House of Commons

Wednesday 15th October 2014 Commons Chamber

Wednesday 15 October 2014

The House met at half-past Eleven o’clock

Prayers

Wednesday 15th October 2014 Commons Chamber

[Mr Speaker in the Chair]

Business before Questions

Spoliation Advisory Panel

Resolved,

That an humble Address be presented to Her Majesty, That she will be graciously pleased to give directions that there be laid before this House a Return of the Report from Sir Donnell Deeny, Chairman of the Spoliation Advisory Panel, dated 15 October 2014, in respect of a silver-gilt renaissance salt, now in the possession of the Ashmolean Museum.—(Alun Cairns.)

Oral Answers to Questions

Wednesday 15th October 2014 Commons Chamber

The Secretary of State was asked—

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

1. When the Joint Ministerial Committee next plans to meet; and what will be discussed at that meeting.

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

The Joint Ministerial Committee is an important mechanism for the UK Government and the devolved Administrations to discuss shared priorities and matters of mutual interest. The European session of the JMC met on Monday 13 October.

[Cathy Jamieson]

Given that all parties now want to see further devolution to Scotland, does he agree that it is time for a review of how that Committee operates and how we can strengthen the way in which the Scottish Parliament, the UK Parliament, the Scottish Government and the UK Government work together in the best interests of the people of Scotland?

[David Mundell]

I absolutely agree with the hon. Lady. I hope that discussion about the relationship between Scotland’s two Governments will be part of the outcome of the Smith commission’s work; if not, I am sure it will form part of future debate in this House and elsewhere.

[Guy Opperman (Hexham) (Con)]

Surely the key question for the Committee to take to the Scottish National party Government is that no means no?

[David Mundell]

I certainly hope that it is now clear that the decisive result of the referendum is respected and that we move forward on behalf of all of Scotland to deliver the new devolved Scotland that everyone wants to see.

[Mr Frank Roy (Motherwell and Wishaw) (Lab)]

The Minister may be aware that in the past hour or so Tata Steel has announced its intention to sell the long products division—more or less, the plate mills in Scunthorpe, Workington, Teesside, Cambuslang and Motherwell—of its company. Throughout the United Kingdom, workers will be affected by this potential sale. Will the Minister ensure that he and other Ministers in both Governments intervene in this national issue for the sake of the workers and for the sake of the construction and manufacturing industry and the infrastructure of the United Kingdom?

[David Mundell]

This is a serious issue for both Governments. In the past it has been demonstrated that the Scottish Government and the UK Government can work together on serious issues that affect employment in Scotland, such as Grangemouth. I assure the hon. Gentleman that we will follow exactly the same approach. The Secretary of State and I will raise this issue with ministerial colleagues and do everything we can to work with the Scottish Government, North Lanarkshire council and other interested parties.

[Angus Robertson (Moray) (SNP)]

It has been officially confirmed today that Nicola Sturgeon will become the next leader of the Scottish National party and Scotland’s first female First Minister. I would like to extend congratulations to her. She will be outstanding in those roles. Will the Minister be discussing the vow signed by the three UK leaders and the extensive new powers that it promises? What extensive new powers does the Minister especially support being devolved to Scotland?

[David Mundell]

I join the hon. Gentleman in congratulating Nicola Sturgeon on emulating Margaret Thatcher and becoming the female leader of her party. I most certainly look forward to working with her as the first female First Minister of Scotland. My previous experience of Nicola Sturgeon is that she has adopted a constructive approach to discussions with the UK Government.

The hon. Gentleman will be aware that the Smith commission has been established. All the political parties in Scotland have submitted their proposals. I particularly welcome the fact that the SNP will be part of that process. He will know that my leader in Scotland, Ruth Davidson, has made it quite clear that we see the Strathclyde commission proposals from the Conservative party as a floor and not a ceiling to those discussions.

[Angus Robertson]

I am sure the Minister would not be wanting to create a false impression. There is absolutely no comparison between Nicola Sturgeon and Margaret Thatcher. Nicola Sturgeon will be leading the most popular political party in Scotland. Margaret Thatcher destroyed the Tory party, and he is the living proof of its having only one seat in Scotland.

I am sure that most people in Scotland think that extensive new powers would help the economy grow, create jobs and deliver greater social fairness, so let me give the Minister another opportunity to outline which ones he is in favour of. Will he please, at the Dispatch Box, outline which extensive new powers he is in favour of devolving to Scotland?

[David Mundell]

I am very disappointed that the hon. Gentleman has not read the Conservative submission to the Smith commission, which clearly sets out, for example, our support for the devolution of 100% of income tax powers to the Scottish Parliament. I welcome the comment from the hon. Member for Glasgow East (Margaret Curran) that she is open to those discussions. We have made it clear that the Conservative position is one of flexibility, and we welcome the fact that the Scottish National party is taking part in the discussions. However, the place for those discussions is the Smith commission, so rather than constantly trying to portray the vow or other commitments as having been broken, let the SNP put its time and energy into the Smith commission process.

[Margaret Curran (Glasgow East) (Lab)]

May I begin by paying tribute to the great Scottish journalist Angus Macleod, who died recently? On behalf of the Opposition, I send condolences to his family.

During the referendum campaign, many voters expressed their deep desire for change in our politics and society. Does the Minister believe that the Joint Ministerial Committee should address the figures published today that show growing poverty across Scotland? That one in three children in Glasgow now live in poverty should not just shock us, but shake us into immediate action. What are the Government doing to give greater priority to the fight against poverty in Scotland? Does the Minister believe that Labour’s policy of increasing the minimum wage to £8 would help in that fight?

[David Mundell]

I certainly agree that the people of Scotland are fed up with the politicking they see on a range of issues. Nobody in Scotland wants to see child poverty. The people of Scotland want politicians to work together to deal with these issues. The Scottish Parliament already has extensive powers that have not necessarily been used while we have been distracted by the referendum process. I hope that a new First Minister in Scotland will be less divisive and that there will be less politicking on these issues, and that we can all work together to reduce levels of child poverty in Scotland.

[Neil Carmichael (Stroud) (Con)]

2. What assessment he has made of the implications for Government policy of the outcome of the referendum on independence for Scotland.

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

3. What assessment he has made of the implications for Government policy of the outcome of the referendum on independence for Scotland.

[Graeme Morrice (Livingston) (Lab)]

7. What assessment he has made of the implications for Government policy of the outcome of the referendum on independence for Scotland.

[Fiona Bruce (Congleton) (Con)]

8. What assessment he has made of the implications for Government policy of the outcome of the referendum on independence for Scotland.

[The Secretary of State for Scotland (Mr Alistair Carmichael)]

I wish to echo the words of the hon. Member for Glasgow East (Margaret Curran), the shadow Secretary of State, about the sad passing of Angus Macleod. He was a true highland gentleman and a thorough professional, and our political and public life in Scotland will be much the poorer without him.

The referendum result ensures that Scotland remains part of our United Kingdom. I welcome the fact that all parties have chosen to participate in cross-party talks chaired by Lord Smith to deliver further devolution. On Monday, the Government published a Command Paper. Following receipt of Lord Smith’s report, we will publish draft clauses before Burns night.

[Neil Carmichael]

I, too, welcome the convincing outcome of the Scottish referendum.

Does the Secretary of State agree that in transferring further powers to the Scottish Parliament, we should have commensurate changes for England, and English votes for English laws?

[Mr Alistair Carmichael]

This matter was dealt with at length yesterday in the House. I have always been of the view that completing the job of devolution will unlock the door to further constitutional reform across the United Kingdom. I caution the hon. Gentleman, however, that in seeking to devolve within Parliament without devolving within the Executive, we could be replacing one messy system with another.

[Michael Connarty]

I call on the Government to stop the clock on decisions on fracking for ethane in Scotland under the present reserved powers for the UK. It is quite clear that the matter should now lie with the Scottish people in the Scottish Parliament. I am calling for that to be devolved as a policy response to the referendum decision.

[Mr Carmichael]

I look forward to reading the hon. Gentleman’s full submission, making that case, to Lord Smith’s commission. The hon. Gentleman will be mindful, however, that significant powers have already been given to the Scottish Parliament and Government through control of planning law, which would have a significant effect on the issue that he raises.

[Graeme Morrice]

In June, the Prime Minister signed a joint statement with the Deputy Prime Minister and the Leader of the Opposition, committing himself to “full representation” for Scotland in the House of Commons. Did the Prime Minister’s commitment extend only to the first UKIP win?

[Mr Carmichael]

I assure the hon. Gentleman that the Prime Minister remains committed to the level of Scottish representation on which he had previously given an undertaking.

[Fiona Bruce]

In light of the high level of public engagement in the referendum—97% registered to vote, 85% voted, and there was an electrified public debate that debunked the view that people are not interested in politics, particularly in the future of the UK—will the Secretary of State confirm that the Smith commission will engage not only with all parties but fully with the public across the UK before putting forward its recommendations?

[Mr Carmichael]

I can certainly confirm that. That has been hard-wired into the remit that the Government gave to Lord Smith to undertake his work. It is a very important part of how, over the years, we have built consensus in Scotland about constitutional change. This is too important to be left to the political parties. We must have—I am confident that we will—the voice of business, trade unions, churches and wider civic Scotland.

[Stewart Hosie (Dundee East) (SNP)]

The UK Government’s devolution policy was outlined in this week’s published Command Paper, which sought to devolve, in a number of ways, about a third of Scotland’s revenue base or less than half of the funding requirements of the Scottish Parliament. Given that this is not the unprecedented devolution of major powers promised by the Prime Minister, will the Secretary of State confirm that the Smith commission will not be restricted in any way by the contents of the Command Paper?

[Mr Carmichael]

If I may correct the hon. Gentleman, the purpose of the Command Paper was to bring together and to outline the proposals of the three parties. It is not a statement of Government policy. As I said when I launched the paper in a statement on Monday—I cannot remember whether the hon. Gentleman was here or not; I suspect not—it is clear that the publication and the content of the Command Paper are without prejudice and do not seek to limit or prescribe in any way the work that we have given to Lord Smith to undertake.

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

When the Secretary of State goes to the population summit in Dunoon, will he remind the Scottish Government that devolution should be not just from Westminster to Holyrood, but from Holyrood to local communities in Scotland? Will he tell the SNP Government that they should reverse policies such as centralising the police and fire services and closing local courts, which are taking people and jobs away from rural Scotland and into the central belt?

[Mr Carmichael]

I am very much looking forward to joining my hon. Friend, leaders of his local council and Ministers from the Scottish Government in Dunoon. What he says is very much the message that Ministers from the Scottish Government will hear. It is a message that they get throughout the highlands and islands. Seven years of SNP Government in Edinburgh have given Scotland the most centralised system of government in western Europe. That has got to change.

[Margaret Curran (Glasgow East) (Lab)]

As the Secretary of State knows, extensive new powers for Scotland are being proposed by the Smith commission. As he also knows, a number of substantial changes to income tax in Scotland have already been legislated for by this Parliament. A document that I have obtained from the UK Government indicates a number of risks to implementation—notably, that of a decision from the Scottish Government being delayed around the time of a referendum. Will the Secretary of State update us on any delays that are taking place and on what plans he has to begin to communicate with taxpayers in Scotland about imminent changes to the income tax proposals?

[Mr Carmichael]

I do not know the document to which the hon. Lady refers. If she sends it to me, I will be more than happy to consider it, if I have not already seen it. I can tell her that discussions between Treasury Ministers and Ministers of the Scottish Government about the fine details of the transfer of income tax powers are ongoing. Once those are nailed down, a joint effort by both Governments to communicate what it will mean to Scotland’s taxpayers will obviously be of prime importance.

[Mr Andrew Robathan (South Leicestershire) (Con)]

4. What assessment he has made of allegations of intimidation during the recent referendum campaign.

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

I hope that we can all agree that the referendum campaign was carried out in a democratic and open way, giving Scotland the debate it deserved. Given that the people of Scotland voted decisively to remain part of the United Kingdom, what matters now is respecting the result and working together to secure the new devolution settlement.

[Mr Robathan]

Elections and voting in the United Kingdom have traditionally been viewed as free and fair, and free from intimidation, but only yesterday the hon. Member for Glasgow South West (Mr Davidson) described being called a traitor and a Judas. A former Deputy Leader of the Scottish National party was reported as saying that there will be a day of reckoning for those opposed to separation. There has been graffiti stating that those who voted no will be shot. That is disgraceful and a shame on those responsible. Notwithstanding the devolution of justice, will the Minister ask the Advocate-General for Scotland, Lord Wallace, to see whether further action should be taken and whether there was any criminal activity during the referendum campaign?

[David Mundell]

It is evident that there was some appalling behaviour during the referendum, not least towards people such as J.K. Rowling, when they expressed their views. However, I think we must regard the referendum overall as a triumph of the democratic process. After all, 85% of the Scottish population voted, and voted decisively to keep Scotland in the United Kingdom.

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

It is clear that there was intimidation during the referendum, but a more important question for the Minister is: when does he see the possibility of another referendum? The last thing we need to get in the way of politicians’ day business is another referendum in a generation.

[David Mundell]

I absolutely agree. It is disappointing that in the days before the referendum the First Minister of Scotland was able to say that he did not foresee another referendum in his lifetime; then he said a generation; and now he is saying a few months. That is totally unacceptable. The sovereign will of the Scottish people is that Scotland should remain part of the United Kingdom. We should all come together to forge the new devolution settlement.

[Sir Malcolm Bruce (Gordon) (LD)]

On the Tuesday before the referendum, I was present in Inverurie when a small group of Better Together supporters who had been manning a street stall day was suddenly surrounded by a flash mob of 150 nationalists waving banners, shouting, playing music and creating an intimidating atmosphere. The Better Together supporters stood their ground sufficiently to ensure that the people of Gordon rejected independence by a majority of nearly 2:1.

[David Mundell]

The right hon. Gentleman is absolutely right to highlight the fact that such intimidatory and bad behaviour in the street and on the internet did nothing to further the cause of Yes Scotland. If demonstrators had not been outside the BBC but had been knocking on doors on the Sunday before the referendum, the result might have been closer.

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

May I tell the Minister what intimidation feels like? Banks threatened to leave Scotland; supermarkets threatened to put up prices; big business threatened to relocate to London; No campaigners told pensioners they would lose their pensions. The premise of “Project Fear” was built, designed and packaged to scare Scottish voters from voting for independence.

[David Mundell]

It disappoints me that the hon. Gentleman has so little faith and confidence in the voters of Scotland. I believe they were quite capable of seeing through bluff and bluster from any campaign. They voted in the way they wanted, which was to keep Scotland as part of the United Kingdom.

[Ian Lucas (Wrexham) (Lab)]

5. What the Government’s timetable is for constitutional reform in Scotland.

[The Secretary of State for Scotland (Mr Alistair Carmichael)]

Lord Smith of Kelvin has agreed to oversee the process to take forward devolution commitments to Scotland. Lord Smith will publish his proposals by the end of November. The Government will publish draft clauses by 25 January 2015.

[Ian Lucas]

Will the Secretary of State confirm that compliance with the vows given to the Scottish people ahead of the referendum will in no way be contingent on other constitutional reform within the United Kingdom?

[Mr Carmichael]

I can confirm that absolutely for the umpteenth time from this Dispatch Box. There will be no delay while the rest of the UK catches up with Scotland.

[Sir Bob Russell (Colchester) (LD)]

When the Government look at the timetable for constitutional reform in Scotland, will they take account of the fact that more people live in Essex than voted yes in the referendum and that if United Kingdom residents are to be treated fairly and equally, what is good enough for Scotland is good enough for East Anglia.

[Mr Carmichael]

I can only repeat to my hon. Friend that the timetable that we have given to Scotland will be met. Let me add, however, that the distinction between Scotland and England is that we already have a well-established consensus. The main thing that was apparent to me from yesterday’s debate in the House was that the people of England still have some way to go in building that consensus, and I wish them the best of luck.

[Ian Murray (Edinburgh South) (Lab)]

The Secretary of State at the Dispatch Box and many Opposition Members continue to repeat that the timetable is on track, but the nationalists keep putting it about that it has been broken. Why does the Secretary of State think that is, and what does he think we can do about it?

[Mr Carmichael]

I confess that that timetable has been broken, because the Command Paper that was published on Monday was published two and a half weeks before the deadline that had been set for publication. The nationalists will have to speak for themselves, but every time they seek to undermine the work of Lord Smith and his commission, it raises a suspicion in my mind, and among a growing number of people in Scotland, that although they are part of the process, they are not acting in good faith. [Interruption.]

[Mr Speaker]

Order. There is excessive noise in the Chamber. However, I feel sure that there will now be an atmosphere of hushed anticipation for Sir William Cash.

[Sir William Cash (Stone) (Con)]

Given what the Secretary of State has just said, and given what he said yesterday in regard to the issue of English laws for English voters, how does he reconcile his statement from the Dispatch Box with collective responsibility in this Government? In the light of that question, is it not time that the coalition was brought to an end?

[Mr Carmichael]

No. I am confident that the coalition will continue until the end of this Parliament. As my hon. Friend will know, the Prime Minister has set up a Cabinet Committee, chaired by my right hon. Friend the Leader of the House, which is intended to establish Government policy on this issue if that is at all possible.

[Gordon Banks (Ochil and South Perthshire) (Lab)]

In 2010, the Secretary of State called for a citizens’ convention on the constitution. Yesterday, at the Dispatch Box, he said that the constitutional convention should not be seen as kicking devolution into the long grass. Does he still stand by what he stood for in 2010 in his manifesto, and what he said in the House yesterday?

[Mr Carmichael]

I think there are lessons that the rest of the United Kingdom can learn from the way in which we have gone about building consensus to achieve constitutional reform throughout the United Kingdom. Bringing together not just the political parties but the other interested voices is absolutely essential. It is the best way in which to proceed, and I hope very much that the rest of the United Kingdom will take a leaf out of Scotland’s book.

[David Mowat (Warrington South) (Con)]

6. What further plans he has for a Scottish constitutional settlement.

[The Secretary of State for Scotland (Mr Alistair Carmichael)]

Lord Smith of Kelvin has agreed to oversee the process to take forward devolution commitments to Scotland. He will publish his proposals by the end of November, and the Government will publish draft clauses by 25 January.

[David Mowat]

My constituents are very much in favour of the direction of the settlement, but they fear that it may enshrine the £1,600 per annum public sector differential between England and Scotland. Can the Secretary of State assure us that that will be reviewed as part of the process?

[Mr Carmichael]

One of the express elements in the vow that was delivered to the people of Scotland was an assurance that there would be no change in the Barnett formula. I should add, however, that once we have delivered the extra tax-raising powers that I believe will go to the Scottish Parliament, the formula will obviously account for a lesser proportion of the Scottish Government’s income than is currently the case.

[Mr Ian Davidson (Glasgow South West) (Lab/Co-op)]

Does the Secretary of State accept that if fundraising powers such as the power to tax income are transferred to the Scottish Parliament to a greater extent, adjustments will have to be made to the Barnett formula to take account of fluctuations, just as account will have to be taken of fluctuations in the oil price?

[Mr Carmichael]

Adjustments will certainly have to be made to the way in which the Barnett formula operates in detail. That is already being undertaken by Treasury officials and Ministers in relation to the powers that are going to Scotland under the Scotland Act 2012.

[Anas Sarwar (Glasgow Central) (Lab)]

Any future constitutional settlement must make it easier to build a fairer society in Scotland. According to a report published by Oxfam, inequality should be measured in terms of welfare, housing, health, education, justice, and employability. Five out of those six have already been devolved to Scotland. Does that not demonstrate that we have two Governments who are failing the people of Scotland?

[Mr Carmichael]

What it shows is that these are complex problems that will require close working by Scotland’s two Governments in order to tackle them. I very much hope that, now we have got the referendum behind us, we will be able to see the cross-party and cross-government working that the people of Scotland need and demand.

The Prime Minister was asked—

[Joan Walley (Stoke-on-Trent North) (Lab)]

Q1. If he will list his official engagements for Wednesday 15 October.

[The Prime Minister (Mr David Cameron)]

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

[Joan Walley]

Everyone in Stoke-on-Trent is finally breathing a sigh of relief that the Government have at last committed extra money to fund the merged hospital services in mid and north Staffordshire, but will he now listen to the widespread local public concern and commit to reversing his Government’s £1.2 billion privatisation of cancer care in Staffordshire?

[The Prime Minister]

I welcome the hon. Lady’s welcome for the fact that money is being put forward to help what the University Hospital of North Staffordshire NHS Trust is doing. A £256 million investment, including £80 million of capital funding, is going into making sure that this project can work well. I have been following the situation in Staffordshire very closely, and I will continue to do so. On cancer, I would say to her that the number of people being referred for cancer treatment under this Government is up 50%. We inherited some of the worst cancer survival rates anywhere in Europe, but in this country they are now at record levels.

[Mr Stewart Jackson (Peterborough) (Con)]

Does my right hon. Friend agree with the opinion of at least one Member of this House sitting on the Opposition Benches—he knows who he is—that the only way to get an EU referendum is to vote Conservative with my right hon. Friend as Prime Minister? Will he commend such eminently sound judgment?

[The Prime Minister]

I cannot think who my hon. Friend is referring to, but it is certainly true to say that if we are not satisfied—as I am not satisfied—with the way the EU is working at the moment and if we want change, reform, renegotiation and, crucially, an in/out referendum—not for us to decide, but for the British public to decide—there is only one choice, and that is to vote Conservative.

[Edward Miliband (Doncaster North) (Lab)]

I should say at the outset that I am speaking through a sore throat, but I would not have missed this meeting with the Prime Minister for the world. Today’s fall in unemployment is welcome. Every time someone gets a job, it is good for them and for their family. Will the right hon. Gentleman confirm, however, that the latest figures show that wages are still failing to keep pace with inflation and that he is presiding over the longest fall in living standards for a century?

[The Prime Minister]

Let me say to the right hon. Gentleman that I am sure the whole House will want his sore throat to get better soon. I hope that, if he gets a doctor’s appointment, he will not forget it. He must make sure he turns up on time.

I am glad that he has asked me about unemployment, because the figures out today show that our long-term plan is working. We see unemployment now below 2 million, we see the claimant count below 1 million and we have just seen the biggest annual fall in unemployment since records began. Long-term unemployment, youth unemployment, long-term youth unemployment and women’s unemployment are all down, but there is absolutely no complacency. To answer his question directly: yes of course we have seen slow wage growth, but that is because we are recovering from the longest and deepest recession in this country’s history. Let me remind him what the Institute for Fiscal Studies said:

“We’ve had a great big recession. We had the biggest recession we’ve had in 100 years. It will be astonishing if household incomes haven’t fallen and earnings haven’t fallen”.

Of course that has happened, and we know who is responsible.

[Edward Miliband]

The right hon. Gentleman obviously noticed that I lost a couple of paragraphs in my speech. I have noticed that since we last met he has lost a couple of his Members of Parliament. Let us talk about what he said at conference. Before the last election he lectured the Tory party and said this:

“you can’t talk about tax reduction unless you can show how it is paid for, the public aren’t stupid”.

So when he announced his £7 billion unfunded tax cut he must have had a secret plan to pay for it. What is it: cutting public services or raising VAT?

[The Prime Minister]

People do not have to look in the crystal ball with us; they can read the book. We have cut taxes for 26 million people in our country; we have taken 3 million people out of income tax altogether; and we have raised the personal allowance to £10,000, so that if someone is on the minimum wage, we have cut their income tax bill by two thirds. But we have been able to do that only because we remembered something important: you have got to have a long-term economic plan and you have got to cut the deficit. We do have a plan, the deficit is down by a third, and the International Monetary Fund says that we are the fastest-growing economy in the G7. With a record like that, we can afford tax cuts—that people deserve.

[Edward Miliband]

We can see the record: higher VAT; cuts to tax credits; hitting working families; and the bedroom tax. That is the record of this Prime Minister. He cannot be straight about his tax plans, so perhaps he can be straight about his plans for tax credits. Can he confirm that as a result of his plans a one-earner family with two children on £25,000 a year will lose almost £500 a year?

[The Prime Minister]

The best way to help people is to take them out of income tax altogether. Next year, people will be able to earn £10,500 before they pay any income tax. We think it is better not to take money off people in the first place, but the right hon. Gentleman wants to compare records. After all, this is the Labour party, so let us look at the record on labour. Here it is: women’s unemployment up 26% under Labour, down 11% under this Government; and youth unemployment up 44% under Labour, down 22% under this Government. The fact is that the economy is growing, the deficit is coming down and we are getting Britain back to work. The long-term plan is working, but the one thing that could wreck it is a Labour Government.

[Edward Miliband]

The right hon. Gentleman did not answer the question or confirm the figures. Let me just tell him that they are the Chancellor’s own figures showing that people will be £500 a year worse off, and the Prime Minister cannot even admit that. Let me ask him about a very specific issue about disabled people and the minimum wage, which goes to the issue of living standards. In response to a question at the Conservative party conference, Lord Freud, the welfare reform Minister, said:

“You make a really good point about the disabled…There is a group…where actually as you say they’re not worth the full wage.”

Is that the Prime Minister’s view?

[The Prime Minister]

No, absolutely not. Of course disabled people should be paid the minimum wage, and the minimum wage under this Government is going up, and going up in real terms. It is now at £6.50, and we will be presenting our evidence to the Low Pay Commission calling for another real-terms increase in the minimum wage. The right hon. Gentleman talked about the Chancellor’s figures, so let me give him the Chancellor’s figures: inflation is at 1.2%—a five-year low; we have had the biggest annual fall in unemployment since records began; we have the fastest-growing economy in the G7; and next year pensioners will be getting an extra £150 a year. Those are the Chancellor’s figures, those are the Government’s figures, and we know that we just get mayhem from Labour.

[Edward Miliband]

We need to be clear about what the welfare reform Minister said, because it is very serious. He did not just say that disabled people were “not worth” the minimum wage. He went further and said that he was looking at

“whether there is something we can do…if someone wants to work for £2 an hour.”

Surely someone holding those views cannot possibly stay in the right hon. Gentleman’s Government?

[The Prime Minister]

Those are not the views of the Government. They are not the views of anyone in the Government. The minimum wage is paid to everybody, disabled people included. [Interruption.]

[Mr Speaker]

Order. Passions are running high but the answer from the Prime Minister must be heard, and I want to hear it.

[The Prime Minister]

Let me tell you that I do not need lectures from anyone about looking after disabled people, so I do not want to hear any more of that. We pay the minimum wage, we are reforming disability benefits, we want to help disabled people in our country and we want to help more of them into work. Instead of casting aspersions, why does not the right hon. Gentleman get back to talking about the economy?

[Edward Miliband]

If the Prime Minister wants to protect the rights of disabled people, I suggest that he reads very carefully what his welfare reform Minister has said, because they are not the words of someone who should be in charge of policy relating to disabled people. In the dog days of this Government, the Conservative party is going back to its worst instincts: unfunded tax cuts, hitting the poorest hardest and now undermining the minimum wage. The nasty party is back.

[The Prime Minister]

I can tell the right hon. Gentleman what is happening under this Government: inflation is down, unemployment is down, the economy is growing and the deficit is coming down. We have faced some tough and difficult times in our country, but we have a Government who are on the side of hard-working people. He came here and told us about the forgotten paragraphs in his speech—I have a copy of them with me. They came under the heading “Hard truths”. Well, I have a hard truth for him: he is not remotely up to the job.

[Mark Hunter (Cheadle) (LD)]

Hundreds of thousands of people across the United Kingdom have their privacy invaded every day of the week by the menace of nuisance phone calls. Those unwanted and intrusive calls blight the lives of far too many of our citizens. Does the Prime Minister think that the Government have done enough to tackle the problem, and will he support stronger action against the perpetrators?

[The Prime Minister]

I am happy to look at what my hon. Friend says. We do have the Telephone Preference Service that helps people to avoid a lot of those calls, but I have had pressure for more to be done, and I am happy to look at what he says.

[Kerry McCarthy (Bristol East) (Lab)]

Q2. A survey I did of GPs in Bristol this summer showed that they are at breaking point: their workloads have doubled, they cannot recruit and surgeries are at serious risk of closure. It was said this week that the Prime Minister did not have a clue about the NHS reforms. Will he at least acknowledge that it is now harder to be a GP and to see a GP on his watch?

[The Prime Minister]

Of course there are pressures on our NHS; everybody knows that. We made some big decisions on becoming the Government, which were to go on spending on the NHS—we put £12.7 billion more in—and to cut the bureaucracy so that there are 20,000 fewer administrators and 6,000 more doctors, including, crucially, 1,000 more GPs. We need to go on to ensure that the reform plus the money eases the pressure on our health service so that we can continue to see the sort of success that we have in our NHS today.

[Mr David Davis (Haltemprice and Howden) (Con)]

Q3. As the Conservative party and only the Conservative party will deliver a referendum and a renegotiation on Europe, will the Prime Minister tell us his intentions of bringing to this House the red line issues that will feature in his renegotiations, and can he give us a preview of some of those issues today?

[The Prime Minister]

I have set out some of the things that need to change. They include safeguards for the single market, the ability to block new regulation, ensuring that Britain comes out of ever-closer union and, crucially, as I said in my conference speech, addressing the issue of immigration. I am looking forward to addressing all of those issues in the months ahead.

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

Given the very serious spread of the Ebola virus worldwide, with reports that there could be up to 10,000 new cases per week in two months’ time, will the Prime Minister, as part of his meetings later today and in Cobra, ensure that he liaises very closely with the authorities in Northern Ireland, which shares a land frontier with another jurisdiction, in relation to checks on people coming into the UK? It is a very serious issue for Northern Ireland and potentially a very serious issue for the rest of the United Kingdom.

[The Prime Minister]

The right hon. Gentleman is absolutely right. There will be another Cobra meeting chaired today by the Foreign Secretary. I will be chairing one tomorrow. We are looking at all these issues about where people are arriving, and co-operating properly with all the devolved authorities. It is worth stressing that there are no direct flights from Liberia, Sierra Leone or Guinea into the United Kingdom, so we are talking about people who come here indirectly, which is why it is so important that we put in place the screening processes, starting at Heathrow but to be rolled out more as the days go by. I am absolutely convinced that we will do everything we can to keep this country safe. I will ensure that proper liaison takes place not only with Northern Ireland but with the Republic.

[Robert Halfon (Harlow) (Con)]

Q4. Is my right hon. Friend aware that over the past couple of years in Harlow youth unemployment has been cut by 53% and general unemployment by 43%, the number of apprentices has gone up by 82% and there have been tax cuts for thousands of low earners? Does that not show that we are the true workers party now and the modern trade union movement for hard-working people?

[The Prime Minister]

I congratulate my hon. Friend on all the work he does locally to help promote jobs, apprenticeships and training. He is absolutely right, and there has been a 56% decline in unemployment in his constituency, but let me stress that there is still more work to be done. We have got to stick to our long-term economic plan. We are not immune from pressures, including the problems in the eurozone, so we need to stick to the plan and do everything we can to get even more people back to work.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

Q5. In the light of the National Audit Office’s estimate of a £750 million cost to the taxpayer of the sale of Royal Mail, what measures will the Government take to ensure that when they sell Eurostar, the City gravy train will not take the taxpayer for a ride yet again?

[The Prime Minister]

Let me say to the hon. Gentleman that there was not a cost to the taxpayer of the sale of Royal Mail. There was a benefit to the taxpayer, because for the first time we had a receipt in for the sale and no longer had, as we did in the Labour years, loss after loss after loss. We are looking at expressions of interest for the business that he mentions and we will make sure that we get value for money for the taxpayer if we look to involve the private sector.

[Richard Graham (Gloucester) (Con)]

The 1984 joint declaration committed Britain and China together to preserve the freedoms and stability of, and a high degree of autonomy for, Hong Kong for 50 years. Recent large demonstrations there show that the people of Hong Kong have real concerns over proposals for the election of their next Chief Executive. Does my right hon. Friend agree that we should do everything possible to encourage the Governments of Hong Kong and China to find ways to provide the widest possible choice in that important election and that that is vital to the stability of Hong Kong and the interests of both Britain and China?

[The Prime Minister]

I agree with my hon. Friend that it is important that democracy involves real choices. I also think that we should be very clear about the importance we attach to the 1984 joint declaration, which makes it very clear that the current social and economic systems in Hong Kong will remain unchanged, including lifestyle. It talks about:

“Rights and freedoms, including those of the person, of speech, of the press, of assembly, of association, of travel, of movement, of correspondence”

and, indeed, “of strike”. Those are important freedoms jointly guaranteed through that joint declaration and it is that, most of all, that we should stand up for.

[Graham Jones (Hyndburn) (Lab)]

Q6. Proposed cuts to GP funding, the proposed closure of a walk-in centre in Accrington, proposed cuts to the GP practice in Accrington Victoria hospital, accident and emergency in special measures, the police taking constituents to A and E at Blackburn Royal hospital in police cars: the NHS in my constituency is in crisis. What can the Prime Minister ever do, considering the broken promises he has given, to assure my constituents that the NHS is safe?

[The Prime Minister]

We are not cutting spending on the NHS, which is what those on the hon. Gentleman’s Front Bench recommended at the beginning of this Parliament. We are spending £12.7 billion more on the NHS, and if we look at his own clinical commissioning group in East Lancashire, we can see that the funding this year of £490 million is going up by 2.14%. That is an increase of more than inflation. That is our policy and that is not the policy of the Labour party.

[Mr David Ward (Bradford East) (LD)]

Q7. The Palestinian ambassador, Mr Hassassian, has described Monday’s vote on the recognition of the Palestinian state as “a momentous vote”. Indeed it was. He has also said:“Now is the time for the UK government to listen to its democratically elected parliament and to take decisive political action by recognising the State of Palestine and upholding its historical, moral and legal responsibility towards Palestine”.Does the Prime Minister agree?

[The Prime Minister]

Of course, I look forward to the day when Britain will recognise the state of Palestine, but it should be part of the negotiations that bring about a two-state solution. That is what we all want to see—a state of Israel living happily and peacefully alongside a state of Palestine—and that is when we should do the recognition.

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

Q8. South Tyneside hospital in my constituency is facing an extra 30,000 visits a year because of the closure of the walk-in centre in nearby Jarrow. Is that acceptable?

[The Prime Minister]

As I have said, NHS funding is going up. If we look at South Tyneside clinical commissioning group, we see that this year its funding has increased by 2.14%. That is more money for the NHS, but obviously it is up to local commissioners to decide how to spend it. They have more money under this Government, whereas they would have had less money under Labour, which said that spending more money on the NHS was “irresponsible”.

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

Does my right hon. Friend agree that far too many people who cannot be described as rich are finding themselves caught up in inheritance tax? Does he also agree that that is not only unfair, but not what the tax was originally intended for? Does he agree that we need to reform it as soon as possible?

[The Prime Minister]

I agree with my hon. Friend. It was a step forward when the threshold was effectively increased by allowing things to be passed between husband and wife, making it £650,000 rather than £350,000, which I think it was before. That only happened because of the pressure from the Conservative party when we were in opposition. Taxes, as they say, are a matter for the Chancellor in his Budget, but we all want to see a system—this might have to wait some time—in which only the very rich pay inheritance tax, not hard-working people.

[Jenny Chapman (Darlington) (Lab)]

Q9. This summer, mothers from Darlington marched 300 miles to show their anger at the this Government’s wasteful mismanagement of the health service. Darlington—I want to help the Prime Minister—is in the north-east of England, like the constituency of my hon. Friend the Member for South Shields (Mrs Lewell-Buck). Does he agree with the Darlington mums and, it seems, a member of his own Cabinet that spending £3 billion on reorganising the NHS was his biggest mistake?

[The Prime Minister]

What we did at the beginning of this Parliament was ensure that we cut the bureaucracy and put in the extra money. The only way to have a strong national health service is by having a strong economy. Let us look at the countries that ignored their deficits. Greece cut its NHS by 14%; Portugal cut its NHS by 17%. They have something in common with the hon. Lady’s leader: they all forgot the deficit.

[Jeremy Lefroy (Stafford) (Con)]

I welcome the £300 million investment in Stafford, Stoke, Cannock and Wolverhampton hospitals, but will my right hon. Friend recognise the substantial improvements at Stafford in recent years and the very hard work of its staff, and will he confirm when the NHS England-led review of consultant-led maternity services at Stafford will take place?

[The Prime Minister]

I am delighted to add to what my hon. Friend says about the hard work being done at Stafford hospital. The link-up with North Staffordshire and the extra money that has been put in gives an opportunity for a fresh start. Obviously, like him, I want to see as many services as possible maintained at Stafford hospital, and I know the importance that local people attach to maternity services. People who live in Stafford want to have their children in their local hospital, and I quite understand that.

[Mr Steve Reed (Croydon North) (Lab)]

Q10. Does the Prime Minister agree that the £11.5 million wasted on a botched and abandoned reorganisation of south-west London’s NHS services would have been better spent providing more GPs so that my constituents do not have to wait over two weeks to see a doctor?

[The Prime Minister]

The hon. Gentleman mentions waiting times, so let me remind him that when this Government came into office there were 18,000 people waiting longer than a year. That number is down to 500, and that is because we have run the health service and the economy effectively. The reorganisation that took place in the NHS was about getting rid of bureaucracy. There are now 20,000 fewer administrators, 6,000 more doctors and 3,000 more nurses. That is a record we can be proud of.

[Lorely Burt (Solihull) (LD)]

Q11. One in four beds in our hospitals is occupied by a patient with dementia. Being treated in ordinary wards can cause them distress and confusion, hampering their recovery and that of other patients. Does the Prime Minister agree with me, and with health practitioners in my local hospital in Solihull, that patients with dementia should be cared for by specially trained staff and, where necessary, in separate wards, and will he support my campaign to make it so across England?

[The Prime Minister]

In dementia, we face an enormous challenge in our country and, indeed, across the world, because so many people have this condition and so many people are likely to get it. This Government have increased massively the research that is going into dementia. We have trained over 1 million dementia friends so that we build more dementia-friendly communities, and we have trained over 100,000 NHS staff in how better to treat people with dementia. We are putting something like £50 million into hospitals to try to help them with the way that we treat dementia sufferers. But the hon. Lady is absolutely right: the more people who we can treat in the community and who we can maintain at home the better, because very often being in a hospital, particularly in A and E, is not the right answer for someone with dementia.

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

My constituent Alan Henning was brutally murdered by the self-styled Islamic State. In Eccles we have lost a local hero who ignored his own safety to take aid to children in need in Syria. People from across this country have told me that they believe that this noble sacrifice should be recognised in some way by a national honour and by support for his widow and children. Can the Prime Minister tell me if he supports these ideas and what we can do to progress them?

[The Prime Minister]

I will look very carefully at the suggestion that the hon. Lady makes, because she is absolutely right that Alan Henning was a hero. He went to serve others. He went with no thought of his own safety: it was about helping other people in their time of need. He was an entirely innocent man, and the fact that he was murdered in such a brutal fashion demonstrates the dreadfulness of the people who we are dealing with in ISIL. I know that people in Eccles and in Salford miss him greatly. I spoke to his wife; the family have been incredibly brave. The hon. Lady makes a very good suggestion which I will take away and look at.

