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Oral Answers to Questions
(9 years, 3 months ago)
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Karen Lumley (Redditch) (Con)
1. What recent assessment he has made of the political situation in the Maldives; and if he will make a statement.
The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)
I remain deeply concerned by the situation in the Maldives. On 24 June, my right hon. Friend the Prime Minister made clear his view that there should be a political dialogue involving all parties to discuss the country’s governance, and that all political detainees, including former President Nasheed, should be released swiftly.
Karen Lumley
Does my right hon. Friend share my concerns that the continued detention of political prisoners, including former President Nasheed—the first democratically elected President of the Maldives—is an impediment to the ongoing talks and to the possible resolution of the crisis?
Mr Swire
We welcome the fact that Mr Nasheed has been moved to house arrest and the political dialogue between the opposition parties and the new Government. We hope the talks will provide the basis for progress on the numerous concerns within the Maldives. It is worth repeating that the Prime Minister has called for the release of all political prisoners, including former President Nasheed.
Andrew Gwynne (Denton and Reddish) (Lab)
But does the Minister agree that the Maldives are in breach of the principles of the Commonwealth charter, and does he think the time is right for the Commonwealth to take action against the Maldives to bring about the return of the rule of law and the principles of democracy?
Mr Swire
We are not a member of the Commonwealth Ministerial Action Group, as the hon. Gentleman knows. I have discussed these matters with the Commonwealth Secretary-General. I understand that there has been a telephone conversation between CMAG members and that they keep the situation under continuous review.
Fiona Bruce (Congleton) (Con)
19. May I associate myself with the concerns expressed about President Nasheed and his welfare by my hon. Friend the Member for Redditch (Karen Lumley)? I understand that Richard Branson recently raised on his blog concerns about the impact of the political situation in the Maldives on travel and tourism. Does the Minister have a view on that?
Ian Paisley (North Antrim) (DUP)
The Minister will agree that the kidnapping and holding of a judge is a very serious affair, and that we should therefore allow the rule of law to determine the outcome of the case of former President Nasheed. Does he agree that the main focus of Government foreign policy in the Maldives should be on improving trade relations?
Mr Swire
The focus should be on improving relations, but it should also be on improving the democratic space. The trial of the former President was very rushed and appeared to contravene the Maldives’ own laws and practices, as well as international fair trial standards. That is currently being looked at.
John Glen (Salisbury) (Con)
I urge the Minister to resist complacency on the Maldives, particularly given that the current regime seems also to be a recruiting sergeant for ISIL in the Maldives. There will come a time when the Government will need to stand clearly on the right side of the argument and intervene more fully to secure justice in that country.
Mr Swire
I hear what my hon. Friend says, but I do not think we can be accused of complacency. I recently raised the Maldives again with the Commonwealth Secretary-General, the Indian Foreign Secretary and the US assistant Secretary of State. Both my right hon. Friend the Prime Minister and I have met Mr Nasheed’s wife, and Amal Clooney and other members of Mr Nasheed’s legal team, to discuss the situation. We are closely involved.
Jeff Smith (Manchester, Withington) (Lab)
2. What assessment he has made of the effectiveness of EU sanctions on the Russian Federation.
The Minister for Europe (Mr David Lidington)
Sanctions are having a tangible impact on Russia by exacerbating negative trends in the Russian economy. Russian sovereign debt has been downgraded to junk status by two ratings agencies and forecasters predict that the Russian economy will contract by between 3.5% and 5% during the current year.
Jeff Smith
The BRIC countries—Brazil, Russia, India and China—announced at the summit last week that they will not join in imposing sanctions on Russia. How much of a blow does the Minister consider that to be, and what diplomatic efforts will the UK Government make, if any, to remedy the situation?
Mr Lidington
We continue to urge all countries to bring pressure to bear, by diplomatic and other means, on Russia to desist from its interference in the affairs of Ukraine and to withdraw the support it has been giving the separatists there. I do not believe that the decision to which the hon. Gentleman referred will have a significant impact on the efficacy of the sanctions that the European Union and the United States have imposed.
Crispin Blunt (Reigate) (Con)
Russia is properly under sanction for its misbehaviour towards Ukraine, but the harsh truth is that in our wider relations with Russia we have a clear common interest in taking on Daesh, which is very important to our national interest. Will the Minister try to ensure that where we can find common cause with Russia, we can conduct relations positively, while sustaining our disapproval of its behaviour in Ukraine?
Mr Lidington
The Prime Minister spoke to President Putin in May and made it clear that while we disagree profoundly with Russia about Ukraine we are still prepared to try to work with Russia on combating international terrorism and advancing the cause of non-proliferation. My right hon. Friend the Foreign Secretary has this week been working with the Russian Foreign Minister and other partners in Vienna to that aim.
Seema Kennedy (South Ribble) (Con)
Does my right hon. Friend agree that Russia’s actions in Crimea and Donbass are a fundamental challenge to rules-based order, and that it is vital that we stand up to that aggression?
Mr Lidington
I completely agree with my hon. Friend’s point. The Russian annexation of Crimea and its continued intervention in the internal affairs of Ukraine are a breach of the Helsinki agreements as well as the agreements that Russia and Ukraine came to at the time of the break-up of the USSR. The precedent that has been set is extremely dangerous.
Brendan O’Hara (Argyll and Bute) (SNP)
3. What discussions he has had with Ministers in the devolved Administrations on renegotiation of the UK’s membership of the EU.
The Minister for Europe (Mr David Lidington)
My right hon. Friend the Prime Minister discussed the United Kingdom’s renegotiation plans with the First Minister of Scotland during his recent visit to Edinburgh. My right hon. Friend the Foreign Secretary spoke to all three devolved Administration leaders in the margins of the recent British-Irish Council. It is a regular agenda item at meetings between the United Kingdom Government and the three devolved Administrations.
Brendan O’Hara
The Minister will be aware that the First Ministers of Scotland and Wales have said that it would be unacceptable for any part of the United Kingdom to be taken out of the EU against its will. Given that the Foreign Secretary is on the record as saying that the UK could leave the EU if treaty renegotiations are not to his liking, will the Minister say whether that opinion has been discussed with the First Ministers of the devolved Administrations?
Mr Lidington
I do not think the First Minister has ever been shy about making her opinions known to British Ministers. The key point is that British membership of the European Union is the membership of the whole of the United Kingdom. Our membership of international organisations is explicitly a reserved matter under the terms of the devolution settlements. Under this Government, the people of Scotland will at least have the right to a vote on whether they wish to stay in the European Union, which the hon. Gentleman’s party tried to deny them when it voted against the European Union Referendum Bill the other week.
Mr Peter Bone (Wellingborough) (Con)
Does the Minister agree that that shower that sit over there have no right to have a veto on what the United Kingdom does and whether it wants to be in the EU or not?
Mr Lidington
As I said a moment ago, it was the United Kingdom that acceded to the European Union back in the 1970s, and it is the United Kingdom as a whole that will take the decision by the end of 2017 whether we wish to maintain that membership.
Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)
16. To be absolutely clear, will the Minister confirm that if the nations of Wales and Scotland vote to stay in the European Union, the UK Government will drag us out against our will?
Mr Lidington
It will not be a matter for the United Kingdom Government: it will be a matter for the people of the entire United Kingdom what decision they wish to take.
Andrew Rosindell (Romford) (Con)
The Minister will be aware that Britain’s relationship with the EU is vital to the people of Gibraltar and to the people of the Crown dependencies that trade with the EU. Will he ensure that consultations take place with the Parliaments and Governments of Gibraltar, Jersey, Guernsey and the Isle of Man?
Mr Lidington
We will certainly want to take account of the views of the Crown dependencies and the British overseas territories. Of course, the people of Gibraltar will, under the Bill we have brought forward, be entitled to a vote when the referendum comes.
Ms Margaret Ritchie (South Down) (SDLP)
Apart from discussions in the margins of the British-Irish Council, will the Minister confirm whether there will be actual discussions as part of the agenda of the British-Irish Council involving the Government of the south of Ireland? An exit from the European Union would have a detrimental impact on business and energy relations north and south, and between Britain and Ireland.
Mr Lidington
The Government’s renegotiation is certainly regularly discussed whenever I or any of my ministerial colleagues talk to our Irish counterparts. I intend to visit all three devolved Administrations later this year. I have no doubt that I will be able to engage in good conversations with political leaders in all three Administrations, so I can take clear account of their views.
Mr Jim Cunningham (Coventry South) (Lab)
4. What recent discussions he has had with the Burmese Government on (a) the Rohingya community in Rakhine state and (b) democracy and human rights in that country.
The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)
Human rights and democratic reform are central concerns for us. In this critical election year for Burma, we regularly raise these issues with the Government of Burma. I strongly reiterated our concerns on the Rohingya to the Burmese ambassador on 18 May, which our ambassador in Rangoon repeated to Ministers locally.
Mr Cunningham
Does the Minister agree that reserved parliamentary seats for the military are not compatible with a modern democracy? It is now clear that the military in Burma retains too much power and influence and that it is time for the international community to reassess Burma’s commitment to democracy and human rights.
Mr Swire
The hon. Gentleman makes a valid point. We have registered our unhappiness with this clause remaining, as indeed we have for the clauses remaining that effectively rule out Aung San Suu Kyi from running as a presidential candidate. Having said that, we have made the point again and again to President Thein Sein—most recently by the Prime Minister—that we expect the elections on 8 November to be inclusive and credible.
Valerie Vaz (Walsall South) (Lab)
Will the Minister raise with the United Nations the possibility of Ban Ki-Moon leading a delegation to Rakhine state to ensure humanitarian access?
Mr Swire
We have encouraged the Secretary-General to play a leadership role. With UK support, the situation in Rakhine state was discussed at a UN Security Council briefing on 28 May. We will keep up the pressure on that. It is also worth saying that we support the continuing work of the UN special rapporteur on human rights in Burma, Professor Yanghee Lee.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
The Minister will be aware of the widespread concerns surrounding the recent arrest of five students protesting outside the Parliament in Burma. Will he do what the Burma campaign recently asked him to do in relation to other human rights concerns and summon the Burmese ambassador to express the widest possible concerns about these growing human rights abuses?
Mr Swire
We welcome, since 2011, the release of 2,000 political prisoners, increasing press freedoms and the discharging of 500 child soldiers. We have, however, seen some re-arrests and we have not been slow to raise these issues. We are working extraordinarily closely with the Department for International Development to try to ensure that on 8 November Burma can face a democratic election where the people can decide who they wish to govern them. From that will flow greater freedoms and respect for human rights.
Kerry McCarthy (Bristol East) (Lab)
Given the continued plight of the Rohingya and the role of the military, not just in Parliament but in its continued use of sexual violence with impunity and the lack of progress on key areas of constitutional reform, it is clear we are not seeing the progress we need in Burma. Does the Minister think that the UK or the EU retain any influence now that sanctions have been lifted?
Mr Swire
Yes, I do. Incidentally, I draw the House’s attention to the hon. Lady’s recent article on Burma in the Huffington Post, where she appears to suggest that the Prime Minister took business leaders to Burma before the EU lifted trade sanctions in 2013, implicitly suggesting that somehow the Prime Minister was promoting trade when EU sanctions were in place. I refer her back to a 2012 article in The Guardian, which she would do well to read. She may wish to correct what is effectively rather a misleading comment in her article.
Kerry McCarthy
I know that the Prime Minister and the Minister are keen to strengthen our bilateral relationship with Burma, but does he agree there will be serious consequences for that relationship if Burma fails to deliver free, fair and credible elections in November in which the Rohingya can participate and Aung San Suu Kyi can play a full role?
Richard Burgon (Leeds East) (Lab)
5. What assessment he has made of the human rights situation in Colombia.
Ian Lavery (Wansbeck) (Lab)
8. What representations he has made to the Colombian Government on the imprisonment of civil society activists and trade unionists in that country.
The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)
I welcome the Colombian Government’s efforts to improve the human rights situation, but we remain concerned about the number of murders of, and threats against, human rights defenders. Most recently, I raised human rights with Colombian Foreign Minister Holguin when we met at the EU-CELAC summit in Brussels last month.
Richard Burgon
The FARC announced last week that it would begin a month-long unilateral ceasefire on 20 July, and in response a joint statement by the negotiating teams of the Government and the FARC has announced their agreement to take steps to de-escalate the conflict and implement trust-building measures, as of the 20th of this month. Will the Foreign Secretary call on the parties to agree a bilateral ceasefire as soon as possible to create the necessary conditions for a successful outcome to the talks and to reduce the human cost and suffering of the population?
Mr Swire
The hon. Gentleman is absolutely right. The peace process, and the peace that we hope will ensue, is the big prize in Colombia for all its people. I therefore welcome the announcement in recent days that the FARC and the Government of Colombia are aiming to de-escalate the conflict and expedite the peace talks in Havana. That is welcome news.
Ian Lavery
Huber Ballesteros, leader of the Patriotic March opposition movement in Colombia, has been in prison since August 2013. Amnesty International claims that the case is emblematic of those of thousands of human rights activists repeatedly intimidated over their work for social justice and support for marginalised groups. What extra pressure can the Minister place on his counterpart in Colombia to stop this human rights abuse?
Mr Swire
We raised these issues some time ago with the Colombian ambassador, who raised the specific cases of Huber Ballesteros and David Ravelo with the Minister of the Interior, and in November 2014 embassy officials visited Mr Ballesteros in prison. The ambassador also raised his case with Guillermo Rivera on 3 February and wrote to the prison authorities that month to ensure his dietary requirements were being respected.
Mr Jeffrey M. Donaldson (Lagan Valley) (DUP)
The Minister will be aware that several of us from Northern Ireland have sought to share our experiences with the peace process in Colombia. Does he agree that it might benefit that peace process if, in addition to the call for a bilateral ceasefire, we had some kind of independent monitoring commission, similar to what we had in Northern Ireland, which was of real benefit in building trust and confidence on both sides?
Mr Swire
The right hon. Gentleman knows as well as any Northern Ireland Member that a peace process is exactly that—a process—and one has to continue to work at it. His experience, and that of other Northern Ireland Members who have visited, is hugely useful, but in the immediate future we need to get the Havana peace talks back on track. There are then huge issues to address about accountability, impunity and all the other issues that he and I would recognise.
Heather Wheeler (South Derbyshire) (Con)
6. What further discussions he has had with his counterparts in EU member states on the issues relating to EU reform raised by the Prime Minister at the June 2015 European Council.
Byron Davies (Gower) (Con)
9. What further discussions he has had with his counterparts in EU member states on the issues relating to EU reform raised by the Prime Minister at the June 2015 European Council.
The Minister for Europe (Mr David Lidington)
Since the June European Council meeting, my right hon. Friend the Foreign Secretary and I have had further discussions with counterparts on the areas in which we want to see change in the EU: sovereignty, fairness, competitiveness and immigration. We will both continue to do so over the coming months.
Heather Wheeler
What changes does the Minister expect to negotiate at EU level to help the businesses and hard-working people in my constituency of South Derbyshire to succeed in an increasingly competitive global economy?
Mr Lidington
I think that the reforms that we are seeking to deepen the single market and make it easier for businesses to sell digitally and to sell services throughout Europe, the efforts that we are making to push for the successful completion of a free trade deal between Europe and the United States, and the work that we are doing to cut red tape in the EU should be of direct benefit to the businesses in my hon. Friend’s constituency.
Byron Davies
There are particular concerns with the recent EU accession countries in relation to corruption and maladministration. What is the UK doing to ensure that these countries conform to the high standards? What bilateral work, if any, is being undertaken to assist them in cleaning up their police, justice and Government departments?
Mr Lidington
We have given practical technical assistance to both Bulgaria and Romania—and, indeed, to a number of candidate countries wishing to join the EU in the future—to root out corruption and to support reform of the judiciary and the police system. I discussed these issues with the Bulgarian Foreign Minister when he came to London in June.
Stephen Gethins (North East Fife) (SNP)
22. The Minister will be aware that reform is a two-way process. Can he set out some areas where he thinks we should have greater co-operation with the European Union, not just those where there should be less co-operation?
Mr Lidington
Yes, we are very keen to see the European-wide single market extend to services much more fully than it does at the moment. At the moment, we have a pretty well functioning single market in goods, which works to the great benefit of British industry. It is services that will provide the future growth for us and other European countries. It is a woefully underdeveloped single market when it comes to services.
Mr Pat McFadden (Wolverhampton South East) (Lab)
The Minister will have seen the stories in the press over the weekend suggesting that the Prime Minister was seeking to wind back the clock and make the opt-out from the social chapter part of the UK Government’s negotiating strategy over Europe. Can he tell the House, first, whether there is any truth in these stories and, secondly, whether he agrees that a bonfire of important protections for people at work, such as paid leave, maternity leave and rights for part-time workers, is not exactly the best way to build support for a yes vote in the forthcoming referendum?
Mr Lidington
As my right hon. Friend the Prime Minister has said before, there are bound to be all sorts of rumour and chatter as the renegotiation continues. I would advise the right hon. Gentleman not always to put too much faith in what he sees in the newspapers. We are certainly committed to cutting red tape in the European Union, as in the United Kingdom, but in the week after a Budget in which this Government have introduced a national living wage and cut taxes for the poorest people in society, it is a bit rich for the Labour party to try to give us lectures about workers’ rights.
Antoinette Sandbach (Eddisbury) (Con)
7. What assessment he has made of the effectiveness of the Greek Government’s approach to negotiations with the EU; and what assessment he has made of the implications of that approach for his policy on re-negotiating the UK’s relationship with the EU.
Sir Simon Burns (Chelmsford) (Con)
14. What assessment he has made of the effectiveness of the Greek Government’s approach to negotiations with the EU; and what assessment he has made of the implications of that approach for his policy on re-negotiating the UK’s relationship with the EU.
The Minister for Europe (Mr David Lidington)
As the Prime Minister has said, we welcome the news of a deal reached with Greece on Monday morning, but we should not underestimate the difficult process that lies ahead of reaching a final agreement. As for renegotiating the UK’s relationship with the EU, that process is under way. Following the June European Council, technical discussions are now taking place, ahead of a further leaders’ discussion in December.
Antoinette Sandbach
I am grateful for the Minister’s answer. Given the uncertainty around the deal announced on Monday, what are the implications for businesses and holidaymakers in my constituency of Eddisbury?
Mr Lidington
We have spent a lot of time preparing contingency plans to help both British business interests and British tourists, should that be necessary. I can say to my hon. Friend that at the moment the reports I have are that visits by British tourists to Greece are continuing much as per normal. The Government stand ready to offer advice to any businesses in my hon. Friend’s constituency that have particular problems or concerns, and the Department for Business, Innovation and Skills has published detailed advice on the support schemes that are available to help businesses troubled by events in Greece.
Sir Simon Burns
Does my right hon. Friend expect the UK negotiators to emulate those involved in the Greek deal and have a 17-hour marathon all-night session to conclude a deal?
Mr Lidington
No Minister would actively look forward to a 17-hour, all-night session, but my right hon. Friend the Prime Minister demonstrated when he led the negotiations to cut the EU’s multi-annual budget that if that is what it takes to get the best deal for the United Kingdom, that is what he and the Government are prepared to do.
Alex Salmond (Gordon) (SNP)
Should the Government not have shown a bit more solidarity with the people of Greece over recent weeks? For many of us, the attitude of the European Commission, the European Central Bank and certain European leaders has been arrogant and dismissive—even anti-democratic—but all this Government seem to have done is to discourage tourists from going to Greece. Should they not have shown more solidarity in recent weeks?
Mr Lidington
We have certainly not advised tourists against travel to Greece. I think the lesson that the right hon. Gentleman needs to take on board is that the Greek Government and the Greek people consistently said that they wished to join the euro and remain within it, and that joining that currency union means the sacrifice of a considerable amount of national sovereignty over economic policy.
Alex Salmond
Perhaps the lesson that the Minister should take is that if a little more understanding had been shown to the people and the Government of Greece in their time of extremity, they might show more understanding towards the UK Government’s position in their renegotiations. Why cannot the Government understand that many people in this country have been touched by the plight of people in Greece? Where is the empathy or solidarity from the Government? People reap what they sow, and this Government are going to reap a bitter harvest.
Mr Lidington
I do not know whether the right hon. Gentleman was present when my right hon. Friend the Chancellor made his statement on Greece last week, but he made very clear both his sympathy and the long-standing friendship between this country and the people of Greece. When this Government were elected in May, the Prime Minister made an offer to the Greek Government of technical support for things such as improving the efficacy of their taxation system. That offer remains open.
Mr John Baron (Basildon and Billericay) (Con)
Which circumstances would lead the Government to advocate a no vote to leave the EU in the forthcoming referendum?
Mr Lidington
I do not blame my hon. Friend for his question, but I would not think he really expects me to speculate about the outcome of negotiations—certainly not at this stage. The Prime Minister has made it very clear that he is aiming to secure reforms in Europe that are good for the prosperity and democracy of Europe as a whole and that help the United Kingdom feel comfortable with its place in Europe—and that if he cannot get those reforms, he rules nothing out.
Mr Pat McFadden (Wolverhampton South East) (Lab)
On the minimum wage, the Minister’s party is late to the cause, but its conversion to support for our policy is nevertheless welcome.
On Greece, the agreement announced yesterday involves a third bail-out estimated to be worth €86 billion. Can the Minister confirm whether the European financial stability mechanism, which could involve £850 million of UK funds, will be used for that or for any short-term financing before the bail-out is agreed?
Mr Lidington
Both the Prime Minister and the Chancellor have already made it clear that there can be no question of British taxpayers being on the line for a deal to keep Greece in the euro. We have chosen not to join the eurozone: there has been a clear agreement by every one of the EU member states that we should not be liable for bail-outs of eurozone countries. It is for the eurozone countries to decide how they are going to organise the detail of the deal they struck earlier this week.
Heidi Allen (South Cambridgeshire) (Con)
10. What assessment he has made of the current situation in Greece and the effect of that situation on other EU member states.
The Minister for Europe (Mr David Lidington)
The Government have carried out regular assessments of the events in Greece and the impact they might have on British business interests, British residents in Greece and British tourists. We have put in place contingency measures for a variety of scenarios to ensure that our interests and those of our citizens are protected. We judge the risk of contagion elsewhere in Europe to be much reduced when compared with the situation in 2012.
Heidi Allen
It is fair to say that the situation has moved on ever so slightly from when I tabled the question. It may be too early to tell, but will we be in a position to look at how the negotiations pan out and assess whether that makes us feel stronger in our desire for renegotiation or weaker?
Mr Lidington
The events that have taken place in the eurozone over the last few weeks have confirmed our wish to see an ambitious programme of reform and renegotiation. In particular, they have demonstrated the need for Europe to work out a design for European co-operation that distinguishes between eurozone countries that will need to move towards closer integration over time, and member states that choose to stay outside the eurozone.
Rob Marris (Wolverhampton South West) (Lab)
Does the Minister share my assessment that the troika was wrong to bail out greedy and irresponsible bankers because its action has led to the immiseration of people in Greece?
Mr Lidington
I think that what is happening to ordinary families in Greece has been a tragedy, but I also think that there are two lessons to be learned. First, those who join a single currency must give up a fair amount of their independent decision-making power over economic policy. Secondly, any country that gets into serious debt will find it hard to do a deal with its creditors. That is why this Government’s intention of paying down the deficit and reducing the underlying debt is so important to our fortunes.
Mr Philip Hollobone (Kettering) (Con)
The Greek financial crisis has given the green light to the gangs of human traffickers who are exploiting the weaknesses of the Greco-Turkish border to push hundreds of thousands of illegal immigrants towards western Europe. Will the Minister ensure that, in this crisis, we do not lose sight of the fact that we must do all that we can to help Greece to plug the gaps in the EU external frontier?
Mr Lidington
My hon. Friend has made a good point. We have already deployed people to Greece to support Frontex and the Greek police, and we will continue to work closely with other member states, particularly Greece, and with the EU institutions.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Is not the pressure that has forced the Greek Government to buckle in the last few days a shame politically, morally awful, and, importantly, economically tragic? It is almost like the parlour game Monopoly. When someone is so obviously losing that the game ends, it has to restart. That is what happened to Germany in 1953 when it was granted debt forgiveness, one of the creditors being Greece.
Mr Lidington
I say with all respect to the hon. Gentleman that it is for the eurozone countries that participate in the single currency to work out how to address the problem. What has happened to the Greek people is indeed a tragedy, but there are people in other eurozone countries with elected Governments of their own who want to ensure that their taxes are not at risk.
Mr Speaker
Order. I fear that the cheeky-chappie disposition of the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) may be incompatible with his long-term aspiration to be viewed as a statesman.
Stewart McDonald (Glasgow South) (SNP)
11. What progress is being made on diplomatic efforts to free the Saudi blogger Raif Badawi.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)
As the House is aware, Raif Badawi is a Saudi human rights activist and blogger who, in May 2014, was sentenced to 10 years in prison and 1,000 lashes. The British Government have raised the case a number of times at senior levels. I now understand that the case is under consideration in the Saudi supreme court.
Stewart McDonald
We often hear that answer from the Government. One of two things is happening. Either the Government are trying and failing, or they are not really bothering at all. May I ask the Minister two questions? First, will he instruct the United Kingdom ambassador in Saudi Arabia to request a prison visit to check on Raif Badawi’s health? Secondly, will he say without equivocation that Mr Badawi should be set free?
Mr Ellwood
I am not sure that the hon. Gentleman heard my first response, so let me repeat it. I understand that the case is under consideration in the Saudi supreme court. This country, along with many others across the world, made representations at senior levels to ensure that it was understood where we stand as a supporter of freedom of expression around the world. It is now for the supreme court of make a judgment, and we should not pre-empt what the court will say.
Mr Nigel Evans (Ribble Valley) (Con)
Lashing, like stoning and crucifixion, belongs to the Old Testament, not to the 21st century. Please will the Minister keep up his pressure on our friends in Saudi Arabia to make them see sense?
Mr Ellwood
I am grateful to my hon. Friend for his comments. It is very important that Britain stands by other countries in pushing for not only the right of freedom of expression, but the right of justice for those in prison, and we will continue to do so. The lashings have now stopped and this case is currently being reviewed by the Supreme Court—[Interruption.]—something I think the hon. Member for Glasgow South (Stewart McDonald) still does not understand.
Huw Irranca-Davies (Ogmore) (Lab)
12. What assessment he has made of the security situation in Tunisia; and what support his Department is providing to British citizens affected by the recent terrorist attack in that country.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)
The House will be aware that all the victims of the terrible tragedy in Tunisia have now been repatriated. Every family of a victim has a dedicated UK police family liaison officer—[Interruption.] I am sorry if the hon. Member for Bolsover (Mr Skinner) does not feel these issues are important, but I would be grateful if he did the House the courtesy of listening to this important message. Every British national injured in the attack is back in the United Kingdom. Our embassy team arrived in Sousse within hours of the attack and further teams were deployed in the following days. The London crisis operation centre moved into operation mode and worked on a 24/7 basis from 26 June until 1 July and the FCO remained in crisis mode to assist with the departure of tourists.
Huw Irranca-Davies
I commend the Prime Minister’s response to my hon. Friend the Member for Walsall South (Valerie Vaz), saying that a committee would be set up to look after the interests of the survivors and the bereaved families for the long term. That is sensible and it is the right approach. In the light of BBC reports of chaos in the security infrastructure in Tunis and the region, what support are we able to give them to augment their security infrastructure?
Mr Ellwood
I am grateful to the hon. Gentleman for his initial comments, and I will be participating in that committee to make sure we do all we can to support all those caught up in that terrible tragedy—not just the families of the victims, but the injured and those who witnessed what happened. We have been working with the Tunisian authorities to investigate the attack and the wider threat from terrorist groups. The threat intelligence picture has led us to believe that a further terrorist attack is highly likely, and I stress to the House that the Sousse attacker was not working alone, but was part of an organised group, most likely trained in Libya. I am glad we are standing by Tunisia as best we can. We must look after the security of our citizens, and may I thank you, Mr Speaker, for receiving the Speaker of the Tunisian Parliament, who I know will wish to come to this country to express his condolences for what happened to the Britons in Tunisia?
