House of Commons

Wednesday 9th April 2014 Commons Chamber

Wednesday 9 April 2014

The House met at half-past Eleven o’clock

Prayers

Wednesday 9th April 2014 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 9th April 2014 Commons Chamber

The Secretary of State was asked—

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

1. What assessment she has made of the level of women’s participation in the upcoming Afghanistan presidential election.

[The Secretary of State for International Development (Justine Greening)]

Provisional estimates show that approximately 7 million people voted in Afghanistan’s presidential and provincial council election last Saturday. About a third of women voted—a tremendous achievement. That is evidence that support for democratic institutions and women’s participation is making a real difference on the ground.

[Karl Turner]

Early indications show that the role of women in Afghanistan’s elections has taken great steps in the right direction, but what plans are in place to ensure that those hard-won battles for the rights of women are not lost as a result of the international security assistance force draw-down at the end of this year?

[Justine Greening]

The hon. Gentleman is absolutely right to raise that point. The Department for International Development committed £20 million of funding to help the UN work to support the elections, including nearly £5 million for a programme to support women’s participation. As we go forward, we must ensure that the constitution that is already in place to support women’s rights is enforced, that we are working at grassroots level and putting more money into community programmes and that across government, for example in the police, women get the chance to play their full role. As far as I and the Government are concerned, we are determined to ensure that those hard-won additional rights for women are not just maintained but built on further.

[Mr William Cash (Stone) (Con)]

May I thank the Secretary of State for that reply? I hope that now that the International Development (Gender Equality) Act 2014 has received Royal Assent, she will be able to give the maximum opportunities to protect women and make certain that they are fully empowered.

[Justine Greening]

My hon. Friend is absolutely right, and this gives me a chance to pay tribute to the tireless efforts he made to push through his private Member’s Bill. It has not just set out how important equality is to our Parliament, but has been picked up across the world as an example of the UK’s taking a stand on gender equality.

[Mr Jim Murphy (East Renfrewshire) (Lab)]

As we pay tribute to others, it is right for the House again to reflect at the time of these elections on the enormous contribution our armed forces have made and continue to make. It is heartening that in the elections the three front-runners were supportive of the extension of women’s rights in government, but progress has been fragile. It is unacceptable that only 1% of those who serve in the Afghan police force are women. I know that the Secretary of State will share that concern, so what more can be done to ensure that the legal, judicial and policing systems properly reflect a better balance of gender in Afghanistan?

[Justine Greening]

That is the very point that I raised with the Minister of the Interior when I was last in Afghanistan. We are providing technical assistance to enable work on this issue across the board, but one thing that is being considered is bringing in women at more senior levels in the Afghan police to get role models, so that incoming female recruits can aspire and look up to them.

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

Given that the engagement in democracy is so strong, with the draw-down of ISAF it will be crucial that donor communities continue to provide aid to what is one of the poorest countries in the world, in order to maintain stability. What discussions has the Secretary of State had with US authorities about recognising the importance of that continued aid commitment?

[Justine Greening]

I routinely discuss the work of the donor community with our US colleagues and there will be an important meeting, which the UK will be co-chairing, at the end of this year and perhaps running into early next year that will assess progress against the Tokyo mutual accountability framework. At that point we should have a new Afghan President and Government in place, so that will be a good time to take stock of progress and of the challenges that remain.

[Ian Mearns (Gateshead) (Lab)]

2. What her health priorities are for the post-2015 development framework.

[The Secretary of State for International Development (Justine Greening)]

The UK has played a central role in developing successor development goals to the millennium development goals, including through my right hon. Friend the Prime Minister’s co-chairmanship of the UN high-level panel. We want to see progress across the board on health, particularly on maternal and child health. We want a dedicated health goal, and articulated and measured health outcomes targets.

[Ian Mearns]

Despite ongoing global commitments, 40 million women gave birth without the assistance of a midwife last year, and families living in the poorest parts of the world are twice as likely to lose their babies as those in the richest nations. Will the Secretary of State use her influence to ensure that there are targets for ending preventable child, maternal and newborn deaths in the post-2015 framework, and to call for universal health coverage and universal access to midwifery?

[Justine Greening]

We are supportive of universal health coverage, which is one of the key means that can improve health outcomes. The hon. Gentleman is quite right to raise the issue of maternal health. We look across the board at how we can do that, including in relation to family planning and what we are doing this summer to combat child and early marriage, which is one reason why maternal health is poor. We will continue to work really hard on that whole agenda.

[Jeremy Lefroy (Stafford) (Con)]

Great gains have been made under the millennium development goals in the areas of malaria, neglected tropical diseases, HIV/AIDS and tuberculosis. Can my right hon. Friend reassure me that the goals that we will push for post-2015 will ensure that those gains will be maintained and, indeed, enhanced?

[Justine Greening]

Yes, I can. In fact, we want HIV, TB and malaria to be incorporated under a health goal. My hon. Friend will be aware that the UK was one of the leading donors at the global fund replenishment at the end of last year, and will continue to support that important work.

[Mark Durkan (Foyle) (SDLP)]

Further to that answer, will the Secretary of State confirm that the Government will commit to the opportunity identified by the “Malaria No More” campaign to halve malaria deaths again—they have already been halved since 2000—by 2020, and back the proposals to accelerate the reduction in the death rate to zero beyond 2020?

[Justine Greening]

We do want malaria to be eradicated. It is one of the key issues African leaders raise in relation not just to its impact on individuals and families, but its economic impact. The recent Bali World Trade Organisation deal was worth about $10 billion a year to the African economy—that is also the cost of malaria every year regionally.

[Nic Dakin (Scunthorpe) (Lab)]

3. What recent steps she has taken to ensure the future funding and effectiveness of the GAVI Alliance. [R]

[The Parliamentary Under-Secretary of State for International Development (Lynne Featherstone)]

The UK is the largest donor to GAVI. Our support will help fully immunise nearly 80 million children and save around 1.3 million lives during 2011-15. We are working closely with GAVI and partners to ensure that their 2016-20 strategy, currently being developed, provides a sound and cost-effective basis for delivering their mission and saving children’s lives.

[Nic Dakin]

May I draw attention to my entry in the Register of Members’ Financial Interests? To reach every child with immunisation requires not only vaccines but staff. Do the Government support the GAVI 15% to 25% spending target on health strengthening in the international community?

[Lynne Featherstone]

I thank the hon. Gentleman for that, because strengthening health systems and the capacity of health workers is a key answer in addressing the immunisation deficit.

[Martin Horwood (Cheltenham) (LD)]

I proudly congratulate the Government on spending 0.7% of national income on eradicating poverty worldwide, much of it on polio eradication. The last three countries with endemic polio all have significant Islamic populations. Is the Department committed to working with religious and Islamic leaders to try to build community support for polio eradication and to protect health workers in those countries?

[Lynne Featherstone]

My hon. Friend raises the issue of the frustrating endgame on polio. GAVI will play a major role in delivering that endgame, but we are working with everyone to try to ensure that vaccinations are seen as good and not some kind of problem.

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

I declare an arrangement, as I went to Cambodia with Results UK to see the GAVI-funded programme there. I am told that the Government put in £860 million, which raises questions about the future. Will the Government make a commitment to maintaining that level of funding in future for GAVI, which runs a wonderful project?

[Lynne Featherstone]

Right now, GAVI has not stated what its actual target is. We are the largest donor at 33%, and we will continue to support it. We will make a decision in the next few months.

[Guy Opperman (Hexham) (Con)]

Does the Minister agree that vaccination assistance and the partnership with the Gates Foundation is not only the right thing to do but one of the best ways to help developing economies? It is also something we should sell and explain to the general public.

[Lynne Featherstone]

My hon. Friend is entirely right. The economic benefits are huge, and vaccination is considered a development “best buy”. The Gates Foundation is at the forefront of that, and we work very closely indeed with it.

[Sir Peter Luff (Mid Worcestershire) (Con)]

4. What assessment she has made of the effectiveness of her Department’s support for the Palestinian Authority.

[The Minister of State, Department for International Development (Mr Alan Duncan)]

The UK is providing effective support for the Palestinian Authority in very challenging circumstances. The Palestinian Authority has developed institutions to the point where the international community has recognised it as technically ready for statehood, and it has made impressive progress in delivering improved outcomes in health and education.

[Sir Peter Luff]

Having just returned from a Select Committee visit to the Palestinian occupied territories and seen the excellent work being done there by the Department, may I ask whether the Minister agrees that its work to support the private sector would be much more effective if Israel lifted many of its restrictions, which can have nothing to do with its essential security, on the freedom of Palestinian business people to develop their economy in areas such as the banking sector, water supply, and even 3G telephone networks?

[Mr Duncan]

I am grateful to my hon. Friend for his appreciation of DFID’s work in the occupied Palestinian territories and glad that he and the Committee had such a useful visit. Israeli restrictions do tremendous damage to the economy and to the living standards of ordinary Palestinians. The simple truth is that they are not allowed to develop their banking or information and communications technology sectors, or to build even their basic infrastructure. Were these restrictions to be lifted, not only would DFID’s work to support the private sector be much more effective, but within a relatively short space of time the Palestinians would probably not need our aid at all.

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

Is the Minister aware that the World Bank has said that area C of the west bank, particularly the Jordan valley, is vital to the future economic viability of a Palestinian state? Presumably that is why the Department is looking to fund infrastructure projects there. What is his view of the fact that illegal Israeli planning restrictions are stopping those infrastructure projects being built, and for how long will the Government allow Israel to have a veto over economic development in the west bank?

[Mr Duncan]

I fully understand what the hon. Gentleman says. I think the Select Committee saw a direct example of the destruction of olive groves when it was there. It is essential that area C is able, through planning arrangements, to develop its economy; otherwise there can be no sensible or useful economic future in the Palestinian territories.

[Sir Malcolm Bruce (Gordon) (LD)]

May I confirm what the Minister says—that without access to area C there is no future for a two-state solution or for an economically viable Palestine? The Palestinian Authority pleaded with us to put all possible pressure on Israel to allow access. We met someone from a company who is saying that the cost of land in areas A and B is prohibitive and that without access to area C he cannot develop his business.

[Mr Duncan]

I fully concur with my right hon. Friend. I hope that a full understanding of this can be included in the peace talks that we hope are continuing towards a productive and useful conclusion.

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

What recent representations have the Government made to the Israeli authorities about the continued forcible removal of populations, and property demolition, in the occupied territories? Yesterday the Foreign Secretary met the Israeli Minister for International Relations: was this issue raised with him?

[Mr Duncan]

I was also at that meeting, and I can assure the hon. Gentleman that we raise such matters regularly. It is essential that some kind of normal activity can be permitted in the occupied Palestinian territories; otherwise, as my right hon. Friend the Member for Gordon (Sir Malcolm Bruce) said, there will not be a two-state solution and there is a danger of permanent conflict and tension.

[John Howell (Henley) (Con)]

5. What steps her Department is taking to reduce levels of aid dependency through the creation of jobs.

[The Secretary of State for International Development (Justine Greening)]

My Department is working hard to grow jobs and end aid dependency. Over the next two years we will more than double to £1.8 billion the amount that DFID invests in job creation and economic development.

[John Howell]

Will the Secretary of State set out her objectives for next week’s meeting of the Global Partnership for Effective Development Co-operation and say what her Department’s work with the private sector will achieve?

[Justine Greening]

The meeting in Mexico is incredibly important. It will help us to take the next steps to shape responsible business practices that can, in turn, support sustainable and inclusive economic growth in countries that so badly need it.

[Mr Gregory Campbell (East Londonderry) (DUP)]

Job creation is of course a very worthwhile task, particularly in the emerging economies. Does the Secretary of State agree that secure, dependable jobs that help the indigenous peoples of those nations are what is required to assist those nations?

[Justine Greening]

The hon. Gentleman is absolutely right. One of the most important aspects is to help shape the economic growth that takes place so that, through work, it lifts the largest number of people possible out of poverty. That is precisely the agenda the Department is pursuing.

[Richard Fuller (Bedford) (Con)]

In every economy across the globe, small businesses are the most secure way to create jobs. What is my right hon. Friend’s Department doing to enhance the provision of finance to small businesses in developing countries?

[Justine Greening]

We are working with a fund for small and medium-sized enterprises that can do precisely that. We have also, with the London stock exchange, focused on the issue of capital markets improving finance more broadly in developing countries—particularly, most recently, in Tanzania.

[Alison McGovern (Wirral South) (Lab)]

The garment industry in Bangladesh and elsewhere provides hundreds of thousands of jobs to people trying to work their way out of poverty, but it has too often involved unsafe conditions and poverty pay, and no one in Britain wants to buy clothes made in such conditions. Ahead of the first anniversary of the Rana Plaza disaster, does the Secretary of State now agree that her Government’s decision to withdraw funding from the International Labour Organisation, which protects vulnerable workers, was a short-sighted mistake?

[Justine Greening]

I hope I can reassure the hon. Lady that we are working with the ILO in Bangladesh, and as she knows we have also sent over experts to help with building practices and construction. As the hon. Lady points out, it is nearly a year since the tragic collapse of the Rana Plaza building, and we have worked very hard since then with the Bangladesh Government and industry to make sure that we learn from that terrible disaster.

[Mr Peter Bone (Wellingborough) (Con)]

Although I welcome enormously what the Secretary of State is doing, is not one of the problems in creating jobs in developing countries the fact that major trading blocs such as the European Union are stopping market access to them?

[Justine Greening]

Protectionism, including by the EU, ultimately does not help anyone. [Interruption.] That is one of the reasons why getting a deal in Bali was so important. I had the chance to make that point personally to the director general of the WTO yesterday. [Interruption.]

[Mr Speaker]

Order. There are a lot of noisy private conversations taking place, notably at this stage on the Opposition Benches, but I want to hear both the questions and the right hon. Lady’s answers, so let us have a seemly atmosphere in deference to Mr Paul Burstow.

[Paul Burstow (Sutton and Cheam) (LD)]

6. What steps her Department is taking to support developing countries in tackling the effects of dementia.

[The Parliamentary Under-Secretary of State for International Development (Lynne Featherstone)]

The UK Government support the improvement of dementia care through increased provision of basic health services for the poor. In 2012-13, the UK provided about £1 billion in bilateral health aid to support work to strengthen health systems and health services for the poor.

[Paul Burstow]

I thank the Minister for that answer and for the actions the Government are already taking. Given that six out of 10 people living with dementia worldwide live not in developed but in developing countries, that the vast majority of them do not have a diagnosis, and that we know from research by Alzheimer’s Disease International that the burden of dementia is shifting to developing countries, will the Government take further steps to build on the success of the dementia summit held last year to lever action in those developing countries?

[Lynne Featherstone]

I thank my right hon. Friend and pay tribute to him for the work he has done; indeed, I have met with him to discuss this very issue. Of course, dementia is a growing issue in the developing world. Regarding the Prime Minister’s summit, we have contributed to the Department of Health, which is the lead Department on the issue, and we are dealing full out with communicable diseases. We also, as my right hon. Friend knows, have a campaign on mental health issues.

[Mr Philip Hollobone (Kettering) (Con)]

7. How much international development aid the UK gave in total to Jamaica, Pakistan, Nigeria, Somalia, India and Bangladesh combined in the last year for which figures are available.

[The Minister of State, Department for International Development (Mr Alan Duncan)]

In 2012 the UK Government gave a combined total of £973 million in bilateral official development assistance to Jamaica, Pakistan, Nigeria, Somalia, India and Bangladesh.

[Mr Hollobone]

Between them, those six countries account for 2,900 foreign national offenders in Britain’s prisons, which is more than a quarter of the foreign national offender total, at an annual cost of some £100 million. Will the Department agree to use some of the £900 million spent annually on those countries on insisting on compulsory prisoner transfer agreements as a condition of that aid, and on building prisons in those countries so that they can take their people back?

[Mr Duncan]

There is no straightforward correlation between the practicality of building a prison abroad and the number of UK-based prisoners from that country. We do not make our aid conditional on securing a prisoner transfer agreement with each such country. To do so would seriously undermine our poverty and stability programmes, and in any case they are deeply political and very complicated to negotiate. However, more than 19,000 foreign national offenders have been returned since 2010.

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

T1. If she will make a statement on her departmental responsibilities.

[The Secretary of State for International Development (Justine Greening)]

On international women’s day, I announced that my right hon. Friend the Prime Minister will host a summit in July to step up our global efforts to end both female genital mutilation and early and forced marriage for all girls within a generation. In March, I attended in New York the Commission on the Status of Women, which supported our call for a stand-alone goal on gender and integrating gender throughout the post-2015 development framework. Last week, the Office for National Statistics confirmed that the UK is the first G8 country to reach a figure of 0.7% of gross national income on international development, and I am proud that it is this Government who have achieved that promise.

[Mr Clarke]

Given the horrific events in Rwanda 20 years ago this week, will the Department redouble its efforts to support conflict prevention in countries such as Sudan, the Central African Republic and, indeed, Syria, so that their people can enjoy the peace and humanity that hitherto has escaped them?

[Justine Greening]

We have had a chance this week to remember the terrible tragedy of the events that took place in Rwanda back in 1994. When we look at progress against the millennium development goals, we know that hardly any has been made in the sort of countries to which the right hon. Gentleman refers, because conflict holds back development. That is why we will continue to focus our efforts on those states to help their people.

[David Rutley (Macclesfield) (Con)]

T2. What progress is the Government’s International Citizens Service entrepreneur programme making in helping entrepreneurs and small businesses in developing economies?

[Justine Greening]

At the end of March, I launched the International Citizens Service entrepreneur scheme. This builds on the successful ICS programme that this Government have introduced. It is about matching young people with businesses and entrepreneurs in developing countries, and it focuses on economic development. The programme has had a fantastic response, and the first volunteers will be on their placements this summer. [Interruption.]

[Mr Jim Murphy (East Renfrewshire) (Lab)]

DFID has a work in freedom programme, aimed at preventing the trafficking of women and girls from south Asia to countries popular with migrants. Last week, I was in Qatar to see the conditions endured by migrant male workers. As Qatar starts to build the World cup stadiums, the abuses I saw cannot continue. Does the Secretary of State agree that it is important to extend the work in freedom programme to these workers in Qatar, and that it is important that FIFA and Qatar act to ensure that the beautiful game is not built on the misery of migrant workers?

[Justine Greening]

The right hon. Gentleman is right to raise these issues. We have certainly raised our concerns with the Qatari authorities, including at ministerial and ambassadorial level. Of course, the work in freedom programme, which we are bringing in—this new programme is about to start—is all about helping particularly girls and women who are being trafficked, and we hope to see that programme succeed over the coming years. [Interruption.]

[Jason McCartney (Colne Valley) (Con)]

What discussions has my right hon. Friend had with other UK Departments about how Her Majesty’s Government can bring an end to female genital mutilation and early and forced marriage worldwide?

[Justine Greening]

I am delighted to say that the UK will host an international summit on these topics in the summer, hosted by the Prime Minister. We have been working hand in hand with my right hon. Friend the Home Secretary, who has done some excellent work domestically on this agenda, too. [Interruption.]

[Mr Speaker]

Order. May I politely say to the House that although I understand the air of expectation, we have just had a question about female genital mutilation? We are discussing matters of intense importance in this country and to billions of people around the world. Simple courtesy would dictate that we do actually pay attention.

[Lindsay Roy (Glenrothes) (Lab)]

T3. Tragically, 3,000 children a day die from malaria worldwide. What contribution are the Government making to eliminate child deaths from this dreadful disease, particularly in the Central African Republic, where UN funding is grossly underfunded?

[Justine Greening]

We have announced up to £1 billion over the next three years for the global fund, which is one of the key mechanisms by which malaria is tackled—it was malaria day yesterday—and, particularly in places such as the Central African Republic, we complement that with humanitarian support as well.

[Mr Brooks Newmark (Braintree) (Con)]

Will the Secretary of State update the House on DFID’s contribution to the commemoration of the 20th anniversary of the Rwandan genocide?

[Justine Greening]

It is 20 years since the Rwandan genocide—my right hon. Friend the Foreign Secretary was in Rwanda over recent days to commemorate that terrible event—but since then, Rwanda has taken huge steps forward in development. It is one of the beacons showing how countries can develop rapidly when there are the resources and the political will. We will continue our work with Rwanda.

[Chris Williamson (Derby North) (Lab)]

T4. I have just returned from a fact-finding mission to Qatar with the construction workers union, the Union of Construction, Allied Trades and Technicians, to look at the terrible plight of migrant workers in Qatar. I was reassured by some of the Secretary of State’s comments in reply to the question from my right hon. Friend the Member for East Renfrewshire (Mr Murphy). Will she, however, give the House an assurance that she will make representations to the Qatari authorities to end the kafala system, which is effectively bonded labour, and to stop the appalling circumstances of migrant workers living in abject squalor? Some 1,200 have been killed on construction sites already, and if some action is not taken, 4,000 will be dead before the World cup starts.

[Justine Greening]

The hon. Gentleman is right to raise those issues, and I assure him that we are raising them with the Qatari authorities. I will also do that.

[Richard Graham (Gloucester) (Con)]

Will my right hon. Friend join me in congratulating Green Fuels Ltd on its successful entry into the Indonesian market, boosting British exports and reducing Indonesian carbon emissions through a strong partnership between DFID and UK Trade & Investment on the ground?

[Justine Greening]

I congratulate the company in my hon. Friend’s constituency. He has been a tireless advocate for the role that such businesses, including this one, can play in combating climate change. It is fantastic to see that work get off the ground in Indonesia.

The Prime Minister was asked—

[Nia Griffith (Llanelli) (Lab)]

Q1. If he will list his official engagements for Wednesday 9 April.

[The Prime Minister (Mr David Cameron)]

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

[Nia Griffith]

The Prime Minister promised by the end of this Parliament to reduce net annual migration to the UK to tens of thousands. Will that promise be met—yes or no?

[The Prime Minister]

We have made very good steps forward on migration from outside the EU, which is down by a third and at its lowest level since 1998. That is a success, and we have seen net migration overall come down by around a fifth. What we have not seen is what we saw under Labour, when 2.2 million people net came in over 10 years. That was unacceptable, and we are getting the situation under control.

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

I spoke recently to a constituent of mine who has just been diagnosed with dementia. Understandably, she is incredibly frightened about what the future might hold for her. The dementia strategy has made great progress, but it comes to an end this month. Will the Prime Minister give his personal assurance that a new dementia framework will be put in place as soon as possible to help my constituents and others to live well with dementia?

[The Prime Minister]

I can certainly give my hon. Friend that assurance, and I can add that we will continue our dementia challenge, which is about doubling research into dementia and treating it like a disease such as cancer or heart disease. The work we are doing to make sure that local communities are more dementia- friendly must continue, and we must also improve the care that elderly people get in care homes, nursing homes and hospitals. That vital work must continue, too, and we will continue to use our position in the G7 to push the issue globally.

[Edward Miliband (Doncaster North) (Lab)]

The events of the last week have caused deep concern and anger to the public. What lessons has the Prime Minister learned from his handling of the situation?

[The Prime Minister]

First, I agree with the right hon. Gentleman that there is still very deep and very raw public concern about the expenses scandal that rocked the last Parliament. The biggest lesson I have learned is that that anger is still very raw and needs to be acted on. I hope the one lesson that will not be learned is that the right thing to do as soon as someone has to answer allegations is just to remove them instantly, rather than give them a chance to clear their name and get on with their job.

[Edward Miliband]

I was asking about the Prime Minister’s handling of the situation and the lessons he has learned, and he had no answer. In his letter to the former Culture Secretary today, he wrote:

“I think it is important to be clear that the Committee on Standards cleared you of the unfounded allegations made against you”.

Can he now explain what, in his view, she did wrong?

[The Prime Minister]

The former Culture Secretary set out the reasons for her resignation in her letter, but the right hon. Gentleman makes an important point, which is that the former Culture Secretary was accused of a very serious offence by a Member of Parliament. She was accused of housing her parents at public expense. She was cleared of that allegation, and I thought it was right in those circumstances—other people can take their own view, but I am talking about my view—to allow her to make her apology and to continue with her job. I think that was the right way to handle the situation. Other people can take their own view, but I think that if people clear themselves of a serious offence, you let them get on with their job—you let them try to do their job. That is actually the right thing to do.

[Edward Miliband]

I have to say to the Prime Minister that it will be completely unclear to the country why the former Culture Secretary is not still in her job, because he thinks that she did nothing wrong. Let me explain to him—[Interruption.]

[Mr Speaker]

Order. This session will be conducted in an orderly way, however long it takes. I happen to know that there are children here today observing our proceedings. I would like to think that the House will show a good example. Let us see if we can.

[Edward Miliband]

What she did wrong was to refuse to co-operate with an inquiry, breach the code of conduct for MPs, and give a perfunctory and inadequate apology to this House, as people on all sides have been saying. The Prime Minister said six days ago that she had “done the right thing” and that we should “leave it at that”. Does he now recognise that that was a terrible error of judgment?

[The Prime Minister]

As I say, I think that it was right to allow her the chance to get on with her job. There is one weakness in the right hon. Gentleman’s argument. If he thought that was the case, why did he not call on her to resign? He seems to be the first Leader of the Opposition, probably in history, to come to this House and make his first suggestion that someone should resign after they have already resigned.

[Edward Miliband]

Now I have heard everything—it is my job to fire members of his Cabinet! This is about him and the fact that he still does not understand what the former Culture Secretary did wrong. The reason the public were so appalled was that if it had happened in any other business, there would have been no question of her staying in her job. Why was he the last person in the country to realise that her position was untenable?

[The Prime Minister]

It is very clear. She did do some things wrong. That is why she was asked to apologise, and she did apologise. It was not right not to co-operate properly with the Committee, and she apologised for that. It is rather extraordinary that the right hon. Gentleman comes here, having not said that she should resign, saying that she should have resigned. It shows all the signs of someone seeing a political bandwagon and wanting to jump on it. He is jumping on this bandwagon after the whole circus has left town.

Where I agree with the right hon. Gentleman is that there is still more that needs to be done to deal with the problems of expenses that we suffered in the last Parliament. We have made some big steps forward. I am not sure that everybody knows this, but any expense complaint from 2010 onwards is dealt with by an independent body and not by MPs. That is right. The Committee of MPs that does the work on the past cases now has members of the public sitting on it. That is right. Let us do more to reassure the public about the scandal of expenses and how we are dealing with it. I am very happy to hold meetings with party leaders and the authorities of this House. It is absolutely right that we should do everything we can to show that this is a good and honest Parliament with good and hard-working people in it. That is the assumption that I start from, and I make no apology for that.

[Edward Miliband]

The Prime Minister describes it as a “bandwagon” and a “circus”. This is about members of the public in this country being absolutely appalled at the conduct of his Government over the last week. That is what it is about. It is about members of the public who cannot understand why he did not act. He said in his foreword to the “Ministerial Code”:

“the British people…expect the highest standards of conduct. We must not let them down.”

Does he not realise that his failure, even now, to recognise what went wrong has undermined trust not only in his Government, but in politics?

[The Prime Minister]

What we see is absolutely transparent: the right hon. Gentleman came here today determined to play politics in every single way that he could. That is absolutely clear. Since 2010—[Interruption.]

[Mr Speaker]

Order. The Prime Minister’s answer must and will be heard.

[The Prime Minister]

I think that Members across the House know that since 2010—since the last Parliament—a lot of changes have been made. We have independent members on the parliamentary Committee; the publication of all meetings, visits and gifts for Ministers; the publication of all special adviser salaries; and the publication of Government spending. Is there more to do? Yes, absolutely, there is more to do. If the right hon. Gentleman is serious about doing it, he will sit down with other party leaders and the authorities of this House. Let us ask what we can do to put it beyond doubt that this is a good and honest Parliament with hard-working people. If he wants to play politics and he wants a good soundbite on the news, he should carry on. If you’re serious, get serious.

[Edward Miliband]

I will have meetings with the Prime Minister any time about how we reform the systems of this House—of course I will—but he just doesn’t get it. That is what he has shown today. He needs to learn profound lessons about how he runs his Government. The former Culture Secretary went not because of her bad conduct but because of her bad press. The Prime Minister promised in opposition to be an apostle for better standards, and he has spent the last week being an apologist for unacceptable behaviour.

[The Prime Minister]

If the right hon. Gentleman thinks that it is leadership to fire someone at the first sign of trouble rather than actually give someone a chance to get on with the job, that is actually not leadership, but weakness. If that is his recommendation for leadership, I do not think the country will have any of it.

[Mr Speaker]

I call Mr Tim Farron. [Interruption.] Order. There should not be a collective groan. The hon. Gentleman is good-humoured about it, but—[Interruption.] Order. The House will hear the hon. Gentleman. I call Mr Tim Farron.

[Hon. Members]

Hear, hear!

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

Thank you—that is much better.

Does the Prime Minister agree that people living in rural Britain have as much right to decent-quality and safe health care and hospital services as anybody else? If he does, will he help to intervene directly, and help me personally, to ensure that Morecambe Bay hospitals trust does not downgrade, sell off, offload or close Westmorland general hospital in Kendal?

[The Prime Minister]

Representing a rural constituency, I know how important it is that people have access to good health services, and I know how important it is that we get health and social services to work better together, which is the key to success in so many of our areas. My hon. Friend asks me to look into a specific case, and I am happy to do that.

[Dr Alasdair McDonnell (Belfast South) (SDLP)]

Q2. In the light of this week’s historic visit by the Irish President Michael D. Higgins to the UK, building on the legacy of President Mary McAleese and of Her Majesty’s historic visit to Ireland in 2011, does the Prime Minister agree that Anglo-Irish relationships have never been stronger, and that if we are to build lasting reconciliation across these islands, we need the full commitment of his Government, along with the Irish Government, to ensure that the potential prospects of the Haass process are delivered and implemented?

[The Prime Minister]

First, I strongly agree with the hon. Gentleman that it is a landmark visit of the Irish President to this country, coming three years after the Queen’s extraordinary visit to the Republic of Ireland. I absolutely agree with him that Anglo-Irish relations are at an all-time high, and the Taoiseach Enda Kenny and I are absolutely committed to building on that relationship. All the time we are thinking of new things that Britain and Ireland can do as good neighbours and good friends. On the Haass talks, I do think it would be good if we could make some progress on that issue. It is something that the parties in Northern Ireland started themselves, and I would urge them to continue it.

[Sir Peter Luff (Mid Worcestershire) (Con)]

Q3. On the day when BBC Radio 4’s “Woman’s Hour” has put the distinguished geneticist Professor Nazneen Rahman at No. 3 in its power list, I am pleased to remind the Prime Minister of his challenge to me to suggest practical policies that could address the damaging and long-standing under-representation of women in science and engineering careers. So what is his response—[Interruption.]

[Mr Speaker]

Order. The hon. Gentleman will be heard.

[Sir Peter Luff]

The Opposition do not regard this as a serious matter—I thought they did.

What is the Prime Minister’s response to the thoughtful report, published last week, which I commissioned to meet his challenge, called “Through Both Eyes”, by the campaign group ScienceGrrl?

[The Prime Minister]

May I pay tribute to my hon. Friend for campaigning and working so hard on this issue? It is really important for the future of our country—not just for gender equality but for our economic future—to get more women into STEM subjects and into engineering. I support the National Centre for Universities and Businesses’ target of doubling the number of female engineering graduates by 2030. We are working with employers, professional bodies and academic institutions to implement the Perkins review of engineering skills, and I think one of the most powerful things is role models like the one that my hon. Friend mentioned in his question.

[Mr Andy Slaughter (Hammersmith) (Lab)]

Q4. Did the Prime Minister or any of his staff ask the right hon. Member for Basingstoke (Maria Miller) to resign her position as Culture Secretary, and if not, should he have?

[The Prime Minister]

My right hon. Friend has set out the reasons for her resignation in a letter today, and I think people should accept that. I have given the fullest possible answers I could about my attitude of working with colleagues and giving them the chance to get on with their jobs. That is the right approach.

[John Glen (Salisbury) (Con)]

Q5. Thanks to the Government’s long-term economic plan, youth unemployment has been slashed by 42% in my constituency. Does the Prime Minister think that the opening of a new university technical college and a new free sixth-form college in Salisbury will enhance the ability of young people in south Wiltshire to compete in the global race?

[The Prime Minister]

My hon. Friend is entirely right in every word, because we see a decline in youth unemployment. The figures in Salisbury and the south-west are remarkable—the long-term youth claimant count has come down by 37% in the past year. To further drive down youth unemployment, we need to ensure that the training opportunities and education are there. That is why university technical colleges are so important.

Youth unemployment is still too high. When we strip out those in full-time education, it is 8.7%. That is much lower than France, Italy, Spain or the EU average, but it is still too high and we are committed to getting it down.

[Simon Danczuk (Rochdale) (Lab)]

Q6. My constituent, Paul Cowdrey, is to lose his home after raising concerns about overcharging by solicitor Michael Sandler. That solicitor from hell found a loophole by which he could sue my constituent for complaining. The Solicitors Regulation Authority described Sandler as “morally reprehensible” but said it is powerless to act. Will the Prime Minister look at that case and intervene to stop solicitors running rings around their regulators?

[The Prime Minister]

I am happy to look into that case. As the hon. Gentleman will know, the legal regulators and the legal ombudsman, which were improved over previous years, are independent of the Government. It is therefore not possible to intervene directly, but I can arrange for a meeting between the hon. Gentleman and the Minister with responsibility for legal services to discuss what remedies are open to the hon. Gentleman’s constituent. If that meeting will be helpful, I will certainly put it in place.

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

Prime Minister Nawaz Sharif of Pakistan is due to visit the United Kingdom later this month. Will the Prime Minister discuss with him specifically the reform of the blasphemy laws in Pakistan, which are often used to persecute and prosecute minority communities, including the Christian community? Will he urge Prime Minister Sharif to ensure that all those who are prosecuted under those laws get justice, including a British national?

[The Prime Minister]

I reassure my hon. Friend that I will raise that issue with Prime Minister Sharif when he comes to the UK. In the run-up to Easter, it is important to remember how many Christians are still persecuted around the world, including Christians persecuted under things such as the blasphemy laws. I will raise that important issue and look forward to meeting the Pakistan leadership.

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

Q7. Is the Prime Minister aware that, for 3 million low-income families, for every £3 they gain through the higher personal tax allowance, they will lose £2 straight away through universal credit? Is he simply giving with one hand but taking away from low-paid Britain with the other?

[The Prime Minister]

I think the hon. Gentleman is profoundly wrong, because the point of universal credit is that people always keep a reasonable share of every extra pound earned. The difference between universal credit and the systems put in place by the previous Government is that, under the latter, people often faced over 100% marginal tax rates effectively when they were in work. Universal credit will change that. That is why I thought Labour was in favour of it. If Labour Members have changed their minds about that, as they often do about other things, perhaps they should tell us.

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

Q8. The number of apprenticeship starts in my constituency is now at a record high. Next week, I am holding the second Halesowen and Rowley Regis apprenticeship fair at St Michael’s school in Rowley Regis. Does the Prime Minister agree that investing in apprenticeships and skills is a critical part of our long-term economic plan to give local people in the black country the skills they need to get good quality jobs and secure their future?

[The Prime Minister]

I join my hon. Friend in what he says. We have seen 185,000 apprenticeship starts in the west midlands under this Government. We now have 1.6 million nationwide, so we are on target for 2 million during this Parliament. I want to ensure that we continue to grow apprenticeships and see an increase in the quality of apprenticeships. Crucially, we want to see better information for young people in school when they are deciding the pathway they want to take, whether it is an academic pathway through university or looking at apprenticeships. We will be doing more on that front.

[Naomi Long (Belfast East) (Alliance)]

Q9. Despite all the progress achieved in Northern Ireland, a recent poll found that 67% of 15 to 24-year-olds think their future lies outside Northern Ireland, with 70% citing their view that local politicians were not capable of agreeing a shared vision for the future as a factor in that. Does the Prime Minister agree that that should act as a wake-up call to those who continue to indulge in the politics of division and fear to start showing real leadership to inspire young people and give them hope for a shared and better future in Northern Ireland?

[The Prime Minister]

I pay tribute to the hon. Lady for the work that she does on this front. Anyone who believes that change is not possible or that politicians cannot rise to a challenge in Northern Ireland will have been struck—as I was—by seeing Martin McGuinness around the table at Windsor castle, toasting the Queen at the banquet celebrating British-Irish relations. People have come a huge way and we need to continue that vital work, including the work to fight racism and sectarianism wherever it arises. Above all, what we need is politicians in Northern Ireland to build a shared future, to take down the peace walls, and to make sure that the economy can grow and opportunities are there for everyone in Northern Ireland.

[Jason McCartney (Colne Valley) (Con)]

Thirty-five thousand runners in last year’s London marathon raised £53 million for good causes. I will run again this Sunday for the Forget Me Not children’s hospice in Huddersfield. Will the Prime Minister join me in wishing all the runners good luck, including a record contingent from this House, including the children’s Minister, my hon. Friend the Member for Crewe and Nantwich (Mr Timpson), and the shadow Chancellor?

[The Prime Minister]

Over the cornflakes this morning I saw a very attractive picture of my hon. Friend in his shorts and the shadow Chancellor in a curious pair of black leggings. I bow down to the bravery of colleagues who are taking part—26 miles is a very long way, and I certainly could not manage it. I am full of admiration for them and for the money that they will raise for excellent causes. I pay tribute to all hon. Members on both sides of the House who are taking part.

[Mrs Emma Lewell-Buck (South Shields) (Lab)]

Q10. My constituent, Sue Martin, suffers from myalgic encephalomyelitis and has been waiting more than nine months for her personal independence claim to be processed. She now has to borrow from her 84-year-old mother just to get by. Why does the Prime Minister think that is acceptable?

[The Prime Minister]

All delays in these sorts of payments are not acceptable: we have to make sure that benefits are paid on time. What we are trying to do with the personal independence payment is to introduce it gradually so that we ensure that the quality of decision making is good.

[Mike Thornton (Eastleigh) (LD)]

Last week, I was privileged to meet Walter Kammerling, a holocaust survivor. Is the Prime Minister aware of another appalling persecution occurring today, which is the ethnic cleansing of the Hazara community in Afghanistan and Pakistan? They are a gentle, religious, tolerant Islamic people who educate their sons and their daughters. Will he meet the all-party group on this issue, which is ably chaired by the right hon. Member for Southampton, Itchen (Mr Denham), to discuss the situation?