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

Q12. Will the Prime Minister join me in congratulating the excellent Conservative-run Medway council on securing nearly £30 million from the Government’s national growth fund, which will further help to improve economic regeneration in the local area? The fact that youth unemployment in the local area is down, unemployment overall is down, apprenticeships are up, business creation is up and jobs are up clearly shows that our long-term economic plan is working both locally in Medway and nationally across the country.

[The Prime Minister]

My hon. Friend is absolutely right. The claimant count in his constituency is down by 36%, which is a huge advance over recent years. He is right about the importance of the local growth deal. This is going to mean more transport links in and around Medway and investment in the growth hub. A total of £442 million of growth funding has gone into this deal. Like him, I have got a feeling I will be spending some time in the Medway towns in the months and years—in the weeks—to come.

[Douglas Carswell (Clacton) (UKIP)]

My hon. Friend the Member for Richmond Park (Zac Goldsmith) will be pressing amendments to ensure that the Recall of MPs Bill makes MPs meaningfully accountable to their constituents—real recall. Will the Prime Minister now support these amendments in order to honour the promises on which he sought office in 2010?

[The Prime Minister]

We made it very clear that we wanted to see a recall Bill come in front of Parliament and be voted on, and I am delighted that we are keeping that promise; the Second Reading of the recall Bill will be happening very soon in this House. I will look very carefully at all amendments that come forward because, frankly, in getting this Bill together we have come up with the minimum acceptable for recall, but I think there are a lot of very good arguments to be had about how we can go further, and I look forward to having them in the House of Commons.

[Richard Harrington (Watford) (Con)]

Q13. Since 2010 there has been £50 million-worth of investment in schools in Watford. Only last week, we had the announcement about St John’s Church of England primary school, under Father David Stevenson. Can my right hon. Friend assure me that this situation of massive investment in schools will continue, because it is hugely benefiting my constituents and their children?

[The Prime Minister]

We are spending £18 billion in this Parliament on school buildings—that is more than Labour spent in their first two terms in office combined—and I want to see that continue. What we are seeing in our schools is not just this important building work but a massive change in culture and leadership as we see standards rise and we see school after school really transformed through their results. I know that is happening in Watford, as elsewhere, and so what we must do is carry on with this programme, carry on with our reforms, and make sure we give more young people the chance of a good start in life.

[Nic Dakin (Scunthorpe) (Lab)]

Today, Tata has announced that it hopes to sell its long products business, including the integrated steel site in Scunthorpe. People are understandably concerned about that. Will the Prime Minister meet me and a cross-party group of MPs whose communities are affected by the decision, in order to make sure there is a bright future for long product steel in the UK, which underpins so much of British manufacturing?

[The Prime Minister]

I am very happy to meet the hon. Gentleman and other north Lincolnshire MPs to discuss this vital issue. Over the past four years we have seen some good developments in the steel industry, not least with the reopening of Redcar and what has happened in Port Talbot. I want to see a strong future for steel making in Scunthorpe. I know how important this issue is. We are engaging with both Tata Steel and the company that is looking to buy, and we look forward to those discussions. The hon. Gentleman will also know that we took action in the Budget to try to ease the burden on energy-intensive users. We have seen a recovery of manufacturing in this country, particularly through the car industry, and obviously we want to see the steel industry as part of that.

[Duncan Hames (Chippenham) (LD)]

As the economy gets stronger, we on the Government Benches will not forget the deficit, but if the Prime Minister can afford his tax cuts, will he also commit to continuing the protection of school budgets that we have achieved under this coalition, or must tax cuts for high earners and those inheriting estates come first?

[The Prime Minister]

As my hon. Friend knows, the truth about all these things is that we can afford a strong school system and a strong health system only if we maintain a strong economy. That is why he is absolutely right to say that we must not forget about the deficit, as the Leader of the Opposition did. We have to make sure that we keep getting the deficit down and keep getting the country back to work. The truth is that, as we stand here today, the British economy is growing and more people are getting into work. We are making good progress on all our economic plans, but there is no complacency, because we face real challenges in terms of what is happening in the rest of the world. The biggest threats to the British economy are sitting a few feet away from me—people who have learned absolutely nothing. They would borrow more, tax more and spend more. They would take us right back to the start.

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

The people of Kobane in northern Syria are desperately fighting off attack from ISIS. The United Nations Secretary-General has asked for immediate action to tackle it and support the beleaguered civilian population. What are the UK Government doing to try to make sure that massacre is prevented in Kobane?

[The Prime Minister]

Of course, we are taking action in the skies over Iraq, but we fully support the action that America and other states, including Arab states, are taking in the skies over Syria, which has had some effect on the town of which the hon. Lady speaks. I think there is a case for Britain doing more, but I recognise that what we have to focus on right now is the air power over Iraq and the training of an effective Syrian national opposition, because in time the right answer for Syria is the same as the right answer for Iraq: a Government who can represent all of their people and armed services that can fight on behalf of all of their people. Britain should play its role in making sure that happens.

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

Will the Prime Minister join me in thanking the 45 companies and organisations that attended my fourth jobs fair last week? Will he also thank Selby college for putting on the event and the staff at Selby Jobcentre Plus, and welcome the fact that unemployment in Selby and Ainsty is now down by more than half since the last election?

[The Prime Minister]

I congratulate my hon. Friend on holding those jobs fairs, which have been a very effective way of helping people who are looking for work to get jobs. If we look at Yorkshire and Humberside overall, we see that across the year there has been a 46,000 reduction in unemployment. That demonstrates that unemployment is coming down right across our country, but we have to stick to the long-term economic plan that is delivering that.

[Several hon. Members]

rose—

[Mr Speaker]

Order.

[Mr Dennis Skinner (Bolsover) (Lab)]

Just one more.

[Mr Speaker]

Mr Skinner will, I am sure, be in his place next week and probably several times before then.

Mental Health Act 1983 (Amendment)

Wednesday 15th October 2014 Commons Chamber

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

[Mr Speaker]

Colleagues who are perambulating around will no doubt leave the Chamber swiftly so that we can move on to the ten-minute rule motion.

12:35

[Sir Paul Beresford (Mole Valley) (Con)]

I beg to move,

That leave be given to bring in a Bill to amend section 136 of the Mental Health Act 1983; and for connected purposes.

Thank you for clearing my line of vision through to you, Mr Speaker. As you are well aware, the useful advantage of the ten-minute rule Bill mechanism is that it can, if a Member so wishes, be used to introduce small changes that cannot easily be fitted into the flow of legislation through the House. My Bill would make a tiny amendment, and I wish it to be supported as a classic example of such a Bill.

I am sure that you are aware of the police parliamentary scheme, Mr Speaker. I highly recommend it to any Member who would appreciate seeing how the police act in the field under existing legislation. It is a great opportunity to be made aware of small changes in legislation that would assist the police in their duties. I am currently part of the way through the course.

A few weeks ago, I joined two young uniformed police officers based in Wandsworth in their police response car. The first call was a blue-light-and-siren dash to a Wandsworth council residential tower block. As it was a Wandsworth property, the lift was clean and fully functioning. We progressed to the source of the emergency call, which was a flat on the 14th floor. The mother of the household nervously let in one of the two officers to see her daughter, aged 22, who was standing on the window ledge and threatening to jump. It was quickly elucidated that she had a short history of having made a previous attempt to commit suicide, but I am not sure if that was by the same means.

The appearance of the uniformed officers did little to ease the problem; but fortunately, we were backed up by two plain-clothes officers, and the young female officer seemed to be acceptable to the young lady on the window sill. With great expertise, she after some time persuaded the lady to come down off the window sill and, eventually, to sit on the bed beside her, as they calmly discussed the problem. The police officer suggested that she might wish to go to a place of safety for medical and psychiatric help. This was refused, and was followed by agitation and more threats to dive out the window.

As all that was being played out, the officers outside the flat had contacted St George’s hospital psychiatric unit to obtain assistance. After a couple of hours, such an individual arrived with an ambulance and a crew of two. Their introduction to the young lady required more re-calming, and we went through the whole procedure all over again. Offers of help, particularly of psychiatric help, caused more alarm and more rejection. The NHS gentleman who had arrived with the ambulance then indicated to the police that the young lady really needed to be taken in for care. The fact that that was glaringly obvious is of course beside the point. A struggle ensued, which required some of the officers to hold her, and in due course she was transported to St George’s hospital as the designated place of safety.

This whole pantomime had occupied up to five police officers and three NHS staff, and it had taken three to four hours to sort out. It was quite obvious from the very beginning that the young lady needed help. It appeared to me that the police officers managed the situation well, and that they could themselves have taken the young lady in for care well within the 45 minutes during which they expeditiously persuaded her. That would have reduced not only police officer and NHS manpower hours, but the time taken and the risk of the young lady dashing back to the window and leaping out.

From discussions with the officers, I found, first, that this kind of situation is far from unusual, and secondly—this surprised me—that if this incident had occurred in a public place, the police would have been able to act immediately. I fail to see why the fact that it happened in a private place meant that they were unable to do so. I therefore wish to make some small changes to the legislation.

I should like section 136 of the Mental Health Act 1983 to be amended as follows. First, the heading, “Mentally disordered persons found in public places”, should be changed to, “Mentally disordered persons found by the police in the course of their duties”. Secondly, the words

“in a place to which the public have access”,

should be changed to, “in the course of carrying out his duties”. That is a small change, but it demonstrates that at the moment we are prepared to place our trust in the police in a public place, but apparently not in a private place. I think that that small change would be very effective, as the example that I have portrayed demonstrates.

I usually call Paul Goggins to present such Bills with me but, regretfully, he cannot do so, so I am doing it on my own.

Question put and agreed to.

Ordered,

That Sir Paul Beresford present the Bill.

Sir Paul Beresford accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 24 October, and to be printed (Bill 98).

Opposition Day

Wednesday 15th October 2014 Commons Chamber

[6th Allotted Day]

National Minimum Wage

Wednesday 15th October 2014 Commons Chamber

12:41

[Mr Chuka Umunna (Streatham) (Lab)]

I beg to move,

That this House notes that the value of the National Minimum Wage has been eroded since 2010 as working people have been hit by the cost-of-living crisis and are on average £1,600 a year worse off; recognises that the fall in the real value of the minimum wage since 2010 is now costing the public purse £270 million a year in additional benefit and tax credit payments; further notes that the Chancellor of the Exchequer cruelly misled working people by saying he wanted to see a minimum wage of £7 while the Government has no plans to reach this goal; calls on the Government to set an ambitious target for the National Minimum Wage to significantly increase to 58 per cent of median average earnings, putting it on course to reach £8 before the end of the next Parliament; supports action to help and encourage more firms to pay a living wage through “make work pay” contracts to boost living standards and restore the link between hard work and fair pay so that everyone shares in the UK’s wealth, not just a few at the top; and further calls on the Government to set a national goal of halving the number of people on low pay by 2025.

We are a great country with some of the most hard-working and creative people in the world, but there are challenges and problems that must be addressed. We are the sixth largest economy in the world, yet too many people do not have secure, fulfilling jobs that provide dignity, respect and a wage that they can live on. Most people who are living in poverty in this country have a job. If people do the right thing, play by the rules and work hard, day in, day out, they should not have to live in poverty in this country; but the reality in 2014 is that they do. More than 5 million people do not earn a decent wage.

We can see the economic data and, yes, on paper, GDP growth is better than it was two years ago, but the reality of people’s lived experience suggests otherwise. Just in the past fortnight, the much respected Resolution Foundation has produced research that paints a different picture. Tens of thousands of people are trapped in low-paid jobs with little hope of a pay rise. Among those minimum wage employees who have been employed for at least five years, a record one in four has failed to progress off the minimum wage for the entirety of that period. That compares with just one in 10 minimum wage workers a decade ago.

That is the background to our motion. What each party says it will do to address that situation and to make work pay will provide the context in which the next general election is fought. Before I set out what the Labour party would do if elected next year, I will remind people what we have already done. I have said it before and I will say it again: in 2010, this party left the country in an immeasurably better state than we found it in 1997. [Interruption.] If the Minister waits, he will get his time in a moment. One of the many reasons for that was our utter determination to end the outrage of people being exploited at work, which led to our establishment of the national minimum wage in the face of opposition from Conservative Members.

In 1997, the current Secretary of State for Work and Pensions—I note that he is not here—told the House that if we introduced the national minimum wage, it would

“negatively affect, not hundreds of thousands but millions of people.”—[Official Report, 4 July 1997; Vol. 315, c. 526.]

In the same year, the current Defence Secretary told the House that the Conservative party had “always resisted” the minimum wage and that he thought there were “other better solutions” to extreme low pay. Then, of course, there was the Conservative party leader—now the Leader of the House—who said that a minimum wage would be

“either so low as to be utterly irrelevant or so high that it would price people out of work.”—[Official Report, 17 March 1997; Vol. 308, c. 618.]

They and their Conservative colleagues made those claims and arguments to justify inaction at a time when some people in this country were earning as little as £1 an hour.

We had the good sense to ignore the Conservatives, and in my view establishing a national minimum wage was one of our greatest ever achievements. As a consequence, between 1997 and 2001 extreme low pay fell from 6.9% to 1.5% of the work force, and we are proud of that. All the evidence shows that the minimum wage boosted earnings considerably, without causing the unemployment that we were told would follow. So when people say that we are all the same, I point to the establishment of the minimum wage to illustrate our very different instincts as parties, our different approaches and the kind of difference that a Labour Government make when in office.

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

I served on the Committee that considered the National Minimum Wage Bill, and the only other person in the Chamber who did that is you, Mr Speaker. We spent many long hours through the night—

[Chris Bryant (Rhondda) (Lab)]

He was wrong then!

[Mr Brown]

I will refer to that later, but it is right that my hon. Friend the Member for Streatham (Mr Umunna) continues to push this issue, because some people out there believe that the national minimum wage would have happened in any case.

[Mr Umunna]

I thank my hon. Friend; that is interesting and I look forward to hearing his comments on who took what position at that time.

Yesterday, I revisited an interview with the great Sir Ian McCartney, a former Member of this House, who was the Minister at the Department of Trade and Industry and pushed the National Minimum Wage Bill through the House. He said that he would have “died in the ditch” to ensure that we got it through, and—my hon. Friend the Member for Dumfries and Galloway (Mr Brown) will remember this—we had a record sitting of the House to get the national minimum wage through in the face of resistance from Conservative Members.

I distinctly remember Sir Ian McCartney at a press conference with the Westminster lobby, explaining why we were doing what we were doing. He was a former kitchen worker and earned poverty wages. I remember seeing the news report of him weeping at that press conference, explaining how he was paid something like 1p or 2p per potato that he put in a bag in that kitchen, and asking the lobbying journalists, “How can you defend that in our country in this day and age?”

As I said, Labour Members are rightly proud of the national minimum wage, and we make no apologies for reminding people of the resistance that we met when we introduced it, and of the difference that a Labour Government make to people’s lives.

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

My hon. Friend is right to highlight the stark choice around fairness that people faced in this country all those years ago in 1997, and the different positions that the Labour and Conservative parties took on the minimum wage. Does he agree that today that choice is perhaps best symbolised by the support of Conservative Members for the bedroom tax, which makes me think that they have learned nothing from their opposition to the minimum wage?

[Mr Umunna]

I completely agree with my hon. Friend, and in my constituency I have seen the stress, upset and angst caused by the bedroom tax, causing people to have to leave an area in which many of them have grown up and love so much. My hon. Friend is right: the bedroom tax shows the instincts of our different parties.

Although we are, of course, proud to have established the national minimum wage, which helped to end exploitation and extreme low pay, it did not end low pay per se. Under this Government working people have experienced their wages dropping by an average of more than £1,600 a year. The 1 October rise in the minimum wage is the first real-terms increase during this Parliament, and it is still 4.1% below its 2008 peak and just 2p above its equivalent value in 2005. Therefore, if we are elected next year, our goal will be to halve the number of people on low pay in our country. To achieve that, we need the minimum wage to evolve to address the broader problem of low pay, which is the purpose of the motion.

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

We need that proposal, but we also need effective enforcement of the national minimum wage. Is my hon. Friend appalled, as I am, to learn that as many as 300,000 people in this country are still being paid below the national minimum wage and yet, in the past four years, there have been only two prosecutions?

[Mr Umunna]

I am appalled by that. My hon. Friend is right to mention enforcement. I will come to that, but I pay tribute to his work—I have been to his constituency—on ensuring that those who work hard get a decent day’s pay, in addition to his work on training and apprenticeships, which he has talked about a lot.

[Mrs Anne Main (St Albans) (Con)]

In the interests of fair pay for a fair day’s work, does the hon. Gentleman share my concern that so many right hon. and hon. Members, including many Opposition Members, pay absolutely nothing to some of the young people who work in this place? He should campaign to ensure that all hon. Members pay a fair wage for a fair day’s work.

[Mr Umunna]

I do not know to whom the hon. Lady refers, but in my experience, my Labour colleagues have always sought to ensure that those who work for them are paid a decent wage. I am sure that she, like others, might occasionally, as I do in my constituency office, have sixth-formers who are work experience students. Their situation is different from those whom hon. Members employ, but if hon. Members employ somebody to work for them, they should be paid a decent wage.

I spoke of the evolution of the national minimum wage and what Labour wants to do. With that in mind, we asked the former deputy chair of KPMG, Alan Buckle, to consult business, trade unions and others on how we can strengthen the minimum wage and restore its value. In so doing, Mr Buckle consulted many companies extensively. There is a growing body of opinion that the value of the minimum wage should rise. Sir Ian Cheshire, chief executive of Kingfisher, Jeremy Bennett, chief executive officer for Europe for Nomura, and Steve Marshall, the executive chairman of Balfour Beatty, are among those who are calling, as the economy recovers, for the minimum wage to increase faster than it has in the recent past. They say that that will benefit businesses and improve the public finances—the fall in the real value of the minimum wage since 2010 now costs the Exchequer £270 million a year in additional benefit and tax credit payments, a point that my hon. Friend the Member for Leeds West (Rachel Reeves), the shadow Work and Pensions Secretary, will build on later.

[Guy Opperman (Hexham) (Con)]

Does the hon. Gentleman accept that the minimum wage has risen, both by reason of the Government’s increase and the increase in the tax threshold, whereby the tax take from the minimum wage earner has decreased, and that the Government’s projections show that the minimum wage will rise to £8.06 by 2020?

[Mr Umunna]

I will address precisely all three points the hon. Gentleman makes, which I have read and heard the Minister make in the media, but the issue is how we evolve what we have to tackle the fact that, despite the minimum wage, more than 5 million people are in low pay. When we introduced the minimum wage and when, as I have said, the hon. Gentleman’s Conservative colleagues opposed its introduction, people were earning as little as £1 an hour in some parts of the economy. We helped to do away with extreme low pay—[Interruption.] I will come to tax if the hon. Gentleman is patient. We now want to move things to address the bigger, broader issue of the large body of people in our country who are in low pay.

[Mr Frank Field (Birkenhead) (Lab)]

When the Opposition are developing policy, we should consider that there are clearly some sectors of industry that could pay substantially above the national minimum wage. When we go into the election, should we not only advocate an increase in the national minimum wage, but encourage those sectors that could pay higher wages without unemployment effects to do so?

[Mr Umunna]

I will come to my right hon. Friend’s point on different sectors if he bears with me for a moment.

How will Labour improve on the current arrangements? When the Labour Government established the national minimum wage, we tasked the Low Pay Commission with the discrete and technical job of setting the minimum wage within existing economic parameters. My right hon. Friend was one of the Ministers involved in its introduction. The Low Pay Commission’s job was to play the hand it was dealt, not to attempt to change the game. Over the years, it has played its hand well, but it has remained relatively hands-off. In that sense, those who say that it is more akin to a minimum wage commission as opposed to a Low Pay Commission are right.

Labour wants to transform the Low Pay Commission into a proper, official low pay watchdog, setting out what it believes we need to do tackle low pay, monitoring progress and making recommendations on how to boost productivity and make a higher minimum wage possible in different sectors. My vision for the Low Pay Commission is for it to be far more active. If we give it a bigger, more active role, it can not only challenge the Government more, but challenge different sectors. I would like it to have a much bigger standing in the national consciousness. Currently, I believe that it has around six to seven staff, who are mainly focused on statistical analysis, but I can see it becoming a big, low pay watchdog, playing a big part in the national conversation.

[Mr Field]

I rise merely to say how much I welcome that statement, because it relates to the work of the shadow Work and Pensions Secretary and other Opposition Front Benchers. If we are to control the welfare bill in a civilised way, making people who could pay higher minimum wages pay their due, rather than relying on taxpayers, is a crucial part of the strategy.

[Mr Umunna]

My right hon. Friend is absolutely right. I could not agree more with him.

My second point is that, up to now, the minimum wage has been set with a view to its short-term impact over the coming year. The Low Pay Commission is asked to describe the labour market as it is when it sets the rate, six months before the rate comes into force. It sets the context and gives the rate, but it does not give any guidance on how a higher level can be reached. Therefore, a Labour Government will set a target to increase the minimum wage from its current level of 54% of median earnings to 58% of median earnings by 2020, to be implemented by the Low Pay Commission during the next Parliament.

Forecasts show that that will take the minimum wage from £6.50 this year to £8.00 in October 2019—I can see the hon. Member for Hexham (Guy Opperman) looking up at me, but I will come to his point on the forecasts of £8.06. That long-term target will give businesses time to plan and to adapt their business models to boost productivity to support the higher level. The international evidence shows that countries can support minimum wages with such a measure, which could give us a similar level to that in Australia and other EU countries.

[Guy Opperman]

Will the hon. Gentleman give way?

[Mr Umunna]

I will give way to the hon. Gentleman after I have addressed his point, which, as I have said, has been raised in the media by the Minister. I read in The Sun earlier this month some nonsense from him. He suggested that the minimum wage was on course to be more than £8 by 2020 in any event, as the hon. Member for Hexham said, and therefore that Labour’s commitment to get the minimum wage to £8 by the end of the next Parliament would mean cutting it. That is desperate stuff. Let me be clear that, under the Labour’s plans, there would be nothing to stop the Low Pay Commission from setting the rate beyond £8. In any event, The Sun pointed out that the Treasury estimates on which the story was based relied on a significant recovery of earnings growth. Not many subscribe to those estimates. My point is that Labour Members are not prepared to sit on our hands and just hope for that earnings growth to come about. We are determined to do what we can to ensure it happens by setting that target.

[Guy Opperman]

I took good note of what the hon. Gentleman said, and if I understood him correctly, he said his plan is predicated upon raising median earnings from 54% to 58%. Surely that is only possible by having a strong economy, for which, of course, he would need a long-term economic plan. Surely that means he agrees with us.

[Mr Umunna]

I think the hon. Gentleman will probably have to wait for the reshuffle. [Interruption.] He gets the prize for mentioning the long-term economic sham, which is his party’s plan. I do not disagree, however, with the point he—[Interruption.] The hon. Gentleman keeps shouting at me. If he will let me reply, I will engage with his point. Is the national minimum wage on its own a panacea for ensuring that people can earn a wage they can live off and have security? No, it is not a panacea, but it is a very important part of the equation. Of course a strong economy is important in this respect, however. I would not disagree with him about that. Anyway, he has got in a reference to the long-term economic plan that he wanted to mention, and I am sure the Whip present, the hon. Member for Croydon Central (Gavin Barwell), will have taken note of that.

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

Is my hon. Friend aware that in my constituency 38% of children are now growing up in poverty? Their parents are working harder, but have a lot less to show for it. Does that not demonstrate that the Low Pay Commission needs to take a long-term view and have an ambitious target to raise low pay, and does he regret the Government’s failure to adopt one?

[Mr Umunna]

That is right. On that 38% figure, I must say that I have a similar situation in parts of my constituency. I agree with my hon. Friend but I would add that I think so much of our economic debate takes part around the GDP figures, statistics and data, and of course that is right—we should look at the data—but the question is the lived experience of people in this country: do they think they have never had it so good? When we listen to the rhetoric from Government Members, that is often what we would be led to believe.

[Ms Karen Buck (Westminster North) (Lab)]

Has the Conservative party not got it completely the wrong way round? Is not strong economic growth dependent upon strong earnings growth, which in turn will help us to make sure we have a sustainable recovery that is shared among all the people?

[Mr Umunna]

I could not have put it better myself; I completely agree with my hon. Friend. We know we have a productivity issue in this country. If people are earning more—if they get better pay—they are more productive. All the research shows that.

I wanted to add a point in respect of our target. Of course the economy might be subject to economic shocks—we had the crash in 2008-09—and the LPC might therefore take the view that the target cannot be met without risk to the economy, and we will build flexibility into the system to account for that.

[Mr Dennis Skinner (Bolsover) (Lab)]

Is it not the plan to get rid of evil zero-hours contracts as well, like those in my constituency—at Sports Direct, Mike Ashley? If that happens, it will considerably add to the wages of more than 1 million people in Britain, and that figure is growing as the unemployment statistics supposedly fall. All that put together makes it an even better package.

[Mr Umunna]

I completely agree with my hon. Friend, and the point he makes about zero-hours contracts shows that, in some respects, the big difference between the two sides of the House is that—[Interruption.] The Minister will have his time in a moment. From our point of view, of course people having work is the absolute priority, and having a job is of course better than not having a job, but we have got to be more ambitious than that given the nature of the work that so many people in our economy are doing.

[Mr Iain McKenzie (Inverclyde) (Lab)]

What does my hon. Friend think of this Government’s lacklustre approach to, and lack of enthusiasm for, naming and shaming employers who pay under the living wage?

[Mr Umunna]

My hon. Friend raises a good point, and I will come to it very shortly.

[Mrs Main]

I can accept that there are some abuses of zero-hours contracts but, as someone who formerly worked as a supply teacher I would caution against getting rid of all zero-hours contracts. Our health and education services rely on people picking up casual contracts—if that is how the hon. Gentleman wants to put it—so that we fill in the gaps when there are shortfalls. It is not always a demon policy to have zero-hours contracts.

[Mr Umunna]

I hear what the hon. Lady says about some zero-hours contracts—if memory serves me correctly, I may have been on one myself when I was a student—but the point is that we are seeing far too many exploitative zero-hours contracts. That is the problem, and we are not going to sit on our hands when we are faced with that situation.

[John Glen (Salisbury) (Con)]

Is it not very important that Government take seriously the failure by employers to act responsibly, and that is why the hon. Gentleman should welcome this Government’s move to increase fourfold the fines on employers who are paying below the minimum wage? That did not happen under the previous Labour Administration. We take those breaches very seriously. What does he have to say about that?

[Mr Umunna]

As I was saying earlier, there would have been no national minimum wage or any fines if it were not for the last Labour Administration, but I take the hon. Gentleman’s point that fines need to be increased, and I will come to that very shortly as he makes a good point there.

[Sheila Gilmore (Edinburgh East) (Lab)]

Will my hon. Friend comment on the experience of my constituent whose fixed-hours part-time job, which fitted in with school hours, was changed recently by a very respectable employer—a large department store, not some unscrupulous employer—to a zero-hours contract in order to make her terms more flexible? She had to stop work because she could not find the child care to help her. That is surely the sort of contract we must do something about.

[Mr Umunna]

Well, that is it, and that is precisely why we will introduce a far tougher package than the sole measure we have seen on zero-hours contracts from the Government, which is basically just a do-away with exclusivity on those contracts. That is simply insufficient given the story that my hon. Friend has just told—and I would be very interested to know who the employer was.

The third point I want to make on the changes we need is that, when the minimum wage was introduced, the hope was that it would have a ripple-effect causing wages to rise up the income scale, but that has not turned out to be the case. Frankly, it is becoming the going rate in some sectors, as my right hon. Friend the Member for Birkenhead (Mr Field) alluded to. This explains why 1.2 million employees currently just earn the legal minimum. That is up from just over 600,000 in April 1999, so we have seen a considerable increase in the number of people on the minimum. Therefore, in its beefed up role, we will ask the LPC to advise on what sectors of the economy could afford to pay more than the minimum wage and how that could be achieved.

Finally, enforcement has been mentioned, and much more needs to be done on that, as the hon. Member for Salisbury (John Glen) said. There has in some respects been a systematic failure in the way the minimum wage has been policed. To address that, we will give local authorities, working alongside Her Majesty’s Revenue and Customs, powers to enforce the law, and we will increase the fines tenfold for rogue companies that do not meet their obligations. In this way, we will evolve the national minimum wage so that it moves beyond the narrow task of setting a minimum wage to avoid extreme low pay to a broader mission to reduce low pay in Britain. As far as the Minister’s party is concerned, I discern no desire to move beyond the status quo and the current arrangements.

[Andy Sawford]

On my hon. Friend’s point about where the Government stand, I had an assurance from the Prime Minister in February that they would name and shame those employers who had been found out and fined for not paying the minimum wage in my constituency. They still have not done that. Does that not show there is no real commitment on this from the Conservative party?

[Mr Umunna]

My hon. Friend’s remarks illustrate a point I have been making.

The Minister has said he would like to see the minimum wage strengthened, but his party has set out no plans whatsoever on how it will make that happen. It is all very well picking holes in, and raising issues with, the suggestions we have put forward, but I do not see any coming from Government Members. All we have seen—as the Minister’s boss the Secretary of State, who I know is away in India, said in June—is the Chancellor, in talking about the minimum wage increasing to £7 earlier this year, simply explaining the arithmetic of what would happen if a real minimum wage were restored; commentary from the Chancellor, but no action.

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

The hon. Gentleman talks about how we best deal with the scourge of low pay. Does he not agree that a combination of raising the minimum wage, which he has alluded to, and raising the thresholds at which people begin to pay tax is the answer, so that the people earning £200 or £250 a week retain all of that as their take-home pay?

[Mr Umunna]

I will come to that point very shortly after giving way to my hon. Friend.

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

Is it not a fact that it is often said that the House of Commons is rather remote from the lives of many people outside? Surely one of the ways we can combat the idea that MPs do not care is to do everything possible to overcome the poverty that so many people, and certainly many of my constituents, suffer week after week because of low wages. Of course, had it not been for a Labour Government, as my hon. Friend says, there would have been no national minimum wage.

[Mr Umunna]

My hon. Friend makes a very good point and it makes me reflect on the 2010 general election. In the polling districts covering the most deprived estates in the two most deprived wards in my constituency—Brixton Hill and Tulse Hill, which were most impacted by our introduction of the national minimum wage—the turnout was more than 70%, and sometimes 80%. That is because the people on estates such as the Tulse Hill estate had been directly impacted by our introduction of the national minimum wage: it helped to reduce poverty in those areas. My hon. Friend is absolutely right.

The hon. Member for East Londonderry (Mr Campbell) talked about tax and thresholds. The Minister has said that, in addition to thinking about the national minimum wage, we should consider the impact of tax on the low- paid. I agree. That is why we will introduce a starting rate of tax of 10%, paid for by abolishing the Government’s ill-conceived married couples allowance.

The Minister will no doubt refer to the increases to the personal allowance—[Interruption.] I thought that might provoke a reaction. I will give way to the hon. Member for Elmet and Rothwell (Alec Shelbrooke) in a moment. I am sure the Minister will no doubt refer to the increases in this Parliament to the personal allowance to seek to show that he “gets it”, as my hon. Friend the Member for Walsall North (Mr Winnick) mentioned. I doubt, however, that the Minister will mention the fact that any benefit the low paid derived from the increase in the personal allowance was wiped out by the Government’s hike in VAT and the benefit and tax reductions that we have seen for working people in this Parliament.

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

Will the hon. Gentleman clarify the thresholds at which the 10% rate and the 20% rate would be paid?

[Mr Umunna]

We will set out in detail the plans we have on the 10% rate nearer to the general election. I cannot give the hon. Gentleman the exact thresholds right now, but I am sure that the Whip will have noticed that he asked the question.

On enforcement, I am sure the Minister will refer to their so-called “name and shame” policy, which the Government announced. [Interruption.] The Whips have already noticed that the hon. Member for Hexham (Guy Opperman) has mentioned the long-term economic plan, so he can quieten down. [Interruption.] I will take no lectures from any Government Member on tax rates, or anything else, when they have made a £7.5 billion unfunded tax commitment. I will take no lectures from them whatsoever. I will return to the point I was making about their “name and shame” policy. Only 25 firms have been named, and even that will be worthless unless Ministers beef up enforcement.

I agree with the Minister on the points I have heard him make about productivity. Increasing productivity enables companies to pay more. As I said before, it is key that we invest in human capital to increase productivity, and that means more investment in skills and training.

Before I wrap up, I just want to say something about the living wage. My hon. Friend the Member for Walsall North talked about what people think of Parliament. We should, on all sides of this House, be proud that the parliamentary estate pays everybody who works here, including contractors, a London living wage. It is very important that we set an example in that respect, and I am pleased to hear that that is happening here.

[Mr Winnick]

There was a campaign on that in the previous Parliament and I am glad if the issue has been rectified. Cleaners who were not in regular employment but contracted from outside were certainly not getting the same wage as those who were in regular employment in the House of Commons. If that has been rectified, Mr Speaker, I am pleased. The conditions and circumstances in which cleaners worked here in the Palace of Westminster were absolutely disgraceful. They reminded one of Charles Dickens’s times. I hope all that has been rectified.

[Mr Umunna]

I do, too. No doubt Mr Speaker will be able to give us more details. I can only talk about my understanding of the London living wage. It is very important that we set an example in this House on paying a living wage. I also think it is very good that this House has set an example in not using zero-hours contracts for people working on the estate.

[Mike Crockart (Edinburgh West) (LD)]

Will the hon. Gentleman give way?

[Mr Umunna]

I am just going to make a little more progress, because I sense that I have been going on for a while.

The minimum wage is set by reference to economic factors, including growth levels, the labour market, economic forecasts and so on. The living wage is calculated by looking at the basic cost of living and the salary needed for an individual to meet their own or their family’s basic day-to-day needs, including housing, food, clothing and so on. We recognise it is very challenging for employers to pay a living wage, so we would not impose it on them by having a statutory living wage. Instead, a future Labour Government will encourage employers to pay the living wage through new “make work pay” contracts. Firms that sign up to becoming living wage employers in the first year of the next Parliament will benefit from a 12-month tax rebate of up to £1,000, and an average of £445, for every low-paid worker who gets a pay rise. This will help firms towards a higher-productivity, higher-wage model. The measure will be funded entirely from the increased tax and national insurance revenue received by the Treasury when employees receive higher wages. Additional savings in lower tax credits and benefit payments, as well as increased tax revenues in future years, will cut social security bills and help pay down the deficit. Not just ensuring people are in work but that they get a decent salary when they are working, is the most effective way to reduce the social security bill.

In conclusion, I would like to go back to where I started. This area—what people are paid at work and the nature of the work they do—will be a key battleground at the next general election. That is why we have come out with the most detailed proposals, both in respect of wages and security at work, that will make a difference to people’s lives. Instead of mocking us, and instead of coming forward with proposals of their own, we see Government Members sitting on their hands while we carry on in the situation in which too many people who work hard do not earn a wage that they can live on. Ultimately, that is why the only way to do anything about this is to elect a Labour Government next year. I commend this motion to the House.

13:19

[The Minister for Business and Enterprise (Matthew Hancock)]

You would not have believed it from the speech the hon. Member for Streatham (Mr Umunna) has just made, Mr Speaker, but a fortnight ago those of us on the Government side of the House put up the national minimum wage in real terms for the first time since Labour’s great recession. The national minimum wage is now at its highest level ever in terms of average earnings. Enforcement of the national minimum wage is stronger and because of the recovery the national minimum wage is set to rise. For the last half hour, the Opposition have talked about the past and the glory days of 1997, but I want to talk about the future.

[Sheila Gilmore]

Is the Minister suggesting, yet again, that the recession in Europe, the United States and throughout the world was Labour’s recession?

[Matthew Hancock]

I am certainly suggesting that we had one of the deepest recessions in the world because of the failure of the last Labour Government to regulate the banks properly and to mend the public finances in the run-up to the recession. That youth unemployment had risen by 40% even before the crash shows the failure of Labour’s economic policy. That is a theme to which I shall warm in my speech.

[Mr Bain]

On the future, the Minister’s close colleague the Chancellor promised that the national minimum wage would reach £7 an hour. When will the Government make good on that promise?

[Matthew Hancock]

I will come later to progress on raising the national minimum wage, but the central point, which Labour Members do not understand, is that we cannot have a strong national minimum wage without a strong economy.

[Alec Shelbrooke]

Does my right hon. Friend agree that the interventions we have heard from Labour Members show that the Opposition have learned nothing from their time in government?

[Matthew Hancock]

I could not have put it better myself.

The rise in the national minimum wage comes against a background of record job creation, the biggest fall in unemployment since records began—before I or my hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke) were born—falling youth unemployment, falling long-term unemployment, unemployment of fewer than 2 million and a claimant count of fewer than 1 million; and that is all part of our plan to build from the ruins of the past an economy that works for everybody.

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

Will the Minister confirm whether, before the worldwide financial crash, he was asking for more or less regulation? Certainly his Chancellor was asking for a lighter-touch regulatory framework, not what, with hindsight, the Minister now claims.

[Matthew Hancock]

In 1998, when the Labour Government removed the requirement to regulate levels of leverage in the City, the Conservative party complained, and it was that removal which led to the crash being bigger in the UK. It was the result of poor regulation of the financial sector. Labour did not fix the roof when the sun was shining, but instead spent money they did not have even before the crash.

Instead of forgetting about the deficit, as Labour does, and ignoring Britain’s economic challenges, we know that a strong recovery underpins a strong society and that we cannot have a strong minimum wage without a strong economy.

[Julie Hilling (Bolton West) (Lab)]

I love the way the right hon. Gentleman is rewriting history. Will he explain why we had three years of a flat-lining economy and why it only started to recover when the Chancellor went to plan B and started to invest in infrastructure?

[Matthew Hancock]

The hon. Lady needs to look at the economic statistics: there was no double-dip recession and ours is the fastest-growing economy in the G7. Economic growth has been strong, the number of jobs is growing at a record rate, our economy is turning around and we have the fastest growth in the G7. Labour might want to deny it, but we want to support the plan and, crucially, ensure that economic growth reaches all parts of the country and that all can benefit. That is why we support and are strengthening the minimum wage. We know that the only route to higher living standards is not through more borrowing, more taxes and more debt, but through fair pay for a job well done.

Today was another test of Labour’s economic credibility, and yet again it was found wanting. Instead, the true supporters of the national minimum wage now reside on the Government Benches. First and foremost, a strong minimum wage requires a strong economy.

[Mr Umunna]

The Minister said he supported strengthening the minimum wage. How has he strengthened it or proposed to strengthen it?