Johnny Mercer (Plymouth, Moor View) (Con)
I am sure the whole House will join me in thanking the Minister for his inspirational service to the Government in working with the families of those affected by last month’s tragedy. It is brilliant to hear that each family will have a dedicated liaison officer to see them through the coming years. Can he confirm that that will be along the lines of the groups set up to support the victims of 7 July 2005?
Mr Ellwood
I am grateful to my hon. Friend for his kind words. It is important that the support that this country and the Government provide is not confined to the time of the event itself but continues well into the future. I pay tribute to the Home Office and the work the police do—the important work of the family liaison officers. This work will not be needed simply over these few weeks; it will be needed for months and years, as the families come to terms with this terrible tragedy.
Diana Johnson (Kingston upon Hull North) (Lab)
18. The funeral of my constituent Claire Windass, who was killed on holiday in Tunisia, will take place tomorrow, and I am sure the whole House will want to send our thoughts and prayers to Claire’s family at this very difficult time. Can the Minister say a little more about the practical assistance that the UK Government are offering the Tunisian authorities in investigating this horrific terrorist attack?
Mr Ellwood
All in the House pay a huge tribute to the families of the fallen victims. This was a terrible disaster for both Tunisia and Britain. The numbers climbed in the first hours from five to six, then eight, then 12, then 30. Then it was not just 30 in number; they became names, individuals, parts of families, as the hon. Lady has outlined. We must stand by these people in their years of need. She rightly points out that Tunisia needs support. It is the country where the Arab spring began; it is where Bouazizi set himself alight and ignited the Arab spring. We must not allow that country to slide back into extremism, so we have teams working in a variety of areas, from airport security to the police to collecting intelligence, which is the crucial ingredient in understanding what is happening behind the scenes in the mosques, as well as next door in Libya.
Kwasi Kwarteng (Spelthorne) (Con)
With respect to the appalling tragedy in Tunisia, will the Minister give the House an assurance that our response will be part of a wider package across the region from Egypt to Libya, where there is a great lack of stability? Are the Government working across the piece to ensure that terrorist outrages such as these are minimised?
Mr Ellwood
My hon. Friend makes a pertinent point, which the House needs to consider. The person and the group that were involved in that terrible killing were trained by an ISIS operation, Ansar al-Sharia, which has now chosen to fly the black flag in Libya. We are seeing the same thing happening in Algeria with Boko Haram, and in northern Sinai with Ansar Beit al-Maqdis. Terrorist groups all across the northern Maghreb are joining forces with ISIS, and this country and the international community need to do more to tackle this extremism.
Jess Phillips (Birmingham, Yardley) (Lab)
13. What discussions he has had with his counterparts in EU member states and others on (a) resettlement of Syrian refuges and (b) the UN’s response to the Syrian refugee situation.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)
We support the EU’s proposals for sustainable protection through the EU regional development protection programmes, to ensure that we can provide the necessary assistance to all those Syrian refugees caught up in this terrible crisis.
Jess Phillips
More than 100 Syrian civilians have been killed since May as a result of the use of indiscriminate weapons such as barrel bombs. In the light of the recent meetings in New York, what role are the Government playing in the United Nations Security Council to ensure that the UK’s strong statement of support for the implementation of UN Security Council resolution 2139, in response to the increasing use of barrel bombs in Syria, is followed through?
Mr Ellwood
The hon. Lady is absolutely right, and there are a number of quarters in which we can provide assistance. We are the second largest donor to the refugee programmes providing support to the neighbouring countries in the region that have taken in the 4 million refugees who have now fled the conflict. The UN has been crucial in coming up with that Security Council resolution, but we have run into the buffers because some of the usual characters do not want to support it. I hope that we will advance the programme and that we will see some movement in the UN General Assembly in September.
Jonathan Ashworth (Leicester South) (Lab)
The Minister will recall that, back in April, the acting head of the United Nations High Commissioner for Refugees said that Europe was simply not doing enough in this regard. This is a humanitarian disaster, with 4 million refugees living in neighbouring countries. What urgent representations is the Minister making to his European counterparts about making the funds available to deal with this humanitarian crisis?
Mr Ellwood
The Kuwait III talks are taking place, and a number of countries in the region are being asked to donate more funds in order to provide that assistance. There is a philosophical argument, which we have discussed in the House, as to whether this country should take in more refugees or provide more support in the region. I have visited the Zaatari refugee camp, and it is clear that the majority of Syrians want to remain in that location, which is why we are donating so much money—£800 million—to support people in the region.
Huw Merriman (Bexhill and Battle) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Minister for Europe (Mr David Lidington)
My right hon. Friend the Foreign Secretary is currently on his way back from Vienna, where he has been taking part in the conclusion of the Iran nuclear negotiations. He plans, with your permission, Mr Speaker, to update the House on that issue at the very earliest opportunity. In addition to those important talks, my right hon. Friend has been leading the Foreign and Commonwealth Office’s efforts to follow up the appalling attacks in Tunisia earlier this month, and on Thursday this week he plans to travel to the middle east and to Cyprus.
Huw Merriman
I welcome the announcement on Iran. What confidence does the Minister have that a nuclear agreement with Iran will be subject to a rigorous inspection regime?
Mr Lidington
Clearly the question of inspection and access by the International Atomic Energy Agency inspectors lay at the very heart of the negotiations. In fairness, I must advise my hon. Friend to wait for the Foreign Secretary’s statement, at which time he will have the chance to examine in detail the agreement that has been reached.
Dan Jarvis (Barnsley Central) (Lab)
As the Minister has just suggested, details are still emerging of the agreement reached in Vienna on Iran’s nuclear programme. Those talks have seen many missed deadlines over the past 12 years, but all sides have been consistent in saying that no deal was better than a bad deal. At this early stage, what confidence does the Minister have that this is a good deal and that it will be implemented?
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)
I am grateful for the question. There is little more we can add at this stage, because the deal is just being concluded in Vienna, as my right hon. Friend the Minister for Europe said. We have made it very clear that we need a long-term and comprehensive solution on the Iranian nuclear issue and that we want a durable, verifiable and comprehensive nuclear deal that addresses the proliferation concerns. We will have to wait, but I hope that there will be a statement very shortly.
Mr Speaker
Perhaps not that shortly. We will see—it might be much later today or it might be tomorrow.
Dan Jarvis
I thank the Minister for that reply and we look forward to hearing from the Foreign Secretary on his return. Let me turn to the struggle against ISIL. The recent attacks in Tunisia, Cairo and elsewhere have highlighted that we will defeat this threat only by working together as an international community. Will the Minister update the House on what specific actions are now being taken alongside other countries to cut off the finances that fund ISIL’s hateful crimes?
Mr Ellwood
As I said in a previous reply, this is the largest threat that we face in the 21st century. The hon. Gentleman is absolutely right to point out that there are many strands to our programme to try to tackle that. The strategy involves not just the military but countering foreign fighter recruitment and dealing with stabilisation and support for those caught up in that, as well as denying funds. That means working with individuals in regional countries that continue to support this activity, and we need to work with the banking community to ensure that we cut off the supplies of funding that are generating and paying for fighters who are recruited from across the globe.
Karen Lumley (Redditch) (Con)
T2. As my right hon. Friend knows, I take a great interest in the Balkans and last year I travelled to Bosnia with colleagues to visit Srebrenica and worked with a charity, Medica Zenica, which helps families affected by the conflict. Does he agree that as well as remembering the anniversary of Srebrenica last week we must refocus on rebuilding Bosnia-Herzegovina and help the people of that country to secure a better future?
Mr Lidington
I agree with my hon. Friend and pay tribute to her long-standing interest in the fortunes of Bosnia-Herzegovina. I saw for myself last year how people from all communities in that country came together in the aftermath of the devastating floods that they experienced. It is that spirit that we must support and encourage to reform the state institutions and to push for economic prosperity.
Karin Smyth (Bristol South) (Lab)
T3. The Minister will be aware of the work of Nobel peace prize winner Malala Yousafzai, who celebrated her 18th birthday in Lebanon at the weekend opening a school for Syrian refugee girls. What is the Government’s assessment of the situation on the ground in Lebanon, where about 500,000 Syrian school-aged children are believed to be living?
Mr Ellwood
I am grateful for the opportunity to update the House on the situation in Lebanon, which I visited recently. We have advanced our Department for International Development programme to assist. Lebanon has taken on almost a quarter of its population in refugees and I commend the work being done to take those people into its society. Unfortunately, ISIL has already set up camp east of the Bekaa valley and is already in Lebanon. We are also providing military support to train the Lebanese forces so that they can have a buffer between the west of the country, towards the Mediterranean, and the east, looking out towards Syria.
Jason McCartney (Colne Valley) (Con)
T4. Does my right hon. Friend agree that the Baghdad Government must now fulfil their financial obligations to the Kurdistan Regional Government, so that they in turn can properly arm and fund the peshmerga, who are fighting the terrorist threat of ISIL-Daesh in northern Iraq?
Mr Ellwood
I pay tribute to the work that my hon. Friend did as a pilot in the no-fly zone in the 1990s. He comes with a wealth of experience of the area and is right to point out that there must be greater co-operation between Kurdistan and Baghdad. We very much encourage that; that is what I did in my last visit to Baghdad a week and a half ago and what I will do when I visit Kurdistan in the near future.
Ian Lavery (Wansbeck) (Lab)
T6. Earlier, the Minister welcomed the decision of FARC to have a unilateral ceasefire in Colombia. Will he therefore consider making a supportive statement requesting an immediate bilateral ceasefire in Colombia?
The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)
The hon. Gentleman will have seen that the Government of Colombia have made a statement about de-escalating the conflict. We fully support the ongoing negotiations in Havana. That is the big prize, as I said earlier, and it is important that both sides come to the table in the spirit of co-operation and not violence. That message needs to get out to all corners of the country.
Alberto Costa (South Leicestershire) (Con)
T5. The visit by President Xi later this year represents a major opportunity to boost the trading relationship between the United Kingdom and China. What steps are the Government taking to ensure that British companies, including those in my constituency, can benefit from the visit?
Mr Swire
The figures are very good indeed. There has been a huge increase in trade between the UK and China, and the UK is the favoured destination for Chinese inward investment. We look forward to the state visit later this year, which will certainly have a very large trade element to it.
Stephen Gethins (North East Fife) (SNP)
T7. We have heard from the Foreign Secretary about the need for treaty change from the EU negotiations. Will fisheries be up for renegotiation?
Mr Lidington
Fisheries have already been the subject of a successful renegotiation, led for the UK by the fisheries Minister, my hon. Friend the Member for Camborne and Redruth (George Eustice). That led to the scrapping of the obscene discarding policy for which British Governments have yearned for years, and the devolution of fishing to a more regional and local level. The hon. Gentleman should welcome that.
Glyn Davies (Montgomeryshire) (Con)
T8. Looking beyond the human rights issue, which has been extensively discussed today, Colombia is becoming an increasingly important, modern and rapidly expanding country, with massive potential. What action is the Foreign and Commonwealth Office taking to develop business and diplomatic links with Colombia, enabling the UK to construct a mutually beneficial relationship with that country?
Mr Swire
My hon. Friend will be aware that UK-Colombia trade grew by 56% between 2009 and 2013, and we are on course to reach our target of increasing bilateral trade and investment to £4 billion by 2020. It is important that we increase our trade with and investment in Colombia because one of the dividends of the peace process will eventually be the economic wellbeing of all Colombians. We must continue to support the peace process and not let up on our demands, such as no impunity, accountability and so on, but at the same time we should continue to support UK-Colombia trade.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Friday is the first anniversary of the downing over Ukraine of flight MH17, killing all 298 on board, including 10 British people, two of whom were Newcastle United fans, Liam Sweeney and John Alder. The families still do not know who murdered their loved ones and they fear that the attention of the Foreign Office has moved away from that complex global political situation. Will the Minister agree to meet me and the families of those who died, so that their questions can be heard and we can begin to get answers?
Mr Lidington
I am more than happy to meet the hon. Lady and her constituents, whom I recall meeting in the aftermath of that appalling tragedy last year. As she knows, a Dutch investigation is ongoing into the causes of the crash and possible attribution of responsibility, and clearly she would not expect me to be able to comment in detail, but I am happy to talk to her.
Jo Churchill (Bury St Edmunds) (Con)
Businesses in my constituency, such as Denny Brothers printers, have suffered a negative impact from the challenges of migration from Mediterranean countries. Such migration has had a consequential impact across Europe, particularly in Calais, where there has also been industrial action. Does the Department recognise how the situation is affecting British businesses and their employees? What can be done about the root cause?
Mr Lidington
Through Department for International Development programmes, we are tackling the root causes by trying to promote greater prosperity in the African countries from which so many of these people are travelling. We are also working actively with both European and African partners to disrupt the work of the people traffickers who exploit vulnerable people in the most appalling way.
Robert Flello (Stoke-on-Trent South) (Lab)
I know that we are about to hear from the Home Secretary, but what is the Foreign Office doing to put pressure on the French authorities and tell them that it is not good enough to take somebody from Calais and release them a mile down the road without fingerprinting or checking them in any way?
Mr Lidington
Our ambassador and his team in Paris and Foreign Office Ministers have been extremely active in talking to our French counterparts. We clearly work extremely closely with Home Office colleagues, and co-operation between the United Kingdom and France is essential to bring to an end the disruption at Calais.
Mr Speaker
Order. I would like to try to accommodate a few more Members, but extreme brevity is now required.
Steve Double (St Austell and Newquay) (Con)
The events that we have seen unfolding in relation to Greece demonstrate the need for urgent and deep reform within the EU. Does the Minister agree that if the EU does not demonstrate that it is willing or able to reform itself, the British people across the United Kingdom should seriously consider voting no in the referendum?
Mr Lidington
I remain confident that the Prime Minister will be able to achieve the reforms that he has set his hand to, but at the end of the day it is for the British people themselves, not any politician, to take the final decision.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
In response to the increased threat from ISIL and the situation in Syria, the Prime Minister tells us that he wishes to use drones more extensively and expand our special forces. Has the Foreign Office made an assessment of the speed at which we can expand the special forces, which would make that promise meaningful?
Mr Ellwood
The hon. Lady is a learned Member of this House. She should be aware that what she reads in the papers about what the special forces will be up to is not subject to discussion in this Chamber. I am afraid we will have to leave it at that.
Andrew Percy (Brigg and Goole) (Con)
The funeral of my constituent killed in Tunisia, Bruce Wilkinson, will take place this week. May I place on record on behalf of the family how thankful they are for the support they have received, the dignified way the bodies were brought back, and the work of the Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for Bournemouth East (Mr Ellwood)? Can we guarantee that such support to families will continue?
Mr Ellwood
May I say how grateful I am to my hon. Friend, who I know was very much involved with that family, and to all other Members of Parliament who played a role in providing a modicum of support to the families during this difficult time? We always learn from these experiences, but we stand ready to support all the families in the best way we can.
Paula Sherriff (Dewsbury) (Lab)
The UK voted for a UN resolution calling for Palestinian co-operation with the International Criminal Court’s preliminary investigation into the Gaza conflict. Can the Minister therefore confirm the Government’s support for Palestinian membership of the ICC?
Mr Ellwood
We debated this at length in Westminster Hall a couple of days ago. We had the resolution, which Britain eventually supported. It is for the ICC to make those judgments itself and we respect its decision.
Tom Pursglove (Corby) (Con)
Have the Scottish Government had a consistent position on the issue of EU reform when making representations to UK Ministers, or is it more a case of one position in Scotland and one here in Westminster?
Mr Lidington
It is obviously for the Scottish Government to defend their own positions. We always listen seriously to points that Scottish or, for that matter, Welsh or Northern Irish Ministers make to us about UK Government policy. At the end of the day it is a United Kingdom-wide policy that we adopt in our dealings with the EU.
Peter Grant (Glenrothes) (SNP)
The Frenchgate memo included an inaccurate account of a private conversation between the French ambassador and the First Minister of Scotland. Which members of staff or Ministers in the Foreign Office were aware of the contents of that memo before it was deliberately leaked by Ministers down here?
Mr Lidington
I have a recollection of having seen a report of that. I do not know if it was the actual text. What I remember thinking was that the text itself said that a lot seemed to have got lost in translation. I did not give any credence to it.
Kit Malthouse (North West Hampshire) (Con)
Given the growing importance of our conversation with Iran and in particular the part it is playing in fighting ISIL, can the Minister give us a firm date for the re-opening of our embassy in Tehran?
Mr Ellwood
It is our intention to reopen the embassy in Iran. That is one of the first things I would have done over a year ago, had the deal moved forward in the manner in which we expected. I do not want to pre-empt the announcement. I will allow the Foreign Secretary to elaborate on that when he makes his statement.
Helen Jones (Warrington North) (Lab)
The Inter-American Commission on Human Rights recently condemned the murder of more than 24 human rights defenders in Colombia in the first half of this year. Given that many of those who are murdered receive death threats in advance, what is the Minister doing to implore the Colombian Government to take such threats seriously and act on them to prevent further assassinations?
Mr Swire
We raise these matters regularly with the Colombian Government, both in Colombia and with the ambassador here. I raised the issue of protection for human rights defenders when I was last in Colombia. I understand that some of them do have protection, but certainly the increasing trend in the numbers being killed is unacceptable.
Mr Speaker
Order. I have extended the envelope and am sorry to disappoint colleagues, but we must now move on.
Calais
(9 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for the Home Department (Mrs Theresa May)
I want to update the House on the action the Government are taking to tackle illegal immigration, particularly in the light of the current situation in the Mediterranean and the disruption caused by the recent strikes that affected the port of Calais and the Eurotunnel site at Coquelles.
The close co-operation between the United Kingdom and France on the issue dates back many years, and our Governments have been working closely together to respond to the pressure caused by the growing number of people migrating across the Mediterranean in recent months.
As the House will be aware, aggressive strike action by French port workers recently exacerbated that pressure, temporarily closing the port of Calais and disrupting Eurotunnel services. That had significant repercussions for the UK, particularly for lorry drivers, the travelling public and local residents in south-east England. Tourists and freight drivers endured long and difficult journeys in the summer heat. Illegal migrants in France, taking advantage of the situation, made increasingly bold attempts to board vehicles heading for the UK, and we heard worrying reports about intimidating and violent behaviour.
I am conscious of the forbearance of the residents of Kent, who suffered disruption due to the build-up of traffic on local roads caused by the French strike. That forbearance has been powerfully championed by their Members of Parliament, whom I will meet to discuss the issue shortly.
Since last week, strike action has paused to allow for talks between French trade unions and the French authorities. The port of Calais re-opened on 2 July and ferry companies and Eurotunnel are operating near-normal services, but the repercussions are still being felt and the risk of further French strike action remains.
It is, of course, the responsibility of the French authorities to police French soil, and they have, like our own Border Force and Kent police, worked extremely hard to maintain law and order during this difficult period. Since disruption began on 23 June, Border Force, working closely with the French authorities, put in place well-tested contingency plans, deploying a range of additional resources to reinforce security and support traffic flow at the juxtaposed ports. Freight vehicles entering Calais, the Eurotunnel site at Coquelles and Dunkirk underwent intensified screening for clandestine illegal entrants, using some of the best techniques and technologies in the world, including sniffer dogs, carbon dioxide detectors, heartbeat monitors and scanners, as well as visual searches to find and intercept stowaways. Between 21 June and 11 July, over 8,000 attempts by illegal migrants were successfully intercepted at juxtaposed ports in France through the joint efforts of the French and British authorities.
That reflects the particular pressures caused by the recent industrial action, but Her Majesty’s Government have been working closely with the French Government for much longer to deal with the broader situation in Calais. At the beginning of this month, I met the French Interior Minister, Bernard Cazeneuve, in Paris, where we agreed to further strengthen our co-operation and build on the joint declaration we made last September.
Since November 2014, we have committed to investing £12 million, of which £6 million has already been spent, to reinforce security at our juxtaposed ports in northern France. That includes new fencing to secure the approaches to the port of Calais and joint work to improve traffic flow through the port and Border Force controls so that more tourist vehicles can queue within the secure environment of the port. That work is due to be completed at the end of this month. In addition, we have funded a £2 million upgrade of detection technology and boosted our dog searching capability by another £1 million.
We have also provided funding for additional fencing to help secure approaches to the channel tunnel at Coquelles, where repeated incursions have taken place over the last few weeks. This work, which we announced last week, has already begun and is also due to finish by the end of this month.
In addition, we have made considerable progress in targeting criminal gangs in Calais through better intelligence sharing and increased collaboration between law enforcement agencies, and we are running joint communications campaigns to tackle myths about life in the UK. We continue to keep the situation under review and will assess whether further measures may be required.
As I have mentioned, the recent strike action has had significant implications for the travelling public and, in particular, for hauliers, who have been subjected not only to long delays but repeated attempts by illegal migrants who try to stow themselves away in their vehicles. We are working with the British haulage industry to support our drivers, and my right hon. Friend the Immigration Minister recently had a further meeting with representatives of the industry to discuss their concerns. It is of course important that vehicles are secured properly to help mitigate the threat of illegal immigration. We provide clear guidance on lorry security that many responsible drivers take steps to follow. However, as the vast majority of vehicles arriving in the UK are foreign registered, the bigger part of our challenge is international. Approximately 7% of fines issued last year were to British drivers, so we need to ensure that the rest of the world’s freight transport industry is keeping up with the UK’s. We have therefore offered to host an international event focused on best practice in lorry security.
I am sure the whole House will agree that British hauliers work tirelessly to keep our economy moving. Without the hours they spend on the roads importing and exporting goods, it would grind to a halt. It is imperative that they are allowed to continue their business unimpeded. So today I can announce the creation of a new secure zone at the port of Calais for UK-bound lorries that will provide a secure waiting area for 230 vehicles—the equivalent of removing a two-and-a-half mile queue from the approaching road. This should transform protection for lorries and their drivers, removing them from the open road where they can become targets for migrants attempting to board their vehicles.
The problems in Calais are clearly symptomatic of a wider issue that needs to be tackled at source and in transit countries. This was reflected in the recent European Council discussions that my right hon. Friend the Prime Minister attended and reported to this House. The Government are clear that we must break the link between people making the treacherous journey across the Mediterranean and achieving settlement in Europe. We must also target and disrupt the organised criminal gangs who profit from their fellow humans’ misery, selling them false promises before loading them on to dangerous vessels and sending them—in many cases in the past—to their deaths. To this end, we are enhancing our work with European and African partners to tackle these callous criminal gangs and increase the support for genuine refugees in their regions of origin.
Recently, the Prime Minister announced the establishment of a dedicated law enforcement team to tackle organised immigration crime in the Mediterranean. About 90 officers will be deployed in the UK, the Mediterranean and Africa to pursue and disrupt organised crime groups. They will make use of every opportunity at source, in transit countries and in Europe to smash the gangs’ criminal operations and better protect the UK and the vulnerable people they exploit. In addition, we are providing practical and financial support to other EU countries, including help to process newly arrived illegal immigrants and distinguish between economic migrants and genuine refugees.
We must also work to stop this problem at source. The UK has a proud record of providing aid to alleviate poverty and suffering overseas. We have committed £900 million to help people displaced by the Syrian crisis, making us the second largest bilateral donor in the world in response to that humanitarian crisis.
However, just as we are generous to those who need our help, the UK will be tough on those who flout our immigration rules or abuse our hospitality as a nation. Since 2010, the Government have introduced new laws to make it harder for people to live in the UK illegally, restricting their access to rented housing, bank accounts, driving licences, and our public services. We have revoked the driving licences of 11,000 illegal immigrants, closed down nearly 900 bogus colleges, and carried out over 2,900 sham marriage operations in the past year. The new immigration Bill that we will bring before the House later this year will build on this work and enable us to take stronger action still. It will include measures to make it even more difficult for people to live in the UK illegally, make it easier for us to deport them, and make Britain a less attractive place for people to come and work illegally—not least by making illegal working a criminal offence in itself.
The approach of Her Majesty’s Government is clear. We are continuing our close collaboration with the French authorities to bolster the security of the ports in northern France; working closely with them to mitigate the consequences of irresponsible French strikers; providing the assistance our hard-working hauliers and the travelling public deserve; and leading the international efforts to tackle this problem in the longer term, with generous support for those who deserve it and tough sanctions for those who do not. I commend this statement to the House.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
I thank the Home Secretary for her statement and for advance sight of it this morning.
When order breaks down, a difficult situation can become desperate. That is what is happening in Calais. Today, there are reports that three people were injured after they broke into the French channel tunnel terminal. That comes just a week after a young man from Eritrea died, attempting to board a freight train headed to Britain. We do not know the circumstances of his death, what made him travel more than 3,600 miles to try to enter Britain, nor how much he paid to criminals who may have profited from his death.
The Home Secretary talked about the serious and growing challenge for hauliers, who are worried continually about the security of their load, whether people will try to break in and whether someone might be caught under their wheels, and about the holidaymakers who see people walking between the queuing cars and worry about the security of their boot, but this is a terrible crisis at our border in which lives are being lost and people are being injured.
I welcome the Home Secretary’s statement today, but it is not the first one that we have had and there have been urgent questions too. The situation has been exacerbated by the huge problems caused by the strike action, but the underlying problem has been getting worse as well. I welcome the additional measures, such as the lorry zone that she announced. I thank Kent police, Border Force and all the authorities for the difficult job that they are having to do. Will she confirm whether the lorry zone is additional capacity? Eurotunnel has already talked about there being additional capacity in place, but has warned that that is just making more people try to get into the tunnel and enter the trains directly. Will she clarify that point? Will she tell us how many additional staff the UK has deployed to Calais since last year and how many additional enforcement staff the French authorities have deployed?
Will the Home Secretary explain what is happening when people are found attempting to cross illegally? She referred to 8,000 people. Is it true that many of them are simply being returned to the streets of Calais to try again? What action has she taken to get a proper process in place in France to assess whether they have an asylum claim and are fleeing persecution or to assess their immigration status and whether they need to return home? Will she say whether the British authorities are fingerprinting those whom they find, which I have raised with her before?
The Home Secretary and I will agree that the French authorities need to do much more. Under the Dublin convention, it is their responsibility to assess those who may be vulnerable or who have asylum claims, and who should not be further victim to people traffickers or the despair that comes from being a vulnerable refugee travelling over large distances. Such people need an assessment early on, either in France or in the other countries that they have come from. What is she doing to ensure that the French authorities are assessing those who are living in camps or on the streets in Calais before they make an attempt to reach the border? Can she tell us how many people have been assessed in Calais by the French authorities, and what is being done to increase the number being assessed, rather than simply leaving people in the camps and leaving the problem to get worse?
The Home Secretary will know the importance of diplomatic action and partnership working with France. The former Home Secretary and Member for Sheffield, Brightside and Hillsborough had to do exactly that when he negotiated the closure of Sangatte many years ago. It would be helpful to hear from her what progress is being made, because at the moment it looks as though the problem is still getting worse.
The Home Secretary talked about the work that is being done to tackle people smuggling more widely, but what is being done to make sure that immigration control and asylum process assessments take place in the southern Mediterranean countries too?
Finally, while it is crucial for us to strengthen border security to ensure that action is being taken in France to address this serious problem, we have a responsibility across Europe to deal with the humanitarian crisis that has been increasing the problem. A significant part of the problem is caused by the war in Syria, which is the worst humanitarian crisis of our generation. We all know of the pressure on families that are fleeing that situation.
