Crown Post Office
(10 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr David Winnick (Walsall North) (Lab)
I applied for this Adjournment debate because of the strong concern felt in Willenhall, in the borough of Walsall, about the closure of the Crown post office. It is one of 70 such post offices that I understand are listed to be closed—[Interruption.] Perhaps I could have the Minister’s attention for a second.
Willenhall has been known over centuries for its lock manufacturing, and locks such as those by Yale are recognised everywhere and must have been used in every part of the country. Many of those lock firms have closed or move abroad, but Willenhall remains a thriving, residential, industrial place, and certainly needs to retain the Crown post office. Many people come to Willenhall market and frequently use the post office facilities, and the traders are obviously busy customers. The post office is located in the centre of the town, opposite the police station, and is very much part of the character of Willenhall. It certainly has no shortage of customers, and when I look in from time to time there is usually a queue. As far as I understand it, the argument for closure is not that the post office lacks customers, because that would not stand up.
I have no complaint about the way that the senior stakeholder manager—I think that is how he describes himself as part of the post office management—has kept me informed of developments. He has done so in a courteous way with e-mails about various developments, which I appreciate. Moreover, he has been willing to meet me and the councillors, including at a public meeting where he and his colleague were virtually in a minority of two.
My strong opposition to the closure is shared by those who live and do business in Willenhall. Willenhall should have its post office; it should be retained and I am totally opposed—obviously, hence this debate—to the decision to close it. As far as is possible, opposition to the closure is simply unanimous. I do not suppose the Minister is particularly surprised, because if a post office were to close in his area, there would no doubt be the same reaction. When I collected signatures for the petition, no one said, “I’m not interested,” which often happens with other issues. Indeed, they were only too willing to sign and knew what they were signing for. They were customers of the post office, or they were passing on the day that I was around collecting signatures, or on other days, and they took the view that the petition should be supported.
I do not take the view that the proposed alternative—a retail outlet—is an adequate replacement. The Post Office says, “The Crown post office will close, but before that happens a replacement will be found,” but as I set out, that will be along the lines of a retail outlet. I simply do not accept, any more than the elected representatives, the councillors, and those who live or do business in Willenhall, that that is a viable alternative.
The Communication Workers Union has also been active in supporting the community to oppose the closure. It will, of course, be said, “Well, one would expect it to do so; it is safeguarding jobs,” and even under this Government it is not considered a sin to try to preserve jobs. Nevertheless, we appreciate CWU support. Indeed, some of those in the CWU live locally and support the opposition to closure as residents as well as union members. The CWU makes the point that, in a recent report published in November 2012, Consumer Focus said that WH Smith was the worst performer on queue time, and that it scored badly on quality of service and accessibility. The report said that Crowns, on the other hand, perform the best on accessibility and show the most significant improvement, as well as scoring highly on quality of service. Perhaps that, too, can be taken on board.
Post Office management say that, once a transfer to a retail outlet is negotiated, there will be a public consultation over a six-week period. That seems nice and democratic. We are all in favour of consultation and going out asking people their views—I doubt whether anyone in the House would object to that—but the snag is that the consultation will be on anything but the crucial issue. It will not be a consultation on whether people want the post office to close. Indeed, at the public meeting I attended, I asked the person representing Post Office management who I have mentioned whether there will be any paper on which people can give their preferences, so they could say, “We want the post office to continue,” but there will be nothing of the kind. It is an odd form of consultation. The major issue is whether the Crown post office remains open. What is the consultation about? Will it be about whether there is enough car space in the proposed retail outlet or whether it is near toilet facilities and the rest of it? The crucial issue is the one I have described, but the people will not be asked.
The Minister—fair enough—might say in reply, “That’s not the normal practice.” I accept that and cannot say that things have been different elsewhere, but it would be a good idea to consult the public when a Crown post office is going to close, even if, at the end of the day, the decision remains the same. In that way, at least the people can give their views, for what that is worth.
A petition signed by many people, which I have mentioned, was handed to the Post Office. Walsall council, the local authority, at its meeting on 23 September 2013 carried a motion supported by all councillors. The motion stated that the council opposes proposals to franchise and/or close the Crown post office in Willenhall. The motion also states that to do so would downgrade the status of the office and lead to inferior customer service. It ends by saying that the closure of Willenhall Crown post office would have a negative effect on the local economy.
The latest information sent to me is that the franchise proposals, as they are described, will not occur in this financial year. There is not much left of this financial year, but the intention remains for franchising to occur in 2014-15. I wrote to the then Minister, the hon. Member for East Dunbartonshire (Jo Swinson), who replied on 30 June. Her letter could have been written by the Post Office—she did not add anything different from what Post Office management have told me. I invited her in my letter to come and visit Willenhall to see the position for herself. If she came in her ministerial role, she would be welcome—she would not be welcome in her politician role. No doubt she will say that Government policy is Government policy. Would it do any harm for a Minister to come and have a look at the situation? Since the Minister of State is responding to the debate, the invitation extends to him too. In Willenhall, he would be treated in a courteous manner, as one would expect, and he could have a look at the situation for himself. Would that do any harm? I do not think so. Perhaps in his reply he can state whether he will take up my invitation.
