House of Commons

Wednesday 25th February 2015 Commons Chamber

Wednesday 25 February 2015

The House met at half-past Eleven o’clock

Prayers

Wednesday 25th February 2015 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 25th February 2015 Commons Chamber

The Secretary of State was asked—

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

1. What recent discussions he has had with the First Minister on the supply of energy in Scotland; and if he will make a statement.

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

I have regular discussions with colleagues on issues affecting the energy sector in Scotland, including with the Scottish Government on energy supply issues.

[Miss McIntosh]

People in north Yorkshire have noted with great interest that the Scottish Government have banned fracking for the moment. Will my right hon. Friend update the House on progress towards a debate on energy supply not only for Scotland, but for the whole of the United Kingdom?

[Mr Carmichael]

My hon. Friend’s key words were “for the moment”. The Scottish Government have come forward with a moratorium, and I am sure that we shall all watch the debate with keen interest. I remind her and the House that we removed the Scottish provisions from the Infrastructure Bill, and that the power to license onshore exploration for oil and gas will be devolved under the Scotland Act that will come after the next election.

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

When the Secretary of State meets the First Minister, will he get information—this is not in the public arena—on how much compensation is being paid to wind farms in Scotland from his and my electricity bills as a consequence of the fact that they are, in my view, inefficient?

[Mr Carmichael]

I am sure that if the hon. Gentleman seeks that information from my right hon. Friend the Secretary of State for Energy and Climate Change, it will be forthcoming.

[Mr Charles Kennedy (Ross, Skye and Lochaber) (LD)]

I am sure that the Secretary of State, as a highlands and islands MP, will share the sense of anger and injustice at SSE’s 2p surcharge on electricity costs, given that it made a profit of £1.5 billion last year. Will he do everything possible at the UK level to ameliorate this state of affairs, not least by endorsing the excellent campaign by The Press and Journal?

[Mr Carmichael]

I rarely have any difficulty in endorsing a campaign run by The Press and Journal. The question of the price being paid by electricity consumers across the highlands and islands is complex, but I know that we all benefit from being part of the wider UK energy market.

[Angus Robertson (Moray) (SNP)]

Scottish generators, including Longannet, provide 12% of the electricity going into the British network, but pay 35% of the transmission charges. The Secretary of State has been in government for five years. What has he done to end that discrimination?

[Mr Carmichael]

The hon. Gentleman is well aware that transmission charging is the responsibility of Ofgem, the energy market regulator. He will also be aware of the work that Ofgem has been doing with other parts of the energy industry in relation to Project TransmiT.

[Angus Robertson]

Last week, the First Minister wrote to the Prime Minister about this very subject, asking

“the UK Government to initiate a dedicated capacity assessment for Scotland, informed by stakeholder views, and take steps to transfer to the Scottish Parliament the authority to set our own national reliability standard for electricity.”

Having failed to end the discriminatory transmission charges, will the UK Government agree to those reasonable suggestions?

[Mr Carmichael]

The hon. Gentleman and the First Minister must both be aware that National Grid has a constant process of reviewing energy supply. The system operators in Scotland have stress-tested 140 scenarios in which Longannet and other Scottish fossil fuel generators were closed, and National Grid has the tools to keep the lights on in every one of those scenarios, including by being resilient against one-in-600-year risks. Those are the facts, and they are preferable to the sort of scaremongering that we hear from the nationalists.

[Mr Speaker]

We are now better informed, I am sure.

[Mr Philip Hollobone (Kettering) (Con)]

But is the Secretary of State satisfied that the capacity of the electricity interconnector between Scotland and England is sufficient and will not act as a brake on competition in the supply and generating markets?

[Mr Carmichael]

That is exactly the kind of work that is within the ambit of National Grid and Ofgem.

[Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)]

I have raised many times the devastation caused by abandoned coal mines in my constituency. The Secretary of State will be aware of the proposal for an exemption from carbon price support, which would greatly help their restoration and create 1,000 jobs. Can we expect good news on this in the Budget, and does he agree that the Scottish Government should step up to the plate with some of their £500 million surplus to help the restoration?

[Mr Carmichael]

First, I am happy to pay tribute to the hon. Lady, who has been a doughty fighter for her constituents’ interests in this regard. As for what will be in the Budget, I am afraid that, like the rest of us, she will have to wait and see, although I can assure her that my Department remains engaged on this issue. We continue to work closely with the Scottish Government on their joint taskforce, which will next meet in March. My right hon. Friend the Under-Secretary of State for Scotland will represent the UK Government on that occasion.

[Guy Opperman (Hexham) (Con)]

2. What assessment he has made of the potential effect on cross-border trade between the north of England and the border region of Scotland of the proposals of the Smith commission.

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

As a result of the clear no vote in the referendum, there remain no barriers to trade across the whole of the UK. Nothing in the draft clauses changes that.

[Guy Opperman]

Does the Secretary of State agree that all political parties need to come together to ensure that airports such as Newcastle in the north-east have air passenger duty support so that they are not unfairly disadvantaged by the proposals of the Smith commission?

[Mr Carmichael]

I assure my hon. Friend that the basic principle of the Smith commission proposals is that there should be no detriment to any part of the UK—that was very much what the people of Scotland voted for on 18 September. Of course, it remains to be seen what will happen to levels of APD, once it is devolved, but he should take comfort from the fact that the principle is already well established that variable rates within the UK are possible, and he would be well advised to speak to the Chancellor of the Exchequer in that regard.

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

Had the Smith commission been faithful to the famous vow and had the Better Together parties not watered down the tepid Smith commission, does the Secretary of State think that the benefits to the north of England, as well as to Scotland, would have been greater?

[Mr Carmichael]

I know that it hurts the hon. Gentleman and causes him genuine pain, but the truth of the matter—he will have to accept this sooner or later, so he might as well get on and accept it now—is that the Smith commission has delivered on the vow. That was why his party signed up to it, even if, having done so, the Scottish National party could not run away from its commitments fast enough.

[Michael Moore (Berwickshire, Roxburgh and Selkirk) (LD)]

The single market of the United Kingdom is vital to the fish processors and agricultural producers of Berwickshire, the coat hanger manufacturers of Jedburgh and the world-class knitwear manufacturers of Hawick, among others, so does my right hon. Friend agree that one of the major achievements of the Smith commission was to bring more powers to Scotland, but preserve that single market?

[Mr Carmichael]

Yes, absolutely. I particularly enjoyed joining my right hon. Friend recently in his constituency and learning from him about not only the challenges but the opportunities facing the knitwear industry. I know that that industry is of great importance to the economy in his area, and he has been a remarkable champion of it over the years.

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

There is obvious eagerness within local authorities in the south of Scotland to have closer trade links with their counterparts in the north of England, as evidence from the work of the Scottish Affairs Committee suggests. Does the Secretary of State intend to engage with the Scottish Government to ensure that the borderland areas are able to exploit their full potential?

[Mr Carmichael]

Indeed. I am well aware of the work of the borderlands initiative and am more than happy to engage with it in any way it considers would be helpful. That has been very much the approach that I have taken in dealing with Scotland’s island communities—the Western Isles, Orkney and Shetland—on their “Our Islands Our Future” campaign. I suggest that this Government’s willingness to hand power back to communities in Scotland bears very favourable contrast with the SNP Government in Edinburgh, who seem determined to centralise everything.

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

3. What discussions he has had with the Scottish Government on practical steps to encourage employers to pay the living wage.

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

I have regular discussions with the Scottish Government on a range of employment issues. The UK Government support businesses that choose to pay the living wage, where that is affordable and does not cost jobs.

[Jim Sheridan]

I thank the Minister for that response, which seems somewhat aspirational rather than ambitious. He will be aware that the Scottish Government at Holyrood refused to support the call for a living wage that was put forward by Labour in Scotland. Will he follow the example set by my local Labour-controlled Renfrewshire council, which has not only introduced a living wage, but used the procurement process to encourage its suppliers to pay the living wage?

[David Mundell]

There are excellent examples of local authorities taking forward initiatives with the living wage, and South Lanarkshire council is one. Perhaps the hon. Gentleman heard the speech that my colleague, Ruth Davidson, made to the Scottish Conservative conference on Friday in which she called for help and support for businesses that promoted the living wage. I hope Scottish Labour and the Scottish Government will support her in that regard.

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

A Labour Government will ban the use of exploitative zero-hours contracts, which leave people not only not making the living wage, but unable to make a living on the minimum wage. Why will this Government not do the same?

[David Mundell]

The hon. Lady forgets that there was actually a Labour Government up until five years ago who took no action whatever on zero-hours contracts. This Government have banned exclusivity in zero-hours contracts, which is what leads to exploitation.

[Margaret Curran (Glasgow East) (Lab)]

This Government are constantly making claims about new jobs that have been created in Scotland since the last election. Of those new jobs, what proportion have been in low-paying industries?

[David Mundell]

Since this Government came to power, 107 jobs a day have been created in Scotland. I am afraid that the hon. Lady has had a memory lapse, because she cannot remember the position on employment when this Government came to power and she cannot accept the good news of the creation of new jobs.

[Margaret Curran]

What I do remember is that the Labour Government implemented the minimum wage in the face of opposition from the Conservative party. According to new research from the House of Commons Library, 82% of these new jobs are in the low-paying sectors. That news comes days after the TUC revealed that one in five workers in Scotland is paid below the minimum wage. Just this morning, the Office for National Statistics revealed that 28% of workers are on zero-hours contracts. This Government stand up for the wrong people: they help out their friends who have been avoiding their taxes, yet they do not help those who work hard and play by the rules, but do not even get a decent wage in return. Will the Minister take any action in what remains of the last days of this Government to help ordinary working people to get a decent wage, or is the only hope is that in 71 days’ time, we get rid of this out of touch Government and get a Labour Government who will put working people first?

[David Mundell]

The hon. Lady could start by endorsing Ruth Davidson’s proposal to incentivise the paying of the minimum wage, and that is actually a fact, not rhetoric. As I have told the hon. Lady on numerous occasions, if she has evidence of people not being paid the minimum wage, she should bring that forward. Yesterday, the Government did something the Labour Government never did: we named and shamed 70 companies, including some in Scotland, that do not pay the minimum wage. What she should be celebrating is the fact that this Government have delivered 107 jobs a day in Scotland, 1,645 of which are in her constituency, as can be seen from the drop in jobseeker’s allowance claimants.

[Dame Anne McGuire (Stirling) (Lab)]

4. What recent discussions he has had with Ministers of the Scottish Government on property taxes in Scotland.

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

As part of the Scotland Act 2012 implementation process, UK Government Ministers have been in contact with Scottish Government Ministers to discuss devolved taxes, including property taxes, since the beginning of this year.

[Dame Anne McGuire]

May I encourage the Secretary of State to be a little more forthcoming and share with the House his view on whether Revenue Scotland is ready for the transfer of property taxes in April?

[Mr Carmichael]

The right hon. Lady will understand my hesitation when I say that we have to take the Scottish Government at their word. They assure us that they are ready and we have done everything within our power to assist them. If it should transpire that there are further difficulties that have not yet been foreseen or disclosed, we will do everything that we can to ensure that the system operates.

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

Does the Secretary of State see the SNP Government’s U-turn on the land and buildings transaction tax as a cause for concern or the sincerest form of flattery—#TartanTories?

[Mr Carmichael]

I think that is quite remarkable. The whole point of devolution is to allow the Scottish Government to do things differently. We devolved stamp duty land tax under the 2012 Act. They came forward with something that was different until this Government introduced a new system, when before we knew it they had changed to follow what was happening in the rest of the United Kingdom.

[Mr Speaker]

Gordon Henderson—not here.

[Sheila Gilmore (Edinburgh East) (Lab)]

6. For what proportion of participants in the Work programme in Scotland job outcome payments have been made to providers of that programme.

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

Work programme participants are some of the hardest to help and can experience multiple barriers to finding work. There are two providers in Scotland: Ingeus has supported 21.2% of all claimants into a job outcome; and Working Links has supported 20.4% of claimants into a job outcome.

[Sheila Gilmore]

The Work programme has performed worse in Scotland than in any English region. In the meantime, successful local projects such as the Engine Shed in my constituency have had to close. Does the Minister agree that powers over this should be devolved as quickly as possible—and not just to the Scottish Parliament, but to local authorities?

[David Mundell]

I certainly agree that the Engine Shed was a great project. I have made it clear to the Deputy First Minister that if proposals are brought forward after the election for the devolution of the Work programme, separate from other items to be devolved, I would have an open mind about that.

[Mary Macleod (Brentford and Isleworth) (Con)]

Thanks to this Government, those helped into employment though the Work programme do not have to pay income tax on the first £10,000 they earn. Does the Minister agree that that represents progress towards economic growth in Scotland and opportunities for its young people?

[David Mundell]

Absolutely. Some 32,620 people in Scotland have found work through the Work programme, which means they can bring home a wage, support their family and play a part in their wider community.

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

By any measure the Work programme has been a failure. It has wasted public money and let down the people depending on it. When will the Government listen to not only the Smith commission, but the dozens of civil society organisations in Scotland that have called for employment support to be devolved so that we can develop an integrated system in Scotland that actually works?

[David Mundell]

I do not think that the 32,620 people who have found work through the Work programme would agree with the hon. Lady’s assessment. It is now time for her party to come forward with its proposals for an alternative to the Work programme, rather than just criticising the Government and calling for more powers. This Government have given a commitment to effect a transition to such a programme, but first we need to know what it will be.

[Jim McGovern (Dundee West) (Lab)]

11. The Work programme is obviously failing in my constituency and in the city of Dundee as a whole, where only one in seven participants actually get a job. What will the Minister do to address that problem?

[David Mundell]

I fully acknowledge that the hon. Gentleman has been a fervent campaigner on this issue—and, indeed, on employment—in his constituency, but I am sure that he welcomes the fact that over the past five years, under this Government, the number of jobseeker’s allowance claimants in his constituency has gone down by 842—some 27%.

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

9. Unemployment in the Motherwell, Wishaw and Bellshill area rose again last month, with more than 500 young people now unemployed. Why has the Tory Work programme failed them?

[David Mundell]

I absolutely dispute the claim that the Work programme has failed them. The Work programme looks to help the most vulnerable people into work, and people have moved into work over the past five years in the hon. Gentleman’s constituency, where the JSA claimant count has come down by 1,403—some 39%. I am sure that even he welcomes that.

[Mr Christopher Chope (Christchurch) (Con)]

7. What public consultation his Department is carrying out in Scotland on the draft clauses published following the recommendations of the Smith commission.

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

The Scotland Office is holding a series of events across Scotland to enable stakeholders to provide feedback on the draft clauses and how the new powers might be used. I can announce to the House today that the Government will now begin a public information campaign to enable people in Scotland to learn more about the devolution settlement and how it is changing. [Interruption.] This campaign will use social media, local media and an information booklet for every house in Scotland. [Interruption.]

[Mr Speaker]

Order. There is a lot of noise in the Chamber. The House and perhaps the nation should hear Mr Christopher Chope.

[Mr Chope]

The nation would be interested to know that draft clause 1 has been widely condemned as legally vacuous. What is the Secretary of State going to do to ensure that the people of Scotland realise that it is legally vacuous and that if they support it, they will be supporting a meaningless constitutional proposal?

[Mr Carmichael]

I absolutely refute that suggestion and the hon. Gentleman’s characterisation of that analysis as being widespread.

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

13. Has the Secretary of State specifically discussed the question of varying tax bands under the Smith agreement, which seems a marvellous opportunity for Scotland to decide how it treats people with differing levels of income? It might be different from the way they are treated in the rest of the UK.

[Mr Carmichael]

The hon. Gentleman is right and he takes the debate in a direction in which it has to go. Surely the time has come when we should no longer be discussing where powers lie, but discussing what can be done with the substantial powers that the third most powerful devolved legislature anywhere in the world will have as a result of these proposals.

[Several hon. Members]

rose—

[Mr Speaker]

What a delicious choice. I call Mr Alan Reid.

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

Thank you, Mr Speaker. The out of touch House of Lords Constitution Committee has said that not enough thought has been given to the impact of giving 16 and 17-year-olds the vote. I hope the Government will reject this recommendation and give 16 and 17-year-olds the right to have their say on who represents them in the Scottish Parliament.

[Mr Carmichael]

I confess that I always hold their lordships’ views in very high regard, but they would not normally be the first port of call that I would make when I was looking for advice either on democratic elections or on young people. The order will be before their lordships’ House tomorrow night. I am confident that it will be passed, as it was passed in this House, without Division.

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

Given the powers that the Scottish Government already have, has the Secretary of State ever received an apology from them for their failure to spend £34 million on disabled children and their families and instead using it for the gimmick of keeping council tax static?

[Mr Carmichael]

There are many, many things for which the Scottish Government should apologise and I suspect that in the event that these apologies ever start coming, the right hon. Gentleman and I will not be at the top of the list to receive them. He is right, though, to point out that the freeze on council tax has caused real difficulties for many local authorities in Scotland, which will be outraged to see the size of the Scottish Government’s underspend this year.

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

8. What discussions he has had with Scottish Government Ministers on the co-ordination of programmes to dual the A1.

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

The provision of road transport in Scotland is a devolved matter. Department for Transport Ministers did, however, offer to work with Transport Scotland on a joint feasibility study on dualling the A1. The Scottish Government chose not to take up that offer.

[Sir Alan Beith]

Now that this coalition Government have committed £290 million to dualling the A1 on the English side of the border, should not the SNP Government in Scotland bring forward plans to dual remaining single carriageway sections on the Scottish side of the border?

[David Mundell]

I agree with my right hon. Friend. He may be aware that my colleague John Lamont MSP has been making exactly that call.

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

As we await the dualling of the A1, has the Minister heard of the success of the average speed cameras on the A9? Accidents have been cut by 97%, speeding is down by 90% and the road experience has been totally transformed. Will he now get his right hon. Friend the Chief Secretary to the Treasury to abandon his reckless and irresponsible campaign to take those cameras down and put my constituents at risk once again?

[Mr Speaker]

Order. I think I was very generous. The hon. Gentleman started banging on about the A9, rather than the A1, but we will let him off on this occasion.

[David Mundell]

It is worse than that, Mr Speaker. We constantly hear complaints from the hon. Gentleman about this place intruding into the affairs of the Scottish Parliament, and yet he raises an issue that is solely the responsibility of the Scottish Parliament.

[Mr Andrew Turner (Isle of Wight) (Con)]

10. What discussions he has had with his ministerial colleagues on the potential implications for Scotland of English votes for English laws.

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

There is clear consensus that change is needed to address the anomalies in our constitutional arrangements, but no consensus on what form this change should take. The solution must be fair to all parts of the United Kingdom and strengthen the links between our family of nations so recently reaffirmed in the referendum in Scotland.

[Mr Turner]

I thank the Minister for that reply. Does he agree that most Scots, unlike Labour Members, recognise the unfairness of their MPs at Westminster intervening to affect English schools, English health and English councils now that those matters have been devolved from England to Scotland?

[Mr Carmichael]

I think I have already acknowledged that there are substantial anomalies within our constitutional arrangements. I caution the hon. Gentleman, however, about being too enthusiastic about replacing these anomalies with ones that could be even bigger.

The Prime Minister was asked—

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

Q1. If he will list his official engagements for Wednesday 25 February.

[The Prime Minister (Mr David Cameron)]

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

[John Woodcock]

British support in Ukraine is welcome, but combined efforts against President Putin’s naked aggression have been woefully lacking. When the Prime Minister leaves office in 70 days, is he content for his place in history to be the Prime Minister whose weakness left Britain mired in years of conflict?

[The Prime Minister]

At the end of this Parliament, I believe that Government Members can be proud of the fact that we closed the massive black hole in our defence budget left by Labour. We can be proud of the fact that we see Voyager airplanes flying out of Brize Norton. We can be proud of the fact that we are building two aircraft carriers. We can be proud of the fact that we have got the Type 45 destroyers. We can be proud of the fact that submarines are rolling out of the hon. Gentleman’s constituency and into the seas of the Atlantic to keep our country safe.

[Sir William Cash (Stone) (Con)]

Last year my right hon. Friend strongly supported my Bill, which became the International Development (Gender Equality) Act 2014, to protect women and girls from female genital mutilation and similar abominations. My amendment on Report to the Serious Crime Bill to protect young girls and women at risk from FGM in this country gained 272 votes. There were many deliberate abstentions, but it was defeated by a three-line coalition Whip. Following a letter from the Minister before the Report stage, several matters remained unresolved. I tried to intervene but I was not allowed to do so. Will my right hon. Friend write to me to explain how these young girls and women will be fully protected under the guidelines under the Act and otherwise?

[The Prime Minister]

I commend my hon. Friend for his Bill and for the campaign that he has waged in favour of that Bill and of equality in how we deliver aid and in this vital area. On the specific issue of the piece of legislation that he is referring to, my understanding is that we believe that the law as drafted covers the point that he is concerned about. I will of course write to him. But let me be absolutely clear: I think the work that we are doing, supported right across the House, in terms of combating FGM and forced marriage, and making sure that there are real rights for women in our country and across the world, is of vital importance.

[Edward Miliband (Doncaster North) (Lab)]

The reputation of every Member of this House is damaged when we see revelations such as those that we have in the past couple of days. Can I take it from the Government’s amendment today on second jobs that the Prime Minister is proposing no change to the current system?

[The Prime Minister]

Let me start by agreeing very much with the right hon. Gentleman that the allegations made against two very senior Members of this House of Commons are extremely serious; they need to be properly investigated. I believe that both Members have done the right thing by referring themselves to the House of Commons standards commissioner, and in having the Whip withdrawn and, indeed, retiring from this House. I think that is vitally important.

I certainly do not rule out further changes, but the most important thing we can do is to make sure we apply the rules: paid lobbying—banned; non-declaration of interests—banned; and making sure wrongdoing is investigated and punished. We are not making no change; we have just passed a lobbying Act, and we have also passed a recall Act so that people can sack their MP.

[Edward Miliband]

The Prime Minister does not rule out further change, and he has a chance to vote for change tonight. This is what he wrote in 2009:

“Being a Member of Parliament”—[Interruption.]

[Mr Speaker]

Order. The questions will be heard, and the answers will be heard. It is a very simple point, which I hope everyone can grasp.

[Edward Miliband]

This is what he wrote in 2009:

“Being a Member of Parliament must be a full-time commitment…The public deserves nothing less.”

He went on to say:

“Double-jobbing MPs won’t get a look-in when I’m in charge”.

What has changed?

[The Prime Minister]

The right hon. Gentleman says we should look at the specifics. The difficulty with his specific proposal is that it would allow, for instance, someone to be a paid trade union official, but it would not allow someone to run a family business or a family shop. Like many of his proposals, it is not thought through; it is whipped up very quickly. If he thought it was such a good idea, why did he not put it in place four years ago?

[Edward Miliband]

Let us agree now that we will rule out anyone being a paid trade union official, a paid director or a paid consultant. Say yes, and we can restore the reputation of this House. [Interruption.]

[The Prime Minister]

I will answer very clearly. [Interruption.]

[Mr Speaker]

Order. Mr Efford, calm yourself. I fear you are about to explode, man. Get a grip. We must hear the answer from the Prime Minister.

[The Prime Minister]

That is not the only problem with the right hon. Gentleman’s proposal. Let me take another problem with the proposal—his cap on earnings. Let me take a specific example—[Interruption.] I have got as long as it takes.

Let me take a very specific example. The hon. Member for Stoke-on-Trent Central (Tristram Hunt), who is Labour’s education spokesman, would have last year earned over a 10% cap from being a college lecturer. I happen to think that is a very good thing: he brings to this House some outside experience, and he tops up that experience. I have to say it is a pity it does not show up in his education policy, but none the less, it is a good thing.

Fundamentally, there is a disagreement between the right hon. Gentleman and me. I think Parliament is stronger when we have people with different experiences coming to our House, but we must impose strict rules and punish people when they get it wrong.

[Edward Miliband]

We can definitely make progress. Let us agree to the principle of a cap, and we can consult on the level of the cap. The motion today is very specific about being a paid director or a paid consultant, and I have said from the Dispatch Box that we will also ban people who are a paid trade union official, the point the Prime Minister made to me. I repeat the offer to him: let us get it done, let us agree this to restore the reputation of the House—yes or no?

[The Prime Minister]

The problem is that the proposal in front of us allows for paid trade union officials, but does not allow for someone who runs a family business. I have to say that the problem with the right hon. Gentleman’s proposal is not just the nature of the proposal; there is also a problem with the timing of his proposal. He first put it forward two years ago. In the previous year—I have done some work—the person with the highest outside earnings on the Labour side was David Miliband. The right hon. Gentleman has not thought it through, he has not worked it out, it is totally inconsistent: it is like almost every other policy he comes up with.

[Edward Miliband]

So the Prime Minister is worried about the precise text of the motion. I am very happy by whatever means we can, perhaps by a manuscript amendment, to insert paid trade union officials. He and all his right hon. and hon. Friends will have the chance in the Lobbies tonight—this is a very big test—to vote for two jobs or for one. I will be voting for one job. What will he be voting for?

[The Prime Minister]

Where the Leader of the Opposition is absolutely right—he put this in his letter to me this week—is that

“the British people need to know that when they vote they are electing someone who will…not be swayed by what they may owe to the interests of others.”

The biggest problem we have on that front is that the trade union movement owns the Labour party lock, stock and barrel. So I make an offer to him: if there is no more support from trade unions for the Labour party, then we have got a deal.

[Edward Miliband]

If the Prime Minister wants to talk about party funding, let us talk about a party bought and sold by the hedge funds and a man who appointed a self-declared tax avoider as his treasurer—that is the Conservative party. He has one more chance. He talked big in opposition about change. He will be judged on the way he votes tonight. He should vote for one job, not two. Last chance: yes or no?

[The Prime Minister]

The problem with Members of Parliament being swayed by outside interests is best seen in this one example. This is the first Parliament in the history of Britain to pass an Act on lobbying. The Labour party has been lobbied by the trade unions to get rid of that Act. What have they agreed? They have agreed to scrap the lobbying Act. That is what they have done. They are owned lock, stock and block vote by the trade unions.

[Mike Crockart (Edinburgh West) (LD)]

rose—

[Hon. Members]

More! More!

[Mike Crockart]

Give me a chance.

[Hon. Members]

More!

[Mr Speaker]

Mike Crockart.

[Mike Crockart]

Thank you, Mr Speaker, and I thank hon. Members for their welcome.

I have harangued the Prime Minister on many occasions to do more on nuisance calls, so it is right today that I thank the Government for the announcement that was made on the subject by the Department for Culture, Media and Sport this morning. Of course, vulnerable consumers will still be targeted today and tomorrow by vicious scammers, who will pay no heed to the announcement. I therefore ask him politely to do all he can to help me set up a national call blocking scheme to protect vulnerable consumers in his constituency and in mine.

[The Prime Minister]

I will certainly look at the specific suggestion that the hon. Gentleman makes. I can announce today that we are changing the law to make it easier to hit companies with fines of up to £500,000 if they pursue nuisance calls. That will be welcomed up and down the country. I am sure that parties from all parts of the House will be doing a little light telephone canvassing and will be talking to people, but such things should never be done by nagging people or being a nuisance, which is what can happen. Proper punishments are being brought in today.

[Naomi Long (Belfast East) (Alliance)]

Q2. It costs 40% more to train a teacher in Northern Ireland than in England. Does the Prime Minister share my concern that, despite commitments to tackle the costs of division in the Stormont House agreement, other parties have blocked Alliance attempts to desegregate teacher training in a way that would save money? Does that suggest to him, as it does to me, that their commitments to a shared future are not worth the paper they are written on?

[The Prime Minister]

I say to the hon. Lady—I think we are in absolute agreement on this—that we have to break down the barriers between communities. That is what the shared future agenda is all about. The Stormont House agreement should make that move faster. We are beginning to see shared campuses for education institutions in Northern Ireland, but we now need to see the sorts of things that she is talking about, such as shared approaches on teacher training, that can reduce costs and deliver a better service. That is what the agreement should be about.

[Andrew Stephenson (Pendle) (Con)]

Q3. Last Friday, I held my fourth Pendle jobs and apprenticeships fair, which was attended by more than 30 local companies and more than 700 jobseekers. Will the Prime Minister congratulate all those who have got jobs or started apprenticeships in Pendle since 2010? Unemployment in Pendle has fallen by 36% in just the last year, showing that our long-term economic plan is working.

[The Prime Minister]

I pay tribute to my hon. Friend, who works tirelessly to support his constituents. I think these job fairs that many Members of Parliament have taken part in and run can do a huge amount in making sure that local people can see the opportunities that are being opened up by a successful and growing economy. In Pendle, the claimant count has fallen by 54% since the election, with the long-term youth claimant count falling by 50% in the last year alone. That shows that, as the OECD itself said yesterday, Britain has a long-term economic plan, it is working, and we should stick to it.

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

As we have heard, the Prime Minister and the Leader of the Opposition agree that the reputation of politics needs improving, but would the Prime Minister agree that the latest format put forward by the broadcasters for TV election debates will not contribute to that? The broadcasters need to realise that these debates are for the benefit of voters as well as themselves, and that the unfair, irrational and legally implausible exclusion of the people of Northern Ireland from those debates—particularly the DUP, which has more votes and more seats than some parties that are included—cannot be justified. So will the Prime Minister agree to go back to the broadcasters and demand a rethink on the basis of justice and fairness, so that they come forward with proposals that he and the rest of us can agree to?

[The Prime Minister]

I have a lot of sympathy with what the right hon. Gentleman says. My argument was that you could not include one minor party without another—obviously I was referring specifically to the Greens on that occasion, but now, with it having been decided to include Plaid Cymru and the Scottish National party, there does seem to be a difficulty in not addressing the question of the DUP. Certainly my party stands in every part of the United Kingdom, so I do think that is important, but I am sure his case will be taken seriously.

[Sir Richard Ottaway (Croydon South) (Con)]

Q4. Following the Chancellor’s significant commitment to London last week to create half a million jobs, build 100,000 new homes and invest £10 billion in transport infrastructure, does the Prime Minister agree that this is not just a long-term economic plan for London but, in stark contrast to other parties, which only offer London a mansion tax, is a commitment to make London the greatest capital city on earth?

[The Prime Minister]

My right hon. Friend is correct, because this plan for London is about being incredibly ambitious and trying to outpace the growth of New York, adding £6.4 billion to the London economy by 2030. That is what we are trying to do to see a higher growth rate. We have created something like half a million extra jobs in London since the election, and we need to keep on with that progress. As the OECD said yesterday:

“The UK is an actual textbook case, or is fast becoming, of best practice of how good labour market and of how good product market reform can support growth and job creation…my main message to you today is well done. Well done so far…But finish the job.”

It said, “You have a long-term economic plan, but you need to stick with it.” That is the view of the OECD, and that, I believe, should be backed by everyone in our country.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

Last week, three young women from my constituency left their homes, travelled to Turkey—[Interruption.]

[Mr Speaker]

Order. I think we will start this question again. The hon. Lady has an extremely serious question to ask, and it must be heard by Members on both sides of the House with courtesy.

[Rushanara Ali]

Last week, three young women from my constituency left their homes, travelled to Turkey and are now thought to have been smuggled into Syria. Their families are devastated. I know that the Prime Minister is making every effort to find them and encourage their return. Will he set up an urgent inquiry into these events to ensure that families, schools, mosques, youth clubs, internet companies and all agencies are guided on how they can better protect our young people?

[The Prime Minister]

The hon. Lady is absolutely right to raise this heartbreaking case, which we also discussed in the House on Monday. Clearly, anyone who saw the parents on the television talking about their children could not help but be moved by their plight.

What I have done is asked the Home Secretary to look urgently, with the Transport Secretary, at all the protocols we have in place about young people and travelling, and at what airlines do and what we can do. My understanding is that the police did respond relatively quickly in informing the Turkish authorities, and that what the Turkish Deputy Prime Minister has said about a three-day delay is not accurate, but there are always lessons to learn. On this occasion, I suspect the lessons will be not just that we can tighten arrangements on aeroplanes and at our borders, but that we all have a responsibility—schools, parents, families, communities, universities, colleges—to fight this poisonous radicalisation of young people’s minds.

[David Mowat (Warrington South) (Con)]

Q5. Tomorrow, the Minister for Universities, Science and Cities will be in Cheshire to sign our local growth deal. It is a deal that will deliver two bridges for Warrington—infrastructure that has been much needed for the past 30 years. Does the Prime Minister agree that the fact we are finally addressing such infrastructure needs demonstrates a commitment to the north-west that was completely lacking under the previous Government?

[The Prime Minister]

I pay tribute to my hon. Friend who has campaigned consistently on this issue. When I visited his constituency, he showed me the difference that those announcements will make to Warrington South. As a result of implementing the Cheshire and Warrington local growth deal, we expect to proceed with the construction of a high-level bridge crossing the Manchester ship canal. A new high-level crossing from the A56 Chester road will open up a substantial area of land for development immediately south of Warrington town centre. That will provide traffic relief, resilience, jobs, homes and livelihoods, which is what our long-term plan is all about.

[Glenda Jackson (Hampstead and Kilburn) (Lab)]

Why did the Prime Minister deem it appropriate to outsource his response to one of my concerned constituents to a political correspondence manager housed in No. 10 Downing street, on paper bearing a Conservative party logo and with contents that referred to a Conservative manifesto and a Conservative Government’s legislation? It concluded in the hope that they—the Conservative party, I presume—could rely on my constituent’s support for many years to come. No Member of the House is permitted to use our parliamentary offices or revenues for political party campaigning. No. 10 Downing street does not become the property of its incumbent’s political party, so will the Prime Minister apologise not only to my constituent, but to the country for this gross misuse of national property and revenue?

[The Prime Minister]

If a letter was sent from the hon. Lady to me to be answered—such letters should always be answered by the Prime Minister to other Members of Parliament, and I will look into what happened in that case. Let me put on record how hard the correspondence unit works because it gets thousands of letters, including from Members of Parliament, every week of the year. I will look into that and ensure that she gets a proper reply from me. I say to all those living in Hampstead and Kilburn that they will be getting lots of letters from me in the coming weeks.

[Ben Gummer (Ipswich) (Con)]

Q6. Last week my right hon. Friend launched the franchise competition for rail services in East Anglia, including a demand for state-of-the-art rolling stock. He may be aware that some Members of the House want a long review of franchise competitions, leading possibly to a renationalisation of the railways. Does he understand the delays and misery that that would cause to commuters and travellers in Ipswich, Norwich, Colchester and up and down the Great Eastern main line if that were ever to happen?

[The Prime Minister]

First, I thank my hon. Friend for the work that he and other MPs from East Anglia have done to press for better rail services. We have a clear view, which is that we want to achieve journey times to Ipswich in 60 minutes and Norwich in 90 minutes, and that is what the reforms are all about.

On this day, it is worth saying happy birthday to the shadow Chancellor, given that he always makes quite a lot of noise on the Opposition Benches. Part of the aim of this programme, when the right hon. Gentleman has plenty of time after the election, is that he will be able to get to see Norwich City in just 90 minutes. I think that is only fair—he gives me a birthday present every week, so I thought I would give him one today.

[Gavin Shuker (Luton South) (Lab/Co-op)]

Q7. In the United States, senators and congressmen face a cap on their outside earnings of 15%. Why is that appropriate for them but not for us?

[The Prime Minister]

If the cap is such a good idea, why are we not voting on it in the House of Commons tonight? If we want evidence that Labour’s policy has been written on the back of a fag packet, that tells us all we need to know. Obviously, with plain paper packaging we will be helping, Labour Members to have more room to write their policies on.

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

May I assure my right hon. Friend—[Interruption.]

[Mr Speaker]

Order. Sir Peter must be properly heard from start to finish.

[Sir Peter Tapsell]

May I assure my right hon. Friend that I am not a paid trade union official but I fear that if Members of the House are not allowed a second job, membership of it will soon be largely confined to the inheritors of substantial fortunes or to those with rich spouses, or to obsessive crackpots or those who are unemployable anywhere else?

[The Prime Minister]

I want to be clear that the Father of the House does not fit into any of those categories. He makes an important point: Parliament is stronger because we have people with different experience. When we look around this Parliament, we see we have actually got practising doctors, practising dentists, people who served our country in Afghanistan or Iraq, and people who run family businesses or have other interests. What we want is a Parliament where people can come and share their experience and make some points, instead of just having a whole lot of trade union sponsored ciphers.

[Phil Wilson (Sedgefield) (Lab)]

Q8. I have asked the Prime Minister this question before and he did not answer: how many jobs should an MP have?

[The Prime Minister]

At the moment I am both the Member of Parliament for west Oxfordshire and I am the Prime Minister. To be honest, I do do constituency work every day, but I would mislead the House if I said that I spent more time on my constituency work than being Prime Minister. That is worth while reflecting on.

[Sir Tony Baldry (Banbury) (Con)]

Q14. It being so successful, I wonder if—for the convenience of the House and particularly for Opposition Members—my right hon. Friend could set out the details of our long-term economic plan.

[The Prime Minister]

I am grateful to my right hon. Friend. The plan is about skills, infrastructure, jobs and cutting taxes, but above all it is about people’s livelihoods—securing jobs and livelihoods for people across our country. The fact that Labour Members cannot talk about the economy any week when they come to this House is because we have created a thousand jobs every day this Government have been in office. They are keen to talk about second jobs because they do not want to talk about the jobs revolution in our country. They do not want to talk about the apprenticeships. They do not want to talk about business creation, and they do not want to talk about the OECD and the fact that our economy grew faster last year than any other major economy in the west. They cannot talk about the economy because they have got nothing to say about it.

[Mr George Howarth (Knowsley) (Lab)]

Q9. Is the Prime Minister aware that as a result of a 40% cut in the disabled students allowance many disabled students say that they might have to drop out of the courses they are on? Will he undertake to have an urgent review of that problem, because obviously I am sure that he does not want that to be the case?

[The Prime Minister]

I have looked specifically at this issue and had a constituency case connected to it. I will go back and look over it again, and perhaps write to the right hon. Gentleman, but it is important to recognise that—with the reform of disability living allowance going into personal independence payments—more of the most disabled people will be paid at the higher rate.

[Glyn Davies (Montgomeryshire) (Con)]

Q10. I know the Prime Minister shares my enthusiastic support for organ donation and my joy at the 63% increase in what is the most wonderful gift that anyone can give since the organ donation task force reported in 2008—[Interruption.]