[The Prime Minister]

We should be absolutely clear that the Afghanistan that we have been supporting, and will continue to support, must be a multiracial and multi-ethnic country that includes Pashtuns, Hazaras, Tajiks, Uzbeks and the many other nationalities that make up that country. It is vital for its future, and I am happy to look at the evidence that my hon. Friend has and perhaps arrange any appropriate meetings.

[Paul Flynn (Newport West) (Lab)]

Q11. Some 2,400 jobs have been destroyed in Leicester and Corby, and last Friday 650 in Newport, by one single firm that specialises in cynically buying up firms, degrading the pay and conditions of staff and then abandoning them to unemployment. What protection will the Government give to those blameless, hard-working people who suffer from the scourge of that new vulture capitalism?

[The Prime Minister]

I am happy to look at the individual case that the hon. Gentleman raises, but—in terms of the job situation in the UK at present—in the last week we have had 8,000 jobs from Birmingham city airport, 12,000 jobs from Asda and more than 1,000 jobs from Vodafone. What we are seeing is businesses wanting to locate in Britain, take people on in Britain and grow in Britain, but if the hon. Gentleman has an example of bad practice, I am happy to look at it.

[Mark Pritchard (The Wrekin) (Con)]

Q12. In 1967, the abortion term limit was set at 28 weeks. In 1990, it was reduced to 24 weeks. Given that it is now 2014, a quarter of a century on, and given recent breakthroughs in antenatal and neonatal care, does the Prime Minister agree that it is now time to reduce the abortion term limit to 22 weeks?

[The Prime Minister]

I have always made my own personal views on this clear. There have been opportunities recently in Parliament to vote on this issue. It is always open to Members of Parliament to bring forward legislation, to amend existing Bills and for the House to debate this. That has happened relatively recently, but it continues on the Government Benches, as I am sure it does on the Opposition Benches, to be an entirely free vote issue.

[Jenny Chapman (Darlington) (Lab)]

Q13. Did the Prime Minister or any member of his Cabinet ask the right hon. Member for Basingstoke (Maria Miller) to resign?

[The Prime Minister]

My right hon. Friend took her own decision and has communicated that decision in a letter. I really think that Opposition Members should respect that decision.

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

A cloud hangs over the job prospects of 700 mineworkers in my constituency at Kellingley colliery. Will the Prime Minister assure the House that the Government are doing everything they can to ensure the future of the pit and the livelihoods of those men and women?

[The Prime Minister]

I can give my hon. Friend that assurance. It is important, despite the difficulties UK Coal faces, that the Government do everything they can, within the rules that are laid down, to look at whether there is help and assistance that we can give. That is exactly what is happening. I am being kept up to date with this, on sometimes a daily basis. I can assure him that it is getting the Government’s attention.

[Mr Mike Weir (Angus) (SNP)]

Q14. In the spirit of a new positive case for the Union previewed this week by Lord Robertson, can the Prime Minister perhaps give us his view as to which of the four horsemen of the apocalypse will be the first to descend on an independent Scotland?

[The Prime Minister]

My view is an entirely positive one about what this United Kingdom has achieved together in the past and what we can achieve in the future. I think the ones who take a narrow, inward-looking and rather selfish view about the future are Scottish National party Members.

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

The surgeon general of the armed forces has raised concerns about the impact of longer NHS waiting times on soldiers based in Wales. Does the Prime Minister agree that NHS outcomes for my constituents, including soldiers, are simply not good enough, and that the Welsh Government could be undermining the operations of the armed forces and are potentially in breach of the military covenant?

[The Prime Minister]

My hon. Friend makes an important point. We have seen an 8% cut to the NHS budget in Wales. The last time A and E targets were met was 2009. The last time cancer treatment targets were met was 2008. Over a third of people miss out on access to diagnostic services within eight weeks. There is a truly dreadful record when it comes to Labour’s NHS in Wales. There is a huge contrast now with the NHS in England—properly funded, well run and meeting the key targets—and the shambles in Wales.

[Mr David Lammy (Tottenham) (Lab)]

Q15. Five years ago, in one of the worst scenes since the Good Friday agreement, my constituent Sapper Patrick Azimkar and his colleague Mark Quinsey were shot and killed outside their barracks in County Antrim. Their families still await justice. Will the Prime Minister look into this case, and into the use of Diplock trials in Northern Ireland?

[The Prime Minister]

First of all, may I take this opportunity to express my sympathy to the families of Sappers Azimkar and Quinsey? This was a despicable terrorist attack and I fully share the desire that the perpetrators are brought to justice. Just because we are trying to deal with the legacies of the past does not mean that crimes that have been committed should not be properly prosecuted and those responsible convicted. I know that the Secretary of State for Northern Ireland met the parents of Sapper Azimkar to discuss their concerns. The Diplock trial system in Northern Ireland was abolished in 2007 and replaced by provisions allowing non-jury trials only in specific sets of circumstances. These provisions lapse every two years and consideration will be given to whether they ought to be renewed for a further two years in 2015.

[Jake Berry (Rossendale and Darwen) (Con)]

People in my constituency will have been reassured this week by the International Monetary Fund’s upgrading of the country’s growth forecast, but does my right hon. Friend agree that they will be even more reassured to know that our long-term economic plan is working in east Lancashire following this week’s announcement by Red Rose Drylining that it has created 30 new apprenticeships?

[The Prime Minister]

My hon. Friend has made an important point. Let us look at what has been happening in Britain this week. The IMF has said that the UK will grow faster than any other G7 country, new jobs are being created at Asda in Birmingham and at Vodafone, and there are the extra apprenticeships in east Lancashire that my hon. Friend mentioned. The trade deficit is falling, and employment is rising. Britain is on its way back.

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

During the Committee stage of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, the then Parliamentary Under-Secretary of State for Justice, the hon. Member for Huntingdon (Mr Djanogly), assured the Committee that those who were refused legal aid could still apply under the new exceptional funding scheme, and described that as “a vital safeguard”. Between April and December 2013, 617 family law applications were made and eight were allowed. What kind of safeguard is that?

[The Prime Minister]

I will look very closely at the cases that the right hon. Gentleman has raised, but the key point is that we must ensure that our legal aid system is affordable. When we compare our system with those of similar common-law countries, we see that we are still spending far more per head than, for instance, Australia and New Zealand. The right hon. Gentleman shakes his head, but it is no good for Members of Parliament to come to Parliament every week and vote against every single spending decision, while not recognising that we must get our deficit down in order to help our economy to recover.

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

Will the Prime Minister take a few minutes over the Easter recess to read at least the winning entry in the Institute of Economic Affairs Brexit competition, the results of which were announced last night? I am sure that, if he does read it, it will give him some good ideas about why leaving the European Union should become part of our long-term economic plan.

[The Prime Minister]

My hon. Friend and I agree on many things, but I am afraid that that is not one of them. However, I will happily look at the Institute of Economic Affairs pamphlet as a potential piece of holiday reading, and see how it competes with alternatives such as, perhaps, the novel written by my hon. Friend the Member for Mid Bedfordshire (Nadine Dorries), which is obviously another possible choice for the festive period.

Petition

Wednesday 9th April 2014 Commons Chamber

Keith Vaz (Leicester East) (Lab)

- Hansard - - Excerpts

I wish to present a petition on behalf of a number of my constituents concerning the proposals of the city council to close Humberstone Heights golf course in Leicester. Some 1,800 people have signed the petition—[Interruption.]

Madam Deputy Speaker (Dawn Primarolo)

- Hansard - - Excerpts

Order. I am sorry to interrupt you, Mr Vaz, but I am having difficult in hearing your presentation of the petition because of the noise in the Chamber. I ask Members to leave quietly. Mr Vaz, may I suggest that you start again with the presentation of your petition?

Keith Vaz

- Hansard - - Excerpts

Thank you very much, Madam Deputy Speaker. I wish to present a petition on behalf of a number of residents of Leicester concerning the proposal to close Humberstone Heights golf club in Humberstone. I was there last Saturday and, as you have correctly said, it is much quieter on a golf course than it is in the Chamber of the House of Commons. I accepted a petition that had been led by Mr Mark Boddice, the club captain, Mrs Heather Smith, the lady captain, Mr Raj Kotak, a past captain, Paul Maurice, Alan Taylor, Jay Marsh, Tony Palmer, Ashok Mistry, Mark Smith, Gaz Kilby, Bruce Frazer, Colin McKenzie, Peter Walker, Michael Pearson and Master David Dewbery. It was signed by 1,800 other people who play regularly at Humberstone Heights golf course. I am grateful to so many right hon. and hon. Members, from all parts of the United Kingdom, for staying for the presentation of this petition. Clearly, the Humberstone Heights golf course has achieved great fame beyond Leicester, reaching the very corners of the United Kingdom. I therefore wish to present this petition on their behalf. If people are able to be more involved in leisure, they will have longer and fitter lives.

The petition states:

The Petition of residents of the UK,

Declares that Humberstone Heights Golf Course is a popular leisure facility in Leicester and further that the Petitioners believe that the planned closure of the Golf Course will have a detrimental impact on the local community.

The Petitioners therefore request that the House of Commons urges the Government to encourage Leicester City Council to reconsider their decision to close Humberstone Heights Golf Course, which is an important community facility.

And the Petitioners remain, etc.

[P001342]

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

- Hansard - - Excerpts

On a point of order, Madam Deputy Speaker. In the last round of Divisions, I had intended to move new clause 7, but new clause 7 was not called, and new clause 6 was called instead. I realise of course that human error can play its part in some of these things, but I would like your opinion on the matter.

Madam Deputy Speaker (Dawn Primarolo)

- Hansard - - Excerpts

Mr MacNeil, I think there was a genuine misunderstanding with regard to new clauses 6 and 7. I regret to say that the intention was not clear to me at the time in the Chair, and I do not feel that I can take the matter any further than that, but I am sure that the record will show the hon. Gentleman’s intention, even if that was not fulfilled through to a vote because of a misunderstanding. I hope that that clarifies the matter.

Agricultural Accidents (Records)

Wednesday 9th April 2014 Commons Chamber

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

12:33

[Bill Wiggin (North Herefordshire) (Con)]

I beg to move,

That leave be given to bring in a Bill to require the Health and Safety Executive to record certain details of agricultural accidents and to report those details annually; and for connected purposes.

I remind the House of my entry in the Register of Members’ Financial Interests, and of the fact that I breed Hereford cattle myself.

In 2006, my constituent Ian Jackson, a vet, was tragically killed by a runaway heifer in Weobley, Herefordshire. He died from injuries sustained after he was attacked and crushed against a lorry. In 2007, my constituent Mick Daw was killed by a Belgian Blue bull in Stoke Prior, near Leominster. Mr Daw had gone to the assistance of another man who was trying to move the bull.

The Health and Safety Executive has reported six deaths so far this year from accidents involving cattle. Last year seven people were killed, there were five deaths in the previous year, and there were six in the year before that. The Health and Safety Executive’s agriculture statistics show that 29% of fatal injuries to the public between 2001 and 2012 were caused by livestock, and that that was the most common cause. That is nearly a third of fatal injuries.

The statistics for injuries are similar or worse. Since 1 April 2013 another two members of the public have been killed following incidents with cattle. There is a case ongoing in our courts at the moment resulting from a rambler being found dead. Over the past four years 24 people have been killed in incidents with cattle, and more than 600 people are injured by animals each year. I am sure we all feel that too many people are dying in livestock-related incidents and we should be doing more to stop this problem.

The Health and Safety Executive has a record of all these incidents, but the same data are not recorded in each case. For example, I could not tell the House what breed of cattle were involved in most of the 24 deaths. That is despite the Government acknowledging the fact that some breeds are dangerous. The Wildlife and Countryside Act 1981 lists seven breeds of dairy bull that are prohibited at all times from fields with public footpaths. Breed information, which is easy to access from cattle passports, is not automatically recorded and it must be.

There is no requirement under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995 or other health and safety legislation for the breeds of cattle involved in incidents to be reported to the Health and Safety Executive. Currently, such a report includes the following: the date of the incident; the severity of the incident— either death or injury; who was involved—the owner, the occupier, or someone contracted or working for them or a member of the public; and a brief description of the incident. Any further detail is at the discretion of the investigator and based on whether any information—cattle breed, for instance—is deemed relevant to the inquiry.

I want to ensure that the necessary details are recorded so we have useful information from which we can learn from these tragic incidents and help prevent future deaths in the countryside. This Bill will ensure the Health and Safety Executive records the following: cattle breed; age of livestock; type of livestock—cows, heifers, bullocks or steers, cows with or without calves or bulls—and their age; details of those injured; whether a right of way was involved; whether the person was accompanied by a dog; whether the person was trespassing; if tuberculosis testing was taking place; and any other relevant and useful information. The Health and Safety Executive will also continue to record the details it currently records.

This change will ensure a uniform list of details is recorded for each and every incident involving cattle. This Bill will provide us with the right data so we can then advise farmers about health and safety concerns and protect them and the public.

The Country Land and Business Association says it is

“always keen to reduce the number of incidents between people and animals.”

The National Farmers Union supports increased detail in the recording of incidents. Indeed, much of the previous list of extra information to be recorded was provided by the NFU. I can tell the House that the Ramblers, too, agrees with the need for increased data collection. Janet Davis, its senior policy officer on rights of way, went so far as to say:

“Scrupulous data collection .... of all kinds is essential.”

As the House knows, supermarkets are very keen to promote ethically sourced British beef. Indeed Tesco, Asda, Morrisons, Sainsbury’s and the Co-op all sell products with the red tractor assurance. The popular food assurance scheme covers production standards including food safety, hygiene, animal welfare and the environment. However, red tractor assurance, other assurance schemes and the supermarkets themselves do not take into consideration whether the cattle they use are dangerous. That is because they cannot; there are no available statistics. However, if the supermarkets had access to data identifying dangerous breeds of cattle would they not then source their meat from breeds that pose less of a threat to farmers?

Twenty-four deaths in four years is far too many not to take action to address the situation. Increased information and learning might help us to prevent future incidents. We need to ensure the relevant changes are made to legislation now so the Health and Safety Executive records the appropriate details. Once this vital information starts to be recorded, I believe it will prove a useful tool to farmers, their spouses and all those working in agriculture or walking in the country.

I want to help people make sensible and informed decisions on the types of cattle they buy, farm and place in fields that have public access. Nobody wants more “’elf and safety”, but the Health and Safety Executive records some data already. I want it to do it better and to make those data relevant and useful. Until we get the facts, we cannot use our judgment. Poor judgment can cause accidents, and accidents with large animals can be fatal.

Question put and agreed to.

Ordered,

That Bill Wiggin, Neil Parish, Martin Vickers, Richard Benyon, Sir Edward Garnier, Sheryll Murray and Jesse Norman present the Bill.

Bill read the First time; to be read a Second time on Friday 6 June, and to be presented (Bill 200).

Finance (No. 2) Bill

Wednesday 9th April 2014 Commons Chamber

(Clauses 1, 5 to 7, 11, 72 to 74 and 112; Schedule 1; any new Clauses and any new Schedules relating to tax relief in connection with the costs of childcare, or income tax allowances for parties to a marriage or civil partnership, or air passenger duty, or the rate of the bank levy, or the subject matter of Clause 1, or the subject matter of Clauses 5 to 7 and Schedule 1.)

[2nd Allocated Day]

Further considered in Committee

[Mr Lindsay Hoyle in the Chair]

Clause 11

Tax relief for married couples and civil partners

12:42

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

I beg to move amendment 3, in page 8, line 25, at end insert—

‘55F Review

(1) Within six months of the passing of the Finance Act 2014, the Chancellor of the Exchequer must undertake a review of the impact of the tax relief for married couples and civil partners introduced under this Chapter.

(2) The review must in particular include—

(a) a calculation of the proportion of married couples and civil partners who are eligible for the tax relief in the financial year 2015-16;

(b) an assessment of the impact of this tax relief on those who are neither married nor in civil partnerships;

(c) the cost to the Exchequer of this tax relief; and

(d) an assessment of alternative tax reliefs that would benefit a greater number of families.

(3) The Chancellor of the Exchequer must publish the report of the review and lay the report before the House.’.

[The Chairman of Ways and Means (Mr Lindsay Hoyle)]

With this it will be convenient to consider clause 11 stand part.

[Catherine McKinnell]

It is a pleasure to serve under your chairmanship today, Mr Hoyle. I rise to speak to the Opposition’s amendment to clause 11 regarding the coalition’s proposed tax relief for married couples and civil partners. Before I begin, let nobody be in any doubt that the Opposition believe that marriage and civil partnerships are a force for good in society. Making a binding lifelong commitment to a partner in that way is truly to be celebrated. Let us not pretend, however, that the Government’s marriage tax allowance, introduced by clause 11 of this year’s Finance Bill, is anything other than a complete and utter dud of a policy.

[Tim Loughton (East Worthing and Shoreham) (Con)]

If that is the case, why in 13 years did the Labour Government not do a single thing—such as introducing a transferrable tax allowance, for example—to recognise married couples in the tax and benefits system? They did not do a single thing.

[Catherine McKinnell]

We know what the Chancellor thinks about this marriage tax allowance. He thinks that the idea is a turkey, both politically and economically. Indeed, an article in The Daily Telegraph went so far as to say—[Interruption.] I hear groans from those on the Government Benches. The article went so far as to say that the Chancellor

“loathes the idea. He is not a social conservative and hates the notion of bribing anyone down the aisle. He has made sure the marriage tax break will not come into effect until the very last weeks of this government—and it will be so small as to be unnoticeable. To resolve the impasse, Treasury officials were asked to see whether they could dump the agenda on to Iain Duncan Smith, so the Chancellor could wash his hands of it. But a tax cut has to come from the Treasury.”

[Mr Stewart Jackson (Peterborough) (Con)]

I am sure my right hon. Friend the Chancellor is touched by the hon. Lady’s warm support. Will she share with the House her thoughts on, and specifically answer, the question asked by my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton)? Why did the Labour Government do nothing to support the institution of marriage in 13 years?

[Catherine McKinnell]

The answer lies in what I have already said; the Labour Government did a huge amount to support all families up and down this country, particularly families with children. Even the Chancellor seems to agree that £3.85 a week is not going to bribe anybody down the aisle or persuade anyone to stay in a marriage if they decide they are going to leave it. The question asked by the hon. Member for East Worthing and Shoreham (Tim Loughton) does not seem to acknowledge the fundamental issues with the Government’s proposal.

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

Does my hon. Friend agree that one difficulty with this proposal is shown in the analysis by the Institute for Fiscal Studies? Robert Joyce, the senior research economist there, says:

“The policy is not a general recognition of marriage in the income tax system”.

So the argument that has been made by the Government is false, in the sense that it gives an impression about this policy which is not actually true. He goes on to say that

“it is difficult to escape the conclusion that an income tax system which makes some people worse off after a pay rise has something wrong with it.”

[The Chairman of Ways and Means (Mr Lindsay Hoyle)]

Order. I think we need shorter interventions rather than speeches—I would sooner save your voice for later.

[Catherine McKinnell]

On the basis of my hon. Friend’s insightful intervention, I am looking forward to his speech on this matter. He makes the point well, and it is the point that I am seeking to make. As the Chief Secretary to the Treasury has said:

“This policy is not about children and families…it does nothing for millions of families with children struggling to make ends meet.”

[Neil Parish (Tiverton and Honiton) (Con)]

Does the hon. Lady agree that although this marriage allowance is not going to persuade people to go or not to go down the aisle, it does recognise what marriage and stable relationships really bring both to children and to the couples? Does she think that in 13 years the Labour party might perhaps have considered it?

[Catherine McKinnell]

Today, we are discussing the merits of this Government proposal in this Bill. We think it is a dud of a policy, and the Chancellor and the Chief Secretary seem to think so, too. I will set out all the reasons why it is a dud, but talking about whether the previous Labour Government considered this policy does not address the issues we are debating today—this policy and our amendment to it. If Government Members are so keen for there to be genuine support for families, for children and for marriage, they should welcome our amendment proposing a proper review on the impact of the tax relief that the Government are suggesting as part of this Bill and exploring alternative tax reliefs that could benefit a greater number of families and, potentially, a greater number of married couples, given the Government’s proposition’s clear deficiencies in recognising most marriages.

[Mr Henry Bellingham (North West Norfolk) (Con)]

Does the hon. Lady agree with the principle that there should never be a financial disincentive for people to be married and remain in a marriage?

[Catherine McKinnell]

The proposal under consideration only gives any sort of tax benefit, small though it is, to a third of married couples. I am surprised that Government Members are not more keen to explore the potential alternatives to this dud policy.

[Tim Loughton]

rose—

[Catherine McKinnell]

Let me make some progress. We are left in a position in which the Minister now finds himself trying to defend a policy that neither his boss nor his deputy support. It is an absolute farce, but clearly Government Members do support it, and quite vehemently. I hope to persuade them to consider the Opposition amendment and take a second look at the policy. If that fails and the policy is implemented in the Finance Bill, I want them to agree to review its impact within six months of its implementation to ensure that it is having the maximum benefit for the maximum number of people.

What is it about this policy that is so bad? Frankly, it is hard to know where to start. Let us begin by looking at who will benefit from this highly restrictive and very complicated measure, which will allow couples to transfer up to £1,050 of their income tax personal allowance to their spouse with effect from April 2015. Of course it applies to married couples and those in civil partnerships, but not just to any old marriages or any old civil partnerships. No, the Government have decided that there is a very particular form of marriage or civil partnership that they wish to recognise in the tax system. Unintentionally, misleading statements were made by the Prime Minister to this House—[Hon. Members: “What!”] Unintentionally, I said. The marriage tax allowance introduced by clause 11 applies only to those couples where one spouse is a basic rate taxpayer and the other does not use their full personal allowance. That scenario has been described by the “Don’t judge my family” campaign as a fantasy 1950s family with a breadwinner and a home maker. The policy will therefore exclude married couples and civil partners on the very lowest incomes where both spouses earn below the income tax personal allowance; couples where both spouses, possibly both basic rate taxpayers, have incomes higher than the personal allowance and therefore have no unused portion to transfer; and couples where either spouse pays the higher rate or the additional 45% rate, with an ever increasing number having been drawn into the 40 pence rate under this Government.

How many people are we taking about? How many households across the country will benefit from the Government’s flagship policy for supporting families? Their own recent estimates suggest 4.2 million couples, which equates to a grand total of one in three married couples and civil partnerships in this country. Two thirds of married couples and civil partnerships will not benefit from a policy intended to recognise marriage in the system.

[Tim Loughton]

I agree that there is a flaw in what the hon. Lady is discussing. Presumably, like me, she wishes to see that relief being extended not just to those on the basic rate but to a greater number of married couples with children. That is the logical conclusion of what she is saying, unless she admits once and for all that the Opposition do not support marriage in the tax system.

[Catherine McKinnell]

We have a much better suggestion as to how the money that has been allocated to the marriage tax allowance can be used to support millions of taxpayers up and down the country, including families with children. So what about those families with children who are hoping in vain for any sign of support from this Government whose tax and benefit changes will result in households being, on average, £974 a year worse off by 2015 than they were in 2010? The Exchequer Secretary, who is in his place, has conceded that of Britain’s 7.8 million families with children, just 1.4 million will benefit from this policy. Yes, that is right—one in six families with children will gain from this marriage tax allowance. To put it another way, five in six families with children will not get a penny from this Government’s flagship policy to support them.

The policy does nothing for widows, widowers, lone parents, long-term co-habiting couples, the 300,000 children living with grandparents or kinship carers or for the spouse who has left their partner for good reason, perhaps because of domestic abuse. It will not help the wife who has been left to bring up the kids after the husband has run off with another woman. If her husband chooses to marry that other woman, who have the Government decided will get the reward within the tax system? It is him.

How much will the allowance be worth for those lucky married couples who will be eligible? Just how much value are Ministers putting on the role of marriage in our society? Yes, for the one in three couples who will benefit, it could be worth up to £200 a year, almost £3.85 a week. To put that into language that people on the Labour Benches might understand—that is just over one pint of beer or a one-off peak game of bingo a week! Who does the Government expect to reap the benefits from this largesse? Let us take a look at their own assessment of the equality impact, which clearly states that while

“couples will benefit as a unit...the majority...of individual gainers will be male.”

But it is not just any old majority. The Government’s own assessment indicates that a staggering 84% of individual gainers will be male.

Before last year's autumn statement, we knew that the net impact of this Chancellor’s tax and benefit changes since 2010 would hit women three times harder than men, not least as a result of his decision to give a £3 billion tax cut to the top 1% of earners in this country, 85% of whom just happen to be men. As a result of the autumn statement 2013, in which the marriage tax allowance was confirmed, that appalling record has worsened even further, such that the Chancellor’s tax and benefit strategy is now hitting women a staggering four times harder than men, raising a net £3.047 billion from men, and £11.628 billion, or 79%, from women—[Interruption.] I hear the word scandalous uttered from a sedentary position, and I quite agree.

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

I am grateful to my hon. Friend for giving way and for making such powerful points. When these points are put to the Government, they always say that the financial circumstances are such that there must be cutbacks somewhere. Is it not ironic that the Government are putting forward a policy that is so badly thought out that if anyone were asked to choose a priority for public spending, this would not be it? Should we not be taking real measures to tackle problems such as the bedroom tax and the changes in universal credit, all of which will cause much more damage than any benefit that this will bring about?

[The Chairman of Ways and Means (Mr Lindsay Hoyle)]

Order. I appeal for shorter interventions. We have time, but Members cannot make a speech as an intervention.

[Catherine McKinnell]

I thank you, Mr Hoyle, and also my hon. Friend whose intervention was powerful and to the point.

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

My hon. Friend is right to highlight the disproportionate benefit of the marriage tax break to men. Does she not agree that the argument that couples will benefit as a unit completely fails to recognise financial coercion in relationships, and that those who get the money have the power?

[Catherine McKinnell]

My hon. Friend raises an important point and it goes to the heart of so many of the changes that this Government have made. So many of the decisions that they have made time and again in Budget after Budget have hit women hardest. Back in September 2011, a leaked No. 10 memo admitted that the Government had a problem with women, and promised a new communications campaign to turn things around, but it clearly has not worked. A key recommendation of a No. 10 communications campaign to be female friendly was to “focus on more visible women leaders”, but until this morning women made up only four of the 23 Cabinet members and that figure is now down to three. Let us not let the Deputy Prime Minister off the hook. Only four out of 25 Lib Dem Ministers are women—[Interruption.] Government Members are shouting, “What has that got to do with this measure?” I wonder whether one of them would like to intervene.

13:00

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

During her research for the debate, did the hon. Lady become aware of the fact that 93% of young teenagers still living with both parents are with married parents? That is quite a powerful statistic.

[Catherine McKinnell]

That is an interesting statistic. I know that the hon. Gentleman is committed to the principle of this measure, but I and other Opposition Members are trying to make the point that the policy is not only dud as regards its practical application but further compounds the unfairness in how the Government have made their decisions in Budget after Budget. Let us remember when hon. Gentlemen question what my point has to do with this measure that we know that the majority of gainers from the policy are men.

[Kate Green]

Does my hon. Friend think that the hon. Member for South West Bedfordshire (Andrew Selous) was seriously suggesting that £3.85 a week would encourage more couples to stay married? There is no evidence of cause and effect at all.

[Catherine McKinnell]

My hon. Friend’s point goes to the heart of the matter. It demonstrates what is wrong with this policy and how ill-conceived it is.

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

The intervention from the hon. Member for South West Bedfordshire (Andrew Selous) was interesting, but should he not acknowledge that only one in six of those families will benefit from any of this?

[Catherine McKinnell]

My hon. Friend makes an extremely good point. Our opposition to this measure is that it disproportionately impacts on women and benefits men and that it does not recognise five out of six households with children up and down the country who are, as we know, struggling to make ends meet.

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

The problem with the hon. Lady’s point is that she is looking at married couples individually. The change is that, rather than wholly going down the route of an individualised tax system, as has happened in the past, this policy considers married couples. Married couples are benefiting and, if we asked them, they would say that they are benefiting as a couple and as a household. They are not hiving off men against women, which is what she seems to be doing.

[Catherine McKinnell]

The tax system works on an individual basis and this proposal introduces incredible complexity to the tax system. I shall cover that in more detail and explain the cost implications. Government Members obviously think that the costs are worth it, but I would be very careful about the concept that all married couples will happily share all their money and any tax gain—although, admittedly, we are talking about £3.85 a week. That seems to be rolling the clock back somewhat and assuming a level of communication within households that I do not think it is the Government’s place to assume.

Women are more than £26 a week—a week—worse off in real terms since 2010, and after significant progress under Labour, when the gender pay gap fell by more than 7%, it is now rising again for the first time in five years. The gap between women’s median weekly earnings in the private sector and the public sector has increased between 2009-10 and 2012-13 from 28% to 31%. The same gap for men has decreased from 17% to 14%. At the same time, the cost of child care places, which we debated at length yesterday, has risen by an average of 30% on this Government’s watch, five times faster than pay.

Analysis by the House of Commons Library shows that the Chancellor’s tax and benefits strategy since 2010 has raised a net £3.047 billion, or 21%, from men and 79%, or just under £12 billion, from women. That includes the Budget 2010 tax credit cuts, which took £2.7 billion from women and only £750 million from men, the 2010 spending review, under which reductions in child care support through tax credits took £343 million from women but just £47 million from men, and the three-year child benefit freeze, which has taken £1.26 billion from women and £26 million from men. That, of course, contrasts with the £3 billion tax cut that was given to the top 1% of earners in this country, under which 85% of the gainers are men, and this marriage tax allowance, under which 84% of the gainers will be men. This issue goes to the heart of the clause and of why we are tabling our amendment.

[Mr Stewart Jackson]

The hon. Lady is being most generous in giving way. Why does she imagine that 80% of the population covered by the OECD have a tax system that rewards marriage, including countries such as France, Germany and the United States?

[Catherine McKinnell]

We must consider this clause in the context of the current situation. We know that families up and down the country—in fact, all households—are facing a cost of living crisis. We have had three years of a flatlining, stagnating economy and households up and down the country have been paying the price for that. We have a Government who are introducing measures that will benefit a small proportion of married couples—only one in six households with children—and under which 84% of the gainers will be men, when we know that those who have paid the bulk of the price so far for the deficit reduction strategy that the Government have been pursuing have been women. It is a question of priorities, and this Government seem to have them completely wrong.

[Andrew Selous]

I want to check that I heard the hon. Lady correctly. She talked about a flatlining, stagnating economy, so I wonder whether she heard the International Monetary Fund say yesterday that we have the fastest rate of growth in the IMF and in the whole of the G7 at 2.9%.

[Catherine McKinnell]

I think that Government Members would love to try to whitewash and erase from the memory of the public the past four years, three of which have had zero—that is, flatlining—growth in the economy. People will be £1,600 worse off on average in 2015 than they were in 2010 and whatever growth is happening in the economy now is happening despite, not as a result of, the Government’s economic policies. I urge hon. Members to exercise caution in saying that everything in the garden is rosy when people out there are struggling to make ends meet.

[Ian Swales (Redcar) (LD)]

I am following the hon. Lady’s speech with great interest. For completeness, so that we have the full picture, can she say what proportion of tax is paid by men and what proportion of benefits are paid to women?

[Catherine McKinnell]

I am pleased that the hon. Gentleman has entered the debate, because the Liberal Democrats are key to today’s measure, and I shall go on to explain why. I think we know that there is long-term inequality. The mere fact that 85% of those who benefit from the tax cut from 50p are men speaks volumes about how this country is weighted. The majority of wealth is held by men. I understand the hon. Gentleman’s point, but I urge caution as the Liberal Democrats are in an interesting position today when it comes to how they will vote not only on this measure in the Bill but on our proposed review.

[Kate Green]

Does my hon. Friend agree that evidence stretching back over several decades shows that when money is paid to the main carer of a child, usually the mother, that money is more likely to be spent on the children? A Government about to preside over a startling rise in child poverty should be mindful of that when they introduce a measure such as this.

[Catherine McKinnell]

My hon. Friend makes an incredibly pertinent point, and expresses her case powerfully. Child poverty is set to increase by a staggering amount under this Government, and the Institute for Fiscal Studies has clearly said that that is a direct result of the tax and benefit changes that they have implemented. The measure, which Government Members are keen to support, will do nothing to alleviate child poverty or to turn the tide of increasing child poverty over the next few years.

[Tim Loughton]

The hon. Lady has cited the IFS, which has conducted an analysis of the distributional impact of the transferrable allowance, demonstrating that it is profoundly progressive, disproportionately benefiting those in the bottom half of the income distribution scale. Perhaps she would read us all the research, rather than a selective part of it.

[Catherine McKinnell]

The hon. Gentleman is incredibly selective. If he genuinely believes that the policy will transform the Government’s appalling record on child poverty and the impact of their tax and benefit changes on women, he is deluded.

[Mrs Mary Glindon (North Tyneside) (Lab)]

My hon. Friend is making a good case for the amendment. Only a third of families will get £200 a year extra, but the average family will be £974 a year worse off by the time of the next election, which shows the iniquitous state of affairs that the measure will create.

[Catherine McKinnell]

My hon. Friend makes an important point. I would add that it is not a third of families who will gain from the policy—it is a third of married couples. Five in six households with children, whom many would consider to be families—particularly the Opposition, but perhaps not the Government—will not gain anything from the policy, which only compounds the child poverty issue about which the Government seem complacent.

[Kate Green]

Does my hon. Friend not agree that the reading of the figures by the hon. Member for East Worthing and Shoreham (Tim Loughton) was highly selective? Perhaps the bottom half of the income distribution scale benefits from the measure, but the very poorest will not benefit at all, because they are not tax payers.

[Catherine McKinnell]

Absolutely. That is why many people, including married couples, will not gain anything from the policy, which is why I am astounded by the vehement support for a policy that does not properly recognise marriage in the tax system, which Government Members are usually keen to do.

To conclude the point that I am making about the impact of the measure, I shall give one example of the women who are particularly hard hit by it: low-paid, new mums, who are losing almost £3,000 during pregnancy and their baby’s first year as a result of cuts to child benefit; cuts to the health in pregnancy grant; the axing of the higher rate of tax credit for families with babies under one; restrictions in the Sure Start maternity allowance; and the Chancellor’s “mummy tax”, which will cost new mums £180 by 2015 in real terms—not to mention cuts in public services and the disappearance of Sure Start centres, with three closures a week, which will impact on mums, dads, families and, indeed, married couples up and down the country for years to come.

The policy is a total turkey in terms of its reach and the benefits it brings. Even the Chancellor thinks so, as does the Chief Secretary to the Treasury—and I am sure that we will hear what the Exchequer Secretary thinks later in the debate—but what about its cost and complexity? Surely, Ministers must have learned from the child benefit fiasco, and would not seek to introduce a new, complex aspect to the taxation system—that fiasco must have given them a few grey hairs—or one that might require significant additional administration and input from the taxpayer. Oh—but they are doing so! Her Majesty’s Revenue and Customs has issued a tax information and impact note on the policy that suggests that it will have an Exchequer impact of £515 million in 2015-16, rising to £820 million by 2018-19.

13:15

The note is a little less candid about how much the policy will cost HMRC to administer and how many additional staff will be required at a time when the HMRC budget has been slashed and its work force significantly depleted. It simply states:

“HMRC will incur additional costs on the introduction and administration of the transferable allowance. The highest expenditure will be in 2015-16, when HMRC will introduce the application processes to enable everyone who is entitled”—

which is not many—

“to benefit from the transfer. During 2014-15, HMRC will refine its costs as part of its work on the new IT to provide on-line services for customers, other customer support and the new internal IT to link spouses and civil partners’ income tax records.”

Given the lack of clarity in HMRC’s impact note, I submitted a written question on the issue, to which the Exchequer Secretary kindly replied and explained:

“The detail of how this policy will be administered by HMRC is being developed.”—[Official Report, 12 February 2014; Vol. 575, c. 642W.]

Perhaps the Exchequer Secretary would enlighten us about exactly what impact the policy will have on HMRC, which is already coping with the loss of 18,700 full-time equivalent staff, or 26% of its work force, between 2010 and 2016? Equally concerning is the impact that the policy is expected to have on employers. The Government’s tax information and impact note neatly sums up the problem, clearly stating that

“it is estimated that in 2015-16, the cost across 1.6 million employers and pension providers of processing PAYE tax codes to reflect transferred allowances may be up to £5.8 million. In subsequent years, the additional cost across employers and pension providers may be up to £0.8 million. There are also likely to be negligible one-off costs in 2015-16 due to employers and pension providers familiarising themselves with the change to the legislation.”

The cost to employers of processing this shabby policy is thought by the Government themselves to be up to £5.8 million in its first year. Surely there are better ways for that money to be spent. The Institute for Fiscal Studies indicates that the precise costs of this policy for the Government, HMRC and employers

“will depend on the rate of take-up, as people will presumably have to make an active claim to HMRC to benefit, and the extent to which individuals change their behaviour in order to qualify.”

[Sheila Gilmore (Edinburgh East) (Lab)]

My hon. Friend will have attended previous debates on this issue. Indeed, only yesterday in the Chamber, lectures were being given by Government Members about the need to simplify the tax code. Does she not find surprising the support for measures such as the one that we are debating today?

[Catherine McKinnell]

Indeed. Government Members often lament red tape and the complexity of the tax system. I am not entirely sure that they will be thanked for adding to it in this way and putting the burden of implementation on employers.

The apparent onus on taxpayers proactively to apply for this allowance is a concern that has been raised more widely. The Low Incomes Tax Reform Group has pressed the Government to ensure that a claim for the marriage tax allowance can

“be made on paper, as well as online; digital exclusion affects disproportionately people on low incomes, the very people to whom this relief is directed. It is particularly important that a paper copy is available since, in some cases, taxpayers will seek assistance from the voluntary and charitable sector with, perhaps, only one spouse being physically present at such meetings.”

LITRG goes on to urge that

“the claim/election process will be made as simple as possible—preferably a joint election rather than separate claim and election.”

I look forward to the Minister’s response to those concerns.