[Matthew Hancock]

I will give the hon. Gentleman a couple of examples. We have increased the budget for enforcement by 15%, while the Small Business, Enterprise and Employment Bill, which I am leading through the House, backs up those resources with tougher penalties for those who break the law. While we are at it, we are also tackling the scourge of zero-hours contracts—something Labour failed to do after 13 years in office.

If anybody has ever queried the idea that the plight of the low-paid is linked to the health of the economy, all they have to do is study what happened as a consequence of the great recession. When the economy shrank after 2008, the incomes of the lowest-paid took a hit, through jobs lost, hours cut and wages frozen, and our nation’s finances shrank by 6%, which inevitably had a profound impact on people’s incomes—after all, national income is merely the aggregate of individuals’ incomes. The need to turn that around is why our long-term economic plan is so vital.

The evidence shows that the plan is working. Record numbers of jobs have not been created by accident, but because the economy is growing, but we are keenly aware of the risks that remain and the costs that would be paid, especially by the low-paid, if we abandoned the plan. Those who truly support the minimum wage also support the plan to tackle the deficit and repair the health of the economy, and that is why Government Members are the true supporters of the national minimum wage.

[Guy Opperman]

Is not the most crucial point, as well as raising the minimum wage, the need to address and examine the issue of tax? This coalition Government have raised the minimum threshold and actually given people on the minimum wage more money in their pockets. Will he set out in detail the effect it will have when we elect a Conservative Government and introduce a £12,500 tax threshold?

[Matthew Hancock]

Of course, it is post-tax income that matters to families. Having raised the threshold to £10,500, we are proposing to raise it to £12,500, meaning that no one working full time on the national minimum wage would pay any income tax at all. That is the sort of action we can get only if we have the grit to deal with public spending and leave more money in people’s pockets, thereby supporting the low-paid.

True supporters of the minimum wage also know that it is a partnership with business.

[Richard Fuller (Bedford) (Con)]

My right hon. Friend has rightly talked about post-tax income, but for people on low incomes, what matters is post-tax and post-benefit take-home disposable income. The shadow Secretary of State did not say what his policies would be on tax credits. Does he agree that that is an important part of the debate about how we improve living standards?

[Matthew Hancock]

The shadow Secretary of State could not even explain his own tax policy when he was asked by my hon. Friend the Member for Elmet and Rothwell. On the other hand, we are clear about ours—[Interruption.]—and I am delighted every time the Opposition complain about it. They should put it on their leaflets. We will increase the threshold to £12,500 so that anybody on the minimum wage doing 30 hours a week will not pay a penny in income tax.

[Alec Shelbrooke]

Labour Members chunter about VAT, but does my right hon. Friend find it surprising that Labour increased VAT by 2.5% and doubled taxes on the lowest-paid workers while, by comparison, we have put VAT up by 2.5% and raised the tax threshold?

[Matthew Hancock]

We know what would be most damaging for the low-paid—if we lost control of the economy and had another great recession like the last time Labour was in office.

[Julie Hilling]

I want to return to the Minister’s point about the number of new jobs being created. I asked him once about this matter and got the following reply:

“Information regarding the number of jobs created is not available. As an alternative…estimates relating to the net change in the number of people in employment are available… Unfortunately the requested information on duration of employment is not available”.—[Official Report, 12 November 2013; Vol. 570, c. 578-9W.]

The Government continue to talk about the number of jobs created, but they do not have the evidence to back it up.

[Matthew Hancock]

The evidence was published at 9.30 this morning. It showed that record numbers of jobs had been created and that in the hon. Lady’s constituency the number of unemployment claimants fell by 32% in the last year. If I were her, I would look at the statistics before complaining about our record on jobs.

True supporters of the national minimum wage know that it is a partnership with business. Jobs cannot be created without job creators. Business is a force for social good, not only because it creates jobs, but because business prospers by finding solutions to other people’s problems. It is something for something, and it is what the British people mean by fairness. After all, the Low Pay Commission was set up because the minimum wage relies on consensus to keep the support of both employers and employees. In fact, the hon. Member for Streatham made that point in his speech, but then sadly undermined it with a policy that I think was probably pushed on him by his leader.

[Mr Bain]

On the issue of fairness, does the Minister agree that people should be treated equally under the minimum wage legislation? Will he take this opportunity personally to disown the distasteful comments made by his ministerial colleague, Lord Freud—that some disabled people were not worth the full rate? Is that not an outrage; should not the Government apologise?

[Matthew Hancock]

Yes, of course, everybody who is in work should be paid the minimum wage.

[Mr Umunna]

I must say that the comments to which my hon. Friend the Member for Glasgow North East (Mr Bain) referred were absolutely disgraceful and that Minister must answer for them. The Minister talked about how the Low Pay Commission does things and how it works through the tripartite model and we absolutely want to see that go forward into the future. The Minister did not say it, so I will: the issue that some people worry about is the possible politicisation of the Low Pay Commission. I think that can be avoided, in much the same way that having a 2% target for the Monetary Policy Committee did not lead to the politicisation of that process.

[Matthew Hancock]

Unfortunately, the hon. Gentleman says one thing and his party then proposes something quite different. The Low Pay Commission was set up to support that consensus, to ensure that the minimum wage has the support of both employers and employees and to ensure that the low paid are not priced out of work. When politicians such as the hon. Gentleman’s boss get on a soapbox and undermine the Low Pay Commission consensus by clearly stating an amount that should be achieved by 2020, they undermine the very people they claim to support. As the Federation of Small Businesses says—the hon. Gentleman can address this when I give way to him,

“the decision on what the rate is should be set only after consultation with the Low Pay Commission.”

Labour’s proposal, according to the FSB, “does the opposite”.

[Mr Umunna]

As I said, I believe it is possible to move towards a new framework without leading to politicisation and to address the concerns that some have raised. I am taken aback when the Minister says that the Leader of the Opposition’s talk about achieving a certain rate for the national minimum wage undermines the Low Pay Commission, when that is precisely what the Chancellor of the Exchequer did when he talked about a £7 rate.

[Matthew Hancock]

No, because every year the Government present evidence to the Low Pay Commission of what level of pay the economy can support. In fact, I can go further. Today, we are publishing the economic evidence that is going in to the Low Pay Commission. It shows what level of pay the Government believe can be supported. It shows that the recovering economy is creating jobs, with unemployment falling faster than any country in the G7. Indeed, the Low Pay Commission has said that it can raise the national minimum wage in real terms this year only because of that recovering economy. Government analysis underpinning today’s evidence projects that on the Office for Budget Responsibility’s economic earnings forecast, the minimum wage is set to reach £8.06 by 2020—only because of the recovering economy.

[Mrs Main]

Did the Minister note—I am sure he did—that the shadow Secretary of State said that there would be some “flexibility” in the plans, but without saying what that flexibility entails? It seems to me that this is a fudge; there is not really any particular figure that he is looking towards.

[Matthew Hancock]

I was going to come on to that. The hon. Member for Streatham made an important admission today. I think it is the first time that Labour has admitted that if the £8 target was going to damage the economy, there would be “flexibility”, as my hon. Friend said. Within a month the hon. Gentleman has completely undone the promise that was made with such loud cymbals at the party conference. It was a promise made for a party conference by a desperate party leader who is struggling to get his message across. Today, it has been completely undermined by the man who wants to replace him as party leader after Labour loses the next election.

[Mr Umunna]

I have to say that this is really desperate stuff from a desperate Minister. In the same way as there is flexibility for the Monetary Policy Committee in setting the interest rate target, there would be flexibility in our system. The Minister talks as if this were some new revelation. What I have said is absolutely no different from what the Leader of the Opposition has said. The Minister can pick holes in what we have suggested, but he has come forward with no proposals whatever to evolve or move on the national minimum wage—none.

[Matthew Hancock]

I certainly can pick holes in what the hon. Gentleman said, and I intend to do exactly that. I would say that today’s admission that there is no £8 target from the Labour party because there will be “flexibility” around it shows that Labour has nothing to say on low pay, just as it has nothing to say on any other area of economic policy. The grin of the hon. Member for Streatham as he came to the Dispatch Box after the discussion about who will be the leader of the Labour party after the next election demonstrates, I think, that undermining his leader was part of his job today—and he has done it brilliantly.

[Andy Sawford]

Clearly, the Opposition have initiated this debate on the minimum wage, so it is quite bizarre to suggest that we do not have anything to say about low pay when we put it on the agenda. However, perhaps one of the Minister’s colleagues has had too much to say about the minimum wage by suggesting that disabled people are not worth it. Can the hon. Gentleman confirm whether Lord Freud is still a Government Minister? How can his position be tenable?

[Matthew Hancock]

I have said that everybody should be paid the minimum wage. That has been our policy throughout the whole period of this Government and it will continue. In fact, we are strengthening it—an issue I want to come on to. We have rejected the Opposition’s advice that the national minimum wage should be limited to £8 by 2020, not least because, on the central projection from the OBR’s earning figures as reported in The Sun, the national minimum wage will, under the Government’s plans, reach £8.06 by 2020—but only so long as we continue the economic recovery and not if we put that recovery at risk by adopting Labour’s plans.

[Mr Umunna]

I am grateful to the Minister for giving way, which provides me with the opportunity to remind him of what I said earlier, which is that the claim he made in The Sun was complete and utter nonsense. He should have rewritten his speech before delivering that passage.

[Matthew Hancock]

On the contrary, Government analysis underpinning today’s evidence projects that, on the OBR’s earnings forecasts, the minimum wage is set to reach £8.06 by 2020.

[Alec Shelbrooke]

I am sure that we all want the facts to be right when we have a debate, so let me quote directly what the Leader of the Opposition said as reported in the Sunday Mirror:

“I am delighted to be able to tell Sunday Mirror readers that we are going to raise the minimum wage–if we win the election–in the next Parliament to over £8 an hour.”

There was no qualification in that statement.

[Matthew Hancock]

Absolutely. I concur strongly with what my hon. Friend says. Today’s Labour U-turn on low pay policy shows that ours is the only party and this is the only coalition Government strongly supporting the national minimum wage. We are the ones who are raising the minimum wage, putting it up in real terms at record levels when compared with average earnings, while at the same time reducing taxes. It is those on the Government Benches who support the minimum wage, and it is particularly the Conservative party that is the party of the low-paid.

[Mr Iain McKenzie (Inverclyde) (Lab)]

I would like to tempt the Minister to say more about our proposal for “make work pay” contracts and partnership with the Government and business. Does he not think that business would embrace such contracts in order to promote investment in their employees’ skills, providing not just jobs but a career for their employees?

[Matthew Hancock]

It is absolutely true that the long-term and fundamental way to support the increase in productivity is to ensure more rigorous education and more skills, which is why we increased the number of apprenticeships. We are on track to have 2 million apprenticeships started in this Parliament, and we are clear that we will deliver 3 million in the next Parliament. The hon. Gentleman is absolutely right that education and skills underpin the long-term advance of prosperity for everyone in this country. I suggest that he would support the Government’s policies to strengthen education if he was truly interested in supporting a long-term increase in productivity.

We have discussed enforcement, the increase in the budget for enforcement and the Small Business, Enterprise and Employment Bill. We have quadrupled the maximum penalty to £20,000—per worker, not per firm. As a result, the amount from enforcement has increased from £2.6 million in 2003 to £4.6 million today. We know that a strong minimum wage must be properly enforced.

My third and final point is that the true champions of the low-paid know that the minimum wage is only one tool among many. We are reforming welfare so that it supports people into work rather than trapping them in poverty, and we are letting people keep more of what they earn. Thanks to our rise in the tax threshold, a typical taxpayer already pays £700 less income tax than in 2010. The tax bill of someone working a 30-hour week on the minimum wage has been cut by two thirds. In the next Parliament, we will abolish income tax for those working full time on the minimum wage. We can do that only because we are prepared to make difficult decisions on spending.

It seems that the Labour party does not want to make those difficult decisions. Perhaps the shadow Minister will explain why all we have heard from it is taxes on jobs, taxes on business, taxes on homes, pensions, investments, taxes on driving and now even taxes on death.

[Mr Russell Brown]

Does the Minister recognise that the economic recovery he talks about is not being witnessed in many parts of the country? He talks about people coming out of the tax bracket, but the reality is that in many parts of the country less than half the work force works anywhere near enough hours to pay tax.

[Matthew Hancock]

Absolutely. I recognise that as we get the recovery moving we must ensure that it benefits all parts of our country. That is why we are ensuring that the jobs recovery is spread throughout the country. This morning’s jobs data show that unemployment is falling in all regions, and in the hon. Gentleman’s constituency it has fallen by 28% in the last year. Instead of pointing fingers, he should congratulate the Government on that effort.

The Labour party forgets that we do not support the incomes of those at the bottom by making the whole country poorer. Tax cuts and welfare reform are both essential, but ultimately must go hand in hand with strengthening education and skills.

The Government support work and our record shows that we deliver work. We have a plan that will work. A strong minimum wage is possible only with a strong economy. We passionately support the minimum wage, not for a headline, but for the benefit of those who rely on it. It is just one part of our long-term plan to restore the health of the British economy from the ruins of the past. Instead of that past, we will build an economy that works for all and secures a brighter future for Britain.

13:43

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

In the spring, my hon. Friend the Member for Leeds West (Rachel Reeves) and my right hon. Friend the Leader of the Opposition visited a remarkable woman, Rachel, on the Castle Vale estate in my constituency. She is a proud, working-class woman trying to bring up her child. She lost her job with the council as a consequence of the huge cuts that the Government are imposing on our city. She found a new job but she was on the minimum wage. She broke down in tears when she explained how difficult life is for her trying to bring up her kid with dignity and to pay her bills. She is a salt-of-the-earth working-class woman who works hard to get on. Sadly, she is typical of 30,000 people in Birmingham on the minimum wage.

I remember sitting down at the food bank run by the Baptist church on Erdington high street with three of the working poor. Two of them said exactly the same as Rachel, explaining in graphic detail what it was like to count every penny and to have their kids come home from school asking whether they could have something, only to be given an excuse for why it was not possible. One of them said—I will never forget her words—“Jack, I exist. For me this is no life.”

Before I came to this place, I was proud to serve the Transport and General Workers Union and then Unite. In the world of work, work forces showed me wage slips of £1.50, £2 and £2.50 an hour. A linen supply company in west London was supplying the swankiest hotels and restaurants and charging an arm and a leg for its services, but paying its workers £2 an hour. We unashamedly sought to organise an upward drive in pay and to end working poverty, and I remember the Conservative party’s bitter resistance to any serious steps to tackle low pay, particularly the notion that somehow the minimum wage would fundamentally undermine economic success in our country.

The national minimum wage is a landmark achievement and Labour’s legacy, but it is not good enough. The working poor are ambitious, and so are we. First, we want a much higher minimum wage and, secondly, its vigorous enforcement. When I was deputy general secretary of the Transport and General Workers Union, I chaired a coalition, which had all-party support across the House, that took the Gangmasters (Licensing) Bill into law. It was a remarkable coalition from plough to plate—from the National Farmers Union to the supermarkets. Even then, after the introduction of the minimum wage, when the Gangmasters Licensing Authority was up and running—it was a highly effective organisation—a company employing 1,500 strawberry pickers paid them, after deductions and charges, £20 or £25 a week for a 60 or 70-hour week. That is why vigorous enforcement of a higher minimum wage is crucial.

On the living wage, we are more ambitious than just wanting a minimum wage. We need a minimum wage for underpinning, but we are more ambitious, which is why we have championed the living wage. I am proud that I was a founder member of the drive for the living wage in London. I ran the union’s organising department. We had 100 organisers, 10 of whom were cleaners. With the East London Communities Organisation and London Citizens, we successfully mounted that campaign, which included 4,000 cleaners in Canary Wharf and the City of London. It was obscene to sit down with good men and women and to hear their stories about how they cleaned the toilets and boardrooms of bankers who were sometimes earning millions when they were on the national minimum wage. We won a living wage for them.

I am also proud that I led the first strike in the history of the House of Commons when we organised the cleaners here to achieve the living wage. To this day, I have their manifesto in my office. Good men and women were being paid a shameful wage in this mother of Parliaments.

[Richard Fuller]

It is a pleasure, Mr Deputy Speaker, to listen to the hon. Member for Birmingham, Erdington (Jack Dromey). I have never led a strike—at least not since school. Does he agree that one concern is that those on both Front Benches are too timid about raising wages and that they do not have the passion he had when he led his trade union to do more? The issue is not fiddling about with the figure of £8 or £8.50, or whether we hit it naturally, but the courage that those on both Front Benches should have to address the real problem of people throughout the country working for low wages.

[Jack Dromey]

The hon. Gentleman speaks in good faith. All that I will say is that timidity is the preserve of his party’s Front Bench, whereas passion and determination characterise our side of the House.

As the Member of Parliament for Birmingham, Erdington, I am proud to say that Birmingham has been taking a lead in driving the living wage, first for those directly employed by the council, then for those working in schools, and now—it is the first time that any council in Britain has done this—for those employed in all future care contracts. Birmingham is working with a range of good employers, who are coming together and saying “We believe that the success of our city can be best achieved if workers are paid properly and treated fairly.”

[Mr McKenzie]

We should pay tribute to the numerous Labour-controlled councils all over the country—and I speak for Scotland in particular—who have led the way in securing a living wage for their employees.

[Jack Dromey]

I agree. Labour councils throughout Britain are taking the lead.

Experience tells me that a much higher minimum wage, and a living wage, are good. They are good for workers and for their dignity. I remember, during a dispute here at the House of Commons, meeting one excellent African cleaner. We were going to do a photo-call outside, but he said to me “I would prefer not to, Jack.” I asked “Why not?” He replied “I do not want anyone to know that I am a minimum-wage cleaner.”

A higher minimum wage is good for the family. I also remember sitting down with a group of men and women—along with Emmanuel, one of our organisers at Canary Wharf—to talk about what it was like to have to do two, three or four jobs at once in order to survive. One of them said “Jack, I sleep on the bus from one job to the other. I never see my family.” A higher minimum wage is good for employers, because all the evidence suggests—and KPMG and others have done some excellent work on this—that it contributes to higher productivity and reductions in turnover. It is good for the economy, because if low-paid workers get more money in their wage packets, they will not salt it away in the Cayman islands; they will go out and spend it in local shops and clubs, buying goods and services. It is also good for the welfare bill, because if the low-paid are paid more, they will rely on welfare support less. It is absolutely wrong for us in our country to be subsidising, on a grand scale, employers who pay low wages.

We should be thinking about what kind of country we want to be. The International Monetary Fund recently conducted a fascinating study of the problems that are inherent in unequal societies and what they mean in terms of social cohesion, but there is more to it than that. A successful modern economy cannot be based on low pay and low productivity. That is why Opposition Members argue, unashamedly and with passion, that we must espouse the cause of fair pay for every worker, so that no worker needs to live in working poverty any longer.

Government Members must hear about this in their constituencies; Opposition Members hear about it all the time. I remember one Stockland Green mum saying to me, “Jack, I keep being told that everything is fine. Recovery? What recovery? Do them up there understand what life is like for us down here?” For us, this is a noble cause. Of course it is about work, family, good workers succeeding, the economy and bringing down welfare bills, but, dare I say it, it is a moral cause as well.

13:54

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

It is a genuine honour to follow the hon. Member for Birmingham, Erdington (Jack Dromey), who has a long history of supporting the lowest-paid in our society, and a long history of defending workers’ rights. When he speaks, he speaks not just with passion but with experience. That is in stark contrast to the synthetic arguments that we have heard from the Opposition Front Bench so far. I hope that today’s debate will reach a different level, because what we have observed so far is a lot of complacency about what Members think people want to hear when they are electioneering.

For me, this is not just an issue of party politics. I can agree with most of what the hon. Member for Birmingham, Erdington has just said—as, indeed, can most of my colleagues, especially those who are members of the new generation of Conservatives and Liberal Democrats on the Government Benches. We have been in those jobs at the bottom. We have seen what it is like to be on short-term contracts, and what it is like to work as a sole trader. I was a kitchen and bathroom fitter. When the contracts that I had in the university of Leeds were short-lived, I had to plug the gaps. That, in many ways, was a zero-hours contract. I have a great deal of respect for what was said by the hon. Member for Edinburgh East (Sheila Gilmore) about zero-hours contracts. I wish that she would stand up and name the company concerned, and I offer her the opportunity to do so now if she wishes.

[Sheila Gilmore]

The company was Debenhams.

[Alec Shelbrooke]

I am delighted that the hon. Lady has named that company, because there can be no excuse, in our society, for forcing people into a position at work in which the employer says, effectively, “Do as I say, and you cannot do anything else.” That is wrong, as the Prime Minister said in his conference speech. Zero-hours contracts have their place—they can work for people—but it is absolutely wrong and immoral to say to someone “We will tell you when you can work, and if you dare to work for anyone else, you will not be paid.”

[Mr McKenzie]

The hon. Gentleman rightly says that there is disgust over zero-hours contracts. Has he impressed on his colleagues in the Government the need for a Bill that would enable us to end such contracts?

[Alec Shelbrooke]

The hon. Gentleman has made the mistake of believing that zero-hours contracts are wrong in themselves. They offer flexibility to people. What is wrong and unacceptable is the abuse of zero-hours contracts, when an employer says “You cannot work for anyone else.” That is what is wrong. The hon. Gentleman needs to take a close look at Members in his own party who have people on zero-hours contracts. That is the problem. We must not mix up the arguments along the way, because there is positivity in some instances. The abuse is what the Government need to crack down on.

[Sheila Gilmore]

The exclusivity of zero-hours contracts is one issue, but it is not the only way in which they exploit people. A constituent of mine is a care worker who has to wait for a weekly text message telling her what hours she will be working at the end of that week. She has no choice either. The arrangement is causing severe problems in terms of her personal cash flow and her ability to obtain benefits and pay her rent, and, of course, it is also having a severe effect on the quality of the care that is being provided.

[Alec Shelbrooke]

I do not disagree with a single word of what the hon. Lady has just said. It is absolutely true, and that is why it falls to this place to start looking at the way in which employers have been abusing a flexibility which does work for certain people.

When I was between contracts and doing manual labour, did I want to be wondering whether I would have a kitchen or bathroom to fit in the following week, or did I want a constant supply of work? The fact is that I could not demand that the work would be there. I could not say, “Sorry, Mr Shelbrooke, you will be on a permanent contract whether the work is there or not.” There must be flexibility, but what we must legislate for is stopping the abuse. That is what my party is trying to do now, and my hon. Friend the Minister is working to address these very issues in his Small Business, Enterprise and Employment Bill.

Let me now deal with the minimum wage, which, after all, is what the debate is mostly about. I want to go further than our £12,500 tax threshold. My hon. Friend said that people in full-time work who are paid the minimum wage would not pay tax, but I want to maximise the benefit. If anything, I am a politician of aspiration. I want to make sure that someone who wants to work 42 hours a week, 52 weeks a year, will not have to pay any tax. That gives us a figure of £14,196 at today’s minimum wage rate, and that is my ambition. It is not a new policy. We have seen members of a newly formed political party leap up and say that they want the threshold to be raised to that level. Let me remind them that, back in the 1980s, Nigel Lawson said that no one should be taxed until their income had reached the rate at which it was not necessary to give the money back to them. That is the really important point when we are talking about how we can empower people. We must ensure that they have not only the motivation to go to work but the ability to keep the money they earn. If we have a minimum wage, surely we have to have minimum taxation. That taxation should not start until people start to earn more than the minimum wage full time. That is my ambition for this Government. Yes, I am delighted with our policy regarding £12,500 but I personally would like to go further.

The Opposition Front-Bench spokesman, the hon. Member for Streatham (Mr Umunna), said that there was not enough certainty in our policies. He made a good, considered opening speech but when he was pushed on the detail of where the 10% tax threshold would come in, he had no answer. That worries me. I worry that the policy of increasing the threshold from £10,500 to £12,500 would involve people paying 10% tax. We do not know whether that is the case; the policy is not there. I accept his argument that he cannot answer the question today, but this worries me none the less. I am worried about what these policies on wages for the lowest-paid workers actually mean. I worry that these policies could be inflationary if they are not carefully considered.

[Mr Umunna]

In respect of the increase in the personal allowance that was announced at the Conservative party conference, and of the policy of raising the threshold, will the hon. Gentleman tell us how that £7.5 billion unfunded spending commitment will be paid for?

[Alec Shelbrooke]

The Chancellor of the Exchequer and the Prime Minister made it perfectly clear in their speeches that there would be more reductions in certain areas of public spending. We are looking at a 0.3% further reduction, which can be found. The point that the Opposition do not understand is that if we grow an economy by building on solid foundations, we end up with a growth rate that far outstrips those of the EU or the USA. More importantly, this is in stark contrast to the economy of France, whose policies the Opposition were telling us only three years ago we should be adopting. Their plan B was to follow the French President’s economic proposals, yet that country’s economy is now collapsing round its ears and dragging a lot of the EU down with it. This is simple: we must grow the economy healthily, and the hard-working people of this country who help to grow the economy do not deserve to come home after a day’s work to discover that the Government are taking more of their money. We need to ensure that increases in the minimum wage do not simply involve people doing more work for the same money.

The living wage is an important development. I have gone on record in this Chamber as saying that I do not support a statutory living wage. If we try to chase a living wage simply by upping wages by statute, we will increase inflation, thereby putting the living wage out of reach. The figure for a living wage has gone up since we last had this debate, but the way to reach it is to grow the minimum wage by cutting taxes on business and growing the economy. We cannot do it by imposing stealth taxes on business. We should be saying to employers, “Don’t give the money to the Government so that we can do all the things we want to do. Instead, give it directly to the people who are creating the wealth.” That is a policy that we should be proud of, and that everyone on these Benches will get behind. We want the highest wage figures that we can get in this country, and we want to ensure that people are not being exploited. When new phenomena such as the exploitation of zero-hours contracts are created, it is important that we legislate on them in a way that still allows flexibility for people who are trying to put together a living.

I am worried that Opposition day debates are often simply about electioneering. That is the wrong thing to do in this Chamber. The Opposition have talked about taking things seriously and being the party that truly represents the lowest-paid workers in society, but I must remind the House that they opposed my ten-minute rule Bill to outlaw unpaid internships. The Division was called by Opposition Members. I am still a strong believer that nobody in this country should work for more than four weeks without pay. Work experience has its place, but employing people for months at a time with no pay, claiming that they are gaining experience as interns, is morally wrong. That is why I introduced my Bill.

In that context, we have to look at what we are really discussing. We need to ensure that the poorest in society—those who are working at the bottom and in the most economically sustainable way—see their wages increase without having to give the money back to the Government just so that they can be grateful when the Government then give it back to them. We need to ensure that a good day’s work is properly rewarded. As we grow the economy, we need to ensure that businesses give the money to the people doing the work and not to the Government. When we discuss the minimum wage, we must ensure that we have in place a strong economy and strong policies, and that we are willing to legislate against those who abuse workers in this country. We must ensure that we represent everybody; that is what a one-nation party is all about.

[Robert Halfon (Harlow) (Con)]

On a point of order, Mr Deputy Speaker. On the “Daily Politics” programme today, the shadow Education Secretary said that I had made the case for not paying disabled people the minimum wage. I have campaigned strongly for increases in the minimum wage, very much along the lines set out by my hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke) a moment ago, so I find that assertion quite incredible. While I have been sitting here, I have seen a text from the shadow Education Secretary acknowledging that it was not me who said that, but the problem is that millions of people will have seen what he said on television. I am a passionate supporter of the minimum wage, especially for disabled people. Mr Deputy Speaker, will you ask the shadow Education Secretary to come to the Chamber to correct what he said, and to apologise for it? Otherwise, the people who watched that programme, including my constituents, will believe that I hold those abhorrent views.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

That is not a point of order for the Chair, as the hon. Gentleman will be well aware. However, his comments are on record for everyone to read, and everyone in the Chamber has heard them. He has also told everyone that he has received an apology. He has certainly ensured that his position as a supporter of the minimum wage for disabled people has been maintained.

14:08

[Ms Karen Buck (Westminster North) (Lab)]

Three important pieces of news frame our debate on the minimum wage today. First, we heard the good news about the continuing fall in unemployment. Our politics, like those of most hon. Members, are motivated by wanting to see people in work, and any fall in unemployment is therefore extremely welcome. However, we also heard that the squeeze on incomes is continuing. Alongside that, we saw the data released by the End Child Poverty campaign, which mapped child poverty figures in every constituency in Britain. The figure for my central London constituency of Westminster North—of all places—confirms that 43% of all children there are now living in poverty.

Those three pieces of news are all connected. They show us what happens when people’s housing, energy and travel costs, along with all their other costs, go up but their incomes do not. Pay has been squeezed for years at every level in this country, except the boardroom. Only last week we also heard that FTSE chief executives enjoyed a 21% increase in their incomes over the past year, at the same time as the average increase in all pay and bonuses was a mere 0.7%. I do not begrudge those of great skill and entrepreneurial talent a good reward for their labours—I really do not. However, I do not see how it is possible to justify a 21% increase at the top end of the earnings scale when in my borough we had to fight to get recognition for carers—people carrying out the most intimate and personal care and support—of elderly and disabled people. These carers were not even guaranteed the minimum wage for their labours because, unfortunately, their travel time between care appointments was not counted in their earnings and therefore they were not able to enjoy the basic statutory protection for low wages. That is truly shocking.

The big story of events in the past few years is the shift to working poverty, which is when a job simply does not pay enough to lift someone over the poverty line. Some 6.7 million people who are in poverty, or half of all those in poverty, live in a family where at least one person is working. Scandalously, that figure rose by half a million in the past year. The proportion of jobs that are low paid also rose and although it is popularly supposed that that burden falls on the young—and they have had a particularly hard time in recent years—60% of all low-paid people are over 30. This is not just a phenomenon affecting the young.

[Richard Fuller]

Many of the employees on those low incomes are obtaining tax credits, which increases the amount of money they have at their disposal, with the companies therefore benefiting from the subsidy those tax credits provide. What is Labour’s policy on tax credits?

[Ms Buck]

I will talk about tax credits in a moment, because they are extremely important, but, as we have heard from Labour Members, there is no excuse for tax credits being a substitute for employers paying a decent wage.

The number of people paid below the living wage rose in the past year from 4.6 million to 5 million, so we have seen that problem getting worse. I want to talk a little about London, because this vastly successful city, which includes a massive concentration of wealth and some of the best paid people in the country, has a scandalous problem with low pay, and it has been getting worse. Almost one in five jobs in London are low paid and the number of low-paid jobs—those below the London living wage—increased by 45,000 last year to 600,000. The number of low-paid people in London has increased from a total of 420,000 just before the global economic crisis. In 2013, almost one in five London jobs were low paid. That figure has risen from 12% in 2009, so we have a worsening problem of low pay in London.

That problem is not spread equally across people or across all sectors. We know there is a particular problem in the retail and wholesale sector and that one in five low-paid jobs are in the hospitality sector—in hotels and restaurants. Together those two sectors account for nearly half of all low-paid jobs in London—again, that proportion has risen since 2010. We know that low pay particularly affects those working part-time, particularly women. The number of women working part-time on low pay in London has increased by 67,000 since 2009-10. Women are particularly at risk of being trapped in low pay.

Worryingly, we know that there is a particular crisis of low pay affecting black and minority ethnic communities. The Bangladeshi and Pakistani communities are at particular risk of being low paid, and that is also true of black African workers in the capital. We also know that low pay has spread from inner London, which has historically had some of the worst concentrations of poverty, out into the suburbs. They have seen the fastest increase in low pay, with the proportion of low-paid jobs being highest in boroughs such as Harrow and Bexley. They were traditionally regarded as among the more affluent communities in London, so the whole pattern is changing and, unfortunately, in the past few years it has not been changing in a good way.

What does all this actually mean? It means three things, one of which is that people are worse off. We know that, on average, working people are worse off by £1,600 a year. Paul Gregg, of Bath university’s institute for policy research, said in a report that the wages of Britain’s working people are almost 20% lower than they would have been had trend wage continued at its level before the global economic crisis hit us.

[Mr McKenzie]

My hon. Friend makes a good point about the £1,600 that people find themselves down each year in real-terms pay. That £1,600 would be spent in the local economy, thus promoting more jobs and sustaining more business.

[Ms Buck]

My hon. Friend is absolutely right about that. We know that the £1,600 fall in income in cash terms and the fact that wages are 20% lower than they would have been if wage growth had been consistent with its level before the global economic crash—before 2008-09 and beyond–—means several things for the wider economy. Obviously, low-paid people invest their money in the local economy; they spend it, and that has a beneficial effect on the shops, services and communities where they live. It also means that some of those people who would have been paying tax are no longer doing so, which has a beneficial effect for low-paid people coming out of tax but means that total tax revenues are undershooting dramatically, as the Office for Budget Responsibility has confirmed. Indeed, the problem of low pay and tax revenues is a contributing factor to not being able to reduce the deficit, which of course the Conservative party told us would be completed by the next financial year. That has been a complete public policy failure, with a reduction of only a third compared with a target of almost total elimination.

Other issues arise from low pay. It damages work incentives, and we hear a great deal from the Conservative party about those. It is as if it were the party that discovered the idea of work incentives and making work pay. In fact, we all want to see work pay and for that to be an incentive for people going into work. Let us accept that that is universally shared. The trouble is that the worsening scandal of low pay, including in cities such as London, means that work simply does not necessarily guarantee a route out of poverty and it traps people on benefits. That is partly because wages have fallen, as we have heard, but also because they have fallen, particularly in places such as London, relative to soaring housing costs and rising rents. The rise in rents in London means that many households simply cannot work enough hours at the kind of pay that is being offered to get free of benefit tapers. That is particularly true for lone parents and couples with children.

Let me return to the question I was asked by the hon. Member for Bedford (Richard Fuller) about tax credits. It is very important to put on the record just how crucial they are, because whatever one does about the tax threshold and taking people out of tax completely, it simply will not be enough to make sure that people with children are earning enough to make ends meet. The tax credit policy is not a substitute for tax thresholds; it is an essential complement to them, particularly for parents.

[Richard Fuller]

The hon. Lady rightly says that tax credits are a necessary policy addition to tax thresholds We are clear what the Government’s policy is on tax credits, but can she tell us what Labour’s policy is on them for the next five years?

[Ms Buck]

We heard from the Chancellor at the Tory party conference about what he wanted to do in that area. We are yet to have any specific proposals brought to this House and we will consider them when they are put in front of us. When we were asked to vote in favour of a freeze on tax credits—[Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The hon. Members for Bedford (Richard Fuller) and for Streatham (Mr Umunna) should listen to the hon. Lady.

[Ms Buck]

When we were asked to consider what the Government’s freeze on tax credits was going to do in the earlier part of this year, we drew attention to exactly that fact and opposed the Government on that particular freeze for this year because we knew it would hit working people. We hear all the rhetoric from the Conservatives about work incentives, but we do not hear what impact that has on low-income working people.

[Richard Fuller]

I am trying to try to find some common ground. Does the hon. Lady agree that when we are talking about what to do with incomes for the low-paid, it is important that we do not try to sell them this idea that an increase in their wage will necessarily lead to an increase in their full income unless we are clear about what the policy will be on tax credits?

[Ms Buck]

I think I understand the point. We will consider, and make a decision on, those proposals that are put in front of us. They will not necessarily be the proposals that have been put in front of us by a Conservative party conference. It is extremely important to look at tax credits in the round as well as at other changes to the tax system to ensure that we are helping not just those on low incomes through tax thresholds but those who have children so that they have a chance of a decent standard of living too.

Another related point is that low pay has caught people in in-work benefits and added to the benefit bill. The low-wage economy has led to an enormous increase not only in the number of working people claiming in-work benefits such as housing benefit, but in the total expenditure. For example, we have seen a £4 billion increase in housing benefit— that is despite the fact that the Government have made cuts to the total level of housing benefit—as more people are forced into making claims to make ends meet. Indeed, the number of working households needing housing benefit has already increased by 22% and is expected to double over the coming years.

To ensure that we have a sustained recovery and that we tackle the cost of living crisis, help people on low pay and cut the benefits bill, we need to do something about low pay. That is why I so warmly welcome what my hon. Friends on the Front Bench have said about tackling the minimum wage, delivering the “make work pay” contracts, and helping and supporting employers to pay the London living wage, which was set at £8.80 in 2013-14. That will ensure that Londoners can enjoy the full fruits of economic growth as it now belatedly returns.

Where possible—we know that this will not apply to every single sector of the economy—employers should be able to pass on the benefits of the recovery to employees, and in so doing ensure that the additional costs of in-work benefits are offset, so that we can make a contribution to the Treasury. We know that the minimum wage is only one component in a package that will do something to end the cost of living crisis. I welcome the proposals that will ensure rent stability for London renters who have been dealing with this enormous burden of increased housing costs, and the measures to tackle energy costs that have so burdened low-income households over the past few years. The minimum wage may be only one component of the package, but it is a vital one. I very much welcome today’s motion and look forward to voting for it.

14:23

[Heather Wheeler (South Derbyshire) (Con)]

It was really interesting to hear the hon. Member for Westminster North (Ms Buck) deliver the last bit of her speech, as it was the most promising and uplifting part of the whole thing. The tone of this Opposition debate has been so downbeat. As usual, it is about doom and gloom. The only way out, say the Opposition, is through regulation and for a would-be Labour Government to layer more and more costs on business. Life is not like that. Labour has not learned its lesson. I find it utterly fascinating that, four years into this parliamentary term, we have this synthetic anger and calls for regulation and layering costs on business, not to do the things that our communities need. We need to lift horizons, especially with regard to education.

One of the things that I am most proud about is the fact that we now have a college in South Derbyshire. We have never ever had one before. It was normal for people to leave school at 14. The boys went down the pits and the girls went into the potteries; that is what they did. Well, it is not like that any more, and it must not be like that. If I can get a college in South Derbyshire, surely to goodness, Labour MPs can think about lifting the horizons for their communities. They should think about how people can get better jobs, because they now have better education. We have 1.3% unemployment in South Derbyshire. When the mines shut, we had 25% unemployment. That is a huge change around in the economy of my constituency.

[Julie Hilling]

I get extremely frustrated with this mantra that people should get better jobs. Actually, the precious jobs in our economy include caring, nursing, sweeping our streets and making sure our communities are safe. The people in those essential jobs are frequently on really low pay. We must drive up the amount of money that employers pay them. We should not just say, “Go and get a better job.” Those jobs are essential to our economy.

[Heather Wheeler]

I completely agree with the hon. Lady. All work should be worth doing and worth paying. There is no difference between us on that. How depressing would it be if ever, God forbid, Labour got into power? That is what its mantra is about. Ours is not about that; ours is about sunny uplands.

[Ms Buck]

Does the hon. Lady not accept the fact that the number and proportion of people in low pay has increased since her party has been in government? It is all very well telling people to lift their horizons, but in fact the crisis of low pay has intensified over the past four and a half years.