The Prime Minister said that the UK Government would accept a “modest expansion” of the programme to accept Syrian refugees. I have urged the Home Secretary many times in the House to accept far more UN refugees from Syria. How many does she now expect to accept? I urge her to work with local authorities across the country, including on reviewing the support processes, to get them to offer places for those who are fleeing persecution. This country has a long tradition of providing humanitarian support and sanctuary for those who need it.
We have had a series of urgent questions and statements, but the problem is getting worse. Can the Secretary of State really put her hand on her heart and say that she thinks that as a result of her statement, things will be better in six months’ time than they are today? It does not feel like they will be. What else can she do to prevent the crisis from simply escalating, and to prevent us from simply being in the same situation in a few months, having the same discussions and asking the same questions, with her being able to give only the same answers?
Mrs May
I thank the right hon. Lady for her response and for her gratitude for my coming to the House and making a statement.
The right hon. Lady referred to the work of the police and Border Force officials, as I have done. We should recognise the professionalism with which Border Force officers deal with circumstances such as the current ones. They had contingency plans in place for the possibility of a strike related to MyFerryLink, and those plans were put into action. From the Border Force’s point of view, what it did operated smoothly. We should recognise the professionalism with which its officers approach their job. A number of resources have been deployed over time around the Border Force ports, and it operates a flexible system to ensure that it can move resources around.
The right hon. Lady asked whether the lorry park or buffer zone that I described was additional capacity. It is a new secure area that is being set aside, because if lorries are queuing it is easier for illegal migrants to try to get on to them. Putting lorries separately in a secure zone means that we can remove people’s ability to access them. The French have also put in extra staff, and in particular they have increased the number of police in the area, including riot police.
As the right hon. Lady said, and as I recognised in my statement, previous Governments have worked with the French authorities on this issue for many years. The juxtaposed controls at Calais and Coquelles are important to us and work well, but they have come under increasing pressure. She asked about the progress that has been made, and I point out to her that in 2014-15, the Border Force, its contractors and the French authorities prevented about 40,000 attempts to enter the UK illegally at the juxtaposed controls in France, compared with 18,000 in the previous year and 11,000 the year before that. There is increasing pressure, but also increasing ability to make identifications. As I indicated, we have put in some more technology to help that process.
In 2014 the number of organised criminal networks dismantled in the Calais region increased by 30% compared with the previous year, so the increasing joint working and collaboration with the French authorities is having an impact on the ground.
The right hon. Lady asked how asylum seekers are being dealt with. That is being addressed in a number of ways, but I return to a point that I have made in the House before. The number of asylum claims in France has increased—she referred to that point—and the French authorities have encouraged people to make asylum claims in France. There is a further upstream issue for both us and the French Government, which is what action the Italian authorities can take when people arrive across the Mediterranean on Italian shores. We have offered and given the Italian authorities increased support in fingerprinting and registering people properly at that point.
We have said before that we expect several hundred Syrian refugees to be relocated to the UK over a period of years as part of our vulnerable persons relocation scheme, and we are increasing that number by a few hundred. I remind the House that we have not set a target number, but those are people in particular need. We work with the United Nations High Commissioner for Refugees, which identifies such people. Some of them require long-term medical treatment, which we will provide in the United Kingdom. We are trying to focus support on those who are most in need.
Sir Roger Gale (North Thanet) (Con)
You will understand, Mr Speaker, that this issue is of particular concern to Members of Parliament in east Kent, most particularly my hon. Friend the Member for Dover (Charlie Elphicke), who is constrained by his office from asking questions but is present in the Chamber today.
There are two problems. First, the Home Secretary recognises that French strikers have brought Calais, and therefore Dover, to a grinding halt. Will she make it clear to the French authorities that in the name of the much-vaunted freedom of movement, we expect the port of Calais to be kept open at all times, as it ought to be?
Secondly, does the Home Secretary recognise that part of the problem is due to the complete failure of the Schengen agreement? Because border controls within Europe have been broken down, there is now effectively free movement from Martinique, on the other side of the Atlantic, to the port of Calais. It is time to abolish Schengen and bring back border controls.
Mrs May
My hon. Friend makes some important points. As my hon. Friend the Member for Dover (Charlie Elphicke) is the Home Office Whip, my hon. Friend the Member for North Thanet (Sir Roger Gale) can be absolutely sure that he has made his concerns about the matter clear to me.
I know that a number of colleagues have met my right hon. Friend the Secretary of State for Transport to discuss the problems of traffic queuing in Kent—Operation Stack, as it is known. I am arranging to meet a number of colleagues to discuss the policing of the operation.
I have made the point to the French authorities that we expect Calais to be kept open, most recently when I met Monsieur Cazeneuve a few days ago. That is important for both countries. In relation to the Schengen agreement, my hon. Friend might have noticed that two or three weeks ago the French started taking some action on their border with Italy in relation to migrants who were effectively being allowed to move into France unimpeded. Of course, the Schengen scheme allows for some emergency action to be taken.
Joanna Cherry (Edinburgh South West) (SNP)
The latest incidents, which the shadow Home Secretary mentioned, are of grave concern. The fact that people risk their lives, and in many cases have lost their lives, trying to get into Europe and the United Kingdom should give us pause for thought. We must ask what is driving thousands to such desperate action and what more we can do to deal with the root of the problem. We are a wealthy union of nations in a world that is becoming increasingly divided, and we are the big winners from the way the world works, so surely we in the United Kingdom have a responsibility to help and support those who are driven from their homes and families because of war, poverty or environmental degradation.
Playing our part in Europe-wide efforts on asylum would be a good starting point, as I and my party have urged on previous occasions. I associate myself with the shadow Home Secretary’s comments about that this morning. Ensuring maximum UK participation in policing and rescue efforts in the Mediterranean is also essential. We must also move questions of social justice to the top of our political agenda, so that greater economic opportunity exists where people live.
Earlier this month, one of my hon. Friends asked Ministers at the Department for Business, Innovation and Skills to estimate the cost to UK businesses of an unscheduled closure of the channel tunnel. The reply that she got was dismissive to say the least, to the effect that no assessment had been or would be made. Businesses in Scotland, particularly food exporters, face substantial additional costs each and every time the tunnel is closed. A fish exporter has described the situation as follows:
“Fish is a perishable commodity, and it is imperative that it is delivered as fast as possible to the customer. This generally takes 2 days from Scotland to say Switzerland. Because of the disruption our lorries are arriving a few hours late and miss the onward connections. This means I am being forced to hire other lorries at €250 a time to deliver my goods to the customer as a way of keeping them supplied and happy.”
That is just one example of one gentleman’s difficulty. Do the Government care about the impact on exporters, and if so, what are they going to do about it?
Mrs May
At the beginning of the hon. and learned Lady’s comments, she referred to dealing with the root of the problem—I believe that was the phrase she used. Indeed, one of the issues that we are looking at in the UK and that I discuss with my European colleagues is how aid and development money can be used to ensure that we develop the economies and stability of the countries from which people are seeking to move to Europe.
The hon. and learned Lady asked about the channel tunnel. We recognise the significance of the channel tunnel to importers and exporters. Precisely because of that, Border Force made significant contingency arrangements with the French authorities for the possibility of a MyFerryLink strike. Obviously, the disruption—the strikers burned tyres on the tracks—had an impact on the tracks. We had contingency operations in place because, for all of us, it is important to maintain those routes through the channel tunnel, both for businesses and for those who wish to travel for tourism and other purposes.
Mr Speaker
Order. This is an extremely important statement. That said, may I just point out to the House that well in excess of 30 people wish to take part in the final day of the Budget debate, and therefore that there is a premium on brevity? The tutor in this matter today can be Mr Philip Hollobone.
Mr Philip Hollobone (Kettering) (Con)
A lorry driver constituent, Peter Clark, turned up at Calais with a cement mixer from Italy. He asked the French authorities to check it. It was six o’clock in the morning and they said they had no torches and their ladder was locked up. He crossed the border with five Vietnamese illegal immigrants on board and now faces a fine. Will the Home Secretary tell the French that they need to raise their game?
Mrs May
May I suggest to my hon. Friend that, if he sends the Immigration Minister details of that case, we will look at it? There are two parts to the searches that should take place involving not just the French authorities, but Border Force. We would like to look into that.
Keith Vaz (Leicester East) (Lab)
The Home Secretary is right that our security and immigration policy should not rest in the hands of a few French strikers. Later today, the Home Affairs Committee will hear from the Immigration Minister, the Road Haulage Association and the police to look at her proposals. I am not convinced that putting 250 lorries in a secure zone is the answer or even part of the answer. When I was in Calais a fortnight ago, a lorry with German plates driven by a Romanian was opened up. Five people from Darfur emerged. They were collected by the French police and let off about a mile down the road. Before they left, they said they would try again the next day—1,000 migrants were found on those lorries every single day. The key is the taskforce that she has set up in the Mediterranean, because unless we stop the flow of people into France, we cannot solve the problem of Calais.
Mrs May
The right hon. Gentleman makes an important point about the taskforce and dealing with the organised criminal gangs. The taskforce will work with countries in Europe and Africa to deal with the problem, but we are supporting the JOT Mare operation under Europol, which has a fusion cell in Italy. It is looking to increase the intelligence available on the routes people are using so that we can better target the criminal gangs involved.
Mr Ranil Jayawardena (North East Hampshire) (Con)
I welcome what my right hon. Friend says about close working with the French Government, but does she agree that it is vital that further pressure is brought to bear on the Italian Government to process newly arrived migrants quickly, including fingerprinting, in line with international obligations?
Mrs May
My hon. Friend has put his finger on one important aspect—the Italian authorities have responsibility for fingerprinting and registering those who cross through that central Mediterranean route and arrive first in Europe in Italy. My French colleagues and I, and others in the European Union, are putting pressure on the Italians to do that.
Keir Starmer (Holborn and St Pancras) (Lab)
The focus is understandably on Calais and what is happening around Calais, but all hon. Members acknowledge that, in the long term, what happens in the transit and source countries makes the difference. Could we have more detail on whether we plan to escalate our role in the source countries, which in the long term will be the only way of dealing with the problem?
Mrs May
There are a variety of ways in which we are looking at what the UK can do, and at what we can do collectively with other EU member states. We could have a centre in Niger to which it would be possible to return people who have made the journey into Europe. As I indicated in my response to the hon. and learned Member for Edinburgh South West (Joanna Cherry), we are also looking at what can be done in the source countries to ensure that there is an economic future and a stable future there so that people do not feel the need to make the journey.
Helen Whately (Faversham and Mid Kent) (Con)
I thank the Home Secretary for acknowledging the impact on the people of Kent of Operation Stack and the disruption. I also thank her and her Department for their work to ensure that the channel crossings are secure and flow smoothly. Does she have any further tactics up her sleeve should all those efforts prove unsuccessful during the summer?
Mrs May
I assure my hon. Friend that we are constantly looking to see whether there are ways in which we can improve the action we are taking, but we need to approach it across a wide variety of areas of action, not just what happens at the ports. We will of course continue to look at what action needs to be taken in the ports.
Jeremy Corbyn (Islington North) (Lab)
In the later part of the Home Secretary’s statement, for which I thank her, she drew attention to the wider question of desperate migrant people around the world—my Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper) did the same. Are we not facing a global refugee crisis of similar proportions to that which took place after the second world war? We see the tragic, awful symptoms in the camp in Calais, in the Mediterranean and in many other places. Does it not require a much stronger, bigger and more humanitarian global response, possibly through the United Nations as well as through the European Union? Many people are destitute, desperate and fleeing from the war in Syria and many other conflicts. The problem will not be solved by turning people back. It will be solved by looking at the cause of the crisis and providing a high level of humanitarian support. I realise that we have given a great deal of support to Syrian refugees, but clearly more has to be done globally.
Mrs May
The hon. Gentleman is right that we are seeing significant movements of people in various parts of the world. We focus on those moving across the Mediterranean, but there are significant movements in the far east—we have seen lives lost when people move on boats there. It is important for us to look at what is causing the movements of those people. As I have said, that is why we will be looking at how we use our aid budget, and at how the European Union uses its budget, in those source countries. As regards the people we are relocating from Syria, we are working with the United Nations—we are working with the United Nations High Commissioner for Refugees—to ensure that we provide support to the most vulnerable.
Tim Loughton (East Worthing and Shoreham) (Con)
I welcome the Home Secretary’s comments about myth-busting in respect of the prospects for migrants coming to this country. Clearly, the Home Secretary has been doing an awful lot with Border Force at no little expense to the British taxpayer, but Calais remains a magnet, so will she robustly respond to the deputy mayor of Calais, who seems to think that the UK should do more to let those people in? If we were not so effective with Border Force, many thousands more would be attracted to Calais to try to get into the UK illegally.
Mrs May
I assure my hon. Friend that we make those points clearly. He is absolutely right. That is why the juxtaposed controls are important to us. If a significant number of illegal migrants come through into the United Kingdom, an ever-increasing number of people would try to come through—it would act as a pull factor.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
The Secretary of State rightly acknowledged that the situation in Calais is closely linked with the refugee crisis in the Mediterranean. We know that many of the people camped in Calais are from war-torn countries such as Syria. Do the Government not recognise therefore that, by participating in significant resettlement of refugees from Syria, cutting out the criminal gangs and providing the means for safe and legal transfer to the UK, they will be taking action that is helpful both for the situation in Calais and for the ongoing disaster in the Mediterranean?
Mrs May
I have a couple of responses to the hon. Gentleman. First, it is wrong to assume that all or the majority of people who are travelling across the Mediterranean are necessarily refugees from Syria. Significant numbers of people are coming from countries such as Senegal and Nigeria. People are paying organised criminal gangs—they are illegal migrants attempting to come into the United Kingdom and other European countries illegally. We must be clear about the need to deal with that.
Secondly, I have indicated that our Syrian vulnerable persons scheme will take several hundred people over a few years. A number of Syrian asylum seekers have been granted asylum in the United Kingdom. The Government and I remain of the view that the majority of our support is best given by supporting the refugees from Syria in the region, as we have done by providing £900 million in aid.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
Does my right hon. Friend agree that we are witnessing the kind of large-scale migrations that were predicted some 20 years ago? We now need a much more comprehensive response from responsible countries to deal with the issue. I commend her for insisting to our European partners that they should seek to return people to their home countries rather than accepting them into the European Union, and for questioning the borderless Schengen area in Europe that encourages large-scale migration across our continent.
Mrs May
My hon. Friend is right: one of the keys to the problem is breaking the link between people making the journey and being able to settle in the UK or other parts of Europe. We work closely with other member states in the EU—such as the Italian authorities—to try to ensure that they are undertaking their responsibilities properly. As I have said, we have the benefit of not being part of the Schengen area and therefore being able to operate our own borders, but some action has been taken by other member states within that area to increase their ability to operate their borders.
Caroline Lucas (Brighton, Pavilion) (Green)
There are more refugees today than at any time since the second world war because of so much violence and turmoil in the world. Support in the region is welcome, but it is not enough. Will the Home Secretary acknowledge that the Government’s refusal to accept some kind of EU refugee quota system is unfair and irresponsible? In the past, she has said that Britain has a proud tradition of standing up for refugees: now is the time to prove it by supporting such a measure.
Mrs May
The hon. Lady should take pride in the work that the United Kingdom is doing to support refugees from Syria. We are taking asylum seekers from Syria and we have our vulnerable persons relocation scheme. Crucially, we are working to support hundreds of thousands of people in the region with medical supplies, water, food and shelter, and that is the best place to spend the money because many of those people look forward to an opportunity to return to their homes in due course.
Damian Green (Ashford) (Con)
I am grateful to my right hon. Friend for her tribute to the forbearance of the people of Kent—I might have chosen a slightly sharper word to describe the mood in Kent last week. In the context of the welcome increase in security at Calais that she has outlined, has she had any indication from the French authorities of increased security at the Eurotunnel exit at Coquelles? As she knows, it takes a third of the freight and, if it is kept secure, at least one route not directly associated with the Calais strike can be kept flowing at all times.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
Can the Home Secretary tell the House when the secure waiting area will be up and running, whether it will be policed by French or British police officers operating under—presumably—French law, and what the cost will be?
Mrs May
The secure area will be in place in the autumn: we are working on putting it into place. I would expect it to be policed by the French police, because the British police do not police in other member states. We are providing £12 million, and the security arrangements we are putting in place in Calais will be paid for from that sum of money.
Henry Smith (Crawley) (Con)
I commend my right hon. Friend the Home Secretary for her comprehensive statement on tackling attempted illegal immigration from Calais. Can she assure me that the UK Border Force will not be diminished at other points of entry, such as Gatwick airport and elsewhere, where attempted illegal immigration can occur?
Mrs May
I recognise the significance of Gatwick airport for my hon. Friend and his constituency, and I assure him that UK Border Force is constantly looking to ensure that it is able to maintain security at all types of ports. That includes looking at security arrangements at some sea ports which have perhaps not had the same focus in the past.
Gavin Robinson (Belfast East) (DUP)
I am grateful for the Home Secretary’s mentioning other ports. Has she had a chance to consider how porous the border is between Northern Ireland and the Republic of Ireland? Northern Ireland is seen as a key entry point for the United Kingdom, but there is no protection until mainland Britain is reached.
On the secure zone, can she tell us whether UKBF officials will be present or will it be left solely to French authorities? Clearly, we need to be sure that what is proposed for delivery in the autumn is as secure and protective as possible.
Mrs May
We have the common travel area with the Republic of Ireland, but I can assure the hon. Gentleman that we have ongoing discussions with the Irish Government about the arrangements for the external borders in particular of both countries.
On the new secure zone, Border Force officials of course operate in the port, and the area will be—I was going to use the phrase “to one side”—somewhere lorries can be stationed securely, rather than have to queue up on the road. It will be before they get to the juxtaposed controls.
Damian Collins (Folkestone and Hythe) (Con)
I welcome the Home Secretary’s comprehensive statement and her agreement to meet Kent MPs to discuss the matter further. Has she received an assurance from the French Interior Minister that if more industrial action occurs this summer, swift action will be taken against strikers seeking to enter the tunnel and port site illegally to cause criminal damage, and that they will face prosecution if they do so?
Mrs May
I assure my hon. Friend that I have indeed discussed with my opposite number, the Interior Minister, the action that the French authorities will take and how they will approach any further strikes, should they take place. It is for the French authorities to decide how they will deal with those matters and for the French police to take their operational decisions, but I have made our concerns clear.
Jason McCartney (Colne Valley) (Con)
Does the Home Secretary agree with me and my constituent Mark, who runs a logistics company based in Holmfirth and who updated me on the situation in Calais over the weekend, that we should continue to work closely with freight and haulage bodies to ensure driver safety?
Mrs May
My hon. Friend is right: the Minister for Immigration spoke to representatives of the haulage industry yesterday, and that was not for the first time. He has had several meetings with representative organisations and hauliers, and he will continue to do so, because we need to keep the lorries moving.
Tom Pursglove (Corby) (Con)
Haulage is a prominent industry in Northamptonshire. Has any assessment been made of the losses that have been suffered by the industry as a result of the situation in Calais?
Mrs May
I am not aware that the industry has produced any such figures, but concerns arise in several areas—first is the strike action and the delays caused to hauliers. Secondly, if clandestines get into food lorries, the whole consignment often has to be destroyed. That is another incentive for us to do everything we can to stop illegal migrants entering the lorries.
The Leader of the House of Commons (Chris Grayling)
On a point of order, Mr Speaker—[Interruption.] I wish to inform the House that in a correction to the business statement I made on Thursday, tomorrow’s business will begin with the Appropriations Bill and continue with a full day’s debate on the issue of English votes for English laws, as set out last week.
Mr Speaker
I am grateful to the Leader of the House—[Interruption.] Order. Ordinarily, when there is a change to business, there is a supplementary business statement to the House. If I may say so, that is the proper course to follow. In this place, we tend to be guided and governed to a considerable extent by precedent, and I simply make the point—I hope in a gentle, understated and courteous way—that following that precedent would seem to be sensible. It is not obvious why there should be a departure from it. That said, I thank the Leader of the House for what he has said. It is the fact that he has dealt with it in this way that has been the cause of some commotion.
Ms Angela Eagle (Wallasey) (Lab)
Further to that point of order, Mr Speaker. We found out only by accident that this change to the business was going to be announced to the House in this way—we heard about it through the media. Of course, we heard initially that the statutory instrument on hunting was to be debated on Thursday of this week only because we had a load of people from the pro-hunting lobby emailing us about it before it was announced to this House. That was then shifted to Wednesday at the business statement last week. We now learn through the media that it is being withdrawn altogether, while the debate on English votes for English laws has become a general debate. May I ask that we make provision in our Standing Orders for a business statement every day, because the Government seem to be getting into such a shambles with their own legislation?
Mr Speaker
The resources of civilisation have not been exhausted. Precisely because I thought that ordinarily such a matter would be treated by way of a supplementary business statement, and in the light of the evident interest in the House in the matter, I will, with the agreement of the House, treat it as a supplementary business statement, in relation to which colleagues’ contributions are therefore not just invited but welcomed.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Further to that point of order, Mr Speaker. When the Leader—
Mr Speaker
Order. Forgive me if I did not make myself sufficiently clear. We are very pleased to have the Leader of the House here. What I said was that, as this would normally be a supplementary business statement, we will operate on that basis. Therefore, there is no “Further to that point of order.” The right hon. Gentleman, in his full splendour, can now ask a question to which I hope he will elicit a reply from the Leader of the House.
Mr Carmichael
Thank you, Mr Speaker. I very much share your hope in that regard. When the Leader came to the House last Thursday, he told us:
“on Monday I will, having listened to comments from hon. Members, publish a modified set of draft Standing Orders on English votes for English laws.”—[Official Report, 9 July 2015; Vol. 598, c. 451.]
As a consequence, I spent yesterday in a state of fevered anticipation, but went home at the end of the day an empty-handed and disappointed man. In fact, the draft set of modified Standing Orders was not published until after midday today. Do you know of any reason for that, Mr Speaker? How many hounds are we allowed to employ to flush out an explanation from the Leader of the House?
Mr Speaker
I have no knowledge of that matter. I very gently say to the right hon. Gentleman, whose humour has not deserted him, that his question and other questions must be directed not at me but at the Leader of the House, who can respond accordingly.
Business of the House
(9 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Leader of the House of Commons (Chris Grayling)
Since this is a business statement rather than on the matter for tomorrow, I will answer the questions in more detail tomorrow. Suffice it to say that rather than publishing a draft order at the end of business last night, it was published at the start of business today.
Mr Speaker
I emphasise that this is a supplementary business statement. Forgive me if new Members are not familiar with the concept, but the notion of a supplementary business statement is that the Leader of the House will come to announce what is usually quite a modest variation in business, at least in terms of the number of items subject to change. Questioning is therefore on the relatively narrow changes plural, or change singular. It is not a general business statement; it is on the matter of the change announced, and possibly on what might be called any consequentials.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
May I observe for my right hon. Friend that the Scottish National party has only one objective in this House, which is to foment the break-up of the United Kingdom? Unless all Unionist parties in this House work together to frustrate that aim, instead of continuing the usual games we play in this House, we will help them to achieve that objective.
Chris Grayling
I am surprised that the Scottish nationalists have chosen to move away from what they have done for many years, which is to abstain on matters that do not affect Scotland. They have clearly taken a decision to change policy. It is up to other Unionist parties to decide whether they will help them in that approach.
Pete Wishart (Perth and North Perthshire) (SNP)
What an utter and absolute shambles! That is the only way that this could possibly be described. It seems to me that a number of things need to happen. First, this looks very much like the Tories knew they would not win the vote tomorrow, so they want to change the rules. The Leader of the House has to come back not with a “mini” business statement, but a full business statement. The plans need to be withdrawn from the House absolutely and totally, as they are a complete and utter mess. He needs to bring back a proper approach to dealing with this—[Interruption.] I do not know why the hon. Member for Peterborough (Mr Jackson) is chuntering away, because he knows the Tories would be defeated if they were left on their own. We need a proper Bill, a proper piece of legislation, and proper scrutiny and examination. Will the Leader of the House now withdraw the plans for English votes for English laws, come back with a total rethink, and allow the House proper scrutiny, so that we can look at this properly and in order?
Chris Grayling
With respect to the hon. Gentleman, this matter is nothing to do with English votes for English laws, which will be debated extensively tomorrow. In fact, the debate on that matter will now be longer than it would otherwise have been. The issue of hunting and the debate that might have taken place tomorrow has nothing to do with English votes for English laws. If the hon. Gentleman had read the small print of our proposals, he would know there is no connection between the two.
Henry Smith (Crawley) (Con)
May I invite my right hon. Friend to say how incredulous he is that the SNP, which thought we should have had a longer discussion on English votes for English laws—the people of Crawley certainly want that—is now complaining that we have more time to discuss this very important issue?
Chris Grayling
I fear that what we are seeing on the Opposition Benches is the shape of the Government we thankfully did not get in May; a collaboration between a party that claims to be Unionist but behaves in the opposite way and a party that wants to break up the United Kingdom. All I can say is thank goodness the electorate saw through them.
Mr Ben Bradshaw (Exeter) (Lab)
Is not the real reason the Government have withdrawn the hunting amendment that they would have lost the vote with or without the votes of the SNP, given the very large number of Conservative MPs, including the Under-Secretary of State for Culture, Media and Sport, the hon. Member for Chatham and Aylesford (Tracey Crouch) and two of my near neighbours the hon. Members for Totnes (Dr Wollaston) and for Torbay (Kevin Foster), who do not want to reintroduce cruelty? Given the huge public interest in this issue, when will the Leader of the House bring the matter back before the House?
Chris Grayling
There are different opinions on both sides of the House. Does the right hon. Gentleman not think it appropriate for this matter to be decided in a mature way by English and Welsh MPs who would be affected by the change, and not by Members of Parliament whose constituents would be unaffected by the change and are saying that they will vote against the law as it currently applies in Scotland?
Kevin Barron (Rother Valley) (Lab)
The Leader of the House suggests that only English and Welsh MPs should vote on this matter. Does that not completely contradict the answer he gave earlier? After 32 years in this place, I have never seen such a shambolic decision. There are thousands of our constituents out there who want this thing sorted out once and for all.
Chris Grayling
The point is that there are different opinions on this issue on both sides of the House. It was a manifesto commitment to offer a choice to the people of England and Wales on what they want to happen. It is not right for a party that has no connection to these matters to say that it wishes to interfere—that is a change to the policy it has pursued for many years.
Angela Smith (Penistone and Stocksbridge) (Lab)
Even by the standards of those on the Government Benches, we are all shocked at the cynical and shabby way with which the Government are attempting to use the business of the House to destroy the Hunting Act 2004. The Leader of the House has just said that he wants a material debate on the future of the Hunting Act. Why does he not bring back a Bill for the repeal of the Act? We could then have a proper debate with a free vote.
Chris Grayling
Nobody is trying to repeal the Hunting Act. The measure that was proposed had nothing to do with repealing the Hunting Act.
Simon Hoare (North Dorset) (Con)
Will my right hon. Friend undertake to discuss with colleagues on the Treasury Bench the introduction of a general animal welfare Bill in the next Session covering foxhunting, wild animals in circuses, the clipping of chickens’ beaks and other such issues? All those things could be covered in one large umbrella Bill that the House could discuss and then vote on in the proper way.
Chris Grayling
I think that was a representation on legislation for next year’s Queen’s Speech to which I am sure my hon. Friends will have listened carefully.
Mr Speaker
They may have listened carefully and been struck by the ingenuity of the hon. Member for North Dorset (Simon Hoare), but I hope that questions will not follow in quite the same vein, because we are principally concerned with the business of the House for this week and possibly slightly beyond; we are not taking a panoramic view.