[Mr Speaker]

Order. I apologise for interrupting the hon. Gentleman. It is discourteous to interrupt an hon. Member in the middle of his or her question. Let us hear what the hon. Gentleman has to say: it is a matter of manners.

[Glyn Davies]

Will the Prime Minister take an early opportunity, should one arise, to join me in helping to raise awareness of that wonderful achievement and to drive on the creation of ever greater success in the future?

[The Prime Minister]

I absolutely agree with my hon. Friend. We have seen a very substantial increase in organ donation. That has been done without moving to a system of presumed consent, which I know the House discussed and voted on previously. I was not in favour of that, but I am in favour of doing more to lead by example and making sure that hospitals are pursuing the best practice. There has been a remarkable increase, and if there is anything I can do to help with his campaign, I would be delighted to do so.

[John Cryer (Leyton and Wanstead) (Lab)]

Q11. The lobbying Act, which the Prime Minister mentioned earlier, did absolutely nothing to affect those who are lobbying specifically for commercial gain. Will he now introduce a register of professional lobbyists; not to stop it, but so we all know what they are up to?

[The Prime Minister]

First, before I answer the hon. Gentleman’s question, may I congratulate him on being appointed as the new chair of the parliamentary Labour party? I hope that in 70 days’ time he will be able to conduct a root and branch inquest into what went wrong.

Let me answer the hon. Gentleman’s question specifically. If he supports the lobbying Act, can he explain why trade unions in Britain have lobbied the Labour party to get rid of the Act? If we want an example of what is wrong with British politics, it is the massive money that goes from the unions to the Labour party that buys their candidates and buys their policies. The only reason their leader is sitting there is because a bunch of trade union barons thought he was more left-wing than his brother. That is what is wrong with British politics and that is what needs fixing.

[Tessa Munt (Wells) (LD)]

When the Prime Minister wrote to my local newspapers heralding the work done to bring superfast broadband to Somerset, was he aware that, according to the Government’s own figures, Somerset has 41% coverage at the moment? BT’s monopoly means that it will be the only organisation able to bid for the next phase of connections. That offers very little hope for the residents and business people in my area who do not have access to superfast broadband. What is he going to do about that?

[The Prime Minister]

What we are going to do is continue spending record sums on broadband roll-out. We have seen across the country that it is almost double from the 40% we inherited. There is more to do in the most rural areas, including the hon. Lady’s constituency. All local councils now have searchable websites so people can see when they expect broadband to get to their area. We need to look at creative solutions to make sure we get to the last 5%. It is a very important part of our long-term economic plan. That can only be secured by a Conservative majority Government.

[Clive Efford (Eltham) (Lab)]

Q12. I welcome the fact that the Government have been forced to accept our demands for people to be protected when buying tickets in the secondary ticketing market. If the Government had listened to us last year, thousands of rugby world cup and Ashes cricket fans would have been saved from having to pay more than face value for tickets. Why are the Government always on the side of people like bankers, tax dodgers and the organised gangs behind ticket touting in the secondary ticketing market, and never on the side of ordinary people in the street?

[The Prime Minister]

This is something that has happened after four and a half years of a Conservative Prime Minister that never happened after 13 years of a Labour Prime Minister. I will tell the hon. Gentleman whose side we are on: we are on the side of working people, because we are getting them jobs, we are cutting their taxes, and we are helping with child care. We sit opposite a party that is the party of Len McCluskey and the trade unions.

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

Q13. Does the Prime Minister agree with me that, hot on the heels of devolving powers on transport and housing, the welcome announcement that Manchester will take control of its £6 billion NHS budget shows the coalition’s commitment to local decision-making for Manchester, in stark contrast to the Labour Government that oversaw the closure of Withington hospital from Whitehall?

[The Prime Minister]

My hon. Friend is absolutely right to say that this is an important breakthrough. It has been made possible by our reforms. It will help to bring the NHS and social care together. The shadow Health Secretary, who presumably knew absolutely nothing about this, does not understand that eight Labour authorities in Greater Manchester have been talking to us and working with us about how to make this a reality. What a contrast: people working together to improve the NHS, instead of trying to weaponise it across the Dispatch Box.

[Jeremy Corbyn (Islington North) (Lab)]

Last year, more than 3,000 desperate migrants drowned in the Mediterranean. Several hundred have already died this year trying to reach a place of safety. Many people, in absolute desperation, turn to traffickers to try to escape the crisis in Libya and in many other places. They are victims of war and oppression. The European Union is closing down Mare Nostrum, which has saved a very large number of lives, and is instead instituting something that will only protect Europe’s borders, not search for and rescue people. Will the Prime Minister go back and ensure that Europe adopts a humanitarian approach of saving these desperate people and supporting these desperate migrants who are trying to survive—that is all, survive—in Libya?

[The Prime Minister]

The hon. Gentleman makes a very important point, but I am afraid that the statistics do not necessarily back up the case he is making. Mare Nostrum was a genuine attempt by the Italians to deal with this problem, but I think I am right in saying that more people died during the operation of that policy than when it was brought to an end. There are some answers. We need to make sure we press ahead with the Modern Slavery Bill, an historic piece of legislation taken through by this Government, that is doing a huge amount to deal with the problem of people trafficking. Yes, we need to do more to stabilise countries such as Libya and others on the Mediterranean, from which many of the problems derive. That serves to underline the important work done by our development budget.

[Mr Speaker]

Order.

[Mr Dennis Skinner (Bolsover) (Lab)]

Just one more.

[Mr Speaker]

There is always next week.

Petition

Wednesday 25th February 2015 Commons Chamber

Jon Trickett (Hemsworth) (Lab)

- Hansard - - Excerpts

I wish to present a petition on changes to health service budgets in my constituency and in Wakefield district more generally. It is now quite clear that the Government intend further to cut NHS funding across the district. Local GPs surgeries are already struggling and these cuts will lead to the closure of small practices and job losses among doctors, nurses and other practitioners. Obviously, this is causing great alarm among my constituents, who are living in one of the most health-deprived areas in the country. This is why I am presenting a petition today signed by more than 1,460 individuals in my area.

The petition states:

“The Petitioners therefore request that the House of Commons urges the Government to reconsider the proposal to make these cuts to health service budgets in the Hemsworth area.”

Following is the full text of the petition:

[The Petition of residents of the Hemsworth constituency,

Declares that the Petitioners are concerned about cuts to health service budgets in the local area, particularly the proposed £3.8 million cuts from budgets for GPs; further that these cuts will affect all Practices funded through a Personal Medical Services (PMS) contract and will see £3.8million lost from this area over a three year period, starting in April 2015; further that local GP surgeries are already struggling and these cuts could lead to small practices closing and job losses; and further that a local petition on this matter has been signed by 1,464 individuals.

The Petitioners therefore request that the House of Commons urges the Government to reconsider the proposal to make these cuts to health service budgets in the Hemsworth area.

And the Petitioners remain, etc.]

[P001438]

Service Personnel (Ukraine)

Wednesday 25th February 2015 Commons Chamber

12:36

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

(Urgent Question): To ask the Secretary of State for Defence if he will make a statement on the deployment of UK personnel to train Ukrainian forces.

[The Secretary of State for Defence (Michael Fallon)]

The Government’s position from the outset has been that we deplore Russian aggression in Ukraine. We do not believe that there is a military solution. There needs to be a diplomatic solution, which can be enabled through sanctions, pressure and the economic weight of Europe and America. Obviously, however, as the Prime Minister has said, where we can help a friend with non-lethal equipment, we should do so.

The second Minsk agreement of 12 February provided a framework for stabilising the situation in eastern Ukraine. We want it to succeed and we urge all sides to take the necessary steps to implement it. In the light of continued Russian-backed aggression in eastern Europe, the UK is committed to providing additional non-lethal support to the Ukrainian Government to help their forces deal with the pressures they are facing. As the Prime Minister confirmed in Parliament yesterday, we are providing additional non-lethal support by sending advisory and short-term training teams. This support, provided at the request of the Ukrainian Government, will help their armed forces develop and maintain the capacity and resilience they need, and help reduce fatalities and casualties.

Support to the Ukrainian armed forces is not new; we have been providing it for some time. This includes support on anti-corruption, on defence reform and on strategic communications and procurement. Over the last year, we have also provided personal protective equipment, winter fuel, medical kits and winter clothing for the Ukrainian armed forces.

As part of the wider Government effort to support Ukraine and ensure a robust international response to Russia’s aggression, UK personnel will now provide to the Ukrainian armed forces medical, logistics, infantry, and intelligence capacity-building training from mid-March. Most of the advisory and training support will take place in Ukraine, but well away from the areas affected by the conflict in the east of the country. The number of service personnel involved will be around 75.

In respect of medical support, we will provide combat life-support training through a “train the trainer package” to multiply the numbers trained. The logistics team will identify and help improve deficiencies within Ukraine’s logistics distribution system. The infantry training package will focus on protective measures to improve survivability, and the intelligence capacity building team will provide tactical-level analysis training. We are considering further requests from the Ukrainian Government for support and assistance, and we will work closely with key allies through the Ukraine-US-UK-Canada joint commission. In the meantime, Russia must abide by its commitments at Minsk. That means making the separatists withdraw their heavy weapons, stopping continued separatist attacks so that an effective ceasefire can hold, and allowing effective monitoring to take place.

[Mr Jones]

Let me begin by apologising to the Secretary of State and the House on behalf of my hon. Friend the Member for Gedling (Vernon Coaker). As the Secretary of State knows, my hon. Friend is currently making a scheduled visit to our armed forces who are involved in Operation TOSCA.

Members on both sides of the House are rightly concerned about the serious and ongoing situation in eastern Ukraine, and about the question of an imminent ceasefire. Labour Members have made it clear that the international community must be ready to increase diplomatic pressure on the Kremlin should Russia fail to implement the ceasefire and change course. We support these non-lethal steps to improve the capacity of the Ukraine armed forces, but the public will want not only to know what strategic rationale lies behind the announcement, but to ask questions about the operation itself.

If this deployment is to succeed, it must form part of a broader NATO strategy. How does the Secretary of State’s announcement fit into the broader NATO strategy on Ukraine, and what discussions has he had with our NATO partners about the deployment? What is the overall strategic objective of the deployment, and how long has it been in the planning? How does it fit into the wider ongoing diplomatic efforts to bring about a peaceful resolution to the current crisis?

Let me now ask some specific questions about the operation itself. What force protection arrangements will there be for the UK service personnel who are involved in this operation, and how long does he expect the deployment to continue? What will be the legal status of the UK forces while they are in Ukraine?

As I have said, we support these non-lethal steps to reinforce the Ukrainian forces’ logistical, medical and intelligence capabilities. We also pay tribute to, and recognise the professionalism of, those of our armed forces who will take part in this vital operation.

[Michael Fallon]

I am grateful to the hon. Gentleman for what he has said.

Let me make it clear at the outset that Ukraine has the right to defend herself, and to defend her sovereign territory. The hon. Gentleman asked what was our strategic objective. It is to help Ukraine in that task: to help it to build up the capacity and resilience of its armed forces, and above all, when we can, to help to reduce the number of fatalities and casualties that are occurring.

The hon. Gentleman asked about NATO. This is not a NATO deployment; it follows a decision by the United Kingdom Government. Obviously we consult our allies very closely—I hope to do that in Washington very shortly—and NATO has set up a couple of trust funds, to which we have contributed, as part of its partnership with Ukraine. Nevertheless, this is not a NATO operation A number of our allies are considering providing non-lethal assistance, and the United States is already doing so.

As for how the deployment fits in with other efforts, it accompanies our continuing diplomatic efforts. I should emphasise that this country has been at the forefront of the efforts to impose sanctions on Russia. I should also emphasise that it is leading the efforts to ensure that those sanctions are renewed, and to make Moscow understand that unless its aggression ceases, it will face further sanctions and additional international isolation.

The hon. Gentleman asked about force protection. The training will be carried out either around Kiev itself or in the west of the country, an area that we know well and where exercises and training take place. Obviously, however, we will continue to assess what force protection is required for each specific mission. The hon. Gentleman asked about the status of our trainers. I want to make it very clear that we are providing this training capacity at the request of the Ukraine Government. Each of these things has been asked for by Ukraine; we are answering Kiev’s call.

[Sir Edward Leigh (Gainsborough) (Con)]

The trouble with sending advisers is that, as the Americans found in Vietnam, and as many other nations have found since, mission creep eventually results in the sending of combat troops. Given that Ukraine is an area the size of France, where whole German armies of tens of thousands of men were enveloped and destroyed in the second world war, is there not a real danger of that? We must rule out sending ground troops, and we should concentrate our efforts on promoting peace, self-determination in the east within Ukraine’s borders, and solving what the Foreign Secretary described as a “sink of corruption” in Kiev. We should send advisers to help to sort out corruption, not wage war.

[Michael Fallon]

We already provide advice and support on how to tackle corruption inside the Ukrainian Government. We have done so over the past few months and, indeed, I think even before then. As for mission creep, may I make it absolutely clear that we are not deploying combat troops to Ukraine, and we will not do so? We are providing non-lethal assistance that has been requested by the Ukrainian Government to enhance the capability of their armed forces and to attempt to reduce the number of fatalities and casualties that they have suffered.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

Of course everyone wants a diplomatic solution to the crisis, but are the Government not at risk of showing naivety in the face of a calculating thug in President Putin? Every time that the right hon. Gentleman stands at the Dispatch Box and rules out a military solution from the UK and its allies he makes such a military catastrophe more likely by emboldening Putin.

[Michael Fallon]

I do not accept that. We have to make it clear to Russia that it has to cease its aggression and its encouragement of the separatists in eastern Ukraine. The best way to do that, as we are already doing, is through sanctions and political pressure on Russia. Equally, it would not be right to refuse the call that we have received from Kiev—from the Ukrainian Government—to help with some of the basic training, support and equipment that they need.

[Sir Gerald Howarth (Aldershot) (Con)]

The whole House will recognise that there is a risk here, but does my right hon. Friend not agree that it is in our interests to check President Putin’s aggression? Does he also agree that that is entirely consistent with our obligations under the 1994 Budapest agreement, signed by Boris Yeltsin, John Major and Bill Clinton?

[Michael Fallon]

I agree with my hon. Friend, who has experience of serving in the Ministry of Defence. He is right about the aggression that Putin has shown. We need to stand up to that, but there are a number of routes to that. They are political and diplomatic: we do not think that there is a military solution to the conflict. However, where we have been asked to help, we should do so. We are a friend of Ukraine, and we should come to the help of a friend in need.

[Angus Robertson (Moray) (SNP)]

Like the Defence Secretary, I abhor the Russian aggression in eastern Ukraine, and I support the EU sanctions approach. Has he had the opportunity to review the Ukrainian media? The Kyev Post writes:

“The United Kingdom stunned officials across Europe with a unilateral announcement that it would send 75 troops to Ukraine…EU officials in Brussels first learned of the decision when contacted by the Kyiv Post for comment, and were unable to provide one.”

Why do our allies seem to be so badly informed, and why did the Government not come to the House and make a proactive statement to Parliament?

[Michael Fallon]

On the latter point, I announced in Defence questions on Monday that we were preparing such a package, and the Prime Minister gave details of the package to the Liaison Committee yesterday. One thing we cannot be accused of is not keeping Parliament informed: we are keeping Parliament informed. As for consultation with allies, of course we talk to them. I meet my fellow Defence Ministers in NATO all the time, and I shall meet another one later this afternoon. I saw High Representative Federica Mogherini yesterday. This is a decision for the UK Government; this is not a NATO deployment. It is a decision by the UK Government to respond to a request from the Ukrainian Government.

[Dr Liam Fox (North Somerset) (Con)]

I welcome the Government’s initiative, particularly if it is alongside our allies in the United States. The Ukrainians need the ability to defend their homeland against a much more powerful aggressor and they require equipment such as unmanned aerial vehicles for reconnaissance and targeting. They require anti-tank capability and encrypted communications. Is not the argument that we cannot give defensive equipment to a country under threat because it might provoke a further reaction from Russia simply a bully’s charter that is already discredited by history?

[Michael Fallon]

I agree with my predecessor but one as Secretary of State. We are supplying defensive equipment. It might not be lethal, but it does help the Ukrainian armed forces better defend themselves. As I said in my initial statement, in addition to the secondment of 75 trainers we are considering a further request from the Ukrainian Government for additional equipment and support. That is non-lethal, but we reserve the right ultimately to keep it under review.

[Mrs Madeleine Moon (Bridgend) (Lab)]

The Secretary of State said that the 75 trainers would “mostly” be in Ukraine. Where else will they be operating from? If any Ukrainians are coming to the UK for training, can we have an absolute assurance for the citizens of the UK that we will not face another incident such as those in Bassingbourn, where we were training Libyans and members of the Cambridge community were assaulted? Can we have an assurance about how many are coming to the UK and where else they will be trained?

[Michael Fallon]

It is slightly unfortunate that the hon. Lady has compared the general purpose force we were attempting to train—a very raw force of recruits from Libya—with the Ukrainian armed forces. She asked me a straightforward and quite reasonable question about where else the training might be. There will be, and has already been, some training in the UK, but there can also be training in countries alongside Ukraine. We are looking at where the training can best be provided, but it is likely that most of it will be provided in Ukraine, in the Kiev area or elsewhere in the west of Ukraine, areas that are very familiar to the British military as we have been on exercise there in the past.

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

It is of course very important that there should be non-lethal support and training, but in a parallel situation in north-east Iraq, where we are training the peshmerga in Kurdistan, we have discovered that the Americans and other EU allies are training on the front line and they find that much more effective than the kind of training we have been providing about 100 miles behind the front line. Is there not an argument that, although that support is non-lethal, we might find a way to move the troops forward so that they can advise the Ukrainians where they are doing the fighting?

[Michael Fallon]

I do not think it is right for other countries to get involved in the conflict in eastern Ukraine. On the contrary, Russia should now be withdrawing its heavy weapons from eastern Ukraine and be putting pressure on the separatists to lay down their arms. On the location of the training, we are not putting combat troops anywhere near the front line. The training we have been providing to the peshmerga in northern Iraq has, as my hon. Friend says, been well away from the front line. We have trained more than 1,000 peshmerga as well as supplying them with machine guns and ammunition.

[Derek Twigg (Halton) (Lab)]

We know for a fact that the Russians are supplying lethal weapons to the rebels. NATO’s response has been pretty woeful, but may I ask a specific question about what the Secretary of State said? I am sure that he mentioned that he was considering what else can be done about further requests, so will he enlighten the House on what more might be being considered to be put in place in the future?

[Michael Fallon]

We have had a series of requests from the Ukrainian Government, including lists of equipment of all kinds. I do not want to give too many details, but we are looking at these shortfalls in their capacity and at what further training we might be able to provide in addition to the infantry training, logistics and medical and intelligence capacity-building training I described.

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

I welcome the Secretary of State’s announcement. These are proportionate and sensibly judged measures for us to take. We are good at this sort of thing and as we have been asked to help it is only right that we should do so. Let us not exaggerate the scale of what we are doing, however. The idea that 75 trainers will lead to creep into a mission in an area the size of France is clearly far-fetched, but we should be willing to respond to anything more of a similar kind and we should do so on a pan-governmental basis to help the Ukrainian Government build up their capacity more widely.

[Michael Fallon]

I am particularly grateful to my hon. Friend, another former Minister in the Ministry of Defence. He has got it exactly right. We should respond to requests. Ukraine is our friend, it is in need and we should respond to requests, whether they are for equipment or additional training. I want to assure the House that that is exactly what we will continue to do.

[Mr Dennis Skinner (Bolsover) (Lab)]

Is the Secretary of State aware that mission creep knows no boundaries? That has happened so many times, as evidenced by the point made much earlier by one of his hon. Friends. In Vietnam, it started with only a little request. On Libya, not so long ago in this House I asked about mission creep and did not get a satisfactory answer. I never could and now I know the result: ISIL roaming over large areas of Libya. That is what mission creep did. As sure as night follows day, Ukraine will now realise that the United Kingdom is a participant in the battle and will ask for more. What is he going to do then?

[Michael Fallon]

It is rather odd to describe the operations in Libya as mission creep. This was a mission to get rid of Gaddafi and to help the Libyan people get rid of a brutal dictator; a dictator I believe the former Labour Government rather cosied up to—

[Mr Skinner]

No, Mrs Thatcher did to get more oil during the pit strike—

[Mr Speaker]

Order.

[Michael Fallon]

It was a mission to help the Libyan people get rid of a dictator and give them the chance of choosing a better future. Obviously, we would want to see the situation in Libya improve.

This is a closely defined training mission. We think it is right to respond to the call for help. If the hon. Gentleman is suggesting that we should shun such a call, I cannot agree with him.

[Mr John Whittingdale (Maldon) (Con)]

Is my right hon. Friend aware that last week Prime Minister Yatsenyuk told me that he regarded Britain, alongside America, as Ukraine’s strongest allies, and his statement this afternoon confirms that? Is my right hon. Friend aware that we have a special responsibility as a signatory of the Budapest memorandum to help Ukraine? Specifically, will he consider the requests made by the Ukrainian Government for defensive weapons such as counter-battery radar, electronic jamming equipment and anti-tank weaponry?

[Michael Fallon]

My hon. Friend is probably as knowledgeable as anybody about the affairs of Ukraine, as he chairs the all-party group. It is very clear to us that the Ukrainian armed forces are in desperate need of further equipment and they have supplied lists of equipment they would like. We are focusing, as I have said, on the non-lethal equipment we can supply and are considering the additional requests.

[Kevin Brennan (Cardiff West) (Lab)]

At the very least, the House is entitled to know what equipment the Secretary of State is considering supplying to Ukrainians. So far, the Secretary of State has been very unwilling to detail any of those requests. We are entitled to know what is under consideration. Will he now give us some more detail on the nature of the equipment he is actively considering, as he outlined in his response?

[Michael Fallon]

As soon as we make a decision on what equipment to supply or to gift, we will of course inform Parliament in the normal way. If the equipment is to be gifted, a minute has to be laid before Parliament and that will be done.

[Richard Benyon (Newbury) (Con)]

Like many people, I take an increasingly bleak view of the situation when we examine the psychology of this aggressor. What measures has my right hon. Friend taken with colleagues across Government to look at the possibility of this happening in other areas on the western boundary of Russia? What work should we be doing now to prepare for requests similar to that that he has received from the Ukrainian Government from countries such as Moldova or, God forbid, a NATO country, as we would be required to respond differently to an attack on one of those countries?

[Michael Fallon]

As my right hon. Friend the Prime Minister told the Liaison Committee yesterday, we can now see a pattern of behaviour around the borders of Russia. We have seen it in Georgia and elsewhere. The first thing that we had to do about that was to stiffen up NATO to ensure that we had a rapid reaction force worthy of the name. That was agreed at the NATO summit last September, and we have now agreed our contribution to it. We will be a framework nation in 2017 and we will be seconding staff to the two divisional headquarters, in Poland and Romania. We will also be seconding staff to all six of the forward integration units. We are encouraging other NATO members to make similar commitments in order to reassure the members on NATO’s eastern flank that we are ready to stand by our commitments under article 5.

[John Cryer (Leyton and Wanstead) (Lab)]

Whatever the Secretary of State might say, to the real world this will look like military intervention. At what point is he going to come here and seek the agreement of the House of Commons to this?

[Michael Fallon]

There is a well-established convention that if we were engaged in offensive military operations in a country we would of course come to the House, as we did last September when we obtained the authority of the House to carry out air strikes in Iraq. This, however, is not a military operation. We are providing trainers and advisers to help the armed forces of Ukraine better to defend themselves and to help to reduce the very high number of fatalities and casualties that they are suffering.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

Does my right hon. Friend agree that the lesson of the cold war is that we secure peace through strength? I very much welcome this intervention, but we in the west must decide whether we are going to indicate our resolve to deter Russian aggression or not. Will he remind our American allies, whom I very much welcome as part of this initiative, that it was the sailing of their sixth fleet into the Black sea that stopped the invasion of Georgia in its tracks? When are the Americans going to come to this initiative with force?

[Michael Fallon]

I am looking forward to discussing this with the new American Secretary of Defence, Ash Carter, whose appointment I hope the whole House will welcome. I say to my hon. Friend that we cannot simply leave the defence of our continent to the Americans. They are involved in the joint commission with Ukraine, alongside Canada and ourselves, but it is also important for NATO to have the resolve to defend its own borders. That is why I hope that my hon. Friend welcomes the commitments made at the NATO summit, which we now need to follow through.

[Jeremy Corbyn (Islington North) (Lab)]

I should like to ask the Secretary of State for Defence how far the Government have really thought this thing through. Does he acknowledge that 75 trainers will be followed by 150 trainers, and that they will be followed by more and more? The gifting of weapons is being talked about, and we are now moving into a situation in which we are going to be in the conflict in Ukraine. NATO wants Ukraine as a member, contrary to everything that was agreed following the break-up of the Soviet Union on the non-alignment and independence of that country. Instead of upping the military ante, why will not the Government put huge efforts into trying to demilitarise Russian militarism and NATO expansionism, in order to bring about a longer-term sustainable peace in that area? The danger of getting involved in a hot war in central Europe has got a bit closer as a result of the Secretary of State’s statement today.

[Michael Fallon]

I do not agree with the hon. Gentleman. We are not supplying weapons and we are not attempting to escalate the conflict in any way. As I have said, we believe that in the end the answer has to be diplomatic and political, and the pressure therefore continues to be applied, through sanctions and so on. He invites us to help to demilitarise eastern Ukraine, but I think he ought to ask himself who has militarised the area and who has supplied weapons, tanks and heavy artillery across the border. It is now up to President Putin to withdraw his heavy weaponry, as was agreed at Minsk, and to implement the agreement that he has signed up to.

[Bob Stewart (Beckenham) (Con)]

As a follow-up to what my hon. Friend the Member for Aldershot (Sir Gerald Howarth) said about the 1994 agreement between Russia, the United Kingdom, Ukraine and the United States, under which the sovereignty of Ukraine was guaranteed in return for getting rid of the one third of the Russian nuclear arsenal that it had on its soil, may I suggest that there is an oblique lesson for us now as we think about whether we should replace the independent nuclear deterrent and whether we need to keep it?

[Michael Fallon]

So far as the 1994 agreement is concerned, it is for all parties to respect the territorial integrity of Ukraine, but that has not happened in this Russian-backed aggression and the movement of heavy weapons and artillery from Russia across the border into eastern Ukraine. So far as the nuclear deterrent is concerned, the House debated the matter a few weeks ago and recorded one of the largest majorities in recent years in favour of building the successor submarines.

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

It is clearly correct to support the effectiveness of the Ukrainian army and its capacity to protect the country from Russian aggression, but back in 2013 when we undertook the training of the Libyan troops, the Libyan Government paid for that training. Will the Secretary of State tell us who is to bear the cost of the proposed training in Ukraine, and whether there is any financial limit on the UK’s assistance to that country?

[Michael Fallon]

At the moment, we are bearing the cost of the training, and the costs involved in gifting any non-lethal equipment will be borne by my budget. So far as the Libyan training is concerned, I am afraid that I have to tell my right hon. Friend that although the Libyan Government had committed to pay for it, they have not quite paid for it all yet.

[Sammy Wilson (East Antrim) (DUP)]

We must all be concerned by the expansionist tendencies of the Putin regime, and it is therefore important to provide a robust response to the situation in Ukraine, but if we are going to train troops there, would not the logical step be to give them the wherewithal to use that training? Why are we not in a position to consider making equipment available to them as well?

[Michael Fallon]

We have not taken that decision. The equipment that we have supplied is non-lethal; essentially it is to help the Ukrainian armed forces to protect themselves better and to reduce the number of casualties. We do, however, reserve the right to keep that position under review.

[Richard Drax (South Dorset) (Con)]

My right hon. Friend has assured the House that we are giving non-lethal aid—that it was asked for and that we have given it. Have we been asked for lethal aid and, if so, what was our response?

[Michael Fallon]

The Ukrainian military has identified a whole series of equipment shortfalls that it would like to fill—a lot of its equipment is east European; it is old Soviet equipment that does not fit naturally with ours—but our decision at the moment is not to supply lethal aid.

[Jack Lopresti (Filton and Bradley Stoke) (Con)]

Can my right hon. Friend reassure the House that, regardless of any force protection measures taking place before deployment, our people will be legally authorised under any future rules of engagement to pick up weapons and defend themselves if they need to?

[Michael Fallon]

We will assess the force protection that is required for each of the different training teams. As I have told the House, we expect the training to be carried out in areas well away from the fighting, right over in the west of Ukraine or around Kiev, where our troops have exercised before and are used to exercising. I will of course keep my hon. Friend’s point under review.

[David Tredinnick (Bosworth) (Con)]

As a Member who has taken parliamentary delegations to Ukraine, spoken in the Ukrainian Parliament and believes himself to be a supporter of Ukraine, I say to my right hon. Friend that I am worried about this decision. All along, we have underestimated Russian sensitivities about Ukraine, and the Lords report said that we have sleepwalked into this mess. I fear that the thought of NATO troops, from us, in Ukraine will further destabilise things in the long term and will be used, possibly in March, by the Russians for further intervention. I do not think we have got the measure of Russia’s concerns about what it sees as a country that is very much part of its immediate diaspora.

[Michael Fallon]

There are, of course, Russian concerns, but above all there are Ukrainian concerns. It is eastern Ukraine that has been destabilised by Russia; this is a country whose sovereign territory has now been invaded by personnel from the Russian armed forces. As for my hon. Friend’s fear about NATO troops, let me emphasise again that these are not and will not be NATO troops—this is not a NATO mission. This is the British Government deciding to respond to a request for help by our friends in Kiev. It is right that we should answer that call and provide the training capacity, in which our armed forces excel, to help reduce fatalities and casualties.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

I welcome the Government’s announcement, and my right hon. Friend’s robust stance against Russian aggression and this threat to Ukrainian sovereignty. Can he tell us what engagement his Department or the Government more widely have had with the newly elected Moldovan Government, given the great uncertainty and concern about Trans-Dniester on the border between Ukraine and Moldova?

[Michael Fallon]

Indeed there is exactly that concern. As I have said, this seems to fit a pattern of Russian interference right along its southern and western border, and we need to be mindful of that. I have not yet had the opportunity to meet or talk to my Moldovan counterpart, but I look forward to doing so in due course.

Employment of People with Disabilities (Reporting)

Wednesday 25th February 2015 Commons Chamber

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

13:12

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

I beg to move,

That leave be given to bring in a Bill to require listed companies, public bodies and voluntary agencies to report annually on the number and percentage of people they employ who have disabilities; and for connected purposes.

In the UK today, more than 11 million people are living with a disability, impairment or limiting long-term illness, and nearly 7 million of them are of working age. That is nearly one in five of the working population. People with disabilities continue to face many barriers in accessing work, whether they have a visible or invisible disability or illness. The barriers may be physical but they are also cultural. That is the situation despite the Disability Discrimination Act 1995 and Equality Act 2010, which provided a legal platform to challenge discrimination based on disability. Even before that, the Disabled Persons (Employment) Act 1944 and the Disabled Persons (Employment) Act 1958 prohibited employment-related discrimination against disabled people. Although some progress has been made, only 47% of working age disabled people are in employment, compared with nearly 80% of non-disabled people, and the figures vary considerably for different disabilities. So there is a disability employment gap of more than 30%, and it has widened slightly in recent years.

Although 4 million people with disabilities are working, another 1.3 million are available to and want to work but are currently unemployed. The vast majority of disabled people used to work, so this is such a waste of their skills, experience and talent. Attitudes, perceptions and judgments can get in the way of identifying someone’s talent or skills, and for people with disabilities that can be magnified, particularly in a job interview or at work.

A man in his 40s from Oldham told me that after an operation to remove a benign tumour left him disabled, he applied for hundreds of jobs but kept being knocked back. His experience was ignored and instead he was made to feel like a liability. He said:

“I’m ex-army, disciplined and driven to work like millions of other disabled people. I just need a chance.”

Adrian, from Saddleworth, who is in his 50s, left work in 2013, suffering from severe depression as a result of bullying. Now fully recovered, he is desperate to get back to work. He said:

“I think many employers look at mental health issues in your medical records and see it as a weakness.”

Working-age disabled people are twice as likely to be living in persistent poverty as non-disabled people, and that has implications for disabled people’s families, too. Families with one disabled member make up one third of all the families living in poverty. With the recent changes to social security support introduced by this Government, including nearly £24 billion to be cut from 3.7 million disabled people by 2018, the poverty and inequality experienced by disabled people are set to get worse. There are also implications for the economy and society as a whole; research from the Social Market Foundation has estimated that halving the disability employment gap and supporting 1 million more disabled people into work would boost the economy by £13 billion a year.

There are many reasons for the disability employment gap, including a lack of information and advice for employers. Discrimination against disabled workers is still prevalent. A recent survey showed that 15% of disabled people felt they had been discriminated against when applying for a job, and one in five felt that they had been discriminated against while in work. Information is not enough to address this—leadership is needed.

Governments set the tone for the culture of society explicitly, through their policies and laws, and more subtly, through the language they use and what they imply, which collectively tells us who they think are “worthy”—or not. This Government have made their views abundantly clear, from their swingeing cuts to social security support for disabled people to their overhaul of the work capability assessment process, which managed to be both dehumanising and ineffective. Their new sanctions policy has targeted the most vulnerable, bringing people to the brink, and people have died under it. We must also not forget their closure of Remploy factories for disabled people and their replacing them with—well, nothing. The chaos and inadequacy of the specialist employment support programme, Access to Work, which last year supported only 35,000 disabled people into work and at work, and the jobcentres’ disability employment service, with one adviser providing support to 600 disabled people, again reveal this Government’s priorities.

But what I, and many others, find so deeply offensive is the pejorative language that has been used by this Government, as they refer to people receiving social security as “shirkers” and “scroungers”—and that includes people with disabilities and limiting illnesses. The Government and anyone else who wilfully misrepresent the facts should be ashamed of themselves.

My Bill is a very modest step to help address that prevailing culture. People with disabilities should be able to access the same opportunities that everyone else can, including being able to use their talent and skills to the best of their ability. No one should feel they are unable to reach their full potential or that their hopes and dreams do not matter. By requiring employers with more than 250 employees to report the number and proportion of people with disabilities they employ, my Bill seeks to raise their awareness of the disability employment gap in their own organisation, prompting them to consider this information and what they may do about it. As we know, what is not measured or reported is rarely acted on. This is not about red tape; it is about what sort of society we want.

On its own, reporting will do little to address the disability employment gap. In addition to leadership from Government, we need leadership from organisations to shift attitudes to disability in the workplace. Training for employers, and more widely, can help develop empathy and change attitudes and behaviour. We also need practical measures to support disabled people at work, enabling them to thrive and protecting them from prematurely leaving the labour market. Some disability charities have recommended more flexible leave arrangements, as well as extending the Access to Work programme, which currently supports only a tiny minority of disabled people.

Although a number of employers do exceptional work in recruiting and retaining disabled employees, how does this apply to their procurement policies and supply chains? Of course more also needs to be done to help disabled people into work. As has been reported in recent Select Committee on Work and Pensions inquiries, the work capability assessment needs replacing with a more holistic, whole-person assessment. Instead of the increasingly punitive sanctions system, more appropriate support needs to be provided. One employment adviser helping 600 disabled people will just not cut it.

It is more than 70 years since legislation was first introduced to prohibit employment-related discrimination against disabled people. Sadly, we are still fighting to address this discrimination and the inequality in employment that people with disabilities still face. Changing attitudes and behaviour needs cultural change—it needs leadership. My Bill takes another step along this path for fairness.

Question put and agreed to.

Ordered,

That Debbie Abrahams, Dame Anne Begg, Sheila Gilmore, Glenda Jackson, Teresa Pearce, Alex Cunningham, Mr Peter Hain, Mike Kane, Caroline Lucas, Alison McGovern and Grahame M. Morris present the Bill.

Debbie Abrahams accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 27 March, and to be printed (Bill 178).

Opposition Day

Wednesday 25th February 2015 Commons Chamber

[18th Allotted Day]

Bankers’ Bonuses and the Banking Industry

Wednesday 25th February 2015 Commons Chamber

13:21

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

I beg to move,

That this House believes bonuses should be rewards for exceptional performance and that, following the banking scandals that have emerged in the last few months, this year’s bank bonus round should reflect this principle; further believes that a tax on bank bonuses should be levied in order to fund a guaranteed paid starter job for young people who have been out of work for over a year, and that this tax should cover allowances paid by banks which attempt to get round the EU bonus cap; calls on the Government to reform the rules on bankers’ bonuses by extending clawback of bank bonuses that have already been paid in cases of inappropriate behaviour to at least 10 years and by also extending the deferral period for senior managers to 10 years, in line with the recommendations of the Parliamentary Commission on Banking Standards; and further calls on the Government to implement wider reform of the banking industry to increase competition and boost net lending to small and medium-sized businesses.

As we enter this year’s bank bonus season, I am reminded that seasons used to be for football and fashion, but it now seems that we have a season for bank bonuses as well. I am delighted to have this opportunity to set out everything that a Labour Government would do to reform the banking sector in this country, and to highlight the areas where the current Government have failed to make the necessary reforms.

Earlier this month, in our Opposition day debate on tax avoidance, my hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood), with whom I have traded places today, explained how the tax system is underpinned by the principles of fairness, trust and transparency. Those principles are equally applicable to the banking sector. Just as a Labour Government will restore those principles to the tax system, ensuring that tax loopholes are closed, tax dodgers are caught, and everyone pays their fair share, so we will restore them to the banking sector. In doing so, we will be acting in the best interests of businesses, consumers, the wider economy and the banks themselves.

[Guy Opperman (Hexham) (Con)]

The hon. Lady’s motion seeks to increase competition in banking. Will she therefore explain why the Labour Opposition voted against the Financial Services Act 2012, which specifically encouraged competition in banking services?

[Cathy Jamieson]

Having sat on the Bill Committee for that piece of legislation, I remember well the considerable discussion that there was. If the hon. Gentleman has read our paper on banking reform, he will know that we support the reference to the Competition and Markets Authority to ensure that we get new challenger banks in the system. That will be an important feature of our reforms in government.