[Heather Wheeler]

I will have some difficulty in accepting that. The point is that 1 million fewer people are unemployed. There are more people in employment now than ever before. There are more women employed than ever before. I want people to understand that getting a job and looking after their family is their No.1 priority, and that is happening.

Obviously, I have looked at the statistics for South Derbyshire. Fewer than 7% of workers in South Derbyshire are on the minimum wage. That is because we have made a real effort to get manufacturing in South Derbyshire and to get a supply chain for the manufacturers. We have made a real effort to get apprenticeship training schools in South Derbyshire. We have worked like—let me find a nice phrase for this. We have worked very hard to ensure that people do not just say, “Do you know what, I do that because my dad and my grandfather used to do that.” It is about lifting horizons.

I totally agree that we need all our public services to ensure that we have clean streets, bins that are emptied and street lights that stay on. People should understand the value of working. I find it so depressing that all we ever get from Labour is this business of layering on regulation and doom and gloom. The right ideas that we heard at conference include raising the tax threshold to £12,500. The horizon of my hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke) is to raise it to more than £14,000. We are not talking about people being grateful that we are only going to tax them at 10%. We want everybody lifted up out of that level. It is outrageous that people should even contemplate that that might be in a Labour manifesto.

[Mr Russell Brown]

I know I am about to make a contribution after the hon. Lady, but let me make this point. There are people who are not working enough hours to come anywhere close to paying income tax. The people who really benefit from what the coalition Government are doing are she and I and everyone else on high salaries. We benefit from increasing the personal allowance. Some people do not even earn half of that personal allowance a month.

[Heather Wheeler]

I completely accept the hon. Gentleman’s point of view and it is completely fair to say that people who were unemployed are now working a few hours, but I remember the great outcry about changing working hours from 16 to 20. There was massive outcry and we were told that it would never happen, but I have not had a single constituent come to me to tell me that they are worse off because they are now working 20 hours or because they are working towards those 20 hours. I think that things have changed.

[Alec Shelbrooke]

In relation to the comment from the hon. Member for Dumfries and Galloway (Mr Brown), which I am sure we can all agree with, does my hon. Friend agree that the best way to try to get people working more hours is to cut the tax on business and get businesses to give the money to the people doing the work, rather than raising more taxes on business?

[Heather Wheeler]

My hon. Friend raises a superb point. Our aspiration to take corporation tax, which is already among the lowest in the G8 and the G20 at 23%, down to 20% is fantastic. The money should stay in the businesses, so that they can afford to pay their employees.

I have two superb employers, among many, in my constituency that make a point of ensuring that I am aware of what is going on. Nobody earns less than £7 an hour at Nestlé and there will be nearly 1,000 workers there. The second company, Faccenda, which is a turkey processing plant, has 400 employees. Nobody there earns less than £7 an hour and most earn far more than that. Companies realise that they do very well if they pay their employees well, but they can only do that if they do not have layers of regulation, layers of red tape and layers of “the Labour party knows best”. That is the old days. That is the ’70s.

[Andy Sawford]

It is sometimes said that my constituency neighbour, the hon. Member for Wellingborough (Mr Bone), is the meanest boss in Britain. As a former employee of the hon. Lady, who was a trustee of the charity that I ran, I can say that she certainly was not one of the meanest bosses in Britain. We would agree that it is important to pay people well and I know that that is something that she stands by, but I am not quite sure about her point about regulation. The proposals are to continue to seek to increase the minimum wage. Surely, she supports the minimum wage, so I cannot quite see why she thinks this will be a burdensome new regulation.

[Heather Wheeler]

The difficulty that the hon. Gentleman slightly skates around is the fact that this would be such a burden for companies that are not doing well. That is where we have the problem. We need our companies not to have regulation, to have aspiration and to have 20% corporation tax, so that they can pay their employees well.

[Ms Buck]

By that same logic, does the hon. Lady think the cost of in-work benefits, which is soaring because of the rise in the payment of low wages and because of falling wages, is a burden on the taxpayer?

[Heather Wheeler]

I want to turn the whole argument the other way around. I feel that companies need to understand that we expect them to look after their employees. We need only to think about what has happened with the taking on of pensions. It has been a huge success. Again, all the naysayers said that nobody would take it up and it would not work, but it has been one of the best successes because good employers have loyal employees who stay and work for them. That is what I want to see in the future for our country. Goodness forbid that Labour get in next May. I do not want that to happen because I feel that the economy is just turning around, as people are understanding that we are manufacturing so much more than we ever used to and that that is the way forward. It is about aspiration, education, apprenticeships, good living and good wages. I see all of that in South Derbyshire and I do not want it to be put under threat.

14:33

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

It is a pleasure to follow the hon. Member for South Derbyshire (Heather Wheeler), who is, dare I say, one of the jovial characters in this place. She speaks much sense. She speaks about doom and gloom among Labour Members, and I try as best I can to be upbeat, but I am sure that she would recognise that the economic recovery that Government Members talk about is not being seen across the country. I have said it time and again, and I hate to say it, but I will not let people forget that 13 or 14 months ago the average wage in my constituency in rural south-west Scotland was 24% beneath the UK average. Thankfully, that has improved and it is now at about 17% or 18%, but people are struggling.

Across the country, working people have seen their wages fall by an average of £1,600 a year, because under what I—and my colleagues, I am sure—see as the Government’s failing plan, the recovery is benefiting a privileged few and most families are not seeing the green shoots of any kind of economic recovery. The real value of the national minimum wage has fallen and one in five employees are low paid. That impacts not only on low-paid workers but on their families, their communities and the local economy. It piles up across the country as more people in work have to rely, as has been said this afternoon, on the social security system to make ends meet.

My hon. Friend the Member for Westminster North (Ms Buck) mentioned the Campaign to End Child Poverty and the work done by the centre for research and social policy at Loughborough university. The figures out today for my area are soul destroying. The figure for the number of children living in poverty is now 23.2%. Those figures include more than 3,000 children affected by in-work poverty, whereas 1,200 are affected by out-of-work poverty. A massive shift is going on and we are seeing more and more families affected—families with children. We should all be saying that we are going to do something about that together to get children out of poverty. The situation is pretty desperate in some areas, and I recognise that my hon. Friend cited even higher figures from her London constituency.

The hon. Member for South Derbyshire mentioned colleges. I have to tell her that the college system and the further and higher education systems are different north of the border. I have a new college in my constituency that is only two or three years old, but the budget has been cut by the Scottish Government. Over the years, about 30% of the young students going into that college have had no formal qualifications whatsoever. The formal education system has failed them, but the college offers them a second chance that many of them have seized. However, the budget for our further education colleges is being cut—that is not the fault of Government Members, because it is a devolved issue—and so courses are being cut. That means that young people who need that second chance are being deprived of the opportunity.

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

Does the hon. Gentleman accept that the number of apprenticeships in Scotland is at a record level and that targeting funding at policies that will get young people into work, rather than at an endless cycle of college courses that do not lead to work, is a better use of scarce public money at a time when the block grant has been cut and when public finances are under immense pressure?

[Mr Brown]

I recognise that finances are under pressure, but I would say the same to the hon. Lady as I said to the hon. Member for South Derbyshire. The situation is not the same across the entire country. Youth unemployment in my area sits at some 5.3% whereas the Scottish average is 4.8% and the UK average is 3.8%, as there are so few job opportunities. When young academically inclined people in my area manage to get off to college or university, 90% never come back because the quality jobs that the hon. Member for South Derbyshire has spoken about are simply not there. It is a rural economy—tourism is the other major employer—but the growing job market is in the care sector as people come to the area to retire. We have a vastly different economy to other places, although similar economies exist.

I want to move on to the issue of the national minimum wage. I said in an intervention on my hon. Friend the Member for Streatham (Mr Umunna), the shadow Secretary of State, that I served on the Committee for the National Minimum Wage Bill. As I said at the time, the only other person who served on the Committee who was in the Chamber at the time at which I made the intervention was Mr Speaker. There were some long nights. Indeed, I remember two particularly lengthy sittings: one that started at 4.30 on a Tuesday afternoon and ended at 1 o’clock the following afternoon, and another that started at 4.30 on a Thursday afternoon and finished at 6.30 the following morning. But it was really worth it. I remember campaigning in Lockerbie when the figure of £3.60 an hour was announced, and one guy I met on the doorstep asked, “Is this figure of £3.60 right?” I said yes and asked whether it would affect him. “Of course it will,” he said. He was working the best part of 50 hours a week in the forests—heavy, dirty and dangerous work—but taking home only about £112 a week.

[Andy McDonald (Middlesbrough) (Lab)]

I just want to congratulate my hon. Friend on the work he did to introduce the national minimum wage, because I remember that there were adverts in my local press for security guards, and they read, “£1 an hour. Bring your own dog.”

[Mr Brown]

I thank my hon. Friend. Yes, we have moved on, but the fear among Opposition Members is that we are starting to slip back. In those days it was women, in particular, who were having to hold down two or three jobs in order to make ends meet. I see the same thing returning but, more worryingly, it is not only women, but men who are having to hold down two or three jobs.

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

Zero-hours contracts.

[Mr Brown]

Yes, this is about the whole employment method. We cannot deal with this just with a stand-alone national minimum wage. When we came to office we had the windfall levy on the privatised utilities, which allowed us to introduce the new deal programme for young unemployed people, the long-term unemployed, the disabled and lone parents, and then we introduced the tax credits system. It was about pulling together two or three strands to make things work, and that led to a step change in people’s standards of living.

[Ian Swales (Redcar) (LD)]

I certainly support the work that the hon. Gentleman’s Government did on the national minimum wage, but does he not regret the fact that when they left office people earning the minimum wage were paying £1,000 a year in tax? By April they will have seen that figure cut by £800 through the work of the Liberal Democrats. [Interruption.]

[Mr Brown]

I refer to the coalition Government in that regard—credit where credit is due—and I will come to that point later.

With regard to the reduced levels of unemployment, we need to look at the figures from the Office for National Statistics for the weekly average number of hours worked across the country and compare them with the number of people working over the past 12 to 18 months. Although more people are working, we have not seen an increase in the number of hours being worked on a pro-rata basis. What we are seeing—this relates to the point about zero-hours contracts—is that more people are in part-time work or working shorter hours. Some people are desperate to grab four or six hours in order to supplement a job they are doing elsewhere. The unemployment figures might be falling, but the overall number of hours being worked across the country is not increasing at the level we would have expected for the number of people now in employment.

People need job security, but we are seeing a scale of job insecurity in this country that we have not seen for many years, so I challenge Government Members to say that we have not gone backwards in some respects. I hate to say it, but there are some unscrupulous employers who are prepared to exploit zero-hours contracts and short-term working for people who are prepared to do a hard day’s work if given the chance. I also want to mention migrant workers, because I was talking about that with three or four guys I met five or six weeks ago. They were very angry, and not about the migrant workers they were working with, but about the fact that their employer was exploiting the situation in order to keep wages low, with local indigenous workers paying the price.

I want to mention the personal tax allowance again, because it is a big issue. I applaud the aim of taking people out of tax. I have challenged Treasury Ministers on this, as has my hon. Friend the Member for Edinburgh East (Sheila Gilmore), because many people are not working enough hours to come anywhere close to paying tax. The fact is that it is the rich, or those in well-paid jobs, who reap the benefits of the personal allowance changes. I also recognise that there is always a narrow band of people who benefit, and if we shift or change tax bands and tax rates, some people will be more heavily penalised than others.

[Mr Donohoe]

This is an increasingly important subject. We must also consider the fact that north of the border, as my hon. Friend will know, many local authorities are talking about not only a minimum wage, but a living wage, because of the problems associated with the minimum wage. Does he agree?

[Mr Brown]

Yes, I think that it is about a step change. We need to recognise that we should do whatever we can to increase the quality of life and lessen the impact of the cost of living on households. My local authority will be looking long and hard at that issue and imploring the businesses it offers contracts to—we know that we cannot demand it—to pay a living wage.

In 1997, we were told that we would lose millions of pounds as a result of a national minimum wage, but my party had clearly done our homework while in opposition, because the figures showed that when we give £1 million to the lowest-paid people in any community, they will go out and spend it, which creates 35 to 40 jobs in the community. That is what we saw. Some people in my area saw businesses shedding jobs, because the type of work they were doing was coming to the end of its life, and they could not understand why unemployment levels were still low. Unemployment was falling simply because we were putting money into the local economy.

I will return to a point that was made when we were discussing the benefits increase earlier this year. The figures clearly show that freezing benefits for the lowest-paid people over a three-year period took £6 billion out of the local economy. Giving some of the poorest paid extra money stimulates the local economy.

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

The hon. Gentleman is making a good speech. I agree with his point about the economic multiplier effect of a minimum wage, and indeed of increasing benefits. The economist Paul Krugman makes the economic argument that increasing benefits adds to the economy by creating demand among the people who are likely to spend.

[Mr Brown]

Absolutely. As my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) said earlier, low-paid workers do not salt the money away but go out and spend it, and that is what we need. I honestly believe that that is where the coalition Government, to a certain extent, have failed. They have taken money away from some of the poorest communities and households, and there is no doubt that if we had left money in their hands, it would have been spent.

[Richard Fuller]

rose—

[Mr Brown]

Mr Deputy Speaker is looking at me and I want to draw to a conclusion.

I want to mention “make work pay” contracts. In November last year, the Leader of the Opposition announced

“that a future Labour government would encourage employers to pay the living wage through new ‘Make Work Pay’ contracts.

Firms which sign up to become Living Wage employers in the first year of the next Parliament will benefit from a 12-month tax rebate of up to £1,000—and an average of £445—for every low paid worker who gets a pay rise.

This measure will be entirely funded from the increased tax and National Insurance revenue received by the Treasury when employees receive higher wages. Additional savings in lower tax credits and benefit payments, as well as increased tax revenues in future years, will cut social security bills and help pay down the deficit”—

as we all want to do. That, without a shadow of a doubt, is a commitment that an incoming Government would make the desperate moves that have to be made to reduce the deficit.

[Richard Fuller]

Will the hon. Gentleman give way?

[Mr Brown]

I am going to finish now.

I am proud that when I came into this House I was one of a team of people who took forward the National Minimum Wage Bill. I have always said that even if I do nothing else in life, I can say that I played that part in what that Labour Government did. With no doubt whatsoever, I will be supporting our motion. I would like to think that one or two Government Members who have spoken will support us too.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Let me just say that if Members stick to 10 minutes each, I will get all five speakers in, because I want to bring in the Front Benchers at 20 minutes to 4.

14:51

[Mrs Anne Main (St Albans) (Con)]

I am truly grateful, Mr Deputy Speaker, that you took the point of order from my hon. Friend the Member for Harlow (Robert Halfon), because the fact that he has been maligned by the shadow Secretary of State for Education so publicly on the media means that he will probably now be touring the media studios having to explain that he did not make the comments attributed to him. I seriously hope that the Member who made those allegations comes here as quickly as possible to explain in the public domain, not just by sending a text, that my hon. Friend did not make those comments, from which I am sure that many of us would dissociate ourselves.

I am glad that I heard all the previous speeches, but particularly that I heard about the flexibility that the hon. Member for Streatham (Mr Umunna) is building into his plans. One of the things I have learned about being bendy in life is that it allows one to do U-turns. We now know that Labour does not have a firm promise, as was said at the party conference, to deliver a “greater than £8 an hour” minimum wage, and there is flexibility about that. That means, of course, that in reality, with a poor and failing economy like the one we inherited from it, Labour will deliver less than the £8.06 an hour that is projected by us. This debate has revealed the fact that the shadow Secretary of State is distancing himself from that commitment. Today Labour has illustrated the fact that it is prepared to be flexible about having £8 an hour while we desire to have a greater amount of £8.06 an hour.

I am sorry that my hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke) is not still here; he has probably had to pop out for something very important. As I said in an intervention, I completely agree with what he said about his ten-minute rule Bill on the payment of interns. We are talking about the minimum wage in this very privileged place. Many of us are glad to be here, but many of us have had to take second jobs, or whatever, to make sure that we could afford to be here, while some people here are very wealthy and can afford to be here. It is appalling that once we have got here we seem to forget that a lot of young people would like to work for us, but then they read on the “Working for an MP” website that interns are paid only expenses. That means that they are not being paid the minimum wage. I can see the hon. Member for Leeds West (Rachel Reeves) looking at me at this point.

I believe that we should set an example in this place. The hon. Member for Streatham, who has now left, said that I was talking about work experience of a few weeks for sixth-formers, but no, I am not. All of us may have people with us doing work experience. I encourage that from those of any political persuasion in my constituency, and I do have young people coming in for a few days or a week. However, that is not what I am talking about. I am talking about the fact that MPs, with the expense accounts accorded to us to make sure that we can pay our staff proper rates in accordance with the Independent Parliamentary Standards Authority guidance, will still consider having people doing long hours in important jobs for expenses only, which often fall far below the level of the minimum wage.

The hon. Member for Leeds West might want to intervene on me, but I believe that she has had a series of interns who have not been paid the minimum wage. There is a website in operation that says whether an MP will pay for an internship. I do not believe that anyone should work for free or for very little, and that applies in this place and outside this place. If we cannot uphold the principle here, it is very hard to make the argument to employers outside.

I look forward to a revisiting, I hope, of what interns can expect should they come to work for Members in this House. Otherwise we will perpetuate the fact that this is a place of privilege and so people need to be able to have the bank of mum and dad to pay their bills in order to come here and work for a pittance for an MP. That is wrong, and it should go now. We should guarantee at least the minimum wage to anyone who comes to work in this place. The hon. Member for Birmingham, Erdington (Jack Dromey) said that he had joined a strike of members of staff here so that they could have the living wage. Good on him, but let us remember the interns who come through this place, often on short-term six-month contracts, who cannot strike and cannot have the same rights accorded to them. We as Members should think about those people, many of whom are young and aspirational.

[Andy Sawford]

Last year I had a person, Vincent Torr, working with me on the Speaker’s scheme, which was properly funded. That was a fantastic scheme for which we should pay tribute to Mr Speaker and my right hon. Friend the Member for Salford and Eccles (Hazel Blears), who supported it. Does the hon. Lady agree that that shows us the way?

[Mrs Main]

I am in favour of any schemes that ensure that if young people want to come and work in this place, they can afford to do so. They should not have to subsidise themselves in order to be able to get here and find out what it is like to work in politics.

[Andy McDonald]

Will the hon. Lady give way?

[Mrs Main]

Briefly, because I have a few more comments to make.

[Andy McDonald]

Is the hon. Lady not aware of the Conservative party auctioning internships to serve with J. P. Morgan? How does that sort of attitude, whereby people are purchasing places with companies like that, fit in?

[Mrs Main]

I think I have made myself very clear. I have never had an intern work for me whom I have not paid, and I will not do so. Sometimes I am constrained as to the numbers of staff I can have, and I budget accordingly. Unless the hon. Gentleman condemns any Labour Member who does not do the same, I am not interested in auctioning internships. I believe I have made it very clear that young people should be paid if they work for Members of the House of Commons.

I should like to turn to zero-hours contracts. Other Members have said that zero-hours contracts should be abolished because they are awful and appalling, and are sometimes not proper jobs. There are examples of all those things, but, as I said in an intervention, let us be aware that zero-hours contracts do not always provide a dreadful solution. They sometimes provide a very necessary solution for bank nurses, supply teachers, and other people filling gaps where suddenly there arises a vacancy. I speak as someone who has been in that situation myself. When my husband died and I was a single parent, I was glad to work as a supply teacher so that I could work around the needs of my young children—for example, sometimes they were ill and could not go to school. Opposition Members condemn all zero-hours contracts, but if we were to get rid of them, our health and education services, to name but two, would probably grind to a halt within a few days or weeks. It is very necessary to have contracts that give flexibility in the delivery of these services.

The most crucial thing that will come out of this Opposition day debate is the fact that Labour has declared that it does not have a promise or a guarantee of a greater than £8 an hour minimum wage but a flexible target of £8 an hour that can be abandoned at any moment. I hope that the electorate out there will take note of that when its leaflets come through their doors.

14:59

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

I very much welcome today’s debate on the minimum wage, because it affects millions of people across the UK, including thousands in my own rural constituency, and I think that it, more than any other policy, has the potential to tackle poverty.

In-work poverty is perhaps the most stark symptom of the deep income inequality that is increasingly the hallmark of British society, but people in low-paid jobs have been badly let down by successive Governments, who have failed to ensure that the minimum wage keeps pace with the cost of living. We need to recognise that that failure has had a huge impact on people in low-wage jobs and ask ourselves how we can change the minimum wage into a living wage.

If the minimum wage had kept pace with inflation, those in low-paid jobs would be more than £600 a year better off now: they would be earning £7.48 an hour. That is still short of the living wage, which is currently calculated at £7.65 an hour, but it is a lot closer and makes the gap between a minimum wage and a living wage a lot more bridgeable.

I intend to support the Labour motion because any commitment to increase the minimum wage is a step in the right direction, but it is important to put the proposal in perspective and acknowledge that it will not be a living wage. If we use existing forecasts of inflation, we will see that the living wage is projected to rise to £8.57 an hour by 2020, so what is being proposed today falls well short of a wage that someone can actually live on. I would also urge a note of caution: we have no means at all of knowing whether those forecasts are right. They might be higher or lower—the Office for Budget Responsibility does not have much of a track record in accurate forecasting to date—so we have absolutely no way of knowing what a phased increase of the minimum wage to £8 an hour by 2020 will mean in real terms.

[Ian Swales]

Does the hon. Lady recognise that the living wage is based on a net figure, because it is a net figure that people actually spend, and will she join the Living Wage Foundation in welcoming what this Government have done with regard to the tax threshold, which has helped to narrow the gap between the minimum wage and the living wage?

[Dr Whiteford]

The hon. Gentleman makes an important point, but in fact the Government have not gone nearly far enough, because inequality in this country is growing, not reducing. There have been vast increases in income at the top end of the income spectrum, while increasing pressure is being put on people at the lower and middle parts of the spectrum. The gap between the richest and poorest in our society is widening and that is not in any way sustainable.

It is important to understand that if the minimum wage were linked to inflation, it would have a much better chance of keeping pace with the actual cost of living. That would help avoid the current situation, whereby the minimum wage is well below the cost of living and forces people to be dependent on in-work benefits. It would also help address Labour’s prescriptive proposal, which limits us to the increases on the table without knowing what the economy is going to do between now and 2020. Anyone with a crystal ball would be well advised to be cautious in their predictions.

Yesterday and earlier today the House discussed the promise of extensive new powers for the Scottish Parliament, which are now being considered by the Smith commission. The minimum wage is a prime example of a policy that I would like to see devolved, and I am pleased that the Scottish National party’s submission to the Smith commission has set out the benefits of that, particularly the ability to link the minimum wage to inflation, which would immediately improve the position of low-paid workers and, over time, reduce reliance on in-work benefits.

The Scottish Government’s expert group on welfare reform has also considered the issue and recommended that the minimum wage should begin to rise, in phased stages, to the level of the living wage. Like others who have spoken, however, I do not think it is possible to divorce the issue of the minimum wage from the wider tax and benefits system.

Given that a very high proportion of people in low-paid work are in receipt of in-work benefits, we need to look at the design of the welfare system. One of the greatest failures of the UK’s welfare model has been the disincentives it has created for part-time workers in particular to increase their working hours, because of clear financial disadvantages and risks associated with doing so. For instance, for a couple with children and one parent in work, increasing working hours from 50% to full-time work results in 82% of the extra earned income being lost through tax and loss of benefits, which radically undermines the perception of work as a route out of poverty. A redesigned model would have the potential to address those high withdrawal rates and tackle the existing disincentives so that lower-income households could keep a greater proportion of the increases in earned income.

I echo the point made by the hon. Member for Dumfries and Galloway (Mr Brown). The people who are getting the biggest and fullest benefit from changes to the tax system and the lowest rate of tax are those on the highest incomes. The changes are benefiting those at the top end of the income spectrum and having a fairly marginal impact on those at the lower end, because what they gain in tax they lose in benefit. The net impact in many cases has been to reduce their income, particularly in relation to average income in the country as a whole.

A redesigned model would be especially important for families and those with dependent children. In a week when we have seen very sharp increases in child poverty—this has been referred to by the hon. Member for Dumfries and Galloway—it is really important to make the point that most of the children in poverty in Scotland are children in working families. They are the children of working parents, and the changes to the tax and benefits system have pushed them into an even harder position than they were in previously. They have been hitting the headlines for all the wrong reasons. I want to challenge the view that having one in five children living in poverty is inevitable, because that is simply not acceptable. We could change that if we put our minds to it. We need to get our priorities straight.

When the minimum wage was introduced in the 1990s, I remember fears of Armageddon being expressed from some quarters and apocalyptic warnings that jobs would be lost and that the economy would go to hell in a handcart. Of course, that is not what happened, because when people had a bit more money in their pockets they spent it. The higher costs to businesses, which we all take seriously, were more than outweighed in economic terms by the benefits to businesses, including job creation, and in social terms by the huge benefits and improvements to the standard of living for people in low-income households.

There are also potential fiscal benefits from an improved minimum wage in savings to the benefits bill, and potential for increased tax receipts. We need to recognise that and not pretend that it is simply a cost. It is actually a way of getting people into work and improving the standard of living for many people throughout our society—not just the people in those jobs, but those who depend on them, such as their children and other dependants.

[Mr MacNeil]

My hon. Friend is making a fine speech. What she is saying could be summed up by the economists Krugman and Stieglitz, who say that one person’s spending is another person’s earning. When we put money in people’s pockets, it has a very good economic effect all around.

[Dr Whiteford]

My hon. Friend makes a valuable point.

I want to touch on another issue that has been mentioned by others, namely the disproportionate number of disabled workers and minority ethnic workers in minimum wage jobs. We have already heard about Lord Freud’s disgraceful comments and I hope the Government will step back from what was an outrageous thing to say about people who are already disadvantaged in the labour market.

[Mrs Main]

I am sure the hon. Lady will also condemn the slur against my hon. Friend the Member for Harlow (Robert Halfon) by an Opposition spokesman, who said it was he who made those remarks.

[Dr Whiteford]

Absolutely.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. For the sake of accuracy, the hon. Member for St Albans (Mrs Main) made that point earlier and it has been dealt with. The hon. Member for Harlow (Robert Halfon) certainly did not say that.

[Dr Whiteford]

Thank you for that clarification, Mr Deputy Speaker. The first I heard of those outrageous slurs on the hon. Member for Harlow was today, but I hope that the record has been put straight and that he will continue to put it straight. I would feel much happier, however, if Government Members would dissociate themselves more firmly from what Lord Freud has said.

[Richard Fuller]

On a point of order, Mr Deputy Speaker. This is my first point of order so please give me some forbearance. At what point is it orderly to refer to comments that have not been made in this House and at what point is it not orderly to do so? Comments have been made about one Minister in one location, and other comments have been made about a Member of Parliament in another location. Which is orderly and which is disorderly to refer to here?

[Mr Deputy Speaker]

First, we are not going to worry about the Chair’s decision. My decision—I will be quite clear—is that a peer from another place has been mentioned, but I do not want to get into a debate about something that has been over the airwaves relating to two Members. That issue has been clarified in this Chamber and by another Member. I do not want the debate to centre on that. This is a debate, as we know, about the minimum wage and support for people.

[Dr Whiteford]

I want to dwell on equality, because we must remember that the vast majority of people in minimum wage jobs are women. Issues of ethnicity and disability often compound those of gender inequality. Minimum wage jobs are overwhelmingly done by women who are in part-time positions because of their caring responsibilities. Such women are often in sectors with far too much gender occupational segregation, such as cleaning, catering and cashiering. They often have temporary and insecure jobs, and they often work antisocial hours. Other Members have mentioned the problems of exploitative zero-hours contracts.

We cannot separate from this debate the huge impact of gender inequality on wages in this country or dissociate it from child poverty and its long-term impact on our society, which was discussed earlier. We know that children who grow up in deprivation are likely to need the heath service more, to have lower educational attainment and to have much worse job prospects in the long term. Unless we are prepared to recognise that people deserve a living wage to support their families, we cannot begin to tackle the inequality that so dogs our society.

I want to touch on the difficulties of enforcing the minimum wage, which other Members have mentioned. This year, the Low Pay Commission has taken evidence in my constituency, where a significant number of people are in low-paid jobs. Although unemployment is very low in Banff and Buchan—about 1%—a very high proportion of people earn less than the living wage. The vast majority of employers respect employment law and pay at least the minimum wage, but people have nevertheless brought me reports of being paid less than the minimum wage. That issue is extremely difficult to address.

I have been made aware of cases of people involved in the so-called informal economy, as well as in the service sector. They may not have a contract and may not have received pay slips. They know that they are being short-changed and that, in relation to national insurance, they could be losing out on their pensions in the longer term. They are also short-changing Her Majesty’s Revenue and Customs and the rest of us. However, they are reluctant to put their heads above the parapet because they need their job and do not want to jeopardise what little income they have. In a close-knit rural community, they also do not want to be labelled a troublemaker.

Beefing up local authorities’ powers might help, but that is not a real solution. In theory, employees who are being paid less than the minimum wage can pursue legal action against their employer or take them to a tribunal with every likelihood of success, but the reality is that somebody paid less than £6.50 an hour is very unlikely to have the financial means to access the tribunal service or take on the associated legal costs. That is wholly unrealistic, and I hope that the Minister will address that issue and suggest ways round it when she responds, particularly given the changes that the Government have introduced.

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

I just want to say that any constituent of the hon. Lady, or indeed of any other Member, who finds themselves in such a situation should ring the pay and work rights helpline on 0800 917 2368. They do not need to access the tribunal system; HMRC enforces the national minimum wage on behalf of workers.

[Dr Whiteford]

I am grateful to the Minister—it is very helpful to have that phone number on the record—but my experience, having helped constituents in such a way, is that nothing changes. The Government need to do more on this to make people feel confident about asserting their rights.

I want to wind up quickly by saying that we have reached a situation in the UK where people in low-paid work—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. May I just help the hon. Lady? I have been very patient. She has now spoken for 14 minutes. To be serious, I do not think that that is doing justice to other Members. I am very patient, but she needs to get to the end.

[Dr Whiteford]

I was just bringing my remarks to a close, Mr Deputy Speaker, but it is important to say that the minimum wage has the potential to lift people out of poverty. I hope that this Government and whoever the next Government are will take such an opportunity.

15:13

[Richard Fuller (Bedford) (Con)]

The motion recognises that there is a series of extremely important issues, but it fails on at least three fronts: in my view, it is too timid in its prescription; it lacks honesty in addressing the issue of how to meet competing ambitions; and, above all, the public have no confidence whatever in the ability of the shadow Treasury team and the leader of the party who tabled it to manage the country’s economy.

These issues are important because people want a pay rise. They want a pay rise because for many years now they have suffered from the consequences of the previous Labour Government’s debt-fuelled policies, which came crashing down in the economic collapse of 2007. That was seven long years ago, and we are still suffering the consequences of their failures. People understand that it takes time for the economy to be repaired. They are pleased to see that the Government have a long-term economic plan and are making progress in addressing the fundamental weaknesses of the economy. They understand that a stronger economy means stronger businesses, that stronger businesses mean more jobs and that an increase in employment will result in higher wages. However, they are impatient to feel that in their own pockets.

There is a lack of ambition in the proposals before us. There are several reasons why the motion and policy prescriptions from both sides of the House are too limited to meet the challenges that the economy faces. The first reason is that we are living through an era of massive corporate welfare. Vast sums of taxpayers’ money are funnelled into our private sector—or so-called private sector—companies year in, year out. One of the most substantial amounts of corporate welfare each year is paid out in the form of tax credits. I am not at all saying that we should scrap tax credits, but I think we need to be clear about how much taxpayers’ money can be paid to corporations to subsidise wages or provide other subsidies for what are otherwise private sector, free market activities.

The second reason is the conundrum that those of us in free economies do not value valuable work. We have heard comments from Members on both sides of the House about this, but if we asked the public to rate how important they think certain jobs are and what should be paid for such jobs, we would end up with substantially different outcomes from those that now exist. For a start, every Member of the House would be paid a whole lot less and bankers would not gain the millions of pounds that they achieve, but our nurses would earn more and, most importantly, our care workers would earn substantially more. In free economies, there is a conundrum: how do we get to a point somewhere between what the market delivers and the remuneration that people expect to be given for the work put in? There is no question but that the moves under the previous Labour Government in both introducing the national minimum wage and providing working tax credits—I might have concerns about the latter going too far—were steps in the right direction of trying to find solutions to that problem, which still persists.

The third major reason why today’s prescriptions are too timid is that there is a substantial underlying issue of demand in western economies. If we look at the risks faced by this country—it is a tremendous accomplishment that the UK economy is growing so strongly, despite the international headwinds—we still have to conclude that one of the most substantial risks is the insufficient demand in the real economy. There is quite a lot of demand in the financial products area, but there is not enough demand in the real economy. Providing a boost to real wages would address the issue of the absence of demand perhaps even more effectively than quantitative easing has managed to do over the past five years.

As I have said, the motion fails because it lacks honesty in tackling the existence of competing ambitions. Let me give an example in relation to the first issue. One sector with low pay is care, but a route out of that is to have transparency in commissioning. This week, I was very pleased to meet Citizens UK, which has been at the forefront of efforts on the living wage. It will have a manifesto for each of us as Members of Parliament or candidates at the next election to consider. It has looked at commissioning, and wants transparency in commissioning to show that care workers’ pay can be at or above the minimum wage or at or above the living wage. It says that that can be accomplished by providing a floor on commission pricing. If we are to be honest, we have to address the consequence of that. In an era of limited public expenditure, when it is necessary to bring the deficit down, what will we do when the average cost of care goes up? Will we expand the amount of care that is provided and expand the budget for it or will we reduce the amount of care to keep the expenditure the same? The Government and the Opposition need to be honest about what their proposals are on that.

The second issue, which I ask Opposition Members to address, is that in a number of the scenarios for increasing pay from the minimum wage to the living wage, the increase is offset nearly 100% by reductions in benefits. What are the proposals of the Opposition and the Government on that? They say to the public, “We will increase your pay and that will be a good thing,” but when tax and national insurance are taken away and the working tax credits, child tax credits, housing benefit and council tax benefit are added, are people actually going to be better off? If it is not possible for parties to demonstrate that there will be an increase in pay at that point, we are in danger of misleading people by saying that we are doing something that will make them better off in their pockets. That is compounded when Opposition Members say that they can achieve an increase in wages at the same time as reducing the deficit. The same pound cannot be spent in two different places. In her closing remarks, perhaps the shadow Secretary of State for Work and Pensions might provide some light—it might be too early to be too explicit—on how she sees that conflict playing out.

The third issue is directed more at my own party. I believe strongly that we need a strategy for wages. However, I understand that that will have consequences for employment. The Government have done a remarkable job of increasing employment during the country’s worst recession since the war. We now need to look at how we will balance that policy over the next few years with increasing wages.

May I make three suggestions? First, we should continue the work that the Department for Business, Innovation and Skills is doing to look at the national minimum wage. Secondly, we should consider whether there should be a cross-party agreement to peg the minimum wage to a percentage of average wages. That could become a norm within the Low Pay Commission’s role and responsibilities. Thirdly, we should promote the living wage through greater transparency requirements in all local government contracts, so that local authorities cannot parade the fact that they are doing the right thing by paying their own employees the living wage unless it is transparent that people in the private sector companies and charities that are commissioned to provide their services are being paid the living wage as well.

15:22

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

It is a pleasure to follow the hon. Member for Bedford (Richard Fuller). He made some important points. I will return to some of them, such as the one about procurement and the supply chain.

My constituency has been fighting for better wages for more than a century. I dare say that the struggle goes back even further. In 1905, Raunds boot and shoe workers marched to London. [Interruption.] The hon. Gentleman is smiling because he knows Raunds well. The workers might even have gone through his constituency. They marched to London to demand a fair rate of pay from the War Office, because they were making boots for the British Army. They rallied in Parliament square and then came into the Strangers Gallery of the House of Commons, where they caused a disturbance, such was the strength of feeling that they needed to be heard. They then marched up to the War Office, where they had a meeting. The War Office agreed to pay a fair rate. It accepted the principle that people should be treated with dignity and respect, and should be paid a wage that is commensurate with the work that they do and that enables them to exist and to have decent lives.

People in my constituency have campaigned long and hard for better wages. People in the steel industry, which used to be a major employer alongside the boot and shoe industry, campaigned for better wages and good jobs. They were incredibly let down in 1980 when the Government closed the steelworks, leaving many people out of work. That has shaped the story of my constituency, which is one of hard-working people, of a great spirit of enterprise and of some very good employment opportunities and good employers. However, there is a darker side to our local labour market.

Today, many people in my constituency have very insecure employment. Many people work through employment agencies, have zero-hours contracts and are paid at the minimum wage. Indeed, some people, as the Minister is well aware, have been paid below the minimum wage. I will come on to that later. The combination of low pay, contracts that lock in insecurity and the role of agencies in our local labour market means that, although people who work for the better employers, such as Tata Steel and RS Components, have good lives, many people struggle to lead the lives that they should be able to lead, given the work that they do, day in, day out, when they have the opportunity to work.

There has been a conversion on zero-hours contracts from the Government. They now seem to accept that they are a problem. For a time, they denied that they caused a difficulty in our local labour market. I campaigned on the issue, as did many others, and persuaded the Office for National Statistics to revise the way in which it surveys employers to identify whether people are being employed on zero-hours contracts. Its revised figures show that almost 1 million people are employed on zero-hours contracts.

The Conservative party has made the argument that some people want to be on zero-hours contracts. In the end, this issue is about economics and power. There are different kinds of casual employment where there are no fixed hours. For a long time, my local authority swimming pool has offered seasonal work. It often suits students to be employed during the summer months on a fair rate of pay and not to have a long-term contract or fixed hours. It is common to combine working in the Co-operative funeral business with being a retained firefighter. There is a long-standing tradition of that. Again, it might suit such individuals not to have fixed hours and not to be on a permanent contract. There are also examples among higher paid jobs. There are hospital consultants and lawyers who do not have fixed hours or permanent contracts, and that might suit them. That is their choice.

However, when I talk about zero-hours exploitation, I am talking about people who would much rather have a proper contract of employment; know where, from week to week, their money will come from; know what hours they are able to work so that they can plan; and, frankly, be in a stronger position with their employer to demand fairness and respect in return for the work that they do. That exploitation is not just characterised by the narrow issue of exclusivity that the Government have belatedly said they will tackle. We have not seen the legislation on that and I hope that the Minister will tell us how urgently the Government will act. Such exploitation is also about employees being required to be available for work when there is no guarantee of work, and being employed on such contracts on a long-term basis.

Others might say that people can move about in the labour market and look for better opportunities. However, if my constituents cannot get a loan to buy a car to get further afield in the area of the country that has the lowest public subsidy for public transport, how can they break out of the trap? I come across young people who cannot get into the housing market. They cannot get a rental contract, let alone a mortgage. People therefore cannot lead the life that they want, such as starting a family, because they are trapped on zero-hours contracts.