The complexity of the Government’s marriage tax allowance proposal has been commented on by the IFS, which stated, when the measure was first announced:

“One striking feature of the policy is that it complicates the income tax system. A transferable personal allowance for married couples capped at £1,000 and then withdrawn using a cliff-edge at the higher-rate threshold is not the simplest to understand. It is three years since another cliff-edge at the higher rate threshold was announced at the 2010 Conservative Party conference as a way of effectively means-testing Child Benefit, only to be removed and replaced with a less egregious taper at Budget 2012. The amounts involved here are less than in that case, which perhaps explains the willingness to cliff-edge again rather than implement a taper. Nevertheless, it is difficult to escape the conclusion that an income tax system which makes some people worse off after a pay rise has something wrong with it.”

One might think that, as my hon. Friend the Member for Edinburgh East (Sheila Gilmore) pointed out, a Government who have so boasted about being committed to tax simplification would want to avoid further complicating the system. At the launch of the Office of Tax Simplification, the Chancellor commented:

“A decade of meddling and intervening has made the tax affairs of millions of families and businesses across the UK extremely complicated. We need to sort out this mess.”

What does the Office of Tax Simplification make of the marriage tax allowance, which will clearly make the tax affairs of couples and employers more complex? We do not know because, in the words of the Exchequer Secretary in response to a written question I tabled:

“The Office of Tax Simplification (OTS) has not made an assessment of the proposals for a transferable tax allowance.”—[Official Report, 12 February 2014; Vol. 575, c. 642W.]

Why on earth not? What could Ministers possibly fear from the outcome of such an assessment?

It may be clear now that the Opposition oppose the Government’s marriage tax allowance and will vote against clause 11. We believe that the marriage tax allowance is perverse and unfair. It is a poorly targeted use of resources and is overly complex, and our amendment to clause 11 presses the Government to undertake a proper review of the cost, the impact and the benefits for those who will receive it and for the overwhelming majority of married couples and families who will not benefit at all.

Amendment 3 calls on the Government to ensure that any such review includes an assessment of alternative tax reliefs that would benefit a much greater number of families, because we are not just opposing the marriage tax allowance today. Indeed, we have said that a future Labour Government would scrap this policy and use the money saved, together with funding from a mansion tax on properties worth over £2 million, to reintroduce the 10p starting rate of tax, meaning a tax cut for 24 million people on low and middle incomes, by contrast with the 4.2 million couples who will benefit from the marriage tax allowance. Crucially, almost half of those benefiting from a new 10p tax rate would be women.

We know that the Liberal Democrats are apparently implacably opposed to the policy introduced by clause 11 and secured a deal in the coalition agreement to go so far as to abstain on the measure. I believe it was before the 2010 general election that the now Deputy Prime Minister described the Conservatives’ proposal for a transferable tax allowance for married couples as

“patronising drivel that belongs in the Edwardian age.”

I know that Liberal Democrats have, as some might say, an irritating habit of saying one thing before a general election, then doing precisely the opposite—university tuition fees and the VAT bombshell spring to mind—or of saying one thing at any point in the electoral cycle and doing precisely the opposite: for example, 46 Lib Dem peers voted to retain the bedroom tax just 24 hours after their party president, the hon. Member for Westmorland and Lonsdale (Tim Farron), said it was something his party could not “continue to support”. Although the Liberal Democrats may be thinking about abstaining on clause 11 as it stands, it is difficult to see how they could sit on their hands this afternoon and vote against our reasonable amendment.

We know that the Lib Dems apparently secured the policy of free school meals for every child in reception, year 1 and year 2 from September 2014, reportedly in exchange for agreeing to abstain on the marriage tax allowance. We of course back the policy, having piloted the idea in government in County Durham and Newham, with excellent results, but there are very real concerns about the way in which the policy was announced, and how it will be implemented. The initial pledge was for a “hot, nutritious meal at lunchtime”, but that is now being described as an aspiration. Ministers are now simply referring to a free, nutritious school lunch.

Many thousands of schools across the country simply do not have the facilities to ensure this provision. The Liberal Democrats have stated that around £80 million of the additional £150 million capital funding required for the project will come from an underspend in the Department for Education and an additional £70 million would be new money from the Treasury. [Interruption.]

I hear hon. Members on the Government Benches chuntering from a sedentary position. They seem very disturbed by the Liberal Democrat policy of free school meals and do not see how it is linked to the marriage tax allowance. Would they like to confirm that that was not an agreement, as has been reported?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The advice is not needed. There is a definite link, and if Members were to listen a little more closely, they would understand where the link is between the choice and where the money can be spent. Less advice and more listening might help all of us.

[Catherine McKinnell]

I thank the Deputy Speaker for his clarification. The link is clear. It is to do with the allocation of resources and the agreement that has been made. It also goes fundamentally to the heart of the Liberal Democrats and how they intend to vote on the matter. We believe they are likely to abstain on the measure, although we have not had that confirmed. We hope and assume that although they will abstain on the Government’s motion in relation to implementing the marriage tax allowance, they will support our call for a review. If the measure goes through, they would have as much of an interest as we would in ensuring that it is properly reviewed and monitored in the months to come, and that the Government take seriously the proposals for possible alternatives that benefit a larger number of families throughout the country.

The Opposition believe that the money allocated to the marriage tax allowance could be put to much better use elsewhere. That is why we have pressed the Chancellor to scrap it, and to use the money to give tax help to many more working people instead, including more married couples and more families.

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

I am interested that the Opposition want to give tax cuts to hard-working people, yet they voted against the Second Reading of the Bill, which provided a tax cut for 25 million people.

[Catherine McKinnell]

The Bill is inadequate as it entirely fails to recognise the cost of living crisis facing many households, including families and married couples, throughout the country, and does nothing to address the problems that people are facing. The review proposed by amendment 3 would be an important first step in looking at how the Government can allocate the available resources to help more people than a few carefully selected types of married couples whom they have deemed should benefit.

[Susan Elan Jones (Clwyd South) (Lab)]

Does my hon. Friend agree that one of the problems of the married couples tax allowance as proposed by the Government is the situation of what might traditionally have been called the deserted spouse, often the wife who was left? What would happen in that situation? That is a very real issue to be answered.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. May I say once again that we must have shorter interventions? I know that many Members wish to speak. We have been going for a long time and have not even got to the Back Benches yet.

[Catherine McKinnell]

Although my hon. Friend’s intervention took longer than Mr Deputy Speaker might have liked, it was a very good intervention.

I would be interested to hear what Government Members think about the fact that this provision could very much reward men who desert their spouses, leave them with the children to care for, and then receive a tax benefit, but only if they marry the woman they ran off with.

13:30

I will be interested to hear what the Minister and Government Back Benchers have to say about the total inadequacy of this policy in terms of its outreach, implementation, cost to Her Majesty’s Revenue and Customs, and cost to employers to implement. I urge all hon. Members, particularly the Liberal Democrats, although they are severely under-represented today, to support us. We are grateful to the hon. Member for Redcar (Ian Swales) for being here. I hope that he will not sit on his hands and will back our amendment.

[Mr Stewart Jackson]

For the avoidance of doubt, I will be voting against Labour’s amendment. Although the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) is a very engaging spokesman for her party, her speech was mischievous, disingenuous, mealy-mouthed, patronising, leftie drivel—typical middle-class, tofu-munching, Guardian-reading Labour nonsense that said, “We know best what’s good for working people, not you.”

The hon. Lady referred to our friends the Liberal Democrats. I am disappointed that more of them are not here. It is awfully hard to dislike the Liberal Democrats, but it is well worth the effort.

I am delighted that in clause 11 the Government have brought forward this very important change in the tax system, for which I have consistently campaigned since the last general election. We retain the bond of trust with the electors by introducing a proposal that we promised at that time to introduce by the 2015 general election.

[Catherine McKinnell]

I assure the hon. Gentleman that I do not eat tofu, although I do not think that those who do need to be quite so insulted. Are we to assume from his comments that he is wedded to this policy regardless of how inadequate its reach and implementation will be?

[Mr Jackson]

The hon. Lady’s comic timing is exemplary. I will develop my more detailed arguments, if she will allow me, given that she had the thick end of 46 minutes to develop her own. That is probably the record for an Opposition spokesman—or spokesperson—although I accept that it was on the Opposition’s amendment.

This has been a long time coming—

[Tim Loughton]

Forty-seven minutes.

[Mr Jackson]

Indeed—47 minutes, as my hon. Friend says. However, it has definitely been worth waiting for.

In presenting a 10% partly transferable allowance, clause 11 may not yet be worth a huge amount, but it is of seminal importance in supporting marriage in the tax system. For the past 15 years, our tax system has been unusual in not recognising marriage, or indeed any other aspect of family responsibility. Our fiscal policy has been extraordinarily individualistic. Clause 11 changes that by inserting into our system of independent taxation the transferable allowance that former Chancellor Nigel Lawson, the architect of independent taxation, has argued it always should have had. I genuinely believe that qualifying the individualism of our current fiscal policy should be something we can all agree on, and that should appeal to Labour Members. The Opposition spokesperson failed on two occasions to answer the specific question of why, in 13 years in office, her party failed to support the institution of marriage in the tax system in any meaningful way. That is regrettable on her part, because it is disingenuous to say, “We disagree with the policy but, incidentally, this is how you can improve it.” It is churlish and mean-spirited from a party that claims to support the family in the tax system, and children as well.

[Ian Swales]

I can understand the hon. Gentleman’s passion on this issue, but what would he say to a couple in his constituency who are both earning the minimum wage and will not benefit from this policy?

[Mr Jackson]

I will come to the specifics later. However, my hon. Friend—I am pleased to call him that because we serve on the Public Accounts Committee together—will know that many of his constituents in Redcar on low wages have benefited from our personal allowance changes. Indeed, many of them have been taken out of tax altogether, as have people across the north-east of England. He will know, too, as will the Opposition spokesperson, that unemployment has significantly fallen in the north-east and there are now more jobs available than in 2010. [Interruption.] We will not take any lectures from Labour, which doubled youth unemployment between 1997 and 2010.

I would have hoped that Labour Members supported these proposals, particularly this clause, because they are progressive. The Institute for Fiscal Studies has produced a very helpful chart demonstrating how the provision will disproportionately benefit those in the lower half of the income distribution—a point astutely made by my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton). This is not a provision for the middle classes, as Labour critics sometimes suggest. The truth is that the failure of our income tax system to have regard for marriage in recent years has been very odd, as the Prime Minister said in response to a question from the right hon. and learned Member for Camberwell and Peckham (Ms Harman) in June 2010:

“I simply do not understand why, when so many other European countries—I remember often being lectured when I was on the other side of the House about how we should follow European examples—recognise marriage in the tax system, we do not. I believe that we should bring forward proposals to recognise marriage in the tax system…We support so many other things in the tax system, including Christmas parties and parking bicycles at work, so why do we not recognise marriage?”—[Official Report, 2 June 2010; Vol. 510, c. 428.]

[Steve McCabe]

The difference is that the tax provisions on Christmas parties and parking bicycles are extended to all. This provision is for a very narrow segment of married people and those in civil partnerships; it is hardly an example of a general principle of marriage.

[Mr Jackson]

I do not think we all attend Christmas parties or cycle. [Interruption.] The more serious point, which I will elucidate further if the hon. Gentleman will generously allow me, is that there is demonstrable evidence that the institution of marriage has a positive net impact on society, cumulatively, particularly on children. There is nothing ignoble about using the tax system in a mature democracy to support behaviour that is good for society overall.

[Sheila Gilmore]

Will the hon. Gentleman give way?

[Mr Jackson]

Not at the moment. I know the hon. Lady is very keen, and I am sure she will try to get in later.

Given the scale of the public benefits associated with marriage, it is not at all surprising that most people in the developed world live in countries that recognise marriage, as I said earlier in an intervention. There are numerous examples of this benefit that I could highlight, but given the constraints on time I will mention just a few. Regardless of socio-economic status and education, cohabiting couples are between two and two and a half times more likely to break up than equivalent married couples. Women and children are significantly more vulnerable to violence and neglect in cohabiting, rather than married, families. Three quarters of family breakdown in families with children under five comes from the separation of non-married parents. Children are 60% more likely to have contact with separated fathers if the parents were married. Separated fathers are more likely to contribute to their child’s maintenance if the parents were married. Growing up with married parents is associated with better physical health in adulthood and increased longevity. Children from broken homes are nine times more likely to become young offenders, accounting for 70% of all young offenders.

[Kate Green]

I respect the fact that the hon. Gentleman is being very careful with his use of words in saying that there is an association between marriage and some of the outcomes he describes. What he cannot demonstrate, however, is whether there is cause and effect, because we do not know whether there are other personal characteristics that make those couples more likely to be married and whether they also result in those beneficial outcomes.

[Mr Jackson]

I will not take issue with the hon. Lady’s intervention, because it is quite sensible. Nevertheless, the evidence-based data in support of marriage in the tax system have been accumulated over a very long period and are very clear. It is incumbent on the Government not to disregard that evidence, but to take account of it in formulating their fiscal policies.

The list goes on and the findings are put in context by the fact that the Relationships Foundation calculates that the costs of family breakdown amount to £44 billion per annum and that family breakdown outside marriage is the real driver. As the Centre for Social Justice has demonstrated, of every £7 spent as a result of the breakdown of young families, £1 is spent on divorce, £4 on unmarried dual-registered parents who separate, and £2 on sole-registered parents. That is why the Prime Minister was absolutely right to say in response to a question about how the policy could reduce the deficit:

“If we are going to get control of public spending in the long term in this country, we should target the causes of higher spending, one of which is family breakdown. We should do far more to recognise the importance of families, commitment and marriage”.—[Official Report, 2 June 2010; Vol. 510, c. 429.]

I am aware of the arguments that the relationship between marriage and better policy outcomes is merely a coincidence and that the real driver for those better outcomes has nothing to do with marriage and is based on other considerations, especially income. Those arguments simply do not make sense. Apart from anything else, the fact that the millennium cohort study demonstrates that the poorest 20% of married couples are more stable than all but the richest 20% of cohabiting couples makes it plain that marriage is a significant, independent determinant of stability.

[Sheila Gilmore]

Will the hon. Gentleman consider the involvement of other variables? For example, those who are married are likely to be together for longer than those who are not and who split up, and the length of the relationship is likely to contribute to the stability of the children and their relationship with their parents.

[Mr Jackson]

I accept that, which is why I think it is unbecoming to focus on £3.85. We are not arguing that this is merely an issue of monetary transaction. It is about accepting that the inherent benefits of marriage are good for the individuals involved and, principally, their children, as well as for families, communities and society as a whole. We have the evidence.

[Fiona Bruce (Congleton) (Con)]

Is my hon. Friend aware of the work of Harry Benson of the Bristol Community Family Trust, who has found that during early parenthood the single biggest predictor of stability is whether parents are married, even when age, income, education, benefits and ethnic group are taken into account?

[Mr Jackson]

My hon. Friend makes a very strong point. I pay tribute to her for the work she has done in this area and I hope she will continue to do it. I look forward to hearing her contribution later.

[Catherine McKinnell]

Does not the hon. Gentleman’s argument highlight the inadequacy of the Government’s proposals, in that they benefit only a third of married couples and only one in six households with children? If they want to recognise marriage in the tax system, they should recognise marriage, not a certain type of marriage and a certain few married couples.

[Mr Jackson]

The hon. Lady is engaging in a certain degree of amnesia. When her party was in government, it took 7% out of this country’s gross domestic product during the financial crisis. It left us with a disastrous legacy of debt and a huge deficit, which meant that we had to take very difficult decisions. We have to lay the blame for that at her party’s door. That is why we cannot be more innovative in how we approach the tax system. We are, as always, constrained by the legacy of a disastrous Labour Government. Labour always leaves office with more people jobless and the country in trouble.

13:45

[Sheila Gilmore]

Will the hon. Gentleman give way?

[Mr Jackson]

I will give way later, because I am sure the hon. Lady will not forget my comments.

The purpose of clause 11 is not to try to make people get married, but to remove the obstacles to those who wish to marry, which is different. Marriage should at the absolute minimum be a credible, accessible option for all eligible couples. However, the failure of our income tax system—unlike that accessed by the majority of people living in Europe—to recognise marriage means that the fiscal obstacle to marriage is a real concern. The size of the couple penalty in this country, as outlined by the Institute for Fiscal Studies, is deeply worrying.

[Alison Seabeck]

Will the hon. Gentleman give way?

[Mr Jackson]

No, I will not give way—not even to the hon. Lady.

As others have noted, the social policy charity Christian Action Research and Education conducted an annual international tax comparison for 2012—the latest year for which we have comparative data—which demonstrated that the burden on a one-earner married couple on an average wage was a significant 45% greater than the OECD average.

It is not acceptable that we should make the option of marriage inaccessible in this country, and so much more so than the OECD average. Clause 11 will take a vital first step in the direction of addressing that problem, but the limited nature of the partially transferrable allowance means that it will only begin to erode the incentive not to marry. We must go much further in the next Parliament to create a genuinely level playing field. Given the huge public policy benefits of marriage, there is a compelling case for a nudge to marry, although a level playing field would be a massive step forward.

[Alison Seabeck]

I am sorry, but how many people in this Chamber thought, “Oops! I can’t get married because I’ve got a fiscal obstacle in the way,” given that the average cost of a wedding is about £10,000?

[Mr Jackson]

I know that this debate is apposite because the hon. Lady recently tripped along the path of happy matrimony, on which I congratulate her, albeit belatedly. I am not sure whether the issue of £3.85 came into it for the right hon. Member for Greenwich and Woolwich (Mr Raynsford).

If I could move on before we dwell too long on the hon. Lady’s love life, I have read in many places that the provision discriminates against widows and widowers, people who leave abusive relationships and working couples. The hon. Member for Newcastle upon Tyne North regurgitated that argument earlier, but it completely misunderstands the policy.

First, if the widow or the widower was the homemaking spouse, their personal allowance would not die with their working spouse; it would automatically return to them so they could benefit if they re-entered the job market. Secondly, dual-earner couples already benefit from individual personal allowances, so they are already benefiting from both allowances. Thirdly, on those leaving abusive relationships—this is a very important issue and it would be remiss of the hon. Lady not to raise it—if a marriage ends, the homemaking spouse, who had previously transferred the tax allowance to their spouse in paid employment, would be required to take back their allowance because the marriage had ended. It would not be stolen from them by their former spouse.

If the argument is that this policy does nothing for widows and widowers, my response is that that is true of many policies. Most policies have a sharp focus: if we responded to every policy solution by saying, “What about those who won’t benefit?” the implication would be that we should introduce only polices that affect everyone equally. However, in the real world, where we often need specialist and focused policies, that is simply not possible. There is nothing to stop us bringing forward another policy specifically to help widows and widowers—I am sure that Treasury Ministers are listening on that issue—and public policy makes provision for them in other ways. Many widows and widowers were once in one-earner families and will therefore welcome clause 11 for family members who are now in such a position. In short, I warmly welcome clause 11.

On the current drafting, the failure to make provision for a tapered withdrawal of the 10% transferable allowance is an oversight that should be corrected for fairly obvious reasons. I very much hope that the Exchequer Secretary will put that right through a Government amendment on Report.

I congratulate the Prime Minister and Chancellor on introducing this seminal provision. I very much hope that the whole House will recognise its significance in qualifying the individualism of our tax system and reinserting some recognition of the importance of family responsibility. It is a first step that will help to make the option of marriage less inaccessible to those on average and below-average incomes, because it is about social equity as well. We must build on it in the next Parliament; and with a majority Conservative Government, we will.

[Alison Seabeck]

It is always interesting to follow the hon. Member for Peterborough (Mr Jackson). He and I have recently campaigned jointly on the future of our Land Registry offices, but I am afraid that we will be in different Lobbies this afternoon. I cannot agree with his assessment of the value of this tax change for a range of reasons.

Like many measures introduced by this Government, this one is disingenuous at best. It was brought forward to a fanfare of trumpets, after a great deal of pressure from Conservative Back Benchers, but it is basically unfair. I pick up a sense of that unfairness, which is driven through the tax system, when I do a street surgery every Saturday and in my postbag. That unfairness is what the public have the greatest problem with, whether in relation to the tax system or to other Government changes. It is also indicative of the problems we have seen in the House this week. We in this place do not read the public mood as well as we ought to at times, and this measure is yet another example of that problem.

[Mr Burrowes]

The hon. Lady is talking about fairness. Who is it fair for—the 80% of people in the OECD area who live in countries that recognise marriage in the tax system, or the 20% who live in countries that do not?

[Alison Seabeck]

Plymouth has one of the largest percentages of single parents in the country—I will return to that point—and my constituents think that the measure is unfair. How people in other countries view it is entirely up to them, but I can tell the hon. Gentleman that my constituents do not see it as fair.

The transferable allowance—a tax break of about £1,000—discriminates against millions of families, especially those headed by single parents, as well as against non-married couples. We know from the Office for National Statistics that there are about 2 million single-parent households. They find life complicated enough at the moment. They are being hit with the bedroom tax, while some will definitely not benefit from this tax change, and most feel that this Government are not on their side. They face the same challenges as married couples with children, but they face them alone. They have to survive on one income, and they are mostly not single parents from choice. Sadly, death, divorce and separation take their toll on relationships, and financial pressures mount in every one of those circumstances. What have this Government done? They have introduced a measure that will favour just a third of couples and just one in six families with children.

I am almost speechless about this measure. My hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) drew attention to the fact that men will benefit from it far more than women. She highlighted other areas in which men have disproportionately benefited from changes brought in by this Government—this predictably male-dominated Government—and that fact has not been lost on the electorate. Quite frankly, women feel that, for some reason or other, they are becoming second-class citizens in tax terms and all other terms. I am picking that up on the doorstep, and my guess is that we will see it reflected in the ballot box in the elections ahead.

As I said, my constituency has an above-average number of single parents—roughly 38%—who, as I am sure other hon. Members will acknowledge, are struggling to make ends meet. It is wrong for the Government to encourage one type of relationship over another. The policy discriminates against widows, single parents and couples who both work, as well as parents who choose not to marry. Importantly, this tax break might discriminate against children who grow up in single-parent families, and against adults who leave abusive relationships.

In its recent report, “The Home Front”, Demos has argued:

“Evidence shows that it is the quality of relationships rather than relationship status which has the greater effect on…children’s outcomes. There is no evidence of a ‘marriage effect’, rather marriage is probably a proxy for more successful relationships… many married couples do not have children, making this proposal both moralising and inefficient, as it draws resources away from some of the most at-risk families.”

This is a tax change to please the Tory few, but it discriminates against millions of hard-working families. It should be scrapped. We should support the amendment, which demands a closer look at and a review of the measure’s impact, so I will support my hon. Friend in the Lobby this afternoon.

[Tim Loughton]

I do not think that the Opposition are being honest with us. Last week, they tabled a reasoned amendment declining to give the Bill a Second Reading, one reason being that

“it offers a marriage tax allowance which will help only a third of married couples, rather than a 10 pence starting rate of tax which would help millions more families”.

Coming from a party that dispensed with a 10p tax rate when it was in government, those reasons show inconsistency and brass neck, while the opening speech of the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) made a good case for extending the transferable married couple’s tax allowance to make it fairer and more inclusive.

Amendment 3 does not offer outright opposition. It is a fudged amendment, which calls for a review, including

“a calculation of the proportion of married couples and civil partners who are eligible…;…an assessment of the impact…;…the cost to the Exchequer…; and…an assessment of alternative tax reliefs”.

For starters, we know all that. There is a contrast between that and the Labour Opposition’s new clause 1 on child care provision, which was considered yesterday. It asked for a different sort of tax relief or public subsidy, but it did not have any conditions attached to it about a review after six months, a calculation of the proportion of people who benefit, or an assessment of its impact.

The Opposition are entirely disingenuous and inconsistent. Why do they not just come out and say, “We fundamentally—completely and utterly—disagree with and oppose the concept of transferable married couple’s tax allowances”? Why have they not done so in the amendment that we are debating? That would have been more honest, and we could then have had a proper debate. I think that the Opposition are being disingenuous.

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

On the subject of inconsistency, the hon. Gentleman voted against giving same-sex couples the right to marry, so having opposed that union, does he now support their having a tax break?

14:00

[Tim Loughton]

During consideration of last year’s Finance Bill, when my hon. Friends and I put forward in an amendment the concept of the married couple’s tax allowance—the hon. Lady can look this up in the record—I specifically said that the allowance would apply both to civil partnerships and to married couples on enactment. That has never been in question, and the allowance should be absolutely consistent. The law now, however I may have voted, is that we recognise same-sex marriages and that the tax and benefit advantages that go with marriage must be applied to those new circumstances. That is not an issue. There are many issues that we may debate, but that is not one of them.

The Labour party did not and continues not to recognise marriage in the tax and benefit system. Labour chooses to ignore the fact that marriage, whether we like it or not, happens to be the most stable environment in which to bring up children. I was slightly surprised by the lengthy contribution of the hon. Member for Newcastle upon Tyne North because, given her previous role as shadow children’s Minister and her great interest and expertise in that area, she did not once elaborate on the benefit for children of an arrangement such as we are seeking to introduce. As far as I am concerned, the heart of what we should be achieving is the creation of greater stability for children, and it so happens that marriages do that best of all.

[Catherine McKinnell]

The Opposition are committed to supporting families and children. The fact is that this marriage tax allowance benefits only one in six households with children and only one in three marriages. Although the hon. Gentleman is making a passionate speech, the policy completely fails to address the issue.

[Tim Loughton]

That is a good reason for going further. The debut of a married couple’s tax allowance in this Bill is a starting point, and it is the first recognition of marriage in this country’s tax and benefit system. I would like to include many more married couples, particularly concentrating on those with children under the age of five. That is where the allowance can have the greatest impact. We need to provide the greatest stability for young children in their most formative and impressionable years.

[Mr Burrowes]

The married couple’s tax allowance is a starting point, but I want to revise my hon. Friend’s description of this being its debut. Marriage was recognised in the tax system until 2000. We are only properly restoring what countries across the world, including more than 80% of European countries, recognise. We are simply going back to what was the case. We should not have moved away from that recognition in the first place.

[Tim Loughton]

My hon. Friend is right. He has been a pioneer in this area for a long time. The previous Government abolished the recognition, and they had 13 years to try to do something about recognising families in the tax system. Despite the easy words of the hon. Member for Newcastle upon Tyne North, the previous Government did absolutely nothing in practice. That is the record on which they should be judged.

[Jenny Chapman (Darlington) (Lab)]

If the hon. Member for Enfield, Southgate (Mr Burrowes) is correct about his party being pro-marriage and wanting to prevent divorce, how does he account for the decline of divorce between 2003 and 2009? The divorce rate only started to go up again after 2010.

[Tim Loughton]

Very simply, because the number of marriages went down. The change in the divorce rate is a simple statistical manifestation of the number of marriages.

The Liberal Democrats, who are heroically represented here today by the lone star hon. Member for Redcar (Ian Swales), have perhaps been more honest about the married couple’s tax allowance, which they have never supported. Their leader has some bizarre reasons for not supporting it, but they have been absolutely honest. If they had not been involved in some sort of deal, of which we are completely oblivious, they might have been here to vote against the measure, and of course we are very disappointed that they are not here.

The measure will benefit 4 million couples, including 15,000 in civil partnerships and hopefully a good many who adopt the new status that the hon. Member for East Lothian (Fiona O'Donnell) mentioned earlier. My hon. Friends and I welcome the last-minute inclusion of the transferable married couple’s tax allowance in this Finance Bill. The allowance was promised in our manifesto, and it will initially be worth up to £210, but I contrast that with the up to £10,000-worth of subsidies rightly being made available for child care assistance—albeit that that will be available also for higher rate taxpayers whose household earnings may be as high as £300,000—which is still very far from a level playing field. That is why some of us, when the economy has recovered to the extent that it needs to recover after the car crash of 13 years under Labour, ultimately want to see a fully transferable married couple’s tax allowance—the full £10,500-worth, not just 10%. The married couple’s tax allowance is linked to the personal allowance in the Bill.

[Ian Swales]

As with other Government Members, the hon. Gentleman is making a passionate case, but we are considering the detail of the policy. Is he not concerned that the policy will effectively introduce a new 20% tax rate below the personal allowance as the married couple’s tax allowance is progressively withdrawn on the second earner between £9,500 and £10,500?

[Tim Loughton]

My hon. Friend the Member for Peterborough (Mr Jackson) addressed some of those problems, which I hope my hon. Friends on the Treasury Bench will consider as the Bill progresses. Perhaps they can come back with an amendment either in Committee or on Report.

[Helen Goodman (Bishop Auckland) (Lab)]

Will the hon. Gentleman give way?

[Tim Loughton]

I am being terribly generous, but of course I will give way.

[Helen Goodman]

The hon. Gentleman is being most generous. He mentioned that his long-term aspiration is for the transferable allowance to be extended to the full £10,000 of the personal allowance. Does he know what the distributional implications of that would be?

[Tim Loughton]

Interestingly, the Joseph Rowntree Foundation has done a lot of work in that area—this also relates to what the hon. Member for Stretford and Urmston (Kate Green) said about child poverty—and its report states:

“The risk of poverty is much higher for children in couple families where only one parent works; sole earner families account for a significant minority of poor families with children. Many fathers”—

this applies to mothers, too—

“have to work long hours, making it harder for them to get involved in family life and more difficult for mothers to work. To enable more low-income families to have both partners in work”.

The Joseph Rowntree Foundation makes a case for why such recognition helps lower paid families, too. My long-term aspiration is that we should fully extend the allowance, but at this stage, as I stated in my proposed amendment to last year’s Finance Bill, I would like us to concentrate on families with children under the age of five. If it meant that we could extend a more generous allowance to families with children under that age, I would be happy for the allowance not to extend to married couples generally. Such an amendment has been costed at between £700 million and £750 million, which is affordable in the context of what else is happening.

[Fiona O'Donnell]

What is the hon. Gentleman’s definition of a family? He keeps talking about families, rather than married couples with children. Does he consider a family—I hope this is not what he intends—only to be one in which a couple is married?

[Tim Loughton]

I am talking about married couples, which now take different forms. As we have already discussed, the definition includes same-sex marriages, civil partnerships and conventionally married couples. That is to whom the allowance should apply, which has never been in doubt. The allowance is about making it easier for parents to choose the best way to bring up their children. Frankly, it is insulting to describe the measure as discriminating against single parents.

[Alison Seabeck]

Will the hon. Gentleman give way?

[Tim Loughton]

I am about to address the hon. Lady’s point. She may then want to intervene.

Most single parents are not single parents by design or intention. Many are single parents because they have been deserted, subjected to violence or for other reasons, and they are doing an incredible job of bringing up children in very difficult circumstances. We are doing things for them and we probably need to do more for many of them. However, that should not preclude our wanting to do more for people who get no recognition whatever in the tax system, who are also often bringing up children in difficult circumstances. Just because one is in favour of introducing a transferable married couple’s tax allowance, the implication is not that one is in some way against people who happen to be single parents or to be bringing up children on their own. It is a typical Labour argument that if someone is for something, they must be against something else. This is about achieving a much more level playing field for people who choose to engage in a relationship of marriage.

[Alison Seabeck]

I thank the hon. Gentleman for giving way. If he will allow me, I will read a text that I have received from one of my constituents. She says:

“As one of YOUR 38%…nonsense I and kids should be disadvantaged because I chose to leave abusive relationship and bring them up alone in happy home!”

I am really sorry, but that is the view of the public on this measure.

[Tim Loughton]

That is the view of one constituent who has not yet listened to the whole debate. Introducing a married couple’s transferable tax allowance in no way disadvantages that constituent. [Interruption.] In what way is she financially disadvantaged? It is a typical Labour response to say that if someone is in favour of something, they must be anti something else. I am in favour of doing a lot more for constituents who find themselves in that position through no fault of their own and who need help, support and recognition. However, there are also many married couples who need support in bringing up their children, often in difficult circumstances. Just because we want to help them, it does not mean that we are disadvantaging somebody else.

[Andrew Selous]

Of course, everyone in every part of this House is against abuse in any type of relationship. If we want to reduce abuse, does my hon. Friend agree that we should recognise that women and children are significantly more vulnerable to violence and neglect in cohabiting families than in married families? What we are doing today is part of addressing that issue.

[Tim Loughton]

My hon. Friend has done a great amount of work on this issue and there is a much bigger picture.

This policy is popular among the public. It is popular with a majority of Labour voters. It is even popular with an awful lot of Liberal Democrat voters, despite that party’s policy being against it. Last May, the Liberal Democrat Secretary of State for Business, Innovation and Skills attacked the “prejudice” directed at stay-at-home mothers. I am sure that he would have included stay-at-home fathers to be inclusive. It is deeply insulting to the many millions of married couples who have decided to make a lifelong commitment to each other that is recognised in law in front of their family and friends to suggest that we are discriminating in some way against other people.

Some 90% of young people aspire to get married. Some 75% of cohabiting couples under the age of 35 also aspire to get married. There are many forms of family in the 21st century and many people do a fantastic job of keeping their families together and bringing up children, often in difficult circumstances. However, as many of my hon. Friends have said, almost uniquely among the large OECD economies, the UK does not recognise the commitment and stability of marriage in the tax system until one partner dies. Worse still, one-earner married couples on an average wage with two children face a tax burden that is 45% greater than the OECD average, and that gap continues to widen.

To introduce such a recognition of marriage, particularly in the modest form suggested in the Bill, is not to disparage parents who find themselves single through no fault of their own, nor to undermine couples with two hard-working parents, all of whom rightly get help and support from the state in other forms and for whom we might need to do more. Uniquely, married couples, civil partners and same-sex marriage partners are discriminated against in our tax system.

[Mr Stewart Jackson]

My hon. Friend is making a powerful and fluent case. He spoke about the popularity of the policy with Labour voters. Is it not also the case that significant polling evidence shows that young people across all classes, ethnicities and races support the institution of marriage and hope one day to be part of it?

14:15

[Tim Loughton]

Absolutely. It sends out a very poor message to those people for Labour to say that marriage is very nice, but we will not recognise it in the tax and benefit system.

Frankly, it is those who oppose this measure—we have heard them again today—as some sort of 1950s throwback who are being judgmental about how certain people choose to live in their relationships. Disgracefully, they are seeking to pit working mothers and dads against stay-at-home mothers and dads, who are no less, and often more, hard-working. That certainly applies to the increasing number of stay-at-home dads who have made a conscious decision to give up a career because they think that is how they can best bring up their children. The state should respect that.

My support for a transferable married couple’s tax allowance has never been based on a moral stance on types of relationship. My concern, as one might expect from someone who formerly had responsibility in government for children, has always been based on what is best for children. That is why I favour the allowance for families with young children.

Quite simply, if a 15-year-old is living at home with both parents, there is a 97% likelihood that their parents will be married. There is a one in 10 chance that married parents will split up by the time their child reaches five, but a one in three chance that unmarried, cohabiting parents will split up by that time. As the Centre for Social Justice has shown, those who do not grow up in two-parent, married families are 75% more likely to fail at school and 70% more likely to be involved with drugs or to have alcohol problems. The Joseph Rowntree Foundation, which I have already quoted, has identified poorer outcomes for children from separating families. Importantly, a stable home can raise a child’s chances of escaping the poverty trap by 82%. Let us not forget that family breakdown, the prevention of which is the thrust behind this measure, is costing us £46 billion. That is about £1,460 for every taxpayer in this country every year. Marriage accounts for 54% of births but only 20% of break-ups among families with children under the age of five.

I am therefore surprised that nowhere in any of the contributions from Labour Members in support of the amendment did they touch on the outcome for children. That is the most important target at which the measure is aimed. The poorest 20% of married couples are more stable than all but the richest 20% of cohabiting couples, as my hon. Friend the Member for Peterborough (Mr Jackson) said.

Clause 11 alone will not solve all the problems I have set out. I am not naive enough to suggest that £210, or whatever the result is, will represent the difference between staying married and getting divorced or between getting married and cohabiting. However, it does send out the clear and strong message that we value couples who take the decision to bring up their children within marriage. There is a need to address the lack of a level playing field in bringing up children between couples who are not married and those who are. There are 2.2 million households in which one partner is in full-time work and the other is not earning. Those households include 1.2 million children and 700,000 of them include a youngest child who is under the age of five. Those are the families we should start with. Those are the families who deserve our support and recognition most of all. This clause, at last, goes some way towards rectifying that.

[Steve McCabe]

I support the amendment and oppose clause 11. I fear that the clause shows all that is wrong with the modern Tory party. It is based on an illusion—the idea that the Tory party has some special affection for marriage that is shown in its policy actions. Conservative Members have been keen to say that Labour was wrong not introduce such a measure during our 13 years in government, but of course we were not wrong. Had we done so, we would have got into exactly the same mess the Government are in today. We would have been perpetrating a con on the electorate by pretending a level of support for married couples and families with children that our policy simply could not deliver. I have a great deal of respect for the hon. Member for East Worthing and Shoreham (Tim Loughton), but we have heard that he suffers from that delusion. He thinks that he is helping people with children, but in fact he is helping a narrow band of those people.

As we have heard, the policy is not a general recognition of marriage in the tax system. It is a policy for a few married couples and some in civil partnerships—perhaps as few as 3.4 million of the UK’s 12.4 million couples who are married or in civil partnerships. In some ways it is a classic coalition policy, because it does not really satisfy anyone. Those in the Tory party who favour traditional marriage never intended that the tax relief should go to those in civil partnerships—that was not what they were arguing for at the outset. [Hon. Members: “Yes, it was.”] No, it wasn’t. If Conservative Members want to tell me that the hon. Member for Aldershot (Sir Gerald Howarth) is a keen advocate of civil partnerships, I guess that they have missed his speeches and blogs in recent years.

[Mr Burrowes]

I am not sure whether the hon. Gentleman wants to look at his party’s manifesto, but if he looks at ours, he will see that it made a clear promise to the electorate that we are keeping today.

[Steve McCabe]

I am happy to say that I have looked at the Conservatives’ manifesto, and it did not spell out the narrow band of people whom they intended to benefit. It created the pretence that they would help all married couples. The hon. Gentleman has persistently said during the debate that everywhere else offers the system that we are discussing, but I looked it up while he was talking, and New Zealand, Sweden, Finland, Greece and Hungary do not have it, so his “everywhere else” may be wrong.