Our programme of reform, as stated in our recent paper on banking, is designed to undo the reputational damage that has been inflicted by the financial crisis and the subsequent scandals. Our approach will help to restore the trust and confidence of savers, businesses and investors, and to ensure that fair dealing, integrity, prudence and probity are once again the pillars on which Britain’s banks are founded. In a global industry, an international reputation for good practice can only be a competitive advantage.

[Charlie Elphicke (Dover) (Con)]

Does the hon. Lady believe that the tripartite system, which was brought in by the previous Prime Minister and the shadow Chancellor, was one reason why our banking system was left so much more vulnerable in the difficult time that we had? Does she accept that the Labour party should take responsibility for that?

[Cathy Jamieson]

As the hon. Gentleman knows, we did have a global financial crisis. The Labour party has accepted that perhaps the regulation could and should have been tighter; we have said that on numerous occasions. I was not in this place at the time of the financial crisis, but I do not recall many on the Conservative Benches making the case for tougher regulation. Indeed, the opposite is true; they were actually looking for light-touch regulation. I hear what the hon. Gentleman is saying, but perhaps he should look at his own party’s record on this matter as well.

[Guy Opperman]

rose—

[Cathy Jamieson]

I want to make a bit of progress, but I will give way once more to the hon. Gentleman.

[Guy Opperman]

Clearly, regulation is needed, but it is only because we have relaxed some parts of the regulations that we have been able to allow up to 20 new challenger banks to be established since 2010. Does the hon. Lady think that her proposals will encourage or discourage challenger banks? The evidence thus far is that Labour has voted against every single measure that would create greater competition in banking.

[Cathy Jamieson]

I am now becoming a bit confused about what Conservative Members are arguing for here. Do they want more or less regulation? [Interruption.] Did I hear someone say both? The important issue here is to ensure that regulation is fit for purpose, and that we do not simply have more of the same when we talk about new entrants into the banking system.

[Richard Fuller (Bedford) (Con)]

Let me help to clarify the matter for the hon. Lady. The point that she was trying to make is that having an enormous amount of regulation can be ineffective and bureaucratic, but, equally, having too little regulation will not work. What we need is effective regulation. One of the most effective aspects of regulation, when it comes to changing behaviour, is the potential for criminal prosecution of those who do wrong. That is not mentioned in her motion. Will she address that during her speech?

[Cathy Jamieson]

I thank the hon. Gentleman for giving some clarity. He is absolutely right that regulation is part of the process, but we also need a culture change and an attitudinal change. He is correct to identify the lack of prosecutions. Although that is not mentioned specifically in the motion, I recommend that he reads Labour’s document, which takes account of that point. Our agenda is not entirely punitive, because it is driven by economic imperatives. We all know that the performance of the banking sector is vital to the health of Britain’s economy. It employs more than 1 million people, each of whom has an important role to play in advising businesses and consumers, and helping them to manage their money, invest wisely and plan for the future. Without the banks, consumers would be unable to save and borrow. Businesses would not have access to the patient finance that they need if they are to grow and to create high-quality, well-paid jobs.

Too often in recent years, many banks have fallen short of the very high standards that we expect of them; that is a view shared across the House. In many instances, they have not acted with trust and they have not acted fairly. At times, they have acted recklessly and unethically. Instead of helping their customers, they have exploited them.

Banks and their employees operate in a high-skilled environment, dealing with sophisticated financial instruments that are often beyond the ken of the average consumer and small business owner. Rather than using that knowledge to guide and advise consumers, they have, in some instances, abused that knowledge to exploit them. In investment, consumer and business banking, banks have betrayed the trust of customers and undermined the integrity of the industry. In doing so, they have totted up some truly colossal sums in fines.

Indeed, 2014 was a record year for fines in the City of London, culminating in the £1.1 billion fine levied by the Financial Conduct Authority on five banks, including HSBC and the Royal Bank of Scotland, for their part in the forex fixing scandal. In recent times, four UK banks—Barclays, HSBC, RBS and Lloyds—have also paid £1.5 billion in compensation for mis-selling interest rate hedging products. Other recent scandals include LIBOR fixing and the mis-selling of payment protection insurance.

[Mark Garnier (Wyre Forest) (Con)]

I am grateful to the hon. Lady for giving way; she is making an intelligent speech. With regard to the recent fines, is it not fair to say that in the vast majority of cases the actions that led to those fines were perpetrated under the old regulator, the Financial Services Authority, and that the bringing to justice, meaning the fining, has been done under the new regulatory regime? Does that not reinforce how bad the old system was and how good the new one is?

[Cathy Jamieson]

I thank the hon. Gentleman for what I think was a bit of a compliment about me making an intelligent speech. Of course, he then proceeded to make a party political point by trying to shift the emphasis back on to what happened before, and I understand why he would seek to do so. It is important to acknowledge that there have been changes, but there is no evidence yet to suggest that all the behaviours that led to wrong decisions being taken have changed, so we still need to keep an eye on that.

[Chloe Smith (Norwich North) (Con)]

I would like to give the hon. Lady an opportunity to rise above the party politics that the right hon. Member for Morley and Outwood (Ed Balls), were he here—I note that he is not—would no doubt be indulging in. Does she welcome the £5 million funding from LIBOR sources that has benefited charities up and down the country, including the East Anglia air ambulance in my constituency?

[Cathy Jamieson]

I thank the hon. Lady for her comments. The shadow Chancellor is not here, but neither is the Chancellor, so I am not sure what point she was trying to make in that regard. I recognise that a significant amount of money has gone to support valuable organisations such as the one she mentioned, but I hope that she was in no way suggesting that the banks should not be paying attention to their current ways of operating. We must ensure that we never again have a situation in which those fines are necessary, so hopefully things will change.

[Charlie Elphicke]

Will the hon. Lady confirm that the forex and LIBOR scandals took place before this Government were elected, and that it is this Government’s regulatory regime that has taken action to deal with them? Does she also agree that bonuses tripled in four years under her Government, and that under this Government they are a fifth of what they were? Much progress has been made, and she ought to give the Government credit for the work they have done.

[Cathy Jamieson]

I will always give credit where it is due, but we also have to look at what has happened on this Government’s watch. As the hon. Gentleman knows, what we have seen with HSBC over the past few weeks shows that it can take a considerable time for some of those issues to come to light and be dealt with. The important point is to have a regulatory environment in place that allows those issues to be dealt with quickly, rather than just put to one side. We also need a change in culture to ensure that those things do not happen again.

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

My hon. Friend is making a very important point. She will remember that after the LIBOR scandal the Parliamentary Commission on Banking Standards set out a programme of reform for the banking sector. Is she as concerned as I am that those reforms have not gone nearly far enough in their implementation? We need a proper investment bank and proper competition in banking, and we must also ensure lending to businesses.

[Cathy Jamieson]

My hon. Friend makes a useful point. I am confident that he has read the paper we published on that, which highlights the need to ensure that finance gets to small and medium-sized enterprises, in particular, and the important role that a proper British investment bank can play.

Earlier this month we saw a new and startling example of impropriety, with the allegations that HSBC’s Swiss subsidiary actively advised customers on how to avoid, and indeed evade, tax. I want to emphasis again that all those activities are symptoms of a wider culture that has seeped from investment to retail banking. That culture has been characterised by short-termism and the pursuit of profit at the expense of all else—in many cases, at the expense of the banks’ own customers and the wider economy. That culture led to banks exploiting their consumers and ripping off the taxpayer.

That culture has also caused banks to lose sight of what should be their core function. The role of our high street banks is, or should be, twofold: they must serve the needs of consumers, providing basic borrowing and saving facilities and loans for mortgages to buy homes; and they must provide finance to businesses, as my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) suggested, enabling them to start up, grow and create well-paid and secure jobs. However, lending to business has fallen by over £55 billion since 2010, despite an array of Government schemes, such as Project Merlin and the funding for lending scheme, all of which have to varying degrees failed to deliver. Despite that, however, and despite all the scandals, the banks have continued to pay lavish bonuses to a small cohort of senior employees.

[Mark Garnier]

The hon. Lady is being very generous in giving way. She says that business lending is not quite what it was in the old days, but is it not fair to say that business lending in the old days was incredibly irrational and irresponsible, and that that led to the financial crisis that brought the banks down? We want the banks to lend, but we do not want them to lend irresponsibly and create another crisis.

[Cathy Jamieson]

I do not think that anyone is suggesting that we want irresponsible lending. We want those businesses that are valuable, sustainable and want to grow—I am sure that the hon. Gentleman has heard from them in his constituency, as I have in mine—to be able to access finance. That is the important point.

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

My hon. Friend is being incredibly generous in giving way to Conservative Members, and I would like to quote another Conservative, albeit not a Member of this House. Kay Swinburne, an MEP for Wales, had this to say on the subject of the court case in Europe that the Government decided to contest with our money:

“I can tell you there is not a single constituent I have met that actually thinks we were right to have taken that to the courts”.

She then suggested that bankers could be “a little more innovative” in getting around the cap. That is the real voice of the Conservative party, even if Conservative Members are not expressing it here today.

[Cathy Jamieson]

I was planning to say something about the cap later, but my hon. Friend has made her point with words that I would have difficulty bettering.

Let me return to banks paying lavish bonuses. The public are understandably still questioning why, with wage stagnation and the cost of living crisis that they are all facing, senior bankers have continued to reward themselves in that way. Let us look at the figures. Last year, bonuses at Barclays were up 10% to £2.4 billion and those at Lloyds were up 8% to £395 million. The Royal Bank of Scotland, 79% of which is owned by the taxpayer, announced a bonus pool of £577 million. Some may say that that is all well and good, because it is just senior bankers enjoying the hard-earned fruits of their labour, but that is more difficult to justify in the light of recent scandals and given that two of the UK’s four largest banks—Barclays and RBS—have experienced drastic falls in profits. Earlier this week, with impeccable timing, of course, HSBC announced its bonus pool for the year, awarding its chief executive, Stuart Gulliver, £7.6 million—I repeat, £7.6 million—and paying 330 of its top employees in excess of €1 million, despite the revelations of recent weeks and a 17% fall in profits.

It would be remiss of me not to refer to the role that the Government have played in all this. As well as the failure of their schemes to galvanise lending, they have failed—this point was made my hon. Friend the Member for Denton and Reddish—to implement all the reforms recommended by the Independent Commission on Banking and the Parliamentary Commission on Banking Standards. They ignored Labour’s pleas for action to regulate benchmarks when the LIBOR scandal first came to light, and they have actively aided and abetted bankers’ efforts to safeguard their bonuses. As my hon. Friend the Member for Clwyd South (Susan Elan Jones) pointed out, the Chancellor launched an ill-fated and misguided legal challenge to the EU bonus cap, which limits bonuses to 100% of fixed pay or 200% with shareholder approval, which still seems fairly generous.

[Mark Garnier]

What troubles me about a lot of what the hon. Lady is saying is that she is confusing how much bankers have been paid with how one goes about paying them. While many of us would agree that having pay packages of millions of pounds is an issue in itself, it is not to do with bonuses. She will probably propose in due course that bonuses should be clawed back over a period of 10 years, which I recommended as a member of the Parliamentary Commission on Banking Standards, so I agree with her entirely about that. However, capping bonuses reduces the amount of money that can be clawed back. In fact, if one pays a banker £1, 90p should be paid as a bonus, because then there will be more to claw back and therefore more sway over that banker to encourage them to behave better.

[Cathy Jamieson]

I thank the hon. Gentleman for that intervention. I know that he made those points during the work that he did. I am glad to hear that he agrees with us on some of this, and I will deal with a number of his points later.

We still have to look at the actions of this Government in taking on the legal challenge to the EU bonus cap, however. I am sure that the hon. Gentleman does not suggest for a moment that that was a sensible thing to do. I do not think that the public saw it in that way—

[Mark Garnier]

rose—

[Charlie Elphicke]

Will the hon. Lady give way?

[Cathy Jamieson]

No, I want to finish this point.

As I said, it seemed that the scenario proposed was still fairly generous, but it was obviously not generous enough for the Chancellor, who decided to take legal action. The quest ended in failure after he meekly admitted defeat at the hands of the EU’s lawyers, but not before he had wasted thousands of pounds of taxpayers’ money in legal fees. Let us remember that this Chancellor will not devote himself to ensuring that tax avoiders and evaders are brought to book, when the first thing that he does is to challenge something of that sort, but he will devote himself to defending the right of bankers to receive high bonuses, while spending taxpayers’ money as he does so.

The Chancellor has been a diligent defender of bankers on the home front, too. Last year he had to be pressurised by Labour and others into refusing to give taxpayer-owned RBS the shareholder permission it needed to breach the cap and to pay bonuses of 200% of salary, and he still has serious questions to answer on HSBC. Over recent weeks, he has done his best not to answer them and has sent his Treasury Ministers out to do the talking for him. On Monday, he finally put in an appearance, yet he did not have any answers at all, so we need to keep asking the same questions. Did he discuss allegations of tax evasion at HSBC with Lord Green before Lord Green was made a Tory Minister; why has only one person been prosecuted out of 1,100 names; and why has he signed a deal with Switzerland that could prevent HMRC from getting its hands on similar information in future? He has been Chancellor for nearly five years and this is his responsibility. He needs to start taking his responsibilities seriously. If he does not, people are going to draw their own conclusions.

Let me move on to Labour’s reforms. It has been clear since this Government took office that they do not have the stomach for the serious reforms that we need. As our motion explains, a Labour Government will do things very differently. Our starting point, as I outlined, will be trust and fairness. We believe that banks should serve the needs of their customers and the economy, and that bonuses should be a reward for exceptional performance, not a compensation for failure.

[Guy Opperman]

Will the hon. Lady give way?

[Cathy Jamieson]

I will, in the hope that the hon. Gentleman is going to agree with my last point.

[Guy Opperman]

I do agree that there is a need for greater competition. Let me ask the hon. Lady this question again: why did she troop through the Lobby—I presume that she did so with the rest of her colleagues—to vote against the provisions on greater competition in the Financial Services Act 2012?

[Cathy Jamieson]

As I said to the hon. Gentleman earlier, perhaps he would like to take some time to read the report that we produced last week, which shows that we need to make several changes to ensure that there is greater competition. I do not see anything inconsistent in that and I hope that he will choose to read the report.

I want to return to the point that bonuses should be a reward for exceptional performance, not a compensation for failure.

[Several hon. Members]

rose—

[Cathy Jamieson]

I want to finish my point. I have been very generous and time is moving on.

[David Mowat (Warrington South) (Con)]

Will the hon. Lady give way just on this point?

[Cathy Jamieson]

No, I am going to finish the point that I began.

Bonuses are a reward for exceptional performance in other industries, so that should be the case in the banking sector as well. However, despite the scandals that have emerged over the past year, most recently at HSBC, it looks as though this year’s round of bank bonuses will once again be very generous.

There needs to be more accountability in banking, and pay must be more closely aligned with long-term performance, so a Labour Government will embark on a serious and far-reaching programme of reform in the banking sector. We will reintroduce our successful tax on bankers’ bonuses, which generated over £3 billion in 2010, and act to ensure that this tax incorporates role-based pay or any other payments made by banks in an attempt to circumvent the EU bonus cap.

[Richard Fuller]

Will the hon. Lady give way?

[Mr Marcus Jones (Nuneaton) (Con)]

Will the hon. Lady give way?

[Cathy Jamieson]

No, I am going to finish this point because it answers a number of questions that hon. Members have put.

We will use the money generated to fund our compulsory jobs guarantee, creating a paid job for every 16 to 24-year-old who has been out of work for over a year, and for those over the age of 25 who have been out of work for more than two years. According to the latest labour force survey, youth unemployment was 740,000 in the three months to December 2014, which was an increase of 3,000 on the previous quarter. We know that being unemployed while young damages people’s prospects years into the future. Research shows that young people who have been unemployed for a year will, on average, be £125,000 worse off over their working lifetime, which means that a person on the average wage would have to work nearly six years longer to make up for the cost of being unemployed while young.

[Mr Jones]

rose—

[Cathy Jamieson]

I am not going to give way because I am making important and serious points about the future of our young people. I have been very generous in giving way and I want to finish this point. Our bank bonus tax not only will offer a lifeline for thousands of young people, helping them to earn, learn, and get a foot on the career ladder, but will help the economy and mean that the banks give something back to society.

In addition to that and our wider programme of reform, we will extend the deferral and clawback period for bonuses, ensuring that rewards are paid out proportionately and can be recouped when evidence of reckless or inappropriate behaviour is revealed further down the line. As I said, the financial crisis and recent scandals have shown that risky decisions can take up to a decade to have an impact. The next Labour Government will therefore ensure that if bankers have been shown to have acted inappropriately or made reckless decisions, banks will be able to claw back any bonuses awarded. We will act on the recommendations of the Parliamentary Commission on Banking Standards by extending the period for the clawback of bank bonuses that have already been paid to at least 10 years. We will also extend deferral periods for senior managers to at least 10 years, which will help to deter the rash and short-sighted behaviour that we have seen in the past, and to encourage banks and their employers to have a view of the long term.

[Mark Garnier]

rose—

[Cathy Jamieson]

I will give way to the hon. Gentleman once more, given his role on the Parliamentary Commission.

[Mark Garnier]

I am extremely grateful to the hon. Lady; she really is being incredibly generous. Capping bonuses and targeting the bonus with a tax in itself will inevitably drive banks’ behaviour towards the perverse outcomes that none of us in the Chamber wants. If we tax bonuses, the banks will change them into something else. They cannot wriggle out of a balance sheet tax, which this Government have imposed, but they will be able to wriggle out of a bonus tax, and we cannot avoid that.

[Cathy Jamieson]

I believe that the hon. Gentleman is trying to be helpful by making points that I know have been made before, but I refer him to the previous occasion on which a bankers bonus tax was implemented, when a number of anti-avoidance measures were put in place to deal with such a problem. We do not want any unintended consequences.

I am trying to signal our intent. When we are in government, we intend to make the tax work to change the culture and practice in banking, as well as to ensure that we help our young people. I am sure that any folks listening to my speech who are thinking about devising ways of not paying up or not making a fair contribution will hear the intent in what I am saying and therefore not pursue such a course.

I remind hon. Members who have not already read our “Plan for Banking Reform”, which was published last week, that it sets out a series of wide-ranging reforms to the banking sector. It builds on much of the work done by the commissions and is informed by speaking to people in the industry. It focuses on the four key areas of stability, competition, access to finance, and culture and pay. The one-off tax on bankers bonuses is just one part of the reform process, but it is an important part.

Last week, I hosted a jobs fair in my constituency, as have many hon. Members on both sides of the House. I saw at first hand how much the young unemployed people who came along want to work and to contribute to society. I met people who have been out of work over a fairly lengthy period and are desperate for the opportunity to get back into employment and to contribute to society. They want decent jobs with decent pay; they do not want the instability of being on zero-hours contracts or of working for umbrella companies that are more interested in avoiding paying their taxes than in paying their way in society. We need to ensure that such young people and the long-term unemployed—not just in my constituency, but right across the UK—get the help that they need. These young people need to make the first step on to the careers ladder, and the long-term unemployed need help to get back into real jobs. It is absolutely vital that such support is given to not only our young people, but the long-term unemployed, who are almost at risk of being frozen out of the jobs market.

As I said, Labour’s programme of banking reform is driven by economic imperatives. The motion sets out that banks should make a social contribution as well as an economic one, and that the bonuses they pay should be a reward for exceptional performance, not a compensation for failure. I believe that those are vital steps along the road to restoring fairness, stability and trust to the sector so that banks serve the needs of the wider economy. I hope that the Government see fit on this occasion to support our motion.

13:53

[The Economic Secretary to the Treasury (Andrea Leadsom)]

I have to say that I am extremely disappointed by the remarks of the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson). I find it absolutely astonishing that Labour Members have the courage to raise the issue of bankers’ bonuses. Perhaps they have forgotten that it was under their light-touch regulatory regime that the worst excesses of the banking sector were allowed to flourish. I wonder whether she regrets the fact that the shadow Chancellor is not in the House today. Does she suspect that he regrets saying, as City Minister in June 2006, that

“nothing should be done to put at risk a light-touch, risk-based regulatory regime”?

Does she think that he regrets presiding over a system under which £66 billion was paid out in bonuses on his watch?

[Cathy Jamieson]

I wonder whether the Minister heard what I said when I was challenged about whether the shadow Chancellor ought to be in the Chamber. I noted that the Chancellor is not present, and I raised the question of what Conservative Members had done on light-touch regulation. Were they not arguing for it? Can she give me an example from that time when her party proposed something different?

[Andrea Leadsom]

That is just another typical Opposition ploy. At that point, the Conservative party was in opposition and the Labour party was in government. It is absolutely unconscionable for the Labour party to suggest that the Opposition of the day should have saved the Labour Government from their own excesses.

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

Will the Minister give way?

[Charlie Elphicke]

Will the Minister give way?

[Andrea Leadsom]

I give way to my hon. Friend.

[Charlie Elphicke]

Does my hon. Friend not think that the last intervention is reminiscent of arsonists throwing rocks at the firefighters who have worked so hard to put out the fire the arsonists started?

[Andrea Leadsom]

My hon. Friend is quite right. It is extraordinary that Labour Members have the cheek to come to the House and suggest that Conservative Members are somehow responsible.

I want to draw to the House’s attention the very prescient quote from the former Prime Minister when, representing the previous Government, he addressed the City in his Mansion House speech in 2002:

“What you as the City of London have done for financial services, we as a Government aim to do for the economy as a whole.”

And didn’t they just? It is absolutely extraordinary that under the “intensely relaxed” Labour Administration, bankers were rewarded for taking excessive risk, and if they failed, were allowed to get away with it—heads they win, tails the taxpayer loses.

[Debbie Abrahams]

Will the Minister give way?

[Mr Stewart Jackson (Peterborough) (Con)]

Will the Minister give way?

[Andrea Leadsom]

I give way to my hon. Friend.

[Mr Jackson]

Is not this debate a displacement activity for a party that does not have any coherent narrative to deal with jobs, growth and the economy? Is it not reckless of Her Majesty’s Opposition to keep recycling the tax on bankers’ bonuses—10 times over—without ever having to account for where that money will actually go?

[Andrea Leadsom]

My hon. Friend is exactly right that the Opposition are simply trying to recycle something as a distraction. I am truly delighted that the motion gives me the opportunity to set out the wide-ranging measures that this Government have taken to sort out the appalling legacy of the Labour party on banks and remuneration. We have taken an extraordinarily wide-ranging set of measures to sort out a mess left, once again, by a Labour Government.

[Debbie Abrahams]

I am grateful to the hon. Lady for ultimately giving way. Will she remind the House how much more the Government are borrowing now compared with 2010?

[Andrea Leadsom]

The hon. Lady will know that the Government have taken steps to bring down significantly the amount we are borrowing each year to get our economy on the road to recovery after the disaster caused by the Labour party.

To return to the point of this debate, the real fact is that the public are absolutely right to be furious about the behaviour and misconduct of banks. It still feels as though there are fresh examples every day of the shameful practices that went on in the bad old days. The public will want to know what this Government have done to sort out the mess left by the previous Government.

I can tell the House that, under this Government, we have the toughest remuneration regime of any major financial centre in the world; we are making banks raise their standards, rebuild their reputation and get back to the job they used to do prudently and respectably for centuries; and we are making sure that we never go back to the bad old days of banking.

[Guy Opperman]

Will the Minister give way?

[Mr Marcus Jones]

Will the Minister give way?

[Andrea Leadsom]

I will give way in a moment, but I want to be very clear at this point. In such debates, there is always a sense that somehow all bankers are terrible people. The truth is that the vast majority of the up to 2 million people employed in financial services do an honest day’s work and always have done. They would not seek to rip anybody off, or distort anything they do. They are honest, decent people. I want to pay tribute to the work of financial services not just in oiling the wheels of our economy, but in contributing so much to our economy as a whole. Notwithstanding the very real misconduct issues, which have disgusted all of us right across the country, it is true that only a small number of people are responsible for such wrongdoing. I will talk about what we have done to put that right after I have given way.

[Guy Opperman]

Will my hon. Friend also make the point that this Government have ensured that LIBOR funds, which were not previously given to good causes, have benefited air ambulances—my hon. Friends and I supported them at No. 11 Downing street last night—and 96 military charities? This Government have brought in a magnificent innovation that supports wonderful charities.

[Andrea Leadsom]

I am very grateful to my hon. Friend for raising that point. The Government are extremely proud that fines for misconduct go to good causes, unlike under the Labour party, when any fines for misconduct were passed straight back into the hands of the people who committed it. The LIBOR fines have gone to military charities and air ambulances, as he pointed out, and the fines for the appalling foreign exchange rigging will support the NHS and GP surgeries in particular.

[Helen Goodman (Bishop Auckland) (Lab)]

The hon. Lady is a well-informed Minister. Will she tell the House what she did in her years as a banker at BZW and Barclays and, latterly, as a head of corporate governance to lobby for tighter financial regulation?

[Andrea Leadsom]

I am very grateful to the hon. Lady for giving me the opportunity to say that for the last 10 years of my career at Invesco Perpetual, I was responsible for writing a quantitative bonus scheme that measured the performance of fund managers over three, five and 10 years according to the performance of the team, the business and the individual, which involved clawbacks, as appropriate. I started that work in 1999 and finished it in 2009, so I can say with confidence that I did my bit on remuneration.

What have the Government done that we are so proud of? First, we have brought down the quantum of bonuses. City bonuses are now a fifth of what they were under Labour. The banks that were bailed out by the taxpayer have been a key focus for the Government, so let me inform the House about what is happening with bonuses at RBS. We will ensure that the total bonus pool comes down again, both in total and per head. That will continue the reductions that made last year’s bonuses more than two-thirds lower than those in 2009. The bonus pool at the investment bank will come down too in total and per head. We are continuing to restrict cash bonuses to £2,000, and no executive director will receive a bonus.

Let me also tell the House what is happening at Lloyds. This week, we announced that we are getting back another half a billion pounds for taxpayers—money that they had to put in. We can do that because since the crisis Lloyds has gone from failure to being a strong, profitable bank that is helping to drive the UK recovery and is contributing £230 million a year through the bank levy. We will ensure that Lloyds sees its bonus pool reduce this year and we are continuing to restrict cash bonuses to £2,000.

Let us compare that with the Labour party, which presided over a system that paid Fred Goodwin a cash bonus of £2.9 million in 2007. It is now calling for a 10-year clawback on bonuses—once again asking us to clear up the mess that it left—and has spent its bank tax proposal 10 times over.

The Government have made the link between bonuses and performance crystal clear. Bankers should be in no doubt that their bonuses are at risk should misbehaviour occur. Under this Government, highly paid bankers and those who are liable for big decisions have their bonuses deferred over at least three years, and at least 60% must be deferred for senior managers. Bonuses are now clearly linked to the performance of banks, since 50% of any bonus must be paid in shares or similar instruments. Deferred bonuses can be subject to cancellation in the future. Since the start of this year, bonuses can be clawed back up to seven years after they are paid out when misconduct or serious performance issues come to light. Guaranteed bonuses, which were commonplace under the previous Government, are banned in all but the most exceptional circumstances.

We have taken the lead in ensuring that there is transparency in senior executives’ pay arrangements. We have ensured that all the top 15 banks have signed up to the strengthened code of practice, which is a notable improvement on the two that had signed up when Labour left office. Our reforms to company law mean that shareholders are guaranteed a binding vote on pay policy.

We are not stopping there. The Parliamentary Commission on Banking Standards, which was attended so ably by my hon. Friend the Member for Wyre Forest (Mark Garnier), made strong recommendations on bankers’ pay.

[David Mowat]

The Minister is right to say that the level of bonuses has reduced hugely in the past few years. However, does she agree that the real issue with banking is not the bonus level, but the level of absolute remuneration, which the Labour party’s policy does not address? Why does she think banks require so many people to earn more than £1 million a year, in a way that oil companies and pharmaceutical companies do not? The issue is the absolute level of remuneration.

[Andrea Leadsom]

Philosophically, I agree entirely with my hon. Friend. Many people across the country will agree that the absolute level of remuneration in financial services needs to be clearly justified. Although the Conservative party truly believes that wealth creation, which creates jobs, tax revenue for the Exchequer and growth for our economy, should be properly remunerated, we want to give as much power as possible to shareholders to ensure that they can take decisions that make it absolutely clear that remuneration should reflect the contribution of the individual, and not just some norm in the industry.

We have agreed with the recommendations of the Parliamentary Commission on Banking Standards and asked the financial services regulators to look into implementing them, in particular the extension of clawback to 10 years when an investigation into an individual is ongoing and the extension of deferral to seven years for senior managers, which is a significant increase from the current three years. The regulators are due to publish final rules in response to the consultation shortly. I am sure that hon. Members will agree that we want to keep our independent regulators independent, so that they act in the best interests of our economy and not in the interests of a political party.

[Mr Marcus Jones]

My hon. Friend has mentioned power for shareholders and political interference. Does she agree that it is not right for the Government to intervene in certain situations, such as in the financial crash, when the last Prime Minister effectively pushed Lloyds TSB and RBS into a shotgun marriage?

[Andrea Leadsom]

I agree with my hon. Friend in principle. We want to see the market working properly, shareholders taking the decisions on remuneration and businesses acting fairly in the interests of all their stakeholders. That is why we have been so determined to sort out transparency, fairness and the binding votes that boards have in regard to the actions of the banks.

Our desire to see a lack of political intervention is why we have opposed and continue to oppose the deeply flawed and politically motivated EU cap on bonuses. My right hon. Friend the Chancellor, the Governor of the Bank of England and the head of the Prudential Regulation Authority agree that it will not control bankers’ pay, but instead push up fixed pay, make it more difficult to claw back earnings when things go wrong, weaken financial stability and make it more likely that the taxpayer, rather than the banker, pays the cost of mistakes. We continue to believe that the cap is fundamentally flawed. Members will know that we have, however, withdrawn our legal challenge to the cap and are instead looking at how else we can build a system of pay in global banking that encourages responsibility, rather than undermines it.

[Helen Goodman]

Will the hon. Lady explain to the House and the country why it is wrong to cap bankers’ bonuses but right to cap nurses’ pay?

[Andrea Leadsom]

The point that we have made about the bankers bonus cap is that bankers will find other ways to remunerate themselves in fixed pay, rather than in variable pay. The hon. Lady smiles, but she perhaps fails to understand that the whole point of the regime we have put in place is to ensure that bankers are accountable. The way for them to be accountable is through variable pay, which is performance related, unlike fixed pay. The problem with the cap on bonuses is that it will put up fixed pay.

[Helen Goodman]

rose—

[Andrea Leadsom]

I will not take another intervention on that point because I have explained it twice and would like to move on.

The cap remains fundamentally flawed, so we are looking at other ways to ensure that there is accountability. We do, however, fear that fixed pay is going up and there is some evidence of that. Last November, the Chancellor wrote to the Governor of the Bank of England to ask him to encourage this work in his role as chairman of the Financial Stability Board. Such methods at a global level might include standards that ensure that non-bonus or fixed pay is also put at risk, maximising clawback or paying senior staff in performance-related bonds. Any such solution must be international in nature to be effective. That is why we are pushing the Financial Stability Board, which is uniquely well placed, to pursue these issues with urgency.

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

I welcome all the action that the Government have taken to clamp down on excessive banking bonuses, but it is not the case that, as my hon. Friend said earlier, more than 2 million people are employed in the financial services industry in Britain, and not all of them are millionaires? It is important that we take into account the fact that there are people in the banking sector on relatively low pay. Not every banker is earning £1 million or more a year.

[Andrea Leadsom]

I am glad that my hon. Friend has raised that point, and I am happy to reiterate my remark that the financial services sector employs up to 2 million in this country, most of them outside the City and many of them doing regular jobs in banks and call centres, or even in places such as a new dealing room that has been set up outside Birmingham, which I recently had the pleasure of visiting. All those people are as mortified as the rest of us at the behaviour of a few, so it is always important to remember that we are talking about the behaviour of a few, not of the many.

The third thing that the Government have done is to improve the accountability of bankers. I hope hon. Members will agree that the vast majority of people in the financial sector are decent people who have played by the rules and just want to get on with providing a valued and trusted service to their customers. We must have high standards in banking, because that is what will help the UK to continue to thrive as a leading and trusted financial centre. The sector remains a huge asset to the British economy, contributing almost an eighth of the total tax receipts and giving us a trade surplus of £16 billion last year.

Banking oils the wheels of the economy, helps our businesses grow, fosters investment and boosts aspiration. When bankers get it right, it is a driver of this country’s growth. When they get it wrong, the damage is consequentially enormous, because it threatens the livelihood of millions of people in this country, as we saw during the financial crisis.

The public will want to know that this Government have made reckless misconduct leading to bank failure a criminal offence, and overseen banks being fined heavily for their worst excesses. There have been £450 million of fines for the disgraceful rigging of LIBOR and £1.1 billion of fines for the manipulation of foreign exchange rates—disgusting and unacceptable behaviour. I know that all Members will be reassured to know that the Serious Fraud Office has opened investigations into a number of individuals in relation to the manipulation of LIBOR and forex. Of course, many firms have sacked and dismissed staff found guilty as part of their own internal investigations.

[Richard Fuller]

My hon. Friend is now stressing one point that the everyday people feel is most important about the reform of our banking system—that when bankers do wrong, they should face criminal prosecution and the prospect of jail. Is she satisfied that we now have the right measures in place—measures that the last Government did not put in place—and will she assure the House that she will ensure that the Government use all their powers to enforce the regulations as far as possible?

[Andrea Leadsom]

That is an important point. This Government have taken every step we can think of to ensure accountability, prevent future wrongdoing and improve standards in banking. We are always open to new suggestions, but it is our genuine belief that we have fundamentally changed the underlying systems that banks work with. I can certainly reassure my hon. Friend that when I speak to the chief executives of banks, as I do regularly, they assure me that they, too, take the matter extremely seriously and have put in place checks so that they can indentify wrongdoing and punish the offenders under their own steam, as hon. Members will have seen in the press today.

[Helen Goodman]

Will the Minister give way?

[Andrea Leadsom]

I will not give way again; I am just coming to the end of my speech, and I want to give other Members the chance to contribute.

Fourthly, in our efforts to rebuild this vital industry, we have put in place the regulatory reforms necessary to improve bankers’ conduct and make banks serve their clients better, whether they are small and medium-sized enterprises or members of the public. We have legislated for a new senior managers and certification regime, to strengthen the accountability of senior management and raise the standards of individual conduct. We also launched an enforcement review, which recommended improvements to how regulators make decisions relating to enforcement.

We have promoted choice and competition in the retail banking sector, putting it at the heart of our regulatory system. By making it easier for customers to switch banks we are incentivising banks to look after their customers better, and by opening the door for new and smaller banks to compete with the established names we are ensuring that the entire sector ups its game, not least in helping our small and medium-sized businesses grow and expand. That is good for the customer, good for the sector and good for the wider economy.

Reforming remuneration for bankers has been a major priority for this Government. We are sorting out the mess left by the Labour party. It is not a pleasant spectacle when you lend someone your car, and they crash it and then criticise you for not repairing it quickly enough. I totally reject the proposals for changes that the hon. Member for Kilmarnock and Loudoun made. This Government are doing the work needed to ensure that the UK’s financial services are fit for the 21st century and that we put the bad old days of banking behind us.

14:16

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

I think it is fair to say that many of us have been speaking to ever-rising numbers of constituents in the past few weeks, and I am confident that that will continue in the weeks to come. Members will acknowledge that the sense on the doorstep and on high streets is that there will be a recovery that genuinely touches every part of our country only when the talent that is wasting away in each of our communities can find fulfilment again in the dignity of decent work.

Welcome though the recent falls in unemployment are—although, worryingly, youth unemployment rose in the last quarter—they conceal the scale of long-term unemployment, particularly among young people. In my constituency, some 520 people have been out of work for either a year or more in the case of 18 to 24-year-olds, or two years or more in the case of over-25s. That accounts for one fifth of the jobseeker’s allowance claimant count in my constituency.

I have met the families of many young people, who have told me exactly the same story: those young people have gone to college and undertaken good vocational training, but ended up in long-term unemployment at the end of it. They have done the right thing but ended up without work for long periods, so now the Government must do the right thing by them and act to restore their right to a decent job. They are people with ambition, aspiration and great prospects, but they are currently denied the right to work by a way of running the economy that lets inequality rip, with the majority of the gains from growth going to people at the top of society, while low pay, insecure hours and increasingly insecure terms and conditions at work leave a persistent gap between rich and poor.

[Mr Iain McKenzie (Inverclyde) (Lab)]

My hon. Friend has started exactly where this debate should start—with who needs to benefit, which is young people who are looking for work but have been out of work for some time. Does he agree that it is not only about giving them jobs, but about giving them the opportunity for careers and long-term employment? The Conservative party says that it is the party of opportunity, after all.

[Mr Bain]

My hon. Friend’s point will have as much salience in Inverclyde as it does in Glasgow North East and, I believe, in every constituency. When the maximum number of people in this country are involved in the economy, we have a broader tax base and more tax revenue coming in. That is the only credible plan for reducing the deficit in a fair way in the next Parliament. Any Chancellor who wants to have a credible deficit reduction plan has to have a credible plan for abolishing long-term and youth unemployment.

[Ian Swales (Redcar) (LD)]

I am aware that the hon. Gentleman was not here during the last Parliament—at least, I do not think he was—but how does he feel about the fact that his party was in government for 13 years to deliver its vision, yet youth unemployment rose and inequality widened? Why should we believe that it will be different in the future?

[Mr Bain]

I was here for four months of the previous Parliament, when a tax on bankers’ bonuses brought in £3.4 billion in revenue and we introduced a 50p top rate of tax for people earning £150,000 a year or more. The next Parliament should reintroduce that to ensure that the wealthiest in society make a fairer contribution to getting our deficit down, and so that we bring back opportunities for young people who have been denied them during this Parliament.

[Mr Stewart Jackson]

I admire the hon. Gentleman’s sincerity, but his argument would carry more weight were it not for the fact that under the previous Government—run by the party of which he is a member and supports—during a period of economic growth 5.2 million people were left on out-of-work benefits and youth unemployment doubled. The gap between the richest and poorest 10% widened. That is his Government’s record, and it ill behoves him to lecture our Government who have done a lot to address those key issues.