In conclusion, it is to be hoped that this decision is not set in concrete and that it can be looked at again. It is to be hoped that the views of the people of Willenhall can be taken into consideration in the proper way, and that it is recognised that this is a Crown post office with plenty of business. It is not a question of keeping it open out of sentiment. As I said, it does not lack customers. It is always busy and every time I go, there is a queue. We talk about localism. I hope that the views of the community can be taken into consideration on all these matters.
I do not have a great deal of hope. I will not pretend otherwise. I am sure, unfortunately, that the Minister will more or less state what was said to me in the ministerial reply. If that is so, I regret that, but I have no regrets at all—absolutely none—at raising on the Floor of the House of Commons an issue that is very important to my constituents. I believe I have a responsibility to do so. In doing so, I have the very strong feeling that there is hardly anybody in Willenhall, whether they are residents or traders, who would wish otherwise than to see the Crown post office remain open. I hope that that can somehow be taken into account by the Minister when he responds to my remarks.
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
Let me begin by saying that the hon. Member for Walsall North (Mr Winnick) has certainly discharged his responsibility to his constituents by raising Post Office Ltd’s proposals to seek a franchise partner to operate Willenhall Crown post office. He has set out very clearly his concerns, and the concerns of his constituents, on the proposed changes, and I fully appreciate those concerns. As Members of Parliament, we all recognise that post offices are a vital part of the local community, and I understand the real issues and worries that some constituents may feel when changes to our post offices are proposed.
Such concern is not surprising given that there were two major closure programmes between 2003 and 2008, when six branches in his constituency were permanently closed. Five branches in my constituency were also permanently closed. I hope the hon. Gentleman recognises that this Government are taking a different approach. There is no programme of post office closures under this Government and there will be no such programme. We recognise the important social role that post offices play in our communities. Since 2010, we have committed nearly £2 billion to maintaining the post office network at a minimum of 11,500 branches. We are providing for the modernisation of up to 8,300 branches by 2018, bringing improvements such as longer opening hours for the Post Office’s millions of customers. We are also protecting 3,400 community branches and providing an investment fund to deliver improvements to those branches.
The post office network is made up of nearly 12,000 branches, the vast majority of which are owned and operated by private businesses and individuals more commonly known as sub-postmasters. Just 3% of the network—approximately 370 branches—is directly operated by Post Office Ltd. That is the so-called “Crown” network that the hon. Gentleman has spoken about. This small segment of the much wider post office network has historically incurred heavy losses, which amounted to some £37 million in the last full financial year. They account for nearly a third of the losses incurred by the whole network. That is not sustainable, and those losses cannot continue. They are a drain on the company, but, more important, they are a drain on the taxpayer. No business, including the Post Office, can continue to allow some of its high street branches to cost substantially more to run than they bring in. That, I am sorry to say, includes the branch at Willenhall, which I understand costs £1.44 for every £1 of income that it generates.
In return for the historic financial commitment that the Government are providing for the Post Office, we require the company to eliminate Crown losses by 2015. That is good commercial practice, and it is also fair to the taxpayer. The Post Office has a plan to end the losses, which includes working with retail franchise partners in 70 locations to provide continued access to post office services where the Post Office cannot do so viably itself.
As for the franchising proposals, it is important to be clear that Willlenhall is a loss-making branch. Following a process of careful consideration and modelling, the Post Office does not believe that it can operate the branch profitably or sustainably. However, it does believe that another retailer in the community can do so. It has therefore advertised the opportunity to local businesses and retailers, and has received expressions of interest from a number of parties. It is assessing those responses to ensure that the most appropriate partner is chosen to provide access to services, but until we know more details, we cannot take a proper view of how the franchising proposals will affect residents of Willenhall. However, I can reassure the hon. Gentleman and his constituents that this is not a branch closure. Customers will continue to enjoy access to post office services at a new branch close to the existing one.
Mr Winnick
The Minister says that it is not a closure, but it is a closure, to the extent that the existing building will close. There is no doubt about that, and indeed the Minister has not said otherwise. What he is saying is that the post office facilities will be transferred to a retail outlet, and I have not challenged that.
While I am on my feet, may I ask the Minister a simple question? Are the views of the local community on the role that the Crown post office in Willenhall plays and has played for so many years being taken into account?
Michael Fallon
As the hon. Gentleman himself mentioned, a consultation will take place, and the views of local residents will be important. I think he will concede that the post office is not in an ideal condition, in terms of the state of the building. It could also be argued that it is not in an ideal location. The key, surely, is to ensure that customers can continue to access post office services at a new branch that is close to the existing one. What we do know is that the full range of services that are currently offered will continue to be available at the new branch.
I assure the hon. Gentleman that before any changes are made, there will be that six-week local public consultation, under the terms of the code of practice agreed between the Post Office and the organisation Consumer Futures. The consultation will focus—perhaps this answers the hon. Gentleman’s question more directly—on the specific and detailed proposal to relocate the service. That will include issues such as the accessibility of the branch, the layout of the store, and the parking that would be provided. Anyone can express an opinion, and all responses will be considered carefully by the Post Office before a final decision is reached.