This is therefore a much bigger issue than the Government acknowledge. They have been dragged into beginning to accept that there is a problem, but they have only a very partial, narrow understanding of it. I hope that they will legislate soon. If they do not, I will support the steps that my hon. Friend the Member for Streatham (Mr Umunna) said the next Labour Government will take to address the scandal of zero-hours contracts. There is also the problem of employment agencies. My constituency has the highest concentration of employment agencies anywhere in the country. There is a legacy back to the 1980s and the make-up pay that was offered to the then steelworkers, and to the types of industries that located in Corby. To some extent, those were labour-intensive industries where the work could not be shipped abroad. That is why we have a strength in the food sector, with perishables. The work is still labour intensive and it needs to be done in the UK.

Agencies are keeping people in insecure employment on a long-term basis. Some are better than others, and some have signed our local agency code of conduct. The hon. Member for South Derbyshire (Heather Wheeler) entreated us to be positive about what we can do, and we have sought to take a local initiative and to work with the local authority and some of the best employers and agencies. We have got them to sign up to a code so that if, for example, a permanent job opportunity becomes available, they will offer that job to an agency worker who has proven themselves over time. They will, of course, always follow the law and make known to employees the law on, for example, not charging for personal protective equipment, and they will not tell people that they have to attend unpaid training as a pre-condition for work; that is illegal, but it often happens in the labour market.

I am grateful for the support that the Minister has given locally to that initiative. She met me and other local representatives, including the council leader, and helped to initiate a series of inspections by HMRC in our local area. We found that more than £100,000 was owing to local workers in fines, and as I understand, those fines have been agreed with some employers. In February the Prime Minister promised me that he would name and shame those employers, despite some Treasury objections. I hope that the Minister will name and shame them today, or if not, that she will tell me when they will be named and shamed. We have heard repeated assurances and local people want to hear those companies named and shamed.

[Jo Swinson]

On that specific point, the new naming and shaming policy, which is much more comprehensive, came into being for investigations that began from 1 October 2013 onwards. It may be that the investigations the hon. Gentleman mentions were under the previous scheme, which was obviously not adequate and that is why we have changed it. That may explain the challenge.

[Andy Sawford]

That is the kind of bureaucracy that does not work for working people, and which the hon. Member for South Derbyshire deplored. The Prime Minister gave me a personal commitment at the Dispatch Box that those companies would be named and shamed. He is Prime Minister of the United Kingdom and I do not believe that he does not have the power to do that. It would set a real example.

I support the motion. I am looking forward to hearing my hon. Friend the Member for Bolton West (Julie Hilling) so I will draw my remarks to a close by saying that there are good ideas across the Chamber and good will on this issue. It is absolutely clear, however, that we need a Labour Government again to continue the work of the Raunds strikers in 1905, and of those Labour Members who pushed the minimum wage through in 1997.

15:32

[Julie Hilling (Bolton West) (Lab)]

There have been more measured speakers since the Minister spoke, but listening to him was rather like listening to the Comedy Store at times, given the amazing claims he made. It would be funny if it was not so tragic for the many millions of people who are suffering under the policies of this Government. According to the Minister, everything in the garden is rosy. Well, tell that to the million people who have accessed a food bank this year—to my constituent, Neil, an ex-serviceman paid at the national minimum wage who could not afford to buy nappies and needed to rely on a food bank; or to the one in four apprentices who do not even get paid the paltry £2.73 an hour apprenticeship rate, a rate that has increased by only 23p since 2010.

The national minimum wage was a great achievement by the previous Labour Government, and I pay tribute not only to my hon. Friends who are still in this place, but to a great Wigan MP, Ian McCartney, who steered the minimum wage through Parliament in the teeth of opposition from the Conservative party. I wish I could believe the Minister when he says that the Tory party has had a damascene conversion, but the hon. Member for South Northamptonshire (Andrea Leadsom) told us previously that businesses with three or fewer employees should be exempt from the minimum wage, as well as from maternity and paternity rights. The hon. Member for Esher and Walton (Mr Raab) called for the minimum wage to be suspended for 16 to 21-year-olds, and the hon. Member for Shipley (Philip Davies) said that disabled people should be allowed to work for less than the minimum wage. One could argue that those were just renegade Back Benchers, but this afternoon we heard about the disgraceful comments of Lord Freud, the Minister who said that some people “aren’t worth” the full national minimum wage, and that if people want to work for £2 an hour, they should be allowed to.

Another six MPs—including the new UKIP MP—signed a Bill in 2010 calling for employees to be able to opt out of the minimum wage. While I mention UKIP, a week or so ago I had the misfortune of turning on the TV and I found myself listening to a delegate from its conference calling for the abolition of the national minimum wage and the living wage, to resounding cheers from the audience. The hon. Member for Clacton (Douglas Carswell) has already made his views clear, as has UKIP’s business spokesman who said that the national minimum wage was in a long list of workers’ rights that make it impossible to employ people.

[Alec Shelbrooke]

Will the hon. Lady let the House know whether she deplores the use of unpaid interns for more than four weeks of free work?

[Julie Hilling]

I am not going to spend a great deal of time talking about interns. Of course we should be able to pay interns, and we have a real difficulty with people who are on workfare and who are working in different ways. We must work towards ensuring that we can pay interns in some way. I have volunteers—I do not call them interns—and I have no money in my budget to pay them. I will not be purer than pure when talking about this issue.

Even businesses are now calling for a rise in the minimum wage, and a raft of business leaders, including the chief executives of Kingfisher and Nomura, have signed a letter calling for the minimum wage to rise faster. It was signed by Sir George Bain, the former chair of the Low Pay Commission, and Alan Buckle, former deputy chair of KPMG, as well as leaders from household names such as the Findus Group, Stobart Group, Balfour Beatty, and Hewlett-Packard.

I recently held an event for faith leaders in Bolton West. They believe that people at the bottom are not paid enough and that we need to work towards a living wage, not just raise the minimum wage. They also reported a large increase in people turning to churches for help with food, clothing and other support. Not only are people £1,600 a year worse off on average, but the loss of the real value of the minimum wage since 2010 has cost an additional £270 million in extra public spending on in-work benefits and tax credits in the last year alone.

Every time an employer does not pay his or her employee enough to live on, it costs every taxpayer money. I appreciate that some small businesses struggle to pay the minimum wage, but many employers are raking in large profits and not paying their workers the living wage they could afford. That is why we need a Labour Government committed to driving up wages, and who will reward employers who pay a living wage through a reduction in tax. Unlike the Government, we have costed that pledge and know how we will pay for it.

We also need strong action to enforce the minimum wage. The Government have announced their name and shame policy four times, but have named only 25 firms. Last year, the Centre for London found that only two employers in four years had been prosecuted for paying below the national minimum wage, despite more than 300,000 people earning less than that.

On the abuse of the national minimum wage, we are told many stories of employers who will employ migrant labour and make vast deductions for accommodation, food and other things. On paper, they are paying the minimum wage, but in reality they pay far less. That not only exploits those workers, but leads to great damage to community cohesion.

As ever, I want to mention my favourite subject: the abuse of care workers who are paid only for the amount of time they are with a client—they are paid a token amount for travel that does not cover their time, and are usually on zero-hours contracts. That needs to be tackled as a matter of urgency. They do an amazing, precious job. Every day, people such as me entrust the care of our loved ones to those exploited workers. That exploitation leads to instability in the work force. I have previously told the House about the 20 different carers my mum had in less than a month because of workers leaving. That leads to mistakes and a great deal of distress for the cared-for person. Imagine if a person had to tell four different people a day how to care for them.

Many of my constituents from all over Bolton West have come to me with the problems of poverty because of low pay, zero-hours contracts, part-time and insecure work, and agency work. I hope the House supports the motion and that the Government will do better than mere rhetoric.

15:39

[Rachel Reeves (Leeds West) (Lab)]

This has been a valuable and instructive debate. At a time when too many people in the country feel left behind by our economy and left out of our politics, it is important that the House of Commons devotes its attention to the issues faced by millions of people in our country who work just as hard as everyone else, doing jobs that are vital to our economy and country—as Members, including my hon. Friend the Member for Bolton West (Julie Hilling) have pointed out—but who are not getting a fair share of the prosperity that they help to create.

Millions of people put in the shifts and clock up the hours, sometimes in two jobs or more, often when the rest of us are still asleep in the morning or when we have already gone to bed at night, yet when they get their payslip at the end of the month, their pay is not enough to cover the bills or the rent, or to buy simple things that anyone should be able to afford for themselves and their family. Those people think that something has gone seriously wrong with our economy and our country, and they are right. That is why we need a plan to put it right. That is what the debate is about.

I am proud that the Labour party has called the debate. Our party is founded on our belief in the dignity of work, born of the earliest struggles of working people against extreme exploitation, as my hon. Friend the Member for Corby (Andy Sawford) has said. We are proud of the part that we have always played in improving working conditions and winning for working people a fairer reward for their effort and contribution.

A minimum wage was the aim of our movement for more than a century. I pay tribute to my predecessor as Member of Parliament for Leeds West, who, in 1988, laid before the House a Bill calling for a statutory minimum wage. John Battle noted that, at that time, a primary cause of poverty was

“the persistence, even in what is heralded by the Government as a booming economy, of low pay.”

He told the House of jobs advertised in Bramley in my constituency, including a catering assistant post at £2.10 an hour, five cleaning jobs with hourly rates starting at £1.70 an hour, and a security guard job at £1.50 an hour working for 60 hours a week. He said:

“To generate a low-wage economy for a large minority in our society alongside the current economic boom for the rest of us is grossly unjust. It is pricing people into work at the expense of their families.”

He concluded:

“Without a commitment to a national minimum wage, we perpetuate the conditions that manufacture poverty in our society alongside the wealth of others… The way to prevent poverty is to pay decent wages and not force families into the benefit system.”—[Official Report, 18 May 1988; Vol. 133, c. 951-2.]

Needless to say, the Tory Government of the time did not support my predecessor’s Bill; but 10 years later, the Labour Government and the Department of Trade and Industry, in which he served alongside the former Member for Makerfield, Sir Ian McCartney, to whom others have rightly paid tribute in the debate, established the Low Pay Commission and legislated for a national minimum wage, one of the greatest achievements of Labour’s period in office, and now widely accepted as an essential institution of our economic life. It has made a huge difference to millions of working people—two thirds of them are women—with no negative impact on employment, despite the dark warnings we heard at the time from members of the Conservative party.

Even today, some Conservative Members want to turn the clock back and, rather than strengthen the minimum wage, undermine it. We learned today that that reaches into the heart of the Government, with a serving Minister in the Department for Work and Pensions questioning whether some disabled people are worth paying the minimum wage. He even suggested that it should be possible to pay them £2 an hour. Like the rest of us, disabled people deserve a floor below which their wages cannot fall. They should not be paid £2 an hour. They should be paid the minimum wage, and the minimum wage should increase. Disabled people who heard what the Minister said will be horrified. Labour Members, too, are shocked and disappointed. He should not be serving in the Government, and least of all in a Department that is responsible for work and policies for disabled people. Apparently, he has apologised this afternoon, but he says one thing to the Tory party conference and Tory party members, and another thing in public. That is not acceptable and he should not be in his job.

We have heard excellent speeches in the debate from hon. Members on both sides of the House about the cost of living crisis faced by people at the hardest end of the labour market and about the damage that that does to our economy and our society. We heard from my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) about his work campaigning with cleaners in our Houses of Parliament to get the living wage paid to them.

We heard from my hon. Friend the Member for Westminster North (Ms Buck) about people in work in poverty, and particular problems both in London—not just in inner-city London, but growing into the suburbs—and faced by black and minority ethnic communities, especially the Bangladeshi community, as well as the growing problem of low pay and the pressure that puts on in-work benefits.

We heard from my hon. Friend the Member for Dumfries and Galloway (Mr Brown) about the economic recovery not being felt by everybody across the country, and he is right. I pay tribute to him for his work on the Bill Committee that considered the national minimum wage. He spoke about the Bill Committee sitting from 4.30 pm on a Tuesday until 1 pm the next day, and then on the Thursday from 4.30 until 6.30 the next day; but, as he said, it was really worth it, because the minimum wage was set then at £3.60 an hour and has been rising until today, and will rise again, I hope, under a Labour Government in the future. He spoke about a man in Lockerbie working 50 hours a week but taking home just £112 a week—just over £2 an hour. That is the difference a Labour Government made for such men and women across our country.

My hon. Friend the Member for Middlesbrough (Andy McDonald) spoke about a security guard in his constituency working before the introduction of the minimum wage who, as well as not being paid a wage that he could afford to live on, was told that he had to bring his own dog to work.

The hon. Member for Banff and Buchan (Dr Whiteford) spoke about businesses’ worries about the costs of the minimum wage, but pointed out the huge benefits to the economy and to society, as well as the fiscal benefits of a minimum wage.

I also pay tribute to the hon. Member for Bedford (Richard Fuller) who spoke powerfully about the importance of the minimum wage and the importance of it rising. I hope that he will support the motion, because, as he argued and as we put in our motion, the national minimum wage should be pegged to average earnings, so that it increases and regains its value. He also spoke about the importance of the living wage in local government contracts, and I pay tribute to the local authorities—the Labour local authorities—that are now living wage employers, and not just for their directly employed staff, but also for their contracted-out staff. [Interruption.] If the Minister would like to mention the Tory councils that pay a living wage and also pay all their contracted staff a living wage, I look forward to hearing from him.

My hon. Friend the Member for Bolton West (Julie Hilling) also paid tribute to Sir Ian McCartney, as well as talking about the importance of enforcing the minimum wage, particularly for migrant workers and carers, who are so often exploited.

The lesson we should draw from that success of the national minimum wage is not to rest satisfied, but to raise our ambitions higher, because today we face new challenges that require a new plan. This Government have presided over an historic squeeze on wages that has been a key cause of the cost of living crisis our country faces today. Workers are on average £1,600 a year worse off than when the Prime Minister took office in 2010.

Today’s labour market figures confirmed that wages are still losing ground compared with prices, with wages rising by just 0.7% and inflation running at 1.2%. One in five British workers are low paid according to standard international definitions. That is one of the highest proportions in the developed world, placing us 25th in an OECD league table of 30. That is not good enough, and that is why this motion today is so important.

Today, half of people in poverty, and two thirds of children in poverty, live in working households. We need to do more to make work pay by increasing the value of the minimum wage, to ensure we all benefit as the economy grows. It is a damning indictment of an economy that is not working for working people where the link between hard work and reward urgently needs to be repaired.

Change cannot come soon enough for all the people my hon. Friends mentioned in this debate, and it cannot come soon enough either for my constituent, Alice. She works three shifts a day as a cleaner to support her family, but ended up trying to survive on rolled over payday loans and had to come to me to ask for food vouchers because she had to wait months for the tax credits she was entitled to. Our welfare state was built to protect working people who fell on hard times, not to provide a permanent subsidy to profitable companies paying poverty wages. That is why the minimum wage—and increasing it—is so important.

As shadow Secretary of State for Work and Pensions, I know that this simply is not sustainable, with the loss in the real value of the minimum wage since 2010, taxpayers are now paying out an extra £170 million a year in tax credits, an extra £60 million a year in housing benefit and another £40 million a year in other means-tested benefits because of the fall in the real value of the minimum wage since 2010.

Unless the value of the minimum wage increases, there will be further pressure on our social security system. We need to tackle the root causes of the rising social security bill by building homes, ending exploitative zero-hours contracts and increasing the value of the minimum wage.

That is why Labour has set a goal to halve the number of people on low pay by 2025. We have the plans to deliver it. A key plank of that plan is our target to raise the value of the minimum wage over five years to 58% of median earnings from the current 54%, which would bring it to £8 before the end of the next Parliament. We will also get more workers paid a living wage by sharing the savings that the taxpayer makes from reduced social security expenditure. Every pound employers pay in increasing the value of the wages paid to the lowest-paid saves the Treasury 32p in higher tax revenues and national insurance contributions and 17p in lower social security payments. We would allow employers to claim back as a tax rebate 32p in extra tax revenue for the first year only to help their businesses shift to models to make investments in their staff. These measures form part of a comprehensive plan to build a stronger economy that works for all working people: strengthening vocational education, taking tough action on youth and long-term unemployment with our compulsory jobs guarantee and ending the exploitative use of zero-hours contracts.

The House has a clear proposal before it this afternoon: a plan to raise the national minimum wage and to get it properly enforced; a plan to get more people paid the living wage; a plan to halve the number of those on low pay; and a plan to ensure that work pays, so that everyone in our country, not just a privileged few, benefits from the economic prosperity that we all help to create. That is the choice before us this afternoon—a choice that I hope Members on both sides of the House will support. If they do not, that will be the choice that the country faces at the general election next year.

15:51

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

We have had a good debate. There has been a lot more agreement than the political to and fro or the very politicised wording of the motion might suggest. The hon. Member for Dumfries and Galloway (Mr Brown) gave us a welcome reminder of the history of the national minimum wage and his experience on the Bill Committee, which had two overnighters to make the legislation happen. When he was doing that in 1997, I was working in McDonald’s on £2.70 an hour. I was fortunate, however: one of my friends was working in a local greengrocer on £1.90 an hour. The National Minimum Wage Act 1998 was a landmark piece of legislation. I congratulate the hon. Gentleman on his role, and I congratulate the previous Government on introducing it.

Incidentally, it has been suggested in some quarters that the Liberal Democrats did not support the Bill. I would like to correct the record. Hansard shows clearly that Liberal Democrat MPs voted in favour, with not a single one voting against. Indeed, the Secretary of State for Business, Innovation and Skills, who became our spokesperson on the issue shortly afterwards, has made it clear that he supported it throughout.

This month, the national minimum wage for adults rose to £6.50 an hour—a 3% rise and an above-inflation rise. To people working full-time on the national minimum wage, that means an extra £355 each year. That is a significant increase and one that is very welcome. There is, rightly and understandably, enthusiasm for more from both sides of the House, which is why my right hon. Friend the Business Secretary has asked the Low Pay Commission for forward guidance to consider how we can further increase the national minimum wage. In response, the LPC has said clearly that we are coming into a period when there will be faster real increases in the national minimum wage.

The hon. Member for Bolton West (Julie Hilling) and others referred to the apprentice rate of the national minimum wage, which is only £2.73 an hour. In the evidence to the LPC that we publish today, we have made clear our intention to increase apprentice pay rates by £1 an hour to align them with the 16 to 17-year-old rate. We are putting that suggestion to the LPC and look forward to its response.

Various Members have put forward views and made understandable points about the living wage. Indeed, my hon. Friend the Member for South Derbyshire (Heather Wheeler) made a very good case, pointing out that companies do well if they pay their employees well. That is an important point to remember.

My hon. Friend the Member for Redcar (Ian Swales) reminded us that much depends on take-home pay and that therefore the interrelationship between the minimum wage and the tax threshold is also important. As he pointed out, at the beginning of this Parliament, people on the minimum wage were paying £1,000 a year in income tax, and we have reduced that by £800. They say that imitation is the sincerest form of flattery, so I am delighted that my Conservative colleagues now agree with Nick that we should raise the tax threshold further.

[Andy Sawford]

If imitation is the sincerest form of flattery, will the Minister imitate me in saying that Lord Freud should be sacked for his disgusting comments?

[Jo Swinson]

I will come to those remarks in a minute. I understand the very real concern that has been expressed.

The hon. Member for Birmingham, Erdington (Jack Dromey) talked about the money the Government spend to support people on the national minimum wage and suggested that a higher minimum wage could reduce that expenditure. The Institute for Fiscal Studies has analysed that suggestion and is not sure that that would be the result. Nevertheless, he made a powerful and passionate contribution, particularly given his experience over many years dealing with these issues. His point at the end was perhaps the most important: this is about the moral cause of ensuring people are properly rewarded for their work.

Members on both sides of the House have been understandably shocked by Lord Freud’s remarks, which, I stress, absolutely do not reflect the Government’s position and are clearly offensive and unacceptable. I am glad he has issued a full apology. Of course, my hon. Friend the Member for Harlow (Robert Halfon) rightly expressed his dismay that the shadow Education Secretary mistakenly accused him on television of supporting a lower minimum wage for disabled people. I hope that my hon. Friend’s intervention will have helped to correct the record, not just here, but more widely.

The hon. Members for Westminster North (Ms Buck) and for Bolton West and my hon. Friend the Member for Bedford (Richard Fuller) raised the issue of travel time in the social care sector, and it is important—[Interruption.]

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. There are too many private conversations going on in the Chamber, and it is disrupting my ability to hear clearly what the Minister is saying. If Members are in the Chamber, they are here to listen to the Minister. If they want to have a private conversation, they could step outside to continue it.

[Jo Swinson]

Thank you, Madam Deputy Speaker.

Travel times are a genuine issue. If somebody is expected to travel—during the day as part of their work, rather than to and from work—that time should be included for minimum wage calculation purposes. I shall repeat the number for the pay and work rights helpline, which investigates these complaints: 0800 917 2368.

HMRC did a major piece of work on the social care sector and found that of the 224 employers investigated between 2011 and 2013, 104 were not paying the minimum wage properly, and identified £1.2 million of arrears for more than 6,300 workers. So there is a way that people can get what they are due, but we need to look at the wider issues as well, which is why the Department of Health recently consulted on statutory guidance for local authorities to make that crystal clear. The final guidance is expected soon. It is vital that we have proper enforcement, which is why we have increased the enforcement budget by 15% to £9.2 million. The extra money will help to employ extra compliance officers to ensure that complaints can be properly investigated and proactive work undertaken to investigate non-compliance. Indeed, just last year, 22,600 workers were paid back arrears of £4.6 million as a result of HMRC’s work.

The hon. Members for St Albans (Mrs Main) and for Elmet and Rothwell (Alec Shelbrooke) mentioned interns. On this point, we already have clear rules: if somebody is expected to turn up and undertake specific tasks, they should be getting the national minimum wage, whether they are in the House of Commons or anywhere else. It is right that somebody highlighted the excellent Speaker’s parliamentary placement scheme, set up by the right hon. Member for Salford and Eccles (Hazel Blears), along with my hon. Friend the Member for Lancaster and Fleetwood (Eric Ollerenshaw). I was involved in making that happen before I became a Minister. It is a good scheme and one that I hope will continue to be successful.

Zero-hours contracts will be discussed in more detail in the Small Business, Enterprise and Employment Bill, but the Government are taking action, through a code of practice, to ban exclusivity and improve standards for people working on such contracts.

In conclusion, the Government support the national minimum wage setting minimum standards in the labour market and encourage employers to pay more. We do not agree with the Opposition’s flawed prescription on the best way to achieve this, and we do not support the motion, but we will continue to support the national minimum wage and protect the most vulnerable people, making sure that we have more jobs in the economy and lower taxes, so that people can keep the benefit of their hard work.

Question put.

16:00

Division 56

Ayes: 228

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Labour: 210
Democratic Unionist Party: 6
Scottish National Party: 6
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Independent: 1
Alliance: 1

Noes: 303

---

Conservative: 260
Liberal Democrat: 41
Independent: 1

NHS Services (Access)

Wednesday 15th October 2014 Commons Chamber

16:15

[Andy Burnham (Leigh) (Lab)]

I beg to move,

That this House notes comments from leading experts that the NHS and social care services are at breaking point; believes that this is linked to the Government’s decision to reorganise the NHS; further notes that one senior Cabinet minister has said that reorganising the NHS was the Government’s biggest mistake; further believes that the NHS reorganisation has wasted money which could have been spent on frontline care; further believes that access to NHS services is now deteriorating and that staff numbers are not keeping pace with demand; notes the report by the Nuffield Trust, entitled Cause for Concern: Quality Watch annual statement 2014, published in October 2014, which found that it is now becoming harder to access care in many settings, with some people facing extreme waits; calls on the Government to act swiftly to reverse the deterioration in accident and emergency, cancer and referral to treatment waiting times; further calls on the Government to publish its independent evidence on the costs of reorganising the NHS; and further calls on the Government to match the Labour Party’s plans to raise an extra £2.5 billion to invest in building the NHS workforce of the future.

Back in 1997, people were waiting months and years, and even dying, on NHS waiting lists. The last Labour Government brought that scandal to an end. Following the Wanless report we increased investment in the NHS, although that was opposed at the time by the Tories. Slowly, over the course of the past decade, the NHS rose up the international league table to the point where, in June 2010, it was judged by the Commonwealth Fund to be one of the best—if not the best—health services in the world. Of course it was not perfect, and there were terrible failings at Mid-Staffs, but the legacy inherited by this Government included the lowest ever waiting lists and the highest ever public satisfaction. That was Labour’s record: a massive turnaround in the fortunes of the NHS from the crumbling service that we inherited.

So where, after four and a half years of the coalition Government, does the NHS stand in 2014? It is at “breaking point”—[Interruption.] Hon. Members laugh, but those are not my words but those of the seven medical royal colleges and trusted organisations, including the Royal National Institute of Blind People, the Multiple Sclerosis Society, Anthony Nolan and the Alzheimer’s Society, which wrote an open letter last week to all the political parties. They said that

“staff feel undervalued and demoralised…things cannot go on like this.”

[David Morris (Morecambe and Lunesdale) (Con)]

Will the right hon. Gentleman give way?

[Andy Burnham]

I want to make some progress.

The letter identifies six areas of major concern, and I shall focus on three of them today. The first is GP services. The letter states:

“A shortage of GPs means that patients are struggling to get an appointment to see their doctor.”

Paul Turner-Mitchell got in touch with me today to say that getting a GP appointment is now like trying to get sought-after concert tickets with the phone stuck on redial. I am sure that a lot of people watching this debate today will know exactly what he means. It is becoming the norm for people to ring the surgery early in the morning only to be told that there is nothing available for days. This year, 13 million people have either waited a week or more for a GP appointment or could not get one at all. That figure has gone up by 2.5 million since 2011.

Why is this happening? It is happening because the GP budget has been repeatedly cut under this Government, because Labour’s 48-hour appointment guarantee has been axed and because the Government—in the words of their own GP taskforce—have presided over a “GP workforce crisis”. The number of GPs per 100,000 population increased from 54 in 1995 to 62 in 2009. However, the figure has now gone back down to 59.5.

At Prime Minister’s questions today, the Prime Minister tried to claim that there were 1,000 more GPs in the NHS than under the last Government. This is simply not true. I wonder what we can do about it, Madam Deputy Speaker. We have a Prime Minister who regularly abuses statistics at that Dispatch Box, and even when he has been found out, as he has on many occasions—

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. I am going to request that the right hon. Gentleman rephrases the point he just made about the use of the statistics, as he made an accusation against the Prime Minister and I do not think it is acceptable for him to say that. Will he rephrase it, please?

[Andy Burnham]

I will rephrase it, Madam Deputy Speaker, but we have had rulings from the Office for National Statistics in respect of these things. I shall say that the Prime Minister has misused statistics at that Dispatch Box and there is plentiful evidence that that is the case. Statistics have been misused, and I wish to give this example from today. Figures from the 2009-10 census—this was the final year of the previous Government —show that there were 32,426 GPs then. The most recent figures report 32,201 GPs, which is 226 fewer. So let us get some facts on the record.

The second area highlighted by the letter is accident and emergency, the classic barometer of the whole health and care system. The letter states:

“Major accident and emergency departments in England have failed to meet their waiting times targets for an entire year.”

An entire year! What have Ministers been doing? In fact, it is longer than a year, as the target has been missed for 63 weeks running. We must remember that we are talking about this Government’s own, lowered A and E target. Before the Secretary of State says that that is not the figure for the whole NHS because it excludes minor injury units and walk-in centres, I can tell the House that the NHS as a whole has missed the A and E waiting time target for five out of the past six weeks. Almost 95,000 people waited longer than four hours in A and E in September 2014, which compares with 70,000 in September 2013. So there has been a dramatic deterioration. A and E performance over the past six weeks has been worse than it was last winter. Loud alarm bells should be ringing in the Department about this coming winter, but instead of having a plan it seems that Ministers have given up on ever meeting their own target again. The annual winter A and E crisis is now a permanent spring, summer and autumn crisis, too.

[Helen Jones (Warrington North) (Lab)]

My right hon. Friend is rightly outlining this Government’s failures on health. Is he aware that towns such as Warrington face a triple whammy, whereby the number of full-time equivalent GPs is down, ambulance response times are up and yet while this Government last year gave £10 million to Cheshire West and Chester to deal with winter pressures, they gave absolutely nothing to the hospital in my constituency? Does he think that decision was politically rather than health based?

[Andy Burnham]

Many questions are raised by that decision. Areas of the country where services were being run well would say that they did not get money and instead the money was given to areas where things were not working properly. The situation my hon. Friend describes is what is happening across the NHS in England. The Government have cut the GP budget, the mental health budget and the social care budget, and all that has led to increased pressure on hospitals. There are too many people in hospitals right now in England. The wards are full and people cannot be sent back home because the social care is not there. So the wards do not become free, and A and E cannot admit people to the wards because no beds are available. A and E therefore becomes blocked. Ambulances cannot hand patients over to A and E so they end up queuing outside, meaning that ambulance response times get worse. That is the knock-on effect of the Government’s policies across the NHS, and the deteriorations she is seeing for her constituents are mirrored right across the country.

[Helen Goodman (Bishop Auckland) (Lab)]

My right hon. Friend describes it brilliantly. Does he agree that he is describing a system that shows exactly why privatisation and competition is completely inappropriate in the NHS?

[Andy Burnham]

All the evidence from around the world tells us that more market-based health systems cost more than systems such as the NHS, and are more complex and fragmented. The clear conclusion I draw is that the market is not the answer to 21st-century health and care. The Government believe it is, which is why they must be defeated if we are to protect our national health service.

[The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)]

I hear what the right hon. Gentleman is saying. If he is concerned about other providers in the health service, will he explain why the previous Labour Government were happy to pay private sector providers 11% more than NHS providers for providing NHS services?

[Andy Burnham (Leigh) (Lab)]

We brought in other providers in a supporting role to add capacity to bring down NHS waiting lists to the lowest ever level. That is what the previous Government did. By contrast, this Government are doing something different. It is mandating tendering on GP commissioners, requiring people to compete, wasting money on running tenders and privatising the national health service, which is why they must be stopped.

[Andrew George (St Ives) (LD)]

It is fair to say that the previous Labour Government did introduce the private sector to many areas of the NHS. They also introduced a requirement for the tendering of many NHS services. If we follow the logic of Lord Warner, who is setting out the general direction of Labour party policy, we will find that that is clearly where the heart of Labour party policy has been and probably will go.

[Andy Burnham]

May I remind the hon. Gentleman, for whom I have a lot of respect, that I, as Health Secretary in 2009, introduced to the national health service a policy of NHS preferred provider? That is because I am not neutral about the NHS. I believe in the public NHS and what it represents, which is people before profits. Any policy that I develop will always be based on that principle. I was attacked at the time by the Conservative party for introducing such a policy, but I make no apology for it. We used the private sector in a supporting role, but the Government want to use it in a replacement role, and there is a very big difference between the two things. If they were continuing what we had done, why did they need a 300-page Bill to rewrite the whole legal basis of the national health service?

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

Is my right hon. Friend aware that even the Chancellor agrees that the disastrous top-down reorganisation of the NHS was a huge strategic error? Does he agree that those on the Government Benches, including the hon. Member for St Ives (Andrew George), should apologise—I include in that the newly elected hon. Member for Clacton (Douglas Carswell) who has somehow found his way on to the front Bench on the Opposition side, but hopefully not for long—and support the private Member’s Bill of my hon. Friend the Member for Eltham (Clive Efford) when it comes before the House on 21 November?

[Andy Burnham]

I am interested to see this new friendship that my hon. Friend has struck up with the hon. Member for Clacton (Douglas Carswell) on the Front Bench. My hon. Friend is absolutely right. The promise was that there would be no top-down reorganisation. We told the Government that it would be a major mistake to break that promise. They broke that promise and now they are admitting it in private to newspapers. I will come to that point a bit later.

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

It is worth saying to my right hon. Friend and to the hon. Member for St Ives (Andrew George) that all of us on the Health Committee were very concerned yesterday when we spoke to people in Staffordshire and Stoke, because they were talking about what seemed to be the privatisation of cancer and end-of-life care services. That seems to be going on much to the consternation of clinicians and radiologists who were not consulted; much to the consternation of NHS staff and of an awful lot of patients and people who live in that area. It is very concerning indeed that we find ourselves in that situation. That could be one of the biggest mistakes that is made in the NHS.

[Andy Burnham]

I am glad that my hon. Friend raised that point, as again it highlights the major difference between us and the Government. They were saying that we brought in private providers. Yes, that is true, but that was to bring down waiting lists for planned operations, such as hip and knee operations. As she has just rightly said, the Government are putting out to tender cancer services. That is a very different thing. The Government are presiding over a major increase in private ambulances providing blue light 999 services. That is a massively different policy from the one they inherited, which is why the points they have made simply do not hold water.

[David T. C. Davies (Monmouth) (Con)]

The right hon. Gentleman is making some emotional points here. Does he support the policies of his colleagues in Wales, and does he endorse the way in which they have dealt with the NHS in Wales?

[Andy Burnham]

I do get emotional about the NHS, because I believe in it, unlike the hon. Gentleman. That is fine, I do not mind—it does animate me. Let us have a look at Wales and, as I am about to come on to cancer care. In England, only 84% of patients receive treatment within 62 days. That is not good enough, and Wales has better figures on cancer care. The analysis of the four home nations’ health care systems found that there is good and bad in all of them and this Tory attack on the national health service in Wales has to stop.

I will move on to cancer and I will go back to the letter that I was quoting. It said:

“Thousands of patients are facing longer and even unacceptable waits to find out whether or not they have cancer, because services are under extreme pressure and referral targets are being missed.”

In 2014, 10,000 people in England had to wait longer than the recommended 62 days to start their cancer treatment. The number of patients waiting longer than six weeks for diagnostic tests has doubled in the past year—doubled, for cancer tests. That is simply not acceptable. We need to hear today what the Secretary of State is going to do about it and may I suggest that the very first thing he should do is stop the cuts to cancer care? A parliamentary question shows that expenditure on cancer services has fallen by £800 million in real terms since 2009-10; the information comes from his Department and I will send it to him. That is why the NHS has missed the cancer treatment target for two quarters running, the first time that it has ever done that.

The evidence is indisputable. The NHS has gone downhill on this Government’s watch and the question follows of what they are doing to bring GP, A and E and cancer services back up to national standards. That is what our motion and, more importantly, patients demand to know from the Secretary of State today, but they will also want to know why the NHS has gone from being a successful service four years ago to being at breaking point today. The front page of The Times on Monday offered us an answer. It quoted a senior Cabinet Minister who said:

“We’ve made three mistakes that I regret, the first being restructuring the NHS. The rest are minor.”

The Secretary of State is conveniently looking down and avoiding my eye at this point, but I am sure he has found out who that was. I am sure he knows. I know that he is avoiding looking at me, but is he prepared to tell us who it was or is he going to carry on with his head buried and avoiding—[Interruption.] He is blushing. I see that he has the good grace to do that, at least. It is an embarrassing comment, it really is, from a senior Cabinet Minister, but what use is it to people now, when people such as the hon. Member for St Ives (Andrew George) and I were pleading with the Government to stop the process, to admit that it was all a mistake? It is an embarrassing situation for the Secretary of State to deal with, but at least we have from the very top of this arrogant Government the first admission that their reorganisation was a major mistake.

The article goes on to quote an ally of the Chancellor, who says:

“George kicks himself for not having spotted it and stopped it.”

Not having spotted it? This was famously the reorganisation so big we could see it from space. Not spotted it? What planet was the Chancellor living on? The truth is that the Government could have and should have stopped the reorganisation for the simple reason that they were elected on a promise of no top-down reorganisation and did not have the permission of a single person in this land to carry it out. That is why Thursday 7 May 2015 will be their day of reckoning on the national health service.

If this private apology now is designed to bring people back on board, it will not work. Doctors and nurses lined up to plead with the Government to call the reorganisation off, but they ploughed on. In the words of Mark Porter, chairman of the British Medical Association:

“The damage done to the NHS has been profound and intense”.

Let me focus on just one example of that damage, staffing costs, as the Secretary of State was talking about them this week. The staff census shows very clearly that in the early years of this Parliament, when spending on back-office restructuring was at its peak, front-line nursing posts were cut by about 7,000. At the same time, the reorganisation threw nurse training into chaos. Training places were cut and have never recovered, down from 21,000 a year to 18,000 today.

The NHS has been recruiting more staff in the wake of the Francis report, but this is where the damage done by the reorganisation is hitting NHS trusts. They are being forced to recruit overseas or to turn to agency staff because there are simply not enough nurses coming through the training system.

I have been contacted by a whistleblower from a trust in Liverpool who says that it is now common for staff to receive text messages from agencies such as Pulse offering huge fees—up to £1,000—to work weekends in London or the north-east, with all travel and accommodation costs paid. That is now the norm, and it is happening on this Secretary of State’s watch. Some nurses are literally taking off one uniform on a Friday night and putting on another for the weekend. That is why the agency bill is out of control, and it is happening on his watch.

In 2013-14 the NHS spent £2.6 billion on agency staff. For foundation trusts that is a staggering 162% over what was planned. That helps to explain why trust deficits are mounting. Does not this mismanagement of the staffing budget explain why the Government are now reneging on their promise to pay nurses a meagre 1% pay rise? Is not that the real reason? I wonder how the Secretary of State thinks those nurses will feel when they read this week that senior mangers’ pay has increased by 13.8% on this Government’s watch, while their pay has gone up by only 5%. I am told that he has refused to meet the unions even to discuss it. It is not good enough. He should get to the negotiating table tomorrow and start treating the staff of our national health service with the respect they deserve.

[David Morris]

Will the right hon. Gentleman give way?

[Andy Burnham]

I will not.

The Secretary of State now claims that his reorganisation is saving £1 billion a year, but the truth is that that is a fantasy figure. The reorganisation, which cost £3 billion and counting, turned the 163 NHS organisations into 440 separate administrations with their own running costs. It introduced a new competition regime that is eating up tens of millions of pounds of NHS money. Perhaps that is why Kieran Walshe, professor of health policy at Manchester business school, said:

“I haven’t found anybody who thinks that this reorganisation has made the NHS more efficient and more productive… and I don’t think you find many people who think that the new system costs any less to run.”

The Secretary of State needs to clear this up today. Either he publishes the independent analysis that he claims supports his figure of £1 billion, or he stops making a claim that is simply not credible.

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

I thought that this debate was about access to services. One thing that the right hon. Gentleman has not mentioned is mental health services. One of this Government’s achievements is that 100,000 more people are getting access to psychological therapies than under the previous Government, and last week the Government announced for the first time access standards and waiting time targets for mental health services, which were never in place in the 13 years of the Labour Government.