[Alison Seabeck]

Does my hon. Friend share my concern that the new Financial Secretary to the Treasury and Minister for Women voted against same-sex marriage, and therefore takes a slightly ambiguous position on the matter?

[Steve McCabe]

I am afraid that is true. I know that some people will not be comfortable with having to be reminded of that, but it happens to be the case.

To return to the point that the Government’s position is slightly misleading, we know that the Prime Minister himself has been confused about it. Like his hon. Friends, he thought that he was introducing a policy for all married couples paying the basic rate of tax. I can imagine that, in this day and age, it is pretty hard for the poor Prime Minister to keep up with the all the shifts and machinations in his Government, but surely there is something wrong with a policy that deludes even the Prime Minister into thinking he is giving a tax break to all married couples paying the basic rate, which he is not. Thank goodness we have had the opportunity to set the record straight in this debate; otherwise the poor man might have gone around the country perpetrating that calumny. People might have begun to doubt his work on other things, as well—his whole judgment might have come into question. Thank goodness we have had the chance to challenge that idea.

We certainly need to review the policy, because were it to be extended to the nearly 9 million married couples who pay the basic rate of tax, as the Prime Minister implied, it would cost considerably more than the Chancellor’s projections. For that reason alone our amendment, which asks for a review, is crucial. We need to know exactly what the policy will cost and what it would cost were it to meet the Prime Minister’s aspirations.

As we have heard, the policy will give £200 back to 3.4 million couples, but other Government policies will have made the average family £974 a year worse off by the time of the election. Some 85% of the tax allowance will go to men. Perhaps that harks back to the good old days of Tory marriage—I do not know—but in this day and age I do not think the policy will be broadly accepted by women up and down the country. As we have heard, it will not be available to married couples whose income falls below the personal allowance. [Interruption.] I think the hon. Member for Suffolk Coastal (Dr Coffey) has something stuck in her throat. If she wants to intervene, I—

[Dr Thérèse Coffey]

rose—

[Steve McCabe]

Hang on, you have to wait until you are invited.

[The Chairman of Ways and Means (Mr Lindsay Hoyle)]

Order. We are not having two Members on their feet. Let us see if I can help—Mr McCabe, are you giving way?

[Steve McCabe]

I think I will give the hon. Lady her chance.

[Dr Coffey]

I thank the hon. Gentleman. This point has been made before, but we cannot have such a recognition in the tax system for people who do not pay tax. However, the Government have taken many other measures for them, including ensuring that Labour’s fuel duty escalator did not operate. If it had, fuel would be 90p a gallon more, or £450 a year for the average household.

[Steve McCabe]

The hon. Lady is right, and Government Members have attempted to make that point before. She is absolutely right that the VAT rise put enormous pressure on both petrol costs and all sorts of other family incomes.

At its best, the Government’s measure will reward about 3.4 million of the country’s couples who are married or in civil partnerships with £4 a week. That is the figure from the Institute for Fiscal Studies, but if the Government have better figures and want to challenge the IFS, that will be welcome. I would be interested to know not only the cost of the tax relief but the administrative costs of a £4 a week benefit for 3.4 million couples. It does not strike me as the best way to reduce the overall costs of tax collection or harmonise the system.

As was acknowledged earlier, the transfer of allowances reintroduces an element of joint taxation, a measure that the Tory party sought to abolish when it moved to individual taxation as long ago as 1990. The hon. Member for Enfield, Southgate (Mr Burrowes) talked about all the countries that recognise marriage, but the move to individual taxation is a much bigger trend in tax systems across the world. It seems to me that it is the Tory party that is moving in the wrong direction, because as we have heard in this debate, Conservative Members want to move to a fully transferrable tax system. They want to go back to the days of old, and that is exactly what they are going to do. [Interruption.] I think the hon. Member for East Worthing and Shoreham has something to say. Would he like me to give way to him?

[Tim Loughton]

No.

[Steve McCabe]

Oh, he just wants to mutter in the corner. Well, nothing new there.

[Tim Loughton]

Okay, I will intervene.

[Steve McCabe]

Oh, he has changed his mind. He wants to mutter more loudly now.

[Tim Loughton]

The hon. Gentleman tantalises me too much. Will he undertake that, in the highly unlikely and disastrous event that there is a Labour-led Government after the next election, he wants this tax allowance to be abolished in their first Finance Bill, so that 3.4 million married couples—or 4 million or however many—will no longer benefit from it because of Labour’s warped priorities?

[Steve McCabe]

I have never thought of myself as someone who tempts the hon. Gentleman, but I can give a commitment that a Labour Government would move to a fair tax policy. That is what this is all about, which Conservative Members fail to recognise.

[Tim Loughton]

Is that a yes or a no?

[Steve McCabe]

As I said, I am in favour of fair tax. I say it again, so that the hon. Gentleman understands. That is the problem with his party’s policy—it is unfair. If the policy is for only some civil partnerships and married couples, we could target it better. He and I share common ground on one group—people with children—whom we might want to help through the tax system. However, how on earth have we got into a situation in which only 1.4 million couples with children benefit from a proposal? That is an example of a policy that completely fails to do what he would like.

14:30

I agree entirely with many of the Tory MPs who wrote to The Daily Telegraph about the policy in one respect: the benefits of marriage to society do not depend on one’s tax code. It is a failing to make that judgment—it is failing that means that we exclude widows, single parents, deserted mothers and cohabiting couples. They have the same right to benefit from the Government and the tax system but are excluded. That is why the policy is wrong. A Government can do many good things to encourage stable relationships and family life. Unfortunately, this policy is a phoney, misguided and poorly targeted measure. It simply is not one of the good things that we could do.

[Fiona Bruce]

I support clause 11, and acknowledge and support the excellent speeches made by my hon. Friends the Members for Peterborough (Mr Jackson) and for East Worthing and Shoreham (Tim Loughton). I support marriage, not for moral, religious or ethical reasons, but because, as they said, and as all the evidence shows—I shall provide evidence shortly and will not be deterred by the fact that others have quoted it—marriage promotes stability, security and better life outcomes for children; improves health and well-being for the parties to the marriages, notably as they age; and strengthens the wider community, as those in married families are more likely to be actively involved in it.

The Opposition, as the debate has shown, do not get it that the proposal benefits not only those couples who will receive the allowance, but the much wider society. Supporting the proposal, and supporting marriage through the tax system, is a matter of social justice. Underlying so many social problems that the country faces is the problem of family breakdown and, in particular, family breakdown outside marriage. Many hon. Members are reluctant to talk about that for fear of being branded judgmental, but the fact is that helping to strengthen health and well-being through supporting marriage is to help to tackle a key, root cause—relationship breakdown—of so many contemporary problems, such as addiction, abuse and mental health issues, and the increasing problem of acute loneliness, especially in old age.

The proposal is even more a matter of social justice because, as the Centre for Social Justice reports, indications show that, whatever the liberal press might say, the better off in our society get the fact that the benefits of marriage are worth buying into and are marrying while the less well off are increasingly not getting married. According to the CSJ, that is causing a widening gulf between better-off married people and less well-off unmarried people. The latter do not access the health and well-being benefits that I and other hon. Members have mentioned and that marriage can bring. Rather, they are falling into an increasing cycle of negative outcomes and social instability, which is inter-generational. If we really care about building a society that promotes social equality rather than inequality, and one that offers a key route out of poverty for those who may otherwise be trapped within it, and if we are really serious about social justice, one key policy is backing marriage.

As my hon. Friends the Members for Peterborough and for East Worthing and Shoreham have stated, the statistics are stark. Children aged five are five times more likely not to be living with both parents if their parents are not married. The position is far worse for children aged 15. Women and children are significantly more vulnerable to violence in unmarried families. Teenagers living outside married family relationships have much higher delinquency rates than others. Seventy per cent. of young offenders come from unmarried families. The prevalence of mental health issues among children living outside married family relationships is 75% higher than among children of married parents.

[Fiona O'Donnell]

Does the hon. Lady believe that, if a tax break acts as an incentive or a reward, more couples would marry, and that those problems would then go away?

[Fiona Bruce]

The measure sends out a clear marker from the Government that marriage works. That is why it is important. I absolutely agree that it will not be an incentive, but I hope it will be an encouragement. I hope it is a start that will be built upon.

On old age, 90% of all care beds in hospitals and care homes are occupied by unmarried men and women. Couples who separate and who have never been married are less likely to support each other in old age and, apparently, their children are less likely to support their elderly parents.

On the positive side, the commitment that marriage requires in terms of the emotional, economic and social investment in the relationship in turn generates security, health and longevity. As we have heard, even the poorest 20% of married couples are more stable than all but the richest 20% of cohabiting couples. The health gain from marriage could be as large as the benefit from giving up smoking, leading some researchers to suggest that, if marriage were a drug, it would be hailed as a miracle cure. I could continue, but the evidence is legion.

None of that is to suggest that all married families enjoy better outcomes than any single-parent family or cohabiting couple. Clearly, there are dysfunctional married families and successful single parents and cohabiting couples. However, the weight of evidence is firmly in favour of stable, publicly committed married families being the most beneficial structure.

[Steve McCabe]

I am interested in what the hon. Lady is saying. I am not exactly sure what the source of the evidence she quotes is, but does the evidence draw any distinction between the impact on married couples of whom both partners work and the impact on married couples of whom only one partner works? Has that distinction influenced this tax policy?

[Fiona Bruce]

This tax policy increases the opportunity for choice. Many mothers and fathers want to stay at home and do not want to go have to go out to work. I appreciate that the financial implications of the policy are small but, none the less, the policy says, “We value you and your role in society if you want to stay at home.”

If we are serious about finding effective solutions to community breakdown and to the poverty that blights parts of Britain characterised by family breakdown, educational failure, economic dependence, indebtedness and addictions, supporting marriage is one way to do so. The public support that, contrary to the view of the hon. Member for Plymouth, Moor View (Alison Seabeck), who is no longer in her place—[Interruption.] I apologise. She is in the Chamber, but in a different place. I endeavoured to intervene on her because, according to a YouGov poll, 85% of people support giving financial recognition to married couples through the tax system, and 83% of the public think that tackling family breakdown is important. Even more starkly, according to the Centre for Social Justice, half of lone mothers think it is important that children grow up with a father.

Yes, the proposal will cost the Exchequer—I believe the shadow Minister said it will cost some £550 million—but that is dwarfed by the cost of family breakdown which, in 2012, had risen to some £44 billion. It is estimated by the Relationships Foundation to have an equivalent cost to the UK taxpayer of £1,470 a year each. Of course, that figure is still rising—currently £46 billion and increasing.

Support for marriage, therefore, simply cannot be dismissed as giving money to those who are already comfortable. As we have heard, this proposal will disproportionately benefit those on the lower half of the income scale, but it is much more than that. It is a matter of social justice. Supporting marriage is progressive. It is the right thing to do, not only for individuals but for the beneficial public consequences it promotes. If arrangements have beneficial public consequences, such as good environmental conduct or saving for one’s pension, it is established practice that such public benefits are recognised by the tax system. So it should be with marriage.

[Bob Stewart (Beckenham) (Con)]

Is there any provision that would mean that people who have been together as a family—a man and a woman, with children—for a certain period of time, say five years, would be able to count in the same way as being married to get the tax break? The benefits would then be almost the same, would they not?

[Fiona Bruce]

The benefits that are proposed in this clause are for married couples. That is the way in which our society recognises a permanent and lifelong commitment that is intended by the parties.

Of course I would like to see more, but I welcome this positive start. I would like to see a department for families, a dedicated family policy across government and greater investment in relationship education for young people, both in school and later for those embarking on relationships or contemplating having a family. In the meantime, I fully support this proposal. It will encourage marriage and sends out an important signal that, for the first time in a long time from the Government, marriage is valued in our society—something the last Government never did. It places Britain in the position of recognising marriage in the tax system, whereas we were the only country in Europe not to do so. Is it any coincidence that the UK has one of the highest levels of family breakdown in Europe? We have to do what we can to change that, and this is one way. As the Prime Minister said, this change will provide support. Our support for families and marriage puts us on the side of a progressive politics and on the side of change that says, “We can stop social decline, we can fix our broken society and we can make this country a better place to live for everyone.”

[Helen Goodman]

I am pleased to follow the hon. Member for Congleton (Fiona Bruce) and I certainly will not yield one inch to her in the value I place on the importance of marriage. Like her, I am a member of the Mothers’ Union, the Church of England organisation that promotes and supports stable family life in this country. However, she is making a mistake. The undoubted benefits of stable relationships could be far better encouraged by the Government in several ways: if, for example, resources for tackling domestic violence were not being reduced; if, for example, we had compulsory sex and relationship education in schools that prepared people for healthy adult relationships; and if, for example, we had a decent child support system that did not incentivise the non-resident parent to ignore their responsibilities to their children, because that is what is happening. Instead of tackling those real problems, or looking at the factors that put families under stress—debt, long hours and zero-hours contracts—the hon. Lady ignores them. She does not understand that those factors are the cause of rows, tension and stress in families. If Government Members turned their attention to policies that would make a real difference, instead of faffing around with this fatuous married couple’s allowance, families would be a lot better off.

[Andrew Selous]

If this policy is so fatuous, why is it that more than 80% of the population covered by the OECD live in countries that recognise marriage in the tax system? Are they all completely wrong? Are they are all wedded to fatuous systems?

14:45

[Helen Goodman]

That is exactly the point that I was about to come on to. The hon. Member for East Worthing and Shoreham (Tim Loughton) said that we should place the well-being of children at the centre of this policy. That is a perfectly reasonable starting point for this debate, but which country is near the bottom of the UNICEF child well-being table and which is at the top? The country near the bottom is the UK: the country at the top is Denmark, which has the highest rate of single parenthood in Europe. It is at the top because it has a proper welfare state, decent child care and properly functioning systems so that people can look after their children properly. If we want to do something for children, we should have policies that promote the well-being of all children, not just a small minority of children who happen to live in a particular family structure.

The hon. Member for East Worthing and Shoreham asked, “Why do Opposition Members suggest that just because you are in favour of marriage, you are against other patterns of family life?” That is not my view. I am in favour of traditional families, as I have said, but I also think that we need to support all families. The reason we are concerned about this policy is—as the hon. Gentleman should understand—that we can only spend the money once. We cannot spend it twice or thrice over—[Interruption.] Government Members talk a good talk, but they do not seem to understand the practical implications.

People in this country are facing a severe cost of living crisis. We are seeing an increase in the number of children living in absolute poverty. More than 600,000 families are going to food banks. If hon. Members had any real concern for child well-being, they would address those issues, not come here proposing £700 million of expenditure on a tiny group.

[Andrew Selous]

Those of us on the Government Benches care deeply about child poverty, and we believe that family breakdown is a cause of child poverty. By trying to deal with breakdown, we are dealing with a severe cause of child poverty.

[Helen Goodman]

If the hon. Gentleman would pause for a second, he must surely understand that giving people an extra £200 a year is not likely to enable them to continue their marriages when they are under stress. It does not make sense. For £4 a week, the couple could not even have a pint of beer together. The whole thing is absurd—

[Tim Loughton]

It should be higher.

[Helen Goodman]

The hon. Gentleman says that, but the policy is not well targeted. The transferable marriage tax allowance will help just one third of married couples. If we scrapped this allowance and had a mansion tax on homes worth more than £2 million, we could have a tax cut of £100 for 24 million people.

This allowance will go to a third of married couples, and 85% of the benefit will go to men, not to women. Only one in six families with children will get it, and families will only get it if they have only one earner in the family. My test for whether or not this is a good policy is a conversation I had with a constituent of mine recently. She is a shop worker in a supermarket and works 16 hours a week. She has two school-age children. Her husband is not working, because he had an industrial injury. He is on employment and support allowance which, under this Government, will come to an end after 365 days. I simply do not know how a family of four can be expected to live on 16 hours at minimum wage and two lots of child benefit. She cannot. She will lose her tax credits, because she cannot get a shift to increase her hours to 24 a week. Instead of dealing with people like that, who are doing the most responsible things and struggling against all the odds, we have this totally mis-targeted transferable allowance proposal. The Chancellor does not agree with it and the Prime Minister does not agree with it, so why are they doing it? They have made it absolutely clear, in all discussions, that this is about seeing off the Tory right.

I am sorry that the right hon. Member for Haltemprice and Howden (Mr Davis) is not in the Chamber. He had three articles on this subject in the newspapers this morning. The one in The Times is headlined, “Davis the kingmaker plots the next leadership challenge”. He wrote an article for the Daily Mail online promoting large-scale new breaks for married couples and making many of the points we have heard repeated by less elevated hon. Members this afternoon. Let us look at the response the article received from the public; they are not Guardianistas, but people reading the Daily Mail:

“No…I do not want my taxes going to ‘stay at home’ (eg gym/lunch/shopping) women. I want them to go to help vulnerable, disadvantaged people, not the ‘I’ll park my 4x4 on the pavement even if it inconveniences other people’ bunch. Bad idea.”

Another comment reads:

“This is ridiculous. Surely tax should be calculated on household income rather than basing this on a wife staying at home…some people are carers for the elderly, some are in full time education - just focusing on stay-at-home mums is very unfair.”

Then there is this:

“Thanks to this government telling us what we must believe and what we must not believe…This whole article is politically and socially incorrect and out of date.”

I do not think that this proposal will deliver the political benefits that Government Members are hoping for. It certainly will not deliver the social and economic benefit.

When I was first elected to this House, I sat on the Finance Bill Public Bill Committee with the Exchequer Secretary, the hon. Member for South West Hertfordshire (Mr Gauke). Throughout the Committee’s proceedings he told us, on many issues, what Mrs Gauke thought. I hope we will hear what Mrs Gauke thinks this afternoon.

[Andrew Selous]

I speak as the chair of the all-party group on strengthening couple relationships. Family stability lies at the heart of this debate, and I was pleased to hear the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) say that she is a supporter of marriage.

This proposal is one of a range Government policies. The Government have put £30 million into strengthening relationship support. For the first time ever, the Department for Work and Pensions is conducting a family stability review. The good news is that family stability is increasing and strengthening, by a bit in the most recent figures. The scariest statistic in this whole area is that by the time children born today are 15, roughly half will see their parents separate. That saddens me hugely. My own parents divorced and I am very much less than a perfect husband myself—none of us is perfect. We all bring our baggage and personal experiences to these issues, so I understand the emotion on both sides of the House. We need to speak with care and moderation. When I look at the pain experienced by the children of friends of mine who are going through divorce, there is something that makes me want to try to do everything possible to increase family stability and reduce family breakdown.

I will not regale hon. Members with many figures, but I will mention the UK’s biggest household study, “Understanding Society, the UK household longitudinal study” by the university of Essex. Most academics and researchers in this area respect it as one of the most authoritative studies. It shows us that 93% of 13 to 15-year-olds whose parents are still together are living with parents who are married. I am not making that up or making a judgment on anyone; I am merely presenting the House with the facts. There may be many reasons for that, and I accept that there are cause and effect arguments both ways. I accept absolutely that poverty is a cause of breakdown, but I also accept that strong families are a bulwark against poverty.

We should use every tool in the box to try to strengthen family life for everyone, whatever relationship they are in at the moment. We need to care deeply about the 38% of constituents of the hon. Member for Plymouth, Moor View (Alison Seabeck). I want to strengthen family life for everyone. Some of the relationship support money that the Government have put forward will be for her constituents. The work we are doing on the family stability review will be for her constituents. I wish these debates did not become quite so heated, because I can assure her that Government Members who support this measure are for everyone—we are for all her constituents as well. We will defend the measures for everyone in the tax and benefit system—child benefit and child tax credits—because we recognise the important part that marriage plays in family stability. I do not want Opposition Members to think that this is a divisive policy. We are bringing this forward as part of a suite of measures to try to do deal with an epidemic of family breakdown in this country and because we want to do something to promote family stability.

As we look at other countries, we see that this is not an outlandish or an unusual thing to do. In fact, the UK is the odd country out in the OECD. Across OECD countries, Mexico is the only other large economy not to have any recognition of marriage in the tax and benefit system. We have tax benefits for all sorts of policies. We have tax benefits for Christmas parties. Just because we favour a firm providing for Christmas parties does not mean that we are against Muslims, Sikhs or Hindus who might not choose to celebrate. It is just something we recognise. We have tax policies that support people parking their bicycles at work. Just because we favour people bicycling to work does not mean that we are against people who come to work in cars or scooters, or who walk, or take the train or the bus. We need to get out of the mentality that, because we are introducing a tax break for an institution we know is good for family stability, we are being in any way divisive.

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

The hon. Gentleman talks about family breakdown. Has he made an estimate of how many families will break down because of the bedroom tax, which is an awful policy? Could this money be used to scrap it?

[Andrew Selous]

There is relatively good news on the under-occupancy penalty. More families have been able to move, with nearly 200,000 one and two-bedroom properties available for families to move into. I have seen families who are better off because they are paying lower rent and lower heating bills, or are nearer a bus stop or a sick or disabled relative. We must remember the 1.7 million people on social housing waiting lists and the 300,000 people who are very overcrowded.

The general point the hon. Gentleman makes is of course important. There are many stresses on families today. The Government are cognisant of that fact and are introducing a whole suite of policies—freezing council tax and fuel duty, increasing the personal allowance and increasing the minimum wage—to try to make life easier for people. The good news on jobs and growth will also make things easier. We should not seek to divide people. As has already been said today, we know that over half of lone parents believe strongly that there should be both a mother and a father involved in bringing up children. That is something we need to remember as well.

I strongly support what the Government are doing. The sum can always be increased when the public finances allow it—at present, the Chancellor is playing with a limited amount of money—and we are returning to a policy that was well supported until 2000 and is common among OECD countries. I ask Members to focus on the widespread extent of family breakdown in our country, and to see this as one important policy for increasing the family stability which we know is so important to children.

15:00

[Jim Shannon (Strangford) (DUP)]

In the past, both here and in Westminster Hall, I have spoken frequently about issues such as child poverty, food poverty, benefits for single parents, social exclusion and other social problems. On this occasion, I want to express my support, and that of my party, for the married couple’s transferable tax allowance. We gave a manifesto commitment to support it in our Parliament, and we are pleased to be able to support it today as well.

I respect the opinions of Labour Members, and I do not wish to be divisive. I want always to be respectful to Members whose opinions may differ from mine. However, I have a hard-held opinion about this particular issue. I want to help everyone, but I think it is time that married couples had an opportunity to see some benefit from legislative change. Those who support the recognition of marriage in the tax system have waited a long time for the Government to introduce this policy. I expected it to be introduced a long time ago, in view of the Prime Minister’s enthusiasm for what was a headline manifesto commitment, but I am very pleased that, at long last, it is being introduced now.

We have heard some excellent speeches from Members on both sides of the House. I particularly commend the way in which the hon. Members for East Worthing and Shoreham (Tim Loughton) and for Peterborough (Mr Jackson) set the scene. I recall a debate in the House about two years ago to which the hon. Member for Congleton (Fiona Bruce) and I contributed. That was one of my early introductions to the cut and thrust of politics here. Most of the Members surrounding me opposed what I was saying, but I held fast to my opinion, and I am very pleased to be able to express it again today.

Let me begin by highlighting some of the powerful public policy benefits of marriage. I shall then explain why I consider clause 11 to be an appropriate public policy response, albeit rather modest—I should have liked to see more.

[Alison Seabeck]

As always, the hon. Gentleman is talking a great deal of common sense. Marriage is indeed something to which most people aspire. Let us be honest: it is a great institution. However—I think he was starting to make this point just now—the Bill is neither one thing nor another. It does not really achieve what most Government Members want, and it certainly does not deal with the concerns of Opposition Members. I should welcome his views on that.

[Jim Shannon]

As ever, the hon. Lady has made a very sensible intervention.

It is not the financial aspect of the clause that will be the convincing factor for those who wish to proceed with it. Personally, I see it as a recognition of those who are in a marital relationship, which is why I support it. Marriage is unquestionably a source of great benefit to adults, to children and to our communities in general: as others have said, there are extensive research findings to demonstrate that. Given the shortage of time, I shall highlight just some of the benefits of marriage to adult health, on the basis of evidence and statistics.

As has already been said today, the health gain from marriage may be equal to the benefit of giving up smoking. Of special interest to me, given the challenges presented by our ageing population, is the fact that marriage significantly limits hospital use. Those living with a spouse are less likely than others to enter an institution after the age of 60, because that person will be able to look after them and help them. For children, growing up with married parents is associated with better physical health in adulthood and increased longevity. There is a direct link between family breakdown—particularly separation from a biological parent—and future offending. I have not made those things up: they are facts, based on information that we have received.

Some Members have argued that marriage in itself is irrelevant, and that all the positive associations with it are driven by other factors, principally income. I must say that I find that argument particularly unconvincing. When one set of couples have thoughtfully embraced the cost of making an exclusive, lifelong commitment before the world, “forsaking all others, so help me God”—a commitment that is sealed in law—and another have just decided to move in together and see how it goes, is it any wonder that the first set of couples are likely to be, on average, more stable? That is not a reflection on those who cohabit, but it is a reflection of the statistics showing the commitment that we all make in a marital relationship.

Moreover, as others have noted, the Millennium Cohort Study has blown out of the water the idea that it all boils down to money. According to the study, the poorest 20% of married couples are more stable than all but the richest 20% of cohabiting couples. Finance is clearly not the motivator. However, recognition of the marital relationship by the Government through the transferrable tax allowance strikes me as a constructive way forward.

On 25 July this year, the hon. Members for Darlington (Jenny Chapman)—who has now left the Chamber—and for Blaenau Gwent (Nick Smith) will enter the happy union of marriage here in the House of Commons. Let me take this opportunity to wish them well, as others have already. It is good to know that marriage is alive and well in the House.

My concern is not with trying to persuade people to marry, but the evidence suggests that people who want to marry are not doing so because it is not an accessible option. As the Secretary of State for Work and Pensions said in his marriage week speech in 2011,

“When asked about their aspirations, young people are very clear: three quarters of those under 35 who are currently in cohabiting relationships want to get married, and some 90% of young people aspire to marriage”.

Those are very clear statistics. The Secretary of State continued:

“So perhaps the question we should be asking ourselves is this: if people from the youngest age aspire to make such a commitment in their lives, what stops them doing so?

Government cannot and should not try to lecture people or push them on this matter, but it is quite legitimate to ensure people have the opportunity to achieve their aspirations.”

[Ian Swales]

The hon. Gentleman is making a powerful speech, and I think that we have a unanimous view about the importance of marriage. Does he feel that the Government are communicating the details of the policy clearly enough for the young people about whom he is talking to understand whether it affects them or not? Many of them—for example, couples earning the minimum wage—will not be affected by it.

[Jim Shannon]

I cannot comment on the technical figures—no doubt the Minister will say something about them when he sums up the debate—but I understand the point that the hon. Gentleman has made. The Government clearly have much to do. Indeed, we all have much to do in putting forward our views, but let us hope that those who have an opportunity to enter into a marital relationship will be able to benefit financially as well.

Although 90% of young people aspire to marry, marriage rates are at an all-time low, while cohabitation rates are rising. The reason why that matters can be expressed in many ways, but I shall do so by employing language that the Treasury understands. The cost of family breakdown has risen to some £44 billion per annum, and crucially, according to the Centre for Social Justice, of every £7 spent on family breakdown amongst young families, £1 is spent on divorce, £4 is spent on unmarried dual-registered parents who separate, and £2 is spent on sole registered parents.

In this context it is absolutely imperative that the state does not place any unnecessary obstacles in the way of those who wish to marry, yet that is exactly what we do on many occasions. Since 2000 we have had a tax system that is very much in the minority internationally, as the hon. Member for Peterborough said. Just over a fifth of people in the OECD area live in countries that do not recognise marriage or have some kind of couple allowance. The vast majority of those people live in just two countries: the UK and Mexico. Research by Pearson and Binder published by the public policy charity CARE demonstrates that in this context the tax burden on a one-earner married couple with two children on average wage has been consistently much higher in this country than across the OECD on average. In 2012, the latest year for which there are comparable data, the tax burden on a UK one-earner married couple on average wage was 45% greater than the OECD average, up from 42% in 2011. Moreover this burden was a staggering 80.4% of that placed on a single person on the same wage while the comparable OECD figure was just 55%. Figures sometimes blind us to the issues, but these figures illustrate the issue of fairness and balance and show what the Government are trying to achieve through the legislative change before us.

In this context is it any wonder that rather than opting for marriage, couples are opting for other arrangements? Clause 11 will begin to put this right, but this is only a very limited, partially transferable allowance that, far from creating a level playing field, let alone a little nudge to opt for marriage, will instead only erode the incentive not to marry. Clause 11 is thus a hugely important first step; it is a foundation upon which we must build.

On 10 April 2010, when announcing the detail of the Conservative transferable allowance policy, which was then worth 11.6% of the personal allowance, the Prime Minister was clearly bothered that the package was not more generous. He indicated his wish to see more and, speaking on “Sky News”, he blamed the current fiscal constraints and said:

“Of course I want to go further and I am sure that over a Parliament we would be able to go further but this is a good first step.”

I believe this is a good first step. I am on record in my constituency as asking for this. I have done articles for my provincial press, supporting this option of the married transferable allowance. I believe today we have a chance to move towards that, and I hope this House will decide very positively and clearly on this.

It is clear that all we are going to get in this Parliament is a 10% transferable allowance. Many people will be watching to see the Prime Minister make good his commitment to go further in the next Parliament. Perhaps the Minister can confirm in his response in what ways the Government are committed to doing more in the next parliamentary term to introduce a fully transferable allowance. That must be the No. 1 income tax priority for the next Parliament.

[Mr Burrowes]

I very much welcome clause 11 and not the amendment in the name of the Opposition.

Before coming here I had an interview with children who are taking part in the BBC “Newsround” consideration of Prime Minister’s questions. I did not have an opportunity to ask them about the transferable allowance, but as they grow into adulthood I suspect they will look back on the proceedings here and think it rather odd that we are trying to put down dividing lines and divide along party lines on the basic issue of marriage being recognised in the tax system. They will think it rather odd that people are trying to pit one family relationship against another, when this is a very simple and moderate measure that is recognised across the world.

15:15

Those children will think it extraordinary that we have not previously corrected the situation and gone back to how things were. Historically—up until 2000—marriage was recognised and all we are doing is correcting an anomaly created by the Labour Government. Those children will think our position extraordinary, given that only 20% of people in OECD countries live in a nation that does not recognise marriage or the couple relationship in any way in the tax system, and they will say, “Why aren’t we going along”—as we thankfully will be—“with Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Iceland, Italy, Japan, Korea, the Netherlands, Slovakia, Spain, Turkey, Estonia, France, Germany, Ireland, Luxembourg, Norway, Poland, Portugal, Switzerland and the United States? Why have we for so long—since 2000—not been recognising marriage in the tax system?” The people living in those countries, seeing that marriage is recognised in the tax system, are not saying to themselves, “How dare you Governments recognise marriage! You’re discriminating against me because I am not in a married relationship.” They are just saying it is common sense, because they look at the evidence of international research and recognise the basic well-being for children that comes from being in families supported by marriage.

Not everyone is going to be married but everyone—whether married or not—can recognise, as I think we do across this House, that marriage is an important institution. Why do we not simply recognise it in the tax code?

As the hon. Member for Bishop Auckland (Helen Goodman) mentioned, certainly, we can support marriage in lots of other ways. If we are on the side of marriage, we are going to have to do more than simply recognise it in the tax system. That is not a magic wand that will simply transform the issue of family breakdown, which we are all concerned about and have seen in our constituencies. We need to do much more, such as by investing in marriage support before, when and after people get married. Sadly, sometimes people who have been married for 20 or 30 years or more consider ending their marriage. We need to do more to support people throughout marriage. We are not under any illusions here, but we must not try to put in place any false dividing lines.

If we look at the OECD averages, we have to recognise that we are out of kilter. In this country we are generous to single parents but not to married couples. This is not about creating a level playing field; it is simply about starting a process that other countries started many years ago and ensuring we get back into the mainstream.

Clause 11 is not about judging different relationships. The Opposition seek to pit married couples against single parents, and suggest that if we are for something, we must be against something else. That is not the case. We are simply saying, in a very moderate and measured way, what we are for. We are not saying we are against something, because we are not against other couples who conduct their relationships differently. They have freedom to choose, but this is clearly showing who is on the side of marriage.

The Opposition may say, “No, no—we support marriage and we recognise the institution of marriage,” as the Opposition spokesperson said, but at the end of the day we have to put our money where our mouth is. We know we have a division in respect of clause 11 and amendment 3 and the question is, “What are you putting your money on?” The Opposition are not putting their money on the side of marriage.

The reality is it does not matter what I think. It matters what our constituents think. We have heard a few anecdotal comments such as, “My constituent thinks this” or “My constituent thinks that”, but survey after survey shows that young people in particular, in their droves, aspire to marriage. If they have a look at these proceedings and see who has voted for and against, they will see where people have put their money and who is on the side of marriage, and they will know for sure the position of the Conservatives, the Democratic Unionists and others. Indeed, when a married tax allowance measure was moved by, I think, my hon. Friend the Member for Gainsborough (Sir Edward Leigh) during the passage of a previous Finance Bill, some souls—perhaps errant souls—on the Labour Benches supported it.

I make a call across the Benches: this issue should not divide us along party lines. I say, “Come on; show us where your money is. Do you support marriage?” Then, we will know by the end of today who is on the side of marriage.

[Catherine McKinnell]

We have said very clearly that, rather than giving this tax break to only a third of married couples—some hon. Members say they are in favour of marriage, but only certain types, where one partner in the marriage stays at home—we would put that money towards all married couples and, indeed, all taxpayers by reinstating the 10p tax rate, which would benefit all marriages and all children in those households too.

[Mr Burrowes]

I hear what the hon. Lady says, but I am afraid that will not wash with the electorate. The reality is that the Labour Government abolished recognising marriage in the tax system, and Labour now needs to make up that lost ground and join the mainstream in the other OECD countries and across the world. The Opposition need to recognise that people support marriage.

[Alison Seabeck]

The hon. Gentleman is robustly sticking to his guns. All young people aspire to marriage. I aspired to marriage when I was 17, and I thought that my marriage was going to last for ever, because that is what everyone hopes. Does the hon. Gentleman accept, however, that this tax change will not deal with the fact that people whose marriages break up after, say, five years will lose the tax break at that point? How is that fair, when they are still bringing up their children?

[Mr Burrowes]

As I said, we need to look at ways of supporting such couples to stay together, not least for the sake of their children. Too many children see their parents breaking up. We need to look at the evidence in support of marriage, because these decisions need to be based on evidence rather than on moral judgments. We have heard statistics relating to adults’ and children’s health and well-being, which I will not repeat. Members have talked about public health benefits, and mention has been made of smoking and other issues. Leading research has stated:

“If marriage were a drug it would be hailed as a miracle cure.”

Why are the Opposition so keen to avoid a basic measure to recognise marriage in the tax system? Members should not take my word for all this. Let us go across the Atlantic and hear what Barack Obama wrote in “The Audacity of Hope: Thoughts on Reclaiming the American Dream”:

“Many single moms—including the one who raised me—do a heroic job on behalf of their kids. Still, children living with single mothers are five times more likely to be poor than children in two-parent households. Children in single-parent homes are also more likely to drop out of school and become teen parents, even when income is factored out. And the evidence suggests that on average, children who live with both their biological mother and father do better than those who live in stepfamilies or with cohabiting partners.”

We have heard statistics to back that up today. Barack Obama went on to say:

“In light of these facts, policies that strengthen marriage for those who choose it…are sensible goals to pursue. For example, most people agree that neither federal welfare programs not the tax code should penalise married couples.”

He did not want to go against the Bush tax plan, and he recognised that it contained aspects of the Clinton welfare policies, but he wanted to ensure that proposals to reduce the marriage penalty would enjoy strong bipartisan support. It is a shame, given the bipartisan support for recognising marriage in the tax code across the Atlantic, that no such support exists here. We should learn the lessons and take a leaf out of the book of Barack Obama.

I mentioned that the children who were interviewed earlier for BBC “Newsround” would have been confused as to why anyone would disagree with this basic measure. Let us look at the recent history, since 2000, when marriage was not recognised in the tax system. We have heard many of the reasons behind the brokenness of Britain under Labour. One was the lack of recognition of the importance of marriage, not so much culturally as financially. That has certainly played a part, which is why there is a commitment at the heart of Conservative policy to reverse the 15 mistaken years of a system that did not recognise marriage.

One of the criticisms of transferable allowances for married couples is that they amount to giving a few privileged people a bribe to get married. It has been suggested that we are being discriminatory, but where is the discrimination in the tax system? According to the Institute for Fiscal Studies, the couple penalty facing those considering whether to marry is significant, at £44.70 a week, rising to over £85 per week for couples with children under 16. It is that group who have been discriminated against for many years. Our limited but important transferable allowance provision will begin to erode the discrimination and create a level playing field for those couples. Far from creating any kind of privilege, it will simply remedy an injustice that has been going on for 15 years in refusing to recognise the huge policy benefits of recognising marriage in the tax code.

We have heard that marriage is popular, but it is not popular only with a privileged minority. It is an aspiration that goes across social cohorts, and particularly among young people, 90% of whom aspire to marriage. Many of those people do not take up the opportunity to marry, however, and we need to look at the reasons for that. The transferrable allowance will not mean that all those people will suddenly get married. They will have to find an appropriate partner, for a start, and their marriage will of course be based primarily on love and being well-matched. The bottom line is an issue of social justice, however. Why are there particular barriers to marriage among poorer communities? People in those communities have just the same aspiration to marry, but fewer of them do so. We have to recognise that financial and cultural barriers are involved.

[Sir Edward Leigh (Gainsborough) (Con)]

No transferrable allowance will make anyone get married or stay married, or even encourage them to get married. The whole point is that when one person in a married couple—usually the woman—stays at home to look after the children, they are uniquely disadvantaged by the benefits system. This is simply a question of justice; we are righting an injustice in the benefits system.

[Mr Burrowes]

My hon. Friend is quite right. We are simply talking about justice. The Government need to take a lead in this area. The culture can change in many ways, but one way we can take a lead is through the introduction of a small financial instrument to recognise marriage in the tax system. That is what we are doing today, and it will help to bring about a change of character across the whole country.