Ian C. Lucas (Wrexham) (Lab)
Last Thursday, the Leader of the House told the House that he would publish the amended Standing Orders on Monday. I collected them at a quarter to 1 today, which was when the Vote Office received them. Will he do the House the courtesy of his office and apologise for not filing the amended Standing Orders yesterday, as he told the House from the Dispatch Box he would? Does he really treat us with such contempt?
Chris Grayling
If the hon. Gentleman thinks that publishing something at the start of Tuesday, rather than the end of Monday, is treating the House with great contempt, he and I have different interpretations of the word “contempt”.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
The nasty party is well and truly back. I have never had so many emails from constituents in such a short period as I have on this issue and the Government’s contemptuous attempt to bring this measure in through the back door. Is the Leader of the House not showing his contempt for Parliament, the Union and the public in his handling of this matter?
Geraint Davies (Swansea West) (Lab/Co-op)
Will the Leader of the House allow Welsh MPs to vote on behalf of Welsh foxes in order that English foxes, like English badgers, can escape over the border, away from the ritualistic, sadistic slaughter he is advocating in the name of sport?
Chris Grayling
It is appropriate that the hon. Gentleman, on behalf of his constituents, can take decisions on matters affecting them. He and his party have just diametrically opposed that.
Mr David Hanson (Delyn) (Lab)
The Leader of the House tabled the hunting vote to take place tomorrow before the final decision on English votes for English laws. Will he give a commitment that in future the hunting vote will come before a resolution on EVEL?
Chris Grayling
I suggest that the right hon. Gentleman reads our proposals more carefully, which he clearly has not done. If he does, he will realise that there is no connection between the two.
Graham Jones (Hyndburn) (Lab)
The Prime Minister said that this was going to be a free vote for the Conservative party and within the House—or certainly for the Conservative party. The Government timetabled this motion to take place before the debate on EVEL. Given that it was a free vote and the Government have an ambivalent position, why has it been pulled? Is it because they want this to go through, that it is effectively a whipped vote and the Tories are backing the repeal of the foxhunting ban?
Chris Grayling
When we say a matter is subject to a free vote, it is subject to a free vote, but of course Labour takes a rather different position.
Gavin Robinson (Belfast East) (DUP)
The Leader of the House appears to take much joy in categorising all Opposition Members in exactly the same manner. As a new Member and a Northern Ireland representative, I assure him that whenever I hold a principled political position, I will stand up for it, I will speak out for it and I will vote on it. It is a shame he and the Government cannot do the same.
Chris Grayling
I have not categorised the hon. Gentleman’s party as anything, and I would not categorise its Members in the same way as some of those who sit alongside them, as they represent a very different political tradition.
Robert Flello (Stoke-on-Trent South) (Lab)
Given that the Leader of the House seems, fortuitously, to have an extra 90 minutes on his hands tomorrow, rather than giving it to the EVEL debate, perhaps he could table a general debate on foxhunting.
Chris Grayling
The hon. Gentleman has clearly not been in the House for the past couple of weeks, when I have been told that we need more time for EVEL. This is an opportunity to have that time.
Susan Elan Jones (Clwyd South) (Lab)
I am sure the Leader of the House possesses some strengths, but I think he is a suburban sort of chap, so may I suggest that over the summer he schedules some time to visit the countryside and ponder what might happen if a few foxes get ripped apart by some hounds in a chase? It normally means that the foxes get killed, which suggests, in my view, that all he is doing is repealing the Hunting Act—and no it is not the same for game and grouse. He just does not understand the issue.
Chris Grayling
I say gently to the hon. Lady, first, that I live in the district of Mole Valley, one of the most attractive country areas in the country, and secondly, that the measures that were due for discussion this week had nothing to do with repealing the Hunting Act.
Jonathan Ashworth (Leicester South) (Lab)
The hundreds of constituents who have been in touch in recent days opposing this change to the Hunting Act will welcome what the Government have done, but will consider the way they have gone about it to be utterly chaotic. If this was designated a free vote by the Whips Office, as my hon. Friend the Member for Hyndburn (Graham Jones) said, why have the Government pulled the vote?
Chris Grayling
The hon. Gentleman has had lots of representations from his constituents, but the Government will take the decisions we think are in the best interests of the country and what we are trying to achieve, and that is what we are doing.
Points of Order
Robert Flello (Stoke-on-Trent South) (Lab)
On a point of order, Mr Speaker. Thank you for kindly allowing the House to respond to what became a supplementary business statement, but had it been advertised as such, many more Members would have been here wishing to take part. For guidance, would it be possible to have a further supplementary business statement tomorrow to allow other Members to put similar questions to the Leader of the House?
Mr Speaker
The short answer is no. It is up to Members to be in their place and to take their opportunity. I believe there will be a business question on Thursday, and I merely encourage other right hon. and hon. Members in all parts of the House, whatever subject is of interest to them, to display the same perspicacity as the hon. Gentleman.
Mr David Hanson (Delyn) (Lab)
On a point of order, Mr Speaker. Will you take this opportunity to remind the House that statements should be made to the House? I first heard this news on the BBC website. It is not appropriate that Members hear news affecting hundreds of their constituents in such a way. Constituents, whether for or against hunting with hounds, have taken a great deal of time to email their Members of Parliament, and to hear about it from BBC News was not appropriate.
Mr Speaker
It is certainly right that statements should be made first to the House. However illustrious the British Broadcasting Corporation might be, it does not deserve to hear of such matters before elected Members of Parliament. Statements should certainly be made first to the House.
Bill Presented
National Insurance Contributions (Rate Ceilings) Bill
Presentation and First Reading (Standing Order No. 57)
Mr Chancellor of the Exchequer, supported by the Prime Minister, Mr Secretary Duncan Smith, Secretary Sajid Javid, Greg Hands, Mr David Gauke, Damian Hinds and Harriett Baldwin, presented a Bill to set a ceiling on the main and additional primary percentages, the secondary percentage and the upper earnings limit in relation to Class 1 national insurance contributions.
Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 54) with explanatory notes (Bill 54-EN).
Civil Enforcement Officers and Traffic Wardens (Integration of Duties and Powers) (England)
Mr Philip Hollobone (Kettering) (Con)
I beg to move,
That leave be given to bring in a Bill to make provision about the integration of the duties and powers of civil enforcement officers and of traffic wardens with respect to the issuing of fixed penalty notices for additional offences; and for connected purposes.
I thank you, Mr Speaker, for granting me 10 minutes to state my case. I also welcome to his place the Under-Secretary of State for Transport, my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones), and commend him for his help and guidance on this complicated issue. I should also mention in dispatches the Under-Secretary of State for Transport, my hon. Friend the Member for Scarborough and Whitby (Mr Goodwill), who has been most helpful and understands the problems the Bill is trying to solve. I apologise to Members waiting for the last day of the Budget debate, but I hope that in the next 10 minutes they will be as interested in, and intrigued by, the parking issues in Kettering as I am. I hope to outline what the problem is and how it might be resolved.
The problem is that street wardens, whose role in life is to enforce important environmental protection measures, do not have the power in law to enforce parking regulations under a decriminalised parking regime. Likewise, traffic wardens, who can issue tickets under a decriminalised parking regime, are not able to enforce against infringements of environmental legislation. The purpose of this Bill would be to allow both sets of wardens to enforce each others’ provisions and therefore, as it were, establish one generic type of warden, who could take action on lots of important issues at street level.
I declare my interest as a current, serving member of Kettering Borough Council. I want to draw the House’s attention to the tremendous work that Kettering Borough Council has done in establishing an effective generic street warden scheme. The council has sought to remove artificial barriers to service delivery by asking its staff to take an holistic approach to their work. An example of that is the way in which the council has created the generic street warden team, which has required officers to take a creative approach to working within existing legislative constraints. Like most local authorities, Kettering Borough Council originally had a series of small teams, each dealing with areas such as car parking enforcement, dog fouling, litter enforcement, pest control and dog warden duties. The council was also gearing up to introduce residents parking schemes across the borough, which it has now done, and it needed a new resource properly to enforce the residents’ parking zones.
What the council did was combine all those functions into a single, generic street warden team, which was able to absorb the new residents parking enforcement work and reduce the overall cost to the combined service, while at the same time hugely increasing its coverage. As a result, the council now has an enforcement presence across all those areas for 84 hours a week, rather than the original 40. That has meant that the council is effectively two and a half times more efficient than it was in enforcing against both environmental and traffic offences. Originally, the council had 10 staff operating from 9 am to 5 pm, Monday to Friday. Now it has a team of eight staff, operating from 8 am to 8 pm— 12 hours a day—seven days a week, providing 84 hours of work. They are able to enforce controls over abandoned cars, stray dogs, litter, off-street car parking, environmental offences, dog waste and fly-tipping, as well as dealing with pest control, supervision of local markets and residents parking.
On-street parking controls—yellow-line parking controls—in Kettering are still provided by the local police, traffic wardens and police community support officers, because the parking arrangements in Kettering have not yet been decriminalised. This peculiar arrangement works extremely well. The residents parking schemes are extremely popular and there is a demand for more of them. They cost only £45 per vehicle per year and up to three vehicles per household are allowed. There are generous arrangements for visitor permits and there is high customer satisfaction, with good value ratings. The enforcement of residents parking zones is provided by Kettering Borough Council’s generic street warden team, which provides a flexible, responsive service, able to handle peaks and troughs, and at a lower cost than the original environmental warden capacity.
The problem in Kettering has arisen because the Government are keen for local authorities to decriminalise their parking arrangements and have asked the county council, Northamptonshire County Council, to look at this. The problem is that if Northamptonshire County Council goes along and decriminalises parking arrangements in Kettering, Kettering Borough Council’s street wardens would not be able to enforce the residents parking that exists in the town. A similar situation will apply to the Minister’s constituency in Harrogate, because Harrogate Borough Council—which I am sure is an excellent local authority—operates civil parking enforcement on behalf of North Yorkshire County Council, alongside Craven District Council and Selby District Council. However, if Harrogate Borough Council wanted its civil enforcement officers for parking to enforce environmental legislation—such as control of litter, abandoned cars, fly-tipping and so on—it would not be able to do so in law. The purpose of my Bill would be to correct that anomaly in law, so that those wardens could enforce each other’s responsibilities.
Kettering Borough Council is extremely keen to ensure that this problem is sorted out before the successful residents parking schemes in Kettering are undermined. I am sure it is not the intention of the existing law to make such residents parking schemes in Kettering unworkable. Ideally, Kettering Borough Council would be happy to see parking decriminalised, with Northamptonshire County Council allowing Kettering Borough Council to enforce the new arrangements, but that would require a change in the law to enable Kettering Borough Council’s wardens to police the new parking arrangements. If the Government are not certain that that correction to the law would necessarily be the right thing, Kettering Borough Council is volunteering to offer itself as a pilot for this new, multifunctional working to apply to the new types of wardens in Kettering, so that the Government can satisfy themselves that the change in the law is required.
If this more integrated option were taken up, it could provide a template that the rest of the country might like to follow, because what Kettering Borough Council is saying is that we can have better enforcement of on-street provisions for environmental offences and parking offences with a smaller number of wardens, operating a larger number of hours, at a lower cost. If that were rolled out across the country as a whole, I estimate that it could save the Exchequer hundreds of millions of pounds, while also providing better arrangements at street level to police all the things that most of us tend to overlook day to day, but which are very important to making sure that a local area functions properly.
Question put and agreed to.
Ordered,
That Mr Philip Hollobone, Mr Stewart Jackson, Mr John Baron, Andrew Rosindell, Mr Peter Bone, Sir Simon Burns, Mr Christopher Chope, Andrew Percy, Mr Nigel Evans and Tom Pursglove present the Bill.
Mr Philip Hollobone accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 11 September, and to be printed (Bill 55).
Ways and Means
Budget Resolutions and Economic Situation
(9 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
18:59 - The House divided: - Ayes: 280 / Noes: 328 - Question accordingly negatived.
19:13 - The House divided: - Ayes: 320 / Noes: 290 - Question accordingly agreed to.
Madam Deputy Speaker (Mrs Eleanor Laing)
I have to inform the House that Mr Speaker has selected the amendment in the name of the hon. Member for Dundee East (Stewart Hosie).
The Secretary of State for Business, Innovation and Skills and President of the Board of Trade (Sajid Javid)
Last Wednesday, the Chancellor unveiled a one nation Budget with one aim in mind: security—the economic security of a country that lives within its means; the financial security of lower taxes and higher wages; and the national security of a Britain that defends itself and its values. Since then we have had almost a week of debate—a week of the Opposition trying and failing to pick holes and a week in which we have had the usual predictions of doom and disaster. It is a familiar story from Budget debates past. In June 2010, the then shadow Chancellor called our approach “a profound mistake” that ran the risk of “derailing the recovery”. Two years later, another shadow Chancellor said that our long-term economic plan had “failed”, although I should add that in the same speech, the former Member representing Morley and Outwood also warned that “after hubris comes nemesis”—a lesson he apparently failed to learn himself. Let us fast forward to 2015, and yet another shadow Chancellor said last week that
“this Budget made the wrong choices for working people”.—[Official Report, 9 July 2015; Vol. 598, c. 481.]
We have heard it all before.
Every year, the Opposition warn of catastrophe around the corner, yet every year Britain’s economy has got stronger. They said our policies would lead to mass unemployment, yet today more people are in work than ever before. They said that economic growth would be strangled; today, our economy is growing faster than any other in the G7. They said we could not bring down the deficit, yet today we are on course to have a surplus by the end of this Parliament. Even the most partisan critics can see that our economic plan is working. That is why, in May, the British people gave us a mandate to finish what we started, which is exactly what this Budget delivers.
Mr David Anderson (Blaydon) (Lab)
While I accept that it is part of political knockabout that the Government say one thing and the Opposition say another, does the Secretary of State agree with external groups such as Parkinson’s UK, which said that the change to welfare benefits will have a debilitating impact on people with Parkinson’s and will do them real harm? Does he think that is part of the political knockabout, or does he accept what it is saying?
Sajid Javid
What I accept is that we need a welfare system that protects the vulnerable and is affordable and sustainable for the long term. As we deal with excessive welfare spending, we are able to strengthen the economy, which means higher wages for working people. I hope that the hon. Gentleman can support that.
Geraint Davies (Swansea West) (Lab/Co-op)
Does the Secretary of State accept that child tax credits are, in fact, work incentives based on the American earned incomes tax credit, and that the reason the cost is so high at £30 billion is that productivity and wages are so low? In particular, there are 800,000 fewer people now earning over £20,000 than there were in 2010. Is that not a complete failure?
Sajid Javid
I think the hon. Gentleman would agree that it is better to have a sustainable welfare system that protects the vulnerable while at the same does not allow companies to get away with paying lower wages than they otherwise were. I hope he supports our national living wage, especially the fact that it means someone working at the national minimum wage today will get at least £5,000 more a year by 2020 because of our national living wage.
A business-led economy in which hard work is rewarded, entrepreneurs are encouraged and aspiration is applauded —that is at the heart of our Budget. Above all, it is a Budget that supports business. For all the rhetoric one hears from politicians, Governments do not create jobs; businesses do. As my right hon. Friend the Secretary of State for Work and Pensions said last week:
“It is only when businesses are thriving that the people of our country can thrive too.”—[Official Report, 9 July 2015; Vol. 598, c. 482.]
It is only a strong and growing economy that allows us to invest in the NHS and schools; and it is only a strong and growing economy that allows us to spend money on protecting our most vulnerable citizens. Anyone who is successful in business should be congratulated and not condemned.
Helen Whately (Faversham and Mid Kent) (Con)
Does my right hon. Friend welcome, as I do, the introduction of a national living wage, which will increase the pay of the worst paid and help make work pay?
Sajid Javid
My hon. Friend is absolutely right. At the heart of the new national living wage is just what she says—it will mean working people earning even more, and it will go on to boost productivity, too.
Aggressive regressive policies that penalise honest labour have no place in the modern world. That is why we have already cut the main rate of corporation tax to 20%, rewarding productive companies and boosting UK competitiveness. It will now fall further to 19% in 2017 and just 18% in 2020, making it the lowest in the G20. More than a million businesses will see their tax bill fall as a result, allowing them to invest more in their staff and facilities.
That is not all. As corporation tax falls, tax allowances for growing businesses will rise. The annual investment allowance will be set at £200,000—its highest-ever permanent level, while the employment allowance will increase by £1,000 to £3,000, cutting employer national insurance contributions still further. By next year, businesses will be able to employ four people full time on the national living wage and pay no national insurance at all. By April next year, we will publish a business tax road map, setting out our plans for business taxes over this Parliament and giving employers the information they need to plan ahead.
From September 2017, working families with three and four-year-olds will receive 30 hours of free childcare—twice what they currently receive. This will help the parents themselves, but it will also get more skilled employees back in the workforce sooner—a real bonus for British business.
David Rutley (Macclesfield) (Con)
I welcome my right hon. Friend’s announcements. In tandem with the enterprise Bill and plans to review self-employment, does he agree that they will help boost the enterprise culture that we Government Members believe is vital to further the interests of our national economy?
Sajid Javid
I agree absolutely with my hon. Friend. Conservative Members have always understood the power and importance of enterprise, while Labour Members have never understood just how important it is to boosting our productivity and making sure that our economy keeps growing and creating jobs at a record rate.
Nia Griffith (Llanelli) (Lab)
The Secretary of State makes great play of the importance of long-term planning. We all understand its importance for business, so what would he say to the company near Chepstow that used to make wind turbines but is now facing closure because of the sudden change in policy by his Government? Is it not sad that this Government, which should be offering certainty to business, are not only changing policy willy-nilly, but leaving a really big question mark over the European Union that is making businesses very jumpy indeed?
Sajid Javid
No one wants to see any company close in Britain, and no one wants to see any of the job losses that would potentially come alongside that. What is most important when changes in the economy affect businesses is a growing economy so that businesses are growing at record rates. We have record high growth as a country among the G7, which is exactly the sort of environment we want so that other companies can continue to grow alongside.
The national living wage will put more money in customers’ pockets. This will deliver a real boost to businesses right across the country, as eight out of 10 people who will see their pay rise live outside London and the south-east of England. These measures will all support growing, dynamic businesses, as we work with them to tackle the economic challenge of our time.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
The right hon. Gentleman has made an intellectual case for what he calls the national living wage, which most people would call a rise in the national minimum wage. Why did the Government not choose to bring in the national living wage? Surely the case he has made is for the national living wage.
Sajid Javid
Perhaps the hon. Gentleman missed last week’s Budget and what the Chancellor said. The Chancellor did introduce the national living wage. Of course it will be phased in over five years, but by 2020 it will be equal to at least 60% of median earnings. It is the national living wage.
Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)
Will the right hon. Gentleman confirm the situation in Scotland for UK Government employees? Will they get his Government’s low national living wage or will they get the living wage that applies in Scotland, which is considerably higher?
Sajid Javid
People will be receiving the new national living wage, as set out by the Chancellor in his Budget. That is a huge step forward, raising the incomes of millions of people throughout Britain. At least 2.6 million people will benefit directly, and a further 6 million will also benefit. I am sure that the hon. Gentleman will join me in welcoming that.
Mr Anderson
The Secretary of State is being very generous. May I ask him what will be the living wage—his living wage—for under-25s and for under-21s?
Sajid Javid
As the hon. Gentleman may know, the new national living wage applies to those aged 25 or older. The statutory wages for younger age groups are already being set by the Low Pay Commission.
The economic challenge of our time is boosting Britain’s productivity. Britain is home to some of the world’s most dynamic businesses, staffed by incredibly talented, hard-working individuals, yet our productivity—the rate of output per hour worked—is well below its potential. Let me put this in stark terms. It now takes a worker in the United Kingdom five days to produce what his or her counterpart in France can deliver in four. There is encouraging news—the British automotive industry is among the most productive in the developed world, with a vehicle rolling off the production lines every 20 seconds—but by and large, in a situation familiar to fans of the England men’s football team, the country that invented modern industry has fallen behind its competitors, and the Germans in particular.
Mr Jim Cunningham (Coventry South) (Lab)
What does the Secretary of State think we need to do in Britain to improve our productivity?
Sajid Javid
If the hon. Gentleman had joined me in Longbridge on Friday, he would have heard me set out the Government’s productivity plan, which I shall come to in a moment.
Productivity is not just some obscure measure that is of interest only to economists. Higher productivity means higher incomes. When productivity rises, standards of living rise too. That is why, as part of last week’s Budget, we published “Fixing the foundations: Creating a more prosperous nation”. It is our blueprint for getting Britain moving, building and growing, and creating the environment that is needed to tackle the productivity gap once and for all.
The productivity plan will support apprentices with a new compulsory apprenticeship levy that requires large businesses to invest in their own future. It will boost skills with a radical streamlining of further education qualifications and the creation of prestigious institutes of technology. It will support infrastructure, with vehicle excise duty paying for a new roads fund, and a plan to put Network Rail and the rail investment programme back on track. It will allow us to invest in innovation, putting nearly £7 billion into the UK’s resurgent infrastructure, and developing our network of Catapult centres for commercialising technology. It will make our world-class universities open to all, removing the student cap and putting higher education on a more sustainable footing. It will ensure that superfast broadband is available to 95% of UK households and businesses by 2017, and it will make it easier for the market to roll out fixed and mobile infrastructure by reforming planning rules on taller masts. It will mobilise the whole of Government behind exporting, working alongside a more effective UK Trade & Investment and building stronger links with emerging markets.
Geraint Davies
I am grateful to the Secretary of State for his generosity in giving way again. Why did the front page of The Economist sum up the Budget with the words “politically astute, economically flawed”? Why did its editorial observe that it was a result of quick fixing that focused not on productivity but on abandoning investment in the railways, not allowing enough easy access to universities, and not raising skill levels and improving infrastructure in order to make Britain strong?
Sajid Javid
Probably because The Economist was published before I launched the productivity plan on Friday.
The productivity plan will strip further red tape out of the planning system, making it easier to build the homes that British workers need. It will rebalance our economy, devolving further powers and responsibilities to the elected mayors of London and Manchester and working towards devolution deals with the west midlands, Sheffield, Liverpool, Leeds and West Yorkshire. It will create open and competitive markets with the minimum of regulation, an environment in which innovative businesses can thrive to the benefit of consumers.
The drivers of productivity are not a mystery; the barriers that prevent it are well understood. What has been lacking in this country for too long is the political will to do something about the problem by making the bold decisions that are necessary to unleash the full potential of British business. That is not lacking any more. This Government have the mandate and the will to deliver lasting change, and that is exactly what the Budget will do.
In the past few days, we have heard Labour’s former Chancellor say that his party lacks “a credible economic policy”. The Leader of the Opposition has attacked our changes in tax credits one day and supported them the next. We have heard the SNP’s economy spokesman, the hon. Member for Dundee East (Stewart Hosie), promise somehow to reduce the national debt while still running a deficit. On the Opposition Benches, economic competence is almost as rare as a Liberal Democrat Member.
Only this Government have the policies and the will to back British business. Only this Government have the foresight to invest in infrastructure and skills. Only this Government will build the homes that the country needs and the economy that it deserves. This Budget does not just fix the roof while the sun is shining. It fixes the foundations too, and I commend it to the House.
Mr Chuka Umunna (Streatham) (Lab)
We gather here today to conclude the Budget debates, but before I dive in, I want to put the Budget in a long-term, global context.
All political parties in advanced economies face the challenge of translating their values into action in an era of change and globalisation. In some circles “globalisation” is seen as a dirty word, but in my view it is wrong to view it as such. We cannot ignore the fact that it has lifted millions of people out of poverty and destitution in developing economies around the world: that is something that we should celebrate. It has also expanded opportunities in advanced economies for some particularly highly skilled, internationally mobile workers. However, globalisation, powered by technological forces, is also displacing and reshaping industry after industry in economies like ours. It has failed to deliver for nearly enough people in middle and lower-income jobs, often destroying jobs that families and whole communities have done for generations.
The nature of work is also changing. More people are becoming self-employed, and more people need to work around caring and family responsibilities. That is not a bad thing, but our systems are not set up to serve those new work patterns so well. Anyone who speaks to a self-employed person about how difficult it is to take out a mortgage, or to a working family about the rising cost of childcare or the challenge of working while also caring for an elderly relative, will see what I mean. Economic policy is about nothing if it is not about the job that people do, from which so much else flows: self-esteem, a sense of security, and the ability to support a family.
The job of Governments, in addition to providing a safety net for those who cannot work, is to decide what policy responses can transform the challenges posed by technology, globalisation, and other changes from obstacles to solutions—solutions to problems related to jobs, growth and competitiveness—today and in the coming decades. That, ultimately, is the yardstick against which we must measure the Government’s Budgets during this Parliament. Do they empower people to get on in an era of globalisation? Do they promote growth and prosperity, at the same time as reducing our debt and deficit in a fair way?
Let me now turn specifically to this Parliament’s first Budget, and the projections for the economy and public finances in the short term. The Office for Budget Responsibility’s growth forecasts for the forecast period are relatively unchanged compared to those in March, although growth has been revised down for this year. The current recovery is real, but it is the slowest on record. The economy is still fragile. If that were not the case, the foot would not be firmly on the floor when it comes to monetary policy levers: the base rate has sat at 0.5% for more than six years. So there can be no complacency on growth. At the same time, we still need to reduce public sector borrowing and the national debt in the wake of the global financial crisis of 2008-09. That crash was triggered by grossly irresponsible behaviour in the banking sector. It caused a recession that precipitated a fall in tax receipts and the debt and the deficit to substantially increase. I will deal with the debt and deficit issues first, because I want to deal in more detail with matters of growth. Ultimately, the best way to reduce our debts is by people earning more and for the economy to grow in a sustainable way.
James Cleverly (Braintree) (Con)
The hon. Gentleman sticks rigidly to the Labour party’s script that it was all the fault of the banking sector, but does he concede that his Government—whether through too little, too much or the wrong regulation—had any part to play in the economic downturn we are now coming out of?
Mr Umunna
First, undoubtedly we should have better regulated the banks during our time in office, but it is worth Conservative Members remembering that the Financial Services and Markets Act 2000 that put in place a tripartite system for banking regulation was not opposed by them at the time—[Interruption.] No, it was not; I have read the Hansard myself. It is also worth noting that, to the extent that we were criticised by Conservative Members, they were saying we were regulating the banking sector too much.
Secondly, I will happily acknowledge that after 15 years of economic expansion we should not have been running a deficit—albeit an historically small and unremarkable one—going into the crash, but again I remind Conservative Members that the average deficit during our time in office before the crash hit was 1.3% of GDP, whereas in the 18 previous years it was 3.2%. It was not that small deficit that caused the increase in the wake of the crash; it was the fall in tax receipts precipitated by the recession.
David Rutley
By anybody’s measure there was a record structural deficit before the crash. That was on the Labour Government’s watch. Will the hon. Gentleman now join others in his party who have had the guts to apologise for creating that huge structural deficit?
Robert Flello (Stoke-on-Trent South) (Lab)
I came into this House in 2005, and right up until the crash, week in, week out Conservative Members were saying in the Chamber and in Committee meetings that we were killing the banks—that we were stifling them with overregulation and we needed to weaken it. I also remember them coming to the House week in, week out saying they wanted more schools and hospitals in their constituencies; they wanted more spending.
Geraint Davies
Does my hon. Friend agree that in the 10 years up to the 2008 banking crisis the economy grew by 40% under Labour, which is how we afforded to double spending on the health service, and that since 2010—when, incidentally, the economy was growing under Labour—the share of the economy that is debt has risen from 55% to 80% because of the Conservatives’ failure to grow the economy and their focus on cuts instead of growth to get the deficit down?
Mr Umunna
I will come on to that right now.
The Prime Minister said in a speech to the CBI in 2010:
“In five years’ time, we will have balanced the books.”