[Andy Burnham]

I am afraid that the hon. Gentleman is wrong, because I mentioned the cuts to mental health services earlier in answer to my hon. Friend the Member for Warrington North (Helen Jones). The talking therapies he mentioned were introduced by the previous Government —indeed by me—and in some places they are not being cut, which I am pleased about, but in others they are. The letter I referred to from the royal colleges and other organisations talked about a crisis in mental health. They say that people are being ferried hundreds of miles to find emergency beds. That is the reality on this Government’s watch. I think that a little less complacency and a little more focus on these problems would not go amiss.

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

My right hon. Friend should be congratulated, along with my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson), who brought in the IAPT—improving access to psychological therapies—programme. It was a revolutionary system for dealing with access to mental health services. Is not it the case that this Government, even though they obviously think that there are votes in championing mental health, are cutting not only the number of in-patient beds, but the mental health budget across the country?

[Andy Burnham]

My hon. Friend is right. We heard the commitment that the Deputy Prime Minister gave last week, and I am sure that he means it, but people will ask why they have not done anything about it in this Parliament. It is lip service. We introduced talking therapies and many other things. The key point is that they cut it faster than they cut the rest of the NHS. Worse still, they introduced a tariff decision this year that will cut it even further and make the problems even worse. It was Labour that proposed parity of esteem between mental and physical health in law. The Government accepted it, but they have done absolutely nothing about it.

[Lilian Greenwood (Nottingham South) (Lab)]

One of the groups most affected by cuts to mental health services is children. On this Government’s watch we have seen increasing numbers of children with mental health difficulties treated on adult psychiatric wards. Is that not completely unacceptable?

[Andy Burnham]

My hon. Friend puts it very well. If mental health is the poor relation of the NHS, then child and adolescent mental health services are the poor relation of the poor relation. How can that be the case when we are talking about children who need the best possible support—the most vulnerable children—being denied the services that they need? My hon. Friend the Member for Leicester West (Liz Kendall) discussed at a shadow health team meeting a constituency case where a family were trying to find a bed for a child who was in a crisis and not one bed was available for that child in the whole country—not one bed. She is nodding. That is the reality. I wish that Government Members would focus on that rather than making complacent statements.

No amount of spin from the Government can disguise the fact that the NHS is heading for the rocks and urgently needs turning around, so the question is how we get it back on track. I have two positive proposals to put before the House on policy direction and on funding. Let me take each in turn. Instead of just admitting privately that the reorganisation was a mistake, the Government should be actively working with us to begin to put it right—and they will soon have a chance to do so. In five weeks, my hon. Friend the Member for Eltham (Clive Efford) will bring a Bill before this House to repeal the worst aspects of the Health and Social Care Act 2012. When the Government’s reorganisation was going through, their mantra was “Doctors will decide.” The Prime Minister repeated this in his “Today” programme interview during the Conservative party conference when he said:

“there’s nothing we’ve done which makes it more likely there’ll be private provision in the NHS”.

[The Secretary of State for Health (Mr Jeremy Hunt)]

That is true.

[Andy Burnham]

The Secretary of State says that it is true, but that is not how people see it in the real world. Doctor after doctor tells me that their legal advice under section 75 of the Act mandates them to run open tenders for services. Today we see the evidence of how the NHS is changing under that regime. The BBC reports that more than half of contracts awarded by clinical commissioning groups are going outside the NHS. Why is this a problem? Because it is wasting NHS resources on tenders and leading to fragmentation of care when the future demands integration. We need Government Members to tell us today whether they will vote with us on 21 November to repeal mandatory tendering and thus be true to what they originally said they wanted to do, which was to let doctors decide how services are provided.

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

I want to take the shadow Health Secretary back to his words earlier when he seemed to be concerned that private operators are in danger of putting profits before patients. Why, when he was Health Secretary, did he personally sign off on a private-only shortlist for the Hinchingbrooke hospital franchise?

[Andy Burnham]

That is inaccurate, because it was not a private-only shortlist—there was an NHS bidder in the frame at the time. The hon. Gentleman needs to keep his facts straight. As I said earlier, I introduced the NHS preferred provider principle, and that is my policy. [Interruption.] If he wants to dispute that, then the facts will speak for themselves. The shortlist had public and private on it.

[Nicola Blackwood (Oxford West and Abingdon) (Con)]

rose—

[Andy Burnham]

I will give way one last time and then finish.

[Nicola Blackwood]

The shadow Secretary of State is being very generous, and I hope that he will respond to me in a non-partisan way. I speak as the daughter of two NHS workers and as somebody who has recently had a very close family member survive an emergency operation for a life-threatening illness. Will he clarify Labour’s position on what it would do in government about a reorganisation, because the difference between a restructuring and a reorganisation is not clear to me? The British Medical Association and GP leaders have been very concerned about exactly what the policy is and what it would mean, so will he make that clear? He has been criticising certain policies, and I would like to understand what his policy would be.

[Andy Burnham]

I am glad that the hon. Lady asked that—it is a very fair question. I imagine that a reorganisation is the last thing that people in the NHS would want right now. My definition of a structural reorganisation is where we stand down a whole set of organisations and then create a whole set of new ones. I have been very clear that I will not do what the right hon. Member for South Cambridgeshire (Mr Lansley) did. I will work with the organisations that I inherit. I will work with CCGs, and with health and wellbeing boards, in particular. Health and wellbeing boards were one of the few good things that came out of the Act, because they are a partnership between local government and the NHS, and that is something I can work with. She asked a fair question and I hope I have given her a fair answer. A structural reorganisation where we make everybody redundant again and recreate organisations will not help anybody. In fact, if the Government wanted GP-led commissioning, they should simply have put doctors in charge of the old primary care trusts. If they had done that, they would have saved a lot of money and a lot of heartache in the process.

I am going to finish on NHS funding. The letter I mentioned at the beginning called for a long-term spending plan for the NHS. The NHS Confederation has put that at £2 billion a year. At the Conservative party conference, the Prime Minister committed to maintaining the ring fence for health in the next Parliament, but experts are clear that that will not be enough to prevent the NHS from tipping into a full-blown crisis. Indeed, the Chair of the Health Committee, the hon. Member for Totnes (Dr Wollaston), has said:

“Maintaining the ring-fence on health spending is not enough.”

I am sure the hon. Lady is right, but her problem—and the problem for everyone on the Conservative Benches—is that they have chosen a different spending priority. They have given a commitment to tax cuts for higher earners, which will cost an unfunded £7 billion. What that means in reality is that if the Tories get back in, any spare money will go towards filling that black hole and there will be nothing left for the NHS, so the outlook for the NHS under the Tories in the next Parliament is very bleak indeed. Given current policy direction on competition and the funding plans they have announced, the NHS is looking at a toxic combination of cuts and privatisation under a re-elected Tory Government.

By contrast, Labour’s priority is not tax cuts for some, but a strong NHS for all. We have found an extra £2.5 billion a year—that is not spin; it is money we have committed to—to build the NHS of the future, and the question before the House tonight is whether it should call on the Government to match it.

Labour’s plan is for a national health and care service—full integration of health and social care, starting in the home and building one team around the person. We will do that by recruiting 20,000 more nurses, 3,000 more midwives, 8,000 more GPs and 5,000 extra home care workers by the end of the next Parliament—a new generation work force in the NHS, working from home to hospital, transforming the delivery of care. Social care is prevention, and by uniting it with the NHS we can turn the financial tide around and place the system on a path towards financial sustainability.

Labour has a credible plan for the NHS and the money to back it up. This House needs to decide tonight whether it agrees and whether it is prepared to match the money needed to turn the NHS around. The decision we make tonight will clarify the decision before the country next May. Will our top priority be, as the PM used to say, those three letters: NHS? Or will it be tax cuts for some, but an NHS crisis for all? That is the choice. We have made ours and our choice is the NHS.

16:47

[The Secretary of State for Health (Mr Jeremy Hunt)]

I do not think I have ever heard such a misuse of statistics and facts in this House as we have heard today.

I am delighted to debate the NHS, which has been independently rated—[Interruption.] Labour Members do not like to hear this. The NHS has been independently rated by the Commonwealth Fund this year as having become, under this Government, the best out of 11 industrialised countries. It is a better health care system than those in France, Germany and Australia. [Interruption.] Labour Members do not like to hear this, but the independent experts in Washington have said that the NHS has become the best in the world under this Government. The most uncomfortable thing of all for the Labour party is that the NHS has become better than it ever was under the previous Labour Government, when the right hon. Member for Leigh (Andy Burnham) was Health Secretary.

If the right hon. Gentleman wants to talk about Government mistakes, we will do so, but he will find that, on Mid Staffs, the private finance initiative, botched IT projects, a disastrous GP contract, unsafe hospitals, low cancer survival rates and little action on dementia, it is the Labour party, not this Government, that must be held accountable for mistakes in running the NHS. Indeed, after years of mismanagement it is this Government who are finally putting high-quality patient care back at the heart of what the NHS stands for.

[Steve Rotheram]

rose—

[Mr Hunt]

I will give way in a moment, but I want to make some progress.

I want to go through the arguments of the right hon. Member for Leigh in detail, but let me start with the elephant in the room: the massive financial pressure facing the NHS if it is to meet our expectations in the face of an ageing population. There are now nearly 1 million more people over 65 than when this Government came to office. Our economy then was nearly bankrupt. Despite those extraordinary challenges, this Government have been able to increase spending on our NHS—including on Leigh infirmary in the right hon. Gentleman’s constituency—because of our difficult decisions, which were opposed at every stage by the Labour party. Government Members know one simple truth: a strong NHS needs a strong economy.

On the day that unemployment fell below 2 million and the claimant count fell below 1 million, there was nothing in the right hon. Gentleman’s speech about the need for a strong economy to support our NHS and nothing about learning from the Labour Government’s disastrous mistakes, which were so bad that they were in fact planning to cut the NHS budget had they won the election. We should remember that countries that forgot about the deficit ended up cutting their health budgets—Greece by 14% and Portugal by 17%. [Interruption.] Well, these are the facts. We must never again in this country allow the poor economic decisions that have been the hallmark of every Labour Government in history.

[Barbara Keeley]

It is interesting that the Secretary of State is claiming credit for things where the data are based on Labour’s achievements with the NHS, while anything else is our fault. He talked about older people and the demographics of an ageing population, but what good does he think he is doing to that section of the population with £3.7 billion of cuts to social care? Particularly as we move to integration, how does he think that will help those people? In my local area, 1,000 people will lose their care package this year. How does he think that will help the NHS in Salford?

[Mr Hunt]

I will tell the hon. Lady what we are doing: we are integrating the health and social care systems through the Better Care fund—a £3.9 billion programme—which is something that Labour could have done in 13 years in office but failed to do. That will make a massive difference to the social care system. Let us move on to some of the detailed arguments.

[Steve Rotheram]

Will the Secretary of State give way?

[Mr Hunt]

I will make some progress first.

[Andy Burnham]

rose—

[Mr Hunt]

I am very happy to give way to the right hon. Gentleman.

[Andy Burnham]

This is the most important part of the debate. The Secretary of State is right about the elephant in the room. This is the thing that people in the NHS will pay most attention to today. He has gone through his record in this Parliament, but the problems in the next Parliament will be large, as I am sure he would agree. He needs to say today whether he thinks the ring fence will be sufficient, or does he think that the NHS will need more money over and above the ring fence if it is to avoid crisis in the next Parliament?

[Mr Hunt]

First, let me just correct for the record what the right hon. Gentleman has said. The Prime Minister’s commitment was not just a continuation of the ring fence; he has committed to continue to increase funding in real terms for the NHS. If the right hon. Gentleman looks at the record of this Government, he will see that we have increased spending on the NHS by more, in real terms, than Labour’s promises at its conference. The point about promises is whether the people making them are credible. Which party will deliver the strong economy that can fund the NHS?

[David T. C. Davies]

Will my right hon. Friend confirm that this Government have increased spending on the NHS in real terms by 3%? In Wales, where Labour is in control, there has been an 8% cut in real terms. How can we possibly trust a word Labour says on funding for the NHS?

[Mr Hunt]

That is the point. We get all sorts of rhetoric from Labour, but when we look at its record of running the NHS—whether its disastrous record in England previously, or its disastrous record in Wales today—we see the real face of Labour policies on the NHS, and no one should ever be allowed to forget it.

There has been a lot of discussion about reorganisation. The right hon. Gentleman criticised reorganisation as if it were the last thing in the world that a Labour Government would do, but the previous Labour Government had nine reorganisations in just 13 years. Following the conference season, we know that Labour wants to have yet another one by effectively abolishing clinical commissioning groups in all but name and making GPs work for hospitals. There is widespread opposition to that policy across the NHS.

The right hon. Gentleman has repeatedly claimed that the reforms have cost £3 billion, but the audited accounts show that the reforms will save nearly £5 billion in this Parliament and £1.5 billion a year thereafter. These are the words of the National Audit Office—[Interruption.] He should listen to this, because this is about an independent audit that relates to a key part of his case. These are the words of the National Audit Office in its 2013 report:

“The estimated administration cost savings outweigh the costs of the reforms, and are contributing to the efficiency savings that the NHS needs to make.”

Will he publicly correct the record and accept what the National Audit Office has said, which is that the reforms saved money? The man who is never short of a word is suddenly silent. I have the National Audit Office report here, so he can see for himself. The reforms saved money.

If the right hon. Gentleman wants to talk about wasting money, I am happy to do so. The management pay bill doubled under Labour, compared with a 16% drop under this Government. The private finance initiative schemes left the NHS with £79 billion of debt. The IT fiasco wasted £12 billion. We will take no lectures on wasting money from the party that was so good at wasting it that it nearly bankrupted the country, let alone the NHS.

[Barbara Keeley]

Will the Secretary of State give way?

[Mr Hunt]

I will make some progress.

The right hon. Gentleman said that the reforms have made it harder to access NHS services. The opposite is true. Scrapping the primary care trusts and strategic health authorities meant the introduction of clinical leadership, which he wants to abolish, and allowed the NHS to hire 6,100 more doctors and 3,300 more nurses. Those members of staff are helping the NHS to do 850,000 more operations every single year compared with when he was in office. How can he possibly stand before the House and say that access to NHS services is getting worse, when nearly 1 million more people are getting operations every year compared with when he was Health Secretary?

[John Glen (Salisbury) (Con)]

What is more, the evidence from Labour’s last years in office shows that the number of managers was increasing at three times the recruitment rate for nurses. What does that say about Labour’s priorities in office?

[Mr Hunt]

My hon. Friend is absolutely right. That is why the management pay bill doubled under Labour and why we took the difficult decision, which the Opposition bitterly opposed, to get rid of 19,000 administrators and managers so that we could recruit the extra doctors and nurses. I notice that Opposition Front Benchers are very quiet on that point because they cannot answer the simple question of how they would pay for those extra doctors and nurses if the Health and Social Care Act 2012 was reversed. [Interruption.] Ah! They would pay for the extra doctors and nurses by bringing in new taxes that the country is not paying at the moment.

The right hon. Gentleman talked about structural reforms. We ought to discuss the structural reforms that he chose not to talk about, such as making the Care Quality Commission independent, with new chief inspectors for hospitals, adult social care and general practice. He tried to vote down that legislation in this House. So far—[Interruption.] I know that this is uncomfortable for Labour Members, but they should listen, because the new inspection regime has put 18 hospitals into special measures. Five of them have been turned around completely and have exited special measures, and important improvements are being made at the others.

The motion talks about Government mistakes, so will the right hon. Gentleman finally accept the catastrophic mistakes that he made as Health Secretary, such as failing to sort out the problems at those hospitals, even though there were warning signs at every single one of them? Does he accept that because Labour ignored those warning signs, patients were harmed and lives lost? Will he finally apologise to the relatives of patients at Mid Staffs whom he made wait outside in the cold because he refused to meet them and hear their concerns? Will he make that apology now? He has not apologised and it is clear that he does not want to do so today.

The right hon. Gentleman talked about A and E. Just as when he was Health Secretary, there have been weeks when the target has not been met. What he did not tell the House is that, thanks to our reforms, we have 800 more A and E doctors than four years ago and nearly 2,000 more people are being treated within four hours every single day than when he was Health Secretary.

As the motion refers to Government mistakes, perhaps the right hon. Gentleman might like to acknowledge some of his own mistakes on A and E, such as the 2004 GP contract that removed personal responsibility for patients from GPs, making it more likely that people would end up in A and E, or the failure over 13 years to integrate the health and social care systems, meaning that many vulnerable older people continue to end up in A and E unnecessarily—something that we are putting right through the Better Care programme.

When the right hon. Gentleman spoke about NHS performance, he talked repeatedly about missed targets. That is a really important issue and is perhaps the biggest dividing line between his approach to the NHS and mine. Of course targets matter in any large organisation, but not targets at any cost. That is why the Government have been careful to ensure that in the new inspection regime, waiting time targets are assessed not on their own, but alongside the quality and safety of care.

[Andy Burnham]

The Secretary of State makes an important point, and as Health Secretary, I said that over-reliance on targets was not right. I accept that point, but he now needs to answer a question of mine. He has not removed our targets for A and E or for cancer. Does he consider it acceptable that the NHS is missing the national cancer target? If not, what will he say to reassure families that that will get better soon?

[Mr Hunt]

Let us deal with the cancer target. When the right hon. Gentleman left office—[Interruption.] I am dealing with the cancer target. When he left office, we had the worst cancer survival—

[Andy Burnham]

Forget that—I am asking about now.

[Mr Hunt]

The right hon. Gentleman may want to forget that, when he left office, we had the worst cancer survival rate in western Europe, but why did we have that? We had the worst cancer survival rate in western Europe because we were not diagnosing cancers quickly enough. Under this Government—this is the inconvenient truth for the Labour party—we have treated for cancer nearly three quarters of a million more people than in the last Parliament. We have done that because, as the Prime Minister said, we are referring 50% more people. Access to cancer care has dramatically improved under this Government, and we are starting to climb back up the European league tables.

[Andy Burnham]

Will the right hon. Gentleman give way?

[Mr Hunt]

Let me finish my point about targets because it is important. The NHS over which the right hon. Gentleman’s Government presided was, as the former NHS chief executive Sir David Nicholson said, an NHS where

“patients were not the centre of the way the system operated.”

Labour’s NHS was obsessed with targets, and we have still not had an apology for the policy mistakes that led to Mid Staffs. We have got rid of a number of targets; we are happy to keep a few benchmark targets, but we will not be obsessed with targets at any cost.

May I gently suggest that the Labour party re-read the Francis report? These are Sir Robert’s words about the culture during the Mid Staffs period, when the right hon. Gentleman was a Minister. He described an

“insidious negative culture involving a tolerance of poor standards”

resulting from

“a focus on reaching national access targets”.

If the right hon. Gentleman does not want to listen to Sir Robert, will he listen to families who suffered in Mid Staffs, Morecambe Bay, Basildon and countless other hospitals, all of whom are simply incredulous that Labour wants to put him back in charge of the NHS, while he refuses to acknowledge the terrible problems caused by Labour’s NHS target culture?

The right hon. Gentleman also talked about privatisation. That may hit the spot for his trade union supporters, but it does not stand up to scrutiny. He knows that the use of the private sector for secondary care has grown more slowly under this Government than it grew under Labour. He knows that the biggest single privatisation decision in NHS history—the decision to contract out a whole district general hospital to the private sector—was allowed not by me, but by him when he was Heath Secretary. Let us set the record straight, because he tried to give the impression to my hon. Friend the Member for Selby and Ainsty (Nigel Adams) that that decision was not taken—[Interruption.] Let me make my point, and then I will give way. The right hon. Gentleman approved a shortlist for Hinchingbrooke hospital, which had on it two private sector providers and an NHS provider. He did not tell my hon. Friend that the NHS provider then pulled out, and that he accepted the continuation of that process with an all-private shortlist—[Interruption.] That is what happened, and if he wants to deny it, I will give way to him now.

[Andy Burnham]

The question is: when was that contract signed? Will the Secretary of State answer that question?

[Mr Hunt]

Actually, the question is: when did it become an all-private shortlist, and why did the right hon. Gentleman allow that to happen if he is now saying that the privatised running of hospitals is such a bad thing? I think that we have found him out, and he will want to correct the record and the impression that he gave to my hon. Friend the Member for Selby and Ainsty.

[Mr Simon Burns (Chelmsford) (Con)]

Will my right hon. Friend confirm that in March 2010, when the right hon. Member for Leigh (Andy Burnham) was Secretary of State, the number of bidders for Hinchingbrooke hospital—a process that took place under legislation passed by the previous Labour Government—went from five to three? Two of those bidders were private companies; the third bidder was a private company in conjunction with an NHS trust, but at a later stage as the process developed—as my right hon. Friend said—it went down to one bidder. The right hon. Gentleman said in response to my hon. Friend the Member for Selby and Ainsty (Nigel Adams) that there was a preferred bidder and that it was not a private company but the NHS. It was not the NHS; it was an NHS trust in conjunction with a private company.

[Mr Hunt]

I am grateful to my right hon. Friend because he makes it clear that, when the right hon. Member for Leigh was Health Secretary, he accepted an all-private shortlist. He will want to correct the record on that point.

[Andy Burnham]

The right hon. Member for Chelmsford (Mr Burns) has contradicted the Secretary of State. The right hon. Gentleman said that the bidder withdrew at a later stage, but the Secretary of State said that the bidder withdrew earlier. The Secretary of State cannot have it both ways. The right hon. Gentleman flatly contradicts him.

[Mr Hunt]

The right hon. Gentleman is quite wrong. My right hon. Friend said that there was a list of three providers, all with private provision involved. When the right hon. Gentleman was Health Secretary, he accepted that all-private shortlist for the Hinchingbrooke decision. In other words, the biggest privatisation in NHS history happened because of a decision taken by the shadow Health Secretary.

Government Members are not ideological. We believe there are times when we can learn from the independent sector, but, normally, people use the private sector when they are looking for innovation or better value. Only a Labour Government would sign deals with the private sector, paying 11% more than the NHS rate, and ending up paying more than £200 million for operations that never happened. What a shocking waste of money. When the right hon. Gentleman next talks about privatisation, instead of inventing a privatisation agenda that does not exist, will he apologise for a botched one that existed when Labour was in office?

Finally, there is a comparison that Labour never wants to make when talking about NHS performance: what happens over the border in Wales. That is where the policies that the right hon. Gentleman supports are put into practice. Let us see the difference. A record one in every seven Welsh people find themselves sitting on an NHS waiting list, compared with just one in 17 people in England. The urgent cancer waiting time target has not been met once since 2008 in Wales, but it has been missed in England in only two quarters in the whole period. A and E waiting times have been met every year in England, but they have not been met since 2008 in Wales.

[Lilian Greenwood]

Will the Secretary of State give way?

[Mr Hunt]

No, I will finish this point.

The British Medical Association, no friend of the Conservative party, described the NHS in Wales as being in a state of imminent meltdown. The point is that the NHS in England, like the NHS in Wales, faces huge pressure, but politicising operational problems in England, while denying much greater failings in Wales, is the worst kind of opportunism. For Labour Members, good headlines for Labour matter more than poor care on Labour’s watch. They are playing politics with our NHS. That not only scares people in England, but betrays people in Wales.

I shall conclude—

[Lilian Greenwood]

Will the Secretary of State give way?

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. The right hon. Gentleman is not giving way. He must be allowed to speak.

[Mr Hunt]

The Government are proud of our record on the NHS in England: more operations for more people; three quarters of a million more people getting the cancer treatment they need; record numbers being seen promptly in A and E; record numbers getting treatment for dementia; and the first ever introduction of maximum waiting times for mental health conditions. It is an NHS under pressure, yes, but it is an NHS preparing for the future, with higher-quality care in hospitals, integrated health and social care, and personal care driven by a much bigger role for GPs.

Some of those changes need money, and we have delivered that, but some of them need a change in culture, different ways of working, more transparency and a more patient-centred approach. That can mean challenging the system, which the right hon. Member for Leigh has never been prepared to do, but which this Government will always do if it is right for patients. We want an NHS building for the long term and an NHS with the confidence of a strong economy behind it. Under this Government, the NHS is independently rated as the best in the world. I oppose the motion.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. The House will be aware that a great many hon. Members have indicated they wish to speak and that there is limited time available for their speeches. With my apologies for my inability to articulate—I did not catch my sore throat from the Leader of the Opposition—I have to set a time limit of six minutes.

17:09

[Kevin Barron (Rother Valley) (Lab)]

We are here in the Chamber today in a week when we have seen health service workers on the picket lines for the first time in 30 years, and we have seen midwives out on strike for the first time in their history—we have had midwives working in the health care system in this country for 150 years, I think—yet most of the spat we have listened to up until now this afternoon has been about who bid what for Hinchingbrooke hospital and so forth. I wonder what people outside—not just people who work in the health service, but those who rely on it and do not have the option to go elsewhere, into the private sector—think about this situation.

We have a Government—if they had been a different Government, I would probably be saying the same thing—where the case for the defence we heard from the Secretary of State this morning about how well our health service is doing comes from independent experts in Washington. I have never in my 30 years in here heard someone doing that. Philadelphia lawyers are presumably the people saying that; I thought it might be a reference to Washington, County Durham, but, no, I assume it is Washington in the USA where people are saying we have got a good health service, not the British Medical Association or the royal colleges of nurses, GPs and everything else who constantly e-mail Members on both sides of this House about the state of health care in this country and the demoralisation of the staff—hence the first picket lines for 30 years. Here we have a Secretary of State who seems to think he can find somebody to defend him who is an independent expert from Washington DC. I think that it is shameful that the Secretary of State comes to the Dispatch Box and uses arguments like that.

Let me tell the Secretary of State—although he is not listening; he is engaged in other things—that everybody knew what was going to happen when this Government came to office in 2010.

[Mr Simon Burns]

rose—

[Kevin Barron]

I will give way to the right hon. Gentleman in a bit, because I may mention him, as he was a Minister at the time. This Government came to office and passed a Bill through Parliament that was going to introduce competition into the national health service and mean a massive reorganisation, and billions of pounds were going to be spent in doing that—billions of pounds that could have been spent elsewhere—and the case for the defence is, “We’ll make a billion pounds a year in this Parliament.” Well, it is not there yet, Ministers.

It was not just the reorganisation of the national health service that was mentioned. The Government also told us at the same time that they had got to make efficiency savings of 4% a year, something that the health service had never done, and something the public sector had never done. Indeed, people said at the time that the private sector had never done it either.

That is the situation we had when that Bill went through Parliament. They were warned about the consequences of that not just by politicians in the House, but by people who gave evidence to the Public Bill Committee. I served on it. The Bill was stalled and came back in again. Evidence after evidence came in saying what has happened was going to happen.

We have had massive reorganisation. I just wonder if the Secretary of State—if he is prepared to listen—will tell us how many of the 4,000 NHS staff who were laid off and paid redundancy were then re-employed by the NHS, some of them on massive six-figure sums. How much did that cost the NHS? How much did that take away from mental health services or other services that our constituents rely on? None of this is in the debate at all, and Ministers all know perfectly well what the situation is.

Week after week, we hear these platitudes from Ministers. The Secretary of State said not too long ago, “When you go into hospital, you’ll get a named consultant,” but what does having a named consultant matter to most people? Are they going to work seven days a week, 24 hours a day so we can phone and say, “Can we come and see you?” No one has mentioned the latest one we have had, which I thought was wonderful—

[Mr Hunt]

rose—

[Kevin Barron]

The Secretary of State can come in in a minute. This latest one is a consequence of a speech made by the Prime Minister: we are going to be able to see GPs seven days a week. Well, the Royal College of GPs does not think so. I say this to the Secretary of State: “We could see a GP, not far from this place, seven days a week until you lot got in.” We could do so in the Victoria NHS walk-in centre, and I used to go in there, as my GP is elsewhere, but it closed years ago.

We put in walk-in centres—sometimes in the face of opposition from GPs, I have to say. A GP objected to them in my constituency, as I raised in the House at the time, so some of them were saying they did not want them. They gave seven days a week access to GPs.

I understand that my time is up, Madam Deputy Speaker, but I want to finish by saying this: whatever happened at Hinchingbrooke or anywhere else, we never ever had to have competition law on the statute book. We have now. Do not tell me or anybody else out there that the Secretary of State has not got plans to privatise properly the national health service, because I am convinced that he has.

17:15

[Mr Gary Streeter (South West Devon) (Con)]

Thank you, Madam Deputy Speaker. I love your husky voice.

In June, I spoke to a conference of orthopaedic surgeons from the south-west, including the NHS consultant who carried out my own hip replacement very successfully in 2012. They had asked me to speak about the future of the NHS and to be as bold and as honest as I could be. When we came to questions, I was amazed at how all the doctors said basically the same thing. It might be paraphrased thus: “When will you politicians realise that the NHS is creaking at the seams and come up with new, more radical policies and a brand-new model more suitable to the 21st century that is able to cope with the demands we now face?” They said they were grateful for the extra money this Government have put in and they recognised the competing pressures on the public purse, but they believed passionately that it was not just about money going in at the top. They wanted us to be more radical in addressing the problems now facing the NHS and, in particular, in finding new service delivery vehicles.

I explained that one of the weaknesses of modern-day politics is that as soon as anyone starts to grapple with innovation and change in the NHS, we hear the voices Opposition Members—we have just heard them—who immediately shriek privatisation, and the debate grinds to a halt, especially in the run-up to an election. I find it extremely disappointing that this has all happened again today. The audience of doctors recognised this depressing reality, but none the less urged us to be bolder in addressing the pressure under which they work day in, day out in an institution that was designed 70 years ago.

I listened to the shadow Secretary of State this evening and the complaint seems to be that doctors are now under an obligation, in their commissioning groups, to buy in the best services to provide the very best health care for our constituents. That is surely a good thing. The motion before us today is an example of this immature debate. It seeks to lay the blame for the pressure under which the NHS operates today on the reorganisation that took place earlier in this Parliament. That is an absurd claim. Let us look at some of the statistics.

Between 2009 and 2013, the number of general and acute in-patient admissions rose by more than 10%. In 2003, there were just over 77,000 hip operations. By 2013, these had increased by 43% to 110,000 hip operations, of which mine was one. In 2003, there were approximately 46,000 knee replacements. That number rose sharply by 71% by 2013 to more than 79,500 knee replacements. All this has to be funded. Total attendance at accident and emergency departments in 2013 was almost 22 million, representing an increase of 11% since 2003. There were around 9.1 million emergency calls in 2013, up from 4.9 million in 2003—an increase of 85% in just 10 years.

In Derriford hospital in Plymouth, every day 75% of the patients are over 65. In the 10 years between 2003 and 2013, the actual number of people over 75 who completed episodes of admitted patient care in NHS hospitals rose by 61%. Life expectancy in the UK is increasing significantly. One in three children born today is expected to celebrate their 100th birthday. The fact that people are living longer is a wonderful success story, but it is having a significant impact on the NHS. Average NHS spend on retired households is nearly double that for non-retired households.

As everybody in the country knows, the primary source of NHS pressure today is the demographic success we have seen in recent years of people living longer—more of us getting older and needing more health care. That is why we were right to ring-fence the health budget in 2010, which has resulted in an £12.7 billion extra pumped in in this Parliament. That is why it is right that the Prime Minister has committed the next Conservative Government to continuing to increase health spending over and above inflation every year for the next Parliament. I hope we will also be bold and find new models of delivering health care, still free at the point of use, to meet the demands of a growing and ageing population.

On the subject of new models and structures, I see signs that the new commissioning groups in my area are having a positive impact. My constituency is part of the West Devon clinical commissioning group, and my discussions with the GPs who serve on it give me great hope that they are beginning to improve the nature and scope of their commissioning, helping better to meet the health care needs of my constituents. It is right that doctors, not bureaucrats, be in charge of commissioning, and we were right to deconstruct the bloated PCTs. Our PCT in Plymouth was so cumbersome that I gave up attending the regular MP briefing meetings because I could not cope with the bureaucratic culture. I am glad it has been replaced by a more streamlined, doctor-led commissioning group. This is a step in the right direction. I do not suppose for a second that the reforms were perfect—nothing ever is that Governments do—but I can see progress in the commissioning of acute services.

I say one thing to my colleagues on the Front Bench: in the west country, it used to be extremely easy to recruit GPs, but it is getting tougher by the year. I hope in the winding-up speech to hear some reassurance that in places such as Devon—a splendid place to live and work—which are having difficulty recruiting GPs of the highest quality, steps and policies will be put in place to set this right over the next two years. Nevertheless, I support the reforms; the NHS is improving all the time.

17:21

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

I wish to discuss the crisis in the North East ambulance service. To do this, I will give some of the examples I have come across and others that have been backed up by the police and other agencies. But first I must pay tribute to the hard work of the staff of the ambulance service. It is not their fault they are under pressure; they are dedicated individuals who wish to do their best for my constituents and others in the north-east.

I wish to give two of many examples—other north-east parliamentary colleagues have complaints as well. The first comes from Carole Hampson, who lives in Quaking Houses, in my constituency. On 20 June, her son Christopher rang 111, the non-emergency number, because his 10-month-old son had drunk bleach. He was told, “No problem. We’ll get an ambulance to you straightaway. Don’t do anything.” An hour later, an ambulance had still not turned up. His mother then rang back and said, “Forget it. I’m taking him in a car.” The pressure and worry for both him and his grandmother must have been tremendous. Luckily, the youngster was fine. On 4 July, she again rang the ambulance service because her son was critically ill with a diabetes-related condition. She rang 999 and the operator said, “Is he still conscious?” She said, “Yes”. The operator said, “Okay, we’ll get there as soon as possible.” An hour and 20 minutes later, an ambulance turned up.

It is not just Carole Hampson’s family who have been affected. On 11 July, she was driving through Stanley in my constituency when she saw an old gentleman fall into the road and break his head on the pavement. The police arrived and she and other bystanders came by. She rang 999 for an ambulance. While they were waiting—for 30-odd minutes—blue light ambulances were going past. The police rang the ambulance service, but no response was forthcoming. In the end, the police took the old gentleman home, where an ambulance later attended. I have another constituent, who I will not name because I have not asked her permission, whose husband had an angina attack. She rang her GP, who recommended she ring 999. The operator said, “We’ll get a paramedic to you”, which she did, but three hours later the ambulance arrived to take him to hospital.

It is not just individual constituents saying there is a crisis in the North East ambulance service; there is evidence from the police. Over a six-month period this year, there were 675 incidents in which the police had to step in following the failure of ambulances to attend. I shall give just a few examples. On 2 September, the police attended a road traffic accident and asked for an ambulance to attend. Thirty minutes later, an ambulance arrived.

On 5 September, the police requested an ambulance because an individual had been assaulted and had waited 75 minutes for an ambulance to attend. On 7 September, the police transported to hospital a male patient with head injuries because the North East ambulance controller said that no ambulance was available and that there were 39 outstanding instances. On 19 September, the police requested an ambulance to attend a female patient with severe facial injuries; an hour and a half later an ambulance had not attended, so the family had to take care of the individual themselves. On 20 September, the ambulance controller told the local police that the ambulance service was in a critical situation. This needs sorting out.

There are two problems facing the NHS North East ambulance service. One is A and E. Ambulances are backing up at A and E. The other day, an ambulance driver told me that he had been directed from Chester-le-Street to Carlisle on the other side of the country. Then there is the 111 service brought in by this Government, which is failing. The system is not being managed by professionals with any background. It is a tick-box system that is leading to instances in which ambulances that are not needed have been sent out, clogging up the system. This service is in crisis, and what is the North East ambulance service that is responsible for it going to do? It is carrying out a review. It has appointed Deloitte to carry out a review into its operation, but my constituents do not want management consultants to sort it out.

[Mike Kane (Wythenshawe and Sale East) (Lab)]

I thank my hon. Friend for giving way and compliment him on his excellent contribution. Does he agree that this situation is being exacerbated where we are privatising ambulance services? That is what happened in Greater Manchester where in the last year alone, half the journeys failed to get patients to their appointments on time.

[Mr Jones]

That is right. This is what is picking up the slack.

My constituents do not want management consultants to sort the problems out; they want health care professionals to do so. If we in the north-east do not do something about this soon, people are going to die. Because of what is happening, people do not accept this system. The delays are causing a huge amount of angst to individuals and are putting huge pressure on other services such as the police and fire and rescue. In desperate situations, where people in road traffic and other accidents need urgent medical care, they are unable to get it. It is a failure in 2014 that my constituents and those of other north-east Members cannot get basic medical care.

I ask the Minister—I see he is busy talking at the moment and I would like him to pay attention—urgently to intervene in the North East ambulance service because it faces a critical situation. Management consultants are not the answer, and I have no faith in the management to sort this out, as has been said by other emergency services, local authorities and their own staff. Unless there is some central direction and intervention to put this right, people’s lives in the north-east of England will be lost.

17:28

[David Tredinnick (Bosworth) (Con)]

May I say how sorry I am to hear that you are suffering from a throat affliction, Madam Deputy Speaker, and how sorry I was to hear of the throat problems of the Leader of the Opposition during Question Time today. I was reflecting on whether, if he visited his doctor, he would be taking antibiotics. One of the great crises in health care at the moment, of course, is the increase in the use of antibiotics—an issue that the Science and Technology Committee, of which I am a member, has looked at. I hope that we will address this issue with great sincerity and seriousness. The 25% increase in recent years is quite terrifying.

I do not accept any of the arguments I heard from the shadow Health Secretary. I would like to share some experiences of the Hinkley and Bosworth health and wellbeing board, which has had a very positive impact in my area. The very fact that we have together in one room on a regular basis the clinical commissioning groups, NHS England, the borough council, healthwatch and the director of public health for Leicestershire has made a tremendous difference. We heard recently that NHS England was working with GPs to increase capacity in Barwell and Earl Shilton. The clinical commissioning group was discussing new links with paramedics to provide in-home care seven days a week and also about increased sports activity in the borough. Healthwatch is conducting surveys on patients’ concerns about A and E access, dental services and repeat prescriptions. It is perhaps not surprising that the West Leicestershire NHS team has been shortlisted in the primary care innovation category for a national award from the Health Service Journal, and everyone in our area can be proud of that.

I have always felt that the health reforms are only two legs of a stool. Health and social care were brought together in the massive Health and Social Care Act 2012, but allopathic medical services were not integrated with complementary and alternative medicine. My right hon. Friend the Secretary of State for Health should look at this with great care, because estimates I have received show that making greater use of acupuncture, herbal medicine, chiropractic and osteopathy reduce the cost of medical care by about 5%.

The Impact Integrated Medicine Partnership in Nottingham is a social enterprise that provides acupuncture, chiropractic and homeopathy in primary care settings. It combines the best of conventional and complementary medicine and has proved to be flexible, with lasting, sustainable improvements. Comprehensive evaluations of the service in 2006 and 2010 demonstrated the effectiveness of those interventions, and patients—I ask the Minister please to listen to this—who completed treatments subsequently visited their GP less often, reported taking less medication and had less need for referral to secondary care, thus saving NHS resources. The partnership is a shining example of what can be done if the complementary field is brought into the mainstream, reducing costs and burdens on doctors and providing a more efficient and more patient friendly health service.