[Mr Bain]

The Government whom the previous Labour Government replaced were content to leave a wages structure in place in this country in which security guards earned less than £1 an hour. That inequality had to be tackled, and that gap reduced during the previous Parliament. People will want to hear during this debate about the next Parliament, and about our vision for the future of a high-skill, higher wage, higher investment economy. I believe that the Labour party has the more convincing vision.

[Guy Opperman]

I have here the House of Commons unemployment statistics for February 2015 for Glasgow North East. Surely this Government’s long-term economic plan has done something when the number of total claimants has reduced by 19.6% in the hon. Gentleman’s constituency, youth unemployment for 18 to 24-year-olds has reduced by 27%, and those unemployed for more than 12 months—a more difficult area—have reduced by 37%. Are we doing something right?

[Mr Bain]

The hon. Gentleman cites figures that demonstrate that in the last month—[Interruption.] Well, I will give him figures from the Office for National Statistics. In the past month, unemployment in my constituency rose by nearly 50 people. He does not cite the International Labour Organisation figures. If he genuinely believes that unemployment of 2,500 people in my constituency should be tolerated by any Government, he misjudges not just the attitude of my constituents, but the good sense of the British people.

[Charlie Elphicke]

Does the hon. Gentleman agree that welfare reforms, the long-term economic plan, and the jobs revolution that we have seen have been great at getting people back into work so that they can fulfil and achieve their potential? Does he not welcome that?

[Mr Bain]

I welcome any reduction in unemployment, but our communities have a severe problem with long-term unemployment that this Government’s employment policies are simply not reaching.

[Helen Goodman]

Is my hon. Friend aware that the Government have manipulated the jobseeker’s allowance figures by increasing the number of sanctions, which are now affecting some 25% of people who go to the jobcentre?

[Mr Bain]

I agree with my hon. Friend. In this country people want targets for abolishing long-term youth and adult unemployment, not targets in jobcentres for sanctions. We see that in our constituency offices when people arrive in a desperate state having been sanctioned because of edicts from the office of the Secretary of State for Work and Pensions.

The vision of a different economy was picked up by the OECD yesterday in its report. It stated that future growth and rises in living standards in this country will come only if our economy sees increases in productivity, exports and levels of investment. We must improve our skills record and, importantly, sort out more secure and long-term pathways to finance for business and industry in this country—real structural reform for our banks must happen in the next Parliament.

A high-skill, high-investment, higher-wage economy cannot be built when thousands of people are locked outside the labour market for long periods, with skills going to waste and promise left unfulfilled. In 10 weeks’ time—10 weeks tomorrow—my constituents and the rest of the country will go to the polling stations in the hope that change is on the way with a new Government. However, the House does not have to wait that long. By passing the motion today, it can send a powerful message to the Chancellor that a Budget that will command support in the country in a few weeks’ time must have the purpose of abolishing the scourge of long-term unemployment that is so destructive of long-term income prospects, and corrosive of the human spirit.

The House should do more. We must restore fairness to our taxation system and reintroduce that tax on highly paid financiers who have pocketed some of the biggest gains from this Government over the past five years. With the 50p tax cut, for the last few years they have had a Government who have been on their side. Now the British people, who are meeting the burden of high long-term unemployment costs through our social security system, need a new Government who are on their side instead.

With as much as £34 billion a year in taxes going uncollected under this Government, we need policies that maximise revenues and encourage excluded parts of our society back into the labour market. Sweden’s equivalent of the jobs guarantee policy was first introduced in 1983 under a social democratic Government, and it helped balance the books there in the mid-1990s while restoring the right to work to thousands of people. That jobs guarantee was followed in Norway, Finland and Denmark. We should match that ambition in this country by having more people in work and paying into the system, and becoming better off and improving our public finances at the same time.

With bonuses paid by the financial sector since the onset of the financial crisis in 2007 having reached £100 billion this year, and with a few at the top pocketing the biggest gains, the case for asking for a greater contribution from those people—given the taxpayer assistance that has been provided to the banks and financial sector since 2008—is unanswerable. With the Office for Budget Responsibility having revised down by £48 billion at the autumn statement the levels of revenue from income tax and national insurance from the next financial year until 2018-19, the case for more people being in work, and for the super-rich to pay their fair share, makes best economic sense. That is why it is right to increase the clawback period for bonuses paid to people guilty of misconduct in the financial sector from seven years to 10 years, and—crucially—to introduce penalties in law for breaches of the general anti-abuse rule on avoidance.

As the High Pay Centre has shown in recent months, the link between company performance and executive remuneration and bonuses at the very top is tenuous at best. Reform of corporate governance so as to have an employee representative on remuneration committees would help secure greater accountability over what highly rewarded executives receive, and the wider commercial and social obligations that they should have in mind.

Too often, pay structures reward failure when instead there must be a greater relationship with long-term performance. That can be dealt with by the Financial Conduct Authority and greater legal transparency on bonuses, and secured by reform of the laws and corporate governance. Through the taxation system, we in this House can do a great deal more to discourage irresponsibility in the financial sector, and secure justice for the disadvantaged by raising £1.5 billion to £2 billion through a repeat of the bank bonus tax, to fund the jobs guarantee policy that will help so many long-term and young unemployed people. But as has also come up in this debate, we also need to deal with the structural reforms in the banking system which are needed to restore proper channels of finance to small and medium businesses.

A British investment bank, constructed for the purpose and capitalised by some of the revenues we can expect from 3G and 4G licences in the future, is the best way to deal with the gap in the British economy and ensure stable finance for small businesses. As the OECD pointed out yesterday, ensuring consistent lending for businesses is vital for future growth, and policies such as funding for lending have not bridged the gap. They have not delivered the necessary impetus to net lending and the next Parliament and Government need to be much more ambitious on that front.

[Mr Stewart Jackson]

The hon. Gentleman is elucidating another straw man, which was articulated by the shadow Minister—that we somehow have a crisis in lending. The fact is that businesses of all sizes hold unprecedented levels of cash reserves and they will spend if we have a benign macro-economic policy framework. That is not what is being offered by his party, so any accusations of missing lending targets obscures the bigger picture.

[Mr Bain]

I am citing evidence—I hope that the hon. Gentleman has been listening carefully—from the OECD and Bank of England reports that net lending to business has continued to fall. The OECD said yesterday that weak lending is a structural problem in the British economy. He might think that I am raising a straw man, but I hope that he is not accusing those organisations of doing so. It is their argument that this Government have left unsolved that structural weakness in the past five years. Tougher action is needed in the next Parliament to secure stable finance for our businesses, because that is how we will get the jobs and growth that will generate the tax revenues and lower the deficit.

[Helen Goodman]

If it is the case that some firms have high cash balances and others face shortages in investment, it is far from being an example of the success of the current banking system: it is a demonstration of its failure.

[Mr Bain]

Businesses have told me that the absence of a strong investment bank, such as they have in Germany, France, and South Korea and as the Federal Reserve acts in the US economy, is equivalent to our business having one hand tied behind its back. It is that structural flaw that must be addressed in the next Parliament, but it is absent from the Government’s thinking, given what the Minister said.

The OECD also raised a further problem—the risks that the shadow banking sector could cause to our banking sector. We heard nothing from the Minister about closing loopholes that hedge funds have been able to exploit or about strengthening the tools to oversee the shadow banking sector, given the potential risk to financial stability that the OECD mentioned.

The debate is important because the Government have the perfect opportunity in the coming weeks to aim for fairness, with a proper jobs guarantee policy, and a bank bonus tax that would extend opportunity as well as responsibility. If they fail to take that opportunity, Labour will take our case for change to the country and the British people. I am confident that they will vote for change and vote for a new Government on 7 May.

14:34

[Guy Opperman (Hexham) (Con)]

It is a pleasure to speak in this debate. I must first mention the Register of Members’ Financial Interests and point out that I am attempting to create two banks in the north-east at present. My life savings, virtually, are in the Atom bank, which is an internet start-up that has been set up by individuals just outside Durham. We are also attempting to merge the Tynedale community bank with the Prince Bishops bank in Stanley in County Durham, with a view to creating an enhanced credit union.

Having made that declaration, I would like to take the House on a journey. The very first constituent who came to me after I had been elected in 2010 had had his bank finance taken away and, for that reason, his business had failed. It was not through any fault of the business, but because of the bank lending provisions at the time. The bank was local, in Newcastle and then London, and was one of the large banks. That case made it patently clear to me that we needed greater competition. To that end, we have spent much time in this Parliament, both as the Government and individually, trying to create that greater competition.

When we assess the quality of the Labour proposals—I confess that I have not had the great joy and pleasure of reading the shadow Chancellor’s proposals for banking reform, to which the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) referred, but I have glanced at some of the issues—we must look at the record over the last few years. That must start—and I twice raised this with the hon. Lady and did not get a reply—with the Financial Services Act 2012. On 23 April 2012, I spoke in the debate on the Bill. To the Labour party’s eternal shame, it tabled amendment 28, which sought to delete clause 5 of the Act. That would have removed “The competition objective”. Labour claims to be in favour of competition, but I find it utterly illogical and wrong that it should have sought to vote down the specific proposals in the Act that encourage competition. The proposals are simple and I would have thought that those who profess to want competition in banking would be in favour of them. They include

“the ease with which consumers who obtain those services can change the person from whom they obtain them”—

bank switching, and

“the ease with which new entrants can enter the market”.

That is challenger banks and local banks. The clause also includes

“the ease with which consumers who may wish to use those services…can access them”.

I could go on.

I refer to clause 5 because the House and the country will have to judge Labour on what it has done in the past. I have looked briefly at the grave and weighty tome—I speak ironically, I am afraid—published by the shadow Chancellor and the shadow Financial Secretary on proposed banking reform. It says that Labour wants to see

“At least two new challenger banks”.

I hate to say it, but over the last four years some 20-plus new challenger banks have been created under this Government. I have met many of them, including Metro, which is the biggest and the best, Aldermore and Virgin. Those of us who have been trying to increase competition would view the hon. Lady’s argument—which is, presumably, that 20 is good but we want two more—as illogical. I want an awful lot more than two more. Why she chose two, rather than one or 10, I am at a loss to understand, but doubtless when I read the grave and weighty tome, all will become clear.

We need to assess the way in which the Government have addressed the creation of greater competition. The creation of a new bank faces four fundamental challenges—I know because I have attempted to navigate my way through them over the last four and three quarter years. The first was a lack of legislation to facilitate such change. My hon. Friend the Member for Chichester (Mr Tyrie) and I went to see Sir Hector Sants, the then chairman of the regulatory authority, and he agreed and changed the rules. Previously, if I wished to create a challenger bank or new local bank, I would have been judged on the same basis as Barclays or the other big banks. I would have to have capital up front massively in excess of £50 million and my board would have to be set up years in advance—to say it was bureaucratic would be an understatement.

The point I was trying to make to the hon. Member for Kilmarnock and Loudoun was that, in some respects, for the creation of local challenger banks, regulation had to be tweaked slightly so that it was not light-touch—to return to the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) who, as usual, is not in his place—but different and better. First, we introduced the Financial Services Act 2012, which provides the framework for the regulatory authorities to encourage greater competition. Secondly, having passed that legislation, notwithstanding Labour opposition, we tackled the length and complexity of the authorisation process. Setting up a new bank traditionally took years and a huge amount of money. We all want greater competition, and for the FSA to abbreviate the process—in planning, this is done through a pre-authorisation process—and help a potential new bank through it. The long and short of it is that the FSA has dramatically reduced the bureaucratic process and the number of years it took to set up a new bank. As a result, some extraordinarily successful new banks—for example, the Hampshire Trust and the Cambridge and Counties bank, which is effectively a local authority utilising its pension fund to do LEP-style investments in local businesses and communities—have come forward in the past few years.

The third big change was the reduction in the capital requirement. Huge amounts of money were needed to create a local or any kind of bank, but local banks are not now being judged on the scale of Barclays, because they do not want to be like Barclays or any other high street bank. Finally, the scale and complexity of the infrastructure and the information exchange between all the bank authorities was changed, as it needed to be.

I will be nice to the hon. Member for Kilmarnock and Loudoun: of course I would welcome two more new challenger banks. The consequence, however, of the past four and three quarter years of change in the regulatory, legal and bureaucratic process and in the general climate of FSA behaviour is that we have in excess of 20 new start-ups. For the first time, we have new banks taking people on in the high street. I see that myself, because not only am I able to play a tiny part in the creation of a significant new bank in the north-east based in County Durham, but we are trying to fill a gap in the high street in my community in Northumberland.

The Government have changed the rules on credit unions to make it possible to have two types of credit union. You and I, Mr Deputy Speaker, will know that the traditional credit union model requires people to borrow for a very long period of time. The credit union is a very laudable and good thing and we should continue to support it, but there is a gap in the market. That gap has been filled, in my community and up and down the country, by payday lenders. As a result of high street banks not being able to lend in one way and credit unions being relatively restricted, there is a gap. The gap can be filled by community banks, which would effectively be bulked-up credit unions. There is a fantastic number of examples. Several are in large Labour areas, such as Glasgow. The Salford credit union is going from strength to strength. I have spent considerable time getting to know the Prince Bishops bank, which is based literally on the high street in Stanley in County Durham. It competes with what we would think of as high street banks and is, effectively, a bulked-up credit union. That surely shows that the Government are taking things in the right direction.

[Chris Evans (Islwyn) (Lab/Co-op)]

Many credit unions, which are run mainly by volunteers, are the victims of their own success, as they become too large and usually disband because they cannot handle the administration, the back-office work, that comes with it. How does the hon. Gentleman envisage credit unions being able to manage themselves as community banks and, potentially, as building societies? What legislation would help with that?

[Guy Opperman]

The legislation is already there. The hon. Gentleman should speak to the hon. Member for North Durham (Mr Jones), who is doing a fantastic job on the board of the Prince Bishops bank. I happily praise him for the work he is doing with the local community—with the church, the local authority and the housing association. To improve the quality of a credit union and make it viable, one has to, for example, ensure that payments to local authorities and housing associations go through the credit union, so it becomes a clearing bank in the normal way. There must be a greater degree of lending on a long-term basis. To put it bluntly, the credit union needs to go after middle-class lenders, because they are the ones who will make the deposits.

In Northumberland, a large proportion of my constituents are off-grid and have to purchase 500 litres of oil at a time. That costs approximately £350, now about £275. Banks will not give the lending facility to many unbanked people, because the number is too low, but if they were to save with a bulked-up credit union or community bank, that community bank could be the lender of choice for that specific purpose. Such people would, because they are mostly homeowners, be the sort of new lenders and new depositors who can provide the critical mass and the clout for the enhanced credit union-community bank to be more viable. The traditional problem with a credit union is that it does not have the deposit savings unless it has a white knight or a very strong church or trade union backing it.

We can discuss this another time—Mr Deputy Speaker will say that I am straying from the substance of the motion—but opportunities are out there. The point goes to the substance of the motion, which is competition. A credit union should provide competition on the high street to high street banks. Traditionally, credit unions have struggled. The Government’s changes have made it easier for them.

I will touch on two further points and then bring my remarks to a close. The sins of the bad, all of which we deprecate, are now paying for the good works of the good. We cannot have this debate without talking about LIBOR and about the terrible things that happen. However, the Government have done a wonderful thing in saying that the 96 military charities should receive the funds of the LIBOR fines and that air ambulances should receive a considerable amount of money. Last night, I was at No. 11 Downing street with the Chancellor. Representatives of many of the air ambulances throughout the country, including from Essex, were there. They are receiving significant sums of money by reason of the Chancellor’s decision on LIBOR funds. That is a fantastic thing. It was first announced in the 2012 autumn statement, originally for just military charities. It has now developed into other areas—the Minister spoke of GPs and other health services. The great work done by the air ambulances should be noted. The support we are giving to them is crucial.

I want to make one final point on the motion, which refers to tackling unemployment and youth unemployment as the purpose behind everything that it proposes. It is hard to read the House of Commons Library unemployment statistics and find a single Member of Parliament who has not benefited from a dramatic reduction in unemployment.

[Helen Goodman]

That’s not true.

[Guy Opperman]

I know the hon. Lady reasonably well and presumed she would be quite chirpy in her usual fashion. The House of Commons’ “Unemployment by Constituency” research paper 1509, published on 18 February 2015, shows that there has been a 34% reduction in unemployment in her constituency of Bishop Auckland. The reduction for those aged 50 and over is 24%. The 12-month unemployment figure, which of course is the very difficult area to address, has seen a 45% reduction in the past year. Youth unemployment is often prayed in aid by the Opposition—and understandably so, as we all agree that we need to address it.

[Helen Goodman]

Will the hon. Gentleman give way?

[Guy Opperman]

No, let me provide the figures—

[Helen Goodman]

The hon. Gentleman is talking about my constituency.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Whether or not the hon. Gentleman is talking about the hon. Lady’s constituency is not the question. It is a question of whether Mr Opperman wishes to give way.

[Guy Opperman]

I am afraid that I will not give way—first, because I have already gone on too long and, secondly, because I want to enlighten the hon. Member for Bishop Auckland (Helen Goodman), who would surely welcome the fact that unemployment for 18 to 24-year-olds in her constituency has reduced over this last year by 40.2%. I could say much more, Mr Deputy Speaker, but I think you would stop me doing so.

14:50

[Liz McInnes (Heywood and Middleton) (Lab)]

As the motion states, we believe bonuses should be a reward “for exceptional performance” and not a compensation for failure. This applies in other industries and it should in banking, too. Many industries, particularly those in the public sector, manage to get by without awarding bonuses. In industries such as banking, where the bonus culture does exist, there needs to be more accountability. Pay must be more closely linked with long-term performance.

[Chris Evans]

Does my hon. Friend have sympathy for the high-street bank worker, who has had nothing to do with the scandals, but has often had to take abuse from customers for them? As someone who worked in a bank, my hon. Friend will know that these same high street workers are under strong pressure to achieve sales targets and that when they do not, they often face disciplinary action. Does she think that is fair, particularly when the senior executives are taking such massive bonuses?

[Liz McInnes]

I thank my hon. Friend for his series of questions. I will try to answer them in the order he asked them. I think my hon. Friend alluded to my having worked in a bank—

[Chris Evans]

I worked in a bank.

[Liz McInnes]

It was my hon. Friend who worked in a bank; now I understand. My two elder sisters both worked in banks and both were forced out because of the selling culture overtaking the “service to the customer” side of banking, so I fully understand the plight of the ordinary bank worker and the pressure they are under, not to mention the abuse they sometimes suffer because of misunderstanding on the part of the general public about the role of ordinary workers in banking. I thus fully appreciate my hon. Friend’s points, and I hope that answers his questions adequately.

I was referring to the scandals over the last year, most recently, as we are all aware, at HSBC. Regrettably, it looks like this year’s round of bank bonuses will be very generous once again. That is why Labour is determined to repeat its tax on bankers’ bonuses in order to fund a paid starter job for every young person out of work for more than a year. We will also extend clawback of bank bonuses that have already been paid, where inappropriate behaviour has come to light, to at least 10 years.

This Government have not done nearly enough to rein in excessive pay and bonuses. They have refused to repeat Labour’s tax on bankers’ bonuses and they have stopped short of implementing all the recommendations of the Parliamentary Commission on Banking Standards. Instead of repeating Labour’s tax on bankers’ bonuses, the Chancellor of the Exchequer has instead wasted taxpayers’ money by mounting a misguided and ill-fated legal challenge to the EU cap, which limits bonuses to 100% of salary—or even up to 200%, with shareholder approval.

The next Labour Government will guarantee a job for all young people on unemployment benefits for over a year and also for all adults aged 25 and over who are on unemployment benefit for over two years. This is the only policy we will fund with the proceeds of the bank bonus tax.

Being unemployed when young really damages prospects years into the future, so this is an important policy for Labour to champion. According to the latest labour force survey, youth unemployment stood at 740,000 in the three months to December 2014—an increase of 3,000 in comparison with the last quarter. Research shows that young people unemployed for a year will, on average, be £125,000 worse off over their working lifetimes. That means someone on the average wage would have to work nearly six years longer to make up for the cost of being unemployed when young.

The performance of the banking sector is vital to the health of the UK economy. The finance and insurance sector makes up around 8% of the total UK economy, employing more than 1 million people who carry out essential roles working with businesses and consumers to manage their money and ensure that they are able to invest, make profits and plan for the future. Too often in recent times, however, banks have continued to pay high bonuses in the face of falling profits and falling standards. This has led to a level of pay and bonuses to some highly paid bankers that has become disconnected from banks’ performance and their wider economic contribution.

Last year saw a marked increase in the level of bonuses paid by banks, with three out of four major high-street banks increasing their bonus pool in comparison with the previous year. While thousands of bank employees, along with millions of other taxpayers, are struggling by on modest salaries and face a rise in the cost of living, those at the top are benefiting from high bonuses, reinforced by the Government’s tax cuts for the top 1%.

Bonuses have remained high in the face of a series of high-profile scandals. Barclays, HSBC, RBS and Lloyds have paid £1.5 billion in compensation for mis-selling interest rate hedging products. Other recent scandals include HSBC’s role in facilitating tax avoidance, the LIBOR fixing scandal and the mis-selling of payment protection insurance. At the same time, however, many banks are failing to fulfil their core functions. Lending for businesses has fallen by £55 billion since 2010, with several Government lending schemes having little impact. Labour believes that action is needed to ensure that banks act with greater restraint, that pay mirrors performance and that bonuses can be clawed back for up to 10 years in cases where malpractice has come to light.

Following the LIBOR scandal, the Parliamentary Commission on Banking Standards examined how the culture of the banking sector should be reformed. Although this led to some important reforms, such as the introduction of a ring fence between investment and retail banking, the Government’s implementation of the recommendations has too often fallen short. The Government have also failed to implement the institutional reform we need around access to finance, such as the setting up of a proper British investment bank, which could provide vital financing to small and medium-sized businesses and start-ups.

The banking sector plays a vital role in the UK economy. As the global financial crisis showed, the dislocation of the banking sector undermines the whole economy. Financial incentives for bank employees need to be better linked to the long-term stability and performance of their banks.

14:58

[Ian Swales (Redcar) (LD)]

It is interesting to take part in another Opposition day debate on this subject. The Opposition had 13 years to deliver their dream for the financial services and banking sector, but what they left us was, of course, a nightmare, and we have had to do a lot to tidy it up. Without wanting to threaten coalition entente cordiale, I should say that people who examine this subject trace some of the problems back to the deregulation that took place in 1986. It was so drastic that it has been called the big bang. It is certainly true that my coalition partners were still calling for lighter regulation as late as 2007.

However, between us, we recognised that there was a nightmare to sort out, and a great deal has happened, principally the Financial Services (Banking Reform) Act 2013. Let me pick out three items. First, there is a new criminal offence that covers those who run banks and building societies and have engaged in reckless misconduct. The penalty is a maximum sentence of seven years in prison, or an unlimited fine. Secondly, we have worked closely with other countries to tackle risk by introducing strict requirements in relation to the capital that banks must hold. Thirdly, we have prevented banks from engaging in or promoting tax avoidance by making the 15 biggest banks sign up to a code of practice. My party wants more to be done about that: we think that there is room for a new offence of corporate failure to prevent economic crime. We believe that not just those who evade taxes but those who advise or enable them should be prosecuted.

We are still seeing scandal after scandal, and it is notable that most of the scandals that are still hitting the news arose on the last Government’s watch—or the seeds were sown then—so we have had a great deal to do. We introduced the banking levy, and we have kept it going. My party wants it to continue, so that banks go on contributing to the process of rebalancing our budget and helping our economy.

As we have heard from several Members today, bankers are paid a lot. I think that there is a fundamental cultural problem. When an organisation has money to allocate, it has to think about its stakeholders. It has to think about its customers in terms of services and pricing, and it has to think about its shareholders in terms of the reward on the capital that they have invested. It also has to think about investing in its own business. About 10 years ago, my daughter worked in a branch of Barclays bank that was still using punch card machines that I thought had gone out in the late 1970s.

Staff are, of course, part of the balance, but I think most of us feel that the balance between the various stakeholders in some of the big banks has been tipped too far towards senior staff. However, bonuses are a great deal lower than they were. They have fallen from nearly £11 billion, or £33,000 a head, in 2007 to less than £2 billion, or £6,000 a head, in 2013. They are rising a little as banks are getting their act together, but they are nowhere near as high as they once were.

As so often happens with Labour motions, the Opposition have tried to connect two completely disconnected issues. We can have a debate about banking and we can have a debate about youth unemployment, but it is not logical or correct to suggest that the one either depends on the other or is solved by the other.

Of course I support moves to reduce youth unemployment. For me, however, unemployment is not about percentages but about people, and 830 fewer people in my constituency have been out of work in the last year. Unemployment remains far too high, and it is particularly high in the north-east, but it has fallen by an average of about 1,000 people per constituency in the north-east over the past year. In my constituency, youth unemployment has fallen by 43% since the 2010 election, when I inherited my legacy.

The motion asks us to consider the issue of youth unemployment, and also to consider the proposition that the bankers’ bonus tax will help to sort it out. The bonus tax has become the magic porridge pot of Labour policy making. I have a list of nine uses to which Labour Members have put it so far, and I think that my hon. Friends could raise the number to about 11. The last occasion on which we discussed the subject was quite remarkable. The shadow Minister who opened the debate referred to one use for the tax while the Minister who closed it referred to a different one, so they obviously had not shared notes. Perhaps, given that we are so near to a general election, they will finally settle on a use for it.

Let us now think about what will actually happen. If I understand the Opposition’s policy correctly, they want individuals to pay 50% tax on their bonuses, and they want banks to pay 50% tax on those bonuses. Of course, banks have other employment costs, particularly national insurance. Barclays has calculated that, when all that is added together, it will be paying 115% tax on its bonuses. Is it really likely that a bank will continue to declare £1 of bonuses to ensure that a Labour Government receive £1.15?

Matt, the famous cartoonist, must have been very prescient when he prepared his 2015 calendar. The cartoon for this very month shows a banker sitting behind a desk and someone else standing some distance away from him. The banker is saying “I cannot give you a bonus, but there is a £2 million reward for the person who finds my umbrella”—and there is an umbrella on the floor between them. In other words, banks will find ways around this.

It is not just Matt who has made the point. Referring to Labour’s bankers’ bonus tax, the right hon. Member for Edinburgh South West (Mr Darling) said:

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

[David Mowat]

The Opposition’s policy would result in avoidance of the tax through increased fixed-level pay and reduced variable-level pay. A much better way of taxing banks is to tax their balance sheets, which is what the Government have done, because taxation of that kind cannot be avoided in the same way.

[Ian Swales]

My hon. Friend has made an extremely good point, and his words stand on the record. In fact, I was about to mention an aspect of what he has said. It is interesting to note that the motion itself refers to an avoidance method, and tries to close the loophole. As for the clawback proposal, the more we disincentivise banks from paying bonuses, the lower will be the amount that is available for clawback purposes. So, as my hon. Friend has just suggested, the policy is self-defeating.

The banks say that high pay and large bonuses are necessary for competition, but new competition is already emerging. I recommend all Members to visit their local branch of Handelsbanken, which has no targets and does not pay bonuses. It is an incredibly successful bank, and is growing very fast in this country. Competition has already started to undermine the business models of the large banks. My hon. Friend the Member for Hexham (Guy Opperman) mentioned Atom bank. I too have visited its offices, and I am trying to support it as much as I can. Banks of that kind will disrupt existing business models, because they have a much lower cost base than traditional banks. We will see movement: the banks that think life will continue unchanged will find themselves pursued by competition.

One aspect of new funding that needs to be examined is crowdfunding. I think that the next Government will find that they need to consider regulation in that area. We are just starting to hear about some of the scandals involving a practice that is, at present, largely unregulated.

In general, we need to encourage competition, we need disruptive business models, and we need to recognise that, in the private sector, competition should be allowed to beat down bad practice and encourage good practice. We need a successful financial services sector, and we need it to be well regulated. The sector has made it very clear that it does not want a Government who are either anti-Europe or anti-business.

My conclusion is this. If the question is “How do we make our economy stronger and society fairer?”, nothing that we have heard from the Opposition today makes me feel confident that they are the answer.

15:08

[Helen Goodman (Bishop Auckland) (Lab)]

I am very pleased to follow the hon. Member for Redcar (Ian Swales), and to have listened to the hon. Member for Hexham (Guy Opperman). It is clear that Members representing constituencies in the north-east are extremely interested in the debate, and that in itself is significant. The fact is that the banking system is currently not serving our region well. What the hon. Member for Redcar said about the Handeslbanken was absolutely right, and the work that the hon. Member for Hexham has been doing with Atom bank is necessary because of the failure of the current banking system. I would almost go so far as to say that his concern about finance for small and medium-sized enterprises and about tackling financial exclusion would make him a far better junior Minister in the Treasury dealing with this industry than the complacent former banker who currently seems to fulfil the role.

I agree with what the hon. Member for Redcar said about the need to regulate crowdfunding. He is absolutely right: it is a fashionable new thing, and people just leap into it, just as—as he pointed out—they leapt into the free market in 1986, without thinking about the consequences. Both hon. Gentlemen pointed up the inadequacies of banking in this country, but neither of them defended bonus levels and the method of paying them that we can see in most of the financial sector. I do not understand why they will not come into the Lobby with Labour Members at 4 o’clock, because that is where the logic of their position should take them.

In the north-east it is true that unemployment is down—we had the highest unemployment in the country at 10%—but cuts and the depression in the economy of the north-east mean that earnings are down between 4% and 9%. It is not a thriving region, and no one is happy about that.

[Guy Opperman]

Clearly more needs to be done in the north-east—no one disputes that—but does the hon. Lady not agree that the autumn purchasing managers index survey showed that we had the fastest private sector growth? We have the largest exports, and the largest export growth of any part of the country. After London, the north-east has more tech start-ups than any region in the country. There is more to be done, but I would not want her to paint a picture of doom and gloom for a second.

[Helen Goodman]

The hon. Gentleman is absolutely right: we are indeed a successful exporting region, but the Government are spending 520 times as much on the transport industry in London as they are in our region, which does not make sense. That is one reason why the Opposition want to set up a business investment bank.

[Julie Hilling (Bolton West) (Lab)]

Low wages are a problem not just in the north-east but in the north-west and across the country. A third of hourly paid workers in my constituency are paid less than the living wage, and 57% of part-time workers are paid less than the living wage, which means that they depend on other taxpayers to support them so that they can get to a point where they receive a living wage.

[Helen Goodman]

My hon. Friend makes a powerful point. That is why people watching the debate will find it absolutely incredible that millions of pounds have been paid to bankers in bonuses.

I should like to come back to the central points in the motion. Pay should be a reward for good performance, but we have seen a disconnect between bank performance and the pay of many senior executives and traders. We have discussed whether or not there is improved accountability in the banking system. At the Dispatch Box, the Minister tried to persuade us that that was all sorted and that everything was fine and good. However, the argument that it was right for the Government to resist the EU cap on bonuses because if bankers did not receive bonuses they would just receive higher pay reveals that accountability mechanisms have completely failed. If those mechanisms were working properly, shareholders would be able to prevent that abuse and something that is in effect a loophole. [Interruption.] I thought that the hon. Member for Warrington South (David Mowat) would intervene, as that was a point that he made.

[David Mowat]

I thank the hon. Lady for encouraging me to speak. I agree with her. The issue is not about whether to have bonuses or not; it is about absolute levels of remuneration in banks. I do not understand why the Labour party is not trying to address that. There is a good point to be made about why Barclays needs 1,000 people who earn £1 million a year while other organisations do not. The only explanation in the end is that the market is not working properly, which is why we must have more challenger banks to compete that away.

[Helen Goodman]

The hon. Gentleman, if I may say so, makes a fair point. One of the regrets of Opposition Members is that not all the recommendations of the Parliamentary Commission on Banking Standards have been implemented. The weakness of the arrangements set up by the Government was illustrated only this week in the statement by Mr Gulliver, who now heads up HSBC. He said that he could not possibly be expected to know what his many thousands of staff were doing. If we are to have a proper accountability mechanism looking from the outside in at what the banks are doing, we need proper internal management systems; otherwise, the whole thing becomes meaningless. Mr Gulliver is therefore hoist by his own petard.

[Ian Swales]

I used to work in a large global organisation, and does the hon. Lady accept that part of the problem is culture? It is true that someone cannot be expected to know what every employee is doing at their desk at any moment, but if people do not have the right culture down the management chain those sorts of things happen.

[Helen Goodman]

That is common sense, and that is why the right culture was not encouraged when the Chancellor toddled off to Brussels to defend high bonuses. That did not engender the kind of attitude that we want to see.

[David Mowat]

The hon. Lady made an important point about Gulliver and the management philosophy that he appeared to espouse. We could call it something pretty close to plausible deniability: “I don’t know what they’re doing in Mexico—it’s a long way away. I don’t know what they’re doing in Switzerland—we’ve only just bought it.” If that is the management model, that is a better advert for the banks being split up than the retail/investment dichotomy that we have spent so long discussing.

[Helen Goodman]

That is another good point from the hon. Gentleman.

What will our constituents think of the fact that last year we saw an increase in the level of bonuses paid by the banks? What is happening at the top of the banks is not the same as what is happening for the ordinary people whom we meet behind the counter. It does not seem reasonable that bonuses are high when we have had high-profile scandals with LIBOR and forex fixing and with the revelations about tax avoidance through Switzerland.

One thing that particularly concerns me about HSBC is the disconnect between the amount of time and energy the bank is clearly prepared to put into setting up special arrangements for its private clients overseas, turning a blind eye to aggressive tax avoidance, and its attitude to my constituents when it wanted to close the branch in Shildon. We have a serious problem with financial exclusion and the major banks are taking themselves out of the poorest communities, leaving them prey to the Wongas of this world. When I wrote to HSBC saying that that was very regrettable and would mean that there was no longer anywhere for people even to access cash in a town with nearly 10,000 citizens, it would not even give a contribution to the local credit union. That shows a degree of arrogance and a lack of social responsibility that I am sure every Member of the House would deplore. I see that even the Exchequer Secretary is shaking her head in disappointment at hearing that.

We need a banking system that provides banking facilities for everybody in this country and for the whole community. Speaking as the Member of this House who was responsible for handling financial exclusion at the end of the previous Government, I think that it is fine to encourage credit unions, which are very nice institutions, but I do not believe that it is credible to believe that they could set up the kind of national network needed to fill the gaps. That is why, once upon a time, we had a more effective post office banking arrangement. We already have an infrastructure, and we already have institutional arrangements. We would do much better to build on them.

[Cathy Jamieson]

While my hon. Friend is on the point of credit unions, does she support our proposal to increase the levy on payday lenders to support various ethical alternatives, including the expansion of credit unions? I am sure that she will, as she has a great deal of expertise in this matter.

[Helen Goodman]

My hon. Friend is absolutely right. The extortionate charges put on the most vulnerable have been a total disgrace and there is something interesting to say about why a significant proportion of people in this country are unbanked. That is generally put down to being about the high lending risk in that community. It is partly about that, but it is also about the costs of having the institutional infrastructure to reach that community. That is one area where the main high street banks have failed disastrously in this country.

[Chris Evans]

My hon. Friend might know about the basic bank account, which was introduced when I worked in a bank. It allowed people on benefits to pay in their jobseeker’s allowance. There was no credit scoring for overdrafts, credit cards or anything like that. People would pay in their benefits and they would be largely forgotten about by the banks. There would be no account management, and if those people needed to borrow, they would fall into the hands of the payday lenders. They were completely ignored. How do we ensure that banks manage these people into mainstream banking as their needs change—as they get a job, look for a house or something similar?

[Helen Goodman]

Gosh, I am not sure that I have an instant answer to that complex question. This is the kind of thing that we need to think about more. When we hear that in the middle of the financial crash bankers phoned Treasury Ministers from New York worrying about their bonuses and not about the kind of people my hon. Friend has just described, we are bound to say that there is a culture problem in this industry. I also want to say something about the problems that—[Interruption.] The hon. Member for Dover (Charlie Elphicke) needs to show a little more respect.

I want to say something about the need to provide more finance to manufacturing. One thing I am really puzzled by is what performance these bonuses are for. I have a lot of metal-bashers in my constituency and in the middle of the crash they had a lot of problems with their banks. I am sure that other hon. Members will have experienced this. They thought it was absolutely dreadful because they had to drive all the way down to Leeds, and blah-di-blah-di-blah.

The problem with that is that the assessments were being made by people with no scientific understanding and with very little understanding of industry. We are seeing phenomenally high bonuses for people who are no doubt absolutely brilliant and a whizz at the latest hedge fund hoojimaflip and at how to make four more basis points, but who are not very good at what they really need to be good at, which is understanding the financial needs of British industry. That is what we want, but that is not what we are getting. That is why the Opposition are proposing a British investment bank with regional arms and regional focus. The industrial base in the north-east is clearly different from that in London, so we need different expertise in different places. We are just not seeing that in the banks at the moment.

It is alarming that Lloyds, which is 24% owned by the taxpayer, is expected to have a bonus pool of £375 million this year. I could not understand the remarks made by the Economic Secretary. I think she said that no one at Lloyds was going to get a bonus of more than £2,000 this year, but my understanding is that the chief executive could receive more than £7 million in a three-year pay deal. I hope that the Exchequer Secretary will explain whether people will be getting £2,000, several hundred thousand pounds or millions of pounds. RBS, which is 79% owned by the taxpayer, was fined £400 million for its part in the forex fixing scandal, yet it is reported to be considering a bonus pool of around £500 million. There is a general problem with the culture of the banks and the level of bonuses being paid, but there is a specific problem with banks in which we the taxpayers have large equity stakes. Treasury Ministers have a particular responsibility to look at what is going on in those banks and to think about how they are going to control it, in our interests as shareholders as well as our interests as taxpayers.

I wonder what Ministers think about the report in the Financial Times yesterday, headlined “Rothschild eyes early bonus round to avoid possible windfall tax”. It stated:

“Rothschild, the boutique investment bank,”—

for those of us who had never heard of Rothschild—

“is considering paying its 2014 bonuses early to avoid the extra taxes Labour has vowed to introduced if it returns to power, two sources familiar with the bank’s thinking said. The deliberations show how seriously businesses are taking the prospect of Labour winning the May 7 election”.

Those people are good at assessing risk, and it is clear that they are expecting a Labour Government.