The Government have failed to do that. It is worth revisiting the promises made then before giving the Chancellor the congratulations he seeks now for this 2015 Budget. In June 2010 they set a forward-looking fiscal mandate to achieve a cyclically adjusted current balance by this financial year. It was a rolling target, but no one took the rolling nature of it very seriously, so let us put that to one side. In short, they were saying they would eliminate the deficit by this financial year. In 2010, by their own measure, we were told they would do this, achieving a surplus of 0.3% last year and 0.8% this year. That is what we were told would happen. In the event, the Chancellor completely failed to meet that goal. The deficit came in at 2.4% last year, is forecast to be 1.7% of GDP this year and does not move into a surplus until 2017-18, some three years later than planned on their own measures.
There was also a supplementary target for public sector net debt as a proportion of GDP to be falling by 2015-16. The Chancellor managed to achieve that through some jiggery-pokery with the numbers, namely rapid asset sales in the last Parliament to pay down enough of the debt for his supplementary target to be met. But rushed asset sales mean poor value for the taxpayer, as the disastrous sale of Royal Mail illustrated in technicolour.
It is also worth reflecting on what we were told the debt-to-GDP ratio would be in 2010. It was supposed to fall from 61.9% of GDP in 2010 to 69.4% and 67.4% last year and this year, but debt as a proportion of GDP was 80.8% last year and is forecast to be 80.3% this year.
Mr Umunna
The truth is—I say this to the Chief Secretary—the Government borrowed over £200 billion more than they planned in the last five years. That is more in five years than the last Labour Government borrowed in 13 years. Now they want us to pat them on the back for their failure. I will not do it.
James Cleverly
The hon. Gentleman bemoans rushed asset sales. Does that include the significant sale of our gold reserves under a former Labour Chancellor of the Exchequer?
Mr Umunna
Oh dear; I think I will move on.
Why does all this matter? It matters because reducing the deficit is a progressive endeavour. We seek to balance the books because it is the right thing to do. We will not stand by while the state spends more paying interest every year to City speculators and investors holding Government debt than on people’s housing, skills or transport. It follows that aiming to reduce the national debt in the long term, and running surpluses when the economic circumstances allow and the economy is robust, is the right approach. It means we can free resources to invest in people to help them succeed in an era of globalisation. I would much rather invest in people than spend the £36 billion the Red Book tells us we will be spending on debt interest this financial year.
By the way, I say to Conservative Members that this is in keeping with the history of our party. In our 1964 election-winning manifesto we criticised, as we did in the lead-in to the last general election, “an ever-increasing burden” of debt payment on the country. I note that the Chancellor wants to legislate to make surpluses a legal requirement in “normal times”. In 2010, when the then Chancellor Alistair Darling sought to enshrine in law, in the Fiscal Responsibility Act 2010, a deficit reduction target, the Chancellor said that it was “vacuous and irrelevant.” to enshrine such things in law. The Conservatives now need to explain what has brought about this change of mind.
This recognition that we need to reduce the national debt is why we said before the last general election that there would be efficiency savings and cuts under a future Labour Government. However, we were clear we would achieve this in a fair way—not by balancing the books of the nation off the backs of the poor and the vulnerable. The centrepiece of this Budget was to proceed with further fiscal consolidation, principally by slashing the support which helps—[Interruption.] I ask the Minister for Skills to wait for me to finish my paragraph, and then perhaps he can comment on the national living wage.
As I was saying, the centrepiece of this Budget was to proceed with further fiscal consolidation, principally by slashing the support that, for lower and middle income earners, helps to make work pay, and then by supposedly compensating them with an increase in the national minimum wage, which people such as the Skills Minister have sought to re-badge as a living wage, even though it is anything but. Let me say a few things about that. No one will ever forget how the Conservatives opposed the very establishment of the national minimum wage in the first place. They can say what they like about it now, but no one will ever forget that.
In the lead-up to the election, I received sustained criticism from the Conservatives’ supporters in business about our plans to increase the national minimum wage in this Parliament. People say that imitation is the sincerest form of flattery, and in some senses that is what this is, but there are important differences between what we were proposing to do and what the Government are now doing. First, our national minimum wage increase would have applied to all adults on the main rate. This Government, however, do not believe that anyone aged between 21 and 24 deserves an increase. Having abolished their education maintenance allowance and trebled their tuition fees, they are now saying that when those young people get into work, they do not deserve to earn what everyone else does when they reach adulthood.
Secondly, we would not have punished any adult benefiting from the increase we were proposing by subsequently withdrawing their tax credits. The Government have called this a new deal, but it is a gigantic con-trick. Thirteen million families will be affected by the changes, and the Institute for Fiscal Studies could not have been clearer when it said that it was “arithmetically impossible” for the increase in the minimum wage to make up for the withdrawal of the credits that help people to work.
Let us take as an example a couple, both aged over 25, with two children. Both adults work full time and earn the minimum wage. Yes, they will gain £1,560 from the increase in the minimum wage, but they will lose more than £2,200 next year as a result of the change to tax credits. [Interruption.] I say to the Conservative Members who are chuntering that I totally accept that it would be better for people to be in receipt of a salary that did not necessitate the payment of tax credits to make ends meet, but reforming our economy so that it delivers more highly paid jobs must come first; otherwise, it is the working poor who will suffer.
Let me remind Conservative Members that nearly half the people in poverty in this country are in work. The Government seem to forget that. That is why it is unsurprising that the IFS calls this a “regressive” budget and says that the tax and welfare changes between them will result in poorer households losing out quite significantly, and much more significantly than richer households.
Geraint Davies
Does my hon. Friend agree that the minimum wage increase cannot replace children’s tax credits? If a single man and a woman with two children both went for the same job, which paid the minimum wage, the woman would have greater needs due to her childcare responsibilities. Tax credits provide an incentive for people such as her to work, yet they are being withdrawn. We accept that increasing the minimum wage is a good idea, but this measure will not help business at all, because putting up the minimum wage while removing tax credits will clearly be a disincentive for families to work.
Mr Umunna
That is quite right. The problem with Conservative Members is that they just lump everyone into the same bracket. Anyone who is in receipt of support is told, “It’s your fault. You’re not working.” The thing about tax credits is that they help to make work pay, but that seems to be lost on Government Members—
Paul Scully
The hon. Gentleman mentioned welfare changes. Does he agree with his interim leader that Labour should support a number of the welfare changes that we are proposing?
Mr Umunna
We are very clear that, in principle, we accept the benefit cap. In respect of the overall changes to tax credits, I have just made a comprehensive argument to illustrate the problem with those. This is not just about the overall tax changes. I will come on to talk about the withdrawal of support for students in poorer households, which the hon. Gentleman is going to vote for, and about other matters. It is for all those reasons that we cannot give our overall support to this Budget.
Ultimately, the best way to cut the deficit and the debt is to ensure that we have better-paid jobs, which will increase tax receipts and reduce people’s need for extra support from the state. We are among the countries with the highest incidence of low-paid work in the developed world. We come fifth in the rankings of the OECD economies in that respect. We have to change that by rebalancing and restructuring our economy through the active prosecution of industrial strategies—a term that the Business Secretary seems to have a problem with. Now is not the time to junk the approach that started under the last Labour Government and that his Liberal Democrat predecessor sought to continue. Now is the time to move up a gear on industrial strategy if we are to achieve the necessary rebalancing. I say this because, in fairness to the Government, they started with good intentions and sought to rebalance the economy, with their Liberal Democrat partners, from 2010.
I am happy to acknowledge—and have done so publicly—that rebalancing was something that the Major Government failed to do and that we failed sufficiently to address in office, in spite of our many achievements. Our economy was one with too few savings; it was also too concentrated in too few sectors and regions of the UK, and it was based too strongly on cheap credit. The problem is that the current recovery has those same weaknesses that have plagued British recoveries for decades: productivity growth has been absent, as the Business Secretary mentioned; our export performance remains lacklustre; output depends on private consumption; household debt is rising; regional imbalances persist; and investment in innovation and research and development lags behind that of our competitors. I am not at all convinced that the Budget will reverse those weaknesses.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
Going back to the question of tax credits, does my hon. Friend agree that they gave a boost to employment, and especially to the employment of families with a single parent? Between 1997 and 2010, employment in that group increased by 28%.
Mr Umunna
My hon. Friend makes a very good point.
I want to comment on each element of the rebalancing that the Business Secretary mentioned. The first relates to productivity. We have the worst productivity in the G7, save for Japan. There was some fanfare around the Treasury-BIS co-sponsored productivity plan published on Friday—[Interruption.] Ministers might chunter, but having taken account of that amazing plan, the Office for Budget Responsibility has downgraded its forecast for productivity per hour for next year and the following three years. I am not surprised. Two key ways of increasing productivity are to sort out the skills system, which is simply not doing enough to resolve the chronic skills shortages in our economy, and to boost business investment.
After half a decade of Tory-led Government, the CBI warned in its annual skills survey this week of ongoing skills shortages acting as a drag on productivity. Its deputy director general could not have been clearer yesterday when she said that
“firms are facing a skills emergency now, threatening to starve economic growth. Worryingly, it’s those high-growth, high-value sectors with the most potential which are the ones under most pressure. That includes construction, manufacturing, science, engineering and technology.”
Of course we all want to see more apprenticeships, and we support the proposed apprenticeship levy, but we need to see far more action from the Government to ensure that all those apprenticeships are of sufficient quality to reduce the skills shortage. More than one in five apprentices are currently receiving no formal training whatsoever, and almost four in 10 employers do not regard the qualifications they are providing as apprenticeships, even though the Government deem them to be apprenticeship qualifications. Also, there are simply not enough people doing qualifications at level 3 and above.
Mr Jim Cunningham
It has always been generally accepted that, at a time of economic downturn, we should train people with the skills necessary to bring about the upturn. I have never understood why that was not undertaken sooner in this country. Germany has been doing it for many years. Why has it taken until now for the Government here to recognise that?
Mr Umunna
That is a good question, but in fairness I do not believe that there was consensus among employers that that would help increase the number and quality of apprenticeships. There is growing consensus in much of our manufacturing sector in particular—I know that my hon. Friend represents a constituency with a wonderful manufacturing tradition and history—that they must go down this route to prevent those who are not providing training in the different sectors from freeloading.
Mr Cunningham
I have worked in manufacturing, unlike the Secretary of State, who had a crack earlier about visiting Rover. I have not only visited the factories, I have actually worked in the factories. One thing we did when I was involved in the trade unions to try to encourage employment, and particularly investment, was to get the companies to invest, as in a recession the first thing that happens is that training budgets are cut.
Mr Umunna
My hon. Friend makes a very good point. While I am on the subject of apprenticeships, it is worth remembering that the number of apprentices still not receiving the legal minimum wage is alarming. According to the Government’s recent apprenticeship pay survey, 15% are not receiving the appropriate minimum wage, rising to 24% for young apprentices. If we want more young people to study the science, technology, engineering and maths skills that we need them to study, taking away the maintenance grant from the poorest who want to study those subjects at university is hardly the way to encourage that. The Government are taking a huge gamble that that policy will not deter students from lower-income households from going to university.
Catherine West (Hornsey and Wood Green) (Lab)
Does my hon. Friend agree that cuts to further education of up to 24% could undermine the good idea of the employment levy? That is the glue that holds the whole thing together.
Mr Umunna
That is a good point. The cuts that the Government are making in FE are already having a hugely negative impact, not least in the college that the Secretary of State attended.
To go back to undergraduate student financing, I note that the Government are switching from student grants to loans, but that simply dumps more debt on students. In the end, that is debt that, along with the loans taken out to pay tuition fees, will end up in the hands of the taxpayer. It is estimated, according to House of Commons Library figures, that that will add £280 billion to the national debt and we have heard no solutions from the Government to address that.
In the 2011 plan for growth, the Government told us to judge them not only against their achievements on skills but on whether they helped to deliver a substantial boost in business investment. Clearly, we must address that, because, as I said, our performance lags behind that of our competitors.
Mr Anderson
The Secretary of State said that the Government were working on a one-nation basis. Young people in this one nation are being deprived—they are being denied maintenance grants, will lose housing benefit and will not be allowed the proper living wage or minimum wage, yet they are supposed to be able to make their way in that one nation. Is that not nothing other than a two-nation strategy from the Conservative party?
Mr Umunna
My hon. Friend is right to draw attention to the assault on the aspirations of young people all the way from school to when they get a job. We remember that the Government stopped the Building Schools for the Future programme, which helped to give our young people a decent place to work. The Government took away the education maintenance allowance when people got to college and trebled their tuition fees when they got to university. Now, when they leave university the Government tell them that they should not earn as much as everybody else and that they will not extend the increase in the national living wage to those under 25.
Let me return to research and development. Although I welcome putting the annual investment allowance on a more long-term footing and the corporation tax changes, which also help, I would ask Ministers, who have suddenly perked up, this: where was the action on business rates for small businesses in this Budget? They create two thirds of private sector jobs, so where was the news for them?
Reducing the tax burden is all well and good, but in order to invest people need to be able to raise the finance to do so. According to the Bank of England, net lending to small firms has fallen by more than £1 billion in the past year and it continues to be an issue. Towards the end of his time in office, the Secretary of State’s predecessor joined us in championing a state-backed investment bank and put in place the British Business Bank, which we support. Now that he is no longer in post, and with the Government flogging off the Green Investment Bank, the British Business Bank has had no guarantees of future funding in the spending review and faces an uncertain future. I note that there was just one mention of it in the Red Book. I am happy to give way to the Business Secretary if he wants to answer this question: can he confirm today whether the Government plan to sell off the British Business Bank, too, and can he rule out doing that in this Parliament? The silence is deafening.
Let me turn now to infrastructure. We must end the dither and delay in making decisions on projects that not only increase our productivity but iron out regional imbalances and help people travel around in a more cost-effective way. In the Red Book, we are told that the Government believe that a modern infrastructure network is vital, so why, having commissioned the Davies report on aviation, do they appear to be locking themselves into a holding pattern right through until the autumn before coming into land and making a decision on this important matter? Our aviation industry employs hundreds of thousands of people, contributes more than £50 billion to GDP and pays the Exchequer more than £8 billion in tax every year. We have been clear that we will make a swift decision on this matter in the national interest. If the commission’s proposals to build a third runway at Heathrow can meet our tests, including consistency with our climate change obligations, we will take swift action to back them. I suspect that the Business Secretary agrees with me and all I say to him is that he needs to face down the opposition arising in Cabinet and do the right thing.
As for the regional growth policy, there has been a lot of chat about the northern powerhouse, so let me make a few observations. We cannot build a powerhouse if there is no power to connect our northern cities. The decision to shelve northern rail electrification, such as for the TransPennine Express route between Manchester and Leeds, was a kick in the teeth to the areas and regions of the north, and plans for a northern Oyster card do not make up for it. If I have one criticism of the Government’s overall approach to devolution, it is that they should be seeking to make every region a powerhouse rather than simply having a northern powerhouse.
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. Before the hon. Gentleman gives way any more times, I should draw his attention and that of the House to the fact that a very large number of colleagues wish to speak in this important debate. The hon. Gentleman has taken well over half an hour of the time so far, in contrast to the Secretary of State—[Interruption.] Order. I hope that the hon. Gentleman will bear that in mind before considering taking further interventions.
Mr Umunna
I think my generosity in taking interventions perhaps got the better of me, Madam Deputy Speaker.
Let me finish by dealing with trade. In 2010, we were promised that an export boom would fuel the recovery. The Government set a target of tripling exports to £1 trillion by 2020 and getting 100,000 more small businesses exporting. What has happened since? The current account deficit widened to 5.9% of GDP last year —the largest peacetime deficit since at least 1830 according to the OBR. Frankly, I am not surprised given the degree to which we have seen various initiatives fail. Ministers have to sort out what is happening at UK Trade & Investment. UKTI’s own surveys show that more than a quarter of businesses that use its services saw no business benefit in doing so, and it is little wonder when we consider the range of different schemes and the failure to command the attention of Ministers. Records are not even kept of the trade missions that Ministers go on.
We are a great country. We have a great history and great people. We have a tradition not only of ensuring that those who can get on are able to realise their ambitions and aspirations, but of looking after those who cannot. That is one of the big problems with the Budget: it is unfair and regressive. Ultimately, if we really want to get the economy powering on all levels, we have to ensure that our people have the wherewithal and the tools to do that, particularly the skills and business investment needed, but they come up short as well. This Budget is unfair and not equal to the challenges we face as a country, and that is why I ask all hon. Members to support us in opposing the Budget today.
Rishi Sunak (Richmond (Yorks)) (Con)
It is a privilege to be called to speak in this debate, Madam Deputy Speaker, and a pleasure to follow the hon. Member for Streatham (Mr Umunna).
There is much to commend in this excellent Budget, but to me one conclusion stands out: that by the end of this Parliament, under this Government, Britain will live within its means. No more irresponsible borrowing. No more spiralling debt at the taxpayer’s expense. No more passing the debt to the next generation. I was delighted to hear the Chancellor’s plans for this nation finally to run a budget surplus.
I have spent my career in business. Every company I have been involved in sets a budget, as indeed does every household in this nation, and when they do they operate with these basic principles: first, “How much is coming in?” and only then, “How much can I spend?” For too long, Governments have got that back to front, spending first, ignoring how much is coming in, then letting borrowing endlessly make up the difference.
Coming from a financial background, I decided to spend some time analysing our nation’s fiscal history. I wanted to know, when it comes to our Government’s revenue, how much does in fact come in. I can tell the House that, since 1955, tax receipts, with limited variation and remarkable consistency, have averaged 36% to 38% of GDP. In spite of the vast differences between Labour and Conservative Members in our approach to setting tax rates, the average tax take has been remarkably similar under Governments of both parties. There appears to be a natural ceiling to what any Government can extract from the pockets of its hard-working taxpayers.
That to me suggests a simple conclusion: in normal times, public spending should not exceed 37% of GDP. That is the best estimate of our income as a Government and therefore the best guide to what we can afford to spend. So the Government’s plans to get public spending to that level are not, as some Opposition Members have suggested, an ideological crusade or clever politics; rather, tackling excessive public spending is simply the sensible, logical and responsible course of action. That action, taken to make sure that we live within our means, is the same course of action that any business or household would take when presented with the facts. We all know what happens when those facts are ignored: more borrowing, more debt.
Catherine West
The hon. Gentleman makes a good point about debt. Does he agree that a graduate in social care from London Metropolitan University with personal debt of £54,000 not only has a personal problem on her hands, but represents a long-term national problem for us, because in the end we will have to pick up that debt?
Rishi Sunak
It is clear that university graduates’ earning power is raised. It is hardly fair to ask people working hard without the benefits of a university degree to pay for the earnings of someone in the legal profession or the City who is earning a great deal. That is why this Government created a progressive system whereby those who earn more pay more back and those who do not pay just a fair share.
Rishi Sunak
I would like to make some progress. As you said, Madam Deputy Speaker, many people wish to speak.
All debts need to be repaid, with interest. For the next generation, that means higher taxes or less money to spend on public services. As the hon. Member for Streatham said, we already spend more money on debt interest than we do on the police, transport or housing. That simply cannot go on.
Whether one is a Thatcherite or a Trotskyite, the rules of budgeting are the same: one cannot sustainably spend more than one earns. I commend the Chancellor for acting on that principle and ensuring that Britain’s finances will once again be back in the black.
Michelle Thomson (Edinburgh West) (SNP)
I beg to move an amendment, after “importation”, insert
“other than in relation to Police Scotland and the Scottish Fire and Rescue Service”.
The amendment stands in the name of my hon. Friend the Member for Dundee East (Stewart Hosie).
On this final day of the Budget debate, we have heard a great deal about debt and deficit, the Budget itself, and the recently released productivity plan. All the Scottish National party Members have listened with sadness to the planned cuts, which strike fear into our hearts and those of our constituents. I have found myself reflecting a great deal on it—both the conflict of moral principles and the economic madness I believe is contained therein. Called out by the Institute for Fiscal Studies, this Budget is described as having
“benefit cuts at the centre”;
and as a “tax-raising budget”, the IFS gives the stark warning that,
“unequivocally, tax credit recipients in work will be made worse off by the measures in the Budget on average”,
and that ultimately it is a “regressive” budget.
We are supposed to believe that the smart economic choice is for the UK to eliminate any deficit, pay down all debt, and run—and then sustain—a surplus. We are fed the yarn that an economy must be in surplus; that the gain is worthy of the pain. Despite the concerns of Robert Chote of the Office for Budget Responsibility, who described the plan—somewhat euphemistically—as “ambitious”, and the concerns of 77 leading economic academics, the Chancellor has ploughed on regardless. Now, I know that a degree in history—or, for that matter, one in music—does not equip one with an instinctive understanding of cause and effect, supply and demand or even so-called Micawber economics for that matter, but history does teach us about previous economic choices, and that ability to look back provides real accuracy. We know how the Chancellor’s previous predictions failed to meet actuality, and we know that the much vaunted current growth has taken place only over the past few years.
A number of issues concern me today, one of which is levels of personal debt. The OBR predicts household debt going above the levels of 2008 and reaching an incredible 173% of GDP by 2019. That household debt figure excludes mortgages but is based on unsecured lending such as credit cards and store cards and, with increasing frequency, payday loans. Fundamentally, it contributes to a very real risk of a repeated debt crisis as a direct result of the cuts. We have seen a consumption-led crisis before, yet here it is planned again. I quote the Chancellor, who said:
“This growth is driven by stronger private consumption”.—[Official Report, 8 July 2015; Vol. 598, c. 322.]
There is a small mention in the productivity plan about championing enterprise by stimulating finance for small and medium-sized enterprises—but what and how specifically? Simply privatising RBS with the mantra “private equals good” is frankly not good enough. A lack of access to liquidity remains the biggest single issue for small business, while at the other end of the spectrum large businesses stockpile their cash. It has been asked before but is worth reiterating: where is the support for the challenger banks? The cut in corporation tax has been trailed as encouragement for businesses to invest, but there is no clear link or evidence to suggest that will happen. I would have thought that I would have been intervened on by now to ask what within the Budget I agree with, and I confirm that, although I am disappointed with the cut in the annual investment allowance from £500,000 to £200,000, it is better than what was proposed, which was taking it down to £25,000.
The continued focus on financial services, in which I must declare a previous interest, without rebalancing to improve our exports or manufacturing is a worry, particularly where we continue with the models we have adopted. The New Economics Foundation has expressed the view that the
“United Kingdom has the least resilient financial system among leading industrial (G7) nations. It is unusually large and homogenous, highly interconnected . . . highly complex and highly reliant on funding from the wholesale financial markets”.
I recommend to all Members that they read the foundation’s recent report; its concerns concur with those of many other economists.
The SNP is urging action so that we can end the unfair anomaly whereby Scottish police and fire and rescue services alone are liable for payment of VAT. The proposed change to the Budget resolutions would enable us to introduce the necessary changes to the Finance Bill. Were this unfair and discriminatory situation to be corrected, we could free up an additional £23 million of resource for the Scottish Police Authority and £10 million for the Scottish Fire and Rescue Service—money which, I trust, all hon. Members would agree could provide welcome funds to support the fantastic work that our emergency services do.
Our calls for an end to this anomaly have gained cross-party support in the Scottish Parliament, and I am disappointed that the Government have so far refused to address the disparity in their treatment of emergency services north and south of the border. I hope that Members will take the opportunity today to take action and put this situation right.
We all agree that this is about choices, and the choice is how we grow the economy. This must fundamentally be by investment. Despite the productivity plan and various Ministers suggesting an increase in capital expenditure, a comparison between the Red Book of July and that of March 2015 shows total capital spend going down through the lifetime of this Parliament. If the Chancellor is unwilling to invest in the UK economy, give us the powers in Scotland and we will get on with the job.
When talk turns to economic and productivity comparisons, we hear a lot about the G7, the group of the world’s largest western economies, with which the UK likes to compare itself.
Roger Mullin
On productivity in the economy, my hon. Friend may be aware that since 2008 and until about 2014, it is fair to say that in terms of productivity per capita the UK has effectively been flatlining, while many other countries, including smaller countries such as Ireland, have seen their productivity rise significantly. There is much to learn from others, is there not?
Michelle Thomson
I thank my hon. Friend for his intervention, and I thank the House of Commons Library for some excellent work on GDP per capita and GDP per hours worked, including in relation to Ireland. I shall come on to that.
Where the UK stands in relation to Germany, France, Italy, the USA, Canada and so on provides some useful benchmarks for relative economic performance. The fact that the UK lags behind its peers on so many key indicators is another, all too sad, story. Last out of the recession, lowest productivity, and lowest GDP per capita growth rates—a record that does not tally with the UK Government’s “back in business” narrative.
Although the G7 provides a useful comparison for the UK, its relevance to Scotland is less apparent. We do not aspire to be one of the largest economies in the world, to strut faded imperial grandeur on the world stage or to maintain the pretence of exerting some kind of global influence, 100 years after the height of the British empire. Our ambitions are different—more modest, some would say; more enlightened, others would call it. In business there is a saying, “Turnover is vanity, profit is sanity.” To be big is not always to be beautiful. Scotland seeks fairness and prosperity for those who live there.
Jeremy Quin (Horsham) (Con)
Given what the hon. Lady said about financial services in this country and how they should be funded, how would she propose to deal with the situation of RBS?
Michelle Thomson
We know that at its heart the sell-off of RBS is an attempt to balance the books, but the issue that I pointed out earlier is that banks such as RBS are still not lending enough to small businesses. That is vital. I referred to challenger banks. I come from a business background and speak to many people. That is what I hear from them about what they consider to be a critical issue.
For us, the G7 has more limited relevance. What we need to know is how we are performing as a medium-sized north-west European nation. Are we doing well, or are there opportunities for improvement? Thankfully, there is no shortage of comparable countries—our very own G7 equivalents, nations with characteristics similar to those of Scotland, but in most cases with far fewer natural resources. Whether we look north to Scandinavia, east to central Europe, south to the low countries or west to our Celtic cousins, comparisons abound among nations of similar size to Scotland. They are medium-sized in global terms, sitting in the middle third of global population rankings, not too big, not too small—the Goldilocks nations. Let us call them the M8, and I do not mean the boring motorway that runs between our two great cities. Those are countries with diverse histories, a range of memberships of international organisations and monetary systems, and varying levels of natural resources, physical geographies and cultures, but in their diversity all providing useful comparisons for Scotland. So how does the UK line up against them?
The M8 countries are among the wealthiest nations in the world. In terms of GDP per head their average has consistently outperformed that of both the G7 and the European 28. In terms of GDP per hour worked, which it is so vital to improve as a measure of productivity, their average also beats that of the G7 and Euro28. M8 countries are all richer than the UK by 25% on average, and the M8 countries are 9% richer per capita than the G7 as well—not a bad place to start, given our ambitions. Our aspiration as a nation is to be the best we can be, not to accept the poor performance and failed austerity agenda of the UK Government, but to look to what can be achieved when we set our sights a bit higher. Perhaps it is time we used the M8, rather than the G7, to frame our aspirations.
Victoria Borwick (Kensington) (Con)
Thank you, Madam Deputy Speaker, for allowing me to make my maiden speech in this important debate. It is a privilege to have the opportunity to speak from these Benches that have borne witness to so much of our country’s rich history.
I would like to begin by paying tribute to my predecessor, Sir Malcolm Rifkind. One of only five Ministers to serve throughout both the Thatcher and Major premierships, Sir Malcolm has a long and distinguished record of service to our country.
A fierce opponent of injustice, Sir Malcolm is not one to be cowed or intimidated. In 1984, as a junior Foreign Minister on an historic visit to Poland, against the wishes of the then Polish communist Prime Minister, General Jaruzelski, Sir Malcolm insisted on meeting the leaders of the Solidarity movement and laying a wreath at the grave of a Polish priest who had been brutally murdered at the hands of his communist oppressors. Sir Malcolm is also a visionary and a forward thinker. Quick to identify Mikhail Gorbachev as someone with whom the west could “do business”, he was instrumental in convincing Margaret Thatcher of the importance of our engagement with the Soviet Union. Above all, Malcolm Rifkind was much admired in the constituency.