[Sheila Gilmore]

For many poorer couples who are living together, whether they are married or not, the benefits system does indeed have a couples penalty. Would the hon. Gentleman be interested in campaigning to end that?

[Mr Burrowes]

If the hon. Lady looks at the Conservative party manifesto, she will see in it a recognition of the couples penalty. Sadly, there was no money left by the previous Government, but we want to do a great deal to correct that legacy of injustice that they left us. The couples penalty is one example among many. The discrimination is increasingly happening among couples with children, and the transferrable allowance will at least start to right those wrongs.

I am keen to give the House the opinions of others as well as my own. The Institute for Fiscal Studies has clearly demonstrated that the transferrable allowance is progressive, so I invite all those who support progressive policies to join us in the Lobby when we vote on this measure. It was suggested earlier that we are taking a partial view in relation to the IFS, but I understand that about 70% of the benefit will go to those in the lower half of the income distribution. I am not sure whether anyone has yet corrected the comments from the IFS. Anyone who is concerned about family responsibilities should also recognise that this measure does something that has not been done for 15 years—namely, recognising family responsibilities in the tax system.

This is an issue of trust, certainly for the Conservatives, who put this measure in their manifesto and who want to retain the trust of the electorate. This is a vital first step, albeit moderate, towards fulfilling that manifesto commitment. We will also seek to give further recognition to marriage in an increased transferable allowance. We are fulfilling our vow to the electorate, however. At the election, people will look back at this debate and see that the Opposition were not supporting marriage. The electorate will remember that. I urge all Members to support marriage.

15:30

[Dr Thérèse Coffey]

Let us consider the following words:

“I believe in marriage, I believe marriage should be recognised in the tax system. I see this as yes, a start of something I would like to extend further”.

They are not mine; I plagiarised them from my right hon. Friend the Prime Minister. I am surprised that the hon. Member for Bishop Auckland (Helen Goodman), who is no longer in her place, was trying to suggest that the Prime Minister did not support this policy, because it was certainly in our manifesto and he is the person who said that from the Front Bench.

I am not married. Do I feel disadvantaged, as a consequence, that I will not benefit from this transferable tax allowance? No, I certainly do not. I will have a warm heart voting for clause 11 to stand part of the Bill, because I believe that marriage is an important institution at the heart of a strong society, as the Government are indicating, and it has been clear for some time that we wanted to bring forward proposals to recognise marriage in the tax system. We have been hearing about how, “You can only spend the money once”, but the Opposition have managed to spend their version of the bankers’ bonus tax about 11 times. So it is a bit extraordinary to hear some of these comments. As has been said, this is about choices. The choices this Government made in this Budget were to reduce income inequality to its lowest level in 28 years, whether through council tax cuts, or through freezing or cutting fuel duty, as we have done in previous Budgets. This Government are certainly helping families of all models in this Budget.

We debated child care yesterday, and it is right that we start supporting marriage. Some are saying, “Oh, 4 million married couples. You are not helping people.” But of course we are helping 8 million people as a result of this measure, and that is to be welcomed. My hon. Friends will note that the Labour party is committed to reversing this tax transfer. It will come in before the election, so Labour is automatically saying to 8 million people, “We will be putting up your taxes because of our dogma.”

I appreciate that the Front Benchers still need to speak in this debate, Mr Caton. What I want to put across strongly is that there is no arbitrary disadvantage, marriage is a good thing and we should support it. We do the same for people who save, by increasing the individual savings account limit. We do it for people who put into pensions, whom we support with tax relief. We do it for businesses that invest in their businesses, helping to create jobs. That is what we are doing and although only a token amount of money is involved here, it will be very welcome.

[Catherine McKinnell]

Will the hon. Lady give way?

[Dr Coffey]

I was about to sit down, but I would be delighted to give way.

[Catherine McKinnell]

The hon. Lady is making a powerful speech in favour of marriage, but does she not accept that the Government proposal does not recognise two thirds of marriages? Where both partners in the marriage are working to provide for their family, that marriage is not recognised as valid in terms of this policy.

[Dr Coffey]

I do not see that that is the case. Of course the Government recognise those couples who are married or who are in civil partnerships—

[Catherine McKinnell]

They do not.

[Dr Coffey]

They certainly do. This measure is a start. We do not have tons of money, and the fact that resources are scarce has been well pointed out. Nevertheless, we are doing things that reduce the income inequality for families across the country, using the long-term economic plan. It has meant that gilt rates have been able to stay relatively low, which means that mortgage rates have stayed low and that is probably doing more for people than anything else, along with our fuel duty freezes and indeed cuts in previous Budgets. Those kinds of things are helping families, be they married or not.

I appreciate that time is short and others are waiting to speak, Mr Caton. I just wish firmly to say that although I am a singleton—I thought I had met Mr Right 20 years ago, but it did not work out—I hope that every married couple benefiting from this will recognise that at least they can go and have a nice wedding anniversary with a little bit more cash from the Government.

[Sheila Gilmore]

We hear so much in this House about how little money there is and how hard it is, yet certain members of the Government support this measure. It appears that not all do—the Lib Dem part of the coalition may or may not support it; it said it did not previously. We are talking about only a small amount of money, but let us see what it is equivalent to. Many people in this country have been outraged by the Government’s bedroom tax. Even if that makes the savings the Government claim it will, which I doubt, it will save less than the amount this measure will pay out. That is the problem: the Government say that the issue that has to be addressed all the time is saving money, but clearly when it comes to some things saving money is not quite so important. There are priorities, and the Government have chosen to make this policy one of them.

I believe we should be giving particular help to families with children, and not just to couples because they happen to be married. Apart from in respect of the very poorest, I have not noticed any great appetite to do away with the couple penalty that probably does apply in terms of people in the benefits system. But if two people choose to marry, we have an independent taxation system here and they can choose to work or not work, so I do not see where any great penalty is being applied to marriage. For those who have children the situation may be different.

If the Government wanted specifically to help parents who are staying at home with children, perhaps that is what they should have done. This measure does not do that; it helps couples where one person is not working, but it has no relationship with the needs of any children they may be raising. If our main aim is to help people with children and make sure that children are brought up in stable relationships, I cannot see what this measure has to do with that. The reason many relationships break down, whether or not they are marriages, has to do with financial insecurity and the difficulties that causes. Those struggling through a cost of living crisis and those who have lost out because of many of this Government’s policies particularly include the low paid. We can all pick and mix our experts—some hon. Members have cited views of the Institute for Fiscal Studies—but if we really want to help low-paid people, we must examine things such as the proposed tapering for universal credit. We need to examine the structure in place for working people who will be in receipt of universal credit—the replacement for tax credits. Under the current structure there is a serious lack of support for second earners in the family who want to start building up their earnings. We could be looking at such things, including child care help for low-paid families.

Very briefly, let me tackle something that was mentioned by the hon. Member for Peterborough (Mr Jackson). He did not take my intervention, so I will deal with it now, and, as he raised the matter, it must be relevant to this debate. One statement that Government Members are always keen to make is that every Labour Government leave office with unemployment higher than when they arrived, but it is not true. In 1946 unemployment was 2%, and in 1951 it was 1.3%. In 1951, at the beginning of the Tory Government, unemployment was 1.3%, and in 1964 it was 1.7%, so it went up under a Tory Government. Between 1979 and 1997, which was again a Conservative Government, unemployment went up from 5.2% at the beginning to 7.4% at the end, but for 13 of those 18 years, unemployment was above 10%. Therefore, the statement is not true, and it also completely distorts the appalling unemployment record of the Government between 1979 and 1997. I will now sit down and allow others to speak.

[The Temporary Chair (Martin Caton)]

Order. I wish to call the Minister by 3.45 pm at the latest, so I ask the hon. Member for Gainsborough (Sir Edward Leigh) to ensure that he has sat down by then.

[Sir Edward Leigh]

I am grateful, Mr Caton. I apologise for not being here at the beginning of the debate, but I was at the Council of Europe. I wanted to come back here to speak on this measure especially, because I have campaigned for it for many years. This is a very proud moment for our party. We are fulfilling an election manifesto, and I am delighted that at last it will happen. I have no doubt that the party will unite today at 4 o’clock to vote through the measure.

There is no doubt that marriage is the fundamental institution of society. It is the one that contributes the most to the cohesiveness and sustainability of society, and I do not think that anyone disagrees with that. But for too many families, the tax system simply punishes marriage. Why do we have a tax system that does that? It should facilitate marriage. The system has led to numerous social problems that, aside from the obvious human cost, create an undue financial burden on the state. Ultimately, if we promote marriage and support it in the financial system, the state saves money, and we create a happier society. Creating a transferable allowance will strengthen the institution of marriage—that may be only a message, but it is a strong one. It will provide benefits for adults, children and society as a whole.

I am afraid that marriage rates are at an all-time low. The scale of family breakdown as a social problem is increasing all the time. It is estimated that it has cost us between £24 billion and £41 billion to deal with it every single year.

The absence of a transferable allowance obviously makes marriage less attractive to prospective husbands and wives and more costly than it should be for some people. However, that is not the main point. The main point is that we are creating a powerful message that marriage works and it is good for children. As I said in an earlier intervention, a married couple where one partner stays at home is uniquely disadvantaged by the tax system. That cannot be fair.

I agree that policy must be based on evidence, and the evidence is absolutely clear. Regardless of socio-economic status and education, co-habiting couples are between two and two and half times more likely to break up than equivalent married couples. The poorest 20% of married couples are more stable than all but the richest 20% of cohabiting couples. The 2004 Blanchflower and Oswald study in the US and UK shows that the effect of marriage on mental well-being is estimated to be equal to that of an extra $100,000.

A 10-year study of British households found that the health gain from marriage may be as much as the benefit from giving up smoking. The Centre for Social Justice found that those not growing up in a two-parent family were 75% more likely to fail at school, 70% more likely to become addicted to drugs and 50% more likely to have an alcohol problem. We should pay tribute to the Prime Minister, the leader of the Conservative party, for constantly expressing his support for the institution of marriage.

Marriage is even a predictor of survival rates in patients with lung cancer, according to The Independent newspaper. The transferable tax allowance will be in line with international best practice. This is not some way-out wacky idea from the Christian right, but what most countries do. Of the biggest countries in the OECD, it is only the UK, Mexico and Turkey that do not have a transferable allowance. It is only 24% of the population of all the OECD countries that are not benefiting from this transferable allowance for married couples. It is a common idea that is widely accepted all over the world. It works; it is normal; it is good.

The UK is one of the only countries in the OECD not to recognise marriage in the tax system. The comparison between the United Kingdom and the OECD average is telling. The tax burden on the single earner married couple with two children on the average wage in the United Kingdom has increased from being 33% greater than the OECD average to now being 42% greater. Clearly, the problem is growing. Introducing a transferable allowance for married couples will disproportionately benefit poorer families and those in the lower half of income distribution. I am proud of what we are doing and I am proud that at last, this afternoon, we are recognising marriage in the tax system.

15:45

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

It is a great pleasure to respond to the debate. I shall make some remarks on clause 11 and on amendment 3 and address some of the arguments that we have heard in this interesting and passionate debate on a subject in which many right hon. and hon. Members have taken a long-standing interest.

Clause 11 introduces a transferable tax allowance for married couples and civil partners. We have targeted the benefit of the measure on married couples and civil partners with the lowest incomes, when one member of the couple has an income below their personal allowance of £10,500. The clause allows individuals to transfer 10% of their income tax personal allowance to their spouse or civil partner, providing that neither partner is liable for income tax above the basic rate. For the year 2015-16, when the measure comes into effect, the amount of personal allowance that can be transferred will be £1,050, significantly higher than the £750 included in the Conservative party manifesto at the last general election. It is also higher than the £1,000 allowance announced at the autumn statement as a result of the Budget announcement that the personal allowance would be increased even further in 2015-16. That means that more people will now be able to gain from the measure and by a higher amount.

Let me remind the Committee of the purpose of the policy. Marriage is an important institution in this country and I have been struck by the contributions from both sides recognising that point. The hon. Member for Newcastle upon Tyne North (Catherine McKinnell) described marriage as a force for good. We have also recently had a debate about marriage in the context of single-sex relationships and, indeed, the first gay and lesbian marriages took place just over a week ago. In that debate, a variety of views were expressed but it was striking how those on both sides of the argument recognised the importance of marriage. Indeed, the hon. Lady made a powerful and persuasive speech on that very issue in the course of those debates. Whether or not one agrees with the decision that the House reached, the strength of views expressed in those debates makes it clear that people believe in the importance of marriage as a building block of our society. The policy we are debating today is about recognising it in the tax system.

That recognition in itself is not a new idea. People born before 6 April 1935 can still claim the income tax married couple’s allowance, which the previous Government abolished for everyone else from 2000, and marriage is already recognised in the tax system in inheritance tax and capital gains tax. I shall come back to inheritance tax a little later. Marriage is also recognised in the income tax system in most other developed countries, a point that has been made repeatedly this afternoon. In fact, the United Kingdom is the only G7 country not to recognise marriage in the income tax system in some form. Now we want to recognise it more widely in the UK income tax system. That formed part of the Conservative manifesto in 2010 and I am pleased that we have now introduced legislation for that policy.

Let me remind the Committee that that is not the only reason for the policy. It also provides a way of allowing lower income married couples and civil partners to feel more of the benefit from our increases to the personal allowance. As discussed in Committee yesterday, by 2015-16 our successive increases to the personal allowance will mean that a typical basic rate taxpayer will be more than £570 better off than under the previous Government’s plans. That could mean a tax cut of more than £1,000 for a couple, but that is the case only if both partners use all of their personal allowance. If one spouse is a low or non-earner, the couple will be able to benefit only from one personal allowance increase. Let me give an example. By April 2015, one couple with each spouse earning £15,000 will see more than £800 more benefit from the personal allowance increases this Parliament than a couple with one spouse earning £30,000 and the second earning nothing. The policy allows us to change that. It gives married couples and civil partners the opportunity to benefit from the £1,050 of the second unused personal allowance, and thus benefit from the increases to the personal allowance, providing further support to some households with a low or non-earner. That will help just over 4 million married couples and civil partnerships, with each couple gaining up to £210 a year.

Amendment 3, which was tabled by the Opposition, commits the Government to publishing a report on the impacts of the policy within six months of the Finance Bill receiving Royal Assent. I do not believe that such a report is necessary, as there are comprehensive arrangements to report on the impacts of Government policy. First, we have reported the impacts of the clause in the tax information and impact note, which was published on the Government website on 27 March. Secondly, as the Committee will know, the Government believe that the impacts of policies should be considered in the round. The Government regularly produce an analysis of the cumulative impact of changes on households across the whole income distribution. That analysis is published by the Treasury at every major fiscal event, and the analysis at autumn statement ’13 and at Budget ’14 will have included that policy. Thirdly, it is worth pointing out that the amendment requires a report on the impacts of the policy within six months of Royal Assent, but the policy will not be in effect then, so we will not have any additional information or data to analyse. For that reason alone, I hope that the Opposition will not press their amendment.

Let me deal in a little more detail with what the amendment would do. It requires a calculation of the proportion of married couples and civil partners eligible under the policy. We have said that we expect just over 4 million couples to benefit, which means that about 300,000 more couples are in a position to benefit than if we had just increased the personal allowance in line with the retail prices index, which was the approach taken by the previous Government. The 4 million couples who will benefit represent just over a third of married couples. The heart of the Opposition’s case seemed to be that two thirds of married couples will not gain from the policy, so what was the point of it? It is worth explaining how the policy is targeted. First, in 3 million couples, one or both partners are higher or additional-rate taxpayers. Some of them can benefit from the changes to the personal allowance, but if we had a policy that extended the transferable tax allowance to higher and additional rate taxpayers, the Opposition would complain that it was not well targeted and that it should be directed at low-earning households. I think that my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) made the point that the logic of the Opposition’s argument was that we should extend the policy. I know that he takes that view, but it would be rather strange for the Opposition to make that argument.

The second group that does not benefit is the 1.8 million couples in which both partners are non-taxpayers. It is worth pointing out that since 2010 about 350,000 couples have become non-taxpayers because we have taken them out of income tax. It is impossible to provide an income tax cut for people who do not pay income tax. The Opposition argue that what we should do instead is have a 10p rate of income tax, but a 10p rate would not help those married couples either.

[Alison Seabeck]

I have a genuine question for the Minister. Has his Department looked at the question of whether the change would stand up to a challenge in the European courts on the grounds that it is discriminatory?

[Mr Gauke]

There is no reason to believe that the measure is discriminatory. I will address that point in slightly more detail in a moment.

The third category of people who will not benefit is couples where both members are basic rate taxpayers, but those are the households that have benefited most from the very significant increases in the personal allowance that this Government have been able to deliver. One has to look at the overall package and what this Government have done in terms of cutting taxes. I come back to the point that couples with two earners have benefited significantly, more so than couples with one earner, as a consequence of the personal allowance increase.

I mentioned that the Opposition want to use the money to fund a 10p rate of income tax. They have complained in the course of the debate that the benefit is worth only £3.85 a week. This is about sending a signal. The benefit from the new 10p rate, assuming that it were funded from this, would be in the region of 50p a week, and I am not sure that that would change things significantly.

[Helen Goodman]

rose—

[Mr Gauke]

I am short of time so, if the hon. Lady will forgive me, I will not give way.

Let me deal with a couple more points. On support for women, it is worth bearing in mind that of the 3.2 million people who have been taken out of income tax, 56% of the beneficiaries are women, and we have done a lot to help with child care. On the practical points raised by the hon. Member for Newcastle upon Tyne North, only the transferor will need to make an election, which will make it administratively easier for couples. We also want to implement the measure through a digital process, but we recognise the need for support for those unable or unwilling to use that method. HMRC will be properly funded to deliver this policy.

Let me conclude by reiterating the purpose of the clause. It is to reinforce the important institution which is marriage—whether gay, straight or civil partnerships—while also providing support for many households that have not been able to benefit fully from our changes to the personal allowance. I therefore request that amendment 3 be withdrawn, and move that clause 11 stand part of the Bill.

[Catherine McKinnell]

We have had some sincere but variously aspirational speeches from Government Members today, dreaming of a world where marriages are stable and children thrive. Nobody can take issue with the aspiration, but we need to deal with the real world and what the Government’s policy will deliver. It purports to support marriage, but only certain marriages will qualify. Two out of three marriages will get no recognition at all. The policy purports to support children, but five out of six families with children will get no help whatever. It is a dud. It adds complexity to the tax system. Its implementation will add cost both for HMRC and for the employers who will have to deal with the complexity for highly questionable gain.

We will therefore oppose the clause, and we urge hon. Members on both sides of the House, particularly Liberal Democrat Members, whom we know are on our side of the argument on this issue, to vote against the Government’s proposals and for our sensible amendment.

Question put, That the amendment be made.

15:59

Division 249

Ayes: 217

---

Labour: 207
Scottish National Party: 5
Social Democratic & Labour Party: 3
Plaid Cymru: 3
Green Party: 1

Noes: 276

---

Conservative: 268
Democratic Unionist Party: 3
Independent: 2
Liberal Democrat: 1
Alliance: 1

16:13

Proceedings interrupted (Programme Order, 1 April).

The Chair put forthwith the Question necessary for the disposal of the business to be concluded at that time (Standing Order No. 83D).

Question put, That the clause stand part of the Bill.

16:13

Division 250

Ayes: 279

---

Conservative: 269
Democratic Unionist Party: 4
Social Democratic & Labour Party: 3
Independent: 2
Alliance: 1

Noes: 214

---

Labour: 204
Scottish National Party: 5
Plaid Cymru: 3
Green Party: 1

Clause 11 ordered to stand part of the Bill.

New Clause 5

Bank payroll tax

‘(1) The Chancellor of the Exchequer shall carry out a review of—

(a) the possible impact on the bank levy rate of incorporating a bank payroll tax within the bank levy; and

(b) how the additional revenue could be invested to help pay for the first year of a guaranteed jobs scheme for people in long-term unemployment.

(2) The Chancellor must within six months of the passing of this Act publish the report of the review and lay the report before the House.’.—(Cathy Jamieson.)

Brought up, and read the First time.

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

I beg to move, That the clause be read a Second time.

[The Temporary Chair (Martin Caton)]

With this it will be convenient to discuss the following:

Amendment 1, in clause 112, page 94, line 1, at beginning insert—

‘(1) Before bringing forward any further reform of the bank levy rates system, the Chancellor shall lay before Parliament a report considering the impact on the total receipts paid to the Exchequer since 2010 by—

(a) UK banking groups;

(b) building society groups;

(c) foreign banking groups; and

(d) relevant non-banking groups.

(2) The report will pay particular attention to receipts from—

(a) corporation tax;

(b) the bank levy; and

(c) bank payroll tax.

(3) A copy of the report in subsections (1) and (2) shall be laid before Parliament.’.

Clause 112 stand part.

[Cathy Jamieson]

It is a pleasure to be here this afternoon to continue what have been interesting debates, as they always are on Finance Bills. I notice that the hon. Member for Peterborough (Mr Jackson) is no longer in his place, but I thought I ought to declare my interest, given his comments to my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) about tofu-eating, Guardian-reading, sandal-wearing people. If I say nothing other than that I am a vegan, perhaps Members will see that those comments would have been more aptly aimed at me rather than my hon. Friend, who I am assured is not a tofu eater.

The new clause and amendment build on points that the Opposition have made before, both on previous Finance Bills and in various other debates. New clause 5 would require the Chancellor to review and report on the feasibility of reintroducing a bank payroll tax, otherwise known as a bank bonus tax, and on whether the additional revenue could be used to fund a job guarantee scheme for people in long-term unemployment, along the lines that we have proposed. The new clause and amendment are reasonable and relatively straightforward, and there is no hidden agenda behind them. The Exchequer Secretary will know from previous Finance Bills and other debates that I always make reasonable suggestions, and I wish to explain why we believe that the new clause is the right approach at this time.

To put the matter into context, nearly 1 million young people are unemployed, and the time is right to do something about that by repeating the tax on bank bonuses to fund a compulsory jobs guarantee for every young person who has been out of work for more than 12 months. We have been clear that they would have to take that job, or they would lose benefits. The bank bonus tax would help to fund the first year of such a guarantee. As I have said, there are a large number of long-term unemployed people, and the guarantee would help to ensure that not just young people but those over 25 who had been out of work for two years or more got back into work. I will come on to why that is so important, but we believe that the bank bonus tax, coupled with our plan to change pension tax relief, would ensure an annual revenue stream to fund that policy throughout the next Parliament.

I was expecting that Government Members might raise a particular query at this stage, but I will save them the trouble of intervening by saying, for the avoidance of any doubt, that the compulsory jobs guarantee is the only policy that we intend to be funded by the bank bonus tax and the proposed changes to pension tax relief.

Let me give the context of the previous bankers bonus tax—the bankers’ payroll tax, as it was called at the time. Despite comments that Government Members often make, it is generally acknowledged that the banking system survived the financial crash in 2007-08 largely due to the significant support that it received from the taxpayer. Even today, according to the New Economics Foundation, the banks deemed too big to fail continue to receive pretty generous taxpayer support. Barclays, the Royal Bank of Scotland, HSBC and Lloyds enjoyed combined savings of £37.7 billion in 2012, because the financial markets deemed them to big to fail. Arguably, that has left some smaller banks and new competitors at a disadvantage, because they cannot enjoy the subsidised borrowing rates of the big four. Notwithstanding the changes that have been made, about which I will say more, the banking system arguably remains too concentrated and potentially risky. The reality—the Minister and others will be well aware of it—is that, if there is another problem in any of the banks, or another financial crisis, taxpayers would bear the costs of the bail-out.

16:30

Given the level of taxpayer support received by the banks in the previous financial crisis, it was clear that the imposition of some form of taxation was both necessary and justifiable in order to see a return for the taxpayer. The 2009 bank payroll tax—the bankers’ bonus tax—was intended to do that. It was intended to secure something back for the taxpayer, but it was also intended to be a signal to prompt behavioural change in the banks.

When the then Chancellor announced the payroll tax in his pre-Budget statement in December 2009, he made it clear that it was a special, one-off levy of 50% on any individual discretionary bonus of more than £25,000. The legislation to introduce it was included in the Finance Act 2010, and agreed with cross-party support, including, as I understand it, from the then shadow Chancellor, albeit grudgingly—perhaps an hon. Member will correct me on that. Initially, it was estimated that the tax would generate revenues of just over £500 million but, in fact, it raised £3.5 billion. That funding was used for a range of measures, including helping the unemployed get back to work.

Hon. Members might ask why we now need another bankers bonus tax. It is worth recalling that the Labour Government introduced a voluntary code of conduct for the banks. A number signed up very quickly, but others took longer to come to the conclusion that they ought to do something. We have since had separate banking commissions, and the recent Financial Services (Banking Reform) Act 2013, which was debated at some length. It is fair to say we reached agreement on some points, but the Opposition believe that the Government, at various stages, continued to duck the radical banking reform that was needed. We were disappointed when the Government did not initially back a number of Opposition amendments in the Commons, but some changes were made in another place.

It is also fair to say that, despite some of those changes and the positive noises that have been made—like other hon. Members, I meet many people from the banks in the work undertaken in Committee and the Chamber—the evidence, certainly as far as members of the public are concerned, suggests that the banks have not entirely changed their ways as we might have hoped. That has a number of implications for their credibility. Many people even in the banking world accept that. They accept that they have some considerable way to go to show the public that they have learned their lessons and changed their approach to reward and remuneration—they know they have much more to do.

Without wishing simply to list the problems, it is salutary to remember recent scandals and the implications of them for people, including the mis-selling of interest rate swaps, which affected small businesses. Small businesses thought they were doing the right thing in trying to mitigate risks such as fluctuations in foreign exchange rates, but the largest banks have had to put aside more than £3 billion to provide against compensation claims by customers, which shows how serious that was.

[Mr John Redwood (Wokingham) (Con)]

Will the hon. Lady remind hon. Members how much she wants to raise from the tax in the first full year? What impact would it have on banks’ capacity to lend?

[Cathy Jamieson]

I will come to that. In discussions I have had with banks they say that they want to lend and have the resources to do so, but some of the schemes have not necessarily encouraged people to come forward and have not been as successful as they might have wished. I have also heard the criticism from some banks, not all, that perhaps another levy or a different approach to the bankers bonus tax would have implications for capitalisation of the banks and so on. However, when we look at the scale of some of the bonus pots, it is difficult to make the argument that the money will not be there. The money appears to be there in some instances for excessive remuneration and bonuses, rather than other schemes.

Compensation costs for the mis-selling of payment protection insurance—the PPI scandal—have now reached £22 billion, an astonishing sum, with Lloyds alone incurring compensation costs not far short of £10 billion. Significant fines have been imposed on Barclays, RBS, Lloyds and Deutsche Bank for attempts to rig LIBOR, doing huge damage to the banks’ credibility and showing how important it is to change the culture and behaviour. That change has been much talked about, but has yet to be delivered entirely.

I am not trying to bash the bankers, as it is sometimes portrayed. I well understand the difficulties faced by front-line staff in the banks—the people in the lower tiers of the management system. They operated in and had to comply with the prevailing culture, and were set particular targets and given sales incentives. When we look back at that approach, we can begin to pinpoint the move away from the notion that the bank was there to look after people’s money, both individual depositors and local businesses, towards the retail culture, in which the emphasis was on selling and making profits without, in some instances, due care and attention to fiscal responsibilities and duties to the customer. I hope that changes brought about by recent legislation will see an end to that culture. Many of the banks are talking about that, and it will understandably take time, but we need the nudges, the pressures and the reminders, not just from the regulators, but through public opinion. Unless a watchful eye is kept on the banks, the change in culture will not necessarily succeed.

Despite having racked up billions of pounds in fines, several of the big banks still proposed significantly higher bonuses for 2013—the latest year for which figures are available—than for the previous year. They went up 10% to £2.4 billion at Barclays; up 8% at Lloyds to £395 million; and up 6% at HSBC to £2.3 billion. RBS, which is 81% owned by the taxpayer, has also announced a bonus pool of £588 million this year. I know that some of the banks claim that their overall bonus pool is coming down, but for the ordinary person in the street the figures are more than they would ever hope to win in a lottery in their wildest dreams, never mind expect to earn in the course of a year. They also find it astonishing that the banks might seek to breach the EU cap on bankers bonuses. It is difficult to understand why people who are paid in excess of £1 million, and have a range of other benefits, seek bonuses of twice their annual salary.

[Bob Stewart]

One consequence of bonus payments is that the Treasury, presumably, gets 40% of them, which is a bonus for the Exchequer. Or have I got that wrong?

[Cathy Jamieson]

I will come on to that point, and on to corporation tax, when I speak in more detail about why we want a review of the bank levy. I hope Government Members understand why we think it is important to have a review and to consider the implications. I started by saying that we are taking a relatively mild-mannered approach, with no demand, as is sometimes made, for something to happen immediately. We are saying, “Let’s look at the figures, let’s look at the implications, let’s look at what can be done in the round, and let’s have the Government do that work and bring it back for further discussion.”

To go back to the hon. Gentleman’s point, the figures compiled by the Labour party suggest that the cut to the 50p tax rate saw an estimated 2,714 bankers who earn more than £800,000 share a £98.5 million windfall—an average tax cut of £36,300 each. I just make that point in relation to the notion that the Treasury will somehow get the yield from that.

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

Would my hon. Friend like to comment on why the gap—which I do not think, from their policies, Government Members understand—between the top and the bottom matters? Overwhelming evidence shows how harmful it is to society that the gap between rich and poor is increasing.

[Cathy Jamieson]

My hon. Friend makes an important point and it is important to recognise it. I made the point that this is not about bashing the bankers per se. The front-line staff who operate call centres and other places have not seen their living standards rise as quickly as they might have wished. Those on the minimum wage or the living wage, who aspire to improved employment opportunities if they were available; those on zero-hours contracts; those who work part time but would prefer to work full time; young people taking any job, even if it is a stop-gap until they find one that suits their qualifications and aspirations—they are the ones who find it most difficult to understand why the banks have not changed their culture. It appears to them that in some instances people were being rewarded not for success but for failure, and that they could not aspire to have their own success in their own jobs rewarded. It is also fair to say that in some ways the financial services sector was slightly better protected from the wage freezes and so on than manufacturing and other sectors in industry. I absolutely understand my hon. Friend’s point.

No Government Members are seeking to intervene at this point, so I can only assume that they heard what my hon. Friend said and agree that this is a very important point in considering how to take things forward. As she suggested, ordinary people, particularly young people, are still dealing with the legacy of the financial chaos caused by the banks, and with the cost of living crisis that has been made worse by the policies of this Government. To return to her point, real wages—I will say it again, even though I know it has been repeated on numerous occasions in the course of these debates—have fallen by £1,600 since 2010. That is a huge amount of money for those on the lowest incomes. That may not have an impact on those who received the average tax cut of £36,300, but it certainly has an impact on ordinary people who are trying to do the best for their families.

16:45

It is worth repeating the figures from the Institute for Fiscal Studies. Families will be £974 a year worse off by the time of the next election, which will be a real problem for people who are doing their best to look after their children, keep a roof over their heads, maintain a decent standard of living, and ensure that their kids have the same things as their schoolmates and other friends. These people are not necessarily leading lavish lifestyles; they are simply trying to get by without getting into debt. Some are even trying to put aside a small amount of savings for a rainy day, but many who have done that are now finding that it has not just rained but poured, that their savings are gone, and that they are literally living from one week to the next. I do not need to repeat everything that has already been said about those who are struggling most and are resorting to payday lenders, and the increasing number of people who are using credit cards to pay their utility bills and buy household items that all of us here take for granted.

[David Mowat (Warrington South) (Con)]

There is a perfectly good case to be made for reducing the difference between high and low salaries, and the hon. Lady is making it. What I do not understand about Labour’s policy is that it seems to be concerned with variable pay but not with fixed pay. Labour Members appear to be quite sanguine about a pay level of £2 million a year, but not about a pay level that consists of a £1 million basic salary and a £1 million bonus. That strikes me as rather odd.

[Cathy Jamieson]

I think that a separate debate could be had about pay levels overall, but for the purposes of the debate on new clause 5, we are focusing specifically on the question of bonus payments. It has been argued that if we follow this line the banks will find an increasing number of ways of paying bonuses, such as deferring them, and we have not said that is necessarily a bad thing. However, for the purpose of longer-term economic stability, it is surely better for people not to be rewarded for failure, but to be held to account over a longer period.

[David Mowat]

Of course that is right, but if we are trying to reward people for success, it seems logical to assume that variable pay provides a better and more valuable way of doing that than very high fixed pay. I do not understand why the Labour party is so relaxed about very high fixed pay but wishes to tax variable pay, which can be associated—I agree that this is not always the case—with success or failure.

[Cathy Jamieson]

When the last Labour Government introduced a bank bonus tax, one of the issues that we considered was behavioural change, but that behavioural change has not come about in the way that we might have expected.

Let me return to our proposal that these funds should be used to return 900,000 long-term unemployed young people to work. The rate of long-term unemployment has almost doubled since 2010. Government Members talk of the number of jobs that have been created for people in their constituencies, but the fact is that in most constituencies young people are out of work for extended periods—in some instances, for more than a year. A year in the life of a young person can make all the difference to the extent to which that young person will succeed in later life. We all know that if young people do not have an opportunity to enter education, employment or training when they leave school, that can have significant implications for their earning capacity and ability to look after themselves and their families in later years, and indeed can have a number of long-term implications for the state.

[Mrs Glindon]

The cuts in the bank levy and corporation tax over the last three years have cost the country nearly £3 billion. Given what that £3 billion could have done for the young people my hon. Friend is describing, it is a disgrace that it was not collected.

[Cathy Jamieson]

I am sure that, like me, my hon. Friend meets young people every day who are desperate to get into employment, and understands absolutely what additional funding would do to help that happen. Like many other Members, I organised a jobs and employment fair in my constituency recently, and it was humbling to see the number of young people standing outside the hall queuing up before it opened in the morning in the hope of obtaining an interview and the opportunity to put themselves forward to the employers who were there either for an apprenticeship or even for part-time work—anything to get them off the dole queues. If we look at what we could do through this bankers bonus tax to support those young people, I think it is clear that is well worth introducing.

Unlike the Government, we are not willing to sit back and do nothing while ordinary people are struggling with the cost of living crisis. That is why we are calling on the Chancellor to publish a report on the feasibility of reintroducing the bank payroll tax and using the proceeds generated to fund what we have called a compulsory jobs guarantee.

It is important to stress a point I made earlier: under the scheme we are proposing every young person out of work for more than 12 months would be guaranteed a job, and they would take that up or they would lose benefits. So there is both the carrot and the stick, because we think that is important.

[Guy Opperman (Hexham) (Con)]

I have been listening to the hon. Lady’s argument and so I took the trouble to check the JSA claimant levels for her constituency: the number of 18 to 24-year-old JSA claimants is down 20.7% and claims of duration of over 12 months—the long term—are down 12.1%. Surely that disproves her argument that the figures are going up:

[Cathy Jamieson]

I note that the hon. Gentleman did not quote the long-term youth unemployment rate for my constituency. He is looking at the overall long-term unemployment rates, and in my constituency, which I have lived in for most of my life, I have seen what has happened in relation to people who have been unable to secure permanent full-time employment. I have seen the young people who have been unable to get the apprenticeships they so desperately want. I also know, from work I did in the past—I did have a life before I came into the hallowed halls of this place—with young vulnerable people, the importance of trying to support them into employment. I know, too, that many young people right across the UK are in the same situation: they are desperate to get into employment; they need the help to get there; they need us to be on their side. I therefore cannot for the life of me understand why those on the Government Benches would want to vote against bringing forward a report to look at this in more detail.

[Guy Opperman]

rose—

[Cathy Jamieson]

Perhaps the hon. Gentleman can explain to me why he does not support the idea of bringing forward this report.

[Guy Opperman]

Does the hon. Lady not accept that things like traineeships, which are the greatest passport into apprenticeships and jobs, are the true best way in which to train up our young men and women so they can then obtain the jobs and apprenticeships she is so laudably seeking?

[Cathy Jamieson]

I have no difficulty with the idea of getting young people into any form of education, employment, traineeship and so on, but we have to ensure that that is available to the young people who are out of work for a lengthy period as a priority, because we know that the longer young people are away from the jobs market, the more difficult it is for them to get back in, and I do not see that the hon. Gentleman’s point is in any way incompatible with the idea of bringing forward a report to look in more detail at how this could work and how the funding would be used.

[Debbie Abrahams]

I should like to make a quick point about the evidence that links entry-type jobs to future career progression. That evidence is weak, so my hon. Friend is right to say that a sustained approach needs to be taken. Is she also aware that a Prince’s Trust report on long-term youth unemployment shows that one in five young people who are long-term unemployed feel that they have nothing worth living for? Long-term unemployment has a direct effect on finances, but it also affects how young people view themselves in society. The implications of that are—

[The Temporary Chair (Martin Caton)]

Order. This is an extremely long intervention.

[Cathy Jamieson]

My hon. Friend was making a valuable point. I am well aware of the excellent work being done by the Prince’s Trust. Many young people who felt that they had very little hope have been given hope through their involvement in that work. It has given them confidence, skills, training and, in many cases, an opportunity to get their first job, so that they can start earning and contributing to society. That should be our aim for all our young people.

I therefore hope that the Government will agree to our proposal for a report. We believe that the scheme would cost about £1.9 billion. As I have said, the cost would be met in the first year by the tax on bonuses and by the reduction in the rate of tax relief available to those earning more than £150,000 a year. Those measures should generate more than £2.5 billion, and the annual revenue generated by the changes to pensions tax relief would fund the jobs guarantee throughout the next Parliament.

We have consistently argued for the reintroduction of the bankers bonus tax, to ensure that the banks fulfil their obligation to the taxpayer by supporting jobs and growth in the economy. That is why we are calling on the Government again today to stand up for the taxpayer, and for those people who are desperate to get into work, including young people and the long-term unemployed. We are calling on the Government to send a clear signal to the banks by supporting us today.

Amendment 1 to clause 112 relates to the bank levy. This, too, involves a request for a report. In this instance, we are requesting that the Chancellor, prior to implementing any further reforms to the bank levy, should lay before Parliament a report that considers the impact on the total tax receipts paid to the Exchequer since 2010 by UK banks, building societies, foreign banks and relevant non-banking groups. We want the report to pay particular attention to receipts generated from corporation tax, the bank levy and the bank payroll tax.