It is worth thinking about the purpose of the banking system. It is a shame that the Economic Secretary is no longer here, because I am sure that she has seen the book produced by the Church of England, “On Rock or Sand”, in which the Archbishop of Canterbury writes an extremely interesting essay about economic purpose. He says that there are three criteria against which economic institutions should be judged. The first is fairness, and we can see the problem in the banking sector in that regard. The second is generosity, but that does not mean that banks should be generous to those who have the most. The third is sustainability. Judging by what is happening at the moment, the institutions seem to be failing on all three counts. However, taxing bankers’ bonuses and rechanneling the money towards providing employment for young people would help banks to meet those criteria, and that is what we are proposing to do. I believe that that is what people in this country expect from the financial institutions.

15:28

[Charlie Elphicke (Dover) (Con)]

It is a pleasure to follow the hon. Member for Bishop Auckland (Helen Goodman), as I did last week. I hope that there will also be sufficient time to allow my hon. Friend the Member for Warrington South (David Mowat) to follow me. I shall therefore try to ensure that my remarks are more to the point than they might otherwise have been.

I have always been a strong believer in having diversity and competition in the banking system, and I share the concern expressed by many that we have an oligopoly in our system. That is not healthy; there is not enough choice or competition. We need more competition, and I personally would be quite radical and ensure that the banks were separated up to a greater extent than they are today. It is also a concern that the establishment of the banking system in this country has meant that the banks are too big to fail. We could cure that by having depositor preference, because it would then be a matter for the bondholders, who would be much more interested in ensuring that the banks behaved and did not overpay bonuses.

What will not work is Members of this House pontificating about bonuses and what the bonus levels should be; waving a magic wand and saying that they should be this, that and the other; and trying to micro-manage banking business from afar. What makes it even worse is the way the previous Government carried on and the shameless hypocrisy of the Labour party that we have heard today. Let us not forget that the forex and LIBOR scandals happened under the previous Labour Government. Our Government have sorted out the regulatory system and have been cleaning up the mess. Under the previous Government bonuses tripled in four years and £66 billion of bonuses were paid out. The Labour party wishes to forget that. Fred Goodwin became Sir Frederick Goodwin then, and honours, baubles, bonuses and bag slaps were scattered around happily in those days. Labour now wishes to forget that. Under our Government bonuses are now a fifth of what they were then.

[Chris Evans]

Does the hon. Gentleman think the Conservative party is being wise after the event? Was it not the Conservative leader, the current Prime Minister, who argued in 2007 for less red tape and less regulation for the banking industry?

[Charlie Elphicke]

The issue is not the extent of regulation, but the format of regulation and the fact that the previous Government took the Bank of England out of the picture. The one organisation that understands the prudential nature of risk management was pushed to one side. That, together with the failure to police risk, was at the heart of what went wrong with our banking system, so I completely reject the hon. Gentleman’s point.

The Opposition say, “Let’s have a bankers’ bonus tax, so we can raise some money.” Yet again, we have heard that the Opposition want to spend it, this time on

“a guaranteed paid starter job for young people who have been out of work for over a year”.

That is what they say today but that is the 12th time over that they have spent it; I hate to correct my hon. Friend the Member for Redcar (Ian Swales), who thought it was only the 10th time and had lost count. That is understandable, because previously the Opposition have spent this on: the youth jobs guarantee; reversing the VAT increase; more capital spending; reversing the child benefit savings; reversing tax credit savings; more money for the regional growth fund; cutting the deficit; turning empty shops into community centres; spending more on public services; building 25,000 new houses; and free child care. Now it is being spent on starter jobs for young people, but perhaps next week it might be spent on houses again—who knows? It just depends on the thing of the moment, does it not? That underlines the ludicrousness of the Opposition’s position: they simply cannot add up and cannot spend their various banking bonus tax ideas in any competent way at all.

Leaving that aside, the permanent bank levy introduced by this Government is expected to raise £2.9 billion in 2015-16 and then £2.8 billion each year thereafter. That is more than was raised by the one-off bonus tax introduced by the previous Government. I suspect what will happen is that the Labour party will end up with its madcap plans raising less money and the party then being in a quandary as to where to spend it, because it has committed it on multiple occasions. That goes to the heart of the massive contradictions of Labour policy making.

The one thing I want to touch on is the idea that we should have the European Union decide on the levels of pay, bonuses or indeed anything in this country. Let me gently remind the Opposition of a couple of things. First, we are an independent nation. Secondly, we have an independent currency—we are not part of the eurozone. I do not understand why the Opposition think it is a good idea to have the European Union tell us how to manage our banking system. We are competent enough as a country—goodness knows, we have run our own affairs for the past 1,000 years—to decide how we should organise our banking system, and pay, bonuses and bonus taxes in our banking system, without needing help from the European Union.

[Helen Goodman]

I do not think every last detail of the running of these things should be handed over to the European Union, as the hon. Gentleman describes it, but the fact is that all the time we hear from the bankers that they will whizz off to Geneva—some of them do seem to be whizzing off there—to Paris or to Frankfurt. The purpose of having a European-wide approach on bonuses is to avoid exactly that kind of behaviour.

[Charlie Elphicke]

I hear what the hon. Lady is saying, but we are not in the euro. The only time that we would need some measure of control from the European Union is if we were in the euro. I simply do not accept the argument. Our objection to the European Union trying to tell us how to run our banking system and our bank bonuses is that we do not want to see pay rise and rocket in the banking system, which is what would happen—permanent fixed pay would rise. That is what we are most concerned about and why we have put up such resistance. There is also the principle that we can manage our own affairs in the City of London and in the financial services market, and we do not need any assistance from Brussels. I say shame on the Labour party for thinking that it is better to accept diktat from Brussels than decisions made in this Chamber.

15:35

[David Mowat (Warrington South) (Con)]

I thank my hon. Friend the Member for Dover (Charlie Elphicke) for curtailing his remarks so well. I wish to make two points at the end of this debate. First, the thrust of the motion is to replace a levy on the balance sheet, which is not avoidable or evadable, with a tax on bonuses, which is both those things. It is a bizarre policy. The Opposition seem to have mixed up the real issue, which is the overly high level of remuneration in banks, with the fact that it is split between variable and fixed pay. They appear to think that it is fine to pay someone £3 million a year, but that they should not be paid £2 million with a £1 million bonus, and that the extra bit needs to be taxed much more. That is just wrong. Apart from anything else, that £1 million can be clawed back under our current proposals, and indeed even under the Opposition’s proposals.

The real issue to consider is: what is so unique about the structure of the banking industry that means that banks have to pay so many of their employees so much? The same does not happen in the oil or the pharmaceuticals industries—those companies are worth more than big banks. Earlier, I cited the example of Barclays, which feels the need to pay 1,000 people more than £1 million a year. I am sure that those people work extremely hard, but people in Shell, BP, Glaxo and AstraZeneca work hard, too, and those companies are also world class and world-beating organisations, but they do not have that salary structure. The only explanation is that the market is not working, which is something that both sides of the House should consider when drawing up banking reforms. There is something in the way that investment banks work that stops new entrants coming into the market. I have reflected on this and feel that that is almost certainly the case.

If the chief executive officer of a company is hiring an investment bank, they would not get fired for hiring Goldman Sachs—in the same way that someone in IT would not get fired for hiring IBM. Typically, a CEO will last for only two years in a new company—they do not last long and they do not get many chances. If Goldman Sachs comes along with a big transaction, it bases the price of that transaction not on how much effort it takes to do it but on the 1% increased value in the company. Well, if I am the CEO of Apple and I increase by 1% the value of Apple, which is worth £500 billion a year, and Goldman Sachs gets a slight percentage of that, there is an awful lot of money swilling around. That makes it very hard for new entrants to enter that market.

We all have to address the matter of why it is so hard to get challenger banks into that market, because that is where the abuses occur. The problems do not often occur in the retail sector. We should also address the matter of why it is that so many people need to earn so much, when the shareholders in those organisations do not earn much.

Secondly, I want to reflect on what has happened in HSBC over the last little while. HSBC has been running a management structure that is based on plausible deniability. In Mexico, it has been trading with drug cartels, and it has been involved in evasion in Switzerland and it is saying, “We just did not know that our guys were doing that.” The question is: if its management structure is based on plausible deniability, what is the point of the board and the chief executive? We should think about that, because it provides a better argument for splitting up banks than this dichotomy between retail and investment, because it is, prima facie, a bank that is too big to manage.

Here is the truth of it. The guy who was running the operation in Mexico was told, “This is your target. We don’t really care what you have to do to make it. If you can’t make it, the next guy will.” That is how these banks operate. That is the structure of plausible deniability. That is why we need the cultural change that Ministers on the Front Bench are trying to achieve.

15:40

[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

It is a pleasure to wind up the debate and speak in favour of the Opposition’s motion. We have had a very good debate and heard some excellent contributions. My hon. Friend the Member for Glasgow North East (Mr Bain) spoke powerfully about youth unemployment and the danger of insecure employment. I think that Government Members are too often unwilling to engage with the difficulties posed by insecure employment, and not only for those individuals working on zero-hours contracts, but for the economy as a whole.

My hon. Friend the Member for Heywood and Middleton (Liz McInnes) made an interesting point about the experiences of members of her family who have worked in banks and the pressures put on ordinary bank workers to meet selling targets. It is the ordinary workers in banks who are often first in line for abuse when a scandal hits, rather than the small number of individuals at the top of those institutions who might have engaged in the reckless behaviour.

My hon. Friend the Member for Bishop Auckland (Helen Goodman) made a speech that was a tour de force. She spoke about how banking has not served her region, the north-east, particularly well. She made an interesting point about the dangers of crowdfunding, which the hon. Member for Redcar (Ian Swales) also mentioned. Her points about financial exclusion and the failures of regular banking to serve all our communities, particularly those at the lower end of the economic spectrum, were very well made, and they had not been picked up by others in the debate.

As my hon. Friend the shadow Financial Secretary set out in her opening remarks, the time has come for bonuses to be a reward for exceptional performance, not compensation for failure. With the bonus season upon us, this debate is a timely reminder that the public remain rightly angry about the many banking scandals we have seen and that they will be astonished if they see failure continue to be rewarded with sums of money so far out of the reach of working people on lower and middle incomes.

Our banking sector is vital to the UK economy. Banking and insurance make up 8% of the UK economy and provide employment for up to 2 million people. Without the banks, individual consumers would be unable to save and borrow and businesses would not have access to the finance they need in order to grow and create high-quality, well-paid jobs. The importance of banking for individuals, businesses and UK plc means that it is vital that our banking system is underpinned by the principles of fairness, trust and transparency. The next Labour Government will restore those principles to the banking sector.

Too often fundamental trust in the system has been shaken by behaviour that has been unfair, reckless, unethical or a combination of all three, and 2014 was a record year for fines in the City of London. The FCA levied £1.1 billion on five banks, including HSBC and RBS, for their part in the forex fixing scandal, and four UK banks—Barclays, HSBC, RBS and Lloyds—have paid £1.5 billion in compensation for mis-selling interest rate hedging products, which we have debated on a number of occasions in the Chamber. We have also had the LIBOR and PPI mis-selling scandals. Trust and confidence have been fundamentally shaken by the recent revelations about the Swiss arm of HSBC helping its customers to avoid and evade tax. On the one hand customers have been exploited, and on the other hand the taxpayer has been ripped off.

That unacceptable state of affairs is made worse by the fact that the sector has not fulfilled some of its core functions. Banks must provide basic borrowing and saving facilities for consumers and finance for businesses so that they can either start up or grow. However, we know that net lending to business has fallen by over £55 billion since 2010. A couple of Government Members made the point that of course we do not want to see irresponsible lending and suggested that businesses are actually sitting on large cash reserves and somehow the lack of lending from banks is not a big problem.

That is clearly not the Government’s view, because they keep coming up with different schemes to try and encourage lending by banks—schemes which have, unfortunately, failed to turn the situation around in any meaningful way. I am sure Members across the House regularly meet business people in their constituency advice surgeries, who come to us with complaints that they have viable businesses looking to grow and employ more people, but they cannot get access to finance from banks. This remains a key problem, which the Government’s various schemes to try to get net lending up have unfortunately failed to resolve.

So there are huge fines for breaking rules and a failure to fulfil the core functions of the sector. Despite all this, senior employees continue to receive huge bonuses. We can all see that the current state of affairs is difficult to justify. We know that last year’s bonus round exposed the gap between pay and performance. Barclays and RBS increased their bonus pool, despite falling profits. Indeed, at Barclays we saw a fall in profits of 32%, yet the bonus pool increased by 10%. We now learn that at HSBC the chief executive will receive £7.6 million and 330 staff will receive more than €1 million each, at a time when profits are down and the tax avoidance and evasion scandal continues to rage. What are the public supposed to make of all this? Not much, I would say.

The Government for their part have failed to act fully on proposals for reform and have failed to provide answers on HSBC—

[Ian Swales]

Will the hon. Lady give way?

[Shabana Mahmood]

I am sorry, I will not because of time.

The Government have failed to provide answers on HSBC in a way that would inspire confidence and they have wasted money challenging the EU bank bonus cap. What can we do to turn this situation around? It is clear that we need to reconnect the level of pay and bonuses of some highly paid bankers with the wider performance of the banks and their wider economic contribution.

A Labour Government would repeat the tax on bankers’ bonuses, which we introduced in 2009, to raise £1.5 billion to £2 billion. This tax—[Interruption.] I will come to that point in a moment for Government Members. This tax, alongside a restriction on—[Interruption.]

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. The hon. Lady must be allowed to finish her speech.

[Shabana Mahmood]

Thank you, Madam Deputy Speaker.

This tax, alongside a restriction on pension tax relief, would fund a compulsory jobs guarantee. Let me deal with the point made by hon. Members chuntering from a sedentary position. The tax would be spent only once and only for one measure—that is, our compulsory jobs guarantee. That has been the case for as long as we have had our compulsory jobs guarantee policy. I find it interesting that the only line of attack that Government Members have on the compulsory jobs guarantee is to imply, incorrectly, that the bank bonus tax is being spent more than once. It is a weak line of attack from Government Members who do not want to engage with the substance of the policy—a compulsory jobs guarantee for the long-term youth unemployed.

Only one point was made about the substance of our policy, which was about the potential scope for tax avoidance. The first outing of the bank bonus tax introduced by the Labour Government had stringent anti-avoidance measures attached to it, and we would repeat those measures to make sure that the tax was not aggressively avoided and that all the revenue that we expect to be raised will be realised in order to fund our proposals for a compulsory jobs guarantee.

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

Will the hon. Lady give way?

[Shabana Mahmood]

Certainly not to a Member who has just come in for the winding-up speeches, if I may say so.

A measure such as I have described is clearly needed because we know that the latest labour force survey data show that youth unemployment was at 740,000 in the three months to December 2014. To Government Members who try to take comfort from some of the welcome decreases that we have seen in constituencies across the country, as though that means that everything is hunky-dory, I would say that 740,000 young people unemployed are 740,000 too many. There is nothing to be complacent about. We need a rocket booster under our approach to long-term youth unemployment. That rocket booster will be provided by a tax on bank bonuses to fund a compulsory jobs guarantee. Government Members should examine their consciences to decide whether they think that we do in fact need strong measures to tackle the scourge of youth unemployment, and join us in the Lobby to support our motion.

We need to restore trust and accountability to the sector. I call on the House to support the motion and the need to take meaningful action to ensure that bonuses reward exceptional performance, and that where bonuses are given, they are taxed and the revenue is used to deliver the much-needed compulsory jobs guarantee.

15:50

[The Exchequer Secretary to the Treasury (Priti Patel)]

I thank all Members who have contributed to this debate, which has been quite wide-ranging; it even became a debate on the north-east region at one point. I commend my hon. Friends the Members for Hexham (Guy Opperman), for Redcar (Ian Swales), for Dover (Charlie Elphicke) and for Warrington South (David Mowat) for their speeches. I particularly commend my hon. Friend the Member for Hexham, who made a very thoughtful and considered speech about the changes made by the Government through the banking reforms. He also highlighted the role of challenger banks and his own commitment to that through his work locally. He is clearly a champion not just for his constituency and region but for challenger banks, and that is to be commended.

I think it is fair to say that we all agree that the banking scandals that have emerged in the past years have been disgraceful, and we have shown that consensus during this debate. They have, without a doubt, shaken public trust in a proud British banking history, and revealed pockets of rottenness at the heart of the banking system. The country is understandably angry about the reports of practices, behaviour and conduct that have become legendary in the banking scandals of recent years.

[Mr Graham Stuart]

Will my hon. Friend give way?

[Priti Patel]

I will not because of the time, if my hon. Friend will accept that.

We can never go back to the bad old contaminated days when the culture in the banking sector was so wrong. That is why the actions taken by this Government, which were long overdue, and neglected by the previous Government, will ensure that the system and the sector never go back to those bad old days. The core action that has been undertaken to tackle misconduct has been pure reform on misconduct and clearing up remuneration. The reforms have ensured that we have the toughest remuneration regime of any major financial sector. Through the Government’s reforms, we have ensured that rotten behaviour in the sector will be punished. We have heard about criminal sanctions today.

The overall contribution of the sector is hugely important to the country’s economy, but we must ensure that we reform its reputation and conduct, and change the culture to bring probity and integrity back into a system that was challenged and flawed. Back in 2010, we had a banking system that had no connection between performance and remuneration, and that rewarded, and was dominated by, excessive risk taking. There was no accountability for losses. It was a sector where wrong practices and the wrong culture had become institutionalised, and, more disgracefully, where people who should have known better turned a blind eye and looked the other way.

Like any responsible Government, our job is to bring back measures and laws, and a regulatory framework, that were sorely lacking in the past to ensure that the financial sector regains its reputation, while stamping down on the reprehensible behaviours of the culture that the country witnessed in the past. This Government have brought in reforms, transparency, a regulatory framework, and the ability to make sure that those who did wrong would not go unpunished. We have made reckless misconduct leading to bank failure a criminal offence. We have strengthened the accountability of senior management and the powers of the regulators. We have increased choice and competition in the retail banking sector to help create a sector that genuinely puts consumers first and brings through the regulatory changes that are required.

That also means clamping down on unacceptable pay practices. We have heard plenty of references to that throughout the debate. Hon. Members spoke about remuneration in two banks in particular: RBS and Lloyds. The hon. Member for Bishop Auckland (Helen Goodman) asked for clarity on Lloyds. This week, we announced that we are getting another £500 million back for the taxpayer, which is money that we have put in and are now taking out. We can do that because, since the crisis, Lloyds has gone from failure to being a strong and profitable bank that is helping to drive the recovery. The bank contributes £238 million per year through the bank levy. It will have its bonus pool reduced this year, and we are continuing to restrict its cash bonuses to £2,000. It is absolutely right to ensure that the culture is completely reformed.

Both the hon. Lady and my hon. Friend the Member for Hexham mentioned not only challenger banks, but the issue of financial exclusion. I want to pay tribute to organisations such as challenger banks and credit unions. I spend a lot of time in my constituency of Witham at the Holdfast credit union, which does so much for those who are excluded.

Through our reforms, we are ensuring that banks that need to be punished are punished. The reforms have led to greater disclosure and transparency, and we have also reformed bonuses. We are consulting on the recommendations of the Parliamentary Commission on Banking Standards to strengthen the rules further. There is no doubt that actions speak louder than words, and we have taken action.

The EU bonus cap, which has been mentioned, would not control bankers’ pay. It would push up fixed pay, and make it difficult to claw back bankers’ earnings when things go wrong. It would weaken financial stability and ultimately make it more likely that the taxpayer, rather than the banker, paid the cost of any mistakes. Unfortunately, that has already started to happen and the cap remains fundamentally flawed, but we are willing to draw a line under the issue, and the legal challenge has been withdrawn. Instead, we are looking at other ways of building a system of pay in global banking that encourages rather than undermines responsibility.

It is fair to say that bankers got it very wrong over a number of years. Regrettably, they are still getting it wrong, and several Members mentioned HSBC. Its chief executive, who is in front of the Treasury Committee this afternoon, has apologised for the failures and errors, which have been pushed out into the public domain. However, the reality is that the Government have taken action to sort out the mess.

The job is not over. We must continue to be firm in working with the regulators to stamp out malpractice. We should continue down the path we have set: linking pay and performance; making sure that failure is not rewarded; and ensuring accountability by our most senior managers. We should be proud of being the toughest major financial centre in the world on remuneration, but we should also be careful not to get carried away with the rhetoric and damage the competitiveness of one of this country’s most prized economic assets.

This Government have set the sector back on the right path, so I urge hon. Members to reject the Labour party’s motion. As Opposition Members have pointed out, the motion refers to job guarantees, but the best guarantee for jobs is to stick to the Government’s long- term economic plan, under which youth unemployment and unemployment have declined.

Question put.

15:58

Division 163

Ayes: 234

---

Labour: 215
Scottish National Party: 6
Democratic Unionist Party: 5
Social Democratic & Labour Party: 3
Independent: 3
Plaid Cymru: 2
Alliance: 1
Green Party: 1

Noes: 308

---

Conservative: 264
Liberal Democrat: 42
Independent: 1

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

On a point of order, Mr Speaker. On 3 February, during the debate on mitochondrial DNA, I deliberately abstained from the vote because I did not feel that I fully understood all the arguments, yet I was recorded as having been in the Aye Lobby. I took the matter up afterwards with the officials, and received a full apology and explanation. I said that I was quite happy to let the matter rest there, despite the fact that some of my constituents had contacted me and questioned the veracity of what I had said to them.

I was therefore perturbed when on Monday, in an equally controversial and free vote on abortion during the Serious Crime Bill, I acted as one of the Tellers for the Ayes, being a strong supporter of the amendment, yet I was recorded as having voted in the No Lobby on Division 157. I took the matter up again and have been furnished with an explanation that I have forwarded to you, Mr Speaker, since it is a slightly more complicated scenario. As constituents have contacted me, I first wish to put on the record the way that I voted. Secondly, with the greatest of respect, I wish to say that it is very important that every single vote by Members in this House is recorded correctly.

[Mr Speaker]

I am grateful to the hon. Gentleman for his point of order and for his characteristic courtesy in giving me advance notice of its likely content. I understand his frustration. He has placed the facts on the record and I am informed that the Hansard record has also now been corrected. He correctly pointed out that he has received a comprehensive explanation, which he understands—also correctly—has been copied to me. That explanation, very properly, is comprehensive, and occupies a page and a half of A4. The House will be relieved to know that I do not intend to read it out, but suffice it to say that I believe confidence can be placed in it. Officials of this place put great importance on recording and publishing Divisions accurately, and I am informed that they will redouble their efforts to minimise such errors. The hon. Gentleman has properly drawn attention to this matter. He is also a reasonable man and I hope that he will accept that explanation. We will leave it there for now.

Members’ Paid Directorships and Consultancies

Wednesday 25th February 2015 Commons Chamber

16:15

[Mr Speaker]

I inform the House that I have selected the amendment in the name of the Prime Minister. A manuscript amendment to the Opposition motion on paid directorships and consultancies and hon. Members has been tabled by the hon. Member for Leyton and Wanstead (John Cryer) to add at the end of the motion the words, “or be paid trade union officials.”

As I have said, I have already selected the amendment in the name of the Prime Minister. Under Standing Order No. 31, when a Minister moves an amendment on an Opposition day, the question before the House is that the original words stand part of the question. It is on that motion that debate proceeds and, at the end, the House is invited to vote on it. If the Opposition motion is agreed to by the House, it becomes a resolution of the House. If the Opposition motion is disagreed to by the House, the Standing Order obliges the Chair to put forthwith the question on the amendment moved by a Minister. If that is agreed to, the Chair will declare the main question, as amended, to be agreed to.

The situation is, therefore, that once a Minister has moved an amendment to an Opposition motion on an Opposition day, it is not possible for a second amendment, whether manuscript or not, to the Opposition motion to be put to the House. Assuming that the Leader of the House will move his amendment, I cannot therefore select the manuscript amendment.

[Ms Angela Eagle (Wallasey) (Lab)]

On a point of order, Mr Speaker, in the light of your ruling. The manuscript amendment was tabled by my hon. Friend the Member for Leyton and Wanstead (John Cryer) in response to something that the Prime Minister said, in Prime Minister’s questions, that he wanted to happen. If the Leader of the House were to withdraw or not move his amendment to the motion, would it then be possible under Standing Order No. 31 for the manuscript amendment tabled by my hon. Friend to be moved?

[Mr Speaker]

I can confirm that if the Leader of the House were to decide not to move his amendment, it would be open to me to decide whether to select the manuscript amendment. That is indeed the factual position. We should now proceed with the debate.

16:18

[Ms Angela Eagle]

I beg to move,

That this House believes that, as part of a wider regulatory framework for hon. Members’ second jobs, from the start of the next Parliament no hon. Members should be permitted to hold paid directorships or consultancies.

I wonder whether the Leader of the House could indicate—he could even shout over the Dispatch Box—before I begin my speech whether, in the light of the attempts by the new chair of the parliamentary Labour party to give the Prime Minister what he said he wanted at Prime Minister’s questions today, it is his intention not to move his amendment to today’s motion.

[The First Secretary of State and Leader of the House of Commons (Mr William Hague)]

I will most certainly move the Government amendment today. It is an excellent amendment. It is not my role to facilitate the Opposition’s making up their policy as they go along throughout the afternoon.

[Ms Eagle]

I want to make it clear that we are actually trying to facilitate what the Prime Minister said he wanted during Prime Minister’s questions. We are not making up our policy as we go along; we are trying to include all views in it. It is in that spirit that I want to open the debate and move the motion in the name of the Leader of the Opposition, which proposes that this House bans MPs from holding paid directorships or consultancies.

[Philip Davies (Shipley) (Con)]

Will the hon. Lady give way?

[Ms Eagle]

Let me finish my first sentence. If our manuscript amendment is accepted, the motion would also ban paid trade union officials. The public deserve to be safe in the knowledge that every Member of Parliament works and acts in the interests of their local constituents, and not in the interests of anyone paying them.

[Gregory Barker (Bexhill and Battle) (Con)]

Will the hon. Lady give way?

[Ms Eagle]

Let me make a little bit of progress and then I will give way.

I note that, unusually, the Government have tabled an amendment that simply restates the status quo and would completely obliterate the Opposition motion. I intend to deal with all that, but first I want to take a few minutes to deal with the circumstances in which the House of Commons finds itself, and argue that the time has come to make a decisive break with the status quo on Members’ remunerated interests. I believe the current situation has become untenable.

I do not intend to talk about the detail of what was revealed in the “Dispatches” programme on Monday. I think we should concentrate in this debate on developing a solution to this recurring problem. Those events are being dealt with by the independent Parliamentary Commissioner for Standards, and that investigatory process must take its course, although that I note that the court of public opinion has already pretty firmly made up its mind. If the rules were clear and easy to follow, rather than riddled with grey areas and open to endless convenient interpretation, perhaps we would not find ourselves repeatedly having to deal with newspaper headlines such as the ones we have witnessed once more this week. It is undeniably true that these headlines bring this place into disrepute, as far as voters are concerned. Theirs is the opinion, I believe, that we must take the most seriously. They are, after all, the people we have been sent here to represent.

[Philip Davies]

I just wondered on what basis the Leader of the Opposition thought he was an authority on being a world-leading constituency MP. He happens to be my mum’s MP and the MP for the area in which I was born and brought up. It happens to be the consensus of opinion there that he does not really care about Doncaster. He is hardly ever there. In fact, he is known locally as Ed Moribund. Why should those of us who work hard in our constituencies week in, week out take any lessons from the Leader of the Opposition on what it takes to be an effective constituency MP?

[Ms Eagle]

I am rather sorry I gave way to the hon. Gentleman. What we are trying to do with this debate is take a cool, hard look at the situation that faces the House in relation to its rules on outside interests, and the experience we have all had of them in this Parliament and over time. This is not about partisan views about who is a good or bad MP in their constituency. That is for the voters to decide, and they will decide that in their own way on 7 May. As a Parliament and a legislature, we all have a duty to ensure that the rules by which we operate are kept up to date and are fit for purpose. One of the arguments I am trying to make today is that we are not now in that situation, and we have to take radical action to ensure that we bring ourselves back in line with the levels of conduct that our constituents expect of all of us.

[Several hon. Members]

rose—

[Ms Eagle]

I am going to carry on and make some progress with my arguments. I hope that right hon. and hon. Members will do me the courtesy of listening to them as I try to set them out.

[Gregory Barker]

On that point, I do not think anybody in this House is condoning the breach of rules that exist for a very clear purpose. However, if we are talking about being good parliamentarians and representing our constituents, how much time over the last week, or in any week this month, have the hon. Lady and her shadow Cabinet colleagues spent away from this place, neither in their constituency nor performing their parliamentary duties, but instead campaigning on behalf of the Labour party in the country? How much time are they spending doing that, rather than pursuing their parliamentary duties?

[Ms Eagle]

The right hon. Gentleman has picked on the wrong person. I have to spend a lot of time in this building as shadow Leader of the House, and I do not see him here very often on Thursdays.

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

I hope that my hon. Friend will address the argument that a second job helps MPs to keep in touch. My view is that visiting local schools, going to local businesses and workplaces to talk to managers and the work force, spending time with local charitable organisations, and going to day care centres for the elderly is how we should keep in touch with our constituents. That is the work that we should value.

[Ms Eagle]

My hon. Friend is right. There are many ways of keeping in touch that do not involve the exchange of large amounts of money.

An extremely bad and unfair impression of the motives of all Members of this House has now been formed, and it is being reinforced by this latest occurrence. Let me be clear: being a Member of Parliament is an extremely demanding and tough job, and it is done with integrity and dedication by the vast majority of colleagues in all parties. Unfortunately, however, the perception is growing that some MPs are in it only for what they can get, rather than for what they can give, and that is not an impression that we can allow to fester any longer. “You’re all in it for yourselves”—how many times have we heard that said?

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

I have some sympathy with the motion, but why does it not cover somebody who earns £15,000 outside this place lecturing, while someone earning a lesser amount through a directorship is covered? It seems a little confusing to some of us.

[Ms Eagle]

I will come on to the details of the motion later. It is a little more flexible than the hon. Gentleman might assume. I shall explain the consultation process that we are going through, which it would benefit the whole House to consider.

[Mr Mark Spencer (Sherwood) (Con)]

Will the hon. Lady also clarify whether she is talking about cash payments only, or whether the motion includes payments in kind, in the form of goods and services?

[Ms Eagle]

If we are talking about the cap—it is not referred to in the motion, but we are considering it for our own policies—we need to consult so that we can reach a sensible decision about what it should mean.

What impression are our constituents expected to form when Lord Heseltine opines on “Newsnight” that being an MP is “not a full-time job”, or when Lord Lawson tells Sky News that

“if you’re just a constituency Member, you do have time on your hands”?

That is not a description of the job of being a Member of Parliament that I have ever recognised in the 23 years in which I have had the honour to represent the people of Wallasey in this place. It is not a description, either, that the public are willing to accept. Their expectations of their MP have changed dramatically, even over the years I have been in this place, and they have certainly changed dramatically in the last 40 years. Our workloads have increased exponentially. It is time that our rules were changed to acknowledge the very different context in which we must now all do our jobs.

[Conor Burns (Bournemouth West) (Con)]

Will the hon. Lady confirm that it is the principle rather than the time that is important? She has spoken, as have others in recent days, about the time commitment for people who do things beyond their primary duties as elected Members of Parliament. Members of both Front-Bench teams, of course, spend an incredible amount of time on matters beyond their core responsibilities as constituency Members. Surely it is just the principle of earning outside that she is worried about.

[Ms Eagle]

It is about remuneration, and the perception that Members have other interests that they may be putting before their primary interests. Given the cynical age in which we live, we need to think about that a great deal more carefully than we may have done in the past.

[Ian Lucas (Wrexham) (Lab)]

We should really accept that this is about money. It is about Members—primarily Government Members—who want to be paid extra. [Interruption.] They want to be paid extra, and they want to be paid extra because they are Members of Parliament. My constituents know that, and their constituents know that. That is why the public are not prepared to put up with this any longer.

[Ms Eagle]

I thank my hon. Friend for his comments. I am trying to establish that we must move on from the status quo, and today’s motion is about how we can do that.

[Ian Swales (Redcar) (LD)]

The Independent published an interesting league table today, listing the top 10 MPs who earn money outside the House. I am also interested in the choice of words in the motion—and, indeed, in the manuscript amendment, if we are able to see it. Does the hon. Lady believe that anything in the motion would affect the earnings of No. 1 on that list, who earned £962,000 last year—the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown)?

[Ms Eagle]

Let me take this opportunity to make it extremely clear that the motion is not aimed at any particular individual. It is concerned with what Parliament should do to modernise the way in which it interacts with the world outside. I night add that I suspect that ex-Prime Ministers have a rather higher earnings potential than many of the rest of us. Furthermore—I should make this point, now that the hon. Member for Redcar (Ian Swales) has brought the issue up—I understand that my right hon. Friend the Member for Kirkcaldy and Cowdenbeath gives every penny of that money to charity, and does not take any of it himself. Given the import of the hon. Gentleman’s question, I think that should be put on the record.

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

Will the hon. Lady acknowledge right now that some of the highest earners from outside interests are members of the Labour party? It is this Westminster establishment that the people of this country hold in such contempt. Is that not the reason why both the main Westminster establishment parties can barely exceed 60% in the polls at the moment? A curse on both their houses!

[Ms Eagle]

I last heard that the Scottish National party had received some particularly large donations from individuals, but I do not want to have this kind of debate about the issue. I am trying to talk about the future, and about how the House regulates matters that have such an important bearing on the way in which our constituents regard this place and us. If we are to increase trust in our politics, we must pay very close attention to what is happening in this instance.

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

rose—

[Sir Edward Leigh (Gainsborough) (Con)]

rose—

[Ms Eagle]

I will give way to my hon. Friend first and then to the hon. Gentleman, but after that I really must get on with my speech.

[Andrew Gwynne]

Is not the issue that we are in danger of seeing a toxic mix, and that politicians just do not get it? Does my hon. Friend agree that we must send the clear message that being a Member of Parliament is an honour and a privilege, and a full-time job?

[Ms Eagle]

I could not agree more.

[Sir Edward Leigh]

As a matter of interest, will the Labour Front Bench commit to implementing the pay award from the Independent Parliamentary Standards Authority in full?

[Ms Eagle]

My understanding of our position on the IPSA pay award is that the leader of our party has said that it should not go ahead as long as other public sector workers and workers in this country are experiencing a huge standard of living crisis. That is the situation as set out by my right hon. Friend.

It is time that we acknowledged the very different context in which we must all do our jobs, as it has changed. A YouGov poll in 2013 showed that 62% of people felt that MPs should focus on their parliamentary job full time, and over half favoured an outright ban on all second jobs. The proposals in the motion are just a start, but if enacted they would enable us to deal with the ongoing and corrosive issue of remunerated interests, and to begin to restore the health of our democracy and our constituents’ trust in the people they send to this place.

Let me turn to the actual terms of the motion, rather than the wildly inaccurate version that the Prime Minister sought unsuccessfully to dismiss earlier today. Our proposal states clearly that after

“the start of the next Parliament”

no Member of the House should be permitted to hold a directorship or a paid consultancy or, if our manuscript amendment had been accepted, be a paid trade union official. That is a commitment that we will honour in the Labour party by changing the parliamentary Labour party standing orders. All our existing Members of Parliament and candidates who are standing at the general election have been put on notice to expect that.

If the Government had accepted that rule when we first argued for it in 2013, the reputational damage inflicted this week would not have happened. The motion also states that we need

“a wider regulatory framework for…second jobs”

for MPs. The Prime Minister was wrong when he sought to characterise our proposals as an outright ban. We have set out some ways in which a regulatory framework might operate. That could include setting a cap on earnings from second jobs that is sufficiently high to allow, for example, Members to maintain professional qualifications. However, we will consult on that point with everyone who wishes to share their views. Our aim is to get a system that is fair and workable.

Our intention in the motion is simple. We need to be completely clear with the public that when they do us the honour of electing us to Parliament, they can expect our attention to be focused primarily on serving them.

[Sir Gerald Howarth (Aldershot) (Con)]

Is the hon. Lady telling the House that there are two classes of outside interest: professionals, such as some of our colleagues who are doctors or dentists, who need to maintain their skills; and another set who are directors or consultants, who have nothing to offer the House and do not have skills that need to be maintained? If someone is in business and they need to maintain contact with industry it would be unlawful for them to carry on that business, thereby depriving the House of people with experience and preventing them from keeping their skills current.

[Ms Eagle]

No, not really. There is something in the motion about remunerated interests. It is possible for someone with those connections to keep in touch to carry on doing jobs, but not in a remunerated way.

[Sir Richard Ottaway (Croydon South) (Con)]

Further to the question from my hon. Friend the Member for Aldershot (Sir Gerald Howarth), how would the hon. Lady deal with a farmer who was elected to Parliament? Most farms are incorporated, so the farmer would be a director. He would make a contribution to agricultural debates. If the motion is accepted, what advice would she give the farmer? Should he retire? Does he sell the farm? What?

[Ms Eagle]

We want to consult appropriately on this, but Ministers give up their interests and put them in trust when they go into government. There could be proposals that would enable Members to keep hold of the things they did before they were elected without being directly paid for them while they served in this place. There is a consultation process and if the right hon. Gentleman wants to get involved, I am more than happy to listen to what he has to say. It is important, however, that we make this break with the past. Decades ago, being an MP might have been seen as a second job but times have changed radically and we need to change with them.

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

Some of the people watching the debate will be absolutely incredulous at the views of some Government Members. The Prime Minister said that the reasoning behind second jobs was that he thought they would give people a better understanding of the world outside. I think that more people need to have a better view of the world outside before they become MPs. Does my hon. Friend agree that nobody forces us to come here and get paid £67,000, which is a king’s ransom to many of the people we represent? Those Members do not need second jobs, but if they do there are food banks in every one of their constituencies. Go and volunteer in them.

[Ms Eagle]

My hon. Friend, as ever, makes a point that is acute and important.

To those who argue that this will all narrow the experience of politicians in Westminster, I would argue that experience useful in our legislature is not purely gained by being paid for doing a second or third job. I have found many interesting and enjoyable ways over the years to stay in touch with constituents and gain a valuable insight into what is happening in the communities we represent. The payment of large supplementary incomes is not essential in gaining that experience.