Already 17 former Crown branches have been reopened by the Post Office’s franchise partners. In these communities, customers are benefiting from continued access to the Post Office services they rely on, but in more modernised stores that deliver an improved customer environment and are fit for the 21st century. In all franchised branches customers are, importantly, also benefiting from longer opening hours, including in many cases on Sundays, too. That is important. It allows the Post Office to offer its customers the flexibility that they enjoy across the rest of the high street. Responding to its customer needs is the key to securing the long-term future of the network.
It is also the case that these franchised branches are now no longer a financial cost to the Post Office network. Franchising branches presents an excellent opportunity for a business in the locality, or a sub-postmaster, to take on and improve the branch. As with the many thousands of branches already operated by sub-postmasters, these franchised branches are being successfully operated by the Post Office’s business partners and sub-postmasters who are meeting the needs of their customers. They are also helping the Post Office become more sustainable and viable in the long term and reducing the need for taxpayer handouts.
Mr Winnick
I was not aware that the Minister was conversant with Willenhall, and he will no doubt respond on whether he will accept my invitation. He said that the post office is not in the most central place, but it is in the centre of Willenhall town. It is very near the market. I do not know of any location that could be more central in the town.
Michael Fallon
I am certainly going to pass the hon. Gentleman’s kind invitation on to the post office Minister, my hon. Friend the Member for Cardiff Central (Jenny Willott), and perhaps she can go and see for herself and establish beyond any doubt whether the location is optimal. Of course, I stand to be corrected by the hon. Gentleman, as he will know it far better than any of the Ministers, but it is my understanding that it is not on the main high street. All I have seen is a photograph of the location, but let me pass on his very kind invitation and we will see whether my hon. Friend is able to find time in her diary to take it up herself.
Mr Speaker
Order. May I just say to the Minister of State that we wish his hon. Friend the post office Minister an early recovery from her indisposition, but in the unfortunate event that it were to be lengthy, which we very much hope will not be the case, the Minister of State could always consider taking responsibility for the invitation and attending in her stead, and I am sure he would anticipate that with enthusiasm?
Michael Fallon
The House always benefits from your interventions, Mr Speaker, and thank you for your kind good wishes to my hon. Friend. I think the House has already guessed that my hon. Friend would normally have been answering this debate. I receive a number of kind invitations from all quarters of the House to visit, and I will certainly consider a visit to Walsall when I next draw up my regional visits programme.
The commitment I have outlined demonstrates that the Post Office has a plan that sustains and improves services. It is a plan that sees the introduction of new products and services. This is not a return to the closure programmes seen under the last Administration.
Alongside the plans to modernise and improve the Crown network, we are also delivering our network transformation programme, which is seeing the modernisation of up to 8,300 post offices by 2018. That includes Bloxwich post office in the hon. Gentleman’s constituency, which has converted to the new main model. The customers of that branch can now access Post Office services between 8.30 in the morning on their way to work and 7 o’clock in the evening on their way home. Across the UK, more than 3,000 sub-postmasters have signed up to convert, and nearly 2,000 branches, such as the one in Bloxwich, have already converted and are open and operating.
In 2010, we set out our commitments to the post office network in our policy statement, “Securing the Post Office network in the digital age”. I stand here three years later and tell the House that we are delivering on those commitments, and we will continue to deliver. We said then that there will be no programme of post office closures under this Government and there is not—and nor will there be. We said that we will provide £1.34 billion for the Post Office to modernise the network—we are providing that money and the Post Office is modernising. In November last year, we announced a further £640 million funding package to enable the programme to be extended to modernise and protect the whole network by 2018.
We said that we want to see the Post Office become a genuine front office for Government, and the company has so far won every contract it has bid for in the past three years, including the vital Driver and Vehicle Licensing Agency front office contract. We said that we will support the expansion of accessible and affordable personal financial services through the Post Office, and we are doing so. My hon. Friend the Member for East Dunbartonshire (Jo Swinson) was delighted to be one of the first people to open a Post Office current account last year when the company began a pilot in East Anglia. We also said that we will create the opportunity for a mutually owned Post Office. We have held a public consultation on that, and the company, alongside its stakeholders, is engaging the public to agree its public benefit purpose.
In summary, this Government’s track record on the Post Office speaks for itself. We remain committed to the network and we are continuing to invest in it to secure its future. The proposals of the Post Office to seek a franchise partner in Willenhall will ensure that the hon. Gentleman and his constituents will continue to benefit from continued and improved access to vital post office services.
Mr Speaker
Order. Before I put the Question on the Adjournment, the hon. Member for Devizes (Claire Perry) has a point of order relating to the Division at 3.23 pm, in respect of which she was a Teller.
Claire Perry (Devizes) (Con)
On a point of order, Mr Speaker. As one of the Tellers on the motion on the charter for budget responsibility earlier today, I have to report that the correct number of Noes was 23, not 22 as called—mea culpa.
Mr Speaker
I am extremely grateful to the hon. Lady for that helpful point of order, as will be the House.
Question put and agreed to.