Altogether Better, Wakefield has supported individuals in the community to become volunteer community health champions. It has trained 17,000 community health champions and a recent social return on investment study by York Health Economics Consortium showed a positive return of about £1 for every £1 invested. That is £1 more for the health service to spend.

There are many other examples, such as the Kensington and Chelsea beating back pain service and the Royal London Hospital for Integrated Medicine, which has 13 care pathways. They assist with the problems that doctors face with almost intractable conditions such as chronic fatigue syndrome, chronic low back pain, chronic headache, knee pain, hay fever, non-organic insomnia, perennial allergic rhinitis, irritable bowel syndrome and weight loss.

Finally, I am concerned about antibiotics. My right hon. Friend the Secretary of State should address this with the greatest possible speed and care.

17:33

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

The Government argued that the current NHS reforms—their NHS reforms—would result in major savings to the NHS, making our system more “responsible, efficient and affordable.” I am sure that many Labour Members will agree that reforms under the Health and Social Care Act 2012 have failed to deliver a single one of these aims. The NHS is costing more and delivering less, the quality of care it provides has declined and hard-working staff, particularly GPs, nurses and staff in A and E, are bearing the brunt of the Government's misguided and irresponsible measures.

It seems that senior Cabinet Ministers may think the same as Opposition Members. As we have heard, The Times quoted one as having said:

“We’ve made three mistakes that I regret, the first being restructuring the NHS. The rest are minor.”

I think that it is about time Government Members owned up to their mistakes, and started to share their opinions openly with the House.

The reorganisation caused upheaval in every part of the NHS. Primary care trusts and strategic health authorities were abolished, and commissioning responsibility was transferred to NHS England as well as to clinical commissioning groups. The chair of a health and wellbeing board told me last Friday: “I am left more confused by the NHS England role than by anything I have seen over decades of involvement with the NHS.” More than 440 new organisations have been created, but all the evidence now shows that that has been done at a heavy economic and social cost. Some £3 billion has been wasted on altering the structure of the NHS rather than being spent on front-line patient care, and the reforms have consistently failed to be delivered within budget. In July last year, the National Audit Office stated that the cost of their implementation had been 15% more than originally expected.

Of course, we hear counter-claims from Ministers. When I tried to intervene on the Secretary of State, he would not take an intervention on the issue of management and reorganisation costs. It was interesting to hear what was said yesterday by Kieran Walshe, professor of health policy and management at Manchester business school, on Radio 4 about the savings claimed by the Secretary of State. He said that the Government had under-counted the costs of reorganisation, even to the extent of accepting nil returns from some strategic health authorities. Most tellingly, he said that the best way in which to test the facts was to talk to people in the NHS who had lived through the reorganisation. He said that he had not talked to anyone who thought that the reorganisation had made the NHS more efficient and more productive. He had not talked to anyone who thought that the trauma of total reorganisation and redesign was worth while. None of us understands why PCTs were replaced by CCGs, or why NHS England was created. He also said:

“I don’t think you will find anyone who thinks the new system costs less to run”.

We know that the financial difficulties of the NHS have worsened, not improved. For the first time, foundation trusts have found themselves in deficit, along with trusts that are not foundation trusts. Figures from Monitor showed that 86 out of 147 trusts were in the red, and that there had been a deficit of £167 million in the first quarter of 2014-2015. Alongside that, not surprisingly, we are seeing a decline in patient care. In all areas of the NHS, pressures are mounting and the quality of care is declining. The number of people waiting more than a week for an appointment with a GP is up. A survey of patients in Salford for our CCG showed that a third of the patients who responded had had to wait for days for an appointment, and one in seven Salford patients had had to wait for a week or more. That is better than the national picture, but it is not good enough. For the first time, the NHS has missed its cancer treatment target; and NHS workers have felt the need to go on strike—the largest strike of its kind in over 30 years. We have an NHS in crisis.

As we know, there are many challenges in addition to the damage that has been inflicted by the Health and Social Care Act 2012. We have heard about the mounting demographic pressure on health services. However, despite the increase in the number of people aged over 80, the Government have slashed local authorities’ budgets, causing them, in turn, to change eligibility for social care. I believe that that is one of the most serious failings. My city council in Salford has been subjected to savage cuts of £100 million, and—I mentioned this earlier, and I shall keep on mentioning it—1,000 people in Salford will either lose care packages or not qualify for care this year.

[David T. C. Davies]

Does the hon. Lady think that members of the public should vote against any members of any political party who have imposed a cut on the NHS anywhere in the United Kingdom?

[Barbara Keeley]

I am not going to answer hypothetical questions like that. I am talking about local authority budget cuts, and the parlous state in which social care will find itself after £3.7 billion has been taken away from it.

Constituents have told me about care staff working locally who have been allocated too little time to devote to the people in their care. That is a scandal. I have been told that a single care worker was sent out when two were needed to care safely. I have also been told about patients in nursing homes who have not been properly changed or helped to eat by care staff who are rushing to manage their work load. That is the reality, and it is not the way in which to create a sustainable health and social care system. I therefore wholeheartedly support Labour’s alternative plans. We must create an NHS with the time to care.

I agree with my right hon. Friend the Member for Leigh (Andy Burnham) that we must repeal the Health and Social Care Act 2012 before it causes any additional lasting damage to a health system of which people in this country are rightly proud, although they will not be for much longer. I shall be here on 21 November to vote for the private Member’s Bill. We must find ways of providing the resources to cope with the challenges that the NHS will face. As my right hon. Friend said, Labour has pledged to raise £2.5 billion for the NHS Time to Care fund, which will provide 20,000 new nurses, 8,000 more GPs, 5,000 new homecare workers and 3,000 more midwives. And do we need them? Yes we do.

We must also move towards an integrated model of health and social care. That integration in itself will not solve the financial problems the NHS faces, but moving to a model that allows for equal consideration of all a patient’s health and care needs can improve services and should reduce duplication. Above all, we must place patients and carers back where they belong, at the heart of a health and social care system that works for them and puts their needs before those of the providers and the ridiculous and convoluted commissioning structures that we have been arguing about in the debate today.

17:40

[David T. C. Davies (Monmouth) (Con)]

The Secretary of State and his Ministers will know that I have had cause to write to them, to e-mail them and even to meet them on numerous occasions to discuss the absolutely appalling second-rate NHS treatment that patients in my constituency are receiving. They are receiving such treatment from an NHS that is run entirely by the Labour party, which is enacting precisely the policies that Opposition Members wish to enact here. Those patients include Mariana Robinson, whom the Secretary of State was good enough to meet recently. She has waited months for diagnostic treatment for an illness that could well be cancer; she does not know what it is. She wants to be treated in England by the coalition-run national health service.

Those patients also include Mr Christmas in Abergavenny, a war veteran who is in his 80s. He had constant chronic pain in his tooth that was keeping him awake at night, but he was told that, despite his age and his war service, he would have to wait nine months for any form of treatment. In the end, he was forced to use his meagre savings to go private. Ann Wilkinson also wants to be treated in England. She has stated very publicly that she has cancer, but there is no cancer drugs fund in Wales and she wants to have access to Avastin. I believe that she will shortly present a petition in Parliament and in the Welsh Assembly demanding the same high standards in Wales that this coalition Government are already delivering in England.

Some Opposition Members, including the hon. Member for North Durham (Mr Jones), wanted to quote statistics.

[Andy Burnham]

The hon. Gentleman mentions access to cancer services. He might have heard me say earlier that the NHS here is missing its national cancer target, with more people waiting longer than 62 days. In England, only 84% of patients start to receive treatment within 62 days. Does he acknowledge that 90% of patients in Wales start their treatment within 62 days?

[David T. C. Davies]

When they have been diagnosed. The right hon. Gentleman has failed to point out that while only 2% of patients wait more than six weeks for diagnostic treatment in England, 33% of patients do so in Wales. That is absolutely disgraceful. If a situation in which 2% of patients are waiting more than six weeks is bad, what on earth are we to make of a situation in which 33%—one in three, or so—are waiting that long? I hope the hon. Gentleman would agree that that is a disgraceful situation.

The hon. Member for North Durham talked about ambulance response times and gave the House some interesting examples. However, the recent Nuffield report demonstrated that the worst ambulance response times in the United Kingdom were in Wales. We have accident and emergency targets, for those in Wales who are lucky enough make it into a hospital, but those targets have not been met since 2009. We have waiting list targets of 26 weeks, as opposed to the 18-week targets that apply in England. One in seven of the population in Wales is on a waiting list. That is what lies in store for people if they vote Labour at the next general election.

It was interesting that the hon. Member for Worsley and Eccles South (Barbara Keeley) was unwilling to say what she thought voters should do about people who wanted to cut NHS budgets. Despite all the Opposition rhetoric, this coalition Government have kept their promise and continued to fund the NHS. In real terms, we have increased its budget, whereas Labour—where it is in office—has cut NHS funding in real terms by about 8%. It cannot escape any of the blame for this. We heard about reorganisations earlier, and we have had several in Wales. We went from having five health boards to having 22 and then back to having seven. Not only has Labour been in power constantly, either completely or as the dominant party, ever since the Welsh Assembly was set up in 1999, but it has rammed those health boards full of Labour party supporters, failed parliamentary candidates, ex-Assembly Members, local councillors and the like. In one case, Labour put in a former general secretary of the TUC, who, I am guessing, is probably not a supporter of the Conservative party. Labour has politicised the health boards and it must therefore take complete responsibility for the shambles that has led to so many people wanting to be treated not in Wales but in England, by the coalition-run NHS.

No more damning example of all this can be given than the recent antics with the OECD, which is trying to carry out a comparison on NHS systems across the whole of the United Kingdom. The coalition Government are keen for that study to go ahead and are delighted with the opportunity to have themselves compared with Wales, and they should be; they have every reason to look forward to that. But of course the reaction in the Welsh Assembly has been one of absolute horror. I am told by very reliable sources that the Welsh Assembly Government cancelled the visit by OECD officials because they were so desperate to try to ensure that no report comes out before the general election. Of course, people watching this debate do not have to take the word of anyone in this room; they simply have to Google “Wales NHS waiting lists” or something similar to see story after story about people who have been badly treated by the NHS in Wales and want to be treated by the NHS run by the Under-Secretary of State for Health, my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter), who is sitting on the Front Bench.

I could suggest much that would improve things. Ideally, I would like to see the power taken away from the Welsh Assembly, because it has simply made such a mess, but that is never going to happen. If Opposition Members are confident that they could do a good job with the NHS, they should support the OECD report, and get their colleagues in Wales to get behind it and bring it out as quickly as possible. They should allow funding to follow patients, so that where a patient from Wales wants to be treated in England, that should be able to happen, with the money simply deducted from the Welsh Assembly block grant. Of course, the same should apply vice versa; any patients from England who want to be treated in Wales should be allowed to have that chance—I do not see many doing that.

One of the more irritating bits of propaganda coming out of the Labour party is that it says that lots of people from England are being treated in Wales. That is true, as historically there have been people with Welsh GPs who have to be treated in Wales even though they live in England. However, these people have set up an action group called Action4OurCare and are trying to take legal action on this. These are normal patients, not party activists, who want to be treated by the coalition-run NHS.

About the only good thing that comes from all this is that Labour apparently wants to make the NHS one of the main planks of its election campaign. I say bring it on, because I cannot wait to debate the NHS with Labour party members all over the United Kingdom. I will ask them about Wales and the cuts to the budget, the lack of a cancer drugs fund, the long hospital waiting lists and the fact that its ambulance response times are the worst in the United Kingdom. I shall remind them that people are already voting with their feet—they are voting to get out of the Labour-run NHS in Wales and get into the coalition-run NHS in England. They will shortly have the opportunity to vote not with their feet but in the ballot, and I very much look forward to seeing them have the opportunity to do so.

17:48

[Lilian Greenwood (Nottingham South) (Lab)]

Earlier today, my hon. Friend the Member for Darlington (Jenny Chapman) asked the Prime Minister about the mothers from her constituency who marched 300 miles this summer to show their anger at this Government’s wasteful mismanagement of the health service. He dodged her question of course, because he has no answer to it. Is it reassuring that members of the Cabinet have finally realised what the rest of us have known for four years—that reorganising the NHS was a big mistake? I do not think so. There is disgust and anger out there, but not surprise. I was proud to walk alongside the Darlo Mums when their long march passed through Nottingham. The T-shirt I wore that day has a slogan on it. Sadly, I am not allowed to wear it here. It says, “Never trust a Tory with your NHS”. That is good advice.

We all remember what the Prime Minister promised before the election—no more top-down reorganisations. That promise did not last long. The reason I am angry is not just because that was not true, but because the reorganisation was the wrong policy at the worst possible time. We know that the finances are difficult. With both an ageing population and increasingly complex and expensive treatments available, the NHS faces unprecedented challenges. But instead of focusing on achieving the best possible outcomes for people with the resources available, the Prime Minister caused chaos: 4,000 staff were laid off and rehired; nurse numbers have not kept pace with demand; training places were cut; there are not enough GPs; training has been scaled back; hospitals are tied up in competition law; and savage cuts have been made to local authorities, leading to a crisis in social care and so pushing more and more elderly people into A and E when they should be getting the care they need at home. It is no wonder that morale is low when half of nurses say that their wards are dangerously understaffed; Ministers undermine the independent pay review body; and managers are being rehired after having six-figure pay-offs. But what makes me really angry is the impact that this wasteful reorganisation has had on my own constituents. I am proud of the NHS in Nottingham—whether in primary care, mental health services or our two acute hospitals. I know that we have great staff working incredibly hard for the people who need them, but at every level they face unbelievable pressure, and, in places, they are really struggling to cope.

The chief executive of Nottingham University Hospitals NHS Trust was very blunt when he met local MPs a couple of weeks ago. He told us that the trust faces the toughest ever cost-reduction plan, that this year he is planning for a deficit of £19.1 million—the first time the trust has been in that position—and that targets are being missed.

The accident and emergency department at Queen’s has missed the four-hour waiting target every month since August last year, and it reached its worst performance this June, in the middle of summer. I know our local hospital is planning for winter, but the crisis is already here. The reasons for the crisis are not simple, but it is clear that patient flow, both through and out of the hospital, is creating particular problems. Hundreds of patients who are well enough to be discharged or who should be receiving care and support at home or in residential care are still in hospital because their discharge is delayed. That is because, despite a commitment to joint working, social services cannot cope. The deep cuts to social care are having a real and direct impact on the NHS in Nottinghamshire and on my constituents.

NHS privatisation is now taking hold as commissioners are forced to put services out to the market. Let me tell the House about patient transport and my constituent, Jean. Jean is 84 years old and very unwell. She needs four hours of dialysis three times a week. Since a private company took over patient transport, she has been late for appointments, and had to wait for hours to be taken home. Such poor service has a knock-on impact on other patients in our city’s hospitals and the clinical commissioning group tells me that Jean’s experience is typical of feedback from other patients.

Last week, the chair of the hospitals trust described meeting a patient at 10 o’clock at night. That patient had been waiting since 10 o’clock in the morning to go home where his wife was waiting for him. Patients deserve so much better. Next May, they will have a chance to vote on the service, because Labour has a plan for the NHS. We will raise £2.5 billion for an NHS “time to care” fund. The money will come not from ordinary working people, but from ensuring that hedge funds and other tax avoiders play by the rules, and from asking those at the top to pay more and introducing fees on tobacco companies. The £2.5 billion will be used to employ enough doctors and nurses with the time to care for patients—20,000 more nurses to ensure that we get the basics right with safe staffing; 8,000 more GPs to help people stay healthy outside hospital; and 5,000 new home care workers and 3,000 more midwives. We will ensure better access and guarantee GP appointments in 48 hours or on the same day for those who need it. We will repeal the Tories’ NHS changes that put private profit before patients, so that our health service does the things that it should, such as care for patients and not argue about competition law. We will give patients and the public a real say over local services, and bring together physical health, mental health and social care into a single service to meet all of a person’s care needs —whole person care.

The message from the Darlo Mums to the Government was clear: hands off our NHS. It might not fit on a T-shirt, but my message today is equally clear. Labour built the NHS, Labour will save the NHS, and only Labour can transform it for the future.

17:53

[Andrew George (St Ives) (LD)]

It was in fact the Liberals who were the architects of the NHS, but perhaps that might be lost from history. The fact is that we have yet another occasion when the nation will be looking down and counting their shirt buttons as Members on the two Front Benches trade dodgy statistics and rewrite history. I am talking about the nature of the rather tribal debate that we had in the opening exchanges. My fear is that that is the biggest risk to the NHS—too much tribalism and not enough time spent addressing the serious issues of the NHS.

The right hon. Member for Leigh (Andy Burnham) is absolutely right that there are serious issues in the NHS that need to be addressed. What usually happens on these occasions is that the Secretary of State beats the right hon. Gentleman around the head with a report from Mid Staffs. I am pleased that on this occasion he did not, because that is often done in very bad taste and rather inappropriately.

Equally, I have to say to the right hon. Member for Leigh that, as the Secretary of State reasonably pointed out, he failed to acknowledge that Labour cannot ignore the fact that it ushered in and rolled out the red carpet for the private sector. The arrangements for the tendering for Hinchingbrooke hospital happened under a system set up by the then Labour Government. No matter at which stage various companies or NHS trusts fell out of or withdrew from the process, the course had been set by Labour. Unless he is telling us that he was going to preordain the outcome of a proper and open tendering process, which would of course be anti-competitive, he must have known that one of the options—this is what happened—was that a private company would take over the running of the hospital.

[Andy Burnham]

I am grateful to the hon. Gentleman for giving way, as I want him to be absolutely clear about how I operated that process. It followed the NHS preferred provider principle, which I introduced, and I began by asking the officials in the Department to see whether a local NHS trust was prepared to come in and take over. Addenbrooke’s was the trust I had in mind, but for some reason it was not prepared to do so at that point so we had to find a runner. I said that we had to go out more broadly, but my intention was clear: I wanted an NHS provider. That was where things had got to. The former Minister, the right hon. Member for Chelmsford (Mr Burns), mentioned March, but things were going into purdah at that point. That was where the process was when we left government and I want the hon. Gentleman to be clear on that point.

[Andrew George]

I am grateful to the right hon. Gentleman and, of course, he has now had the opportunity to put that point on the record. However, he must recognise that as others have said—indeed, I made this point when I intervened on him—the Labour Government rolled out the red carpet with the policy of independent treatment centres, walk-in centres and other services, where the taxpayer paid dearly for services that were not delivered.

The right hon. Gentleman knows that I did not support the Health and Social Care Act 2012. I saw it as a missed opportunity to address a large number of issues and it engaged in a top-down reorganisation that was not necessary. I fear that both the Conservative party and the Labour party appear to have been beguiled by a set of PowerPoint-wielding management consultants who have persuaded them that changing how the system works is an easy solution when, as a number of Members have mentioned, more than anything else the NHS needs much more integration of services—certainly not fragmentation—and for standards within it to be addressed.

The House knows that I always look to make a constructive contribution to such debates, so, as the Minister knows, I have been championing the case for safe staffing levels. The campaign of the Safe Staffing Alliance has argued for no more than eight acutely ill patients for every registered nurse, excluding the nurse in charge, on acute hospital wards. We need to establish a floor below which standards cannot fall, because services are often engaged in a race to the bottom because of financial pressures. That is very important. It is encouraging that that issue is now being taken seriously and I hope that the Government will consider the recommendations from other bodies to advance the cause.

With regard to the integration of health and social care in the wider community, there has always been the mantra that we need fewer hospital beds, and that certainly happened under Labour. That has resulted in many of our acute hospitals being on red alert and unable to manage the situation, with patients on inappropriate wards or stuck in ambulances queuing outside. That was clearly predicted by many people, not least me, when the policy was being pursued.

What we need to do is front-load the system to ensure that we can discharge patients from hospitals safely. We do not have the facilities for that, either in the community or in primary care. Of course, having that system of discharge and avoiding unnecessary admissions depends on having adequate services at home. Ultimately, that falls on the shoulders of home care workers, who themselves face a race to the bottom, as they are often paid the minimum wage and their travel times and costs are not properly covered. We therefore need a new benchmark that puts a floor in the system by paying those workers a living wage, covering their travel times and expenses, and protecting them so that we do not end up with the race to the bottom that I fear we are seeing in the system.

We need to ensure that we have safe services. Ultimately, we need to address care standards in our hospital wards and press for, rather than simply talk about, the integration of health and social care in order to address the fundamental challenges that the NHS faces.

18:01

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

In the time available, I want to make the case for fair funding for health services in my constituency. My right hon. Friend the Member for Leigh (Andy Burnham) set out powerfully the charge sheet against this Government: a costly reorganisation that nobody wanted; a push to privatisation that nobody wanted, except perhaps some of the Tory donors; and fragmentation where we need integration—nowhere more so than in health and social care, because of the massive cuts to care budgets.

In my constituency there are brilliant health care workers struggling to deliver the best possible care for patients against the backdrop of all this disruption and undermining of the NHS. I was elected on a promise to fight for our local hospital services. A project called “Healthier Together” proposed reducing the number of beds at Kettering general hospital by 500, taking away proper maternity and children’s provision and downgrading accident and emergency services. The Prime Minister claimed that the threat was not real, but when the evidence came into the public domain—the hon. Member for Kettering (Mr Hollobone) stood up to his own Whips and raised it on the Floor of the House—the proposals were ditched.

Some 6,000 people had signed my petition. We continued that cross-party working locally, with councillors from all parties, and the hon. Member for Kettering and I worked with commissioners in the hospital on a plan for major investment. A bid will soon be submitted. We met the partners last week and are seeking a meeting with the Minister soon. Our plan is to really develop the innovative integrated urgent and emergency care approach being pioneered in north Northamptonshire so that more people can be treated more quickly and effectively, whether in primary, urgent or emergency care.

I have to tell the Minister that although there is a real will and a proven ability to innovate and do the best they can with resources, our local health services are severely hampered by a lack of resources. The midwives I met this week told me that they are being asked to work harder for longer and with increasingly stretched resources. That is a pattern across the NHS work force. Ambulance workers trying to improve response times are working longer shifts with increasingly outdated equipment. I was out in a paramedic vehicle with East Midlands ambulance service workers over the summer—a car that had done 300,000 miles without a working phone. That is what our health care workers are struggling with.

Our community health services are struggling. Older people are suffering from the withdrawal of podiatry services. Mental health services have been slashed, with people waiting and waiting for the therapy and treatment they need. Mental health nurses in my area are being made redundant and vital voluntary organisations that have been supported by public funding, such as Safe Haven in Corby, have been severely cut. Children are being sent to the other end of the country because care is not available for them locally, despite their being particularly vulnerable. Doctors’ surgeries are struggling— some more than others, but particularly in our small towns and rural areas. When I met residents in Stanwick the other day, they told me of their concern that, with plans to continue the growth of their village, the doctor’s services simply will not be able to cope.

I recently surveyed hundreds of my constituents about local health services. They told me that they support our cross-party campaign but are deeply worried about access to out-of-hours services, the difficulties of finding a GP surgery appointment and the increased privatisation of services. Specifically, they wanted me to put on record their concerns about the transatlantic trade and investment partnership and the impact that it could have on our national health services.

All these issues are being addressed in a context where we have the worst-funded health service in the country. A report published in September by the National Audit Office bears this out. It is called “Funding healthcare: Making allocations to local areas”. The NAO says that Corby is the worst-funded area of England for health care, receiving £186 less per person per year than the allocation that the NHS says it needs. Each year, the Department of Health and NHS England make these allocations to local commissioning groups, aggregating funding for local primary care, hospital, community and mental health services. The NAO’s analysis suggests that in Corby we are 12.8% below the target that is needed to meet local health needs. That compares with £508 per person above target in the highest-funded area in west London. The head of the NAO, speaking about the report, said:

“Funding allocations have reflected, among other factors, a desire not to upset local health economies by taking funding away or even increasing it by less than inflation. This has significantly slowed progress towards a fair distribution where funding fully reflects needs across the country. The Department and NHS England need to consider carefully whether this approach is fast-moving enough to sustain hard-pressed local areas in the next few years.”

It is totally wrong that health services in Corby are being starved of funds. How can it be right that people in Chelsea or in Kensington are allocated £694 per person extra per year for health funding? Corby’s health care service is doing a good job of managing with these limited funds. The new urgent care centre, for example, is a beacon, but other services are having to be cut back. The NAO found that the unfair distribution is taking place because many decisions are based on individual civil service judgments instead of evidence. The report’s detail and recommendations really stand up to the charge that the Government’s policy is not based on evidence.

The NAO found that the problem is exacerbated because proper account is not taken of population growth. My area has the highest birth rate in England; it is one of the fastest-growing towns in the country. This creates a real double whammy for our local services. It is a basic question of fairness that Corby should be funded according to needs. Therefore, in the coming months, I will be asking local people to join my campaign for fair health funding. Together, we will demand that the Government listen and end the injustice of filling the coffers of health commissioners in wealthy areas of the country at the expense of my constituents in Corby.

18:07

[David Morris (Morecambe and Lunesdale) (Con)]

It is an absolute pleasure to serve under your guidance, Mr Speaker, in this debate about access to services.

I share one thing in common with the right hon. Member for Leigh (Andy Burnham), which is that I am from Leigh, as we both know. I am still under a specialist in Leigh, whom I have seen on many occasions. I have never had to wait and it has always been on time. I have seen specialists across at Tommy’s—St Thomas’s—without ever having to wait and always on time. I have also seen specialists in Lancaster without ever having to wait and always on time. I have heard all the stories about waiting lists and delays, but I personally have not experienced that. My family in the right hon. Gentleman’s constituency, where they still live, have not experienced it either. When my mother was leaving this world, shall we say, she had exemplary care from the local health trust. There was never any talk among the health professionals of cuts. They did not know who I was; I was just another person who was losing their mother.

I do not like to be tribal. The right hon. Gentleman and I have had terse words in the past, but I will say this on the record in the House: he is a good man and an honourable gentleman. I have friends who have voted for him. He is very well-regarded in his constituency. But what upsets me—I do not want to change the tone of this debate—is that in my constituency the Labour party is campaigning on the basis of an erroneous agenda of cuts, hospital closures and A and E closures that have never happened and are not going to happen. I received an e-mail today from a constituent who is absolutely terrified that the local Royal Lancaster infirmary is going to close, but it is not. There is no suggestion of it closing. In fact, I have spoken to the chief executive and she said, “I don’t know where this has come from.”

We are in the run-up to a general election and it is the silly season—that is evident to everyone inside and outside the Chamber—but it does no service to anybody in the political world, never mind the Opposition, if candidates up and down the country are going to fight about cuts and closures to the health service that are not even happening in certain areas. That will certainly not play into the hands of an incoming Government.

In my constituency of Morecambe and Lunesdale, £25 million has been spent recently on a new health centre. The Under-Secretary of State for Health, my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) opened a walk-in centre recently. We have been allocated £150 million to improve the local trust, most of which will be spent on the Royal Lancaster infirmary, which has four new hospital wards, and we have just received £2 million for GP access at the weekend. Two weeks ago, I opened a new mental health facility in my constituency.

Morecambe and Lunesdale has never seen so much investment in the NHS, yet the Labour party in my area says that everything is going to hell in a handcart and the hospital is closing down, but that is wrong. The RLI is not going to close, and neither was the hospital serving Corby, which the hon. Member for Corby (Andy Sawford) campaigned on.

[James Morris]

My hon. Friend is making a powerful case. In my constituency, there has been millions of pounds of new investment in the Rowley Regis hospital, which was under threat under the previous Government when all its in-patient wards were closed. The recent sign-off on a £350 million new integrated hospital in Smethwick in Sandwell, one of the most deprived areas in the country, will substantially benefit the population’s health care and also help regenerate the economy.

[David Morris]

I thank my hon. Friend and namesake for making that point.

I am passionate about the NHS and I know that the Opposition and the right hon. Member for Leigh are also passionate about it, but we should get a grip on reality. Campaigns are saying that £25 million is being cut from the local trust when £150 million has been invested in it, so the maths do not stack up. As my hon. Friend the Member for St Ives (Andrew George) has said, we have been horse-trading figures, but we have to look at the reality of the situation. Scaremongering is not the way forward, because all it does is alienate the electorate, my constituents and the people we all live with across the nation and put fear into the services that we are trying to protect.

I am facing a third erroneous campaign on health cuts in my constituency, and my mail box is always full every time there is such a campaign. All it seeks to do is frighten the electorate, but it does not frighten me, because the electorate know the truth.

[Mr David Ward (Bradford East) (LD)]

I was not going to intervene on the hon. Gentleman, but I sympathise with him, because Labour activists in my area have been campaigning against the closure of a treatment centre when all that happened, in fact, was that the contract came to an end. Hard work is now going on to make sure that the provision continues in another form. The big campaign was that this was about cuts and closing a treatment centre, but it was never going to close.

[David Morris]

I share my hon. Friend’s sentiments.

My hospital in Lancaster, in my neighbouring constituency, is not going to close. Like everyone else in the Chamber, I care about the NHS, but I appeal not just to the Opposition, but to all political parties that have the honour to serve here and speak: let us get a grip on reality, stop scaremongering and work towards making a better NHS. It has been an absolute pleasure to speak in this debate.

18:14

[Mr Andy Slaughter (Hammersmith) (Lab)]

I make no apologies for addressing my comments to the latest developments in the “Shaping a healthier future” programme, the comprehensive reorganisation of health services that is affecting 2 million people in west and north-west London. It constitutes the biggest hospital services closure programme in the history of the NHS, and I believe that it will be the prototype for similarly draconian cuts if the current Government are, by some misfortune, re-elected.

The programme was two years in planning—in secret—and was announced in June 2012. It involves the closure of four of the nine accident and emergency departments in the area, and the closure, effectively, of two major hospitals. It affects both A and Es in my constituency and, indeed, the complete demolition of Charing Cross hospital, one of London’s major hospitals. At the time, all but 3% of the land on which that hospital stood was to be sold off.

There followed two years of confusion, phoney consultation, buck passing and false information, and decisions were taken by primary care trusts that were then abolished the following month. The original scheme was so incompetent that the business case was delayed for more than a year. It emerged last month, and now requires 50% of the Charing Cross land to be sold, as well as 50% of the land at St Mary’s, Paddington. However, it still requires £400 million of borrowing to be approved by the Treasury, despite the fact that the trust—Imperial College Healthcare NHS Trust—cannot manage its finances from one month to the next.

Exactly a year ago, the Secretary of State announced in the House that the Hammersmith hospital and Central Middlesex hospital A and Es should close as soon as was practicable, and that in fact happened on 10 September this year. Two A and E departments closed in one day, with people who attended them being told to go to Northwick Park and St Mary’s hospitals. Four days later, The Mail on Sunday reported in relation to Northwick Park:

“An accident and emergency unit criticised in an official report for being unsafe and unable to cope with demand is set to be swamped with thousands of extra patients—thanks to emergency department closures elsewhere. The Chief Inspector of Hospitals painted a picture of chaos at ‘very busy’ Northwick Park Hospital in Harrow, North-West London, after a recent visit. But its A&E will soon have to deal with at least 8,000 more patients a year due to the controversial closure of two London units last week.”

How that can be said to be a practicable and safe decision, I do not know. At the trust’s annual general meeting two weeks later, the chief executive—newly arrived from Australia—told people that they should not rely so much on A and E departments. Well, they do not have a great deal of choice in my constituency.

Is closing two neighbouring A and E departments enough? Clearly not, despite the fact that GP and community services are also being cut—I wish I had the time to go into that in more detail—because the closure of Charing Cross hospital A and E is being persisted with. That hospital is still due for demolition and downgrading. The current plan is for it to lose all but 24 of its 360 in-patient beds, its emergency surgery unit, its intensive therapy unit, its stroke unit and of course its A and E, which will leave only primary care treatment and day surgery on site.

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

My hon. Friend, alongside his local party, has mounted a truly impressive campaign to protect those services. Government Members say that they are the defenders of the NHS. What action has been taken locally by other political parties to support him?

[Mr Slaughter]

The Conservative party fully supports the closures of the A and E departments. When it ran the local authority—fortunately, it no longer does so—it simply put out disinformation about whether the service closures would or would not take place. It is only because of the actions of local residents that my constituents know exactly what is happening.

Worse than that, on 15 May the Prime Minister came to my constituency for one purpose and one purpose only—to go into the basement of the Conservative party offices and give an interview to a local journalist, in which he said that Charing Cross hospital would retain its A and E and other services, and he then left. That was of course one week before the local elections. On 7 September, The Mail on Sunday, which I now regard as the paper of record on this issue and which has fought a strong campaign on behalf of A and E departments, reported the following:

“A casualty unit that David Cameron personally promised would stay open is due to be closed, The Mail on Sunday can reveal. Days before council elections in May, the Prime Minister visited Hammersmith in London and stated that Charing Cross Hospital in nearby Fulham ‘will retain its A&E and services’. But the organisation that runs the hospital intends to close the department and replace it with an ‘urgent care centre’, NHS papers show. Urgent care centres can be run by GPs and nurses rather than A&E consultants, and have far fewer facilities to care for the seriously ill or injured.”

I do not think that I need to explain that any more. The Prime Minister, for the purely party political reason of supporting a Conservative local authority that he has described as his favourite, did not say what was factually correct.

If they were not so disingenuous and incompetent, I might have some sympathy for those at the trust because, under instruction from their political masters, they have to argue against themselves. On 7 October, they came to answer questions from the scrutiny committee of the local council. They were asked about Charing Cross hospital and said that, in future, it will have

“emergency services appropriate for a local hospital”.

They were cross-examined on that issue and could not amplify their position, so we are none the wiser. However, we do know that a hospital that has only primary care and treatment services cannot sustain an A and E department. In the interests of safety, as well as honesty, it would be better if that was admitted to my constituents.

I will end with the beginning of a letter that is in the Evening Standard today. It is from Anne Drinkell, who is the admirable secretary of the “Save our hospitals” campaign in Hammersmith and a former community matron. She says:

“You highlight the pressures that closing A&Es at Hammersmith and Central Middlesex hospitals put on surrounding emergency departments. God help us if plans to close Charing Cross A&E go ahead. Imperial NHS Trust’s management seems in chaos, with leaked internal memos detailing cuts in acute beds and a mounting deficit. It has been unable to provide a clear description of what future ‘emergency’ care at these sites would look like. A notice on the back door at Hammersmith still advises patients to take sick kids to the now-closed Central Middlesex A&E”.

She ends by saying:

“We ask North West London NHS for a moratorium on closures until they consult on plans for change based on clinical need, not budget cuts.”

Is that an unreasonable request?

18:22

[Chloe Smith (Norwich North) (Con)]

I want to put on the record my view, which is shared by many in this House, that the NHS is an extraordinary, valuable, historic British institution. I pay tribute to its staff, who work particularly hard in the face of pressures. I also pay tribute to its many patients, who include my constituents and those of everybody else in this House. My substantive comments fall into two halves: those on the national pressures on the management of the NHS and those on the local issues that I wish to raise.

It is important to acknowledge that the NHS, however valuable, precious and emotive a subject it is, does not spring from nowhere. It springs from people’s money, which we collect in taxes to spend on their behalf. One of the most important decisions that the Government have taken was the decision at the beginning of the Parliament to ring-fence NHS spending. That has enabled me to communicate to my constituents the importance that we place on the NHS. I want that point to ring out from my contribution.

The other crucial thing that the Government have done is put the economy on a more secure footing at the same time. It is a strong economy that creates the means to have plans for any public services. I think that is a truth that we all acknowledge. By the way, I pay tribute to my hon. Friend the Member for Morecambe and Lunesdale (David Morris) for his very honourable speech in both tone and content about the honesty with which we should aspire to treat the NHS.

Of course, volumes are increasing in the NHS. The Secretary of State was honest in his opening speech in saying that there are pressures. Again, I applaud the staff on dealing with those pressures. Let me give a few examples of the increasing volumes in the NHS. Some 850,000 more operations are being delivered each year than in 2010; there are now 6.4 million more out-patient cases and 1.1 million more in-patient admissions; and more than 77,000 more people each year are being diagnosed with, and treated for, dementia. No wonder the NHS is under pressure when we see the demographic changes behind those figures, and the changes in demand. I applaud NHS staff for what they do, and note that the other key number this Government have delivered on is by having more than 13,500 more clinical staff, including more than 6,500 more doctors and 3,700 more nurses. That is something to praise.

My constituents know the value of a plan and the need to deal with pressures, and they know what they want out of a future NHS that stays within the budget available to it. Let me draw on three local points. The first is Norfolk and Norwich university hospital, and I am glad the Minister has agreed to visit Norwich and meet patients and staff, and to look at a few of the challenges we face. It has already been widely reported in our local press—it will not be strange news to him, a fellow East Anglian—that the Norfolk and Norwich university hospital faces pressures and a lack of beds. The point has been well made today that systemic pressures feed into the number of beds available at any one time, and I would like the Minister to support the NHS in Norwich, as I do as its local MP, and find a way through those pressures. The hospital did that last winter, and I am confident it can do so again.

Secondly, I wish to mention GP access—this is a debate about NHS services and access—and urge Norwich GPs to apply to the second access fund from next April. I understand that there were no applications from Norwich or Norfolk to the first access fund, and it is incredibly important to take every opportunity available in the system within which GPs work to make services more accessible to their patients. I regularly discuss with constituents the challenges they face in making an appointment with their GP, and one of the solutions to that problem is the access fund from this Government, which I applaud.

Thirdly, the Norwich walk-in centre is currently located in a shopping mall in the city centre. The landlord of those premises has terminated that contract which has, of course, created a need to change location. I have sought to be at the heart of those negotiations on behalf of my constituents because we need a quick solution to the problem. It is not acceptable for the NHS to fail to plan for what is needed for Norwich’s primary and urgent care, and I would welcome the Minister’s support for Norwich staff and patients.

Finally, I endorse the Conservatives’ proposed plan to continue to ring-fence and increase spending on the NHS in real terms. That will allow us to move to a 21st-century NHS, where, yes, there will be pressure, but we should fix that through a stronger economy, not through more borrowing and more debt.

18:28

[Jim Shannon (Strangford) (DUP)]

The motion is entitled “Access to NHS services” and I wish to comment on four categories of the NHS where services can be improved. Today we have heard one of the central themes of the next Westminster election on 7 May next year, because the battleground will clearly be the NHS. We have heard different opinions from both sides of the Chamber about the best way forward.