[Paul Flynn (Newport West) (Lab)]

Does my hon. Friend believe that for the sake of clarity, particularly for people outside this place, everyone who speaks or intervenes should say how much they earn from outside sources and what they do with the money? I will start by saying that I earn £7,000 a year and for the past 27 years every penny of it has gone to charity.

[Ms Eagle]

My hon. Friend makes his point.

[Jack Lopresti (Filton and Bradley Stoke) (Con)]

rose—

[Ms Eagle]

I will give way one final time, but then I want to finish because I think it is important that we get on with the debate.

[Jack Lopresti]

I thank the hon. Lady for giving way and I have no outside interests to declare. How would her plans affect reservists, who serve in the military and can often be off on operational tours for months on end earning extra income?

[Ms Eagle]

I see no reason why the cap cannot be constituted in such a way as to ensure that people can carry on serving in the armed forces. Government Members must not caricature these proposals. They are about remunerated directorships and consultancies, not about the sort of things that people did before they came to this House.

It is a matter of great regret that the Prime Minister has been so unwilling to recognise the damage that second jobs are doing to the reputation of Parliament and that he dismissed so quickly the attempts of my right hon. Friend the Leader of the Opposition to make cross-party progress on a ban earlier this week. In opposition, the Prime Minister said:

“Being a Member of Parliament must be a full-time commitment…The public deserves nothing less.”

He knew it then, but once in power he refused to do anything to deal with the problem of second jobs, preferring instead to defend the discredited status quo in which the public have lost faith. The amendment that the Leader of the House will, regrettably, soon move defends the status quo, and even at this late stage the Prime Minister could admit that there is a case for change and get on board.

[Adam Afriyie (Windsor) (Con)]

Will the hon. Lady give way?

[Ms Eagle]

I have given way a lot, so I will not.

The Deputy Prime Minister said earlier today:

“The principle is if you are devoting yourself to public service, that is what you should do…I don't think anyone finds it acceptable…people regard politics as nothing more than a part-time hobby.”

He went on to say that

“the principle should be you are elected to do a job, that is your vocation, that is your act of public service, that is what you should be doing for your constituents”.

Well, I agree, and it is not often that I agree with the Deputy Prime Minister. In the light of that comment, perhaps he will confirm that he and his colleagues will join us in the Lobby tonight. If they do, we can really begin to make progress.

[Mr Dominic Raab (Esher and Walton) (Con)]

Will the hon. Lady give way?

[Ms Eagle]

No, I am right at the end of my speech and I have given way a lot.

The choice is clear. Are we here to serve our constituents or are we here to serve our own self-interest? Are were going to change a broken system or are we going to ignore the public’s clamour for reform? After the election, no Labour MP will have a paid directorship or consultancy, and Labour’s manifesto will include a promise to ensure that that applies to all MPs. Wider reform is now being rejected because the Conservatives are the defenders of a tired and discredited status quo. To reform our politics, we need to stand up to vested interests, not cosy up to them. We need to stand up for the powerless, not the powerful. And we need to accept that sometimes in this place, things need to change. That time has come.

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

On a point of order, Mr Speaker. I seek your guidance. I am sure that no Member would wish to contribute to the debate, given its subject matter, without declaring any relevant interests. What guidance can you give to Members, given the terms of the motion, on what they should declare before intervening or making a speech?

[Mr Speaker]

It is the responsibility of each individual Member to declare as appropriate. The obligation is no different in this debate from it would be in any other debate, and I assume that all hon. and right hon. Members are fully conscious of their responsibilities in this matter.

16:46

[The First Secretary of State and Leader of the House of Commons (Mr William Hague)]

I beg to move an amendment, to leave out leave out from “House” to the end of the Question and add:

“reminds hon. Members of their commitment to uphold the Code of Conduct, not least that Members should act on all occasions in accordance with the public trust placed in them, that they should always behave with probity and integrity, including in their use of public resources, that no Member should act as a paid advocate in any proceedings of the House and that the acceptance by a Member of a bribe to influence his or her conduct as a Member, including any fee, compensation or reward in connection with the promotion of, or opposition to, any Bill, Motion, or other material submitted, or intended to be submitted to the House, or to any Committee of the House, is contrary to the law of Parliament.”

As the hon. Member for Wallasey (Ms Eagle) has acknowledged, the Opposition have moved their motion today because of the questions raised concerning the right hon. Member for Blackburn (Mr Straw) and my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind). It is entirely proper that our two colleagues have referred themselves to the Parliamentary Commissioner for Standards, and we should await the outcome of those proceedings. However, as Leader of the House, I can say that, given the high regard in which those two Members have always been held, these circumstances are the cause of some sadness across the House. In the meantime, I hope that the whole House will join me in paying tribute to the contribution that the right hon. Member for Blackburn and my right hon. and learned Friend the Member for Kensington have made to the House, to our national life and to international relations over many years.

It is vital for the health and strength of our democracy that the public have confidence in the integrity of—

[Sir Gerald Howarth]

Will my right hon. Friend give way?

[Mr Hague]

I will just start my argument, then I will give way to my hon. Friend.

It is vital for the health and strength of our democracy that the public have confidence in the integrity of the democratic process and in the standards of conduct of all Members of this House. We live in an age of greater accountability and transparency, and the House of Commons has to live up to that. Transparency is an absolutely fundamental need in a democracy, and it would not be acceptable for Government policy to be influenced from outside by anybody in a way that was deliberately out of sight.

[Sir Gerald Howarth]

I should like to put on record that my interests are declared in the Register of Members’ Financial Interests in the usual way—[Interruption.] And I am proud of those interests, too.

Does my right hon. Friend not agree that it smacks of extraordinary opportunism on the part of the Opposition to take a whole afternoon to debate this issue? Have they nothing to say about the OECD congratulating the United Kingdom on managing the recovery of our economy after Labour destroyed it? Should not that be the subject of today’s debate?

[Mr Hague]

This is a week of remarkable economic news and good international endorsement of the Government, and that is no doubt partly why the Opposition have chosen to debate other matters today. Nevertheless, the issues of transparency and the reputation of the House are important at all times.

[Ian Murray (Edinburgh South) (Lab)]

Will the right hon. Gentleman give way?

[Mr Hague]

I will give way in a moment.

The reinforcement of transparency and accountability need constant effort, and that is part of what has been happening in recent years. At the end of the last Parliament, as the House knows, agreement was reached on the Parliamentary Standards Act 2009. Since then, more has been done than ever before in Parliament and in government on transparency. We have created a statutory register of lobbyists and appointed the registrar; we are legislating for the recall of MPs; and we have strengthened the rules governing the appointment of Ministers after they leave office to business appointments to cover all appointments or employment they wish to take up within two years of leaving office—there has been a very substantial increase in transparency on Ministers and former Ministers.

[Ian Murray]

rose—

[Andrew Gwynne]

rose—

[Mr Hague]

I shall give way to the hon. Member for Edinburgh South (Ian Murray), who asked first.

[Ian Murray]

The Leader of the House rightly talks about transparency, but may I just push him on that? Can he, and his Government, be wholly transparent with the House and the country by telling us how many jobs, additional to being an MP, he thinks it is acceptable for people in this House to have?

[Mr Hague]

I am coming to the details of the motion in a moment. Clearly, right hon. and hon. Members make their own judgments about that, on both sides of the House, and find it entirely possible to do the work of a Member of Parliament.

[Mark Field (Cities of London and Westminster) (Con)]

Does the Leader of the House share my concern that, understandably perhaps, 10 weeks before an election this rather opportunistic motion is put forward? These issues are not for this House; they are for IPSA. After the expenses scandal, we set up IPSA to look at this and other issues. If we want to unravel what IPSA has done, either on this matter or on the issue of salaries, we do so at our peril.

[Mr Hague]

Salaries and allowances are for IPSA, but there have been independent reports on this issue. Again, I will come to that in a moment, but I just want to finish the point about the substantial increase in transparency that has rightly taken place in recent years. That does not mean we have finished the job of making Parliament more responsive to public concerns. The shadow Leader of the House has said some things about what will be in the Labour manifesto on this, but there will be matters about Parliament in the Conservative manifesto, including reducing the size of the House of Commons, and equalising the size of constituencies, thereby being fair to all parties and all constituencies, and saving money in the process.

[Andrew Gwynne]

But surely the right hon. Gentleman understands, when he talks about transparency, that it is also about how we as Members of Parliament and this House of Commons are viewed from outside. Does he therefore agree with his colleague and former Conservative Deputy Prime Minister Lord Heseltine that being an MP is

“not a full-time job”?

[Mr Hague]

I was about to agree with something the Leader of the Opposition said, so I hope the hon. Gentleman will let me go on to that. Certainly I found when I was Foreign Secretary, for instance, that I still performed the functions of a Member of Parliament, even though I spent probably 90% of my time on being Foreign Secretary.

On Monday, the Leader of the Opposition wrote to the Prime Minister and said:

“I believe MPs are dedicated to the service of their constituents and the overwhelming majority follow the rules.”

The shadow Leader of the House said a similar thing just now, and I believe that is right, across all parties—I hope I can say that as Leader of the House. The Leader of the Opposition went on to say that

“the British people need to know that when they vote they are electing someone who will represent them directly, and not be swayed by what they may owe to the interests of others.”

He wrote that without a hint of irony, having been elected entirely dependent on trade union votes and having presided over the most union-dominated Labour party in 30 years. Of all the candidates selected under his leadership, 61% are union-linked, and more than half of those come from a single union. He did not see the irony in what he was writing.

[Several hon. Members]

rose—

[Mr Hague]

Let me just develop this point. There are four very revealing points about the Opposition motion that I want to challenge. It is not a motion to ban second jobs—that would not be its effect—and it is not entirely clear what it would ban and what it would not ban. As one of my hon. Friends said, would it ban someone from being a partner of a professional firm? The motion does not mention that. Are lawyers, accountants and management consultants therefore in a different category, according to the Opposition? There is some discussion now taking place on the Opposition Front Bench about whether it would ban a partner of a professional firm, but there is no clarity here. The motion just asked us to make a decision. It is helpful when making a decision to know what is being put to the House. Does it ban someone from owning their own business? Are they banned from owning their own business if they are a director of that business, but not if they are not a director of that business? Have the Opposition thought that out? Does it mean—and this is an important question—that someone who sets up their own business, succeeds with it, creates jobs and contributes to the British economy is then to be barred from the House of Commons because they are a director of that business? That would be the effect. There are three-quarters of a million more businesses in this country after the past four years, and more of the people who created those businesses need to come into the House of Commons and not be discouraged from doing so. One suspects that, after a short examination, this motion shows as much understanding of business as the shadow Chancellor does on a bad night on “Newsnight”.

[Grahame M. Morris (Easington) (Lab)]

May I restate the concerns of the public and highlight the fact that someone who is the director of a private health care company—as many Conservative Members are—may participate in legislation that brings a direct benefit? That is appalling.

[Mr Hague]

If I understand the hon. Gentleman correctly, he is saying that being a director of one sort of company is not acceptable, but being a director of other sort might be. That is not at all clear in the Opposition motion before us tonight.

[Several hon. Members]

rose—

[Mr Hague]

Let me continue, because I am talking about the motion. We only have to examine it for a moment to see that it is calculated to create a headline rather than to solve a problem. The next most revealing point about it is that it is different from the policy the Opposition state outside the House. That policy was described to the Guardian newspaper earlier this week—therefore it must be accurate. It said:

“The opposition Labour leader is expected to put the ban on MPs’ second jobs in his manifesto and say he will consult on proposals to limit the amount of money MPs could earn from outside parliament to 10% or 15% of their salary – in effect, limiting outside earnings to about £10,000.”

It will not have escaped the attention of the House that there is no mention of this cap in the Opposition motion, although it may be part of the wider strategy referred to in the motion. Could this be because there are Opposition Members, including in the shadow Cabinet, who currently earn more than 15% of their salaries outside the House of Commons? I will come to them in a moment.

[Sir Bob Russell (Colchester) (LD)]

As a graduate of the university of life and the school of hard knocks, I can say that this is the best job I have ever had. If a Member of Parliament is doing his or her job properly here and in their constituency, where do they find the time to have other jobs?

[Mr Hague]

Members will have different views about that. The views of the right hon. Member for Greenwich and Woolwich (Mr Raynsford) were given a few years ago when these matters were discussed. He was a Minister at the time. He said:

“My interests do not adversely affect my ability to discharge my public responsibilities. On the contrary, I believe they help me to be a more effective MP precisely because they sustain my practical experience in the relevant fields.”

Members are entitled to hold that view, just as they are entitled to hold the view expressed by my hon. Friend.

[Conor Burns]

May I use this intervention to do what I probably should have done when I intervened on the hon. Member for Wallasey (Ms Eagle), which is to draw the House’s attention to my declarations in the register? My right hon. Friend has written a couple of very successful and enjoyable books while serving in this House. Does he feel that he was not serving his constituents during that period? He probably spent less of his spare time with his wife when he was writing those books, but continued to serve his constituents very well.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

On a point of order, Mr Speaker. As I understand the rules—perhaps I could get some guidance on this—a Member should declare what those interests are, as opposed simply to referring the House to the “register”.

[Mr Speaker]

“Erskine May” does treat of this matter. The short answer to the hon. Lady is that, yes, it should be clear to the House what is constituted by the interest, because that makes the debate that much more intelligible. It is a straightforward point, and I am grateful to the hon. Lady for raising it, and I have ruled, on advice, accordingly.

[Gregory Barker]

Further to that point of order, Mr Speaker. Is it in order for Labour millionaires to give us the value of their freehold property in London when declaring their interests—

[Mr Speaker]

Order. Sit down. The right hon. Gentleman is an experienced ex-Minister, and that was a very poor attempt at a point of order—it did not even begin to get into the category of a point of order. [Interruption.] Order. The right hon. Gentleman should not be wittering irrelevantly from a sedentary position. I have ruled on the matter, and I have done with clarity and accuracy. Those hon. Members can accept it, and that is the end of it.

[Sir Tony Baldry (Banbury) (Con)]

Further to that point of order, Mr Speaker. I think that we all want to get this right. Very often in debate all that it has been necessary to say is, “I draw the House’s attention to my entry in the Register of Members’ Financial Interests.” Just to be absolutely clear, I think that what you have said means that we will all have to recite into the record exactly what is in our entry in the register. If that is what you would like us to do when called to speak, I for one am happy to do it. It will take a little time, but I am very willing to do it in the interests of transparency.

[Mr Speaker]

I am extremely grateful to the right hon. Gentleman for his point of order. The answer is very straightforward, and it is twofold: first, of course individual Members must take responsibility for what they say in this House when they rise to their feet; and secondly, very simply, the interest in question has to be sufficiently clear to be informative to the House in the context of the debate. It is a very straightforward point and I have now made it twice. I hope that it is clear to all right hon. and hon. Members.

[Jacob Rees-Mogg (North East Somerset) (Con)]

Further to that point of order, Mr Speaker. It might be helpful to ask you about my understanding that it is not customary to explain points of one’s interests in interventions or supplementary questions; that is normally reserved for main speeches, the idea being that it advances the debate.

[Mr Speaker]

The short answer is that the declaration should be made where it does not impede the progress of debate, and it should certainly not impair the decorum of the debate. [Interruption.] Order. Members can study the matter, which is treated of in some detail in “Erskine May”. The House would be the first to complain, and rightly so, if I were to read out what is in “Erskine May”. I do not do that. I do not need to do that. Members should apprise themselves of what is said in “Erskine May” on the matter and judge their actions accordingly, which I know the hon. Gentleman, in particular, is extremely adept at doing. I suggest that others could usefully follow his example.

[Paul Flynn]

Further to that point of order, Mr Speaker. Very briefly, would it not solve the problem, and be in the spirit of “Erskine May”, if Members gave us not a long catalogue of interests, but an approximate total of the money they receive from them every year?

[Mr Speaker]

The hon. Gentleman is a very experienced Member of this House. He has made his point, and I think that he has done so with a puckish grin. He knows that I do not need to rule upon it.

[Ian Murray]

rose—

[Mr Speaker]

Mr Murray has a very solemn expression upon his face, which gives the impression at least that he has a serious point of order to raise. I hope that he has.

[Ian Murray]

Further to that point of order, Mr Speaker. For clarity, although “Erskine May” does give direction in this House, I received a complaint from the Independent Parliamentary Standards Authority for saying in this House, “I refer Members to my entry in the Register of Members’ Financial Interests”, and the complaint was upheld on the basis that I did not say what the interest was. Practically, in this parliamentary term I had to apologise to the House for declaring my interests but not saying what those interests were.

[Mr Speaker]

I am grateful to the hon. Gentleman. [Interruption.] Order. I hope that the House will understand that I cannot be expected to offer Members a tutorial on the matter. People would think it very odd if the Speaker were inclined to do so. [Interruption.] Order. If Members are uncertain and want my advice from the Chair—I do not think that the Leader of the House is in need of my advice on the matter—I say that it is probably better for them to err on the side of caution, and to reveal more rather than less is a very safe course of action. I think that treats of the gravamen of the point of order raised by the right hon. Member for Banbury (Sir Tony Baldry). I have sought to help the House, but I think that I can best help it now by enabling the Leader of the House to continue with his oration.

[Conor Burns]

Further to that point of order, Mr Speaker.

[Mr Speaker]

Very briefly.

[Conor Burns]

Having known you for more than 20 years, I would not wish to find myself in the position of having to rise to my feet to apologise to you and to the House, so let me say that my entry in the register shows that I work nine hours a month for a construction and civil engineering company that I worked for prior to coming to this House. For the avoidance of doubt, that company does something that Opposition Front Benchers are doing now: digging holes.

[Mr Speaker]

The hon. Gentleman has no need to apologise to me. [Interruption.] Come on—let us try to preserve some decency of spirit in these matters. I say genuinely to the hon. Gentleman that he sought advice on this matter and he has tried to do the right thing. What he has just said is the right thing and I thank him for it.

[Mr Hague]

If I do not get on with this speech, no one will be declaring any interests because time will run out for the debate. When the points of order started, my hon. Friend the Member for Bournemouth West (Conor Burns) was being very kind about the books that I wrote.

That takes me to the point that I was going to make, which I have let the hon. Gentleman’s office know I would make: the hon. Member for Stoke-on-Trent Central (Tristram Hunt), the shadow Education Secretary, according to the register, earns substantial sums from articles, lecturing and book fees, and those are very good books, on which I congratulate him. Does the Labour party propose to apply this cap to earnings from books? Let me explain the import of that. The only way to ensure that sales from such a book remained under Labour’s cap would be to write an unsuccessful book, of which there are also examples on the Opposition Benches.

By what logic, according to Labour, is it acceptable for a Member to write an unsuccessful book but not a successful one? By what logic is it okay to write an unsuccessful book but not to engage in some other activity no more threatening to the public interest than an unsuccessful book?

[Emily Thornberry]

That was a good joke, but may I bring the right hon. Gentleman back to the motion, which, whatever debate there may be about what may or may not be the policy of the next Labour Government, is what we ought to be looking at. It is narrowly about paid directorships or consultancies. Does the right hon. Gentleman agree that if the motion were passed, we would not have the enormous embarrassment of what has happened in the past few days? Surely, on the most minimal change to the status quo, this is a first step. Why are those on the Government Benches against it?

[Mr Hague]

I am discussing the motion and what it means or does not mean. It is difficult to speculate about what would happen or not happen in the future if we pass a motion, the meaning of which is not clear. In any case, the burden of the motion is one with which we disagree. It was not a joke about books. I was making, through a bit of humour, admittedly, a serious point: the Opposition do not know how they would apply a cap to somebody who writes a book, including a member of the shadow Cabinet, or to a farm.

One of my hon. Friends mentioned a farm. A distinguished Labour Prime Minister, Lord Callaghan, owned a farm. How is someone with a farm meant to restrict their income to a fixed percentage of their salary? Would Lord Callaghan have had to resign from the House every time there was a good harvest and then try to return to it when the crops failed?

[Jon Trickett (Hemsworth) (Lab)]

Is the Leader of the House not aware that that precise system, though much more rigorous, is already applied in Washington, the home of free enterprise?

[Mr Hague]

I am also aware that we make our own rules in the United Kingdom. The United States is no longer our colony and we are not theirs, and we are entitled to make our own rules.

[Several hon. Members]

rose—

[Mr Hague]

I will give way again in a moment, but in the interests of the whole House I must make some progress.

The issue was considered in full by an independent and expert body, the Committee on Standards in Public Life, which said that it considered it

“desirable for the House of Commons to contain Members with a wide variety of continuing outside interests. If that were not so, Parliament would be less well-informed and effective than it is now, and might well be more dependent on lobbyists.”

I agree. I am leaving this House in five weeks’ time, as hon. Members know—[Hon. Members: “Shame!”]—and I fear for the future of the House of Commons if rules are adopted that risk it consisting entirely of people who are rich or who are professional politicians throughout their lives. That is the danger of the course that the Opposition suggest.

[Frank Dobson (Holborn and St Pancras) (Lab)]

Everybody has been amused by the points that the right hon. Gentleman has been making, quite rightly, but I do not think the public will be particularly amused. The public’s real concern is not about people with a continuing interest; it is about people who become Members of Parliament and then obtain directorships and consultancies and who are perceived as being in something like a system of outdoor relief for grasping MPs.

[Mr Hague]

The right hon. Gentleman is trying to make a distinction between different circumstances, as another Member did earlier, but that distinction is not made in the Opposition motion, and the debate is on the motion. That suggests that if he disagrees to some extent with the Opposition’s policy—

[Gregory Barker]

Does my right hon. Friend agree that he is exposing the fact that this is not a genuine, sincere motion addressing the governance of the House, but a cheap, opportunistic way of expressing the prejudice of Labour Members? They are anti-business, anti-enterprise and anti-aspiration, and they would trash the economy if they ever got their hands on it again.

[Mr Hague]

I agree with all of that; my right hon. Friend spoke extremely well.

[Andy McDonald (Middlesbrough) (Lab)]

Is the Leader of the House aware of Government Ministers putting the emoluments from outside directorships into trust so that they escape any scrutiny, and if so, is he content with those arrangements?

[Mr Hague]

There are very clear rules about all that—rules not only on the declarations of Members of Parliament but on ministerial interests. Those rules are very rigorously observed and enforced, in my experience in government, and I hope that they have been under Governments of all parties. Transparency about ministerial interests and the interests of people who have left office as Ministers has been greatly strengthened in recent years. This is not a static situation; constant improvements have been made.

[Duncan Hames (Chippenham) (LD)]

If the Leader of the House were to have a change of heart, I am sure that he would be warmly welcomed by the Conservative association in Kensington. Does he agree that if we are concerned to establish, and to give the public confidence in, the independence of MPs in serving the public, then it is not just their earnings that are of relevance but the source of all financial support they have, including that which goes towards their re-election?

[Mr Hague]

That could be a valid point, and I want to address it in closing my speech.

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

rose—

[Mr Hague]

I will try to fit in the hon. Gentleman before I finish.

There are two other revealing aspects of this motion. First, the Opposition make the proposal now, when the issue is in the news, but have done nothing to enforce it in their own party in the meantime. Labour Members—I make no criticism of them for this—are directors of building supply companies and investment companies, and non-executive directors of mining companies and breweries. They are paid as everything from expert advisers to executive mentors, no less. It must be nice to be an executive mentor. Does an executive mentor fall within the definition of “director”?

[Ms Angela Eagle]

rose—

[Mr Hague]

Perhaps the hon. Lady could clarify that.

[Ms Eagle]

To make it clear again, the parliamentary Labour party will change its rules and its standing orders so that from the start of the next Parliament no Labour MP will have remunerated directorships or consultancies. All our candidates and all our existing Members of Parliament will have to change their arrangements in order to comply with this change of rules. Will the right hon. Gentleman now commit to his party doing the same?

[Mr Hague]

No, as is very clear from my speech. I have made the point that the Committee on Standards in Public Life made. The hon. Lady has said what the Labour party will do in the next Parliament, but I hope she will admit that she has to deal with the points I have been making about how to define these responsibilities, because they are not dealt with at the moment. There is no clear answer from the Opposition even about what their policy is.

[Several hon. Members]

rose—

[Mr Hague]

I will give way two last times. I promised to give way to the hon. Gentleman, and I will then give way to one of my hon. Friends.

[Karl Turner]

The Leader of the House has been very generous in giving way. He made a point that he thought was funny—frankly, the electorate would not think it was funny—about the former Prime Minister Jim Callaghan. My hon. Friend the Member for Middlesbrough (Andy McDonald) made it clear that Ministers, which would of course include the former Prime Minister, have to put directorships into trust while serving as Ministers. The right hon. Gentleman’s point was not funny, and it was not correct, was it?

[Mr Hague]

Yes, it was correct. It is not for me to say whether it was funny; others will be the judge. I was making a point about the Opposition motion. If such a motion is so easy to make fun of, it may not have much chance of being a serious policy. The public would not find it funny if we adopted rules that could not be enforced, were confusing or damaged the future of Parliament, which is the central point.

[Mr Raab]

rose—

[Mr Hague]

Let me give way to my hon. Friend. This will have to be the last intervention.

[Mr Raab]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests. My interests all relate to writing columns for newspapers and suing one of them.

Is it my right hon. Friend’s view that the definition of consultancies would include drawing a six-figure salary for being a BBC guest presenter? It would, first, relate to public money; and secondly, hardly draw in outside experience from beyond the Westminster bubble.

[Mr Hague]

Whether that would come under the definition of consultancy is another interesting question for the Opposition to consider. They have to define such things if they are to present their policy more clearly. I hope that they will be able to do so the next time they present it.

The final revealing point about the Opposition motion is that it talks about some forms of outside income, but as my hon. Friend the Member for Chippenham (Duncan Hames) has just said, it does not address the direct influence on Members of trade union sponsorship and support at elections and between elections. If the Labour party gains more seats at the coming election, it will have to address that issue at the beginning of the next Parliament. For the 106 target seats it has named, it has selected 105 candidates, of whom 83 are union linked, including 49 who are linked to Unite. It is by far the greatest single outside influence on Members of Parliament —securing their selection as candidates, supporting their election as MPs, paying for their election, dictating the policies of their party—yet they are breathtakingly silent on that issue. We would not enhance the reputation of Parliament by adopting a motion put forward in a hurry to grab a headline, but which does not address that fundamentally important issue about our Parliament and democracy.

[Several hon. Members]

rose—

[Mr Speaker]

Order. A significant number of Members are seeking to catch my eye. As always, I want to try to accommodate colleagues, so I am afraid that there has to be a five-minute limit on Back-Bench speeches.

[Sir Tony Baldry]

On a point of order, Mr Speaker. It will take me five minutes to read out my entry in the Register of Members’ Financial Interests. [Laughter.] It is not fair: I must be given at least five minutes to make my speech.

[Mr Speaker]

I did not say, nobody said and “Erskine May” does not state that a Member has to read out a list. I know that the right hon. Gentleman is trying to be helpful, not least to himself, but I did not say that; I said that an interest needs to be made clear to the House.

We need a time limit because I want to try to accommodate colleagues, the first of whom to contribute is Sir Alan Duncan.

17:19

[Sir Alan Duncan (Rutland and Melton) (Con)]

As we approach the general election in May, all of us sit in a House that is browbeaten, diminished and increasingly dysfunctional. This place is supposed to be the pinnacle of our democracy, both in providing the Government and in scrutinising them, but, if I may say so, it is not helped by such undignified squabbling.

The sort of Parliament we end up having in a few years’ time will determine whether politicians can meet the challenges of big government and a dangerous world, and serve the long-term interests of the people who elect us, or whether, with the diminution of our political wisdom and conduct, all we do is oversee the country’s perpetual decline. The composition of Parliament and its rules are crucial to that fate. All rules should be fair and even-handed and should not favour one side over another.

Instead of sinking ever more deeply into petty recrimination, today we should ask what Parliament should be. Politics is about interest, about competing opinions and differing views, and about civilised discourse and making laws with the consent of the people. If we try to sanitise all politics by removing all identifiable interests, all we will do is destroy real politics and reduce Members of Parliament to vacuous functionaries. This House needs people of quality and variety who bring genuine experience that is of greater value than the theoretical study of politics and careers founded only in the student union, the special adviser’s office and the party machine.

[Fiona O’Donnell]

I draw the attention of the House to my entry in the register; I have an income from a rental property in Edinburgh.

Will the right hon. Gentleman dissociate himself from the remarks of the Father of the House today at Prime Minister’s questions, when he asked what kind of person would come to this place if they could not have a second job? There is and always should be a place in this House for people who have never dreamt of earning £67,000 a year.

[Sir Alan Duncan]

There needs to be a variety of people, including those who think that money matters, and those who feel that they have forgone so much to be here that there is no disgrace in topping up the salary. We should accept that difference, otherwise we are ruling out of this House a body of people who wish to serve in it, but who might not if they were forced to accept only the salary.

Let me chuck away my notes and, in the short time that I have, say what I think. If we sanitise this House, as people are suggesting, we will end up nationalising the entire process of politics. This House of Commons should be where people come together from all corners of the country, and from whatever background, to do whatever they believe is in the interests of the country.

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

rose—

[Sir Alan Duncan]

I will come back to the hon. Lady. The original purpose of paying people was to ensure that nobody could not afford to come here. That concept has been inverted, so that the salary is the cap on what people can earn. That will stop people wanting to come here who could and should earn more because of what they know and what they might achieve.

This is an ultra-partisan motion. It is designed—let us be absolutely clear—to drive out of this House of Commons as many people on the Government side as possible, because people on the Opposition side think that we earn more and could be directors, and because fewer people on their side do such things. That is the fundamental purpose of the motion. It is partisan and designed to catch a headline for campaigning purposes.

I will give way one more time, and then say what should happen.

[Susan Elan Jones]

I am most grateful to the right hon. Gentleman for having finally given way. Sixty-seven thousand quid is roughly what a deputy head or a head teacher earns. Is he honestly saying that if they wanted to add to their great experience by holding directorships and did not turn up to teach the children very often, that would be okay?

[Sir Alan Duncan]

We are entitled to say that politics should not exclude people who could earn more and who wish to look after their family in a certain way or do whatever they do. There should not be a capped, nationalised process.

Let me turn this debate towards more constructive points. The quality of the argument about what an MP should be and what an interest is has been completely destroyed by ill-informed comment and the inevitable pressure to get press headlines. There is a difference between having a conflict of interest, which our rules are designed to avoid, and having an interest, which can be a useful contribution to the politics of the nation. We are in danger of becoming a low-achieving, sparring, shallow Chamber in which there is insufficient experience to address the big issues of the day. Some of the questions and exchanges that we hear in the House are of a lower standard than those in a school debating society.

I urge everyone in the House to go back to the Nolan principles of 1995, in the first report of the Committee on Standards in Public Life, which explain clearly what an interest is, what the House of Commons should be, why outside interests are a good thing, and how there are differing careers and patterns of life in the House. Some people come here and just want to be a Minister. Sadly, more and more of them push off as soon as they have been a Minister, because they cannot bear to stay here any longer, so they are lost to our deliberations. Some people—it would be better if we had more of them—come here with really good experience and can add to our debates, and they do not want to be a Minister. Why on earth, if they are a good Back Bencher who helps make good law, which, by the way, has become a useless exercise in this House, cannot they earn some extra money and say, “I am serving my country in this way”?

The concept of the full-time career politician does not serve the interests of this country. We should accept that a political career can change over time; someone can be in government, out of government, in opposition, on the Front Bench, and then on the Back Benches. That is what we want. We risk creating a Parliament that people will wish they never had. We are halfway to that already, and if we do not arrest the decline of this House, it is the people who will suffer. If they clamour for what the Opposition are asking for, they and all of the country will regret it.

17:26

[Paul Flynn (Newport West) (Lab)]

The Tories just do not get it. After the great screaming nightmare of the expenses scandal, when our reputation in this country was ruined, sometimes unjustly, we have to try to win it back. I have suggested in books, including one in 1997, that the best way to win the respect of the country is to accept that £67,000 is a full-time wage for which we have to do a full-time job. I have just looked up one Member who spoke earlier and found that he is earning £200,000. He has not said so. The last speaker did not say how much he is earning. We want transparency in this debate.

[Graham Jones (Hyndburn) (Lab)]

Would it not be reasonable to suggest that if somebody wants to do a part-time job, or half a job, they should give half their salary back?

[Paul Flynn]

Entirely reasonable. There are mechanisms available, and I commend them to Members. I made a recommendation on that in 1997.

[Sir Alan Duncan]

May I say to the hon. Gentleman, since this is an example of the low-level sparring from which we suffer, that the reason I did not declare an interest is that I have not got any?

[Paul Flynn]

I was referring to the right hon. Member for Banbury (Sir Tony Baldry). If Members do not have an interest, so be it, but the right hon. Member for Rutland and Melton (Sir Alan Duncan) had an interest in the past—I remember that he had an interest in his neighbour’s council house a long time ago, of which he has no reason to be proud.

In 1994 we had a disgraceful episode in which Members were caught asking for money for questions, and we have it again now. Can we not accept the shame of what has happened in the past week, when greatly respected, experienced Members have shamed themselves in public and shamed all of us? It shames decent politics, and the only people who will be helped by it are those who are into anti-politics and suggest extremist answers. That will come home to roost in a few weeks’ time, when the respectable parties in the House—the parties based on idealism, as all our main parties are—will be damaged in the poll. We deserve to be damaged, unless we have reforms.

Where will the reforms come from? The Leader of the House said that there had been reforms with regard to the Advisory Committee on Business Appointments and the revolving door, but we have had nothing of the sort. It is still possible for any Minister to prostitute their insider knowledge and sell their contacts and experience to the highest bidder. What is to stop them? Not ACOBA—that has not been reformed and is not the Rottweiler it should be. It will say that Members cannot take jobs in areas where they were once Ministers, and cannot do deals while they are Ministers. However, when a contract is up, the Minister will get an indication that if he gives it to firm B, rather than firms C or D, firm B will ensure that he gets a sinecure—a lovely job in retirement. He will get his hacienda in Spain. That is still going on.

The Government have just appointed a new chair of ACOBA who thinks it is reasonable for her to receive £800 a day for a part-time job. People on that committee—the great and the good—are taking those jobs on the basis of what they have gained in public work and in this job. This job should be the pinnacle of their career, but it is not any more; it is a staging post to getting riches later. We have done nothing about double jobs at all. Because of their insiderdom—because they view this issue from the inside—Members have failed to see what the public see from outside: people on the make who come here and use their election and status to make large sums of money.

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

What would the hon. Gentleman say to firemen in my constituency who have second jobs, and to policemen in his constituency, many of whom have quite legitimate second jobs that they manage to do outside their public service, publicly funded, well-paid jobs?

[Paul Flynn]

That is not a serious intervention.

Let us hear the promise of the Prime Minister from 8 February 2010. He said:

“We can’t go on like this. I believe it’s time we shone the light of transparency on lobbying in our country and forced our politics to come clean about who is buying power and influence.”

They are still buying power and influence. The pathetic lobbying Bill affected just 1% of corporate lobbyists. It was a bit of a nuisance for charities, but we have not had control of lobbyists.

What about honours? We have done more to degrade honours than King Charles I and Lloyd George. The Prime Minister set up a special committee to give honours —21 every year—to MPs. That has never been done before. Most of them are failed MPs, or MPs who are disappointed because they have been sacked. We have further degraded the honours system. We have not made any of the great reforms that we should have made and that we promised in order to win back the trust and confidence of the country, which was lost with the terrible scandal of 2009.

Finally, we make a point when we start our business every day, although it is not published. Let us think what the words mean when we say our prayers:

“May they”—

that is, us—

“never lead the nation wrongly through love of power, desire to please, or unworthy ideals”—

there are plenty of those around—

“but laying aside all private interests and prejudices keep in mind their responsibility to seek to improve the condition of all mankind”.

We have seen a Parliament in which many people have prostituted their high office and the great privilege of being here for their own private greed. It has got to stop.

17:33

[Sir Tony Baldry (Banbury) (Con)]

I am grateful to you, Mr Speaker, for calling me to speak in what, according to the House of Commons Library, will be my 650th contribution to proceedings in this Parliament. That puts me well in the top per cent. of all Members of Parliament, including Ministers, for contributions. I refer to my entry in the Register of Members’ Financial Interests, which is to be found on page 11. I am a practising barrister, the director of two public companies and three private companies, and a partner in a film partnership.

The resolution tabled by the Leader of the Opposition and others does not seek to ban Members of Parliament from pursuing outside interests as such: the motion is simply to ban certain types of outside interest. May I suggest that there is no logic, either practical or in terms of public policy, in what the Opposition suggest? The motion seeks solely to ban Members of Parliament from being paid company directors or consultants. I am at somewhat of a loss to understand why the Opposition think it appropriate to ban a Member of Parliament from being a director of a limited company, but if that is what they want, why would they consider it appropriate for a Member of Parliament to be a partner in a limited liability partnership? Why should I be banned from being a company director, but allowed to continue to be a partner?

Under the terms of the motion, it would be acceptable for a Member of Parliament to have an outside interest as a farmer, providing that interest was expressed by way of being a partner in a farm partnership, but the same Member of Parliament would be unable to pursue effectively the same activity if, instead of being a partner in a farm partnership, he were a director in a limited liability company undertaking exactly the same commercial activity.

Under the terms of this motion, it would be possible for Members of Parliament to have any second interests if they were self-employed interests. It would be possible for Members of Parliament to continue to be authors, journalists, television commentators, and stockbrokers, providing the stockbroking was done by way of a partnership. The provision in the motion simply to seek to ban Members of Parliament from being company directors is, I suggest, somewhat capricious, and owes little, if anything, to logic. I am afraid it simply reflects the desire of the Leader of the Opposition to jump on any passing bandwagon.

There is a wholly credible, intellectual case for saying that Members of Parliament can hold no outside interests whatever, and there is a wholly credible, intellectual case for saying that Members of Parliament can hold outside interests, subject to rules on transparency and accountability, but what holds no intellectual credibility is to seek to have a policy which bans certain types of outside interests for Members of Parliament and allows others. Moreover, with respect, it is no good people, including many editors and journalists, complaining that the House of Commons is, from their perspective, increasingly occupied by career politicians who have done nothing else and then, almost in the next breath, advocating the removal from the House of Commons those of us who do bring other experience to this House. As the House will recall, the last time that the Committee on Standards in Public Life considered this matter, it concluded that it was beneficial to Parliament for Members of Parliament to be able to have outside interests.