It is important to set this proposal in context. In the recent Budget, a consultation was announced on the proposed changes to the bank levy. We are concerned that those changes could lead to the bigger banks paying less as a result of the introduction of a band-based system in which the tax of an individual bank would be capped at an upper limit of £375 million. I know that the Government have said that this measure would be cost neutral, but we are not convinced that it would be of benefit. We have made it clear in the past that, when we are in government, we will put in place a bank levy and use the additional funds raised to expand free child care for working parents of three and four-year-olds from 15 to 25 hours a week. Perhaps that is a debate for another day, however. I shall focus on the bank levy.

We have made it clear all along that a bank levy is not a bad idea in itself. As my hon. Friend the Member for Nottingham East (Chris Leslie) has argued in Committee and on the Floor of the House, however, the proposal was unambitious and has been poorly implemented. When the Chancellor announced its introduction in May 2010, he confidently asserted that it would generate more than £2 billion of annual revenues. That is the assertion he has made on several occasions and it has been enthusiastically backed by the Prime Minister.

17:00

In evidence to the Treasury Committee on the 2010 Budget, the Chancellor said:

“When it is fully operational the bank levy is going to raise £2.5 billion and we made it clear that we are targeting a revenue sum rather than a particular rate because we think that is an appropriate contribution that balances fairness with the competitiveness of the UK banking sector.”

In Prime Minister’s questions on 12 January 2011, the Prime Minister said:

“The bank levy will raise £2.5 billion each year once it is fully up and running…we will raise £9 billion compared with his £2.3 billion. Even the shadow Chancellor can work out that 9 is bigger than 2.3.”—[Official Report, 12 January 2011; Vol. 521, c. 280.]

Let me remind the House that in its first two years the levy generated just £1.6 billion a year, which was well below the £3.6 billion generated by Labour’s bankers’ bonus tax and considerably below the £2.5 billion annual target the Government set. [Interruption.] I am not sure whether the Minister wishes to intervene. He seemed to be saying something from a sedentary position.

[Mr Gauke]

I just make the point that one has to examine the net yield from the bankers’ payroll tax, taking into account the revenue that is lost because there are lower receipts for income tax and national insurance contributions. Just to be clear, the number is £2.3 billion.

[Cathy Jamieson]

Yes, I hear what the Minister is saying and I shall deal with some of that in a moment, because I am concerned to ensure that we get all the sums right and reach figures that everyone would agree on. Again, that is one reason we want this report brought forward, because we are now being told that the levy will generate £2.3 billion in 2013-14, £2.7 billion in 2014-15 and £2.9 billion in each of the following three years. I would give way to him again if he were able to give the details, but perhaps it would be more appropriate if he did so his response later, as it may take time to get them. We do not have the detailed figures, the evidence or the workings to show how those figures are arrived at and whether things are on course to deliver them. That is why it is important to get the report we are calling for today.

Let me say something about the problems with the levy as we see them. As I have said and as my hon. Friend the Member for Nottingham East has in previous contributions, the Government’s levy lacks ambition. The argument is that the initial levy was set at a relatively low rate, both by international standards and when measured against the scale of the taxpayer subsidies received by the sector during the financial crisis and thereafter. In discussion of the Finance Bill in May 2011, he said:

“The bank levy is a sensible idea in theory, and we broadly support it. However, the yield suggested in the Bill—only £2.6 billion—is not just small but pathetic by international standards”.—[Official Report, 3 May 2011; Vol. 527, c. 482.]

I will happily give way to the Minister if he wants to comment on the international standards, but again, perhaps he will do so when he winds up.

One other problem with the levy is that its two objectives can be seen as a bit of a paradox or even somewhat contradictory. By setting the levy as a tax on bank liabilities in excess of £20 billion and charging a lower rate for more secure long-term liabilities, the Chancellor was actively encouraging the banks to reduce their exposure by moving towards more stable forms of funding.

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

My hon. Friend has just touched on the central point about the levy: that the Government never had the will to take on the bankers in the first place, as we see if we compare what happened in this country with what happened in the United States. That is why they cannot wholeheartedly support a proper levy on the banks; it is a token levy.

[Cathy Jamieson]

My hon. Friend makes an interesting point. I suspect that if I were to stray into a long debate on what happened in the US versus what happened here, I would see—yes, I do see—Mr Bone’s eye upon me to ensure that I did not yield to that particular temptation. However, I say to my hon. Friend that that could usefully form the subject of another debate at some point, but he makes an interesting point about the will to take on the banks. I want to choose my language carefully because I want to avoid getting into that whole thing of our being seen as aggressively pursuing the banks. I recognise that there are some in the banking sector who understand how badly they got it wrong and who want to see change, but the scale of the problem has not been universally accepted, and nor has the degree of culture change that is required. The Minister has heard Opposition Members talk about that issue many times when discussing other legislation.

Returning to the initial imposition of the levy, the Chancellor also wanted to generate more than £2 billion in annual revenues. One problem was that, as was pointed out earlier, the more the banks changed their behaviour and remodelled their balance sheets, the less money the levy generated. Was the Chancellor unable or unwilling to decide whether he wanted behavioural change or a targeted revenue sum? Was it possible to do both? Some evidence suggests that it was not, because it has not brought in the amount of revenue that he intended.

Not content with devising a levy the dual aims of which are somewhat contradictory, the Chancellor also proceeded to cut corporation tax annually, arguably handing the banks a tax break. In order to ensure that the banks do not benefit from the tax break, the Chancellor has had to increase the levy every time he cut corporation tax. We have consistently raised doubts about the levy’s ability to raise sufficient funds, especially in the context of the cuts to corporation tax. During consideration on Report of the 2011 Finance Bill, my hon. Friend the Member for Nottingham East said:

“The sector will have a tax cut of £100 million in 2011-12, £200 million in 2012-13, £300 million in 2013-14, and £400 million in 2014-15. That is a £1 billion corporation tax cut over this Parliament.”

He continued:

“The Treasury ought to supplement its very modest bank levy plan with the bank bonus tax because it is only fair that those who played such a central role in the global economic downturn make a greater contribution to help to secure the economic recovery by supporting jobs and growth.”—[Official Report, 5 July 2011; Vol. 530, c. 1383.]

I would have thought that that sentiment—that those involved in making some of the decisions that caused the problems have a responsibility to do what they can to secure economic recovery and a change in culture—would be shared by everyone in all parts of the House. A combination of two factors—contradictory objectives and corporation tax cuts—means that the levy has increased on no fewer than seven occasions. It is important for me to lay this out so that the House understands the time scale for what happened with the levy, because it adds weight to our call for a report to consider that in more detail.

Back in February 2011, it was confirmed that the rate would be higher than originally proposed. That was change number one. In March 2011, at the Budget, the levy was increased to offset the effect of the 1% cut in corporation tax and by the autumn statement in November 2011—autumn was already beginning to be stretched as far as we thought possible, although of course, autumn is now in December as far as the Government are concerned—the rates were increased to ensure that tax would raise at least £2.5 billion a year. I think that was a tacit admission that the initial rate was perhaps somewhat timid. In March 2012, at the next Budget, the levy was increased again to offset the 1% cut in corporation tax.

In the next autumn statement, when the autumn had been stretched as far as possible into the first week in December, the levy was increased again to offset the 1% reduction in corporation tax. At the March 2013 Budget, the levy was increased again—guess why: to offset the 1% reduction in corporation tax. In December 2013, again at the autumn statement, in what appeared almost to be a desperate attempt to get somewhere near the £2.5 billion target, the Chancellor increased the levy again and broadened the tax base in an apparent attempt to mitigate the impact of the very behavioural change that the tax is supposed to encourage.

[Jenny Chapman]

Has my hon. Friend done the calculation? I am doing it as she speaks and it sounds as though the Government have raised about £3 billion less than they wanted to from the combined measures.

[Cathy Jamieson]

My hon. Friend makes a valuable point. I stress that we have proposed today that this report should be undertaken and brought to the House so that hon. Members can be fully informed about what has happened, what has been successful, what has not worked and how we can best look to the future. My hon. Friend might well be interested to know that I was about to say that, following the Chancellor’s latest projections for the bank levy, a contributor to the Tax Journal stated that the continued difficulty in raising the expected yield

“should become a lesson in the problems of saddling a new tax aimed at managing behaviour with a fixed revenue target”.

It seems to me and my right hon. and hon. Friends that the Chancellor has not fully learned the lessons, because he is now consulting on wholesale changes to the levy that would lead to the introduction of a band-based system under which the tax of individual banks would be capped at an upper limit of £375 million. As I said earlier, although the Government claim that that will be cost neutral, there is speculation already that it might lead to a tax cut for the banks that pay the larger share of the levy. That issue was raised in a report in The Daily Telegraph that said:

“Last year, Barclays paid £504 million in levy charges, while HSBC paid £544 million, the most of any bank. Under the draft proposals, Barclays’ bill would have been £129 million lower and HSBC’s would have been £169 million less.”

We are struggling to understand whether that is really what the Government intend. Why do they intend to do things in that way? If we do not see the figures or the working and if we do not understand the overall impact of what the Government are trying to do, the only conclusion we can draw is that this is essentially a secret tax cut for some of the big banks that has been hidden away in the Budget. I look forward to hearing what the Minister has to say about that and why it is not sensible to publish the report that we have reasonably requested. Confidence in the banking system and financial services has not been fully restored, and people in the real world will want to know why it is a priority to give such a tax cut to some of the biggest banks, at a time when working people are worse off and banks are still paying massive bonuses—indeed, in some instances, bigger bonuses than in previous years.

17:15

The bank levy has raised billions less than was originally promised. Perhaps the Minister can come clean and explain the impact that the banding will have on the levy revenues from bigger banks in future. Can he guarantee that the proposed changes will not amount to a tax cut for the big banks or, indeed, lead to an overall reduction in tax revenues? We have made it clear that we would increase the bank levy to raise an additional £800 million a year. As I have said, we want that to fund an expansion of free child care places for working parents of three and four-year-olds to 25 hours a week.

When Labour introduced a bankers’ bonus tax, the right hon. Member for Tatton (Mr Osborne), who was then shadow Chancellor, argued:

“The real test of this new tax will be whether it curbs bank bonuses instead of curbing bank lending.”—[Official Report, 9 December 2009; Vol. 502, c. 373.]

While our bankers’ bonus tax met that test, the Chancellor’s bank levy has failed on his own terms, because bank bonuses have escalated, and bank lending to businesses has remained stagnant, despite the need for lending out there, particularly to small and medium-sized enterprises. We have called on the Government to review the bank levy, but they have refused to do so. Given the consistent failure of the levy to raise the projected amounts, it would appear not only that the Government have miscalculated its behavioural impact, but they have failed accurately to predict the impact on the banks of their cuts to corporation tax. I said that there have been seven increases in the levy—every time there was a change in the autumn statement or the Budget, there was a cut in corporation tax. Again, we could have an argument as to whether that was the right thing to do. That does not relate to the new clause per se, but there was hasty scrabbling around to try to mitigate the impact of the measure, and the overall picture was not explained. As far as we can see, the Government have not got their sums right, and we would like to see their workings. It is reasonable to ask the Government to support the amendments and introduce a full and comprehensive review of all taxes levied on the banking sector. The failure of the bank levy to bring in the expected revenue means that effectively, the banks have received a tax cut, despite what the Minister will doubtless claim to the contrary.

Our amendments would shed welcome light on bank taxes with a view to ensuring that banks do not benefit from any further unintended cuts. I hope the Minister will regard as fair and reasonable our requests for information and reports, so that we can take a genuine look at what has happened with the bank levy and examine the figures in detail in the House. I hope he will look similarly at the request for the report on the bankers’ bonus tax. I accept that we have asked for these things before, and the Government have not seen fit to agree to them, but it is always worth continuing to make the point calmly and reasonably in the hope that they will understand it and respond. I hope they will see fit to do that this time, because that would show that they are willing to recognise that people in the real world want trust in the banks to be restored, and would ensure that the banks are treated fairly and treat the taxpayer fairly. That is why we want to see that comprehensive review. As always, I look forward to the Minister’s response and I hope he will agree to produce the two reports we have reasonably requested

[Debbie Abrahams]

It is a pleasure to serve under your chairmanship, Mr Bone. It is a pleasure, too, to follow my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson). I shall spend a few minutes building on the economic context that she described. Unfortunately, we have seen too much self-congratulation at the glimmers of economic recovery that the country is finally seeing, after three years of a flatlining economy. We need to look at the full picture. This is the worst recovery in 100 years.

The gross domestic product in quarter 4 of 2013 was 0.7%. That is 1.3% below the pre-recession peak in 2008. We would need to grow 1.6% each quarter up to the general election just to reach where we were at the end of 2010. Since 2010, we have had growth of 3.8%, compared with the US, where growth has been 8.4%. UK productivity is the second lowest in the G7 and 20% lower than the G7 average—the widest gap since 1992. Exports were down 4% in the last quarter of 2013 and the trade deficit in December 2013 stood at £7.7 billion. As we know, the Government will have borrowed £190 billion more than planned in 2015. Public borrowing in 2015 will be £75 billion. We know about the promises in 2010 that the deficit would be cleared.

We have been speaking about the implications of the fragile recovery for employment and unemployment. The Government are keen to mention absolute numbers, but the employment rate is still below pre-recession levels and most of the jobs created since 2010 tend to be insecure, part-time and low paid. The proportion of short-term contracts has increased by 20 times to 1.65 million, of which 655,000 are involuntary. The increase in temporary jobs accounts for more than half of the rise in employment. Nearly one in five—that is, 1.46 million people—work part-time because they cannot get full-time work. That is the highest level of underemployment since 1992. Four out of five new jobs are paid below the living wage. Another key issue is the geographical spread of these new jobs. Since 2010, 79% of them have been in London, with only 10% in the nine urban centres outside London. It is hardly a recovery for the whole country, is it?

My hon. Friend spoke in depth about unemployment. I am concerned that the true levels of unemployment are hidden. We have seen a sudden increase in self-employment, which, as I know from my role on the Work and Pensions Committee, has been pushed in jobcentres. There has been a 4% rise in self-employment in the last quarter, and a huge rise in inappropriate and punitive sanctions attached to social security payments since the benefit sanctions regime was introduced at the end of 2012. Members may not be aware that 5% of jobseeker’s allowance claimants are sanctioned every month for at least a month. Half of them do not even know they can appeal against that, let alone that they have to keep signing on to remain on the unemployment register. Five per cent. of 1.17 million JSA claimants equates to 58,500 people; we can get the picture from that.

A constituent came to see me who was a special needs teacher who had been made redundant in his late 50s. It had been suggested to him that he become a bingo caller, but he had to travel 70 miles to do that. There is real deskilling of a skilled work force, along with graduates undertaking non-graduate-level jobs. My hon. Friend mentioned the 900,000 young people who are long-term unemployed. A recent report talked about a hidden talent pool of young people. A total of 2.46 million—two in five—young people are unemployed, inactive, underemployed, in a voluntary job, in a Government scheme, or a graduate in a non-graduate role. It may be described as hidden talent, but I would call it a waste of talent.

As I have said before, the impact on these young people cannot be measured only in financial terms. The long-term implications for their future are very significant. A recent report by the Prince’s Trust showed that one in 10, or 100,000, unemployed young people believe they have nothing to live for, and that increases to one in five of those who have been long-term—

[Alison McGovern (Wirral South) (Lab)]

My hon. Friend is a respected member of the Work and Pensions Committee, so is she aware, as I am, that the DWP published its own report on the future jobs fund showing that it did tackle some of the crisis of self-respect and self-esteem that she is talking about?

[Debbie Abrahams]

My hon. Friend makes an excellent point. Yes, we need to be very clear about the interventions and programmes that can make a meaningful difference. I am sure that what we are suggesting in place of the youth contract, which is clearly ineffective, would fit the bill.

The report said that one in five young people who were long-term unemployed felt that they had nothing worth living for, and one in three felt suicidal. There is a moral imperative to act, not just an economic one. We cannot continue like this—it is completely unfair on the lives of these young people, in particular.

All this is happening at the same time as the top rate of tax has been cut for people on incomes of more than £150,000. As we have heard, bank bonuses are increasing again. Top-to-bottom pay ratios for the FTSE 100 stand at 300:1. We look at this in the context of the average family really struggling, with wages down by £1,600. The IFS has shown that since 2010 the average family has lost income of £974 a year.

The recent Oxfam report, “A Tale of Two Britains”, highlighted the growing gap between rich and poor, whereby the five richest families in the UK are wealthier than the bottom 20%, equating to 12.6 million people. Rafts of reports from the Equality Trust and others describe this situation. That gap matters, because overwhelming evidence shows that society as a whole benefits from more equality through better life expectancy, mental health, social mobility and educational attainment, and reduced crime—everybody gains. There is international evidence to support the existence of all these benefits.

I launched an Oldham fairness commission last year, to tackle inequality in my constituency. The commissioners are looking at inequalities in education, employment and income. We find it unacceptable that, in this day and age, someone who is white, able bodied and male is more likely to be in work than someone else with the same qualifications, and that a third of the jobs available in Oldham are paid below a living wage. That is not the way in which to achieve a sustainable economic recovery.

17:30

If we address inequalities and the gap between the rich and the poor, our economy will benefit. Overwhelming evidence from the International Monetary Fund and Nobel prize-winning economists such as Joseph Stiglitz shows that inequality causes financial instability, undermines productivity and retards growth.

New clause 5, which seeks to publish the receipts from the existing bank levy scheme, would help to show exactly how much we are contributing to narrowing the gap between the rich and the poor. We believe that it will show, yet again, the Government’s lack of commitment. They are not just indifferent; they are propping up the status quo.

Our jobs guarantee will give hope and opportunity to young people and those aged 25 and over who have been unemployed for more than two years, whom this Government have clearly abandoned. We will work for a one-nation Britain, not the two Britains we are enduring under this Government.

[Alison McGovern]

rose—

[The Temporary Chair (Mr Peter Bone)]

Order. It would be helpful if the Minister was on his feet no later than 5.50 pm.

[Alison McGovern]

I want to discuss the relationship between how the banks and bank bonuses are taxed and young people. I think that anyone who has just listened to the speech by my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) would agree that the two issues are intimately connected, even if they did not believe that to be the case in the past.

Levels of inequality in our global economy are unsustainable, but Members need not take just my word for that. It is not just me who thinks that inequality is a significant problem: no less than Christine Lagarde of the IMF has said that inequality is a huge challenge and a risk for the world’s future. If even the IMF, which is not known for taking lefty positions, is able to conclude that we must tackle inequality, I think that this House should be able to accept the challenge and seek to find ways to address the significant inequality in our own country.

The top of the economy in the financial services sector is fragile in terms of income distribution. Let me make a few remarks about the banks. The hon. Member for Warrington South (David Mowat), who, unfortunately, is no longer in his place, commented earlier on the issue of fixed versus variable income, which I will turn to later. Surely anybody who is trying to learn the lessons of 2008 would say that the financial services sector still has an unsustainable bonus culture and perhaps that is true of other parts of the economy as well.

Would not anybody who worries about that risk conclude that banks and the financial services sector rely on an implicit state guarantee, given what had to be done to ensure the economy kept working and people could still take cash out of ATMs? Would not anybody conclude that we must take very seriously the contribution to taxation that banks are expected to make, given the Government’s reliance on the financial services sector? I certainly think that that is the only obvious conclusion to draw from the global financial meltdown and the serious failures of the past. Banks cannot be allowed just to make their own decisions; we must take very seriously both the regulatory framework around the financial services sector and the contribution that the sector is expected to make to the Exchequer.

The corporation tax cut benefited a whole range of companies in the financial services sector, but small and medium-sized enterprises—especially those in my constituency that are struggling with, and wanting action on, business rates—find it hard to take or to understand why the Government have not looked more seriously at what banks are expected to pay to the Exchequer. I think the Exchequer Secretary said earlier that, by his calculation, the bank levy has brought in a net £2.3 billion.

[Mr Gauke]

That is the payroll tax.

[Alison McGovern]

For the purposes of Hansard, I thank the Minister for correcting me from a sedentary position. In any event, it is really evident that the bank levy is not good enough. We heard repeated claims about how much it would bring in, but it has failed to reach those levels. The public do not understand why that is, and they want us to take very seriously the position of the financial services sector, given the impact that we all felt and that people are still feeling from the events post-2008.

Bank bonuses are the best representation of the culture that led to the economic meltdown in 2008. A great deal of work on the culture has been done by Members of this House—I am thinking of my right hon. Friend the Member for Wolverhampton South East (Mr McFadden) and others who served on the Banking Commission—and we do that work no service if we give up the idea of a bank bonus tax.

The problem with bank bonuses is the clear connection between the fact that compensation balloons so greatly, and depends on a big bonus at a certain point in the year, and extraordinary risk-taking. A kind of groupthink develops in an organisation, with people forgetting their responsibilities to those outside it. The insider culture accepts reimbursements that are far and away above anything that people in society ordinarily expect. We in this House, if nowhere else in our community, should understand the danger of such groupthink. Have we not all seen it at times, and do we not all want to end it? Therefore, we should not give up the idea of a bank bonus tax.

I remind hon. Members of Martin Wheatley’s recent comments:

“Incentives are used ideally to reward ‘good’ performance. However, as we saw with the mis-selling scandals which have had such a profound impact on financial services…a poorly designed inducement can result in consumers ultimately being worse off.”

Even if we were not worried about the impact on the Exchequer of the bank bonus culture—given the responsibility to ensure that the financial system can continue to do business no matter what—we should absolutely be concerned about the impact on consumers. In the past, consumers of financial services often had a poor deal. The mis-selling of endowments and, more recently, payment protection insurance caused massive problems for families in our country. We cannot allow a culture to persist in which there are incentives that, as Martin Wheatley said, may result in consumers ultimately being worse off, as that would be very dangerous. That is why our amendment probes the issue and seeks to find a way to consider whether more could be done, which is important.

Although I am the first to say that simply bashing one part of our economy—financial services—is not the approach we should take, far from it, it does not mean that inequality is not a serious issue. I do not think that the inequalities in the financial services sector will pass by the people who earn the minimum wage cleaning a local bank branch and who are worried about whether that branch will be there for much longer or those who, if they are lucky, earn the London living wage from working in security or in other ways supporting banks in the City of London. We must address that inequality for people who work in banking and in the financial services sector.

Finally, I will follow up on the remarks on young people made so ably by my hon. Friend the Member for Oldham East and Saddleworth. We cannot lose sight of the difference between a jobs guarantee and work experience. We learned that lesson in the 1980s, when youth training scheme-style programmes were a revolving door for young people, who went in and out of businesses with no proper jobs. That was not fair then, and it certainly is not fair now. The future jobs fund worked with organisations such as Age Concern and other good third-sector organisations in my constituency to provide work opportunities that often led not only to growth in a young person’s skills, talents, self-esteem and self-respect but to growth in the organisations themselves.

I point Members in the direction of a report by the International Labour Organisation from as long ago as 2010 that compared a range of interventions for young people without work. The report said that the last Labour Government had a huge amount of which to be proud, such as the new deal for young people, the future jobs fund and the efforts to get people into work. I believe absolutely that we cannot offer young people only interminable work experience in which they turn up to the jobcentre week after week to be sent on CV writing courses or to gain work experience that does not get them a proper foot in the door. We need a true jobs guarantee so that people know that, however difficult the circumstances in which they find themselves, the situation will come to an end. We need to offer young people that guarantee, and of course we would expect them to take it up without much choice—[Interruption.] If Members wish to intervene, they are welcome to do so.

We still have insufficient numbers of apprenticeships, and we have genuine worries about the quality of some apprenticeship programmes. I am sorry if I repeat this so often that I bore Members—I try not to bore Members—but the issue is vastly important. The prevalence of zero-hours contracts in our society affects young people more than anyone else. Young people are much more likely to have less experience, which means that they cannot get a proper full-time, permanent job with the hours that they want. Of course students might want flexible hours that they can take up when they want, but that is not the case for many young people across the country who feel that they have no alternative but to accept a zero-hours contract.

I am afraid that Conservative Members have swallowed the Treasury’s rhetoric about the number of jobs that have been created and the claimant count, without learning the lessons of their economic policies of the past. Of course the claimant count will fall if there is a sanctions regime that makes going to the jobcentre so difficult and unhelpful that people will do anything not to claim.

17:45

I worry about the people who are totally disengaged from the system and about those who are engaged in the system, but who feel so unsupported that they are compelled to take jobs that are insecure and that do not provide the hours that they want. Since I started the zero-hours contract campaign, countless people have got in touch with me to say that they have taken a job on the basis that there would be 30 or 40 hours a week, but that it turned out there were 10 or 12 hours a week. That under-employment is showing itself in the difficulties that small businesses are facing on high streets up and down the country.

I could talk at length about the insufficiencies of the Work programme. It causes problems to have such huge contracts and not to tailor the programme properly to the local area. Again, there are lessons to be learned from the past. We need to work with other organisations. For example, before the Work programme, the football clubs in my area had good working relationships with the local jobcentre and had schemes that were really working to get people’s confidence up, get them the right skills and get them into jobs. The Work programme swept all those arrangements away. We have seen no evidence of the claim that Ministers made before the Work programme started that small, specialist organisations would still be involved in back-to-work programmes. That has not happened in the way they said it would. That is a big problem, given how unemployment clusters.

We must look at what is going on in our country. The north-east is suffering desperately from unemployment and under-employment. A careful, tailored approach is needed. That could be led by jobcentres if they were freed from the ministerial diktats from the centre and were able to use their expertise to work with young people to get them into the labour market with proper jobs, thereby starting the endogenous growth in our economy that we so desperately need.

We must not lose sight of the plight of young people when there are, on the face of it, better growth figures. I am extraordinarily happy that we have better growth figures. They will create momentum and help get investment into our country, which is good. However, in the end, economic growth is good only if it means that young people have a real chance in our country. I believe that only Labour’s jobs proposal for young people will resolve the terrible situation that we face.

[Mr Gauke]

It is a great pleasure to serve under your chairmanship, Mr Bone, and to respond to this debate. It is always a pleasure to hear the hon. Member for Wirral South (Alison McGovern) speak. I am tempted to respond to her characterisation of the labour market, which almost suggested that we had lost 1.3 million people from employment over the past four years, rather than increased employment by 1.3 million people, but in the interests of time, I will focus on the bank levy.

Clause 112 increases the rate of the bank levy that was set for 1 January 2014 to 0.156%, which will help to ensure that future bank levy receipts meet the Government targets. I also want to highlight the changes that we are making to the bank levy’s design following an operational review in 2013, which we will cover when we debate clause 113 and schedule 22 later in Committee. The changes will help to simplify the bank levy’s design and ensure that it continues to complement improvements in the regulatory regime.

I wish briefly to provide hon. Members with some background. In the June 2010 Budget, the Government introduced a permanent tax on banks’ balance sheet equity and liabilities, which took effect from 1 January 2011. It is designed to ensure that the banking sector makes a fair contribution that reflects its risks to the UK financial system and the wider economy. Alongside wider regulatory reform, the bank levy also provides incentives for banks to move towards more stable funding profiles, reducing the likelihood of liquidity shocks, which can trigger and propagate systemic banking crises. The Government believe that those overarching policy objectives remain appropriate, and the changes being made in clauses 112 and 113 and schedule 22 are in line with that.

In 2010, the Government set a target of £2.5 billion for annual bank levy receipts. We have since increased that target to offset the benefit of corporation tax cuts to the banking sector since the levy’s introduction. Bank levy receipts have fallen short of the targets to date, largely as a consequence of greater than anticipated deleveraging in the sector in response to regulation and the bank levy’s behavioural incentives. However, the Government have remained clear that the target for bank levy receipts is unchanged.

The banking sector needs to make a fair contribution that appropriately reflects its historical costs and future risks to the UK taxpayer. That is why the rate of the bank levy has increased from 0.075% in 2011 to 0.142% in January 2014, and why the changes being made in clause 112, which were announced in the 2013 autumn statement, will further increase the rate to 0.156%, which will be treated as having applied from January 2014. Based on those changes, the independent Office for Budget Responsibility forecasts that the bank levy will raise £2.9 billion a year from 2015-16, more than £8 billion in total over the Parliament and close to £20 billion in total by 2018-19.

When the bank levy was introduced, the Government announced that they would review its design in 2013 to ensure that it was operating efficiently. In line with that commitment, a formal consultation was published in July 2013. It considered changes to the levy’s detailed design to make it simpler, fairer and more aligned with recent regulatory developments. The consultation ran for 12 weeks and the views put forward helped to inform a number of changes to the bank levy’s design, which the Government announced in the autumn statement. They included the exclusion from the bank levy charge of protected deposits, which we limited to amounts insured under a deposit protection scheme, with effect from January 2015.

Also from January 2015, all derivative contracts will be treated as having a short-term maturity, the relief that banks receive for their high-quality liquid assets will be restricted to the rate applicable to long-term liabilities, and the bank levy definition of tier 1 capital will be aligned with the new capital requirements directive. Specific liabilities arising from the central clearing of derivatives will be excluded from the bank levy charge, which will be treated as having applied from January 2014. Those changes will simplify the levy’s application and help to ensure that it continues to apply consistently to banks of different size, activity and domicile. They will also strengthen the behavioural incentives for banks to move towards more stable funding profiles and more closely align the bank levy with recent developments in the regulatory regime.

The hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) touched upon the redesign of the bank levy. There is no intention to reduce the revenue raised by the bank levy. We are considering allocating banks to different bands on the basis of their balance sheet, equity and liabilities. Each band would correspond with a unique and predetermined charge for the year, paid by every bank falling within that band. We consider that that might provide a more predictable and sustainable model for the bank levy, but we are welcoming views on that as part of our consultation. The changes being considered would have no impact on the forecast yield from the bank levy, and the underlying tax base would remain unchanged and continue to provide incentives for banks to move towards more stable funding.

[Cathy Jamieson]

rose—

[Mr Gauke]

I will give way, but I have very little time left.

[Cathy Jamieson]

I thank the Minister for giving way—I appreciate it given the limit on his time. Will he confirm that his proposal will mean that some of the bigger banks will pay less in bank levy than they have paid previously?

[Mr Gauke]

The Government are consulting on how the measure will operate. The intention is for it to be revenue neutral. Assuming it has some effect, revenue neutral will mean that some banks will pay more and some will pay less. Which ones those will be depends on the precise design, which depends on the consultation.

Amendment 1 was described with customary reasonableness by the hon. Member for Kilmarnock and Loudoun but I will give the customary response, which is that the Government do not consider that there is much to be achieved by accepting it. It would add little to the Bill. HMRC already publishes each year statistics on PAYE, the bank levy, corporation tax and bank payroll tax receipts from the banking sector, although they are not broken down by different groups of banks. The most recent publication—from August 2013—showed that the relevant tax receipts from the banking sector were £21.7 billion in 2012-13.

In the time available, I want to make a point about the bankers payroll tax. In September 2010, the right hon. Member for Edinburgh South West (Mr Darling), the former Chancellor of the Exchequer, said

“it will be a one-off thing because, frankly, the very people you are after here are very good at getting out of these things and…will find all sorts of imaginative ways of avoiding it in the future”.

An attempt to repeat that tax would be a mistake.

I fear that, because of the time available, I do not have time to do justice to Opposition new clause 5. I have set out the reasons why the Government believe it is right to introduce a balance sheet tax as opposed to a tax on bankers bonuses. We see no reason to change that approach. The future jobs fund failed to create sustainable employment. Almost 50% of participants claimed benefits again within eight months of starting a future jobs fund job. This Government are doing much more. We have delivered more than 1.6 million apprenticeship starts so far this Parliament and are making it cheaper to employ young people.

In order to give the hon. Member for Kilmarnock and Loudoun a moment or so to speak at the end, I shall conclude. The changes made by clauses 112 and 113, and schedule 22, will help to ensure that future bank levy receipts meet Government targets while providing a simpler and fairer basis on which the tax applies. I therefore hope that clause 112 stands part of the Bill and urge the hon. Lady not to press amendment 1 and new clause 5 to a Division.

[Cathy Jamieson]

It was a pleasure to hear the valuable contributions of my hon. Friends the Members for Wirral South (Alison McGovern) and for Oldham East and Saddleworth (Debbie Abrahams) on the impact of the Government’s policies on ordinary people.

The Minister referred to my characteristic reasonableness and gave a characteristic response. I will give him the characteristic response from the Opposition—despite his best efforts, I will press the new clause and the amendment to a Division. Both reports are reasonable requests and would be important. I realise that he had a relatively short period in which to respond, but it is disappointing that he does not see fit to produce such reports. He referred to a number of statistics and figures produced by HMRC, and we know of other places where statistics are produced, such as the Office for Budget Responsibility. It would be useful to have all those reports put together in a report for the House to consider.

As I have said, I intend to press new clause 5 and amendment 1 to a Division. I hope that, even at this late stage, the Minister will reconsider his opinion, but I doubt it. I am sure that the Government will give their characteristic response once again.

Question put, That the clause be read a Second time.

17:59

Division 251

Ayes: 219

---

Labour: 205
Scottish National Party: 5
Democratic Unionist Party: 3
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Alliance: 1
Green Party: 1

Noes: 293

---

Conservative: 250
Liberal Democrat: 42

18:13

Proceedings interrupted (Programme Order, 1 April). The Chair put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83D).

Clause 112

Bank levy: rates from 1 January 2014

Amendment proposed: 1, in clause 112, page 94, line 1, at beginning insert—

‘(1) Before bringing forward any further reform of the bank levy rates system, the Chancellor shall lay before Parliament a report considering the impact on the total receipts paid to the Exchequer since 2010 by—

(a) UK banking groups;

(b) building society groups;

(c) foreign banking groups; and

(d) relevant non-banking groups.

(2) The report will pay particular attention to receipts from—

(a) corporation tax;

(b) the bank levy; and

(c) bank payroll tax.

(3) A copy of the report in subsections (1) and (2) shall be laid before Parliament.’.—(Cathy Jamieson.)

Question put, That the amendment be made.

18:13

Division 252

Ayes: 217

---

Labour: 203
Scottish National Party: 5
Democratic Unionist Party: 3
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Alliance: 1
Green Party: 1

Noes: 286

---

Conservative: 244
Liberal Democrat: 41

Clause 112 ordered to stand part of the Bill.

New Clause 2

Air passenger duty: Wales

‘(1) Schedule (Air Passenger Duty: Wales) has effect.’.—(Jonathan Edwards.)

Brought up, and read the First time.

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

I beg to move, That the clause be read a Second time.

[The Temporary Chair (Mr Peter Bone)]

With this it will be convenient to discuss the following:

New clause 6—Air passenger duty: Scotland

‘(1) The Scotland Act 1998, Schedule 5, section A1 (exceptions) is amended as follows.

(2) After “rates)”, insert—

“(1) Air Passenger Duty on all flights that are—

(a) originating from an airport or aerodrome in Scotland; and

(b) not part of a connecting flight from—

(i) a domestic UK airport or aerodrome; or

(ii) a territory specified in Part 1 of Schedule 5A of the Finance Act 1994.”.’.

New clause 7—Rates of air passenger duty (Scotland)

‘After section 30A of the Finance Act 1994 there is inserted—

“30B Scotland rates of duty

(1) This section applies to the carriage of a chargeable passenger if—

(a) the carriage begins on or after the relevant day; and

(b) the only flight, or the first flight, of the passenger’s journey begins at an airport or aerodrome in Scotland.

(2) Air passenger duty is chargeable on the carriage of the chargeable passenger at the rate set by an Act of the Scottish Parliament for the purposes of this paragraph.

(3) The rate of £0 may be set for the purposes of paragraph (2).

(4) Any rate set must not exceed the rate which would apply if this section were not in force.

(5) “The relevant day” means the day appointed as such by an order.

(6) Section 42(4) and (5) does not apply to any order under subsection (5).

(7) An “Act of the Scottish Parliament” means an Act passed under section 28 of the Scotland Act 1998.”.’.

New schedule 1—‘Air Passenger duty: Wales

Part 1

Rates of Duty from 1 April 2014

1 Section 30 of FA 1994 (air passenger duty: rates of duty) is amended as follows.

After subsection (4D) insert—

“(4DA) Subsection (4D) applies if—

(a) the passenger’s journey is a relevant Wales journey; and

(b) apart from subsection (4DB), subsection (2) would not apply to the journey.

(4DB) The applicable rate in subsection (2) applies to the journey instead of the applicable rate in subsection (3), (4) or (4A) (as the case may be).

(4DC) A passenger’s journey is a “relevant Wales journey”—

(a) in the case of a journey which has only one flight, if the flight begins in Wales; and

(b) in any other case, if the first flight of the journey—

(i) begins in Wales; and

(ii) is not followed by a connected flight beginning at a place in the United Kingdom or a territory specified in Part 1 of Schedule 5A.”.

The amendments made by this Part of this Schedule have effect in relation to the carriage of passengers beginning on or after 1 April 2014.

Part 2

Devolution of Wales long haul rates of duty

2 Chapter 4 of Part 1 of FA 1994 (air passenger duty) is amended as follows.

3 (1) Section 30 (rates of duty) is amended as follows.

(2) After subsection (1) insert—

“(1B) Subsection (1) does not apply to the carriage of a chargeable passenger to which section 30B below (Wales long haul rates of duty) applies.”.

(3) Omit subsections (4DA) to (4DC) (as inserted by paragraph 1 above).

(4) The amendments made by this paragraph have effect in relation to the carriage of passengers beginning on or after the relevant day as defined in section 30B of FA 1994 (as inserted by paragraph 4 below).

4 After section 30A insert—

30B Wales long haul rates of duty

“(1) This section applies to the carriage of a chargeable passenger if—

(a) the carriage begins on or after the relevant day;

(b) the only flight, or the first flight, of the passenger’s journey begins at a place in Wales;

(c) the passenger’s journey does not end at a place in the United Kingdom or a territory specified in Part 1 of Schedule 5A; and

(d) if the passenger’s journey has more than one flight, the first flight is not followed by a connected flight beginning at a place in the United Kingdom or a territory specified in Part 1 of Schedule 5A.

(2) Air passenger duty is chargeable on the carriage of the chargeable passenger at the rate determined as follows.