Like Sir Malcolm, who as Transport Minister was sent to inspect the early construction of the channel tunnel, I too have had the good fortune to inspect multimillion-pound infrastructure projects. Upon the instruction of my now hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson), I was lowered through a manhole cover to inspect sewers, as part of the re-engineering work for Crossrail. Separately, I have made further visits to inspect the sewers as part of the Thames tideway renewal work. Who says being deputy Mayor of London is without glamour?
While preparing for this maiden speech I dipped into the fantastic resource of books in the Library; I am very grateful for the assistance of the Library team. I re-read my predecessors’ maiden speeches: Sir Malcolm spoke about children with special needs, and incapacity benefit, still topical today. Michael Portillo highlighted what an area of contrasts Kensington is, with some of the most expensive property in the land contrasting with some of the poorest, drawing attention to people living in leasehold property struggling against unscrupulous landlords.
Alan Clark, before Michael Portillo, not only wrote about the delightful architecture of our leafy squares, but spoke about our splendid, robust and diligent local authority, which I am glad to say continues today. I must mention, however, that when my husband was skimming through Alan Clark’s diaries and found my name in the index, he was somewhat concerned. [Laughter.] The story remains untold. I am glad to say that again we were fortunate to have an MP who was a charismatic supporter of Kensington.
Dudley Fishburn, our MP in 1988, reminded the House that it was Sir Brandon Rhys-Williams who argued for people having the right to portable private personal pensions, so I am delighted that this Government have at last made some progress on implementing one of my predecessor’s proposals. I hope that the whole House can empathise with my sense of trepidation in following in the footsteps of such political titans, and in being the first woman to represent the residents of Kensington.
Having come from a family background in engineering, I went into business for many years, becoming a school governor, a campaigner and then a local councillor. As a lifelong Londoner, I was honoured to be elected to the London Assembly in 2008, and in 2012 I was honoured that the Mayor, now my hon. Friend the Member for Uxbridge and South Ruislip, asked me to be his deputy.
Kensington is my home; it is where I grew up, went to school, worked and raised my family. Although I have seen Kensington change over time, I am not quite old enough to have seen the deprivation of the mid-19th century piggeries and potteries, which were some of the most evil-smelling in London, but which have since been transformed into the stylish streets of Notting Hill.
I know many hon. Members are familiar with Kensington. How many have beaten a path with their families to twirl the handles and press the knobs at the Science Museum, to explore the world of the dinosaurs and meet the much-maligned Dippy in the great hall—now the Hintze hall—of the Natural History Museum, and to marvel at the glories of the V&A, to name but a few of our cultural attractions? Twelve million visitors came to our museums last year. Nationally, more people visit museums and cultural attractions than go to football matches.
However, the museums and the streets lined with terraced mansions tell only one side of the story in Kensington. Beyond the affluent stereotype there is a deeper story: the blight of poverty and social isolation afflicts Kensington, too, with some of London’s poorest communities. The constituency is not just for the rich and famous; it is home to a melting pot of constituents who make London the greatest city on earth. I intend to be a champion for all my constituents, irrespective of their backgrounds. It is with this sentiment in mind that I would like to touch briefly on my campaigning priorities.
I have been married to Jamie for over 30 years, and we have four wonderful children. Sadly, our eldest two were born with serious heart defects. Our eldest son spent a year in the Royal Brompton & Harefield hospital. Despite the excellent care, he was left with permanent disabilities. But Jamie and I are great believers in the American maxim, “When life gives you lemons, make lemonade.” We quickly gained a working knowledge of paediatric cardiology and, of course, lifelong disability. I know that I am not alone in this Chamber when I talk about the hours spent by the bedside of a sick child or loved one, or about the toll that being a carer takes. I intend to work steadfastly here with others to represent the needs of the disabled, just as my husband takes up the cudgels for that campaign on the red Benches.
The second issue of vital importance to me is the need to support local businesses, which is topical, given today’s Budget debate. Only by supporting entrepreneurs and small businesses can we help promote jobs and employment. For much of my career I was involved with the art and antiques industry. There are over 7,000 specialist art and antique dealers nationally, offering jobs and employment, particularly in Kensington Church Street and, of course, our famous Portobello Road. As president of the British Antique Dealers Association, I support our trade. We should be working with those small businesses to ensure that we in this House do not impose ill-considered restrictions upon them.
So it is that I come here to fight for the needs of the vulnerable and disabled in our country, and to work with the Government to build on and promote both our small businesses and our national industries, which offer such a valuable contribution to Britain’s growing economy. I welcome the challenge.
Mhairi Black (Paisley and Renfrewshire South) (SNP)
Thank you, Madam Deputy Speaker, for calling me to make my maiden speech in such an important debate. I want first to pay tribute to my predecessor, Douglas Alexander, who served the constituency for many years—I was only three when he was elected. It is for that reason that I want to thank him for all he did for the constituency. I especially commend him for the dignified way he handled himself on what must have been a very difficult election night for him. He did himself proud, and he did his party proud. I wish him the best for the future.
When I discovered that it is traditional for a new Member to speak about the history and legacy of their constituency in their maiden speech, I decided to do some research, despite the fact that I have lived in mine all my life. I am at the tail end of Scottish National party colleagues making their maiden speeches, and I have noticed that they tend to mention Rabbie Burns a lot. In particular, they have tried in their maiden speeches to own him for themselves by claiming some intrinsic connection between him and their constituencies. I feel no need to do that, because during my research I discovered a fact that trumps them all: William Wallace was born in my constituency, in Elderslie, which you will be familiar with, Madam Deputy Speaker.
Beyond the Hollywood film and the historic name, my constituency has a fascinating history, from the mills of Paisley to the industries of Johnstone and the weavers of Kilbarchan. It has a wonderful population with a cracking sense of humour and much to offer, both to tourists and to residents. But the truth is that things are not all fantastic in my constituency. We have watched our town centres deteriorate and our communities decline. Our unemployment level is higher than the UK average. One in five children in my constituency go to bed hungry. Paisley’s jobcentre has the third highest number of sanctions in the whole of Scotland.
Before being elected, I volunteered for a charitable organisation. There was a gentleman there who I grew very fond of. He was one of those guys who have been battered by life in every way imaginable—you name it, he has been through it. He used to come in to get food, and it was the only food he had access to and the only meal he would get. I remember sitting with him while he told me about his fear of going to the jobcentre. He said, “I’ve heard the stories, Mhairi. They try to trick you out and tell you you’re a liar. I’m not a liar, Mhairi.” I said, “It’s okay. Calm down. Go and be honest and you’ll be fine.”
I then did not see him for two or three weeks and became very worried. When he finally came back in, I asked him how he had got on. Without saying a word, he burst into tears—a grown man standing in front of a 20-year-old and crying his eyes out. What had happened was that in order to get to the jobcentre he had needed to use the money that he would normally have paid to travel to the charity in order to get his food. He needed to save the money, so he did not eat or drink for five days. He fainted while on the bus going to the jobcentre due to exhaustion and dehydration. He was 15 minutes late and was sanctioned for 13 weeks.
The Chancellor spoke in his Budget speech about fixing the roof while the sun is shining, but who is the sun shining on? When he spoke about benefits not supporting certain kinds of lifestyles, is that the kind of lifestyle that he was talking about? If we go back even further, when the Minister for Employment was asked to consider if there was a correlation between the number of sanctions and the rise in food bank use, she stated:
“Food banks play an important role in local welfare provision.”—[Official Report, 22 June 2015; Vol. 597, c. 608.]
Renfrewshire has the third highest use of food banks, and food bank use is going up and up. Food banks are not part of the welfare state—they are a symbol that the welfare state is failing.
The Government, quite rightly, pay for me, through taxpayers’ money, to be able to live in London while I serve my constituents. My housing is subsidised by the taxpayer. The Chancellor said in his Budget:
“It is not fair that families earning over £40,000 in London…should have their rents”
paid for
“by other working people.”—[Official Report, 8 July 2015; Vol. 598, c. 335.]
But it is okay so long as you are an MP?
In this Budget the Chancellor also abolished any housing benefit for anyone below the age of 21. So we are now in the ridiculous situation whereby because I am an MP, I am not only the youngest, but I am also the only 20-year-old in the whole of the UK that the Chancellor is prepared to help with housing. We now have one of the most uncaring, uncompromising and out-of-touch Governments that the UK has seen since Thatcher.
I must now turn to those with whom I share these Benches. I have sat in this Chamber for 10 weeks. I have very deliberately stayed quiet and listened intently to everything that has been said. I have heard multiple speeches from Labour Members standing to talk about the worrying rise of nationalism in Scotland. Yet all these speeches serve to do is to demonstrate how deep the lack of understanding about Scotland is within the Labour party. I, like so many SNP Members, come from a traditional socialist Labour family, and I have never been quiet in my assertion that I feel it is the Labour party that left me, not the other way about. The SNP did not triumph on a wave on nationalism; in fact, nationalism has nothing to do with what has happened in Scotland. We triumphed on a wave of hope—hope that there was something different from and better than the Thatcherite, neo-liberal policies that are produced from this Chamber, and hope that these representatives could genuinely give a voice to those who do not have one.
I do not mention this in order to pour salt into wounds that I am sure are very open and very sore for many Labour Members, both politically and personally; colleagues, possibly friends, lost their seats. I mention it in order to hold a mirror to the face of a party that seems to have forgotten the very people it is supposed to represent and the very things it is supposed to fight for. After hearing of Labour leaders’ intentions to support the changes to tax credits that the Chancellor has put forward, I must make this plea through the words of one of their own, and a personal hero of mine. Tony Benn once said that in politics there are weathercocks and signposts. Weathercocks will spin in whatever direction the wind of public opinion may blow them, no matter what principle they have to compromise. And then there are signposts, which stand true and tall and principled. They point in one direction and they say, “This is the way to a better society and it is my job to convince you why.” Tony Benn was right when he said that the only people worth remembering in politics are those who are signposts.
Yes, we will have political differences; and yes, in other Parliaments we may be opposing parties, but within this Chamber we are not. No matter how much I may wish it, the SNP is not the sole opposition to this Government—but neither is the Labour party. It is together with all the parties on these Benches that we must form an Opposition. In order to be effective, we must oppose, not abstain. So I reach out a genuine hand of friendship which I can only hope will be taken. Let us come together; let us be that Opposition; let us be that signpost to a better society. Ultimately people are needing a voice and people are needing help—let us give them it. [Applause.]
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. The hon. Lady has just made an excellent speech—particularly her reference to William Wallace and Elderslie, where I was also born—but the House will show its appreciation in a way other than clapping. [Hon. Members: “Hear, hear!”] The House—[Hon. Members: “Aye!”] Yes, the House can show its appreciation vociferously—just do not clap.
Chris Davies (Brecon and Radnorshire) (Con)
It is a great privilege to stand before you today to make my maiden speech in a such an important debate, particularly as the Chancellor’s Conservative Budget is one of the greatest Budgets of modern times. It is also an enormous pleasure to follow my hon. Friend the Member for Kensington (Victoria Borwick), who delivered a wonderful maiden speech that puts me in a difficult position in following it.
I feel that, as a Welshman, I should—I must—tell the House a little story. I have to admit that this was not the easiest speech I have ever had to write. Many hon. Members might find this surprising, as one’s maiden speech should be the easiest of them all. In many ways it was, but in many others it was rather difficult. You see, since my election, my time in this House has been a total whirlwind. When I arrived in this place, I was given my pass and a laptop and set about meeting a great many people and discovering how this place works. I was rushed off my feet and time never seemed to stop.
That was until I came to write my maiden speech. I sat down at my desk, pen in hand, ready to go, but no words flowed forth. At first, I thought it could be the pressure I felt after listening to so many of my colleagues’ excellent maiden speeches, or the realisation that electioneering was now over and the real work would now begin—but I was wrong. As I looked out of the window at London, I realised that it is almost 180 miles from here to my constituency of Brecon and Radnorshire —the largest constituency in England and Wales, where the distance from Lower Cwmtwrch, below Ystradgynlais in the Swansea valley in south Breconshire, to Llanbadarn Fynydd in north Radnorshire is 85 glorious miles. As I sat in my office, I was a long way from my home in the village of Glasbury in the beautiful Wye valley, and a long way from my family—my wife and my two children. I will be honest—I felt very, very homesick. I wondered what I could do to make myself feel better so I decided to put down my pen and go for a walk; I thought that might make me cheer up and give me inspiration. I left my office and began walking.
The first place I came to was Central Lobby. I looked up and saw the mosaic of St David looking down on me. I smiled and thought of Wales and of how proud I am to be a Welshman—and proud to be a Unionist. I immediately began to feel a little less homesick. I then looked around and saw everybody waiting to meet their Member of Parliament, and I was reminded of my constituents and how honoured I am that they elected me with the largest majority in Brecon and Radnorshire for nearly four decades. I am truly indebted to them for putting their faith in me to represent them, and I will do my utmost to repay that faith by always putting them and their interests first in this House.
I then left Central Lobby and entered Members Lobby, where I encountered the postboxes of Members of this House. I stopped and looked at all the names of current Members and thought of the names of all those who have had their postboxes here over the years. Roger Williams, my immediate predecessor, whom I would like to thank for all of his hard work over the past 14 years, would have had his name here when he was campaigning for lower VAT on the tourism industry—a cause I also intend to champion. Jonathan Evans, my friend and my last Conservative predecessor back in 1992, who served as a junior Minister in John Major’s Government, would have had his name on a postbox. Even Walter D’Arcy Hall, my Conservative predecessor from 1924, whose heroics on the battlefields of world war one won him the Military Cross and Bar, would also have had his name there—though I do hope that my battles in this House are not as ferocious as his on the fields of northern France. As I stood in front of the postboxes, I realised that I too get to walk in their shadows and collect my post as they would have done.
I turned around and saw my Whip coming out of the Whips Office, ready to keep me in order. As he headed towards me, I was reminded of my wife back at home, so I quickly slid into the Chamber. It was there that I saw your Chair, Madam Deputy Speaker. I was reminded that as an auctioneer by trade and an announcer at the Royal Welsh show for more than 25 years, I have some understanding of the role that you undertake, although my time as an auctioneer was in the rural sector, encouraging animals to parade around the ring, preening and prancing and showing off their best sides—of course, that is very different from your role in this House, Madam Deputy Speaker.
Taking a load off my feet, after my thus far long walk, I sat down and took my place on these very green Benches. Looking at their colour, I was reminded of the green fields, valleys and hills of my constituency and of the enormous respect I have for those who farm the beautiful and varied acres that make up the rural counties of Brecon and Radnorshire. I thought of my election to the Select Committee on Environment, Food and Rural Affairs and how I cherished the opportunity to play my part in helping our family farms and young farmers clubs to continue to play a vital role as the backbone of our rural economy.
My eyes continued to gaze around the Chamber and I saw the crests and shields that adorn the walls. I remembered that they represent Members of this House who fell during active service in conflicts past. I was reminded of the armed forces that are based in Brecon and Sennybridge in my constituency, and the courage that those servicemen and women show day in, day out on our behalf.
Thinking about my constituency raised my spirits and I was beginning to feel less homesick. As I sat on the Bench, I listened to the speeches being made from the Government Benches and I was pleased to see so many of colleagues called to speak—and yes, their surnames were Davies. It felt just like being at home. I was reminded of the abundance of Davieses in the regiment of the South Wales Borderers, who won 11 Victoria Crosses in the battle of Rorke’s Drift, which was made famous by the film “Zulu” and brilliantly commemorated by the Regimental Museum of the Royal Welsh in Brecon—an organisation for which I am the resident fundraising auctioneer.
Having listened intently to my colleagues, I began to walk back to my office, feeling in much higher spirits, which only began to rise as I encountered a tour group walking around this beautiful Palace and thought of the excellent tourism industry in Brecon and Radnorshire, which plays host to some of the best events this country has to offer. Many in this place will have come to the Hay literary festival in Hay-on-Wye trying to sell one of their books—I hope that they were successful. [Laughter.] We have the Crickhowell and Talgarth walking festivals, the Llandrindod Wells Victorian festival, the Rhayader and Knighton carnivals and the Royal Welsh show, to which I will be delighted to welcome my right hon. Friend the Prime Minister for the second year in succession next week. Then, of course, we have the world alternative games at Llanwrtyd Wells, which includes the world bog snorkelling championship, where, I have no doubt, many in this House would excel if they attended.
As my walk came to a close, I was feeling much happier. I found myself in Westminster Hall. The glorious old building was full of visitors, staff members and even more tourists, but the people who caught my attention most were the schoolchildren. There were school parties of all ages, shapes and sizes in the hall and, as I climbed the stairs and opened the door to my office, I was reminded of schools in my constituency, including Gwernyfed high school, where I am a governor. Its future is currently under threat unnecessarily. I decided that I would continue to take a proactive role in promoting our schools’ interests to ensure that every child in Brecon and Radnorshire has the opportunity of the best start in life.
I sat down at my desk once more and realised that there were reminders all around me of my constituency, as Brecon and Radnorshire is as much this place as this place is Brecon and Radnorshire. I lifted my pen with a smile, for I no longer felt homesick. In fact, I felt right at home and, with that, my maiden speech was as good as written for me.
Mr Michael Meacher (Oldham West and Royton) (Lab)
It falls to me to comment on the excellent maiden speeches that we have just listened to. The hon. Member for Kensington (Victoria Borwick) made a lovely, warm and engaging speech, with some generous recollections of her predecessor. She need not feel trepidation in following him. We will all remember the emotional and feeling way in which she talked about carers and the disabled. She will make a clear contribution to the House in that regard.
The hon. Member for Paisley and Renfrewshire South (Mhairi Black) made a remarkably confident, relaxed, witty and effective speech. It is not often that a maiden speech in this House makes a strong political case, but she certainly got away with it. I liked her distinction between weathercocks and signposts, with which I wholeheartedly agreed. I think that we will hear a great deal more from the hon. Lady in future debates in this House.
I congratulate the hon. Member for Brecon and Radnorshire (Chris Davies), who again made a warm and generous speech about his first recollections in this place. I am not sure whether his speeches will remain so generous, not least given his early contact with the Whip. It is nice that in some ways, this place reminds him of Wales, his constituency and his roots. I very much hope that he will continue to reflect those things, and I wish him well.
Turning to the debate, all the hoo-hah about the Budget has centred on the £9 so-called living wage in 2020, even though the living wage in London is already £9.35. It is therefore not a living wage at all, but a slightly revamped minimum wage. Nevertheless, it is the macroeconomics of the Budget that really matter—and they are unreservedly depressing. If this is such a wonderful economic recovery, as we are constantly being told, why are average wages still 6% below their pre-crash level seven years ago? Why was the growth rate in the last quarter—the first of this year—just 0.4%, with an annual rate of just 1.5%? Why has productivity been flat for the past five years?
David T. C. Davies (Monmouth) (Con)
Clearly we would all like to see even higher growth rates, but does the right hon. Gentleman not acknowledge that we currently have the highest growth rate in the G7 and that that is a good thing?
Mr Meacher
I would like to ask the hon. Gentleman—although I am not inviting him to come back in—how he would explain the fact that in the latest quarter the growth rate was 0.4%, up from 0.3%. In the last three quarters it has gone down from 0.9% to 0.6%, and then to 0.3% or 0.4%. It was clearly a short-term growth surge, which is now fading.
We all regard productivity as crucial, but the UK’s investment as a percentage of GDP is now among the lowest in the world at barely 14%. By the time depreciation is netted off the growth figure, we are actually down at just 2.5%, which hardly even keeps up with our rising population.
Why does the OBR’s Budget report forecast a never-ending decline in Britain’s share of world exports, even compared with 2014, when this country experienced the biggest proportionate balance of payments current account decline since 1830? Why have the Government squeezed the economy so hard that they are now looking to a steep rise in household borrowing as the main source of future demand? Dangerously, the borrowing level already exceeds £2 trillion and may well be the source of the next economic crisis.
For all those reasons, the Chancellor’s boasts about the state of the economy do not bear even superficial scrutiny. Nor is his explanation of the cause of the economic crisis any more truthful. He continually lambasts the last Labour Government for overspending, but their economic record actually shows the opposite. The largest budget deficit under the Blair and Brown Governments in the 11 years from 1997 to 2008, before the crash, was 3.3% of GDP. The Thatcher and Major Governments ratcheted up budget deficits in excess of that in 10 of their 18 years. Who were the profligate ones? It was not Labour.
Then there is the question of which party has handled better the enormous rise in the deficit, caused by the bankers and the international recession. Again, it is valuable to look at the economic record. Alistair Darling, the last Labour Chancellor, gave the economy a big fiscal stimulus worth nearly 5% of GDP, allowing the automatic stabilisers to work and bringing forward public investment projects worth more than £30 billion.
Robert Flello
Would that be the same Alistair Darling who said that we should halve the deficit between 2010 and 2015, and who was lambasted by the Conservative party for proposing such a measure?
Mr Meacher
My hon. Friend makes a good point, and I will come on to comparing what the Government have achieved with what the Chancellor said in 2010.
Bearing in mind that it takes between 12 and 18 months for Budget measures to work their way through the economy fully, we should remember that Alistair Darling cut the deficit from its peak of £154 billion to just £114 billion by the fourth quarter of 2011—a cut of £40 billion in fewer than two years at a rate of £20 billion a year. The current Chancellor, however, through his successive austerity Budgets, slowed that deficit reduction to a trickle. Today it is still £90 billion, which represents a reduction of £24 billion in three years at a rate of £8 billion a year. If he wanted to reduce the deficit as efficiently and as fast as possible, he has clearly failed. But of course, his real aim all along has been to shrink the state and squeeze the public sector. The deficit has merely been a convenient pretext to enable him to do so.
Now the Chancellor is telling us that he will eliminate the structural deficit by 2019-20. Judging by the fact that he boasted that he would achieve that by this year, when it is still a whopping £90 billion, we can take that with a fair pinch of salt. His Budget forecasts assume a 2.5% a year growth rate all the way to 2020, but with the £25 billion of further expenditure and benefit cuts now being imposed on the economy, we are likely to see a reprise of what has happened in the past five years. The reimposed austerity will flatten growth, exactly as it did from 2010 to 2012, when it was relieved only by postponing austerity to generate a short 18-month economic surge in 2013-14. As I have explained, that surge has now deflated. That pattern is likely to be reproduced in the next five years. I fear that we will have the worst of both worlds—a short-lived growth spurt that fizzles out and is achieved only through a further postponement of deficit reduction extending well into the medium-term future.
The most fundamental question is: what is the right way to deal with a large deficit? We all agree that it is far too large and has to be reduced. It is a statement of the blindingly obvious, but one that is not publicly stated, that there are two ways of doing that—either by cutting expenditure or by increasing income. An individual does not have that option, of course, but the state does, because it controls the momentum of the economy through either expanding or contracting it. The Chancellor chose exclusively to pursue the latter because it suited his political ends of shrinking the state, but economically, it has been dire—the impoverishment of a quarter of the population and the generation of 350 food banks, rather like a third world country, while cutting the deficit by only a marginal amount.
Historically, all the evidence is against the Chancellor. The reduction of large deficits by both the US and Sweden in the 1990s occurred as a result of sustained growth policies. Above all, we have the precedent of Britain in 1945, when the debt was 260% of GDP—three times higher than the 80% it is today. That did not prevent the Attlee Government from introducing the NHS and the welfare state, building 300,000 houses a year, reconstructing the country’s broken infrastructure and, above all, restoring full employment, with the deficit steadily decreasing to 60% over the next 30 years.
The Chancellor has not only failed to cut the deficit by much, but his legacy will be that he fundamentally chose the wrong way to do it, for the wrong reasons, with huge, irrecoverable losses to UK growth and output.
Mr Deputy Speaker (Mr Lindsay Hoyle)
If we aim for speeches of up to 10 minutes, everybody should get the same amount of time.
Luke Hall (Thornbury and Yate) (Con)
I congratulate colleagues on the excellent maiden speeches we have heard this afternoon. My hon. Friend the Member for Kensington (Victoria Borwick) made a passionate speech about the work she wants to do for the House and what brought her here. My hon. Friend the Member for Brecon and Radnorshire (Chris Davies) reminded me, as another Member of Parliament who represents a rural constituency, that the green of these Benches reminds us of home when we are so far away. The hon. Member for Paisley and Renfrewshire South (Mhairi Black) made a passionate speech. I very much enjoyed her signpost analogy and might well use it myself in future.
This was by far the most aspirational Budget I have seen delivered. It speaks to people who want to get up, work hard and get on in life. It promises that work will be rewarded, and seeks to cut taxes and let people spend their hard-earned money as they see fit.
People who work on the minimum wage in my constituency, as I did for a number of years, will take great pride in the implementation of the living wage. I am sure they will also be extremely pleased to know that the Government are clamping down on tax avoidance on a scale never seen before. For those who are successful, who put money away and who want to support the next generation, it is a welcome step that the inheritance tax threshold has been raised.
I should like to discuss the Chancellor’s proposals for devolving Sunday trading hours rules. I am a retailer who has worked in supermarkets since the age of 16. I remember somebody on the campaign trail telling me they would vote for me if I could tell them the price of milk. They were very surprised when I told them not just the price, and how many millilitres were in the carton, but that the barcode was 20076795, and that they could get it mix-and-match with a loaf of bread at best value at the shop round the corner.
I am familiar with the Sunday trading hours rules and they have caused me and other retailers no end of frustration. I understand that there are concerns about the reforms among some smaller retailers and have spoken to a number of retailers in my constituency in the past few days. Many stores are extremely keen for the right to trade when and how they wish, as they already do online, but Stanshawe service station, a local business in my constituency located within a mile of a Tesco, a Lidl and a Morrisons, is concerned that it could lose business to larger stores if opening hours are relaxed.
The Government’s stance is the right one. The internet is a risk to the high street and I want shops to have the freedom to work and innovate wherever possible. I have heard stories of stores doing whatever they can to ensure cash flow by bending the Sunday trading hours rules and serving customers on Sunday when opening hours are restricted. I understand that, in some cases, stores even provide computers for customers to order the product online before giving it to them inside or just outside the store. The stores do not want to break the rules. They simply want to be able to trade freely at times when they know they can sell their goods.
The internet does not rest on a Sunday. In 2011, online sales accounted for just 8.3% of all retail sales. That figure is now at 11.2%. Wherever we can, we must help stores manage that shift in consumer behaviour and for some stores—especially those that serve weekend activity, such as garden centres—Sundays can be the busiest trading day of the week because of the nature of the business. It is right that local authorities can determine the opening hours of such businesses.
Amanda Milling (Cannock Chase) (Con)
Does my hon. Friend agree that we need to find ways to help our high street retailers to adopt online methods of retailing so that they have many ways to reach their customer base?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. When the hon. Member for Thornbury and Yate (Luke Hall) gives way, he should sit down until the intervention has finished, and then he can stand back up. We cannot have two people on their feet at the same time. He should not worry; we are all learning. It is not a problem.
Luke Hall
Thank you, Mr Deputy Speaker.
I absolutely agree that we should do everything we can to support retailers, including the option of trading online. Removing the restrictions on Sunday trading will give consumers and families the flexibility that they need. People who work in small businesses often have Sunday as their day off, because it can be an easy day to manage stores. Current restrictions mean that their first day off—Sunday—is often the least productive and, in the modern world and the retail industry, convenience is key.
I will work closely with local shops in south Gloucestershire to ensure that their voices are heard when local authorities consult on these changes. It is vital that any consultation includes all retailers in any area, and that small shops in the catchment area of larger stores and supermarkets have a strong voice locally in any consultation.