As the register shows, I am a practising barrister, arbitrator and mediator, and I am also a director of a number of companies, public and private. Under the provisions of this motion, if I were standing at the next general election, it would be permissible for me to continue to practise at the Bar, and to practise as a mediator and arbitrator. If the Opposition consider it acceptable for me as a Member of Parliament to continue to be able to practise as a barrister, mediator or arbitrator, their argument cannot possibly be against having outside interests as such. Why would they consider it acceptable for me to continue to practise as a barrister, but not for me to be a director of public companies? It cannot be a regulatory issue. As a barrister, I am of course, in addition to the general law of the land, subject to regulation by the Bar Council and by the Bar Standards Board, but as a company director I am also bound by the law of the land and subject to supervision by several regulatory bodies—the stock exchange, the UK Listing Authority, the Takeover Panel, and numerous others. This motion is simply grandstanding.

[Graham Jones]

The House would appreciate it if the right hon. Gentleman would explain how much he gets from outside jobs, and how much time he spends on them away from Parliament. It would illuminate the debate for the House.

[Sir Tony Baldry]

I have looked at the number of contributions made by those who tabled the motion. The deputy leader of the Labour party is down somewhere in the hundreds, as is the hon. Member for Hemsworth (Jon Trickett), who will wind up the debate, whereas I have contributed 650 times. If we are to start talking about the effectiveness of Members of Parliament, perhaps Opposition Members should start looking at the beam in their own eye before they look at the mote in their brother’s.

It is for electors to judge the effectiveness of Members. I have always declared my outside interests fully. Indeed, in the last general election, I stated very clearly in my election address that I would continue to pursue my outside interests. I am very proud to have been returned as the Member of Parliament for north Oxfordshire on seven occasions. On the last occasion, my majority was 18,000. The people of north Oxfordshire reposed their trust in me knowing fully, from the day I was first selected, that I was a practising barrister and company director. I have been proud to pursue those professions and occupations while a Member of this House.

17:40

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

I refer the House to my entry in the Register of Members’ Financial Interests, which relates to royalties received from works recorded prior to becoming a Member of this House, and on which I work zero hours. There is one recording not in the register: the record by MP4, the cross-party parliamentary group, which has made almost £1 million for charity in the past 10 years. I know you have a certain affection for the recordings of MP4, Mr Speaker, and we greatly appreciate that.

Here we go again. Just when we think that the Westminster establishment could not be held in lower esteem by the public, something comes along to disabuse us of that notion. It is all so familiar: a sting operation by the media using a fake company involving some of our senior Members of Parliament and the lure of access. Underpinning it all is the possibility of cash in the hands of those Members.

[Mr Mike Weir (Angus) (SNP)]

My hon. Friend talks about cash. Does he not find it strange—it seems strange to me—that it is so simple to entrap people in this place with the lure of cash? Members do not even take simple steps to find out if these people are genuine.

[Pete Wishart]

My hon. Friend makes a very good point. The right hon. Member for Blackburn (Mr Straw) made that very same observation about an almost identical sting prior to the last election, when it was then Labour Cabinet members who were caught up in a rotten affair.

The public observe this House with something approaching bemused bewilderment, concluding that the Westminster Parliament exists as little more than a self-serving institution for its overpaid Members. This Parliament has never been held in such contempt. Never has there been such a profound alienation between those who are governed and those who occupy the corridors of power. There is a massive disconnect between this House and the people of Britain. All that has happened in the past week makes that disconnect even wider. People will observe the comments from Conservative Members with something approaching disbelief. We see that reflected in how the public respond to this House—of course we do. The two major establishment parties can barely get above 60% in the polls. The public are not prepared to accept this anymore.

[Graham Jones]

Perhaps the hon. Gentleman could tell the House how many Scottish National party MSPs who are standing in the general election intend to stand down as MSPs, or will they be dual-hatted?

[Pete Wishart]

I know one, and yes he will.

This House is able to secure only 60% of popular support. That suggests to me that the people of these islands are looking for something different. They are sick and tired of the antics of this particular House. That is reflected in how they are responding to the way the Westminster establishment parties do their business. They are sick and tired of the self-justification: the special pleading; the bleating; the idea that somehow this House is enriched because Conservative Members can make some extra money; that this House is enriched because they bring outside experience to it; and that we cannot live on £67,000 a year. Tell that to our constituents! That is treble the national average wage. Our constituents are currently suffering austerity and a diminution of their annual income. They are experiencing real poverty and real difficulty, yet this House tells them that right hon. and hon. Members cannot get by on £67,000 a year.

I believe that being a Member of Parliament is a full-time job. In fact, we have got two jobs: we have our responsibilities in this House, and then we have our obligations to our constituents. Becoming a constituency Member of Parliament has changed dramatically in the 14 years that I have been here. It has become much more technical and much more complicated, with a greater amount of different tasks and skills needing to be acquired to serve members of the public efficiently and effectively. The suggestion that this can be combined with a second job with outside earnings is something I believe our constituents would find very difficult to accept.

[Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)]

Will the hon. Gentleman give way?

[Pete Wishart]

I cannot; I have no more time left.

No SNP Member has a second job, a directorship or a place on a company. Our responsibilities here are our sole concern and our only responsibility. SNP Members serve our constituents and ensure that the agenda for the nation is progressed. That is what we do when we come here.

It is only this House among the Parliaments and legislatures of this nation that seems to have this difficulty. It is only at Westminster where there is an issue about paid directorships and second jobs. We certainly do not have such issues in the Scottish Parliament, and I do not believe they have them in the Northern Ireland Assembly or the Welsh Assembly.

I believe that there is something peculiar and particular about this House. It has something to do with the history and the culture, something to do with the sense of entitlement that almost seems to come out of the pores of this place—the idea that people came to this Chamber because it was something for them to do after their main job.

[John Cryer (Leyton and Wanstead) (Lab)]

Will the hon. Gentleman give way?

[Pete Wishart]

I have no time to give way.

That is what we see with this particular House. It is built into the culture and the history. We need a 21st-century institution that is equipped to deal with the Britain we currently serve. It is no good relying on these old ways of doing things; we need to look carefully and clearly at how we conduct our business. What the public are seeing is cash for access and cash for honours. The public are looking at that absurd, ridiculous place down the corridor, with 850 ermine-clad unelected Lords. That is what they are seeing in this rotten democracy.

We have a task to do if we are to ensure that we clean up this House. I will support the Labour motion, but I observe that a number of Labour Members are among the top earners when it comes to outside interests. I would say to the Labour party, “If you are sincere, do it from next week.” I really hope it goes through with this and can maintain it as a policy. We owe it to our constituents to try to ensure that we do better.

We are not part-time Members of Parliament. Looking after our constituents is a full-time job. A second job means a second master, and that second master expects something back in return. Let us make sure that we do this job exclusively on behalf of our constituents. There should be no second jobs, no paid directorships, no outside interests with a financial return. Let us work for our constituents and make them our only priority.

17:47

[Tessa Munt (Wells) (LD)]

I declare that I have one source of earnings as the MP for Wells; otherwise, I have nothing to declare. I think the public will be shocked when they find out that MPs declared earnings of £7.4 million for outside work and second jobs last year. Of the 650 Members, 281 declared outside earnings in the Register of Members’ Financial Interests. Thirty Members earned the equivalent of an MP’s salary, and a dozen earned more than the Prime Minister’s £142,000. A total of 26,600 hours were spent on non-parliamentary duties. I think this is appalling.

I can think of no other job in which someone could rock up, once they had got it, and say, “Thanks very much for the job, but I am only going to do it for three days a week because I have something else on.” This is about money, time and priorities. We absolutely have to move this place on from the 19th century to now. Public expectations are completely different, and a number of Members across the House have explained that workloads have changed. It reflects the fact that so many people have no voice.

Many of us have considerable experience of work and life. I spent 31 years at work before I came here, and I have done loads of voluntary work, as well as raise my family. All that was gained before the election, but I did not forget it all when I came here. People will not forget everything when they arrive. Surely being an MP is a vocation and a public service. It is a full-time job, too.

In my first term as an MP—I have been here nearly five years—I have held more than 650 surgeries, and 23,700 of my constituents have requested help and advice. As I said, those are people without a voice, and they often face the systemic failure of government, whether it be local or national, and they need somebody to speak out for them.

People must make the choice between earning money and public service. I accept that there are some exceptions: for drivers who need to undertake a minimum number of hours, for instance, or doctors who need to engage in continuing professional development. Politics is a brutal business, and I understand that politicians can come to a brutal end at election time, but what is important is that the people do that to a minimum, and do not become bound up in trying to earn vast slugs of money.

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

As one who has spent a fair amount of time in a voluntary—or more or less voluntary—capacity as a special constable, may I ask my hon. Friend whether it is the amount of time that people spend out of the job of being an MP that causes her concern, or the money? She cannot have it both ways.

[Tessa Munt]

Oh, I think I can! I do this job for the money that is paid to me, and I think that that is fine. I know that loads of my constituents would think that it is a perfectly decent salary: indeed, they dream of earning such an amount. This is a vocation. If you want to go and earn money, get out and go and do it.

[Mr Burley]

May I ask my hon. Friend the same question that I asked the hon. Member for Newport West (Paul Flynn), and hope for a slightly better answer? Would she ban the firefighters and policemen in her constituency from having second jobs? Surely what is good for MPs is good for anyone who works in the public sector.

[Tessa Munt]

No. I disagree. I will talk about what I know, and I know about being an MP, and that is exactly what I can talk about. I am not qualified to talk about the other things. There are clearly restrictions in various other cases, but what we have brought to the House today is a discussion about whether people should hold paid directorships or consultancies. I have to say that I do not think the motion goes far enough, but that is because that there are many other forms of employment. People are employees, they are on contracts, they are agency workers, they are partners, they are office holders, they are barristers and advocates and police officers and members of the clergy. I accept that there are all sorts of exceptions. We should consider these matters carefully.

I am entirely prepared to listen to what might be thought to be a way forward, but I have made a pledge, and I think that it is a privilege and an honour to do my job. There is no job description, and it may be time for us to discuss what one should expect, but the fact remains that I pledge my time to those who elect me and those who do not, and this will be my one and only job.

[Mr Raab]

My hon. Friend is advancing an interesting argument. If we followed the principle to its logical conclusion, would it lead to a ban on Liberal Democrat MPs taking jobs as Ministers, in coalition or otherwise?

[Tessa Munt]

That is an utterly ludicrous suggestion. As my hon. Friend probably knows, for three years I was the Business Secretary’s Parliamentary Private Secretary. That was a promotion. It was something within my job. It was something that I did between Monday, when I arrived at the House, and Thursday, when I went back to my constituency.

My staff have calculated that in most weeks I probably work for more than 100 hours, but this is a vocation, so I do not complain about it. That is the way it is, and that is the way I choose it to be. It is absolutely fine to gain promotion in the Government, but we do not need to have a job outside this place to enhance our expertise inside it. I think it completely unreasonable that people should have such vast earnings and such a vast amount of time.

I recognise that I may have a slightly extreme view on this issue, but I do not care, because it is what I believe.

17:45

[Liz McInnes (Heywood and Middleton) (Lab)]

I speak as a new Member of Parliament and a proud trade unionist. I also went to a school that did not have a debating society, so I have no idea what the standard of debate is compared with the standard of the debating society at whatever school the right hon. Member for Rutland and Melton (Sir Alan Duncan) went to.

One thing that has surprised me since I became an MP is the number of people back home who have asked me “Are you still working in the NHS?” I used to work as a health care scientist in the national health service before I was elected. There is a real perception out there that being an MP is not a full-time job, which is why people are asking me that question. The practice among some MPs of taking paid directorships and consultant roles exacerbates the belief that being an MP is something that someone can do in their spare time when they are not flitting around doing their other well-paid part-time jobs. I no longer work in the national health service. There is absolutely no way that I could hold down a responsible job, with people’s lives and health depending on what I did, and fulfil the responsibilities of my new role as an MP. To be perfectly honest, I do not understand how anyone finds the time to do anything outside their role as an MP, although I am prepared to accept that that may reflect the fact that I am new and have a lot to learn, and that a general election is looming.

People in my constituency are baffled by recent assertions that £67,000 a year is not enough for an MP to live on. Figures were recently published showing my constituency was the second-worst constituency in the north-west for the payment of the living wage. The worst area is Blackpool North and Cleveleys, where 42.1% of workers are paid less than the living wage. In my constituency, 39.8% of local workers are paid less than the living wage, with women faring particularly badly. Over half of them—53.9%—are paid less than the living wage, which is £7.85 an hour, which amounts to £314 a week for a 40-hour week, or £16,328 a year before tax. I am sure that the 39.8% of people in Heywood and Middleton who receive less than that—and, indeed, all those people existing on the average wage in the UK—will be absolutely baffled as to why MPs on £67,000 a year need to have a second paid job.

We owe it to our constituents, and to the people who elected us, to do our job as an MP properly and effectively, to make it our only employment, and to concentrate fully on it—not to be distracted by paid roles as consultants and directors, which feeds the impression that being an MP is a part-time job—[Interruption.]

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. Will the hon. Lady sit down for a moment? I will stop the clock. I am getting a bit fed up with Members, including Whips, shouting across the Dispatch Box at Members who are speaking.

[Pete Wishart]

The Labour Whips did not shut up through my speech.

[Madam Deputy Speaker]

Actually, Mr Wishart, I told them off at that point as well, and made them stop, so you could conclude your speech. I was just about to say that that goes for both sides. There are strongly held views: express them strongly when you have the floor, but please do not shout at one another. Liz McInnes.

[Liz McInnes]

Thank you, Madam Deputy Speaker. I want to end by quoting one of my constituents, Father Paul Daly, who said to me:

“When I vote in May, I will want a full-time MP who does not feel so hard-done by on a mere 67 grand a year plus expenses that they have to go looking for part-time work at a few extra thousand quid a day.

I don’t mind MPs getting rewarded for writing the odd article, but when MPs are earning more outside their parliamentary duties than within them then something is very wrong.”

I think that Father Daly speaks for the majority of people in their perceptions of MPs. That criticism from a member of the clergy brings home to us what people really think of us. This is a moral issue, and it is right that the Church should express its views in that way. We owe it to all our constituents, believers and non-believers alike, to conduct ourselves in an honourable fashion and to concentrate on the role to which we have been elected and which we should be proud to perform.

17:59

[Mr Mark Spencer (Sherwood) (Con)]

I draw attention to my declaration of interests, and let me spell them out, as has been requested. I am a director of a garden centre company and I will even name the other three directors. One is my wife, one is my father and the other is my mother. I am a partner in a farming business, as well. There are three other partners. They are my wife, my father and my mother. I understand the issues that Opposition Members, and Government Members, are trying to address, but the reputation of Members of Parliament is not being enhanced by the situation we find ourselves in.

Front-Bench Members must ask themselves whether the debate is making the situation better or worse. They are assisting the problem, not trying to solve it. In trying to develop rules to trap people or to make—[Hon. Members: “Trap?”] You are trapping me. Let me explain. As a farmer, if I cannot be a paid director, that is quite simple because I can extract myself and make myself an unremunerated director. That would mean that my wife would have to draw twice the salary to maintain the same level of support for the family. That does not affect my interest or whether or not I am influenced. In fact, it could be argued that that is even worse as my family is benefiting from that cash, which gives me that same interest.

[Kerry McCarthy (Bristol East) (Lab)]

On a related point, as the hon. Gentleman talks about farming interests, does he share my concern that Members in receipt of common agricultural payments do not have to declare that in the Register of Members’ Financial Interests, even when they are Department for Environment, Food and Rural Affairs Ministers receiving quite substantial amounts?

[Mr Spencer]

That is a very good point. I am a partner of an agricultural company that receives subsidies from the EU. I am an unremunerated partner in that company, but how does one extract oneself when one’s immediate family are benefiting? I live in a house at the centre of that farm. There is only one electricity meter for that property, so the farming business pays the electricity bill, in effect paying the electricity bill for the house that I live in. I cannot extract myself from that unless I move house. I have never lived anywhere else. I was born in that house and have lived there for ever, but the rules that the Opposition are trying to create will stop people becoming Members of Parliament. It would be impossible for me to be a Member of Parliament under the rules they are trying to set up. I do not think that that is what they are trying to achieve; I think they are trying to stop influence. Everybody in the House wants to ensure that Opposition Members are not being influenced, and I am sure that that is what they are trying to achieve. The rules they are proposing, however, do not do what they want to achieve. That is a great shame. It brings shame on this House and brings the role of being a Member of Parliament into disrepute.

[Mr Burley]

On the subject of influencing MPs, does my hon. Friend share my concern about Members of Parliament who are members of trade unions and do not declare that interest, such as the hon. Member for Stretford and Urmston (Kate Green), who had to apologise to this House for tabling amendments to the Legal Aid, Sentencing and Punishment of Offenders Bill written for her by the GMB union, of which she was a member?

[Mr Spencer]

That is a legitimate point and it brings me to my final point about the best way to solve this. Members of Parliament should be allowed to do whatever they want to do, in whatever role they want to do it in and with whatever money they want to earn elsewhere, but that should be wholly in the public domain. The constituents of that Member of Parliament would be able to make a judgment about whether they thought that that was the right or the wrong thing to do. That is the only clear way to solve this issue without trying to draw up rules. There will always be loopholes when we draw up rules that mean that people with unscrupulous motives will be able to get around them, but innocent people who try to do a good job as a Member of Parliament would be trapped by them. That would be a great shame, not only for the House but for those Members who genuinely became a Member of Parliament to try to improve their own communities and assist the area in which they live. It would also be a great shame for people like myself, because I had no ambition to become a Member of Parliament until very late in life. I had had another career and I sort of stumbled into this by working in a community and being pushed forward through the things that I was doing to benefit that community. I think the House benefits a great deal from people who have worked and gained experience elsewhere before coming to this place to assist in making good, logical decisions based on that experience.

18:05

[Ian Murray (Edinburgh South) (Lab)]

I should like to refer the House to my entry in the Register of Members’ Financial Interests. I am an unremunerated director of a supporters co-operative, and as part of the responsibilities of being the chair of that co-operative, I am an unremunerated director of Heart of Midlothian football club. I am also a director of my own business, which I put into hibernation when I was elected to the House. The total amount of money I receive from all those positions is precisely zero.

I hope that I do not get struck by lightning when I say this, but I actually agree with something that the hon. Member for Perth and North Perthshire (Pete Wishart) said. We are not many days away from the end of this Parliament and we have finally agreed on something. I congratulate him on rightly saying that we must restore people’s faith in politics and in this place. The public are demanding that we do just that, and that is why we are having this debate today; it is not because we are jumping on a passing bandwagon.

Before I was elected to the House, I ran my own businesses, but as soon as I left the stage in 2010 after the returning officer had announced that I was the new Member of Parliament for Edinburgh South, I sold one of the businesses and put the other into hibernation. Why? Because it is a tremendous privilege to be in this place, and every Member should give this full-time job 110% of their time. I was still a councillor at the time, and until the by-election took place and I stopped being a councillor, I donated every single penny of that additional salary to local charities in my constituency.

[Adam Afriyie]

Would the hon. Gentleman take a second job as a Minister or the Chairman of a Select Committee?

[Ian Murray]

That is a completely ridiculous misnomer from Conservative Members. It is a smokescreen to cover up some of the practices that they anticipate doing in this place. Being a Minister or the Chair of a Select Committee is part of the job of being in this place. It is part of the remit of being a Member of Parliament.

[John Glen (Salisbury) (Con)]

Will the hon. Gentleman give way?

[Ian Murray]

I will not give way, but I will say more on that point later, because it is being used as a ridiculous smokescreen in this debate, and it is one that the Prime Minister shamefully trumpeted from the Dispatch Box earlier as well.

There are not enough hours in the day to do the job of a Member of Parliament, Madam Deputy Speaker, and you do not need to take my word for it. You can take it from my partner, my friends, my neighbours and my family—from everyone who does not see me from one weekend to the next because I am doing my job in this place. For Lord Heseltine to say that being an MP is “not a full-time job” simply emphasises how out of touch he is now, just as he was when he was in this place, and just how out of touch the Conservatives are on this issue. Any Member who thinks that the job of an MP is not full time is not doing their job properly, and any candidate standing for election on 7 May who thinks that it will not be a full-time job would be better off standing aside and allowing someone else to do it.

Why do I say that? Because since 2010, I have directly helped more than 12,000 of my constituents, held 800 advice sessions and visited or offered to visit 36,500 households. I get up to 700 e-mails a day. We are ingrained in our local communities because that is what Members of Parliament and elected members at all levels—councillors, Members of the Scottish Parliament, MPs and Members of the European Parliament—should be. We should represent our constituents; that is what we are paid for. The overwhelming majority of MPs work their socks off for their constituents, representing them here, doing the work of Parliament and pushing forward the issues that their constituents care about.

Let us look at the Prime Minister’s response to these questions at Prime Minister’s questions today. He could not have been more exposed on this issue if he had turned up in his infamous holiday Speedos. He was asked by the Leader of the Opposition, not once, not twice, not three times, but six times, how many jobs he thinks a Member of Parliament could have when they are in this place, but he refused to answer. What is he frightened of? Why will he not back us to stop this? To say, as some of the—

[Mr Burley]

rose—

[Ian Murray]

I am not giving way. Some Government Members say that these jobs bring additional flavour and experience to this place, but I do not need to have a £250,000 non-executive directorship of a major business to tell me what my constituents want me to bring to the Floor of this House. I know what my constituents want me to bring to the Floor of this House because I ask them—I knock on their doors, I do surgeries, and I put out questionnaires and surveys. That is how we in this House know what the public are thinking, and to think otherwise is just bonkers.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

My hon. Friend is making an extremely strong speech. Does he not find it strange, as I do, that when we look through the Register of Members’ Financial Interests we find that a lot of those directorships and consultancies involve giving advice and time out of this place and are not about bringing expertise into it, although that was the argument being made by so many Government Members?

[Ian Murray]

Absolutely, and that is the key point; we need to get money and lobbying out of politics. When we had the opportunity to put through a strong lobbying Bill, the raison d’être of the Government was to hit the charities which want to tell us to change public policy and not the very lobbyists they have at the heart of Downing street and of No. 10.

Let me just deal with this issue about shadow Ministers and Ministers. Those roles are an integral part of being a Member of Parliament. If Government Members are suggesting that Members of Parliament should not take those roles, they are completely missing the point of what the public are asking us to do. The Prime Minister said exactly the same from—[Interruption.] Madam Deputy Speaker, if the hon. Member for Cannock Chase (Mr Burley) got £5 every time he chuntered in this place, he would not need any outside interests from this place. A better view of the world outside would be to listen to what the public are saying to us. We do not need to have highly paid second or third jobs to tell us that, and that is what the public are telling us to do.

[Sir Alan Duncan]

rose—

[Ian Murray]

I hope the right hon. Gentleman does not mind, but I have no time to give way

Let me tell the House who needs second jobs, third jobs and fourth jobs. It is the people who have been failed by this Government: the millions of people on zero-hours contracts, who need more than one job; the millions of people in part-time work who need full-time work—they need more than one job; and the millions of people on short-hours contracts in this country, who have been failed by this Government’s failed austerity programme and the so-called “economic recovery”. Those are the people who need to go out to earn additional money, because they cannot make ends meet from the zero-hours contracts, the short-hours contracts and the part-time work they are currently on, and we should be representing those views in this House.

The motion is not perfect, but the Leader of the Opposition said clearly from the Dispatch Box this afternoon, “Let us agree the principle that this is wrong and let us deal with the issues that are in front of us.” If we do not do that, the public perception of this place will drop even further and it will be to the shame of democracy in this United Kingdom.

18:12

[Dr Phillip Lee (Bracknell) (Con)]

I will try to raise the bar of this debate, as at times it has been remarkably undignified in here this afternoon. I am the only independently practising doctor in the House—I thank the Prime Minister for pointing that out earlier at the Dispatch Box—so I guess that, as somebody who has a publicly declared role outside this Chamber, my contribution should have some value.

The House should know that I was selected as a candidate in Bracknell at an open meeting that anybody on the electoral register could attend. At that meeting I declared that I would continue working as a doctor, so when I was subsequently elected the whole electorate knew that and I do not feel that I am doing anything that my electorate have not supported me in doing. During that election campaign I made a bit of a mistake; I am on the record as saying that I thought Members of Parliament should get paid significantly more. I said it in good faith, because I thought this Chamber, this mother of all Parliaments—the Parliament that should lead in this world, not copy other Parliaments—should have the very best people. It is a statement of fact that the best people tend to get paid a bit more, in terms of what they have done in life and whether or not they have been successful; at least part of it is to do with how much they are paid. But I made a mistake, and after four and a half years I am prepared to accept that in my time here, working on Select Committees, contributing in this Chamber some of the very best contributions, on both sides of the House, have been made by people who continue to do things outside this House. Some of the best contributions in the most difficult debates come from people who are working in the field. Many other contributions are pretty substandard because, invariably, they are scripted by other people, such as those in the Whips Office or in outside lobbying groups. The best contributions are from Members who truly know what they are talking about.

Although I understand the Opposition’s desire to improve the reputation of this Chamber, this is not the right way of doing it. The fundamental challenge that we all face in here is the complete breakdown in trust. The rise of the UK Independence party is to do with that anti-establishment and anti-politics feeling. There is a sense that the bigger parties are not listening any more and are populated by people who are in it for themselves.

How do we address this matter of trust? I reflect back to last week when I worked about 40 hours—it will be declared accordingly—both as a doctor and in my constituency. When my patients came in, they recognised who I was. It was interesting to look in their faces, because when they saw I was a politician, they did not want to trust me. Then they realised that I was their doctor, so they were a bit conflicted. I proceeded to treat them and then they left. I then reflected on what had happened. I was the same human being. I have the same values and principles when I am a doctor as I do when I am a politician, and yet I am not trusted. I think it is because the medical profession is about valued knowledge, professional behaviour, honour and integrity— just read what the General Medical Council says—and our patients trust us. They know that, most of the time, we are trying to do the best for them. How come the same is not true for politicians and how do we address that?

[Sir Alan Duncan]

Is it not also the case that, as a result of his practice, my hon. Friend is probably the most qualified person to speak in this House about the national health service?

[Dr Lee]

Yes, I agree.

[Mr Burley]

And the best looking.

[Dr Lee]

I am not so sure about that. I am certainly qualified with regard to the regional health care settlement, of which I have had a lot to say in the Thames Valley. The fact that I have up-to-date understanding of what is happening in the local health care economy makes me a more effective representative for my constituents.

Just as an aside, no one has talked about hours. As a junior doctor, I have done weeks of 100 hours or more—it is pretty harsh when that happens—so I know all about working hard. For most people, 40 hours a week is what they call their full-time job. I suspect that most people in this House do more than that on politics. I know that my family and friends think that I have aged quite markedly in the past four and a half years while doing this role. At no time has the fact that I have done additional work in medical practice impacted on my ability to be a politician. In fact, I think it has improved it.

The reason why trust matters—it matters for all parties—is that it is only with trust that we get to govern effectively. When I look at the challenges we face, I see ageing; I see Britain’s role in the world diminishing because we do not know what it should be. I think to myself that this country needs good government, of whatever political persuasion—

[Mr Raab]

My hon. Friend is making a powerful point about the range of experience that we need. Is not the pernicious thing about this motion the fact that it singles out one particular area, which is business experience, and that is automatically barred?

[Dr Lee]

My hon. Friend is right. To go back to my original comment—[Interruption.] The clock has not been changed, Madam Deputy Speaker. [Interruption.] What am I to do here?

[Madam Deputy Speaker]

You keep going. If you have another minute, that will be fair.

[Dr Lee]

To return to my original point about salary, the reason I have changed my mind is that I think business, the law and trade union experience, for example, are all valuable in this Chamber. If people are working in those areas, I think that they should be paid for it.

The central thrust of my argument is that we face massive challenges as a country, and we do not talk about them here very often. There are not many debates about access to energy and food, ageing, extremism and the like. When we come to deal with those problems properly, we will need to be trusted as individuals, because otherwise the public will not follow us. I do not think that the motion addresses that problem at all. Each of us has a responsibility to behave honourably and with integrity in all that we do. I always have done so in this House, and I will continue to do so irrespective of regulations that are passed either now or in future.

[Several hon. Members]

rose—

[Madam Deputy Speaker]

Order. There appears to be something wrong with the clock, and I hasten to add that it was not the Government Deputy Chief Whip who turned it off. I hope that it will stick to five minutes this time, but if not I will help Members by saying how much longer they have. The next speaker is John Hemming, and we are still on a five-minute time limit.

18:21

[John Hemming (Birmingham, Yardley) (LD)]

I refer the House to my entry in the Register of Members’ Financial Interests. It contains an entry for JHC, which stands for John Hemming & Co., a company I founded in 1983. It currently employs about 260 staff and has a turnover of £20 million. I have declared in the register an income of around £180,000 from that company. I attend a meeting once a month and chair the board meeting. I am a full-time Member of Parliament. I spend five full days during the week and two half days at the weekend on political business. Oddly enough, the motion is so badly drafted that it would not affect me, because the £180,000 I receive is from a partnership, and the motion does not refer to partnerships. Obviously, there is a lot of confusion about equity interest and payment per hour. I spend under four hours a month on the work set out in my declaration of interests.

What do I do? Well, today I met the Latvian Justice Minister, who is concerned about what is happening in the family courts in England as it affects Latvian citizens. I have attended two Select Committee meetings today. I actually sit on five Select Committees, and I probably attend more Delegated Legislation Committees than any other Member of Parliament. Therefore, when it comes to parliamentary activity, I can claim to be as busy in Parliament as one can be. Indeed, one of my colleagues said that he did not think that I had a second job because he always sees me here, and I am here a lot.

[Fiona O'Donnell]

May I ask why the hon. Gentleman decided to donate to charity his income from taking part in ComRes consultations but not to donate income from his other employment?

[John Hemming]

The problem with that question is that the hon. Lady has made an assumption that I do not make other donations to charity. I do make other donations, but they are not set out in my entry in the register. I am sorry, but that claim is basically wrong.

I do a vast amount of casework. I have my advice bureau on Saturdays, and the maximum number I have dealt with is 38 groups of people. Admittedly, that took a little longer than normal, but I see everybody who turns up at my office on a Saturday without an appointment—many colleagues who claim to be full-time Members of Parliament require appointments, but I do not. I have been a full-time politician since 2004, when I was deputy leader of Birmingham city council, which is also a full-time job. From a casework point of view, having dealt with about 30,000 cases of varying complexity since then, I am a full-time MP. I run campaigns about secret imprisonment, term-time absence, parents being prosecuted because their children are ill and dealing with people who leave this country because they are persecuted by the state. That is part of my job as a full-time MP.

I am also a pianist, as is well known. I play the piano at the party conference and later in March I have a gig in my constituency in Birmingham for Macmillan Cancer Support, which is sold out. Admittedly, that will all go to charity. As the hon. Member for Perth and North Perthshire (Pete Wishart) knows, I play jazz music in various places for charitable purposes. This year we are not raising money jointly for Macmillan at the Palace of Varieties show, but these things still go on.

I have additional business costs because I am an MP, but where is the conflict of interest? There is a conflict of interest for Ministers, because if they vote against the Government they are fined by losing their ministerial salary. That is why Ministers are called the payroll—they are paid extra money by the Government in order to back the Government and vote with the Government, whether they agree with them or not. So it is very clear, with our system of failed separation of powers, that a conflict of interest arises from the second job of being a Minister.

How do my constituents benefit from me? I have a little bit more money, that is true, so I pay beyond parliamentary expenses for a benefits adviser who comes to my office to give specialist benefits advice. I was able to take legal action against the city council to try to get it to clean up the streets, which was good in that it got the council to clean up the streets, but bad in that I was ordered to pay costs against the council. That is being appealed through the courts.

Since 2009 I have claimed no second home expenses and I am the most cost-effective Member of Parliament in Birmingham. I use saver return tickets to get to the House of Commons. That keeps my travel costs low so, although I go between London and Birmingham every week because I live in Birmingham, I am by a long way the cheapest MP in Birmingham in terms of personal expenses.

I deliver for my constituents. I deliver more widely on campaign issues. What is the problem with me spending four hours a month continuing to have an interest in the business that I founded more than 30 years ago, which pays a large amount of tax and provides jobs for 260-plus people?

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. I am taking the time limit down to three minutes as interventions have slowed us down. Dr Lee, you got nine minutes. I do not know how that happened, with the clocks going wrong. It was not your fault. The time limit is three minutes from now.

18:27

[Grahame M. Morris (Easington) (Lab)]

I shall speak as quickly as I can. I shall not go through a litany of my attributes, how many times I have spoken or how many contributions I have made, but it must be a considerable number.

I take the opportunity to correct the right hon. Member for Banbury (Sir Tony Baldry), who said his entry in the Register of Members’ Financial Interests was on page 11. It is actually on pages 11, 12 and 13. Mine is on page 205 and it consists of three letters. Guess what they are. [Hon. Members: “Nil.”] Correct—nil.

We are here because once again Parliament has been brought into disrepute by the actions of, in this case, two former Foreign Secretaries. It is disgraceful. I am disappointed by contributions from Government Members who say how disappointed they are that the Opposition are raising these concerns and that that demeans Parliament. Surely to goodness our electorate want us to tidy up Parliament and stop the conflict of interest.

The hon. Member for Cannock Chase (Mr Burley), who is no longer in his place, was going on about the trade unions funding the Labour party. This might be an incredible revelation, but it is the labour and trade union movement, and many of us are proud that millions of workers pay money to a political party, not for personal financial gain, but to support their collective endeavour. Surely there is a world of difference between the narrow financial interests of somebody who represents an energy, private health or outsourcing company, from which they can clearly derive a narrow sectional interest, and someone who represents the collective interests of millions of workers, be they in the health service, the coal mines or the shipyards.

[Mr David Anderson (Blaydon) (Lab)]

Will my hon. Friend confirm that when he talks about the contributions paid by trade union members through a democratic process, that is done under rules and legislation that were drawn up mainly by the Conservatives, so the rules are their rules, which trade union members abide by to pay money to the party that they choose to support?

[Grahame M. Morris]

My hon. Friend is absolutely right. Every attempt is being made to try to cut the link between organised labour and the Labour party, and that is shameful. I find the attacks that are made on trade unions under the guise of whatever flag is waved on the Government Benches appalling and disgraceful.

I do speak to some Government Members privately, and I think there is a lot of concern about MPs with second jobs. May I appeal to their self-interest? I think I am reasonably hard-working, although people might doubt the quality and content of what I am saying on occasion. Does it not strike Members as odd or problematic when their colleagues are away being barristers or consultants? I have looked at the register, and some of them are getting £1,000 an hour. That means that a greater work load falls on the Back-Bench Members who are staying behind here, covering for absent colleagues who are also getting £67,000 a year for being MPs. I think that is a disgrace, personally, and it should be stopped.

There is an opportunity for Members to support this motion and make a statement. The Leader of the House said that there are faults with the motion, but there is a difference between a general rule and a general principle. We can support the general principle here today, and I urge all Members to do so.

18:31

[Martin Horwood (Cheltenham) (LD)]

I have no relevant interest to declare, which makes me feel like a bit of a poor relation in this debate. I find being a Member of Parliament a full-time job, and with a salary that is some three times the national average, I hardly think we are poverty-stricken in this place.

It is a shame that at the beginning of the debate things instantly degenerated into party political point scoring, points of order, procedural manoeuvring and personal accusations. Our constituents really expect better. Later contributions, including those of my hon. Friend the Member for Wells (Tessa Munt) and the hon. Members for Sherwood (Mr Spencer), for Bracknell (Dr Lee) and for Easington (Grahame M. Morris), were much more measured, and that is to be welcomed.

The Government amendment is good as far as it goes, but for me it implies too much acceptance of the status quo, and I do not think the status quo is acceptable. I cannot, though, support the Labour motion, which is far too simplistic. Reference has already been made to the fact that it excludes partnerships, farmers, broadcasters, journalists, and writers like the Leader of the House. I am very impressed that he managed to find time to write an acclaimed biography of Pitt. I have not had time to read it, so how on earth he found time to write it, I do not know.

My background was in business and in the charity sector. My new Conservative opponent is a barrister in London chambers. If the people of Cheltenham were so rash as to elect him in May, he would be completely unaffected by what is proposed in this motion. He would be able to continue earning very large fees as a barrister, whereas I would be ruled out of becoming a director in a business. I do not understand what is so special about paid directorships. The motion would prevent, for instance, the retention of a directorship in a small local family business, even if it took hardly any time from the Member’s parliamentary business, but allow unpaid directorships that might carry with them significant equity shareholdings that could result in a significant increase in wealth, if not technically in income. I am afraid that this looks like a well-intentioned motion that was written in a hurry and, I venture to say, by a party with a beginner’s knowledge of business.

The key issues that need to be addressed are conflicts of interest and the time that we devote to parliamentary business. They must be addressed in a way that is not the subject of silly party political point scoring—so it will have to take place after the election—and without our being seen once again to mark our own homework. The hon. Member for Cities of London and Westminster (Mark Field) suggested the Independent Parliamentary Standards Authority for the role. An alternative would be the Standards Committee, but with increased representation from lay members who could look at this with a strong external voice. That would command the confidence of the public and the electorate, and we certainly need that confidence.

18:34

[Mr Dominic Raab (Esher and Walton) (Con)]

The English Romantic poet Samuel Taylor Coleridge said:

“In politics, what begins in fear…ends in folly.”

My fear is that in this debate—not just the debate in the House today, but more generally—that is where we will end up.

The motion is obviously flawed. Why exclude just business consultancies and directorships? Why exclude that one area of experience from outside this place? It is very important to have business experience in the House of Commons, whether in considering issues of business red tape, business taxation, jobs growth or even the minimum wage, which is very close to the hearts of Opposition Members. There is the whole issue of whether increasing the minimum wage would result in more unemployment. They take that very seriously, but it is a subject on which we want to hear from employers and people with experience of running or taking part in businesses. We need this place to have experience from a whole range of outside professions and sectors. Why should business be excluded?

If this debate was really about the amount MPs earn outside that role, we could have a cap at the amount earned for a Government job. A Government job is of course a second job, and it is ludicrous to keep up the farcical pretence that it is anything else. If the debate was about hours, they are already declared in the Register of Members’ Financial Interests. If it was really about lobbying, we could have a sensible debate. For example, it would be reasonable to place a bar on an MP lobbying the Government for a business from which they draw an income. That would deal with the point about the conflict of interests. However, we have no such focused, sensible debate; the motion seems to be about political point scoring.