(3) If the passenger’s journey ends at a place in a territory specified in Part 2 of Schedule 5A—

(a) if the passenger’s agreement for carriage provides for standard class travel in relation to every flight on the passenger’s journey, the rate is the rate set by an Act of the National Assembly for Wales for the purposes of this paragraph; and

(b) in any other case, the rate is the rate set by an Act of the National Assembly for Wales for the purposes of this paragraph.

(4) If the passenger’s journey ends at a place in a territory specified in Part 3 of Schedule 5A—

(c) if the passenger’s agreement for carriage provides for standard class travel in relation to every flight on the passenger’s journey, the rate is the rate set by an Act of the National Assembly for Wales for the purposes of this paragraph; and

(d) in any other case, the rate is the rate set by an Act of the National Assembly for Wales for the purposes of this paragraph.

(5) If the passenger’s journey ends at any other place—

(e) if the passenger’s agreement for carriage provides for standard class travel in relation to every flight on the passenger’s journey, the rate is the rate set by an Act of the National Assembly for Wales for the purposes of this paragraph; and

(f) in any other case, the rate is the rate set by an Act of the National Assembly for Wales for the purposes of this paragraph.

(6) The rate of £0 may be set for the purposes of any paragraph.

(7) The same rate may be set for the purposes of two or more paragraphs.

(8) Subsections (5) to (7) and (10) to (12) of section 30 apply for the purposes of this section as they apply for the purposes of that section.

(9) “The relevant day” means the day appointed as such by an order.

(10) Section 42(4) and (5) do not apply to an order under subsection (9).

(11) A Bill containing provision authorised by this section may not be passed by the National Assembly for Wales except in pursuance of a recommendation which—

(g) is made by the Minister of Finance; and

(h) is signified to the Assembly by the Minister or on the Minister’s behalf.

(12) “Passed”, in relation to a Bill, means passed at the final stage (at which the Bill can be passed or rejected but not amended).

(13) Duty paid to the Commissioners in respect of the carriage of chargeable passengers to which this section applies must be paid by the Commissioners into the Consolidated Fund of Wales.”.

5 (1) Section 33 (registration of aircraft operators) is amended as follows.

(2) After subsection (2A) insert—

“(2B) If the Commissioners decide to keep a register under section 33B below, an operator of a chargeable aircraft does not become liable to be registered under this section just because the aircraft is used for the carriage of chargeable passengers to which section 30B above applies.”.

(3) In subsection (3)(b) after “applies”, insert “or, if the Commissioners have decided to keep a register under section 33B below, that no chargeable aircraft which he operates will be used for the carriage of chargeable passengers apart from the carriage of chargeable passengers to which section 30B above applies.

(4) In subsection (7) after “section 33A”, insert “or section 33B below”.

6 After section 33A insert—

33B (1) The Commissioners may under this section keep a register of aircraft operators.

(2) If the Commissioners decided to keep a register under this section, the operator of a chargeable aircraft becomes liable to be registered under this section if the aircraft is used for the carriage of chargeable passengers to which section 30B above applies.

(3) A person who has become liable to be registered under this section ceases to be so liable if the Commissioners are satisfied at any time—

(a) that he no longer operates any chargeable aircraft; or

(b) that no chargeable aircraft which he operates will be used for the carriage of chargeable passengers to which section 30B above applies.

(4) A person who is not registered under this section and has not given notice under this subsection shall, if he becomes liable to be registered under this section at any time, give written notice of that fact to the Commissioners not later than the end of the prescribed period beginning with that time.

(5) Notice under subsection (4) above shall be in such form, be given in such manner and contain such information as the Commissioners may direct.”.

7 In section 34 (fiscal representatives) in subsection (5)—

(a) in paragraph (a) after “33A”, insert “or 33B”.

8 After section 41B insert—

41C Wales long haul rates of duty: disclosure of information

“(1) An officer of Revenue and Customs may disclose to the Secretary of State, the Treasury or the Department of Finance in Wales any information for purposes connected with the setting of rates under section 30B above, including (in particular) to enable the setting of rates under that section to be taken into account for the purposes of section 118 of the Government of Wales Act 2006 (payments by Secretary of State into Welsh Consolidated Fund).

(2) Information disclosed under subsection (1) above may not be further disclosed without the consent of the Commissioners (which may be general or specific).

(3) In section 19 of the Commissioners for Revenue and Customs Act 2005 (wrongful disclosure) references to section 18(1) of that Act are to be read as including a reference to subsection (2) above.”.

9 In section 44 of CRCA 2005 (payment into Consolidated Fund) after subsection (2)(cb) insert—

(cc) sums required by section 30A(15) of the Finance Act 1994 (air passenger duty: Wales long haul rates of duty) to be paid into the Consolidated Fund of Wales,”.

10 In column 2 of the Table in paragraph 1 of Schedule 41 to FA 2008 (penalties for failure to notify), in the entry relating to air passenger duty, after “33A(4)”, insert “or 33B(4)”.

11 The amendments made by this Part of this Schedule have effect in relation to the carriage of passengers beginning on or after 1 April 2014.

12 The rate of duty in force under section (30B) shall not be greater than the rate which would be in force if the section had not been enacted.’.

Clauses 72 to 74 stand part.

[Jonathan Edwards]

Diolch yn fawr iawn, Mr Bone. It is an honour to serve under the chairmanship of the best slow left-arm bowler in the Westminster cricket team.

It is with pleasure that I rise to support new clause 2 and new schedule 1, and I will be pushing for a vote at the appropriate time. The UK Government commission on devolution in Wales, headed by Paul Silk, published the first phase of its report in November 2012, which concentrated solely on fiscal powers. Some 18 months later we are still waiting for an essential part of the cross-party Silk commission recommendations to come to fruition: the devolution of responsibility for long-haul air passenger duty. The original cross-party report recommended that responsibility for APD be transferred to Wales at the earliest opportunity and that the Finance Bill was the appropriate vehicle for doing that. The commission had the 2013 Finance Bill in mind, following the precedent set during the 2012 Finance Bill when APD was devolved to Northern Ireland.

It therefore comes as no surprise that I am here yet again attempting to transfer APD to Wales, as was agreed by all the parties in the commission. I will seek to divide the House and to hold other parties to what their representatives on the commission said and, perhaps more importantly, what their representatives in the National Assembly say back in Wales. I would of course be ecstatic if by some divine intervention their masters here in London listened to them for once and voted in favour of the policies they advocate—I do not hold my breath in much hope.

I will go on to speak about the discrepancies between what the Unionist parties say in Wales and how they vote here on devolving APD. First, let me inform the House a little about the background to the UK Government commission’s recommendation to devolve APD as part of a comprehensive package of financial powers and about the stage we are at now. In short, the cross-party Silk commission recommended that powers over stamp duty land tax, the aggregates levy, long-haul APD, landfill tax and business rates be devolved in their entirety. It also advocated a sharing arrangement for income tax, with Wales having the ability to vary each individual income tax band and rate.

After having been made to wait for more than a year by the London Government to grace us with a response to the commission which they themselves set up, we find ourselves already having debated the Second Reading of the Wales Bill in this Chamber. We expect it to be confirmed tomorrow morning that the whole House will return to consider the Committee stage of that Bill after the Easter recess. Yet the Wales Bill has some glaring omissions. It seems like a long time ago now when, last autumn, the Prime Minister and Deputy Prime Minister swept into the Senedd building in Cardiff, to flashing camera lights and an adoring paparazzi, in order to announce new financial powers for Wales. Very few questioned what exactly was being proposed. Only later did it emerge that the Westminster Government were prepared to accept the cross-party commission recommendations only in part and that they would be ignoring some. That is despite the fact that they had representation on the commission in the form of a commissioner representing the Conservative party and a commissioner representing the Liberal Democrats.

In essence, the Government have cherry-picked the commission’s recommendations, even though they were agreed on as a comprehensive package of reforms. It is therefore greatly disappointing that the Westminster Government have decided to ignore the will of the people of Wales, who believe that Wales should have greater power over its own affairs, according to successive polls, not least the ones conducted by the commission while it gathered evidence as part of its reports. Those polls represent some of the most detailed research undertaken on attitudes towards devolution since we first had our own devolved legislature in 1999.

[Hywel Williams (Arfon) (PC)]

Is all that not doubly disappointing given that our representative on the Silk commission was prepared to compromise in order to get a unanimous report? We gave ground and support to the recommendations of the Silk commission, but the Government are cherry-picking.

[Jonathan Edwards]

My hon. Friend makes a very important point and of course he is right. As I will go on to say, the Silk commission was a huge compromise for Plaid Cymru, yet we find ourselves the only party represented here in Westminster, and the only party represented in the National Assembly in Cardiff, trying to preserve the integrity of the Silk commission. That is a vital point which the people of Wales will realise in good time.

The devolution of air passenger duty was an important element of the package recommended by the Silk commission. It was therefore a slap in the face for Wales when it was omitted from the Wales Bill, which is currently progressing through this House. Both my colleagues and I have spoken several times about that Bill so I will not go into it too much further, save to say that my party and I have been dismayed by the attempts of both the Government and the Labour party to put narrow party self interest ahead of the Welsh national interest and to lay down road blocks in terms of the Silk commission.

The Government have sought to water down the financial powers recommended by the commission by constraining them through a lockstep.

18:30

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

I note the hon. Gentleman’s points about the Silk commission and about how the principal parties reneged on it. That also happened in Scotland with the Calman commission, which was set up by the Conservatives, Liberals and the friends of Labour, who then reneged on the Calman proposal to devolve ADP to Scotland.

[Jonathan Edwards]

That is an interesting point. I am sure that the people of Scotland are watching these developments intently, as they will be voting in a referendum on independence in September. The issue is, can they trust anything that the no campaign says in advance of that referendum? I am sure that that will become a growing theme as we approach the closing stages. I wish the hon. Gentleman and his colleagues well in the forthcoming months.

As I was saying, the Government have sought to water down the financial powers recommended by the commission by constraining them through a lockstep, essentially making it impossible to vary income tax in Wales. Meanwhile, the Labour party says that it will block any income tax powers via its Government in Cardiff unless the Barnett formula—the way in which Wales is funded—is reformed. That is despite having 13 years to do so while it was in government.

Labour also now supports the lockstep principle, despite the protestations of the First Minister. There is of course the added twist that the bands can only be moved upwards, which is why I have labelled Labour’s policy “lockstep plus”.

Needless to say, the agreement that was the Silk commission’s recommendations fell far short of what Plaid Cymru was advocating as a party, to which my hon. Friend the Member for Arfon (Hywel Williams) alluded earlier. We wanted a more comprehensive list of job-creating and economy-boosting powers including VAT, corporation tax, resource taxes and capital gains tax. However, in the interests of compromise, we settled on the final recommendations.

The Silk commission argued that should corporation tax be devolved to Northern Ireland, Wales should not be left behind. I follow with interest the unanimous support in Northern Ireland, among all parties, pressure groups and interest groups, for the devolution of corporation tax—[Interruption.] Exactly, that is a very interesting point: the Unionists in Northern Ireland want corporation tax and a whole range of job-creating powers for their devolved Government, yet we have unionists representing Welsh constituencies trying to block any move towards further powers for our country.

The Silk commission argued that should corporation tax be devolved to Northern Ireland, Wales should not be left behind. The fiscal powers recommended by Paul Silk and his team in the commission’s report are still desperately needed for the sake of the Welsh economy. The ability to vary some taxes and to borrow for investment would enable us in Wales better to deliver job-creating and economy-boosting measures and policies to help turn around the continuing bad performance of the economy.

It was also interesting to hear the Secretary of State sing the praises of the lockstep income tax provision of the Wales Bill in a TV interview. He said that it could be used to vary rates and would put Wales at a competitive advantage, but that the devolution of long-haul air passenger duty would put Bristol airport at a competitive disadvantage. That incoherence shows that the cherry-picking of the Silk recommendations falls apart unless they are introduced as a comprehensive and whole package.

Long-haul APD was devolved to Northern Ireland in last year’s Finance Bill, and the Silk commission has recommended the devolution of long-haul APD to Wales. It is clear therefore that today’s debate is the appropriate legislative vehicle to move this issue forward. Although I failed to do so last year, I live in hope that I might succeed today, but given that all the Labour MPs have disappeared home—AWOL again when the interests of Wales are under discussion—I am not holding my breath.

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

I have a lot of sympathy for what the hon. Gentleman is putting forward. He has mentioned Northern Ireland in relation to corporation tax and APD. Does he recognise though that one big argument in relation to Northern Ireland is the fact that we have a neighbour to our south, another EU member state, which competes directly with Northern Ireland? We also have a land border, and the corporation tax and APD rates down south are much less than they are in Northern Ireland, so there is a unique case in Northern Ireland—but I am not for one minute setting aside the merits of his case

[Jonathan Edwards]

As usual, the right hon. Gentleman makes a reasoned argument. Northern Ireland has a land border with the Republic, of course, but we would argue that we have a sea border. I normally find myself making the case for equality with Scotland in this place, but in this instance I am calling for equality with Northern Ireland. What is good enough for Northern Ireland is certainly good enough for Wales.

Just over a year ago, the Labour Welsh Government acquired the national airport of Wales, located just outside Cardiff near Barry in the Vale of Glamorgan. The ability to attract long-haul flights to the airport would significantly improve its competitiveness. It has more than 1.5 million people within its catchment area, and long-haul flights could attract people from even further afield given that that is the only airport in Wales or the west of England with a runway large enough to accommodate transatlantic aircraft. The development of the airport could act as a spur to growth in the south Wales economy, bringing in greater foreign direct investment through better business links, which would in turn bring jobs and growth. Quite frankly, I am amazed that the Labour party has not proposed its own amendment to the Finance Bill and that only goes to show that the First Minister has absolutely no influence over his bosses down here in London or, at least, over Labour MPs based in Wales.

In response to the UK Government’s proposals for the Wales Bill last November, the Labour First Minister said that he was “disappointed” that air passenger duty on long-haul flights would not be devolved. I am not surprised, given that his Government had brought the airport under public ownership only a year earlier. In a lecture at the London School of Economics, the First Minister said:

“Air passenger duty is another tax that should, in my view be devolved. While London struggles with where to build additional airport capacity, we in Wales face a very different problem. Our national airport in Cardiff has not enjoyed the growth in passenger numbers and destinations that we need to help drive economic growth. Devolution of air passenger duty would give us a useful tool to incentivise the growth of Cardiff airport and other smaller facilities, such as Anglesey in north Wales. APD has already been devolved to Northern Ireland for long-haul flights; at a minimum, I believe Wales should have parity.”

The First Minister makes my case for me, but where are his MPs? Where are they? It is just a shame that he could not get his MPs to the Committee to vote when he has the opportunity to do what he keeps preaching to the people of Wales in the Western Mail and on the BBC.

MPs representing Welsh constituencies who fail to vote in favour of devolving air passenger duty do not only ignore the economic needs of Wales, the First Minister of Wales and the overwhelming majority of Welsh public opinion.

[Mr MacNeil]

I am intrigued by the behaviour of Welsh Labour MPs. Does the hon. Gentleman think that Welsh Labour MPs hold their First Minister, Mr Carwyn Jones, in contempt deliberately or accidentally?

[Jonathan Edwards]

The key point is that if the First Minister cannot persuade his own MPs and those on his own Front Bench in Westminster to propose policies that he is promising to the people of Wales, why should the people of Wales listen to a single word he says to them in the media? It is a test of his credibility and authority and, based on tonight’s and last year’s evidence, I would argue that the First Minister has no credibility or authority whatsoever.

[Hywel Williams]

Does my hon. Friend agree that the First Minister has form on this matter? He will recall that we proposed a new clause to the Water Bill to implement the Labour Administration in Cardiff’s policy on borders and the control of water. Of course, the Labour Benches were entirely empty and, as he has mentioned, Labour failed to vote on that matter, too. Labour is entirely bogus.

[Jonathan Edwards]

Once again, I am grateful for that intervention. That is one in a long list of political issues on which the First Minister and his Cabinet members say one thing in Cardiff while Welsh Labour MPs operate completely differently down here. The proof of the pudding will, of course, be the Westminster Labour party manifesto. We will see what influence the First Minister has over that, but the manner in which he has been completely bullied by the shadow Secretary of State, who now supports a lockstep on income tax powers, seems to show that the balance of power is quite firmly here in London.

[Bob Stewart]

The hon. Gentleman has referred to Cardiff airport. Is there another airport in Wales to which air passenger duty applies?

[Jonathan Edwards]

Cardiff is the only international airport. We are talking about APD relief on long-haul flights, and it would apply primarily to Cardiff, but I imagine that the Welsh Government would have ambitions to redevelop other airports in Wales—[Interruption.] If they had the ambition, they would want to improve those airports.

As I was saying, public opinion clearly supports the devolution of the tax to Wales. Only yesterday, the Western Mail published the results of a survey that showed that 78% of respondents supported the devolution of APD. On this, as with so many other issues, the powers that be in Westminster are at odds with what the people of Wales demand. In response to that poll, the Welsh Labour Government said:

“We will continue to put forward the strong case for it”—

APD—

“to be devolved in the hope the UK Government will eventually listen to us and the overwhelming majority of the Welsh public who support this move, as reflected in this poll”.

A day after the poll, we have an opportunity in the Finance Bill to achieve that objective, but where is the Labour party?

I am glad that, since Cardiff airport has been brought into public ownership, new management has driven up passenger numbers by 9%. That is a crucial point—the national airport of Wales is publicly owned. I agree with that, as the airport is an essential part of Welsh national infrastructure, but Labour MPs from Wales are not here to ensure that something that is publicly owned by the people of Wales has the best chance of succeeding in the long term.

The devolution of APD could help to ensure the long-term future of the airport and draw passengers away from congested airports in the south-east of England—something I am sure many MPs and their constituents in and around the south-east of England would welcome. I therefore look forward, perhaps somewhat over-excitedly, to some of those MPs joining us in the Aye Lobby. I am similarly amazed that the Secretary of State for Wales is not pushing for the devolution of APD at the highest level, as it would provide us with the ability to develop the Welsh economy, which should be one of his core objectives.

The hon. Member for Vale of Glamorgan (Alun Cairns) is not in his usual place, which is slightly strange, considering that the airport is in his constituency. The livelihood of many of his constituents depends on the vitality of the airport, as well as the aircraft engineering industry that has grown around it, and they will be dismayed to learn that their MP does not support measures that could give the airport a competitive advantage. I should like to make reference in passing to the difficulties that engineering companies operating from the St Athan airbase, which is close to the international airport, face as a result of the management of that airfield by the Ministry of Defence.

The new clause effectively seeks to give Wales an essential tool to support and provide jobs locally in south Wales and the wider Welsh economy. The financial powers recommended by the Commission on Devolution in Wales are needed as soon as possible as a spur to jobs and growth in Wales. The Westminster Government, in the Wales Bill, have cherry-picked the recommendations and omitted the devolution of APD as well as other proposals. The powers included in the Bill may not be implemented until well into the second half of the decade, provided that no more roadblocks are put in place by other parties. Every month that passes without the devolution of those powers, the Welsh economy languishes even longer at the bottom of the economic league table of the nations and regions of the UK, with job and economic prospects diminished, hopes and dreams dashed, and lives stalled.

Plaid Cymru has made jobs and the economy its absolute priority, which is why we have again tabled an amendment on air passenger duty. We want to create a modern and prosperous Wales and, unlike our political opponents, we have little faith in London government of whatever colour achieving that ambition. That is why we want Wales to have the tools to get on with the job without delay. Diolch yn fawr.

[Henry Smith (Crawley) (Con)]

It is a pleasure to serve under your chairmanship, Mr Bone. I have the privilege and honour of being the Member of Parliament representing Gatwick airport, so aviation is important to my constituents. Aviation is extremely important to the whole of the United Kingdom, as an island trading nation. Many companies located in my constituency are aviation companies, such as Virgin Atlantic, easyJet and TUI Travel, or international companies that have chosen to base themselves close to a major international airport. Therefore, the issue of taxation on aviation concerns not only Wales, Scotland and England, but my constituency in particular.

I would prefer to see us abolishing air passenger duty altogether. We have one of the highest rates of air passenger duty anywhere in the world. I believe that only Chad charges more. Compared with our European competitors, the amount we charge is considerably more. One of our nearby competitors, the Netherlands, used to charge a form of APD but abolished it because of the cost to its economy. Just over a year ago a PricewaterhouseCoopers report concluded that although air passenger duty brings in about £3 billion to the Exchequer, it is estimated to cost the British economy some £16 billion.

I congratulate the Government on their move to reduce the burden of APD, as announced by my right hon. Friend the Chancellor of the Exchequer in his Budget a few weeks ago. It is a great step on the way to reforming and, I hope, one day abolishing this duty. It is a tax that we, as an island trading nation, can ill afford. Reducing bands C and D into band B for flights to capitals more than 4,000 miles from the UK will help many people who want to take well deserved, well earned long-haul holidays. It will also help the diaspora communities, particularly those travelling to the West Indies, India, Pakistan, Australia and New Zealand. Perhaps most importantly for us as an exporting and trading nation, it will help reduce the cost to business of trading with emerging economies such as China.

[David Rutley (Macclesfield) (Con)]

My hon. Friend is making a characteristically powerful speech. I agree that exporters are vitally important. Lord Livingston recently pointed out that mid-sized businesses in particular in the UK are underperforming, as are small businesses, compared to other European businesses. Does my hon. Friend think the changes to APD will help those small and medium-sized enterprises that want to get out and do more exporting?

[Henry Smith]

Indeed. The simplification of the upper bands of APD, as announced in the Budget, will help small and medium-sized companies in particular to export. I pay tribute to UK Trade & Investment under this Government, which has been making a fantastic effort to give SMEs the tools to maximise exports. The simplification of APD is of great help to small and medium-sized companies not only in England, but in Wales and Scotland.

My remarks are brief this evening. I congratulate the Government on a Budget that is good for business and good for individuals, with the income tax threshold being raised, corporation tax being lowered, fuel duty being frozen and the simplification of APD. I put in a bid once again for the abolition of APD in the future, but I recognise that it is only this Government who are tackling our economic problems in a fiscally responsible way. Charging APD on a Great Britain-wide basis is the most appropriate approach; I would not support the regionalisation of APD. Let us focus on getting APD ultimately abolished, but welcome the simplification that is good for individuals and for business in this country as a whole.

[Mr MacNeil]

I rise to speak in support of new clauses 6 and 7, in my name and the names of my Scottish National party colleagues, and I intend to press new clause 7 to a vote.

Unfortunately, air passenger duty has become yet another of the Westminster Government’s damaging interventions in the Scottish economy. It is a tax whose time has passed, if indeed it was ever fitting for Scotland, and it is at best only a demand management tool for Heathrow, needed because of the dithering and prevarication at Westminster about doing anything there. As London lost its advantage in sea-going transport to Rotterdam for reasons of dithering and prevarication, it seems that it is now losing its advantage at Heathrow as well, as the world No. 1 slot goes to Dubai. If Schiphol sorts out a few minor irritants for travellers, it will do to Heathrow what Rotterdam did to the docks.

Since 2007, APD has increased markedly: by between 160% and a staggering 360%. This tax—this demand management tool for Heathrow—is definitely damaging the Scottish economy. I object to it not because Westminster wants to slap it on to flyers owing to its dithering and prevarication—it should be free to tax and spend as it wants, regardless of the stupidity and myopia of its actions—but because of what it is doing to Scotland. The damage is obvious. PricewaterhouseCoopers says that its reduction would increase tax receipts in other areas, especially VAT, and create jobs. In short, Westminster is costing us jobs, certainly jobs in Scotland, through this tax.

Let us have a quick glance at tables that compare APD in the UK with that in some other countries in Europe. According to the Airport Operators Association, the next highest rate on short-haul economy flights is that of Austria, which charges a hefty €8. This sum increases markedly—by 100%—in the UK, which charges €16. On the medium-haul rate, Germany is the leader with €23, but that is trebled, and more, in the UK, where it is €89. On long-haul, Germany, again, leads with €42, but the UK is well out in front with €113—double to treble the rate in other countries. On the maximum-rate charge, France manages to pick up the crown with €47, but steaming out in front, yet again, is the UK with €226. While this demand management tool might be good enough for Heathrow, it is certainly not good for Scotland. It is a gate-keeper tax. I compare it to a high street shop that demands a fee of shoppers before they come into the shop and then wonders why sales have gone down.

There are many ways to approach this, and I think I am going to have to resort to poetry to advance my case. Given the Government’s intransigence, I wonder whether this may be the last untried key to unlocking their obstinacy. I turn to Mary Howitt’s poem of 1829—nearly 200 years ago. It is salient to this issue, because despite its being written before the Wright brothers and the first manned flight, it does make reference to a form of aviation. It is “The Spider and the Fly”:

“‘Will you walk into my parlour?’ said the Spider to the Fly,

‘’Tis the prettiest little parlour that ever you did spy’”.

Scotland, as we know, is one of the prettiest parlours; it is famed for its scenery. Indeed, the website TripAdvisor has named Lewis and Harris, the main island in the north of my constituency, as Europe’s No. 1 island to visit, and fifth in the world overall. Indeed, I would encourage anybody watching this debate or reading it later in Hansard to go to Google Earth and have a look at the scenery. Whether it is the beaches of Harris at Luskentyre, or Uig of the Lewis chessmen fame on the west side, or over at Gress and Tolsta or Port of Ness in the far north, they will see what TripAdvisor is talking about. Anybody visiting will find fine hotels in Tarbert, Harris or Stornoway, Lewis, and many bed and breakfasts, dotted throughout the islands. Stornoway is probably one of the best-connected towns in all of Scotland, with direct daily flights to Scotland’s principal cities of Aberdeen, Inverness, Glasgow and Edinburgh, and sometimes several times daily. There is more. Other islands to the south include North Uist, Benbecula, South Uist, and of course my own native Barra.

But despite our advantages, with standing stones older than Stonehenge and a visitor record going back to the Greeks in 325 BC, the London Government’s attitude is, “Walk into my parlour if you like. We’re not too bothered if you do or you don’t, but if you do we’ll have our highwayman mask on and we’re out to charge you a king’s ransom”—and this is just to reach Scotland in the first place.

That is a pity, because those who do discover the beauty of Scotland and especially its islands—from Islay to Unst in Shetland—find, rather like the fly at the end of Mary Howitt’s poem, that those who go up the winding stair can ne’er come down again. Similarly, those from overseas who discover Scotland are very likely to return. The damage is huge. It is not quite cataclysmic, but it is big. We are not quite in the territory of Lord George Robertson, who killed the word “cataclysmic” stone dead after he took a flight recently to make a speech in the United States of America. I am sure he is well aware of how much APD he paid.

Moving on to more serious voices on this issue than that of Lord George Robertson, a range of industry figures have lined up against this self-defeating tax. Amanda McMillan, the respected managing director of Glasgow airport, has said:

“Aviation plays a critical role in supporting the growth of the UK economy and this role is even more profound in Scotland given the country’s location on the periphery of Europe. Travelling by air is not a luxury but an essential element of business and family life, yet we continue to have the highest levels of taxation in the EU. It was extremely disappointing, therefore, that despite repeated representations to the UK Government the Chancellor in his Autumn statement opted to further increase levels of APD. APD is already proving a significant barrier to attracting new routes and unless there is a fundamental re-think, I have no doubt that Scotland’s domestic and international connectivity will suffer. Thankfully, there is broad cross party support in Scotland for action on APD and we welcome any moves which would address the issue and stimulate further growth.”

I hope to see evidence of that broad cross-party consensus in Scotland when we press the new clause to a vote tonight—or is it similar to the hollow words of Labour in Wales?

Gordon Dewar, chief executive of Edinburgh airport, has said of the White Paper:

“We welcome this policy from the Scottish Government and we would like to see APD not only halved but abolished completely. We’ve had a successful year at Edinburgh Airport but it is clear from our discussions with our airlines that Scotland could be far better connected without the iniquitous yoke of APD. It puts our country and importantly our vital tourism industry at risk. People and airlines will go elsewhere. We reiterate our call for governments to support our economy and abolish this unfair tax.”

The managing director of Aberdeen airport, Carol Benzie, has said:

“What is becoming increasingly clear are the implications of this tax on UK businesses. Put simply APD adds to the burden of running a successful company. 65% of our passengers in Aberdeen are travelling in a professional capacity and ultimately the responsibility for paying APD in each and every one of these cases is being passed back to their employer. Firms in Aberdeen are connected globally with links in emerging and existing markets. These businesses are paying APD twice if they chose to use a hub airport in the UK, and are taking their business elsewhere in increasing numbers to avoid this tax.”

It is self-defeating.

Commenting on the Irish Government’s decision to abolish air travel tax, which came into force on 1 April, Scottish Transport Minister Keith Brown, a former veteran of the Falklands war, said:

“Scrapping Air Travel Tax in Ireland has had an immediate impact and shows what could be achieved in Scotland if we had control over Air Passenger Duty…After the Irish Government outlined its plans to abolish the tax last year, Ryanair stated that it will deliver an additional 1 million passengers to and from Ireland as a direct result of that decision, with 20 new routes into Dublin, Shannon and Cork launching this summer.”

When I spoke about this last year I warned that the UK Government had been ignoring the industry, the people and the Scottish Government for far too long and that it was no wonder that support for independence was growing. We now know that support for independence has grown far more in the past year than I could have imagined. Are the UK Government going to continue with their intransigence? A year on, what do we have? The gap in the polls has closed, tightening to 6% within the margin of error, which is almost a swing, and the head of British Airways, Willie Walsh, and Ryanair’s Michael O’Leary are supportive of Scottish independence because they see the opportunities. I am sure that Members of this place will be supportive of independence after the event, but why do they have to be so slow and so late to the party? Michael O’Leary and Willie Walsh are right on the money, as we will see on 18 September.

The Scottish Government, in their White Paper on the best-planned independence process of any country in the world, aim to reduce APD by 50% within the first term of an independent Parliament, and to abolish it completely when circumstances allow, with a proposal for a straight reduction in bands. Independence is gaining support because of such straightforward, common-sense approaches.

19:00

I note that this is a time of improved, or the best-ever, UK-Irish relations, as the Prime Minister has said; relations are at an all-time high. He calls them “Anglo-Irish relations”, but I am of course working my hardest to make sure that those words are indeed accurate after September. Yesterday, the Irish President Michael D. Higgins, a lovely, charismatic and inspirational man, said that people-to-people connections have never been closer between these two islands—no doubt because of their independence.

I must say that I am grateful to a visiting Member of the Dail Eireann, Frank Feighan TD, the Member for Roscommon Leitrim South. He reminded me that not only are the number of routes shooting up in Ireland—the 20 routes that I mentioned—but the ending of APD will increase visitors’ spend. Irish politicians can see clearly, far more clearly than Westminster, that such spend will more than replace what was lost in APD revenue.

It puzzles me that the UK Government are quite comfortable with Ireland, with which we share a sea border, having zero APD—saying that relations are the best ever and are at an all-time high—but are absolutely petrified of Scotland managing to reduce its APD by 50%. That is illogical, incoherent and daft. If the UK Government lost their imperial control mania, they would find themselves living in an island whose aggregate GDP was going up. We would all benefit from that—not just in Scotland, but in England and, I hope, particularly in the north of England, a part of the world for which I have a real soft spot.

I will finish with a PricewaterhouseCoopers study, which says that the UK picture last year suggested that the abolition of APD would yield 0.46% of UK GDP in the first year, and add at least £16 billion to GDP within three years, while creating 60,000 new jobs. The figure for Scotland would be about £667 million. APD raises £2.8 billion to £3 billion in the UK, which is £13 billion less than what could be made. In Scotland, the figure is £234 million.

I say to Treasury Ministers that, given a UK net gain of £13 billion, perhaps the Treasury is thrawn or uninterested in what is happening in Scotland. I appeal to them to get out a calculator and to act in their own self-interest, because if they do, they will see the wisdom of what Ireland, the Netherlands and many other countries have done and the wisdom of what every voice in the industry is saying. Only intransigence and a thrawn, thrawn Westminster attitude has left us in a situation where, year after year, we have to use poetry or any other device to try to get it into the minds of bods at the Treasury that here is something to be listened to and noted for the prosperity of many people, and for those who would fill the 60,000 new jobs.

[David Rutley]

It is a pleasure to serve under your chairmanship, Mr Bone, as we debate the Bill on the Floor of the House. One thing we have learned is that if Scotland made the mistake of voting yes, at least those wanting to leave could do so at a lower cost, given the benefits coming through from the proposal on APD.

[Mr MacNeil]

In the light of the events of the past few days, does the hon. Gentleman think that Irish independence is a good idea?

[David Rutley]

I have no idea what that matter has to do with APD.

[Mr MacNeil]

The hon. Gentleman may have heard me say in my speech a few moments ago that the Irish have reduced APD to zero. The President of Ireland has been here on a state visit this week, showing how warm relations are, and we are looking for such warm relations. We are looking to control our APD, and to have very friendly and very warm relations, especially with the people of Macclesfield.

[David Rutley]

I am a regular visitor to Scotland—I normally drive—but I think we should move on to wider issues.

As they stand, the changes to air passenger duty from April 2015 will save business-class, long-haul passengers more than £100. It makes sense to abolish the very high bands of APD. They have caused understandable concerns, with the widespread perception that they were just another example of the unfair tax changes that we inherited from the Labour party. It is right that, as a result of the Government’s decisions, all long-haul flights will carry the same lower band-B tax rate that is paid to travel to the United States, for example. A family of four flying economy to visit relatives or communities in the Caribbean or south Asia will pay £56 less in APD. It is also right and fair that the Government have brought private jets into the scope of APD and that the share of the burden is more easily spread across air passengers.

Government Members believe in tax fairness, and we believe in reducing the burden of tax wherever possible. As my hon. Friend the Member for Crawley (Henry Smith) pointed out, however, it must be a fiscally responsible approach, although that seems to have been completely ignored in the comments of some Opposition Members.

By cutting APD, the Chancellor is again helping to support British exporters, not least first-time exporters looking to make their first steps into high-growth export markets, perhaps by attending international trade fairs or visiting prospective clients and customers abroad. Virgin Atlantic says:

“The Government has rightly recognised the damage APD is having on exporters and the travelling public alike.”

There is a real need to encourage more exports and exporters. As I indicated in my earlier intervention, Lord Livingston recently pointed out that

“only 17% of UK mid-sized businesses generate revenues outside of the EU compared to 25% in Germany and 30% in Italy.”

I am delighted that action is being taken across Government to meet that challenge. Our small and medium-sized businesses have the potential to be economic powerhouses for our economy and to create more wealth and more jobs across all regions of the UK, including Wales and Scotland. To realise that potential, we need to rediscover our great trading heritage and embrace the global opportunities for Great British services and manufactured goods. By cutting APD, we are underlining the commitment of the Department for Business, Innovation and Skills, the Foreign Office and UK Trade & Investment to provide support. Those are positive steps.

International aviation links are not merely important for exporting goods and services from the UK to other countries, or to make more sales missions feasible; lower APD will support UK tourism and help to improve our competitive position in the market for inbound tourists, be they leisure tourists or business travellers in the meetings, incentives, conferences and events sector.

According to Kurt Janson, the Tourism Alliance’s policy director, the Bill’s proposed savings

“will be a benefit for attracting visitors from the growth markets of China, India and Brazil as well as the traditional market of New Zealand and Australia.”

Indeed, PricewaterhouseCoopers suggests that the studies it reviewed for its research

“all point to a link between whole economy productivity and airline sector output.”

By encouraging greater connectivity between the UK and the global economy, reductions in APD can add to the mix of supply-side measures introduced by this Government since 2010. APD is another barrier to productive growth that the Government seek to remove.

This Government believe in long-term thinking. Difficult decisions have had to be made to save us from the appalling legacy that we inherited from the previous Government, but we are now seeing the results of that approach. It has become affordable and fiscally responsible to cut APD and other taxes that have been holding back this country’s businesses and people from realising their ambitions. The Government are helping people to realise their ambitions and objectives in life by working progressively to de-risk entrepreneurialism and support the export industry. For that reason, the measures have my full support.

[Catherine McKinnell]

It is a pleasure to serve under your chairmanship, Mr Bone. It is clear from the contributions and amendments tabled by the hon. Members for Carmarthen East and Dinefwr (Jonathan Edwards) and for Na h-Eileanan an Iar (Mr MacNeil) that APD remains an important issue for many hon. and right hon. Members. Indeed, we have debated APD on the Floor of the House on many occasions, so it is worth briefly reflecting on the coalition Government’s record on APD since they came to power in 2010— a record, as I am sure many hon. Members will agree, of prevarication, indecision and lack of direction.

Before the election, the Conservatives made a commitment to look at a per-plane duty. The report that resulted almost a year later, contrary to the manifesto commitments of the Conservatives and the Liberal Democrats and the coalition agreement, was not taken forward, and for very good reasons. The industry certainly did not support it. Although right hon. and hon. Members on both sides of the Committee will be all too conscious of the need not to take a Liberal Democrat promise at face value, we had certain expectations concerning the coalition agreement.

The Government promised a further review of APD. The consultation covered several areas including private jets, different tax bands, premium economy flights, flights from regional airports and the possible devolution of APD. The consultation paper raised the concern that the existing four-band structure was damaging the UK’s competitiveness and contained several anomalies, such as a higher rate for Caribbean flights than for other destinations in the USA. That was a source of concern for many hon. Members, which, given the announcement in this year’s Budget, the Government seem to have taken on board. The consultation lasted the best part of a year and numerous interested parties took considerable time and effort to respond constructively and in good faith.

What was the result of that long and arduous process, which, including the first consultation, spanned the best part of two years? It was next to nothing. Aside from the extension of APD to cover business flights, we have seen no changes to APD across the UK. That period of time has been described by industry players as

“a sham and a waste of taxpayers’ money.”

There were three full years of promises, yet the Government delivered next to nothing. Three wasted years—a phrase that is synonymous with the coalition Government, whether in respect of APD or, more broadly, the flatlining economy that we have seen for most of the Chancellor’s time in office.

In this year’s Budget, choices were made that, notwithstanding the years of delay and the further year of delay ahead, have been cautiously welcomed by much of the industry. The third coalition U-turn in this area in as many years means that there will be some relief for long-haul flights in the form of lower rates of APD. Let us not forget that APD on all flights of more than 2,000 miles will be uprated by RPI this month. That comes on top of the large increases over the past few years, including the 8% rise that the Chancellor announced in Budget 2012, which was double the rate of inflation.