In conclusion, I once again voice my support for the Budget, and I look forward to hearing ones like it in the future. We should support workers by ensuring that work always pays, encourage employers and free the market to provide what the public demand. The Budget delivered the Conservative promise and supports our long-term economic plan to get this country moving forward.
Mr George Howarth (Knowsley) (Lab)
I should start by saying a few words about the three maiden speeches that I have recently heard. All were passionate, witty or lyrical, and one was all three. We will look forward to hearing more from those hon. Members in the future.
I want to concentrate my remarks on young people, especially those in Knowsley. Three years ago I carried out a project over the summer in my constituency. I think we called it, “What young people in Knowsley think”. It is not a very original title, but it summed up what we were trying to do. Without going through the whole process and perhaps spending too much time on an analysis of what we did, I just want to talk about two conclusions that I drew from the questions that we asked some 80 young people.
The first conclusion was that young people in Knowsley are no less ambitious than young people anywhere else in the United Kingdom. Like other people, they want to have their own business, to join one of the professions or to be in the entertainment business. Some of them were remarkably specific about what they wanted to do: one young man wanted to be a diesel fitter in Canada. I never did get to the bottom of that story. In any case, they were all very ambitious.
The second conclusion, however, came from asking the young people what barriers they saw to achieving what they wanted to achieve in their lives. Most of them were between 14 and 18, and it was staggering that at that young age they recognised that in an area such as Knowsley—one of the poorest in the country—the barriers to achieving what they wanted in life were enormous. Some of the barriers were to do with educational qualifications—they thought that they would not get the requisite number of GSCEs to go on to do A-levels or to higher education, and that there was a lack of availability of training in the things they wanted to do.
Others feared that they did not have the right connections to get into professions they wanted to follow. In other words, mum and dad could not buy them an internship in a firm of national accountants so that they could get a head start to put on their CV. I say that not with any sense of bitterness, but at the tender age of 14 to 18 young people in Knowsley already know the limits of their potential owing to the poverty of their background. I am not saying that some will not get out of that—some will—but at that point in their lives they realise that there are enormous barriers to their achieving what they want to do.
What will the Budget do for children and families with children, particularly for those in receipt of tax credits? There are 9,900 such families in Knowsley, compared with the average in English constituencies of about 3,342—we have more or less three times the number. The number of families affected by the changes to tax credits will be nearly 10,000, which is an enormous number. That will have an impact on the children in those families. The percentage of children in families receiving tax credits in Knowsley is 71%, compared with 55% for England as a whole. On top of that—I am grateful to the Children’s Society for these statistics—the Government have allocated just £6.8 million in early intervention funding to Knowsley Council for the current year. That is £10 million less on early intervention than in 2010, yet we know that to overcome the sort of barriers I referred to earlier early intervention support is crucial. Children need that head start at an early age, but fewer resources will be available.
We also know from the Children’s Society that nationally there are 3 million children living in poverty. Some 5,290 of them are in Knowsley alone, of whom 3,840 are living in families who are the working poor. In other words, the families are in employment but they are still classified as being in poverty. I know the Government might like to redefine poverty in such a way that a lot of these statistics fall out of the definition, but there is real poverty in many of those families. We know that from some of the things that have already been mentioned.
For example, two weeks ago I spent Saturday morning collecting food for the Big Help Project food bank in Knowsley. As always when I do that, I am struck by the incredible generosity of people. They were going around Tesco, as it happened, buying their own food and then setting aside one or two bags full of food to donate to the food bank. Other hon. Members have referred to food banks. I am a huge supporter of the Big Help Project and I recognise the necessity of food banks because of the situation some families are in—many of them, by the way, are in employment, not on benefits. I never thought—a number of customers in Tesco made the same point to me—that I would live through a time when we saw families dependent on food banks to feed their children.
Chris Stephens (Glasgow South West) (SNP)
Does the right hon. Gentleman agree that in many communities across the United Kingdom the food bank is the only growth industry?
Mr Howarth
The hon. Gentleman is probably right. In some areas, a food bank has an enormous impact. It is something I honestly never thought I would live to see.
Mr Howarth
I will give way to my hon. Friend and then I will press on, because I know, Mr Deputy Speaker, that you do not approve of interventions in added-on time.
Mr Anderson
Does my right hon. Friend agree that Conservative Members would probably say that going to a food bank is a lifestyle choice?
Mr Deputy Speaker
I do not mind interventions, but I want to ensure that speeches come in below 10 minutes.
Mr Howarth
I shall try my best, Mr Deputy Speaker.
My hon. Friend is right; of course it is not a lifestyle choice. Who would choose a system where they have to get a voucher, turn up somewhere and give it to someone they have never met before in return for food to take home to their family? It is not a lifestyle choice. Of the 7,000-odd people—a staggering number—who have used the food bank in Knowsley, 700 are in employment. It is definitely not a lifestyle choice for them, and I do not think it is for the others either.
In conclusion, I have set out the reality for many children in Knowsley, and Knowsley is not unique—I am not making that argument—but even at the end of it all, what sort of employment opportunities are available? For many, there are zero-hours contracts under which the person does not know when they are expected to turn up for work, or even how many hours they are going to work, and in some cases—I have spoken to people for whom this is the case—the person gets a call at 11 o’clock at night telling them to go 10 miles away to do a two-hour shift in a packaging factory, the first hour’s earnings from which go on a taxi because public transport does not start until after 6 o’clock. Is that the sort of work these children should inherit? I think not. And these are often major international firms. For those not lucky enough to go into higher education, the other option is a rolling contract. That sounds great, doesn’t it? Why would anyone not want to be on a rolling contract? Actually, it means that every now and then the person gets sacked, so they do not have any continuity of employment rights. Sadly, that is the future for many young people, and this Budget does nothing to take away the fear of that future.
Wendy Morton (Aldridge-Brownhills) (Con)
Thank you, Mr Deputy Speaker, for giving me the opportunity to speak in today’s Budget debate, particularly on enterprise and business. It has been an honour to listen to the maiden speeches of colleagues from across the Chamber, each so different, so eloquent and so passionate. I have two lasting memories: the references to Dippy the Dinosaur and—I cannot resist—the “preening and prancing” of animals into the auction ring. They were all really enjoyable speeches.
I am particularly pleased to speak on business and enterprise, not just because I come from a family manufacturing business—we started 25 years ago thanks to the enterprise allowance, introduced by the then Conservative Government, without which we would never have taken that first step and for which I will always be grateful—but because I believe business is at the heart of Britain’s economic recovery.
A main objective of the summer Budget was recognising that business was leading our economic revival. Like other colleagues, I spend time visiting and using local businesses in my constituency, be they the large manufacturers, the small shops and traders in the villages and high street shopping centres, or the farmers. Each business plays a vital part and contributes to our local economy, be it in Aldridge, Brownhills, Pelsall, Rushall or any of our other communities, and each plays a part in securing the economic future of our country. We must never forget that.
We hear much about the plans for the northern powerhouse. As someone from the north originally—my roots are in Yorkshire—I welcome those plans; they are exactly what we need. But let us not forget the west midlands. I believe that the west midlands is the engine room of our economy—the engine room of the future. That is what I will be supporting and fighting for. It will come as no surprise that I am not a mechanic, but I know that a good engine needs to be well tuned. In a similar way, businesses need to be well tuned to keep running smoothly and to keep our economy moving forward. I believe that there are measures in the Budget that will help to make a big and positive difference to businesses in this country.
Back in 2010, corporation tax was a staggering 28%. It was lowered under the coalition Government to 20%, and this Budget sets out further reductions, from 20% to 19% from April 2017 and down again to 18% from April 2020. From April next year, the employment allowance, which gives national insurance contribution-free allowances to businesses, will be extended, from £2,000 to £3,000. That means that a company will be able to employ four people full time on the new living wage without paying any national insurance. These are the sorts of practical measures that I believe help businesses today. They therefore also help local communities—when we help a business, we are helping to create jobs and put money back into the economy.
In 2010, the figure for jobseeker’s allowance claimants in my constituency was 4%. In May this year, it was down to just 1.4%. That does not just happen; it happens because of the economic policies of the Government of the day—a Conservative Government. It is also down to the hard work and the efforts of all those businesses and traders, who work day in, day out, often to keep those businesses going and to support their staff. The Budget will be a strong step forward in continuing to support and encourage business, enterprise, and apprenticeships and skills. We will continue to deliver this country’s economic recovery and security. We will continue to show not only that Britain is backing business, but that we are well and truly back in business.
Before I finish, I want to refer to the welcome news on vehicle excise duty and the fact that we will be putting that money into improving our roads. With my Aldridge-Brownhills hat on, I want to make a plea: please make sure that some of that money really comes down to the local level and that we all feel the benefit of it.
I for one welcome this Budget. It is the right Budget for this country. It is the right Budget for moving us forward.
Jim Shannon (Strangford) (DUP)
It is a pleasure to speak in this vital debate. I commend the three Members who have given their maiden speeches. The hon. Member for Kensington (Victoria Borwick) spoke of her constituency and how we can deal with what life gives us. I commend her for that. The hon. Member for Brecon and Radnorshire (Chris Davies) did not walk too far in the House, but he walked the length and breadth of his constituency, and we appreciate that. The hon. Member for Paisley and Renfrewshire South (Mhairi Black) has just left the Chamber. I am unashamedly a Unionist and I do not agree with the ultimate goal of the Scottish National party, but I tell the House this: I agree very much with many of the issues that she raised, as my speech will reflect. I commend her for her contribution. While she speaks for her constituents, I know that I speak for mine.
There are several issues that I feel must be addressed, as I have already been inundated with phone calls from constituents concerned in particular by the announcement on tax credits. That is a massive issue for me; the mailbag has been enormous. Those who have phoned or written have been worried. There are some pleasing announcements in the Budget—I recognise that—including on defence spending. I am on the Select Committee on Defence and I am pleased that we will be spending 2% of GDP, but is that enough? The Chairman of the Defence Committee has said we should have 3%, and I agree with him.
Sammy Wilson (East Antrim) (DUP)
Does my hon. Friend accept that the 2% on defence spending has been reached only as a result of including expenditure on internal security—it is not pure defence spending—which is a disappointment and, indeed, a manipulation of the figures?
Jim Shannon
I thank my hon. Friend for his contribution. We made the decision in the Defence Committee just today that we will look at this issue. We will thoroughly investigate whether the 2% figure amounts to real money. As I said earlier, the Chairman of the Defence Committee wants 3%, and I want it too.
Another of my concerns is about the national living wage. I also fear for the huge number of small and medium-sized enterprises across the Province and particularly in my Strangford constituency. I have grown increasingly concerned about the large number of people using food banks, to which other hon. Members have referred. Some people in secure employment simply do not earn enough to live, so it obviously goes without saying that wages have to increase. We must help to safeguard the most vulnerable in our society.
The Federation of Small Businesses Northern Ireland claimed that 99.9%—its figures—of employment in the Province comes from small and medium-sized businesses, so naturally this change in wages poses a huge threat to some employers. I am concerned about that. What is the Chancellor going to do about the minimum wage? We welcome it, but what is he going to do to help small and medium-sized businesses to remain profitable and successful. Will some businesses be forced to employ people in the lower-age bracket, and will it demean and detract from what is being put forward?
As for child tax credits, it seems that we are given something on the one hand, but a great deal is taken away on the other hand. It is great to hear that tax-free personal allowances will increase next year. I hope that it will put a little bit of extra money into our constituents’ pockets, but whether it will really help the poorest in our society is debatable.
I find it rather distressing that the Government are virtually saying that by 2017 they will support people if they have two children or fewer, but if they happen to have more than two children, they are on their own. One cannot help but draw comparisons between the United Kingdom of Great Britain and Northern Ireland and the Democratic Republic of China. I am reminded of a quote from the American poet, Maya Angelou, who said:
“I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.”
Clearly, this Government are in danger of adversely affecting the people they are supposed to be standing up for. This change in tax credits and benefits will greatly affect many of my constituents.
The anti-child poverty charity, Barnardo’s in Northern Ireland, has claimed that 160,000 families across the Province could be left struggling if plans to cut tax credits go ahead. Barnardo’s also warned, as it launched a campaign, that the Westminster Government should keep the “lifeline” benefit. Lifeline benefit is rightly named, because that is exactly what it is. With low wages and high living costs stretching budgets across Northern Ireland, tax credits are an everyday lifeline for families. It would be remiss of me not to remind the Government of the impact on families of the reduction or removal of child tax credits and working tax credits. Let me assure the Chancellor and the Minister that people feel extremely aggrieved. Large families feel totally alienated, and people feel they are being punished for having more than two children.
In the last Parliament, the Democratic Unionist party worked alongside the Conservative Government to deliver the marriage allowance. What a breakthrough that was: we encouraged marriage, we encouraged the family. Yet now, one year later, it seems that the Government intend to punish those with more than two children. I find that quite incredible. Last year, the family was the cornerstone of our society, and we agreed that family brought communities closer together; now it seems that the Government have done a U-turn. The Government cannot claim to support the family unit, and then attach terms and conditions to it. We cannot say that we support families so long as they do not go over the two-child criterion—this is simply ludicrous. I have already had many calls from concerned parents, from families and from many of my constituents who are struggling. This reduction in child tax credits is going to make it even more impossible for them just to get by. Unfortunately, this is evidence that the Budget was certainly not designed to help working people in our society.
Another issue that concerns me—this, too, was raised by the hon. Member for Paisley and Renfrewshire South—is the change in housing benefit for those aged between 18 and 21, which will force young adults to live at home with their parents until they are 21. They will have to either “earn or learn”. In principle, that seems a good idea, given that a significant number of 18 to 21-year-olds are either working or still in education, but the fact is that a great many of them are not. All that this measure will do is increase the pressure on social workers, and that concerns me greatly.
The Budget has made some welcome changes, but a great many others will cause the worst off in society to struggle even more. It has been estimated that, in the years leading up to 2019, a 10th of the population in the United Kingdom will lose about £800 a year as a result of the tax and benefit changes. That is equivalent to nearly 7% of their net income. As I have said, I fear that the pluses in the Budget do not outweigh the disadvantages, especially for the most vulnerable and the worst off in society.
It is good to see the economy recovering and growing, but those at the bottom are struggling to see that that is happening. I fear that if the Chancellor and the Government press ahead with their £9 billion saving, reducing tax credits, housing benefit and other benefits and pushing 160,000 more families in Northern Ireland—including families in my constituency—towards child poverty, they will undo all the economic good that has been done. They may well lose sight of it altogether as, once again, the purse strings tighten around those who can least afford to absorb the changes.
Those are my concerns about the Budget, and they reflect the concerns of my constituents. I shall vote against the Budget this evening.
James Cleverly (Braintree) (Con)
According to figures published by the Office for National Statistics in 2014, there are 4,155 businesses in my constituency, but that is almost certainly a considerable underestimate. Many businesses will have started up since the figures were compiled, and many others are not captured by official statistics because they fall below the VAT threshold. Of those businesses, 90% are defined as micro-businesses, having between zero and nine employees. That, too, is almost certainly an underestimate, because it is in the micro-business sector—the back-bedroom business, the converted garage business, the former farm outbuilding business—that we see the most expansion. Those businesses form the cornerstone of the British economy. Other members have rightly spoken with pride about the number of businesses in their constituencies, but it is at that end of the business spectrum, the small and micro-business end, that the largest opportunity for employment growth presents itself.
I was deeply disappointed, saddened and shocked by how infrequently the shadow Secretary of State used the words “business”, “firm” or “company” during the half hour that he spent at the Dispatch Box. The simple truth is that, eloquent as the hon. Gentleman is, and good as he is at using words, the words that he used today were fundamentally flawed. This country is, has been and always will be built on a business foundation, and when the Labour party loses sight of that fact, we are in trouble. I am very proud that my party has presented a Budget with business at its heart.
Paul Scully
Does my hon. Friend agree that what the Chancellor has done is help set businesses free from regulation and lower taxes, whereas Labour tends to add regulation and layers of bureaucracy, which makes it far harder to start and grow a business?
James Cleverly
As is often the case, I am in considerable agreement with my hon. Friend, who I know shares my passion for, and understanding of, small business.
I feel guilty that I have not yet congratulated my hon. Friends on the Conservative Benches who have just made their maiden speeches. I will now set that right. Both of them have strong business backgrounds and credentials—my hon. Friends the Members for Kensington (Victoria Borwick) and for Brecon and Radnorshire (Chris Davies). I almost said “Brecon and Renfrewshire”.
James Cleverly
That would be a big constituency.
I also wish to put on record my huge admiration for the hon. Member for Paisley and Renfrewshire South (Mhairi Black) for her excellent and punchy delivery of what was an impassioned and very well thought-through maiden speech—I have already written a personal note to her. Her maiden speech was more political than I would perhaps have delivered, but it was none the weaker for that.
An understanding of small business is essential if the British economy is to succeed and I am proud that my Government have recognised the significant part small businesses play not just in the economic prosperity of this country, but in its social prosperity. Employment does not just give people the opportunity to pay the bills; it gives them a sense of worth and place, and it is a foundation stone in their lives that enables them to blossom and flourish in so many other areas.
Wendy Morton
Does my hon. Friend agree that small businesses are often not just the backbone of the local economy, but are at the heart of the local community?
James Cleverly
The word “community” is key, because businesses are as much a part of any geographical community as the people who live in it. We lose sight of that at our peril.
Barbara Keeley (Worsley and Eccles South) (Lab)
I feel the need to defend my hon. Friend the shadow Business Secretary, who is being unfairly attacked by Conservative Members. It is being said that he did not even mention business in his opening speech. [Interruption.] I am one of the people on this side of the House who does have a business background; I have a very substantial background in the IT sector, supporting manufacturing industry up and down the country. An extensive section of my hon. Friend’s speech addressed the need to do something about business rates, but there was no answer from the Secretary of State on that point. I think—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We must have briefer interventions.
James Cleverly
I will take it that the hon. Lady misheard the opening of my speech. I did not say that the shadow Business Secretary failed to mention business; I said I was horrified by how seldom he used the words “business” and “firm” in his speech.
Kwasi Kwarteng
The broader point my hon. Friend makes is absolutely right: in the run-up to the election the Labour party gave absolutely no indication whatever that it had the faintest interest in the wealth-creating business part of this country. There was—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The hon. Gentleman has made his speech; I do not need to hear a repeat of it.
James Cleverly
It does not matter what my hon. Friend or I think, or what Labour Members think; what matters is what businesspeople think, and the feedback I had—
James Cleverly
I am running short of time and have been very generous in taking interventions, so if the hon. Lady forgives me I will continue.
The message that came through loud and clear on the doorsteps when I visited businesses in my constituency during the election campaign was that they did not feel that the Labour party understood them or was sympathetic to their plight. The hon. Member for Worsley and Eccles South (Barbara Keeley) asked me specifically about business rates. We are going to have a business rates review—
James Cleverly
I am not a member of the Government. The hon. Lady needs to take that up with a member of the Government. If anyone wants to make me a member of the Government, however, my door is always open.
Small businesses need a tax and regulatory framework that is sympathetic to their needs, but they also need interventions that will unlock their potential. I am unapologetic that I am now going to mention the need for broadband in rural Britain, and I shall continue to mention it almost every time I get to my feet in the Chamber. I recently visited a business in my constituency, ESco Business Services Ltd. It provides services to the magazine industry, dealing with magazine subscriptions and prizes and so on. It is a digitally enabled business, and much of its work is done online. It is in a building in the middle of the countryside, near the picturesque village of Finchingfield. It provides good quality, well-paid local employment, and it relies absolutely on good quality digital connectivity, without which it would be unable to locate where it is. Instead, it would be forced to locate in a nearby city such as Cambridge, or even in London. If we are to spread economic activity in this country away from London, it is really important that we open the door to businesses such as ESco to allow them to locate where the potential employees are, rather than where the broadband is.
I echo the point made about road investment, and I make no apology for once again mentioning the A120, which is sorely in need of attention. My Government understand the needs of small businesses—I am far from convinced that the Labour party does—which is why I welcome the Budget and will be supporting it in the Lobby later.
Mr David Anderson (Blaydon) (Lab)
I congratulate the people who have made their maiden speech today. I particularly commend the very mature speech from the hon. Member for Paisley and Renfrewshire South (Mhairi Black), and I agree with her view that Labour Members and our colleagues from Scotland must form a shared opposition against the Conservatives.
It is well known that British education is among the best in the world. We also know that the more we pay for it, the better it is. And didn’t that show last week, when we saw our Chancellor, the Old Etonian, in action? We are used to the Tories fiddling the figures, but now they are using a new tactic. As well as fiddling the figures, they are misleading by message. Let me give the House some examples. The first, and most blatant, is the renaming of the national minimum wage as the new living wage. That is clearly a farce. It might have seemed to Conservative Members like a real wheeze, a rabbit being pulled out of the hat, but it is nothing other than subterfuge.
The concept of the living wage—the real living wage—has been around for decades. Back in the 1990s, when the national minimum wage was introduced at a level of £3.60 an hour, I led the Unison delegation to the Low Pay Commission, where we proposed a living wage of £4.85 an hour. We made the case that that was the level at which working people would not need wage support from the state. It is on that basis that the proper living wage has been developed over the last two decades.
The farce is that the rip-off Chancellor wants to con our people by pretending that this new living wage is a genuine substitute not only for the national minimum wage but for the present and very worthy living wage. Added to his attack on young people who will be excluded, and building in the appalling attack on in-work benefits, we now have a new basic wage that is nothing but a con. He has not spelt out what he intends to do to support public sector bodies to pay the so-called new living wage. For example, councils have already said that they will have a £1 billion funding gap in paying their in-house workforce and at least a £500 million funding gap in paying the wages of workers contracted in from private sector service companies providing things such as care for the elderly.
Sammy Wilson
Is that not the flaw in the argument that we move the burden of wages from the taxpayer to the employer? First, there is no guarantee that the timing will be correct, secondly, there is no guarantee that employers can make the payment and, thirdly, there is no guarantee that many employers will even bother making the payment.
Mr Anderson
It is absolutely clear that that is the case and that this was nothing other than a political ruse to try to mislead the country and to wrong-foot the Labour party to pave the way for the Chancellor to move from No. 11 to No. 10 Downing Street. It is nothing other than that.
The Government now call this the new living wage, but we have been here before. We were there in the 1980s and 1990s, when the Conservatives tried to pretend that the community charge was not really the poll tax. We have been with them over the past five years as they have tried to pretend that the spare room subsidy was not a bedroom tax. Just as those two ideas have never stuck, the new living wage will not stick. People know that it is nothing more than half of a new minimum wage that blocks out young people in this country.
I want to move on to something else the Chancellor said last week:
“The left will never understand this, but we on the Conservative Benches know that the wish to pass something on to your children is about the most basic, human and natural aspiration there is.”—[Official Report, 8 July 2015; Vol. 598, c. 330.]
Well, he is half right. The left never will believe that providing for the grown-up children of dead millionaires with a bung from taxpayers while poor families and children go hungry is a basic, human or natural aspiration. What is basic is that far too many families face the reality of sending kids to school hungry, and worrying about where the next meal will come from and whether they can afford to clothe and feed their children. Too many families are worrying about whether to keep the house warm or not, and now they are being hit even harder in the struggle to pay their rent. The hit is £60 a week in this city and £120 a week for the rest of us across the nation. When the landlord says, “I want your rent off you,” the tenant has to say, “I’m sorry, I can’t pay the rent this week and, by the way, next week I will pay you £120 a week less than I am now.” I really do not know where those people will end up. That is basic, that is life at the sharp end and that is what is happening in the real world. That is what happens when the children of dead millionaires are prioritised over the children of poor working people. It is an utter disgrace.
Mr Anderson
I certainly will, even though the hon. Gentleman has only been here for five minutes.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I think that I am the judge of how long people have been here. We have already had one intervention from Kwasi Kwarteng and I can assure the hon. Gentleman that he has been here for a lot longer than five minutes, although it might only feel like that.
Kwasi Kwarteng
I promise that my intervention will not last five minutes. Who are the dead millionaires that the hon. Gentleman is talking about?
Mr Anderson
The people who die leaving property worth £1 million. In the past, some of that would have been taxed and now it will not be. Instead, the Government will tax poor working people, people who are on the dole and people who have more than two kids—they can have two kids, but no more.
Let us also consider the deliberate misuse of language by this Government over the past five years. They have replaced the notion of social security with the idea of welfare, yet they pretend to be the workers party. The concept of social security is crucial to the notion of how civilised we are in this country. Social security underpins the lives of working people and is based on the real concept of people being in this together, with a national insurance scheme that we all pay into if and when we can work and a security net that will support us when we cannot work for whatever reason. I know that the Conservative party has spent the past 10 years trying to paint everybody who uses public services or needs social security as a skiver and not a striver, or a shirker and not a worker, to further its own political narrative. That despicable tactic has to be challenged as the poor, the vulnerable, the ill, the young, the women and the disabled people of this country struggle to make ends meet in desperate times. They are the people the Tories are making pay for the economic mess that their friends in the City, the banks and the hedge funds got us into.
At the same time, the Tories are attacking the millions of public sector workers in this country who take care of the nation by freezing their pay for what will become a decade. We have to stop making nurses, careworkers, firefighters, police and other public sector workers pay the price for the failure of the Tories’ friends. Let us acknowledge in the debate about productivity the productivity gains that have been made in the public sector, where far fewer people are doing a lot more.
Mr Anderson
Yes, because I am going to mention the hon. Gentleman in a minute.
James Cleverly
If the hon. Gentleman is so proud of his party’s credentials in relation to working people, perhaps he would like to explain why the working voter has deserted his party for mine and even for the United Kingdom Independence party?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. It might help if I remind people that this is a Budget debate, not an election debate.
Mr Anderson
Actually, less than a quarter of the people of this country voted for the Tory party, and the vast majority of them would not be traditional working people. More than 75% of the people of this country did not vote for the Tory party.
Let us acknowledge that people in the public sector have made great sacrifices. The hon. Member for Braintree (James Cleverly) told us less than five minutes ago about the 4,000 businesses in his constituency. What about the thousands of people who work in the public sector in his constituency, who he never mentioned once? They have not had a pay rise for five years and will not have one for another five years, but they are the people who pay for his businesses to make their way.
Quite frankly, this Budget stinks—it is as simple as that. It is divisive, it is dishonest, it is damaging, and people inside and outside this House know it. It will not be long before they and those of us who really care about this country stand up against it to get rid of it. We have to send a strong message from this House. On Saturday, going on for 150,000 people marched on the streets of Durham saying clearly, “You’ve got it wrong. We’ve got to stand up. We’re not taking any more of this. We’re sick to death of the poor paying for the failings of the rich.” It is time to change the tune in this country.
Paul Scully (Sutton and Cheam) (Con)
It is a pleasure to follow the hon. Member for Blaydon (Mr Anderson), who gave us a more than adequate demonstration of what one might call the Corbynisation of the Labour party. It is an equal pleasure and a privilege to follow three fantastic maiden speeches. My hon. Friend the Member for Kensington (Victoria Borwick) reminded me that I must go back and flick through my copy of the “Alan Clark Diaries”, which I did enjoy. I was not present to hear the speech of my hon. Friend the Member for Brecon and Radnorshire (Chris Davies), but knowing him as I do, I am sure he lit up the House. I look forward to reading his maiden speech in Hansard. I had to go to visit a constituent who is a black cab driver attending a rally upstairs about Uber. Those people are small business people in their own right, and it is important that we take that into consideration. As has been said, the hon. Member for Paisley and Renfrewshire South (Mhairi Black) gave a fantastic maiden speech, and I know we will hear far more of her in the years to come.