Parkinson’s disease is a progressive neurological condition that affects 127,000 people in the UK with an average age of 50 to 60. One person in every 500 has Parkinson’s disease, and there is no prospect of a person’s condition improving over time as there is currently no cure. Medication is the main treatment for the symptoms of Parkinson’s disease, and many people require multiple doses at specific times throughout the day. People with Parkinson’s who are admitted to hospitals are often prevented from managing their own medication, or are not given it in time. That leads to a deterioration in their condition, or even to permanent harm. It is clear that that costs the NHS some £20 million a year and that it is down to medication mismanagement in hospitals. It is a simple matter of receiving medication in time. What steps is the Minister taking to ensure that people with Parkinson’s always receive their medication on time in hospital, which in turn would mean that patients could return home sooner and that those costs could be greatly reduced? We talk about access to NHS services, but we need to know about funding, too.

Other hon. Members, including the hon. Member for Norwich North (Chloe Smith), have referred to Alzheimer’s. The numbers are horrific. Some 856,000 people in the UK have it: 720,000 in England; 45,000 in Wales; 70,000 in Scotland; and 21,000 in Northern Ireland. It will cost the UK £26 billion a year. Yet again, the question is: can access to NHS services happen? The costs are astronomical. How does the Minister plan to prepare for providing the necessary services in the years to come, perhaps at a reduced cost, and ever mindful of the access to the NHS services we all wish to have?

My third concern is diabetes. It is a great concern to many. It has been referred to in the Chamber and other places as a ticking time bomb that will cost the NHS the most money. It is also a question of access to services. I declare an interest as a type 2 diabetic—other hon. Members have the same problem. Diabetes UK says that, in this year alone, 280,000 people will be diagnosed with diabetes, which is the equivalent of the population of Newcastle—if we want to put the problem into perspective and relate it to a town or a city, that is the figure. The number of people living with type 1 and type 2 diabetes has increased throughout the UK: by 33% in Northern Ireland; by 25% in England; by 20% in Wales; and by 18% in Scotland. Some 738 people are diagnosed with type 2 diabetes per day.

The cost is significant. A report on diabetes in the NHS estimates a total cost of £3.5 billion per annum, or £9.6 million per day. An estimated 10% of the NHS budget is spent on diabetes, which is some £286 a second. The problem is funding and access to services. How do we ensure that people who are diabetic access NHS services?

A health survey in Northern Ireland—I am sure the figures are equivalent for the rest of the UK on the mainland—showed that some 62% of adults were classified as overweight or obese. The interesting thing that worries me a wee bit is children. Some 19% of children were reported to be overweight, and a further 6% were reported to be obese. When it comes to access to NHS treatment, what steps is the Minister taking to address childhood obesity and diet?

My final point is on cancer drugs. A central theme of the motion is cancer referrals and treatment waiting times. The problem impacts not only on those on the mainland, but on those of us in Northern Ireland and on our access to cancer drugs, despite Northern Ireland being an integral part of the United Kingdom and despite it being covered by the work of the National Institute for Health and Care Excellence, unlike Scotland, for example. Patients in Northern Ireland do not have access to 40 cancer drugs simply because of their postcodes.

In my discussions with Jim Wells, the Minister who has responsibility for health in Northern Ireland, he has referred to access in Northern Ireland to the individual funding request, whereby a consultant can submit an application for one of those 40 drugs on a patient’s behalf. However, there is a high hurdle, known as the “exceptionality test”, which is very hard to pass. Many consultants in Northern Ireland do not apply to use the IFR and know that the application will not pass. What discussions has the Minister had with the Minister in Northern Ireland on that? It is totally unfair. I am baffled and find it totally unacceptable that the access to treatments for my constituents who are diagnosed with cancer—they live in Northern Ireland and pay UK tax—is far more limited than it is for patients in the rest of the UK. With that in mind, I believe it is time for the provision of cancer drugs across the whole United Kingdom, and to the 331,487 people in the UK with cancer, irrespective of postcode.

18:34

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

Many hon. Members on both sides of the House have talked about their personal experiences of the NHS, and movingly about the care that they and others have received. It might not have escaped the House’s notice, but I am statistically one of the least likely Members to access NHS services, being under the age of 40—[Interruption.] I hear disparaging remarks about my size coming from my left, but I will ignore them.

I was extremely grateful to receive incredible care for my wife and child when Ruby, my daughter, was born last year, and got to see, incredibly and movingly, the dedication of NHS midwives, doctors and other staff as well.

I am hugely moved as well by the fact that locally in the seat I represent in Luton we receive fantastic NHS care. We have Luton and Dunstable hospital, and we were pleased to welcome the Darlington mums who had marched down to Whitehall to protest about the changes to the NHS when they came through Luton. They made many of the points I want to make today. They, as members of the general public, were able to articulate what I do not believe many Members across this House could: the depth of passion people feel for the NHS.

I would just say this. A number of different contributors today have talked at length about statistics and churned out figures, but for me there is one stand-out statistic from this Parliament: the level of patient satisfaction in the NHS. We can talk until we are blue in the face about which target should be met and which target should be missed, but it speaks volumes to me that the highest ever level of patient satisfaction was in 2010 when this Government came to power and it has dropped since then. That should cause us to ask profound questions, because we understand that a new top-down reorganisation of the NHS can only do one thing, which is distract from patient care. That is the experience in this Parliament.

People forget that the NHS is not a series of services that can easily be bolted together. It is more a network or a system, and just as Beeching wielded his axe and chopped up different parts, compartmentalising and fragmenting the railways, so we must be aware of the lessons of history when it comes to fragmentation in our NHS system. It is the role of us in this Parliament not just to protect our own local services or seek to move forward with the amazing new treatments that exist now, but to protect the legacy of the NHS over the last 70 or 75 years.

Will this Government talk about the massive error that was the reorganisation of the NHS in this Parliament and allude to two others? The starvation of funds by the Tories in the ’80s and ’90s that had to be put right by a Labour Government in 1997, who saved the NHS, is the second, and opposing its creation in the first place was the Tories’ original sin on the NHS, but they seem not to have learned that lesson. They continue to make this mistake, and it has led to 440 new organisations in the NHS, tying up hospitals in competition law, with 4,000 staff laid off and then rehired. Is this not the waste we have talked about in our system—the waste that could be repurposed for better patient care, and a rise in patient satisfaction as well?

We need a clear plan for putting this system back on track, because of the many shortages and the rationing we have seen in the system. The first plank of that plan, advocated by my right hon. Friend the Member for Leigh (Andy Burnham), is to be clear about our plans to repeal this damaging Tory NHS Act that has done so much damage in this Parliament. I am glad to hear that in five weeks each of us in this Parliament will be asked to cast our votes for the repeal of the most damaging aspects of this legislation, and I pledge to my constituents that I will not be found wanting when that comes. We must also exempt the NHS from the transatlantic trade and investment partnership, make sure the extension of competition law that has led to a massive acceleration in privatisation is curbed, increase NHS spending by £2.5 billion a year in a sustainable way to make sure the NHS has time to care, and hire 36,000 new nurses, doctors and midwives.

That is the expectation that will fall to us in the next Parliament, but in this Parliament there is also something that needs to be done. Government Members must admit publicly, not just privately, their error in going about this reorganisation, and commit to the funding that is going to be required. We all accept that there are no easy solutions, and politicians can sometimes get wound up in all sorts of knots trying to defend services that should be reconfigured. I fully accept that. But, fundamentally, we are the custodians and the guardians of the greatest mechanism against social inequality and the greatest mechanism to attack health inequality head on. The national health service is an institution rightly held in high regard by the people who believe they own it, not those who are asked to be its custodians. It is the crowning achievement of the 1945 Labour Government. It needs to be rescued by successive Labour Governments after Tory Administrations. The NHS demands nothing less.

18:40

[Liz Kendall (Leicester West) (Lab)]

It is a pleasure to close today’s debate and to follow my hon. Friend the Member for Luton South (Gavin Shuker), who spoke very powerfully. In fact, hon. Members on both sides of the House have spoken with great passion and commitment about the NHS and the vital role it plays in their constituents’ lives and in their families’ lives. Many hon. Members, including the hon. Members for South West Devon (Mr Streeter), for Bosworth (David Tredinnick) and for Morecambe and Lunesdale (David Morris), have rightly praised NHS staff for working tirelessly to deliver good quality services despite all the challenges they face.

However, we have also heard countless examples of what the Alzheimer’s Society, the Multiple Sclerosis Society, the Royal College of Nursing, the Royal College of Midwives, the Royal College of General Practitioners, the Royal College of Physicians, the Royal College of Paediatrics and Child Health, the British Medical Association and many others said in their letter to The Independent last week. It stated that

“Signs of a system buckling...are everywhere…The NHS and our social care services are at breaking point and things cannot go on like this.”

We heard from my hon. Friends the Members for Corby (Andy Sawford) and for Worsley and Eccles South (Barbara Keeley) about how more and more people are struggling to get an appointment with their GP, with one in four waiting at least a week and thousands waiting more than two weeks.

Hon. Members, including my hon. Friend the Member for Nottingham South (Lilian Greenwood), spoke about how the huge cuts to local council care budgets mean half a million fewer older and disabled people, some of the most vulnerable people in society, are getting vital services, such as home care visits or home adaptations. This is leaving their families struggling to cope and to pick up the pieces.

Fewer services in the community mean that increasing numbers of frail, elderly people end up ringing 999, going to A and E and getting stuck in hospital when they do not need to be there, causing them and their families distress and costing the taxpayer far more. Ambulance services are under huge pressure, as my hon. Friend the Member for North Durham (Mr Jones) said. Hospital A and Es have now failed to meet the Government’s lower four-hour waiting target for 63 weeks in a row. A and E performance over the summer has been worse even than at the height of last winter. Delayed discharges from hospital are at a record high and cost more than £250 million in the last 12 months alone—money that could have paid for a year’s home care for 37,000 older or disabled people. Where on earth is the sense in that?

Rising emergency admissions and delayed hospital discharges mean planned operations are going backwards, too. More than 3 million people are now on the waiting list. The 18-week maximum wait target has been missed for the last two months in a row, and the NHS has missed the 62-day wait for vital cancer treatment—

[David T. C. Davies]

Will the hon. Lady give way?

[Liz Kendall]

I will not. [Interruption.] If the hon. Gentleman is going to talk about Wales, 90% of patients get their treatment within that target, compared with 84% here, so let me save him some time and bother.

The Government’s failure to keep people out of hospital and keep waiting lists under control, means the NHS is facing a looming financial crisis, too. Two-thirds of all acute hospitals are already in deficit to the tune of £500 million. They predict they will end the year £1 billion in the red, piling on the pressure for even greater service cuts and worse standards of care in future.

The tragedy is that it did not have to be this way. After 13 years of investment and reform, the previous Labour Government left the NHS with the highest ever patient satisfaction rates and the lowest ever patient treatment waits. But we were not complacent. We understood that the NHS had to face up to even bigger challenges: our ageing population, the increase in long-term conditions and huge medical advances, at a time when there is far less money around. For that reason, we had a plan in every region to reform front-line services, through Lord Ara Darzi’s NHS next stage review, by delivering some services in specialist centres so that patients got expert treatment 24/7 and by shifting other services out of hospitals and into the community. It was a move towards prevention joined up with social care to help people stay living at home. Instead of going ahead with our reforms, however, the Government scrapped them and forced through the biggest backroom reorganisation in the history of the NHS, wasting three years of time, effort and energy, and £3 billion of taxpayers’ money that should have gone on patient care.

The Health Secretary told the House today, and said on the “Today” programme, that the Government had saved £1 billion.

[Mr Jeremy Hunt]

The NAO said it.

[Liz Kendall]

I actually picked up the copy of the report he left behind, and I found his highlight. It reads:

“The estimated administration cost savings outweigh the costs of the reforms”,

but it does not mention the £1 billion figure. In fact, paragraph 4.10, on the reliability of the Department of Health, states “we found…limited assurance” in the figures. It also states that

“strategic health authority staff did not verify the figures submitted to them by primary care trusts”

and that it

“saw no evidence that the”

Government

“challenged these figures.”

Far from being independently verified, as the Health Secretary claims, they have been made up on the back of an envelope. [Interruption.]

Government Members can complain, but we have constantly argued that the NHS reorganisation has been the single biggest mistake made by the Government, and now we find out that members of the Cabinet agree. An ally of the Chancellor told The Times:

“George kicks himself for not having spotted it or stopped it”.

A former No. 10 adviser says that

“no one apart from Lansley had a clue what he was really embarking on—certainly not the prime minister”.

So we have a Chancellor, who is meant to safeguard public money, failing to stop billions of pounds of waste and a Prime Minister who claimed the NHS was his top priority, but was too confused or complacent to bother to understand his own plans. The Conservative party still does not get it. One Downing street adviser is quoted as saying:

“A lot of work had gone into persuading people that David Cameron believed in the NHS, had personal experience and cared about it. Then the Conservatives came in and forgot all about reassurance. Lansley managed to alienate all the professional people in Britain who were trusted on the NHS.”

The Government’s NHS reorganisation was not just terrible politics; it is terrible in practice for patients, taxpayers and NHS staff. I remind hon. Members that the Health and Social Care Act 2012 did not just create 221 CCGs, 152 health and wellbeing boards, NHS England, Public Health England and Health Education England; it also created four regional NHS England teams, 27 local area NHS England teams, 16 specialist commissioning units—well, there were 19, but at least two have already been merged—and 10 specialist commissioning units. That is on top of Monitor and the Care Quality Commission. It is a system so chaotic and confusing that no one knows who is responsible or accountable for leading the changes patients want and taxpayers need.

And now, just when we thought it could not get any worse, another major new reorganisation is under way. NHS England was commissioning primary care and specialist services, but in May it announced it wanted to give primary and specialist commissioning back to CCGs to try and patch up the fragmentation created by the Government's own plans. How much will this second reorganisation cost patients and staff?

Patients, staff and taxpayers cannot afford another seven months, let alone another five years, of this Government. They need a clear plan to restore care standards and restore care services so that they are fit for the future. Opposition Members would use the savings from scrapping the cost of competition in the NHS to guarantee new rights for patients to see their GP at a time that is convenient for them. We would raise £2.5 billion from a mansion tax, clamping down on tax avoidance and a levy on the tobacco companies to fund more GPs, nurses, midwives and homecare workers to transform services, particularly in the community. We will support carers with new duties on the NHS to identify family carers, a single point of contact for information and services and ring-fenced funding for carers’ breaks. Our plan for whole-person care would ensure the full integration of physical and mental health and social care services into one service with one team to meet all of a person’s needs.

At the next election, there will be a real choice on the NHS: a choice between care going backwards and money wasted under the Conservatives or Labour’s plans to fully join up services to get the best results for patients and the best value for money. It will be a choice between the Conservatives who have broken their promises to protect the NHS, throwing the system into chaos and blaming staff, or Labour who will make the real reforms we need so that people get personalised care in the right place at the right time. It will be a choice between the Conservatives’ unfunded plans to cut taxes for the wealthiest or Labour’s fully funded plans to reform the NHS and care services on which we all rely. I commend the motion to the House.

18:50

[The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)]

It is a pleasure to conclude this debate and to speak to the contributions of hon. Friends and hon. Members. It is a pity that when we have NHS debates, they sometimes become unnecessarily tribal and partisan. Some Labour Members often seek to talk down the local NHS rather than to stand up for their hard-working NHS staff who deliver high-quality services on the ground.

I want to talk about some of the successes this Government have delivered for our NHS and then I shall address some of the points raised in the debate. We know that even in these difficult economic times, this Government have protected our NHS budget with £12.7 billion more during this Parliament. That was something that the shadow Secretary of State, the right hon. Member for Leigh (Andy Burnham) called “irresponsible”, but it is not irresponsible to make sure that we continue to support and protect the NHS front line. We have stripped out over £5 billion-worth of bureaucracy and reinvested that money into front-line patient care. That has been audited by the National Audit Office, but the hon. Member for Leicester West (Liz Kendall) did not choose to highlight that point in her remarks. It has been confirmed and we know it is true.

I make no apology for the fact that we as a Government have focused ruthlessly on having a more efficient health service that frees up as much money as possible for front-line patient care. We have reduced the number of administrative staff by around 20,000, increased front-line clinical staff by over 12,500 and set up a cancer drugs fund that has helped 55,000 people who would not have received cancer drugs to receive them. There has been an unrelenting focus on promoting a more joined-up approach to care, to help deliver more care in the community for people with long-term medical conditions, particularly the frail elderly.

Let me deal with some of the comments and contributions to the debate. I would like to reassure my hon. Friend the Member for Morecambe and Lunesdale (David Morris) that the hospital in his constituency is, of course, not going to close and that any local scaremongering by the Labour party is wrong and misplaced. I would also like to reassure the hon. Member for North Durham (Mr Jones), who raised concerns about the north-east ambulance service, that the service has generally been performing well. In 2013-14, it met all its national targets. I urge the hon. Gentleman to write to me if he has any further concerns on behalf of local patients.

We heard strong contributions from my hon. Friend the Member for Norwich North (Chloe Smith), who made important remarks about the services delivered at the Norfolk and Norwich hospital, and I look forward to accepting her invitation to visit that hospital once again in the near future, and from my hon. Friend the Member for Bosworth (David Tredinnick) who made one of his regular pleas for more alternative medicine in the NHS. Importantly, he talked about the benefits of clinically driven commissioning. Under this Government, we have put doctors and nurses in charge of our NHS to make sure that services are delivered at local level. Patient services are run by doctors and nurses, not by bureaucrats, which has been a tremendous step forward. My hon. Friend the Member for St Ives (Andrew George) made a considered contribution about the previous Government’s record on encouraging private sector providers in the NHS—a point to which I shall return.

[Lilian Greenwood]

What does the Minister think about what happened to the clinical commissioning group in North Staffordshire, which decided not to allow people with mild to moderate hearing loss to have hearing aids, even though that was clearly not the view of the local health scrutiny committees or local patients? Is that not precisely putting in jeopardy preventive services, which would keep people in work and keep them active in the community rather than being isolated? It is stopping those people from participating.

[Dr Poulter]

If the hon. Lady has concerns about local commissioning decisions, she should take them up with local commissioners. Time forbids me from going into the rationing of services by the previous Labour Government. It is important that clinical services are now designed and delivered by front-line health care professionals, and if she is concerned about them, I am sure she will take that up with her local CCG.

The right hon. Member for Leigh (Andy Burnham) referred to a work force crisis in GP training. It is clear that under this Government 1,000 more GPs are now in training and working in the NHS than in 2010 when we came into government. If it is not accepted that that is good start, we have committed to training an extra 5,000 because we want more people working in general practice.

We have ensured that 1.3 million more people are being treated in A and E compared with the number in 2009-10. We have halved the time that people must wait to be assessed, and every day we are treating nearly 2,000 more people within the four-hour target compared with the number in 2010.

Competition was introduced into the NHS not by the Health and Social Care Act 2012 but by the previous Labour Government, of whom the right hon. Member for Leigh was a Minister. The Labour Government opened the door to private sector providers when they opened the first independent sector treatment centres in 2003. The Labour Government gave £250 million to private companies and independent sector treatment centres, regardless of whether they delivered that care. Labour was more concerned about giving money to the private centres than about ensuring that quality care was delivered. Labour paid independent private sector providers 11% more to provide the same care as NHS providers. That is Labour’s record on the private sector in the NHS—a record that shows that it is more committed to the private sector than any previous Conservative Government.

[Kevin Barron]

If that is the case, will the Minister—as a Back Bencher, he sat on the Health Committee—tell us why there were so many clauses in the Bill that introduced the Competition Commission and the Office of Fair Trading into our national health service?

[Dr Poulter]

The right hon. Member will be aware that Labour’s legislation, which gave the private sector the opportunity to tender for contracts, saw 5% of NHS activity—I believe that figure is correct—provided by the private sector at the end of the last Labour Government. In the Health and Social Care Bill, we wanted to stop the unregulated approach. We wanted greater emphasis on integration of health care services. It was not just about the private sector provider fixing someone’s hip and forgetting what sort of care was available when their hip had been repaired and they had gone home. It was about ensuring greater emphasis not just on competition and what was best for patients, but on integrated and joined-up services to ensure that people were properly looked after when they left a treatment centre. We stopped the cherry-picking of services that happened under Labour, and we are proud of that.

We will take no lessons from the Labour party on NHS finances. Labour was the party that crippled the finances of so many NHS trusts with PFI deals, and it was the party that during its final year in government saw the number of managers rise six times as fast as the number of nurses.

I am proud of this Government’s record on the NHS and I am proud of our record on integration. There will be a clear choice at the general election next year: a Conservative-led Government who have delivered for patients, a Conservative-led Government who have delivered on cancer services and a cancer drugs fund, and a Conservative-led Government who will continue to ensure better care for people with long-term medical conditions. We have a proud record on the NHS and I urge my right hon. and hon. Friends to oppose the motion.

Question put.

18:59

Division 57

Ayes: 222

---

Labour: 215
Plaid Cymru: 3
Democratic Unionist Party: 2
Social Democratic & Labour Party: 1
Alliance: 1

Noes: 300

---

Conservative: 255
Liberal Democrat: 43
Independent: 1

Business without Debate

Wednesday 15th October 2014 Commons Chamber

Delegated Legislation

Wednesday 15th October 2014 Commons Chamber

[Madam Deputy Speaker (Mrs Eleanor Laing)]

With the leave of the House, we shall take motions 3 and 4 together.

Motion made, and Question put forthwith (Standing Order No. 118(6))

Copyright

That the draft Copyright and Rights in Performances (Certain Permitted Uses of Orphan Works) Regulations 2014, which were laid before this House on 7 July, be approved.

That the draft Copyright and Rights in Performances (Licensing of Orphan Works) Regulations 2014, which were laid before this House on 7 July, be approved.—(John Penrose.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6))

Constitutional Law

That the draft Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 2014, which was laid before this House on 7 July, be approved.—(John Penrose.)

Question agreed to.

Public Sector Executive Pay and Governance

Wednesday 15th October 2014 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(John Penrose.)

19:16

[Mr David Amess (Southend West) (Con)]

The Economic Secretary to the Treasury and I are both Members of Parliament and politicians, and, as such, we are under no illusion as to how politicians are regarded. We are blamed when things go wrong and, from time to time, we are praised when things go right, and we make no apology for any of that. As Members of Parliament, we are paid £67,060, and the pay for the Prime Minister is £142,500. Some people would say that that is a lot of money, and it is compared with the pay of all sorts of people, but the Minister and I are judged by the electorate every five years. If they do not like us, they can get rid of us, and if they do not like our party, we may pay the price for that too, so we are constantly judged.

What I am increasingly angered by is the way public sector governance and executive pay are not working. I am sick to death of the relationship between chief executives and the chairmen of local authorities. There seems to be, in all sectors, a very cosy relationship, and there is no rigorous scrutiny whatever. The late Baroness Thatcher once famously stated:

“There is no such thing as public money; there is only taxpayers’ money.”

I called for this debate because there is, and has been under previous Governments, a huge problem with the ease with which taxpayers’ money is spent.

There are many hard-working people in the public sector, and I praise all of them, including those in the health service, the police and education, for doing a fantastic job under difficult circumstances. Thirty-one years ago, when I became a Member of Parliament, I did not think that I would be making this speech. I now think that the management of some public services is not up to scratch, and the salaries paid to the executive directors are in many cases absolutely outrageous and unjustifiable.

I have, of course, touched on this subject in previous debates, but I am sadly not sure that any action has been taken as a result of what I said. I have been looking very closely at how the management of my local public services function and to say that I have been unsatisfied with them would be an understatement. Of course, Madam Deputy Speaker, you are a fellow Essex Member and are proud to be so, and I am well aware that some of these organisations serve your constituency as well.

I have raised the issue of my local mental health trust, the South Essex Partnership University NHS Foundation Trust—or SEPT—my local hospital and probation services on many occasions in the House. Let me repeat once again that I will not let the matter drop when it comes to any of those services until I see a satisfactory and radical change of management.

This is not just about Essex and my constituency of Southend West. It is a nationwide issue. At 48.5% of our GDP, we have one of the highest public spending levels in the world. We spend more on public services than Germany, Japan, Canada, the USA, Brazil, Russia, Australia, Switzerland, South Africa or Singapore. Whereas I wholeheartedly support our hard-working medical staff and our wonderful police officers, taxpayers’ money could be managed much more efficiently and fairly.

Many aspects of our public expenditure need to be addressed. For instance, we contribute a net amount of €9.2 billion to the European Union—when the Prime Minister renegotiates things I know that that will be at the top of his agenda. We subsidise trade unions with the stunning amount of £113 million per annum, and lose 2.6% of total hours on sickness leave in the public sector, as opposed to just 1.6% in the private sector. However, I am going to concentrate more specifically on the problems that should be addressed in public sector governance and the salaries of public sector executives. When what I have to say is reported in Hansard, some of the individuals concerned will not like it.

My major concern about executive pay is not the amount of money directly paid to the director, but rather how in many cases it seems inversely proportional to the quality of service provided. We seem to be rewarding failure, which is absolutely and totally unacceptable. I have done some numerical comparisons of my own and the figures at which I have arrived are shocking. I attempted to compare the ratio of directors’ pay to the income from activities at various hospitals. For this reason, I compared my local NHS foundation trust’s management, with which I am very unhappy, and Salford Royal NHS Foundation Trust, which appears to provide exemplary service to patients and has displayed some excellent management.

It turns out that Salford hospital spends only 0.2% of its income from activities on directors’ pay, whereas SEPT spends 0.5% and Southend hospital 0.6% of their income from activities on directors’ pay. Let me reiterate: both SEPT and Southend hospital have management boards that are not suitable for their roles and yet they spend twice and three times as much respectively on rewarding their directors. That is absolutely unacceptable.

I want to provide some examples. The departing chief executive of Southend University Hospital NHS Foundation Trust—we do not know whether the individual has gone voluntarily or what has gone on, but we have been saddled with a huge amount of debt—took a pay rise of £20,000 in the last year. When I challenged the individual on that, because I had been told that it was £25,000, they said, “David, you’ve got it completely wrong. It’s £20,000.” That is absolutely ridiculous: a £20,000 pay increase, and the deputy took a £15,000 pay increase in the past year.

It gets worse. The commercial director at Southend university hospital trust, who is paid £112,500, took a pay rise of £40,000 last year. The former deputy chief executive, currently chief executive at SEPT, is on a salary of £167,500 plus £22,500 employers’ pension contribution. I know that my hon. Friend the Member for Colchester (Sir Bob Russell) is served by the same trust.

The former chief executive at SEPT—I have talked about the trust many times in the House—received a salary of £217,500. That is crazy. What on earth was the chairman of the board thinking? It gets worse, because they also received £32,500 in employers’ pension contributions. That is absolutely outrageous. While all that was going on, the then deputy got the job of chief executive.

The former executive director of strategy and business development at SEPT, who has a close relationship with the former chief executive—I believe that individual was hired in contempt of the non-fraternity policy and am following up the issue with Monitor—does a totally unnecessary middle-management job with a salary of £147,500 and £22,500 in employers’ pension contributions. Most shockingly of all, when that individual left SEPT—coincidentally with the chief executive—in October 2013, he received an exit package of £470,000. That is absolutely outrageous, and I will not shut up about it or allow a line to be drawn under the matter simply because it happened last year. I will keep going on about it until those responsible for this outrageous abuse of taxpayers’ money are held to account.

The executive chief finance officer at SEPT received a salary of £207,500 and £22,500 in employers’ pension contributions. It is marvellous that at the Liberal party conference we were guaranteed certain waiting times for mental health appointments and all that, but the reason I get so many complaints about mental health services from my constituents is the appalling mismanagement of SEPT.

The executive director of corporate affairs at SEPT, another unnecessary middle-management person—why the trust needs someone in that role, I do not know—received a salary of £132,500 and £17,500 in employers’ pension contributions. That is more or less the same as the Prime Minister. Whatever anyone thinks of the current or previous Prime Ministers, as far as I am concerned it is the toughest job in the public sector.

It is also outrageous that the chief executive of Essex county council receives a salary of £210,000 and total remuneration of £254,769—over £100,000 more than the Prime Minister. That is absolutely ridiculous and totally unacceptable. It is a matter that I think Essex county council should address pretty quickly.

The TaxPayers Alliance’s list of the highest-paid council employees ranks Essex as the place in England with the greatest number of council employees who earn more than £100,000—there are 30 such employees in Essex. That is crazy. Those officers might turn up to the House of Commons to brief us on an issue, yet they are earning a hell of a lot more than we are. The director-general of the BBC, which is publicly owned and, frankly, has not had a great record over the past years, is paid £450,000. That is absolutely ridiculous and totally unacceptable.

I am not going to name names, but Essex MPs were lobbied today by a number of individuals, and at one of those meetings three of those officials turned up, which I think was ridiculous, as one would have been quite sufficient. When I asked about their salaries, I found that one was on £140,000 and the other two were on £111,000. It is absolutely ridiculous. I have been in contact with the Royal College of Nursing, which is calling on all NHS senior managers to demonstrate the kind of pay restraint that nursing staff have been forced to accept in recent years.

I have identified a number of unnecessary jobs in the public sector, such as the overpaid “commercial director” position at Southend hospital and the “executive director of strategy and business development” at SEPT. However, this is just the tip of the iceberg, as lots of unnecessary, middle-management positions are created across the country in the public sector, and it is the taxpayer who pays for this arrogant self-indulgence.

The TaxPayers Alliance has tried to scrutinise public expenditure, and it has identified 1,129 unnecessary jobs in the NHS alone, costing £46 million. According to its report, taking the east of England as an example, there are 52 unnecessary public relations jobs in the NHS. Why we need to have all these public relations people, I do not know. If the organisation is doing such a marvellous job, I would have thought that the media would cover it in any case, and it would be self-evident. I should think it is more like having 52 apologists. There are also four unnecessary equality jobs, six green jobs, and three other unnecessary jobs.

Among other non-jobs in my constituency, the TaxPayers Alliance lists two “communications managers” and an “estate and environment manager” at SEPT, as well as an “equality and diversity manager” and “head of communications and engagement” at Southend hospital. I am sure we would agree that equality, diversity and the environment are all very important, but they should somehow be incorporated into the daily duties of the top management instead of creating a number of full-time, very well-paid managerial positions to deal specifically with such issues. This is all happening at a time when Southend hospital’s management is facing a £8.5 million deficit. How has this been allowed to happen? Where is the governance? It is absolutely outrageous. To make matters worse, Southend hospital is now hiring an external consultant and has the nerve to ask hospital staff for ideas on how the hospital should manage its own finances. That really is taking the mickey, frankly.

Governance in the public sector should be addressed. The general guidance provided to the public sector services—for instance, NHS trusts—is that boards of directors have responsibility for the quality of care and for the ongoing financial stability of their organisations. In NHS foundation trusts such as Southend hospital’s South Essex Partnership University NHS Foundation Trust—or SEPT—boards of directors are held to account by the council of governors, which is elected by the foundation trust’s membership of various stakeholders, including the local public, patients, carers and staff. The council of governors is led by the chairman. Whereas that form of governance appears reasonable in theory, in practice we encounter many problems on various levels in terms of whether the dog is wagging the tail or the other way round.

It is simply unbelievable that the chairman of SEPT remains in position—she has been there since 2008— having allowed a number of scandalous developments, which I have articulated this evening, to take place. Where was the governance there? It was under her leadership that the former chief executive appointed his partner to a very highly paid middle-management job, and under her leadership that the latter employee left with an exit package of nearly half a million pounds. If Monitor is worth anything, I want it to do something about it.

How it is possible that the chief executive of the former Essex probation service, currently Essex community rehabilitation company, is still in her position? I remember that 10 years ago the probation service was judged to be failing. She hung on to her job, and now she and the chap who had been chairman for two and a half years seem to be setting up another organisation, hoping to be one of the successful bidders.

I have serious concerns regarding chairmen’s independence from the chief executives, as illustrated by Southend hospital. The chair of the foundation trust is supposed to overlook the work of executive directors. In the case that I am concerned about, the individual seems impotent and unaware of what is happening at his hospital. Indeed, I was there with an Essex colleague who was meeting the hospital chairman for the first time and did not know who he was, even though he had been chairman for three years.

Problems and irregularities at the top management level are adversely affecting other members of staff. Morale was affected as a result of the £20,000 pay rise. Guidance was given that people paid more than £100,000 should receive no pay rise at all. At the same time, staff morale seems to be at an all-time low, as the management fails to retain and motivate the hard-working medical and non-medical staff.

It recently hit the headlines that the hospital faces a £8.5 million deficit, and it is justifiable to believe that a bulk of that sum is due to the fact that the hospital’s management fails to attract and hire permanent staff and instead relies heavily on agency staff. It is estimated that the hospital spent as much as £6.9 million in just five months on agency staff. There are a huge number of vacancies at the hospital. The situation is absolutely ridiculous. What is wrong with the recruitment?

The internal financial crisis at Southend hospital is serious, but it could have been avoided. Clear guidance needs to be provided to the public sector management to boost its knowledge of skilful management as well as its ethical approach to excessive pay.

The use of external consultants should be looked at very carefully. It is outrageous that Southend hospital has just hired an external consultant to look at its financial problems, despite already having a highly paid full-time director of finance. The services of the external consultant will come with a cost of hundreds of thousands of pounds to the taxpayer. If Southend hospital needs to resort to external financial advice, what is the point of having a full-time financial director?

I apologise to my hon. Friend the Economic Secretary for bombarding her with all these facts and figures, but she will realise that I am somewhat frustrated. This is not the first time that I have raised the matter in the House. I will end with what I said at the start: my hon. Friend and I are both politicians and we are blamed for most things, but I think we are being badly let down with regard to the matters under discussion. I know that I can rely on her to do her best to address those problems.

19:37

[The Economic Secretary to the Treasury (Andrea Leadsom)]

I sincerely congratulate my hon. Friend the Member for Southend West (Mr Amess) on securing this debate. He is clearly incredibly passionate about the subject and I agree with the quote he gave from Lady Thatcher at the start. In fact, I would add:

“The larger the slice taken by government, the smaller the cake available for everyone.”

My hon. Friend is right to highlight the important point that at a time of austerity the Government need to be committed to taking as small a slice as we can for ourselves.

As a Government we do, of course, greatly value the very important work that senior managers and executives perform in the public sector. I am sure my hon. Friend will agree that the rewards we give them should reflect the work they do, not least because we need talented individuals in those jobs. However, I am very sympathetic to his cause. The examples that he has given of high pay will lead many, including me, to question the fairness of so many in just one county earning as much or more than our own Prime Minister, who I am sure nobody in this House or, indeed, the country would argue does not do an extremely demanding job.

Of course, we live in difficult economic times. There are few households in the country that have not been affected by the financial crisis. Government absolutely cannot be profligate when our citizens are having to make difficult spending decisions themselves.

My hon. Friend has raised a number of important points, including pay in the public sector and its link to performance, especially in the NHS, and the excessive use of middle-management jobs and consultants. I want to address each of those, but before I do so, I want to say that I am aware that my hon. Friend has raised with Monitor, the regulator for health services in England, a number of issues relating to the South Essex Partnership University NHS Foundation Trust. I assure him that I will make sure that what he has said today is passed on to the Under-Secretary of State for Health, my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) to review. This Government take allegations of abuse of the system extremely seriously, so we will make sure that these matters are examined and that we get an answer.

Public sector pay restraint is one of the many difficult choices we had to make to help to put the UK’s public finances back on track. Of course, we expect senior public sector managers and executives to lead by example. For the senior civil service, pay is set by the Government within nationally determined pay scales following recommendations from the independent Review Body on Senior Salaries. Like all public sector workers, senior civil servants have therefore been subject to pay restraint. Their pay was frozen in 2010-11, 2011-12 and 2012-13, and it was subject to increases of just 1% in 2013-14 and 2014-15. The number of senior civil service bonuses has also been reduced by two thirds, cutting the bill by £15 million.

For all Departments and public bodies where appointments are made by Ministers, any salary over the Prime Minister’s salary of £142,500 and any bonus arrangement over £17,500 must be approved by the Chief Secretary to the Treasury. Those measures have reduced the number of individuals earning more than £150,000 from 372 in 2010 to 243 now, which is a 35% reduction. That has been accompanied by greater transparency, as the Government have increased public scrutiny of senior salaries. For executive pay in the wider public sector, the Review Body on Senior Salaries makes recommendations on the pay of judges, very senior managers in the NHS, senior members of the armed forces, and police and crime commissioners.

At this point, I will say a little more about NHS organisations. The position depends on whether such organisations are NHS or foundation trusts. NHS trusts are subject to supervision and performance management by the NHS Trust Development Authority, whose responsibilities include appointing chairmen and non-executive directors, agreeing their remuneration and influencing decisions on executive pay. Very senior managers in the Department of Health arm’s length bodies received no pay increase in 2014-15, and their pay will be frozen next year. NHS foundation trusts have greater autonomy over their affairs. They can make their own board appointments and determine their own pay, but they are expected to take full account of Treasury guidance, as well as the state of the trust and market pay for the role.

As part of its regulatory function, Monitor regularly assesses trusts’ governance and financial risk through its risk assessment framework. Where a foundation trust provides poor-quality care or fails to meet national waiting time requirements, it is likely to open an investigation into the trust. Specifically on pay, Monitor does not set executive or non-executive pay at foundation trusts—that is the role of the board remuneration committee—but it does have powers. For example, if it considers board remuneration to be excessive, the governors can remove the chair and/or the non-executive directors responsible. I understand that, to date, Monitor has yet to take serious action against any individual trust. I assure my hon. Friend that I will urge the health team to investigate exactly why that is, and that I will get an answer on that point.

Let me turn to the excessive use of middle-management jobs. Public service is an honourable activity—whether someone does it as a volunteer or a paid private sector employee, theirs is a high calling—but public service must at all times emphasise the service, not the bureaucracy, which means emphasising front-line staff, not the officials and managers. The Government have introduced significant reforms regarding the number of senior staff employed across the public sector and their pay. Since 2010, overall numbers of senior civil servants have been reduced by 13%, and the senior civil service pay bill has been reduced by 18.5%. Specifically, the NHS now has more than 7,400 fewer managers and more than 12,500 more clinicians than in 2010. All Members will be glad about that. The savings from administration costs arising from the reforms to the NHS from 2010-11 to 2014-15 are expected to free up at least £6.4 billion for patient care.

We have slashed the amount of money that is spent on central Government consultants from £1.2 billion in 2009-10 to £0.3 billion in 2013-14. At the same time, we have introduced a consultancy controls process, which ensures that any spend on a central Government consultant that exceeds £20,000 and lasts for longer than nine months is approved by the Minister for the Cabinet Office and the Chief Secretary to the Treasury. The amount of money that is spent on consultants in the NHS has also decreased during this Parliament from £636.9 million in 2009-10 to £584.7 million in 2013-14.

We are not complacent. I hope that I have illustrated to Members that we have taken enormous steps to improve the fiscal restraint among senior bodies. We have done what we can. The Government have in place effective controls over executive pay and governance. I hope that I have assured Members that we do not spend taxpayers’ money in an excessive or frivolous manner. Through our policies, we are ensuring that we protect taxpayers’ money, because we will never go back to the bad old days when money was no object.

Question put and agreed to.

19:46

House adjourned.