Budget 2014 saw the announcement or re-announcement—I am not entirely sure which, as Ministers will not give me a straight answer—that the Government will provide funding to aid start-up routes at smaller airports. The regional air connectivity fund, as it will be known, will help new routes from regional airports according to the Red Book, but Ministers do not seem to know which airports or new routes will be eligible or what the fund may be spent on. Although any new support for new air routes is clearly welcome, the proposal seems to bring yet more uncertainty for the aviation industry, the like of which it has already endured for years.

Clearly, that support could be of most value to the constituents of the Members who have tabled the new clauses and the new schedule. Perhaps the Minister will enlighten the Committee and reassure hon. Members about what support their regional airports can expect to receive from the fund.

[Hywel Williams]

While the hon. Lady is talking about enlightening the Committee, will she enlighten us as to where her Welsh Labour colleagues are? There is a Welsh Whip lurking at the far end of the Front Bench. Perhaps he will give us a clue.

[Catherine McKinnell]

We have been very clear on numerous occasions that Labour remains to be convinced of the merits of devolving APD. We do not believe that it is necessarily the correct way forward at this stage.

We acknowledge that the Government have made some notable changes to APD in Northern Ireland. The Chancellor announced in September 2011 that APD rates on long-haul flights using airports in Northern Ireland would be cut because of the threat of competing routes from the Republic of Ireland to the transatlantic route from Belfast to Newark airport in New York, which is critical to the Northern Irish economy. Continental Airlines had been paying APD, unsustainably, at a cost of £3.2 million a year. Following the Finance Act 2012, APD on long-haul flights departing from Northern Ireland was devolved to the Northern Ireland Assembly, which abolished it on 1 January 2013.

I know that right hon. and hon. Members, and anyone who has engaged in this debate over the past few years, will be all too aware of those facts. However, it is important to remind the House of them, so that it can better understand the new clauses and new schedule. Flights in Northern Ireland clearly face specific challenges. As I and other Labour Members have noted before, it is the only part of the UK that shares a land border with another EU member state. George Best Belfast City airport and Belfast International airport compete directly with Dublin in attracting airlines, routes and passengers. The Opposition supported the Government’s move on APD on long-haul flights from Northern Ireland, given its unique international land border and the fact that Northern Ireland largely relies on air transport for its link to the rest of the UK.

19:15

[Mr MacNeil]

Is aviation not about more than competition? It is also about growth. When Governments get their head around that, we will surely see a sea change in their approach to APD. They should focus on growth, not just competition.

[Catherine McKinnell]

The hon. Gentleman makes an important point, and I entirely agree that the Government should be absolutely focused on economic growth. The debate about APD is part of that discussion, and the regional air connectivity fund must also be part of the conversation. The Government need to provide clarity on those issues in this Finance Bill and in the future.

As I said, Labour remains to be convinced of the merits of devolving air passenger duty. The Calman commission proposed that it be considered, and the Labour Government committed to keep it under review.

[Jonathan Edwards]

The hon. Lady made a telling point in response to my hon. Friend the Member for Arfon (Hywel Williams) when she said that the Labour Treasury Front-Bench team remained to be convinced of the position taken by the Labour Government in Wales. As she knows, the Labour Government are in direct intergovernmental negotiations with the UK Government’s Treasury team. If the First Minister and the Welsh Government cannot convince their own party, what credibility can they have in those vital negotiations with the UK Government?

[Catherine McKinnell]

I have said clearly that the Labour party remains to be convinced of the merits of devolving APD, but let us remember that the Wales Bill that is currently going through Parliament contains a number of devolved tax powers for Wales and is the appropriate place to debate these issues in the round. Labour’s devolution commission in Scotland considered the matter again and argued that devolving APD within the mainland of Great Britain would generate unhelpful tax competition within the UK.

[Hywel Williams]

I am intrigued. The hon. Lady says that Labour remains to be convinced about devolving APD. Has she told Carwyn Jones?

[Catherine McKinnell]

As I said, the Wales Bill, which is currently going through Parliament, contains a number of devolved tax powers for Wales and is the appropriate place to debate these issues. That is why Labour will abstain on the issue of APD devolution tonight, but we look forward to the Exchequer Secretary providing clarity on the various queries that have been raised today, particularly about the regional air connectivity fund, which is clearly linked to the issues of certainty for investment, growth, which all Members are focused on, and the role that aviation plays in our economy.

[Mr Gauke]

In 2010, the Government inherited an air passenger duty system that needed to be fixed. The changes that the previous Government made in late 2009 caused aggravation to the UK’s overseas friends and frustrated diaspora communities. Clauses 72 to 74 will fix the system by implementing air passenger duty rates for this year and by reform of the rates for next year.

I will address new clause 2 and new schedule 1, tabled by Plaid Cymru Members, and new clauses 6 and 7, tabled by Scottish National party Members. The Plaid Cymru proposal broadly follows the form that was taken to devolve the duty on direct long-haul flights from Northern Ireland, and requests a similar devolution for direct long-haul flights from Wales. The SNP proposals seek the devolution of duty on flights to all destinations.

I remind hon. Members that the devolution of duty for Northern Ireland was in specific response to Northern Ireland’s unique circumstances. It shares a land border with Ireland, leading to a risk of flights relocating from one part of the shared land mass to another. We recognised that risk and acted to ensure that Northern Ireland was not disadvantaged.

The current situation is that airports on the Great Britain mainland face the same APD rates, but the SNP and Plaid Cymru proposals could well lead to the introduction of the same market distortions that our devolution to Northern Ireland sought to prevent, namely the reallocation of flights from one part of the UK to another, leading to distortion in competition, and winners and losers across the UK.

Regional airports are doing well: 2013 was the third consecutive year of passenger growth and our APD banding reform is another confidence boost for the air travel market. Relevant examples include Cardiff airport, which in 2013 saw a 4% increase, equating to around 44,000 extra passengers, with new routes announced to Germany and the Caribbean. In Scotland, there has been 3% growth at Glasgow airport, with almost 206,000 additional passengers. New routes have been announced for this summer to Croatia and Greece. Edinburgh airport has grown 6%, equating to more than 580,000 additional passengers. In the past six months, new routes to Qatar, the USA and Norway have been announced.

[Mr MacNeil]

Is the Minister happy, or does he agree with industry figures in Scotland, particularly the managing directors of airports, who believe that that growth has been constrained by APD?

[Mr Gauke]

My point to the hon. Gentleman is that the Government must reduce the deficit and APD is a valuable source of revenue. One cannot look at the effects of APD in isolation; one must look at the overall effects on the economy. We have taken measures in the Bill to reduce the burden of APD, but it is worth noting that airports in Scotland and Wales, and regional airports elsewhere in the UK, have been doing well in recent months.

[Guy Opperman]

I wish to praise Newcastle airport, which has welcomed the changes to APD. It is pleased that officials are indicating that the regional air connectivity fund will extend to airports beyond the 3 million passenger mark to those with upwards of 5 million passengers in certain circumstances. Does the Minister agree that that is a further example of the Government assisting regional airports and allowing them to grow as we know they can?

[Mr Gauke]

I am grateful to my hon. Friend because he brings me to my next point. I agree with him. The Government recognise the importance of aviation connectivity for all parts of the UK—for example, domestic flights are not subject to VAT. As he says, we are extending the scope of the regional air connectivity fund to include start-up aid for new routes from regional airports, and increasing funding to £20 million a year. Clearly, exactly how that works is a matter for the Department for Transport, but I welcome the fact that the Government are consulting the regional airports to see whether those that have more than 3 million passengers per year can receive extra support. That includes Newcastle airport, which has 4.4 million passengers. One could also mention East Midlands International, Liverpool John Lennon, Belfast International, Aberdeen, London City and Leeds Bradford, all of which have more than 3 million passengers a year. We are trying to do what we can to ensure that those airports can gain support from the connectivity fund.

[Catherine McKinnell]

Obviously, we broadly welcome any support for expansion and new routes from regional airports, but would the Minister accept that making an announcement without any details about the type of activity that will be covered by the funding can add uncertainty to the already difficult environment for the industry at present? It is imperative to bring some clarity to the issue as soon as possible. Will he tell us when he will be able to clarify what might qualify for the funding?

[Mr Gauke]

The hon. Lady is being uncharacteristically glass half empty. We have announced an expansion of the connectivity fund. We have said that we are seeking to take that beyond airports that have more than 3 million passengers per annum. As it happens, the Department for Transport is consulting on and developing guidelines for accessing support, and the results will be published in the summer. I am sure that the hon. Lady is as keen as my hon. Friend the Member for Hexham (Guy Opperman) to ensure that the best happens for Newcastle airport.

[Guy Opperman]

It is surely a relevant factor that the Budget was only a few weeks ago and the guidance on which we are consulting was published by the European Commission only at the end of February. One could hardly have done it any earlier.

[Mr Gauke]

My hon. Friend is right. As I say, the Department for Transport is developing these guidelines with the intention of publishing in the summer.

[Catherine McKinnell]

rose—

[Mr Gauke]

I am sure that the hon. Lady—I think she has Newcastle airport in her constituency or at least nearby—will take this opportunity to welcome what the Government are doing.

[Catherine McKinnell]

Newcastle international airport is in my constituency—[Interruption.] However, I speak on behalf of all the regional airports. I am not being churlish about the potential funding that has been announced, but I hoped that the Minister would realise the increased commercial uncertainty that can be created by making announcements that lack clarity about what may or may not be included. The Government need to move as fast as possible to create—

[The Temporary Chair (Mr Peter Bone)]

Order. Interventions are getting longer than some of the speeches.

[Mr Gauke]

I am not sure that I can add much, other than to say that if the hon. Lady is concerned about uncertainty she might want to look at some of the anti-business policies pursued by her party.

We also recognise that air services in some of the more remote parts of the UK represent a vital connection to the rest of the country. That is why there is an air passenger duty exemption for flights from the highlands and islands of Scotland.

[Mr MacNeil]

I am grateful for the exemptions for the highlands and islands of Scotland, but does the Minister think that the devolution of APD to Scotland and Wales would result in an increase in the number of routes, flights, passengers, commerce, tourism and eventually revenue to the public purse? Does he see any advantage to the devolution of APD?

[Mr Gauke]

I wish to avoid running the risk of repeating myself, but I make the point that I made earlier: the devolution of APD within Great Britain would create unfortunate market distortions. As we said in our November 2013 response to the Silk commission, we are not convinced of the case for devolving air passenger duty to Wales, given the potential effects across the country as a whole. In the case of Scotland, the distortive effects across the country as a whole are harder to diagnose, given that it has more major airports with significant route connectivity. Our opinion remains that this requires careful evaluation if we are to be confident of its potential effects, so I ask hon. Members to withdraw their amendments.

[Bob Stewart]

Is it the Government’s intention to continue the trend of reducing air passenger duty across the country?

[Mr Gauke]

What I would say to my hon. Friend is that we have set out in the Budget and in the Bill significant changes that we think fix the problem we inherited from the previous Government.

My hon. Friend gives me the opportunity to turn to clauses 72 to 74. Ahead of our rates reform, clause 72 fulfils the commitment given in Budget 2013 on the rates of duty for 2014-15. This respects the air travel industry’s point that tickets are often sold a considerable time in advance of travel. The industry needs up to a year’s forward rates certainty to have sufficient time to prepare its accounting systems and set pricing ahead of advance ticket sales. The rates contained in clause 72 have therefore been anticipated by the industry.

19:30

Clause 73 rolls back the previous Government’s four-band system. That system saw travellers to China, India, Brazil, the Caribbean and a host of other destinations paying more in tax than travellers going to Hawaii, even though Hawaii is further away. We believe this system to be crazy and unfair. Clause 73 restores sense and fairness by reforming the duty bandings. It introduces a simple to understand two-band system: one band for travel to countries up to 2,000 miles from London, and another for travel to countries further away. This puts a host of countries on to the same rate as the USA and delivers a rates cut for travel to growth markets in Latin America, southern Asia and the far east with effect from 1 April 2015. For example, a family of four visiting relatives in the Caribbean will save £56, and a commercial traveller to China will save at least £14 per trip.

Clause 74 updates the list of countries over 4,000 miles from London to reflect changes in the legal composition of several island states in the Caribbean and the south Atlantic. These states are also set to benefit from rates savings with the reform of APD from 1 April 2015.

In 2011, a number of regional airports offered the view that there ought to be an additional charge of duty at congested airports, or a lower rate at uncongested airports. Their thinking was that it would spread demand for air travel more widely across the country. However, other airports countered that this is not the most appropriate way to address congestion, and many airlines felt that it would distort the market without materially affecting decisions about where services are located.

In October 2012, Her Majesty’s Revenue and Customs published a report that shows that significantly higher prices at congested airports could lead to some passenger redistributions, but it also suggests that the benefits might not be spread widely across the UK. In addition, the report suggests that some regional airports would in fact lose passengers if a difference in price meant traffic and services went to other competing airports. Having carefully considered the idea, we were not convinced that a regional variation of rates would materially help in meeting our objective to rebalance the UK economy. Budget 2013 therefore ruled out varying duty rates by levels of airport congestion. It is of note that the Airports Commission’s December 2013 interim report also concluded that

“an air passenger duty congestion charge is not a promising solution to the capacity problem in London and the South East.”

In more recent times some regional airports have turned their thinking to the idea of a holiday period for new long-haul routes during which duty would not be payable. On this, the Airports Commission’s interim report offers an illuminating view. It says that there are two potential pitfalls. First, if the idea applied to all new routes equally, there would be substantial potential for airlines to game the system by switching existing routes between airports. Secondly, if there were measures to control this behaviour, the idea would run a substantial risk of legal challenge, because it would distort competition in favour of particular routes and not others. The commission felt that it could not recommend the use of air passenger duty holidays. It instead referenced how airport landing charges might be used to incentivise new routes. We see nothing to disagree with in the commission’s analysis.

In Northern Ireland, there is a defined devolution of air passenger duty that responds to Northern Ireland’s unique circumstances. Since 1 January 2013, the Northern Ireland Government have had a devolved power to set rates for direct long-haul flights leaving Northern Ireland. They have used that power to set a zero rate, which means that the highest rate of duty on any direct flight from Northern Ireland is £13. The rates of duty for through-ticketed flights using connections at one or more hub airports remain the same as those applying to the rest of the UK, which means that from 1 April 2015 passenger savings will result from the Budget’s rates reform.

The Republic of Ireland’s recent decision to reduce its air travel tax to zero from 1 April this year is, of course, acknowledged, but I must make clear that I cannot accept calls from Members for the abolition of air passenger duty. Outright abolition is an unfunded request that would leave a £3 billion-plus hole in the public finances. If, as a consequence, the Northern Ireland Government wish to argue their case for further devolution, they must consider the fiscal costs, which would have to borne locally.

I can confirm that in total, the rates reform in clauses 72 to 74 provides a £920 million shot in the arm for travel to growth markets. It simplifies the tax system, and supports the UK’s export drive. The clauses maintain fiscal responsibility within a fiscally neutral Budget, with targeted action to fix the problems left by the last Government. I therefore ask the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) to withdraw his motion, because the proposals in the new clauses and new schedule would inhibit fair opportunity and distort the market.

[Jonathan Edwards]

We have had an informed and very interesting debate. We have also had an incredible revelation, which I hope the Welsh media will pick up tomorrow. Let me make it clear for the benefit of Labour Front Benchers that Carwyn Jones is the Labour First Minister of Wales.

We heard excellent speeches from the hon. Members for Crawley (Henry Smith) and for Macclesfield (David Rutley), a typically passionate speech from my hon. Friend the Member for Na h-Eileanan an Iar (Mr MacNeil), speeches from both Front Benches, and many good interventions.

The people of Wales own—via the Welsh Government —our national airport, which is a key piece of our national infrastructure, and we need to control air passenger duty if we are to maximise the potential of that asset. This is primarily an issue of jobs and growth, but it is also an issue of gross hypocrisy, given that parties operating in a devolved context say one thing in Wales and something completely different here in Westminster. The Labour First Minister of Wales says that this is an economic priority for his Administration, but he cannot persuade his own bosses here in London, or Labour Members of Parliament based in Wales. This is therefore an issue of the First Minister’s credibility and authority. If he cannot convince his own side, why should anyone in Wales take anything that he says seriously, and how can he possibly engage in detailed negotiations with the United Kingdom Government on these very fine and important fiscal matters?

It is necessary for us to divide the Committee so that the people of Wales can see the truth for themselves, and I therefore wish to press new clause 2 to a Division.

Question put, That the clause be read a Second time.

19:38

Division 253

Ayes: 9

---

Democratic Unionist Party: 3
Plaid Cymru: 3
Scottish National Party: 3

Noes: 254

---

Conservative: 223
Liberal Democrat: 29
Alliance: 1

[The Second Deputy Chairman of Ways and Means (Dawn Primarolo)]

Does Mr MacNeil wish to move new clause 6 formally?

[Mr MacNeil]

indicated dissent.

[The Second Deputy Chairman]

No? Okay. [Interruption.] It is very generous of Members to assist Mr MacNeil, but he can manage it by himself and I believe that the new clause is not moved.

Clauses 72 to 74 ordered to stand part of the Bill.

The Deputy Speaker resumed the Chair.

Bill (Clauses 1, 5 to 7, 11, 72 to 74 and 112 and schedule 1) reported, without amendment (Standing Order No. 83D(6), and ordered to lie on the Table.

Business without Debate

Wednesday 9th April 2014 Commons Chamber

European Union Documents

Motion made, and Question put forthwith (Standing Order No. 119(11)),

Climate and Energy Policy 2020 to 2030 and High Volume Hydraulic Fracturing (fracking) in the EU

That this House takes note of European Union Documents No. 5644/14 and Addenda 1 and 2, a Commission Communication: A policy framework for climate and energy in the period from 2020 to 2030, No. 5706/14 and Addenda 1 to 5, a Commission Communication on the exploration and production of hydrocarbons, such as shale gas, using high volume hydraulic fracturing in the EU, and No. 5700/14, a Commission Recommendation on minimum principles for the exploration and production of hydrocarbons, such as shale gas, using high volume hydraulic fracturing; supports the Government’s objective of securing an ambitious EU emissions reduction target for 2030 in order to support the EU in meeting its long-term climate and energy objectives; and further supports the Government’s objective of maintaining maximum flexibility for Member States to choose their own energy mix, including by exploring the potential for domestic resources, in order to secure their emissions reductions in the most cost-effective manner, given their particular circumstances.—(Stephen Crabb.)

Question agreed to.

Humberstone Heights Golf Course (Leicester)

Wednesday 9th April 2014 Commons Chamber

19:51

[Keith Vaz (Leicester East) (Lab)]

I wish to present a petition on behalf of a number of my constituents concerning the proposals of the city council to close Humberstone Heights golf course in Leicester. Some 1,800 people have signed the petition—[Interruption.]

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I am sorry to interrupt you, Mr Vaz, but I am having difficult in hearing your presentation of the petition because of the noise in the Chamber. I ask Members to leave quietly. Mr Vaz, may I suggest that you start again with the presentation of your petition?

[Keith Vaz]

Thank you very much, Madam Deputy Speaker. I wish to present a petition on behalf of a number of residents of Leicester concerning the proposal to close Humberstone Heights golf club in Humberstone. I was there last Saturday and, as you have correctly said, it is much quieter on a golf course than it is in the Chamber of the House of Commons. I accepted a petition that had been led by Mr Mark Boddice, the club captain, Mrs Heather Smith, the lady captain, Mr Raj Kotak, a past captain, Paul Maurice, Alan Taylor, Jay Marsh, Tony Palmer, Ashok Mistry, Mark Smith, Gaz Kilby, Bruce Frazer, Colin McKenzie, Peter Walker, Michael Pearson and Master David Dewbery. It was signed by 1,800 other people who play regularly at Humberstone Heights golf course. I am grateful to so many right hon. and hon. Members, from all parts of the United Kingdom, for staying for the presentation of this petition. Clearly, the Humberstone Heights golf course has achieved great fame beyond Leicester, reaching the very corners of the United Kingdom. I therefore wish to present this petition on their behalf. If people are able to be more involved in leisure, they will have longer and fitter lives.

The petition states:

The Petition of residents of the UK,

Declares that Humberstone Heights Golf Course is a popular leisure facility in Leicester and further that the Petitioners believe that the planned closure of the Golf Course will have a detrimental impact on the local community.

The Petitioners therefore request that the House of Commons urges the Government to encourage Leicester City Council to reconsider their decision to close Humberstone Heights Golf Course, which is an important community facility.

And the Petitioners remain, etc.

[P001342]

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

On a point of order, Madam Deputy Speaker. In the last round of Divisions, I had intended to move new clause 7, but new clause 7 was not called, and new clause 6 was called instead. I realise of course that human error can play its part in some of these things, but I would like your opinion on the matter.

[Madam Deputy Speaker (Dawn Primarolo)]

Mr MacNeil, I think there was a genuine misunderstanding with regard to new clauses 6 and 7. I regret to say that the intention was not clear to me at the time in the Chair, and I do not feel that I can take the matter any further than that, but I am sure that the record will show the hon. Gentleman’s intention, even if that was not fulfilled through to a vote because of a misunderstanding. I hope that that clarifies the matter.

Abortion (Disability)

Wednesday 9th April 2014 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Harriett Baldwin.)

19:55

[Fiona Bruce (Congleton) (Con)]

I thank you, Madam Deputy Speaker, for this opportunity to speak on a sensitive subject. Few would disagree that Britain is a friendlier place for disabled people than it was a few decades ago—better, that is, unless we are talking about a disabled baby in the womb. The contrast between the way we see disabled people before and after birth could barely be starker. A disabled unborn child has effectively no rights up to birth. Many people are shocked to learn that he or she can be aborted right up to birth—as many as 16 weeks beyond the 24-week threshold for able-bodied babies. But the moment after birth, a whole panoply of rights and support suddenly comes into play for the disabled child. I know that from personal experience, and here declare an interest. My own son, Sam, was born with a club foot, one of the defects for which an abortion up to birth can be obtained. Yet within minutes of his birth, the hospital telephoned its specialist in treating club feet, who was on leave at the time and who rushed in within two hours to begin manipulating Sam’s foot.

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

On the issue of abortions up to birth, does my hon. Friend share my belief that where the disability may be relatively minor—a cleft palate or something such as that—the public would be very concerned to learn that these were allowed literally right up to birth?

[Fiona Bruce]

Indeed I do, and I thank my hon. Friend for that intervention. Although there are not many such abortions, there are still some taking place for treatable and relatively minor defects, such as a club foot. My son had physiotherapy every day for the first year of his life. He wore a calliper in his early years and he had two operations until into his teens, but now one would never know, unless one was a specialist, that he had been born with a foot defect. Yesterday, Sam was 21, and in the past few days has heard that he has been admitted to Oxford university. It is hard to think that such a treatable disability could have deprived him of life, and he is far from alone. I believe that the footballer, Steven Gerrard, was born with a club foot.

We have allowed a completely inconsistent and contradictory approach to disability to develop in this country with reference to the born and unborn child, and for that reason I am asking the Minister to review the application of this legislation. To clarify, the Abortion Act 1967 was amended in 1990 to provide for abortion up to, and during, birth where there is “substantial risk” of “serious handicap”—often called ground E abortions. But neither of those terms have statutory definitions. Instead, what constitutes “substantial risk” or “serious handicap” is left to doctors to decide, with differing outcomes across the country, and that difference can mean life or death to an unborn child. Professor Gordon Stirrat gives an example of a couple seeking abortion because of a cleft palate at 34 weeks, where there was a significant difference between doctors who refused an abortion under ground E and other doctors who interpreted the law as covering the couple’s situation.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Lady on bringing this very important matter to the House for consideration. It was mentioned in Prime Minister’s questions today, for example. Does she agree that the UN convention on the rights of the child, which protects the rights of children, and the Equality Act 2010, which outlaws discrimination on grounds of disability, would demand that this House should change this grossly offensive law that allows children over 24 weeks to be aborted?

[Fiona Bruce]

The hon. Gentleman makes a relevant point.

Developments in the law, in medicine and in cultural attitudes have led me to introduce this debate. Because of the lack of clarification, the law is being applied in what one barrister has called a haphazard fashion. In 2007, the Select Committee on Science and Technology recommended that the Department of Health produce guidance that would be clinically useful to doctors and patients in this regard, and in response the Royal College of Obstetricians and Gynaecologists provided updated guidance in 2010, but there still seems to be a considerable difference in views and working practice about what comes within the law and what does not. That is concerning for parents, practitioners, law makers and disabled people, many of whom believe it is now time to review the framework within which this law operates.

It is hard to see the differing treatment of disabled fetuses and able-bodied fetuses as anything other than discrimination, about which disability groups are particularly concerned. Medical knowledge has changed radically since 1990, and even more since 1967, and there have been improvements in fetal medicine, including the ability to correct disabilities, even within the womb before birth.

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

I, too, congratulate the hon. Lady on bringing this important matter before the House. As the father of a disabled boy who had eight years of a wonderful life—he had spina bifida and hydrocephalus, he gave much love and everybody who knew him loved him greatly—I join her in her plea for an end to discrimination against children in the womb who are disabled. She makes an important point about developments in medical treatment, even within the womb, especially in the area of spina bifida.

[Fiona Bruce]

I thank the right hon. Gentleman for that intervention. He makes a pertinent point. Disabled children can enjoy life and can give great joy to their families. Even disabilities such as Down’s syndrome cover a very wide spectrum and we need to remember that. When mothers and fathers hear the news about a child’s diagnosis with fetal disability, it is important that they are given information about the spectrum and about their options.

We have seen changes in neonatal intensive care, palliative care, paediatric surgery, educational care and community support. Conditions that might previously have been grounds for abortion are now treatable, and attitudes towards people with disabilities have moved on greatly.

As has been mentioned, the Equality Act 2010 protects disabled people from being treated differently or discriminated against as a result of their disability. In light of all this medical, legal and cultural progress in our society, is it not now time to review the application of the legislation? If we do not consider a disabled person of inferior worth after birth, why do so before?

I want now to turn to a separate point. Many women feel steered, pushed or even rushed into having an abortion once it is determined that they might be carrying a disabled baby. Time and again I heard of that in a commission that I chaired in this House last year, which carried out a parliamentary inquiry into abortion on the grounds of disability. A copy has been placed in the Library. The commission’s committee comprised several Members of both Houses and all parties with different views on abortion but a common concern about the issue. We took oral and written evidence over several months from a total of 299 witnesses. Repeatedly, mothers told us that they had come, as one said,

“under huge pressure to have an abortion”,

because, as another said,

“this is the expectation of the health care professionals”.

Other mothers told us that they were not given support when making the decision, or they felt fearful that they would not be able to cope in future due to limited financial resources or community support in their locality. One said:

“My son (who is now eight years old) has Down’s syndrome. He was diagnosed in the womb at 35 weeks and I was actively encouraged to seek a termination by the doctor who gave me the diagnosis. I was given no support by my local hospital in my decision to keep my baby. I had to actively seek support elsewhere and I’m sure you will appreciate how difficult this was as I was heavily pregnant and in a vulnerable state.”

Parents may find that they are given only a leaflet on abortion, with plenty of advice on having an abortion, but no information specific to the condition that has been diagnosed, or information about what support they could expect if they kept the baby, or an alternative such as adoption. One said that

“choosing to keep the baby effectively meant I was on my own.”

Some mothers were made to feel irresponsible bringing a disabled child into the world on the basis that the child would be a drain on public resources. Many felt guilty about allowing their disabled child to be born. Recently we heard how distressed mothers were in Leeds general infirmary when they felt under pressure to abort babies with treatable heart defects. Was it ever Parliament’s intention that a treatable condition should come within the scope of ground E?

We also heard from a doctor, Mr Jayamohan, about particularly good practice such as counselling; expert support from trained clinicians; the provision of information about the child’s potential disability and treatment; the offer to speak to another family with a child with a similar condition; palliative care; and the opportunity to meet specialists as soon as possible after diagnosis, and so on, to enable parents to make their decision. One parent said:

“Guidelines and standards need to be set in place, which all hospitals need to meet, to ensure all families are given support on education of disabilities when faced with such a situation. To give a family a diagnosis of a disability and then to immediately follow that up with the advice that they can have a termination without any other information is simply not acceptable in a civilised society”.

Does the Minister agree that there is a need for better, more consistent, balanced information, trained counsellors, increased awareness of palliative care for newborns, and comprehensive information and support from the medical profession, whatever parents’ decision about the pregnancy? Would she consider developing best practice guidelines to encompass that?

We even heard of misdiagnoses. Parents told the commission about diagnoses that had proved to be incorrect. One said that

“we were advised my daughter be aborted up to birth due to the results of an antenatal test. The most serious result indicated Dandy Walker Malformation of the brain. In fact when scanned after birth there was no such malformation. Our daughter is now 6 years old and a happy normal child.”

Mr Jayamohan told the commission that of 32 post-mortems of late-stage terminations he had examined, two indicated that the diagnosis had been profoundly wrong. It is worth remembering that these are wanted babies, and parents who choose an abortion suffer grief from their loss. As one has said, it is a

“bereavement like any other person”.

Last year, more than half of ground E abortions were diagnosed by ultrasound alone, which I understand can carry a 10% to 15% rate of false positive diagnosis, meaning that of the 1,367 ground E abortions diagnosed by ultrasound in 2012, as many as 200 may have been falsely diagnosed. What steps are in place to help the Department assess the accuracy of prenatal diagnostics? Should not all be done that can be done to reduce the option of an abortion where it is not necessary or wanted? To that end, does the Minister agree that improvements need to be made in data collection, as there seem to be weaknesses, gaps and limitations in the collection of information on abortions that take place due to disability. One professor has described it as “very inaccurate”. We should be collating more information on the reasons for abortion beyond 24 weeks and analysing such data appropriately. We should consider a report to a coroner for all late-term abortions and carefully consider the need for post-mortems. There should be a national register for all congenital abnormalities, not just for Down’s syndrome. All this would help to improve future diagnosis and, I hope, lead to lower numbers of abortions.

Let me touch on the increasing concern about fetal pain. A new scientific consensus is emerging that babies in the womb can feel pain, even from 20 weeks—certainly, as seems incontrovertible, from about 26 weeks. Yet we permit disabled babies to be aborted at up to 40 weeks. One mother, when asked whether her child would feel pain, was told, “He’s going to feel it.” Is it because we believe that disabled babies do not feel pain, or because we do not care that they do, that we allow abortion at up to 40 weeks for them? During the passage of the Bill that became the Human Fertilisation and Embryology Act 2008, the age of viability was agreed at 24 weeks; it can of course be even younger. Why does this threshold not apply to the disabled?

The logical corollary is that society is saying that disabled babies who can survive outside the womb should not be allowed to do so. I cannot escape the conclusion that this is discriminatory. It simply cannot be right that, as a society that purports to respect disabled people, we act to prevent their very existence in this way. These are arguments open to anyone who values human life and deplores discrimination against disabled people.

My final request of the Minister is whether she would be good enough to take time after this debate to consider the 2013 parliamentary inquiry into abortion on the grounds of disability and respond to the recommendations within it, not all of which I have been able to touch on tonight for reasons of time.

20:12

[The Parliamentary Under-Secretary of State for Health (Jane Ellison)]

I congratulate my hon. Friend the Member for Congleton (Fiona Bruce) on securing a debate on this subject, in which she has a long-standing interest. She made a very personal, moving and thoughtful speech to which we all listened intently. I thank other Members for their interventions. I know that there are views on this issue that are deeply and strongly held.

I am aware of the independent inquiry into abortion on the grounds of disability, which my hon. Friend chaired and which reported in 2013. Although I was not in post at that time, I have looked at the report. I have not had a chance to look at all the detail, but I have seen some of the recommendations. I have responses to one or two of the recommendations that she highlighted. As she knows, I will always go away and look at the points she has made, and those that I cannot cover tonight I will of course write or talk to her about.

Obviously, the House remains divided on the issue of abortion, which is a very personal matter. A number of concerns have recently been raised that we in the Department are working hard to address. On some issues, such as abortion on the grounds of gender alone, there is a strong parliamentary consensus. My hon. Friend has raised this with me in the House and in private, and we are working hard to deal with it. In other areas of abortion law, there are a range of views and differing interpretations.

It is crucial that everyone, regardless of their views on abortion, feels assured that the law on abortion is operating as Parliament intends. This is particularly important for clinicians directly involved in certifying and performing abortions, who need to know that they are operating within the law, and for women seeking an abortion, who need access to safe, legal, high-quality abortion services. I recently had discussions with the General Medical Council and the Royal College of Obstetricians and Gynaecologists, and we will be publishing strengthened guidance and revised procedures for the approval of independent sector places. That puts the debate into some context.

In 1990, Parliament decided that in some circumstances abortion should be available without time limit, including abortion where

“there is a substantial risk that if the child were born it would suffer from such physical or mental abnormalities as to be seriously handicapped.”

I should clarify that abortions for fetal abnormality are listed as ground D in the Abortion Act 1967 but are set out differently in the regulations and certification forms, where they are listed as ground E. The grounds in the regulations are those most commonly referred to, but that is why there is sometimes a discrepancy with regard to grounds D and E.

In 2012, it was reported that 2,692 abortions had taken place under ground E of the regulations and that 160 of them took place at gestations beyond 24 weeks. It is important to note, as my hon. Friend has said, that Parliament did not define “serious handicap” in the Act. Indeed, it chose to leave it to the expert clinical judgment of the two doctors involved, who were required to form their own opinion about the seriousness of the handicap the child would suffer when born, taking into account the facts and circumstances of each individual case.

Some Members have expressed the view that the Act and, in particular, the provision that allows abortion on the grounds of disability should be revisited. Of course, by convention it is for parliamentarians, not the Government, to suggest amendments to the legislation, but that does not mean that the Government do not reflect carefully on any points made and there will be opportunities to provide clarification in some areas through guidelines.

Concerns have been expressed, not least this evening, that abortions are taking place for abnormalities that are rectifiable after birth. The Act requires doctors to assess the level of risk that the child would suffer from serious handicap if it were born. It should be noted that conditions such as cleft lip and palate, which have been mentioned this evening, can in some circumstances be an indicator of far more serious problems with the fetus.

The availability of remedial treatment that might alleviate suffering is obviously a factor that doctors will take into account in making their assessment. Guidance from RCOG states that the assessment of serious handicap should be based on a careful consideration of a list of factors, one of which is the probability of effective treatment either in utero or after birth. RCOG already says that that must be taken into account. However, the fact that remedial treatment may be available does not automatically mean that it will be successful, and the child may suffer from a serious handicap. Remedial treatment may be prolonged and painful.

I firmly believe, and I hope my hon. Friend will agree, that such decisions are exceptionally difficult ones for patients, women and parents to make, and that they are often finely balanced. Doctors and other professionals need to work hard to ensure that parents are properly supported and have all the information they need to come to a decision. I think we all share my hon. Friend’s concern that some people have reported feeling rushed and that they have not been given proper information. Ultimately, such decisions should be taken on a case-by-case basis and always according to the Act.

[Fiona Bruce]

Will the Minister confirm that she will look at the production of best practice guidelines, because there is a clear indication that practice differs across the piece? If she agrees that we should give every mother and father in this situation the best possible opportunity to make the right decision, appropriate guidelines, which do not appear to exist in a functional format at present, would be the best approach.

[Jane Ellison]

I will certainly reflect on that point. RCOG has published best practice guidelines and I am sure it would be concerned to hear that my hon. Friend feels they are being inconsistently applied. I will give her some information from the guidelines. I have regular conversations with RCOG representatives and will raise her point with them. There is no absence of guidance, but she is clearly concerned that it might be being inconsistently applied.

RCOG has published guidance for its members on terminations for fetal abnormality. It notes that palliative and other care must be made available to women who decide to continue with their pregnancy. The guidance also makes it clear to women and their partners that they should receive appropriate information and support from a properly trained, multidisciplinary team who must adopt a supportive and non-judgmental approach, regardless of whether the decision is to terminate or to continue the pregnancy. Support for parents faced with a similar diagnosis is available through the charity Antenatal Results and Choices.

The RCOG guidance also states that women and their partners must be fully supported before screening for fetal abnormality and during any decision that they may need to make about termination, as well as in continuing the pregnancy following a screening and during any aftercare. That should include referral to other professional experts, including palliative experts, as I have mentioned, and referral for counselling, where it can be part of a co-ordinated package of care. I will of course put my hon. Friend’s concerns about that not being consistently applied to RCOG, which I am sure will want to consider that matter. However, as I have said, RCOG has looked to address the issues, and I know that it is aware of her commission of inquiry and its report.

My hon. Friend mentioned adoption. That is a matter for the Department for Education, but I will of course draw the concerns she has raised in this debate to its attention.

With regard to information, the RCOG guidance does not make specific reference to the element of the life ahead that the child might have, but that is a matter for RCOG and other professional and training bodies, such as Health Education England, to take forward in their training procedures. Again, I undertake to bring that point to their attention.

On my hon. Friend’s concerns about a discrepancy between the numbers, I know that the independent inquiry recommended that funding should be made available to ensure that there are independent congenital anomaly registers covering all congenital anomalies across the whole country. She made another point about inconsistency. I can confirm that work is under way to support the increased coverage of congenital anomaly registers across the whole of England. That work is led by Public Health England. I have regular meetings with Public Health England, and I will draw to its attention Parliament’s interest in this matter. I undertake to update her on the progress of that work.

My hon. Friend made several other points. If she will excuse me, I will come back to her about fetal pain. RCOG has looked at and written about fetal pain in some detail, and has offered guidance about it. I will revert to her on that, as well as on some of the other matters that she raised about which I cannot now comment in any detail.

I thank my hon. Friend for her very thoughtful speech, for drawing the attention of the whole House to this issue and for how she expressed the potential that people have in their lives. I think that the whole House was thrilled to hear the story she told about her own family, and to hear about the great success that her son has enjoyed. I congratulate her on securing this debate, and on the tone in which she always conducts such difficult and sensitive debates. I will return to her with more detail when I have given her points further consideration.

Question put and agreed to.

20:22

House adjourned.