I want to talk about some of the stepping-stones to rebuilding trust in politics and in Parliament. There is no silver bullet, but I would like more open primaries—I was selected by open primary, which had a huge impact on me—which make it easier for people with experience from outside politics to come into Parliament.

[Dr Phillip Lee]

My hon. Friend and I share the experience of open primaries. It struck me that the majority of the people in the room at my open primary—half of them were not Conservative members—just wanted a really good Member of Parliament, who had integrity, a sense of honour and a sense of duty, and wanted to serve the constituency. They were very happy that I had an outside job, because they wanted someone with experience of the real world. Did he have the same experience?

[Mr Raab]

I had exactly the same experience. Of course, in an open primary, the community can ask someone specifically how they would do the job.

We should attract the brightest, the best and the most talented people to this place. It is no good referring to the median wage, or to what people earn on average. I understand why that is attractive and alluring in a superficial political way, but this place should be a cradle of democracy that attracts people with huge expertise and experience.

I would like MPs to be paid at a similar level to a secondary head teacher, an assistant chief constable or a partner in a GPs’ surgery. I would not increase our salary, or accept an increase, at a time when we are imposing a freeze or a 1% cap on the rest of the public sector, but MPs’ pay does need to be readdressed or reset to make sure that this place has the expertise and experience to do its job. We should cut the number of MPs; that would be another important stepping stone. I agree with my hon. Friend the Member for Richmond Park (Zac Goldsmith) about the right of recall, which would be not a panacea, but a stepping-stone.

Above all, Parliament needs to be a bulwark against the Executive. It needs to ventilate debate and give voice to the convictions of MPs as the representatives of their constituents. I would like members of Public Bill Committees to be elected in the same way as those of Select Committees, and I would like Parliament to control its own business. Those sensible things would help to restore public trust in politics.

It is possible to restore public trust in politics. Ipsos MORI has shown that mistrust of politicians sank to its lowest level in 2009, but crept back up 5 percentage points since, before dipping again. That shows that the public respond to what we do, how we hold ourselves and the job we do. If we want to restore public trust, it must be done in a sensible way, not by scoring cheap political points, as in the motion.

18:39

[Adam Afriyie (Windsor) (Con)]

This is a tricky debate for MPs, because each individual MP will be put in the media spotlight, but there is something more pernicious behind the motion than just its opportunistic nature. One or two fallacies have been peddled. One is that being an MP is a job with a salary; it actually means holding an office that has duties and responsibilities, but is otherwise not that clearly defined. I make that point because the primary function of a Member of Parliament is to hold the Executive—or, in the past, the monarch—to account. The idea that Back-Bench MPs are not getting a second job or performing a different function when they become Ministers or Opposition Front Benchers is completely false. Most MPs will, during their career here, have two jobs at a minimum. We must also remember that there are Select Committee Chairs.

We keep talking about £67,000 as if it is extraordinary. We must bear it in mind that when Lloyd George introduced the Members’ allowance in 1911, it was set at £400, which was six to eight times the national average income. I am not proposing that we go back to that level, but I want to paraphrase what he said at the time. He said that it was not a payment for services rendered, it was not a payment for a job, it was not remuneration, it was not to be considered a salary, but it was merely an allowance that recognised that there were costs associated with being here and with being a Member of Parliament. It was fantastic for the Labour party at the time, because the Osborne judgment had meant that less well-off people were unable to make it here.

The point that I want to make in my last 60 seconds is that the motion would lead to a Parliament in which the party leaders had ever more power, because by being able to hand out, through patronage, larger salaries for Front-Bench positions, they would control the way the Back Benchers worked. We are here to hold the Government and Front Benchers to account. The motion would lead to a Parliament stuffed full of professional politicians and the independently wealthy with unearned income, inherited homes, wealthy families and trust funds. If we want a citizens’ Parliament in which Back Benchers hold the Government to account without fear or favour, we must reject the motion entirely. Be in no doubt: the motion would extend the power of political party leaders and the Government, and deliver a Parliament full of Back-Bench MPs who were either independently wealthy or partisan political drones.

18:41

[Jon Trickett (Hemsworth) (Lab)]

This has been an interesting debate, although it has not always been of the highest quality. A number of contributions stay in my mind, but I will not have a chance to deal with them all.

My hon. Friend the Member for Newport West (Paul Flynn) pointed out that £67,000 is a full-time salary and that this is a full-time job. That was a recurring theme. I remind those who say it is not that much that we are in the top decile. Nine out of 10 people earn less than us. My hon. Friend the Member for Heywood and Middleton (Liz McInnes) reminded the House that almost four out of 10 people in her constituency earn less than the living wage.

My hon. Friend the Member for Easington (Grahame M. Morris), who I am sure is on his way back to the Chamber, reminded the House that there are Members of Parliament who are earning £1,000 an hour in addition to their salary. These are staggering amounts of money. The hon. Member for Wells (Tessa Munt) used extravagant but accurate language to describe the horror that many people will feel when they discover how much money is earned by some Members of Parliament.

There were a number of interesting speeches by Government Members, which all boiled down to three arguments. I will deal with those quickly before getting to the point of our motion. There were the loud-and-prouders or topper-uppers, who were in favour of earning more because they felt that, as a result of what they did, they were entitled to a larger salary. They felt that £67,000 was not enough. I will come to that argument in a moment or two.

The Leader of the House said that our proposal was just too complicated and difficult to achieve. I reminded him that it has been done in Washington. In fact, Washington has gone much further than this relatively modest proposal. I am not saying that we should model everything we do on Washington, but it is interesting that the home of free enterprise and buccaneer capitalism has been able to regulate its elected members when the Government suggest that we cannot.

The third argument was that it helps the House to have the experience of people who do things outside. Of course it does. We all do things outside. The issue is remuneration. My hon. Friend the Member for Edinburgh South (Ian Murray) reminded us that he previously had two businesses, and he did the right thing—he closed one down and put the other into hibernation, so that there could be no conflict of interest. The central question is one of remuneration.

[Mr Spencer]

Will the hon. Gentleman give way?

[Jon Trickett]

No, I do not have time.

The central issue that our motion is intended to address is the crisis of legitimacy that the British governing elite is experiencing. We encounter cynicism wherever we go, and in the end it will imperil the very foundations of our democracy unless we somehow regain the trust and respect of the British people. The question is, can we respond to a new zeitgeist that is everywhere in our country—one that is more democratic, egalitarian, non-deferential and occasionally even unruly? It is right that it should have all those attributes in the second decade of a democratic century.

[Sir Alan Duncan]

Will the hon. Gentleman give way?

[Jon Trickett]

No, I am not going to take any interventions.

If we do not respond to the current mood in the country, we will be lost as a House of Commons. I do not for one minute think that most voters imagine that their elected representatives are somehow superhuman and never make mistakes, and the Leader of the House rightly paid tribute to the two Members who have got themselves into trouble this week. I echo much of what he said. However, voters will judge us on how we respond to our mistakes. We need to show that we have reflected on any errors that we have made and learned the lessons, and that if necessary we will change the rules.

[Sir Alan Duncan]

On that point, will the hon. Gentleman give way?

[Jon Trickett]

No, I am not going to take any interventions, because I do not have time.

We need to show that we have learned the lessons and changed the rules, to prevent any repetition of those errors in the future. The Opposition contend that it is a mistake for the House to continue with a set of rules on second jobs that were designed for another era. There simply is not time to spell out all the arguments for our proposition, but I will make two.

First, in an era when Victorian deference and hypocrisy have long ended, and rightly so, it is no longer acceptable for one set of rules to apply to the governing class and another to the rest of the country. That is how it will seem to millions of people if we continue to have a permissive policy on second jobs. After all, there are millions of people—thousands in every one of our constituencies—who work hard and play by the rules, yet are living in poverty. There are millions more who find it hard to pay their bills at the end of the month. After all, the average working person has lost £1,600 a year in salary since this Government were elected. When the people we represent hear the argument, which we have heard today, that an MP cannot live on £67,000 a year—plus an additional £14,000 for a Chair of a Select Committee, incidentally—they will inevitably ask themselves, “What kind of planet do these people live on?”

What about people who are on exploitative zero-hours contracts, who receive no guarantee that they will have a single hour’s work today, tomorrow, this week, next week or next month? Their contracts also prevent them from taking second jobs. How can we explain to them the idea that we should have second jobs? Then there are 1.9 million people who are out of work. How will the Government parties explain to the people in their constituencies who have no job that some of them have six jobs? It is simply impossible to imagine how they can justify it.

[Sir Alan Duncan]

On that point, will the hon. Gentleman give way?

[Jon Trickett]

No. The right hon. Gentleman has had his chance and made his speech.

I said that I would develop two arguments. The second relates to who we are here to serve, and it is critical. Every hon. Member, when they first become a Member of the House, swears an oath of loyalty to the country and is required to serve their constituents to the exclusion of all other interests. However, if someone is a remunerated director or a consultant, they have a legal duty to the body corporate that employs them always to act in the financial interests of that corporation. The question that therefore arises in the minds of interested observers is how any hon. Member can reconcile those dual loyalties to the corporation and to the country.

I have previously given the House the example of a paid director of a tobacco company who is also an MP. If a matter of public health concerning restrictions of tobacco sales comes before the House, the perception will arrive in people’s minds that that hon. Member is balancing two interests—those of the person who pays the contract for the directorship, and wider public health. To be blunt, many electors will come to the widely held view that is summarised in a two-word Yorkshire phrase: money talks. The question is not simply about whether an MP has sufficient time to do a second job—although how they find the time is a good question—but about whether there is a conflict between their duty exclusively to serve the public and their employment in the service of a private interest.

The best way to resolve a problem is usually the simplest. We think that the simplest way is to impose restrictions on second jobs, and that is what today’s motion is about. For those reasons, and for many others outlined today, it is time for the House to move on. The Government amendment takes us no further; it is simply an elegant reformulation of the status quo and as such it will not do. Even at this late stage it is possible for Government Members to come through the Lobby, vote with Labour and begin to clean up politics, and I urge them to do so.

Let it be known that if the House rejects the motion today, the Labour party will introduce a new standing order for our MPs to cover these matters in the new Parliament, which is now only a few weeks away. Under those circumstances, let other parties do as they will. The people of the country will judge them.

18:51

[The Deputy Leader of the House of Commons (Tom Brake)]

I had to fight the temptation to start and finish my speech by saying, “I refer the House to my speech from 17 July 2013, column 1165”, when the Opposition tabled the very same motion. As they have clearly not attempted to address any of the issues raised in that debate—the deficiencies of which were pointed out by some Labour Members and have been pointed out again by the Leader of the House today, and the motion was rightly rejected—I think I could quite legitimately have dusted down the same speech.

The last debate was a car crash of the most epic proportions after which many expected a Bennett-style apology from the hon. Member for Hemsworth (Jon Trickett). He said today—I think he has repeated some of the same errors—that this debate was about second jobs, but it is clear that he has not read his own motion which makes no reference to second jobs. We all know why Labour has chosen to re-run this debate. It heard that bell ringing on the bandwagon, started salivating at the prospect of some political nourishment, and leapt on it.

I do not for one moment suggest that the actions of the right hon. Member for Blackburn (Mr Straw) and the right hon. and learned Member for Kensington (Sir Malcolm Rifkind) should not be investigated—they should, and they were right to refer themselves to the Parliamentary Commissioner for Standards. The code of conduct is clear in stating what is and is not acceptable, and I am sure that the commissioner will investigate those cases thoroughly to see whether the rules have been observed or broken.

If this was a genuine attempt by Labour to address in a cross-party way public concerns about trust in MPs and their outside interests, the Leader of the Opposition needed to do much more than his half-hearted effort at Prime Minister’s questions to engage with the other parties. Before getting on their high horse, Labour Members should consider how many on their Benches are effectively in the pocket of the unions, taking their money and giving their questions and speeches in the House in return. Will Labour seek to clamp down on that?

What about party funding? There is a wider issue about too much money sloshing around in politics. That is why we have always argued that there should be limits on donations because the more we can get big money out of politics, the better. What about political reform? Surely it is not a coincidence that the worst expenses abuses involved MPs in safe seats. The more genuine competition that all MPs face, the more likely high standards are to be maintained. What are effectively jobs for life in safe seats clearly risk breeding a certain kind of culture.

Surely this debate is not about forcing MPs to stop practising as lawyers or doctors, or to drop an interest in a family business. The scandals arise when parliamentarians use their privileged positions and contacts to try to earn huge amounts of money by lobbying for business. If parties are serious about cleaning up politics, they should ditch the rhetoric and work on a cross-party basis to end those cash for access cases once and for all.

More positively, it is clear that the House is agreed that it is the responsibility of all of us to uphold the highest standards and that the vast majority of Members do so. Our rules against paid advocacy are essential, and breaches of them should be punished. Efforts to ensure maximum transparency and accountability must always be maintained. The Government have a strong record and we will maintain that record. It has been evident from the debate, however, that if there is a problem to be solved, the motion from the Opposition does nothing to provide a solution.

I agree with my right hon. Friend the Member for Rutland and Melton (Sir Alan Duncan) that we do not want vacuous functionaries in this place and that we want a diversity of Members. My right hon. Friend the Member for Banbury (Sir Tony Baldry) rightly highlighted the partnership issue. If the Opposition were serious about addressing directorships and consultancies, why miss out the whole issue of partnerships? My hon. Friend the Member for Sherwood (Mr Spencer) sensibly explained that it would be easy for directors to avoid the Opposition’s proposals by becoming unpaid directors. My hon. Friend the Member for Bracknell (Dr Lee) rightly highlighted the anti-politics movement that is abroad at present, and said that we each have a duty to act responsibly in this place.

My hon. Friend the Member for Birmingham, Yardley (John Hemming) also touched on the issue of partnerships, and I am very pleased that he has picked up the baton from me as the Member who deals with the most delegated legislation. I commiserate with my hon. Friend the Member for Cheltenham (Martin Horwood) on being the poor relation in terms of entries on the Register of Members’ Financial Interests.

I have one unpaid directorship as a director of a local environmental charity, EcoLocal. I made it clear in my election campaign back in 1997 that I would not take any paid directorships or consultancies. I went into the campaign on that basis and my Conservative opponent made it clear that he would continue to hold his directorships. A choice was therefore presented to the electorate and that is what they need. The electorate should be able to choose. If Members want to maintain an interest and they make that clear, it is up to the electorate to decide whether they accept that. Saying that I would not take any outside work did not do me any harm, and I suspect that one of the reasons I won the seat was that my opponent said that he would maintain his paid directorships and consultancies. But that is a decision for the electorate to make, not any of the parties.

My hon. Friend the Member for Esher and Walton (Mr Raab) was very brave in sticking his head above the parapet on MPs’ pay. My hon. Friend the Member for Windsor (Adam Afriyie) made an interesting point, which no one else picked up on, about the increased patronage that would result from the changes that have been proposed, by putting power in the hands of the party leaders.

The House will have noticed the contrast in approaches. The Opposition are trying to boost their green credentials by recycling this debate from 20 months ago. How have they used the time since that motion was defeated? They have no new ideas, no clarity and no substance. In contrast, the Government are committed to promoting transparency in terms of Members’ relations with the public and the political system as a whole. We have taken measures including a statutory register of consultant lobbyists; legislating for the recall of Members of Parliament; strengthening the rules governing business appointments for Ministers on leaving office; and proactively publishing details of Ministers’ meetings with external organisations, and of Ministers’ and officials’ meetings with senior media executives. Those measures will bring greater accountability and transparency to our democracy. That needs constant effort and reflection—

[Ms Rosie Winterton (Doncaster Central) (Lab)]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Question put accordingly (Standing Order No. 31(2)), That the original words stand part of the Question.

18:59

Division 164

Ayes: 219

---

Labour: 209
Scottish National Party: 6
Plaid Cymru: 2
Social Democratic & Labour Party: 1
Independent: 1

Noes: 287

---

Conservative: 248
Liberal Democrat: 38

Question put forthwith (Standing Order No. 31(2)), That the proposed words be there added.

Question agreed to.

The Deputy Speaker declared the main Question, as amended, to be agreed to (Standing Order No. 31(2)).

Resolved,

That this House reminds hon. Members of their commitment to uphold the Code of Conduct, not least that Members should act on all occasions in accordance with the public trust placed in them, that they should always behave with probity and integrity, including in their use of public resources, that no Member should act as a paid advocate in any proceedings of the House and that the acceptance by a Member of a bribe to influence his or her conduct as a Member, including any fee, compensation or reward in connection with the promotion of, or opposition to, any Bill, Motion, or other material submitted, or intended to be submitted to the House, or to any Committee of the House, is contrary to the law of Parliament.’.

Business without Debate

Wednesday 25th February 2015 Commons Chamber

Deferred Divisions

Motion made, and Question put forthwith (Standing Order No. 41A(3)),

That, at this day’s sitting, Standing Order No. 41A (Deferred divisions) shall not apply to the motion in the name of Mr William Hague relating to Estimates.—(Mel Stride.)

Question agreed to.

Estimates

Motion made, and Question put forthwith (Standing Order No. 145(3),

That this House agrees with the Report of the Liaison Committee of 24 February:

(1) That a day not later than 2 March be allotted for the consideration of the following Estimates for financial year 2014-15:

Department for Communities and Local Government, insofar as it relates to devolution in England; and

Ministry of Defence, insofar as it relates to the next Defence and Security Review and NATO.

(2) That a further day not later than 3 March be allotted for the consideration of the following Estimates for financial year 2014-15:

Department for Work and Pensions, insofar as it relates to support for housing costs in the reformed welfare system; and

Department for Health, insofar as it relates to child and adolescent mental health services.—(Mel Stride.)

Question agreed to.

Delegated Legislation

[Madam Deputy Speaker (Dame Dawn Primarolo)]

With the leave of the House, we will take motions 4 to 11 together.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Representation of the People, Scotland

That the draft Representation of the People (Scotland) (Amendment) Regulations 2015, which ere laid before this House on 7 January, be approved.

Representation of the People

That the draft European Parliamentary Elections (Amendment) Regulations 2015, which were laid before this House on 6 January, be approved.

That the draft Representation of the People (England and Wales) (Amendment) Regulations 2015, which were laid before this House on 8 January, be approved.

Road Traffic

That the Electrically Assisted Pedal Cycles (Amendment) Regulations 2015, (S.I., 2015, No. 24), dated 12 January 2015, a copy of which was laid before this House on 16 January, be approved.

Public Bodies

That the draft Public Bodies (Abolition of the Library Advisory Council for England) Order 2014, which was laid before this House on 4 November 2014, be approved.

Social Security

That the draft Social Security (Contributions) (Re-rating and National Insurance Funds Payments) Order 2015, which was laid before this House on 19 January, be approved.

That the draft Social Security (Contributions) (Limits and Thresholds) (Amendment) Regulations 2015, which were laid before this House on 19 January, be approved.

That the draft Employment Allowance (Care and Support Workers) Regulations 2015, which were laid before this House on 19 January, be approved. —(Mel Stride.)

Question agreed to.

Changes to Health Service Budgets

Wednesday 25th February 2015 Commons Chamber

19:14

[Jon Trickett (Hemsworth) (Lab)]

I wish to present a petition on changes to health service budgets in my constituency and in Wakefield district more generally. It is now quite clear that the Government intend further to cut NHS funding across the district. Local GPs surgeries are already struggling and these cuts will lead to the closure of small practices and job losses among doctors, nurses and other practitioners. Obviously, this is causing great alarm among my constituents, who are living in one of the most health-deprived areas in the country. This is why I am presenting a petition today signed by more than 1,460 individuals in my area.

The petition states:

“The Petitioners therefore request that the House of Commons urges the Government to reconsider the proposal to make these cuts to health service budgets in the Hemsworth area.”

Following is the full text of the petition:

[The Petition of residents of the Hemsworth constituency,

Declares that the Petitioners are concerned about cuts to health service budgets in the local area, particularly the proposed £3.8 million cuts from budgets for GPs; further that these cuts will affect all Practices funded through a Personal Medical Services (PMS) contract and will see £3.8million lost from this area over a three year period, starting in April 2015; further that local GP surgeries are already struggling and these cuts could lead to small practices closing and job losses; and further that a local petition on this matter has been signed by 1,464 individuals.

The Petitioners therefore request that the House of Commons urges the Government to reconsider the proposal to make these cuts to health service budgets in the Hemsworth area.

And the Petitioners remain, etc.]

[P001438]

Childhood Cancers

Wednesday 25th February 2015 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Mel Stride.)

19:16

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

Skye was born on 5 November 2008. He was a happy, healthy young boy with a wonderful sense of humour who loved his younger brother, Jesse. In July 2013, he became unwell with nausea and vomiting and after many visits to the GP and the failure of medication to help, he was referred to the John Radcliffe in Oxford where he had a CT scan and was diagnosed with a brain tumour. That was 27 August 2013.

Skye was operated on less than a week later and tissue analysis identified the tumour as a grade IV metastatic medulloblastoma, the most commonly occurring paediatric brain tumour. It is an aggressive form of primitive neuroectodermal tumour, which originates in the cerebellum, the part of the brain which controls movement and co-ordination. Although Skye’s tumour had been caught early, it had already metastasised throughout the brain and spinal cord. Surgery was quickly followed by what is known as the Milan protocol: four cycles of chemotherapy over 11 weeks, and a further five weeks of hyper-fractionated radiotherapy. After a four-week period of recovery, Skye had high-dose chemotherapy that confined him to hospital for seven and a half weeks.

He then had four weeks rest at home, and was due to head back to hospital on 14 May 2014 for another round of high-dose thiotepa, but a urinary tract infection delayed the treatment until 28 May, which in hindsight was fortunate. Instead of getting stronger, it became apparent that Skye was getting weaker and an emergency MRI scan on 20 May revealed widespread white matter lesions within his brain and spinal cord, which caused a flurry of correspondence between consultants across the UK and abroad. He was quickly started on high-dose steroids to combat the inflammation.

It was initially diagnosed as radionecrosis, which had been brought on by the combination of therapies that he had had to endure. It was later confirmed as radio-chemo neurotoxicity. His parents were told that that was highly unusual and very rare. We now know that a number of other children have also developed severe neurological side effects and the Milan protocol was quickly withdrawn from use in the UK. He was in a state of paraplegia, with double incontinence, and very poor use of his upper limbs and hands. Skye sadly died at home on 29 August 2014.

I did not meet Skye and I only met his parents some time after his death. They are in the Gallery tonight and have demonstrated to me the most extraordinary bravery in the face of losing their child in this most distressing of ways. They have set up Blue Skye Thinking, a charity that supports research so that all children diagnosed with brain tumours will have a better chance of survival and a better quality of life post-treatment. They continue to support many other parents whose children are suffering from cancer today.

I have taken some time to explain Skye’s story in detail this evening because it illustrates only too well some of the things that are working in childhood cancer treatment at the moment and some of the things that need improvement. The overall story of childhood cancer treatment over the past 30 years is a positive one. Eight in 10 children with cancer survive five years or more, compared with just three in 10 in the 1960s. Short-term survival is also high: fewer than 10% of children die within a year of diagnosis and only 2% die within 30 days.

I congratulate the Government on that. Ministers have demonstrated a clear commitment to fighting cancer and the work and money that has been put into the system to improve cancer survival rates are bearing fruit and proving that the money is being well spent. However, we should not allow these headline statistics, encouraging though they are, to blind us to the fact that, rare though childhood cancer is, it remains the leading cause of death in children and teenagers in the United Kingdom. Childhood cancers account for just 1% of cancer diagnoses in the UK. For research purposes that is a small cohort, but 700 children and young people are diagnosed with a brain tumour every year.

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Lady for bringing this matter to the House today, and for allowing me to intervene. Cancer Research UK has given me some figures today showing that 60 people are diagnosed with cancer each day in Northern Ireland. When Josh Martin, a young boy at secondary school, went into hospital to have his appendix removed, he was found to have progressive cancer. His family started the Pray for Josh campaign, which is being supported by his family and by the Churches. It has not only given great comfort to the family but helped to highlight the scourge of cancer and the fact that funding for drugs and help for families are very important. One of the organisations that can help is Macmillan Cancer Support. Does the hon. Lady agree that the support of such organisations can be important for families at times like these?

[Nicola Blackwood]

The hon. Gentleman is absolutely right to say that this is about not just Government funding but the way in which funds are given, and charities in particular play an important part. The fundraising that they do through individuals is vital.

As I was saying, 700 children and young people are diagnosed with a brain tumour every year, and that makes it the most common form of cancer affecting children and young people. It is also the most lethal. Brain tumours kill more children and young people than any other cancer—around 160 children a year—but despite being responsible for more than a third of childhood cancer deaths, brain tumours receive only 6% of childhood cancer funding. That funding matters because children’s cancers are biologically very different from adult cancers and treating them effectively requires specifically tailored research and targeted treatment regimes. At the moment, only about 50% of childhood cancers are part of a clinical trial; the remainder are treated using standard treatment guidelines. As Sally and Andrew Hall discovered, that can have serious consequences.

Cancer treatment is harsh at the best of times, and recent studies show that while many survivors of children’s cancers go on to live healthy lives, others face long-term disability and reduced immunity. Radiotherapy, the gold standard in terms of its efficacy in treating cancer, can also have damaging long-term consequences for the developing child. This is particularly true of childhood brain tumour survivors, 60% of whom are left with a life-altering disability. In a few cases, the side effects can be so severe as to be fatal. That is what happened in Skye’s case.

The Milan protocol, under which Skye was treated, was a standard treatment guideline, because as with about 50% of other childhood cancers there is no clinical trial available. It has become clear that there is currently no formal infrastructure in place to collect, record and share data, particularly on adverse effects of treatment, about standard treatment guidelines. I understand that before 2008 the responsibility for collecting and sharing data for clinical trials and for standard treatments fell under the remit of the Children’s Cancer and Leukaemia Group. Subsequently, clinical trials monitoring was tightened, and the CCLG’s “Guide to Clinical Trials” states:

“Clinical trials are very closely monitored by a number of different individuals and organisations. This will include the Chief Investigator…the working group…and relevant staff within the clinical trials unit. An Independent Data Monitoring Committee may also be established to oversee the conduct of the trial. At a national level, there will be an ethics committee and the national regulatory body. If there are any concerns about the conduct of the trial or the results, a trial may be stopped early.”

By contrast, in a letter responding to my concerns about the issue, the National Cancer Intelligence Network, told me that

“all of us in the field accept that (adverse effects in Standard Treatments) is something that should, under ideal circumstances, be a part of the data that we routinely collect. Such data are, however very much more difficult to collect than might be imagined and adverse effects were never part of what the CCRG (Childhood Cancer Research Group) or the CCLG themselves collected outside of a clinical trial. There are no nationally agreed datasets relating to adverse effects and few clinicians systematically collect and collate data of this sort...but it is clearly something that we in the NCIN should be considering.”

I am grateful that the NCIN has recognised that these data should be collected and collated, but I do not think that considering doing it is a sufficiently robust or urgent response to the problem, given the gravity of the consequences if a standard treatment goes wrong.

Clearly, in an ideal world all childhood cancers would be the subject of a full clinical trial and new targeted therapies being developed to reduce the long-term risks, but all of us know the challenges associated with research into childhood cancers, where cohorts of rarer cancers can be incredibly small and the ethical issues are more complex, making recruiting participants more difficult. Obviously, I am going to urge the Government to do whatever they can to fund and encourage more research into childhood cancers. I am going to ask the Minister to consider whether having only 6% of childhood cancer funding going to the biggest killer in childhood cancer represents getting the balance right, and I am going to ask her to maintain investment in the Health Research Authority programme to streamline the regulation and governance processes for clinical research in the NHS.

[Mr Brian Binley (Northampton South) (Con)]

May I say that, as a cancer sufferer, I welcome my hon. Friend’s courage in bringing this debate? May I pay tribute and offer my sorrow to these parents? May I also say that our Front-Bench team need to take on board the problems? I have seen parents, week in, week out in Northampton general hospital, and I know the case she is making is a real and heartfelt one. I hope that we will get good words from the Minister.

[Nicola Blackwood]

I thank my hon. Friend for his intervention and his support. I wish to emphasise the need for investment in the HRA streamlining programme, because I believe it will have a significant impact on reducing the resource and time required to set up trials across multiple sites in the UK, and that can only be good for research into childhood cancers, as it will be for research into all cancers.

I particularly want to focus today on the complete absence of data collection, recording and sharing on standard treatments of childhood cancers in the UK. I am very disappointed that having written to the life sciences Minister about this issue in early December I have yet to receive a substantive response. This issue could not be more serious for the treatment and long-term outcomes of children with cancers, especially brain tumours. Consultants around the country who work with incredible dedication to save the lives of their young patients struggle with their inability to quickly access information about the potential adverse effects of very tough treatment regimes, and it is a problem that we must try to fix. The architecture for collecting the information—the NCIN and the CCRG—is in place, but the lack of a formal data collection requirement and of a single responsible body can have devastating consequences for families.

When Skye’s consultant noticed there was an unexpected problem with Skye—the severe white matter damage shown on the MRI scan—she immediately tried to see whether any other clinicians had experienced similar issues. This was important in order to ascertain what other symptoms to look out for, what other treatments could be tried and what other outcomes they had had. Despite the fact that we now know that other children had been suffering in a similar way and that different treatments had been tried, she could not easily obtain this information; it was a matter of phoning around individual colleagues in an ad-hoc way to ask them one by one, and all this took place while Skye deteriorated. Time in such situations is of the essence so this is an unacceptable situation and it cannot be allowed to continue. Had there been a system in place to monitor adverse effects, things might have been different.

In so many ways, we are making tremendous strides in tackling cancer in the UK, including childhood cancer, but the complete absence of monitoring for adverse effects of standard treatments of childhood cancers can lead to life-long disability and death. I hope the Minister will take this away and take urgent action to rectify the situation. I also hope she will arrange for myself and Sally and Andrew Hall to meet the appropriate representatives from her Department to address this issue, once and for all. If details of those adverse effects are properly collected, recorded and shared, we might be able to avoid those consequences in more cases, increase childhood cancer survival rates and improve the quality of life for survivors even more.

19:29

[The Parliamentary Under-Secretary of State for Health (Jane Ellison)]

I apologise in advance for my cold and for possibly not bringing the healthiest of tones to the Dispatch Box tonight. I do not want that to detract from the excellent and typically sensitive way in which my hon. Friend raised this debate. I also commend Skye’s family for their work. They have shown enormous courage, as have so many other children and families who are affected by this terrible disease. Many of us, both constituency Members and Ministers, meet other such families and stand in awe of their courage in bringing these issues to the fore. The work of the charity set up by Skye’s family, Blue Skye Thinking, highlights some of the key issues, including the importance of research into and the treatment of childhood brain tumours.

I will make a few general points, but I hope to speak to some of my hon. Friend’s specific asks as well. On those that I cannot respond to—as she knows this is a complex situation—I undertake to ensure that responses are provided.

Improving cancer outcomes, including for children, is a major priority of this Government, as Members who have been at recent debates on cancer will know. The annual report on our cancer outcomes strategy in December showed that we are on track to save a projected 12,000 more lives a year by 2015, which is more than double our ambition of 5,000 lives. As my hon. Friend said, the strategy is bearing fruit.

Further to that, we were delighted that, on Sunday 11 January, NHS England announced a new independent cancer taskforce to develop a five-year action plan for cancer services that will improve survival rates and save thousands of lives.

That taskforce has been set up to produce a new cross-system national cancer strategy to take us through the next five years to 2020, building on NHS England’s vision for improving outcomes set out in the five-year forward view. The taskforce is formed in partnership with the wider cancer community and other health system leaders and is chaired by Dr Harpal Kumar, chief executive officer of Cancer Research UK. It aims to cover the whole cancer pathway, from prevention to end-of-life care, including improving outcomes for children and young people with cancer. The taskforce will produce a statement of intent by March 2015 with the new five-year cancer strategy to be published in the summer. We did ascertain during a recent Back-Bench business debate on cancer that the taskforce had asked the leading all-party groups on cancer to submit evidence. That might be something that other parliamentarians wish to do.

My hon. Friend mentioned issues around diagnosis. In cancer debates, we always talk about the importance of tackling late diagnosis. To increase the awareness of a number of childhood cancers among GPs, the Department funded BMJ Learning in 2012 to provide an electronic tool for GPs through a two-part module on diagnosing osteosarcoma—a type of bone cancer—and brain tumours in children and young people. That module helps GPs to understand osteosarcoma and types of brain tumour in children and young people and their common presentations, and to recognise when patients need that urgent referral. Those modules were developed with help and contributions from various charities including the Brain Tumour Charity, the Teenage Cancer Trust and CLIC Sargent.

As part of the recent taskforce announcement, NHS England also launched a major early diagnosis programme, working with Cancer Research UK and Macmillan Cancer Support to test new approaches to identifying cancer more quickly. They will be familiar to those who ask whether the system can do better. They include: offering patients the option to self-refer for diagnostic tests; lowering the threshold for GP referrals; creating a pathway for vague symptoms; and setting up multi-disciplinary diagnostic centres so that patients can have several tests done at the same place on the same day. For parents with children, that is a welcome development. We want to reduce the stress of multiple journeys into health care settings.

NHS England’s aim is to evaluate these innovative initiatives across more than 60 centres around England, collecting evidence with a view to implementation in 2016-17. My hon. Friend will also want to know that the National Institute for Health and Care Excellence is updating its current referral guidelines for suspected cancer, with a final version due in May to continue to help GPs to identify and refer patients promptly, including children and young people with symptoms that could be cancer.

Obviously, once diagnosed, it is critical that children and young people receive the most appropriate treatment. The NICE improving outcomes guidance for children and young people serves to assist the NHS trusts in planning, commissioning and organising services for children and young people with cancer. It recommends, among other things, that all care must be provided in age-appropriate facilities. NICE also published a quality standard for children and young people with cancer in February 2014.

Over the past four decades there have been major advances in the development of successful treatment strategies for childhood cancers, as my hon. Friend generously acknowledged. Much of that has been due to the use of standardised protocols in clinical trials and specialisation of care, as evidenced in the neuroblastoma trials run at Great Ormond Street children’s hospital, for example.

Although outcomes for children with brain tumours are often poor, medulloblastoma has an outcome of disease-free survival of around 80%, as my hon. Friend said. That is achieved through timely sequences of surgery, radiotherapy to the whole brain and spine—to mitigate the tendency for the tumour to spread to the central nervous system—and adjuvant chemotherapy. That treatment protocol is standard throughout Europe and America and has been developed and refined as a result of clinical trials carried out throughout the UK, Europe and America over recent decades.

It is obviously vital for children with cancer to have the most appropriate treatment, so it is very sad to hear that Skye’s treatment did not succeed. My hon. Friend referred to the Milan protocol. I can confirm that it was suspended by the Children’s Cancer and Leukaemia Group in May 2014 due to indications that in some instances, as in this tragic case, it resulted in neurotoxicity. NHS England has recently set up a children, teenagers and young adults group, reporting to the independent cancer taskforce, which will look to address those issues, particularly single-arm studies such as the Milan protocol, because although the way they are set up is innovative, they do not recruit high enough numbers to qualify for a randomised control trial, as my hon. Friend mentioned. NHS England is currently drafting terms of reference for the group. I will certainly ensure that, in so doing, it is aware of this debate and of the concerns she has raised. The major children and young people cancer charities have agreed to participate, and the first meeting will take place in the near future.

My hon. Friend mentioned the routine collection of side effects data from single- arm trials. I understand—this was mentioned in the letters she received—that at present these data are not routinely collected, but obviously ideally they would be. I am advised that there are problems in being able to collect the data, although the National Cancer Intelligence Network is continually working to improve the range and quality of the data it collects and analyses. I hear her challenge to say, “That is not good enough”, because she wants it actually to happen, rather than just to be worked on. As she said, she was advised that adverse effects data were not originally part of what the Childhood Cancer Research Group or the Children’s Cancer and Leukaemia Group themselves collected outside a clinical trial. Of course, there is added complexity when considering the sharing of adverse reaction data on an international level, as I am sure Members appreciate.

I have asked my officials to discuss those issues with Public Health England and the National Cancer Intelligence Network to consider how those data might be collected, and I will ask to be updated on that work so that I can fully understand what the barriers might be. Clearly, without knowing exactly what those are it is very difficult to know whether they are essentially clinical, administrative or the result of something else. I know that it is important to my hon. Friend to understand that, so I will ask for that work to be undertaken.

I am also really sorry that my hon. Friend did not receive a substantive reply from my ministerial colleague, which was not good enough—there was clearly a mix-up on that front. As she said, Dr Michael Peake, the National Cancer Intelligence Network’s clinical lead, who wrote to her, is happy to meet her and Mr and Mrs Hall to discuss in detail how these issues might be addressed, which I hope will be of help. Clearly that would feed into the work that I have asked to be done to understand what the barriers to making progress are.

My hon. Friend spoke about the vital issue of research, so let me give her an update. Research is critical to improving outcomes. The Government and the charities work closely together on childhood cancer research through the National Cancer Research Institute. The national cancer research initiative’s children’s cancer and leukaemia clinical studies group interacts with clinical research networks, funders and researchers to develop studies aimed at improving outcomes.

The National Institute for Health Research clinical research network is currently recruiting patients to a study assessing quality of life in paediatric, teenage and young adult patients treated for medulloblastoma. A study looking at treatment for children with neuroblastoma has recently been approved for funding through the health innovation challenge fund, which is jointly supported by the Department and the Wellcome Trust.

In conclusion, I thank my hon. Friend for bringing this important and sensitive issue to the House tonight. I reiterate the respect and admiration in which we all hold the parents and families of children who have died in these tragic circumstances, and their intention to take from their personal and family tragedy the desire to do better for other people’s children and to try and ensure that we learn those lessons. That intention is shared by all hon. Members in all parts of the House and by the Government. I thank them, through my hon. Friend, for doing that.

The new independent cancer taskforce, in partnership with the cancer charities and health system leaders, is leading the way towards making a real difference. With the ground-breaking research that I mentioned, we can look forward to cancer outcomes that are among the best in the world, and in particular to improved cancer outcomes for those precious children.

Question put and agreed to.

19:40

House adjourned.