For 20 years or so, I have run my own small business—I refer the House to my entry in the Register of Members’ Financial Interests. Being responsible for other people’s livelihoods, going through bad times when one struggles to pay the mortgage and the bills, but also during the good times of real success when one can think, “Actually, that was down to me and my efforts as a self-employed businessman”—those experiences give one a perspective on life, on business life, on working life, on wages and on what it means for people to strive and take opportunities. That is why I welcome so many of the measures that the Chancellor has given us in the Budget, in stark contrast with Labour. In the lead-up to the election, we had what has been described as the heaviest suicide note in history—the Ed stone.
Nia Griffith
Does the hon. Gentleman accept that the Chancellor has tried to imitate one of our policies by trying to raise the minimum wage? He mistakenly calls it a living wage, but it is not at that rate. However, he has not offered any incentives to employers to introduce it, as we were proposing.
Paul Scully
I will come back to the national living wage.
The platitudes on the Ed stone were in stark contrast to the measured policies in the Budget.
Hon. Members can talk about semantics and about whether it is the national minimum wage or the national living wage. What we have seen is a significant—
Christopher Pincher (Tamworth) (Con)
Does my hon. Friend agree that the doubling of the workforce at Jaguar Land Rover from 3,000 to 6,000 in three years is not semantics? Those are real jobs for real people—a real opportunity that we are giving those people, which the Opposition never did.
Paul Scully
Absolutely. I could not have said it better. The number of jobs that we have created and the amount of wages that we are putting in people’s pockets are real measures. With this increase in the national living wage, the Chancellor has put cash in people’s pockets.
Kwasi Kwarteng
This is a pertinent question. For the edification of the House, does my hon. Friend have any idea what happened to the Ed stone?
Paul Scully
No. I believe it was in a London warehouse, but your guess is as good as mine. I think it may be auctioned off as a fundraiser at some point in the future.
The lowest paid people in this country will be more interested in the cash in their pockets than in the semantics being played by Labour. The big leap in the national living wage chimes with me as an employer. A good employer does not scrape around the bottom and pay people the bare minimum. The Chancellor has allowed the lowest paid to get more than that. As an employer, I tend to try and look after my employees, pay them more than the market rate and give them other benefits as well, to make them feel valued. In that way an employer gains loyalty and has people who want to work with him as a career, rather than as a job.
We have increased the employment allowance by 50%, which will help ease the burden on employers. A couple of months ago I was at an independent shop in Cheam, Dragonfly. I was speaking to the proprietors with an Evening Standard journalist. When we talked about what the Government have done over the past five years, they explained that they had benefited from the small business rates relief, which enabled them to pay very little, if any, business rates. They also explained that they had benefited from the employment allowance. The fact that they knew that term floored the Evening Standard reporter. The employment allowance, they explained, had allowed them to take the gamble of taking on a part-time worker when times were tough financially—a gamble, they went on to explain, that had worked out for them and helped them grow their business.
John Mc Nally (Falkirk) (SNP)
The hon. Gentleman will be aware that small businesses up and down the country, especially those in the construction industry, are struggling to stay afloat due to incomplete payments. Does he agree that a voluntary approach will not work and that tougher sanctions should be available so that small businesses can spend less time chasing debt and more time creating economic—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. If the hon. Gentleman has such a long list, he ought to do it in two bites, not all at once.
Paul Scully
The combination of measures—paying the lowest paid more and softening the cost to employers with the increase in employment allowance— will help businesses solve that problem themselves.
The Budget is only one part of helping to build growth and productivity. It is the Whitehall part, but we also have the town hall part. We need to look at our changing high streets and at issues such as parking. For example, Ross’s Fruiterers in Worcester Park is a real centre of the community—my hon. Friends the Members for Aldridge-Brownhills (Wendy Morton) and for Braintree (James Cleverly) made similar points—because everybody knows Ross Nelson and uses his business as their local shop. The key issue for him is parking, as it is for hundreds of shops and small businesses in Sutton and Cheam and Worcester Park. He needs stop-and-shop parking so that his delivery vans can come and go. That is a matter not for the Chancellor, but for the local authority and Transport for London, so we need to work in partnership.
The third part of the jigsaw is businesses themselves. As we heard earlier, Governments do not create jobs; businesses do. Having been a businessman for 20 years, I feel that, in becoming a politician, I am a poacher turned gamekeeper. However, I still believe that business people are far better placed than any politician to solve the problems faced by retailers dealing with changing high streets or by small businesses trying to attract more customers and grow. Members will remember Ronald Reagan’s remark that the nine most terrifying words in the English language are, “I’m from the Government and I’m here to help.”
Christopher Pincher
I am obliged to my hon. Friend, who is being generous in giving way. Of course, the Labour party was never there to help business when it was in government, because it introduced regulation after regulation. Is not regulation bad for business, and should not the Government—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Mr Pincher, you should have applied to make a speech, rather than making these long interventions. The problem for Mr Scully is that he is coming to the end of his speech, because I said that Members should speak for up to 10 minutes, not beyond.
Paul Scully
Regulation is a key issue for businesses.
I will conclude with the welcome news about the cut in corporation tax. Having inherited a rate of 28%, bringing it down to 20% and now 18% will release £6.6 billion for companies to put back into their businesses to help improve jobs, training and productivity. It is really good news for big businesses in Sutton such as HH Global and Subsea 7, and for small businesses such as Sense Communications, Press 2 Dress and Brasserie Vacherin, which is a fantastic restaurant in Sutton. Some 40% of residents in my borough commute to London, but those sorts of investments help deliver a local option to allow them to work closer to home.
Finally, I echo the Chancellor’s words, which really chime with my Conservative guiding principles, about moving from a low wage, high tax and high welfare economy towards a higher wage, lower tax and lower welfare economy. That is why I very much support the Budget.
Neil Gray (Airdrie and Shotts) (SNP)
Thank you, Mr Deputy Speaker, for calling me to make my maiden speech in this most important of debates. It is a pleasure to follow all the excellent maiden speeches we have heard this afternoon, particularly that of my hon. Friend the Member for Paisley and Renfrewshire South (Mhairi Black). She has just graduated with a first-class degree in politics. I suspect that her first-class speech will be read by generations of her successors as political students. It was brilliant, powerful and moving. In line with the Scottish National party being in trend in this place, my hon. Friend is now trending on Twitter.
I rise sharing some of the trepidation described in the maiden speeches of many of my predecessors, including the former Leader of the Opposition, John Smith. The fact that he was humble enough to share his nervousness fills me with hope for the next few minutes. If I can be half the parliamentarian and constituency representative that he was, my constituents and I will be doing well.
I owe a huge debt of gratitude to a number of people for helping me to my place here today: first, my brilliant campaign team, led so ably by Graham Russell and Michael Coyle; my Scottish Parliament counterpart and former boss, Alex Neil, who first encouraged me to stand, and whose example I wish to follow; and my family, particularly my wife Karlie and baby daughter Isla, who are a constant source of love and support. It will not be standing up to this most right-wing of Tory Governments or, indeed, standing up for the good people of Airdrie and Shotts that I will find most challenging over the next five years; it will be missing my family when I am here. I am sure that is a sentiment shared by many others in this House.
Lastly, I am incredibly grateful to the 23,887 people who voted for me on 7 May. Fifty-four per cent. of voters in Airdrie and Shotts voted for an end to austerity, for the Scottish Parliament to receive the full package of powers promised last year, and for an end to the immoral and financially obscene Trident nuclear fleet. While I am incredibly grateful to those who took journeys of varying difficulty to arrive at the decision to mark their cross next to my name and that of the SNP, I want to make it clear to everyone in Airdrie and Shotts that I am here to represent you, no matter which way you voted or if you voted at all. The SNP won a decisive victory in Scotland because we put forward a credible alternative to austerity and we are recognised as the party of and for all of Scotland.
This result was many decades in the making. We must not just be thankful for the work done by the First Minister and by my right hon. Friend the Member for Gordon (Alex Salmond); we must also thank the giants whose shoulders we stand on. One of them comes to mind more than most for me personally. As I prepared this speech, and as I go about my business pursuing the various issues I plan to in this place, I am truly sorry that I cannot seek the wise counsel of my friend Margo MacDonald. Her experience here, of the Parliament up the road, and of life in general would have given all of us, as new SNP Members, valuable guidance. It would also have been great to tease her about gaining only a 26.7% swing in her 1973 Glasgow Govan by-election, but I would have needed to be prepared for the inevitable stinging but witty rebuke that would have followed.
I must take this opportunity to pay tribute to my most immediate predecessor, Pamela Nash, with whom I shared a positive election campaign. When Pamela took her seat in 2010 she was the baby of the House, at just 25—a veteran compared with my hon. Friend the Member for Paisley and Renfrewshire South. Her election was none the less a fantastic achievement. She went on to represent her constituents to the very best of her ability and championed the cause of those with HIV/AIDS around the world through her position as chair of the all-party parliamentary group on HIV and AIDS. I wish her well for whatever she chooses to do with the rest of her career.
Pamela Nash regularly spoke of her pride at representing Airdrie and Shotts, and I am equally proud and humbled to be here to represent the good people of this constituency. Airdrie and Shotts sits either side of the M8 motorway between Edinburgh and Glasgow and stretches from the Airdrie town boundary, with Coatbridge in the west through to Harthill in the east. To the north are Greengairs, Wattston, Riggend, Longriggend, Stand, Glenmavis, Plains, and Caldercruix; to the south are Holytown—the birthplace of Keir Hardie—Calderbank, Chapelhall, Salsburgh, Newmains, Bonkle, Allanton, Hartwood, and Shotts, which I hope will receive town status from North Lanarkshire Council very soon.
It is a constituency dominated by heavy industry. Communities have literally been forged by mining, steel and iron. The grit, determination and common weal needed for workers, their families and communities to make ends meet has lived on from those days and I am proud to represent people who are warm, generous and welcoming. You need only look at the incredible work done by Airdrie Supporters Trust, Getting Better Together in Shotts, Shape up Shotts, the Moira Anderson Foundation, HOPE for Autism, Basics food bank, St Andrews Hospice, Airdrie food bank and many more brilliant community groups who are supported by the kind-hearted people of my constituency to know that the people I represent are as honest and generous as they come.
Looking back on the maiden speeches of some of my predecessors, I was struck by the fact that there was a consistent theme running through them all, and that is how we treat those who are disadvantaged and living in poverty in our society. In that vein, as I look to address this Chancellor’s Budget statement, I must quote what Margaret, or Peggy, Herbison said in her maiden speech on 17 October 1945:
“I realise that I have chosen a subject upon which one cannot be at all non-controversial.”—[Official Report, 17 October 1945; Vol. 414, c. 1281.]
This Government are plotting a path of social engineering with this Budget and by continuing their ideological austerity agenda. For example, saying that families on low wages can receive support for only two children is outrageous. As my hon. Friend the Member for Glasgow Central (Alison Thewliss) pointed out, the fact that there needs to be a form for the victims of rape to “register” their child highlights everything that is wrong with this policy. It is stigmatic, demonising and utterly degrading.
Further cuts to social security will hit not only the poorest and most disadvantaged people in our society, but ordinary working families. The Tories plan to freeze working-age benefits for the next four years, which will fail to protect social security against rises in the cost of living. They also plan further to marginalise young people by scrapping support for those who are under 25 and under 21.
The Government must recognise that they cannot threaten, demonise and sanction people into work. After seven years working on casework in Airdrie and Shotts, I am still to come across anyone who has chosen to live on social security. That is why the Chancellor’s comments about benefits being a lifestyle choice were inappropriate, inflammatory and, frankly, ill judged.
People in my constituency are desperate for work that allows them a decent standard of living and that suits their skills and qualifications. If they cannot work due to temporary illness or permanent disability, or intermittently due to mental illness, they rightly expect the support to meet minimum living standards. There is no doubt that the best way to lift people out of poverty and indignity is through work, but it must be well-paid work.
The wholesale cuts to tax credits that the Chancellor has announced, which include a reduction in the income threshold at which tax credits are paid, remove any benefit from the minimal increase in the minimum wage. For the Chancellor to attempt to present the proposed minimum wage rise as a living wage is a scandal. The living wage is £7.85 an hour outside London, so he is 65p short. It is a con trick. If he gives with one hand and takes back with another, the people will not swallow it.
Freezing public sector pay at 1% for another four years yet again punishes those who are delivering vital front-line services for the profligacy of the banks. It was not the low-paid, it was not the disabled, it was not the under-25s, it was not the public sector workers who got the UK into dire financial straits, so why is the Chancellor choosing repeatedly to kick the legs from underneath those who are struggling to stay on their feet? We on these SNP Benches are opposed four-square to the dismantling of the social security system by this Tory Government.
Earlier, I quoted the maiden speech of Peggy Herbison, who must be birling at the state of her proud party. At the beginning of the sitting in which she delivered her maiden speech, Sir Basil Neven-Spence, the then Member for Orkney and Shetland, raised a point of order and begged the Speaker to allow Scottish Members to be called more frequently in the House. Without wishing to prejudge, Mr Deputy Speaker, I doubt that you will need such a reminder of the presence of Scottish Members. The Chair has certainly been more than fair thus far. It strikes me that then, as now, the status of Scottish Members was under discussion, although with the constitutionally kamikaze English votes for English laws proposal, the status of Scottish MPs and, as a result, the Union hangs far greater in the balance.
I am proud to hail from Orkney and a large chunk of my family and friends still live there. I am reliably informed by the learned listeners of BBC Radio Orkney that I am the first Orcadian parliamentarian for 200 years, since Malcolm Laing served in this House between 1807 and 1812. I hope that after next year’s Scottish elections, Orkney returns its first ever SNP representative. I was proud as a schoolboy to carry the Orkney banner at the parade for the reopening of the Scottish Parliament in 1999. It struck me then, as a 13-year-old, that a nation having its own Parliament was perfectly normal. Why on earth would we want decisions about us to be taken elsewhere?
On that note, I will make my closing remarks. As SNP MPs, we are not here just to argue the case for the Scottish people; we are here on behalf of the people of Scotland. We want to build consensus where we find it to deliver progressive policies across these isles. We are here to be a voice for change, and we are determined that the voices of our constituents will be heard, no matter which Standing Order the Government use to try to curb our right to represent them. As we have seen with the Budget, Scotland cannot afford for decisions over its people and resources to be taken here for much longer. That is the ultimate change that we want to see: independence for Scotland. Benjamin Franklin said,
“When you are finished changing, you’re finished.”
That is something we all must reflect on.
Paul Blomfield (Sheffield Central) (Lab)
I am delighted to follow the maiden speech of the hon. Member for Airdrie and Shotts (Neil Gray). Like him, I represent an area whose heritage is in mining, steel and iron, and that has similarly warm-hearted and welcoming people. I thank him for his tribute to his predecessor, Pamela Nash, and for opening his speech with a quote from John Smith, whose premature death was a sad loss to all of us in politics. The hon. Gentleman made a powerful maiden speech that demonstrated values and passion, which indicates that he will bring a great deal to the House.
I want to congratulate the Chancellor—[Interruption.] There is some dissent among my hon. Friends, but he did well to put the issue of low pay in the headlines. He is right that we need to tackle the scandal of low pay, and he was right when he stole the words of the TUC in saying that Britain needs a pay rise. The question is whether his measures meet that challenge. Any increase in wages for struggling families has to be a good thing. That was why Labour introduced the national minimum wage.
Robert Flello
Did my hon. Friend spot that when the Chancellor said that the nation needs a pay rise, that did not apply to public sector workers with their 1% rises for four years?
Paul Blomfield
My hon. Friend is absolutely right, and other colleagues have made that point forcefully in this debate.
As we have been reminded today, Labour’s introduction of the national minimum wage was opposed by the Conservatives. I am delighted that they now apparently embrace it. It ended the scandal of poverty pay, providing a safety net below which wages should not fall. But for too many people, the national minimum wage has become the norm, not a safety net, as have zero-hours contracts and part-time hours for those who want full-time work. Alongside those setting up real businesses, there has been a growth in bogus self-employment, particularly in sectors such as construction. Uncertainty has replaced job security, and it has all been aimed at reducing labour costs.
Christopher Pincher
The hon. Gentleman mentions zero-hours contracts. Would he care to tell the House the percentage of the workforce who are employed on zero-hours contracts?
Paul Blomfield
I will tell the hon. Gentleman that too many people are employed on zero-hours contracts, and I could cite countless examples of people in my constituency whose lives have been destroyed by them and who have raised the issue with me.
It was interesting last week to hear Ministers, almost in the same breath, expressing their concern about low pay and then condemning tube staff for their industrial action.
Paul Blomfield
I will not at this stage, simply because other Members want to speak and I am conscious of time.
Over a generation, we have seen a shift of between 5% and 7% of GDP from wages to profits, and from profits to shareholders’ dividends. That has widened inequality and reversed a century of progress towards a more equal society, and it started with deliberate decisions in the 1980s to weaken the bargaining power of working people and the trade unions that represent them. A sensible policy response to low pay would be to strengthen the negotiating hand of working people, but instead the Government made it clear in the Queen’s Speech that they want to weaken their position further with more attacks on the trade union movement.
James Cleverly
Would the hon. Gentleman concede that when tube drivers, for example, go on strike, the people who are hurt the most are not those who can fire up their laptops and work from home but those who, if they cannot get to work, do not get paid for work, such as contract cleaners and those who work in the care sector? Is it not the case that when people go on strike it is the low-paid who get hit the hardest?
Paul Blomfield
It is absolutely true that when people go on strike, everybody gets hit, including those on strike. Trade unionists go on strike only with enormous reluctance, because of the impact on services and their wages. The uncomfortable truth for Conservative Members is that improvements in living conditions, health and safety and other workplace situations have been won through the struggle by trade unions.
The campaign for a living wage was a great response to the challenge of low pay. Members on both sides of the House have rightly praised the work of the Living Wage Foundation, but that work has been made more difficult by the Chancellor’s attempt to steal its clothes. We need to be clear. The increase that he proposes to take the wage floor up to £9 for many workers is welcome, but let us not pretend that it is a living wage. Let us call it the over-25s rate or the national minimum wage supplement, or we could just call it the national minimum wage, but he should not damage the brand of the living wage by associating his proposal with it.
We should continue to work to encourage employers to adopt the living wage and to incentivise them to do so. We need to recognise, as the Living Wage Foundation has pointed out, that the rate will need to rise to take account of the cut in tax credits. Here is the rub: although the new rate of the national minimum wage might benefit up to 5 million workers, more than half of them will be worse off—an estimated 3 million families, according to the Institute for Fiscal Studies—by an average of £1,000 a year because of the changes in tax credits. It could not be any other way: an estimated wage uplift of £4 billion is being offset by welfare cuts of £12 billion.
The Chancellor will argue that raising the tax threshold will benefit low-paid workers by taking them out of tax, but he knows that that is not true. He knows that lifting the tax threshold is a regressive tax measure, because it benefits everybody equally except the lowest paid. Six million workers who are already paid too little to pay tax in the first place will not benefit at all from raising the threshold, whereas Members of Parliament will get a tax break. Frankly, in comparison with low-paid workers, we do not deserve one.
Paul Blomfield
Perhaps the hon. Gentleman can explain how people can choose not to take a tax break.
The hon. Member for Braintree (James Cleverly) rightly spoke forcefully about small businesses. I do a lot of work with small businesses in my constituency. They are a driver of growth. When there is any increase in pay, they face a challenge, as does the voluntary sector. They need support, but the Government and the Budget have got it wrong. Support should not have been provided through a greater cut to corporation tax; it should have been provided to small businesses by further cuts to business rates.
The Prime Minister is right that company profits should not be subsidised by the public purse. If he is serious, why not tax listed companies that fail to pay the real living wage to recoup the cost? If he is serious about tackling poverty pay, what about strengthening labour market enforcement? We know, for example, that thousands of workers do not even get the national minimum wage in the care sector because employers refuse to pay for travelling time. We debated that in the last Parliament. Ministers admitted that the practice was widespread and said it was illegal, but nothing is happening to chase down those rogue employers and bring them to book.
Paul Blomfield
I will not because of time—I am sorry.
On the question of the care sector, will the Government find the resources to support local councils—they have been hit harder than any other part of the public sector—in meeting the cost of increasing the national minimum wage and paying workers what they are legally due?
The Government are right to respond to the need to give people a pay rise and have opened a debate, but they will need to do much more to make the difference that working families need, because this Budget fails to do so.
Mr Deputy Speaker (Mr Lindsay Hoyle)
We now have a maiden speech. I call Martyn Day.
Martyn Day (Linlithgow and East Falkirk) (SNP)
I am grateful for the opportunity to make my maiden speech as the newly elected Member for Linlithgow and East Falkirk. There are so many new Members that I was starting to worry that I might not get the opportunity before the summer recess. Now I need only live up to the high standards set by so many who have gone before me.
I would like to start by extending my gratitude to the parliamentary staff who have assisted Members with directions and procedures. Of particular assistance was my induction buddy, Donald Grant, whose help proved invaluable. May I recommend that the practice of induction buddies be continued for future intakes?
Of course, I would not be making this speech without the trust and confidence placed in me by the local electorate, who returned me with a convincing majority of 12,934 on my first attempt at a parliamentary election. Much as I would like to claim all the credit for my election victory, I am very conscious of the fact that, along with my local campaign team and the wider Scottish electorate, I have played only a small part in the transformational change in Scottish politics. Indeed so transformational has the change in Scotland been that it may better be described as a revolution—a revolution without even breaking a window. Politics in Scotland will never be the same again.
Many long-serving former Members were swept away in the revolution. Such was the fate of my predecessor, Michael Connarty, who had represented the constituency since its creation and the former Falkirk East seat from 1992. It would be fair to say that Michael was a man of deeply held political convictions. While we may not always have seen eye to eye on every issue, one area where we were in agreement was our support for Scottish CND and our opposition to nuclear weapons—I will always campaign strongly against nuclear weapons during my time in office.
Prior to the formation of the current seat, much of the constituency was represented by Tam Dalyell, who was the Member for Linlithgow and before that for West Lothian from 1962. Tam Dalyell can claim some responsibility for my personal journey to this House. As a young lad of nine years, I first visited Parliament as a guest of the Member for West Lothian, as he was then. It took me 35 years and 32,055 votes before my return trip. Tam is well known for the West Lothian question, and given the current debate on EVEL—English votes for English laws—Members would be well advised to review his contributions from the 1970s. I have made a point of reappraising his book, “Devolution: The End of Britain?” in which he looked at all four possible answers to the post-devolution problem of Scottish representation at Westminster and concluded that
“not one of them can be reconciled with Britain’s continued existence as a unitary state”.
He was right then, and he is right now. Perhaps less well known is Tam’s entry in “Guinness World Records” for having contested the same constituency against the same opposing candidate at a record number of successive elections—seven times, against Billy Wolfe, in the old West Lothian seat.
Billy very much modernised the SNP in the 1960s, and led the SNP to its previous Westminster high point in 1974, though he was never successful in his own parliamentary attempts. On a personal note, he was my friend and political mentor and he taught me much about decency in politics. It is therefore a particular honour to have achieved the victory that eluded Billy on so many occasions across much of the same geography. I owe a debt of gratitude for the early groundwork that he, along with many other pioneers of the SNP, put in over the years.
That brings me on to the nature of my constituency. Linlithgow and East Falkirk is a varied mix of county towns and villages across parts of West Lothian and Falkirk districts. From Whitburn in the south to Grangemouth in the north, and from Slamannan in the west to Newton in the east, the constituency has numerous landmarks and attractions as well as many famous sons and daughters. My own hometown of Linlithgow, for example, can boast many famous births. The House may think that the most famous of them all is Mary, Queen of Scots, but it is not. The House may think that, following last year’s referendum, it is my right hon. Friend the Member for Gordon (Alex Salmond), but it is not him either. It certainly is not me: I was born in Falkirk. It is in fact Scotty from “Star Trek”, who will be born in the town in 2222!
Scotty is not the only science fiction connection from my constituency. David Tennant, who played Doctor Who, was born in the neighbouring town of Bathgate. For my part, I did not need a TARDIS to travel backwards in time—it only took my election to Parliament. Arriving here has reinforced my belief that we need electoral reform and modernisation, and a good place to start would be with abolition of the House of Lords.
Linlithgow and East Falkirk lies between a rock and a hard place, being situated midway between Edinburgh and Glasgow, and enjoys good transport links across the central belt of Scotland. Ironically, the weakest link in local transport connections lies at the very heart of the constituency at the Torphichen bridge over the Avon gorge. The inadequacy of the bridge was described by one of my predecessors, Manny Shinwell, when he was MP for Linlithgowshire in 1922 as being
“unfit for the horse and cart”.
It is scantly better today.
The area was of course the heart of the shale industry and is now subject to much speculation regarding fracking. Let me make my position clear: I just dinnae like it. I will work with local groups in the constituency to oppose fracking applications across the local area.
The villages of Westfield and Torphichen, at the heart of my constituency, can lay claim to being the birthplace of the modern SNP, having been continuously represented at local government level since 1963. I myself was one of the SNP councillors for a number of years in that area. Of course, the claim to the birthplace of the modern SNP will also be hotly contested by the neighbouring towns of Armadale and Bo’ness, which were returning councillors as far back as the 1940s for the SNP. My stint as a councillor has now ended after 16 years on West Lothian Council.
Every Member will tell the House that theirs is the best constituency to visit and so will I, but they do not just have to take my word for it: so attractive is my constituency that other Members are trying to claim parts of it. Take the Falkirk Kelpies for example, which my hon. Friend the Member for Falkirk (John Mc Nally) tried to claim. I can understand why, but just for the record the Falkirk Kelpies are in Grangemouth and lie just within the boundary of my constituency. Perhaps, in the spirit of cross-constituency relations, I could offer to share this magnificent attraction with my hon. Friend and promote the wider local area together.
As well as impressive tourist attractions, the area in general is outstripping Great Britain and Scotland across a number of indicators, including population growth and economic activity. The real level of unemployment in the constituency depicts a falling trend in recent years. However, it remains largely a low-wage commuter economy, and the Budget’s proposed minimum wage con-trick will see many families in Linlithgow and East Falkirk on average £1,000 a year worse off.
Let me end with an apocalyptic reminder that my constituency also has the distinction of being the scene of the first modern political assassination, when Regent Moray was shot by a firearm in 1570 while riding through Linlithgow high street. So let us be under no illusions as to what fate may befall any of us should we fail to meet our constituents’ expectations. Therefore, to my constituents, family and friends I give this commitment: I will work tirelessly as your representative; I will not go native; and I will not be seduced by the political bubble, but I will enjoy my stint behind enemy lines working on your behalf.
Mr Jim Cunningham (Coventry South) (Lab)
I congratulate the hon. Members for Paisley and Renfrewshire South (Mhairi Black), for Airdrie and Shotts (Neil Gray) and for Linlithgow and East Falkirk (Martyn Day) on their three excellent maiden speeches. I grew up around Airdrie and Shotts, so I know the area very well.
Let me remind the Government that Labour certainly did not cause the deficit. It was caused by events in the United States. Many people have heard me say that before so I will not go over old ground, but listening to Conservative Members we could think that they had been brainwashed into trying to brainwash us into thinking that we did it. We have fought the general election and that one should be put to bed.
Conservative Members also talked about visiting Rover and about Jaguar Land Rover. Let me remind them that we saved Rover when it collapsed in 2001. The previous Labour Government encouraged Tata to invest in Jaguar Land Rover, so we do not need any lessons from Conservatives about who did what in relation to manufacturing.
I have listened to Conservative Members make an argument on productivity two or three times now, but there is a difference between efficiency and productivity. Productivity is what we actually produce and efficiency is how we get people to do that. The Government should understand and distinguish between the two. The other issue is that of skills. I would support the Government on anything they do in relation to skills. If we look at Germany’s economic recovery, we see that there was a training levy on most of the businesses in Germany. We have had debates on that for many years and the Government have just woken up to the fact that if they want to improve productivity in this country, this is one of the areas that has to be looked at.
We should remember that the Budget did not provide for public sector workers. The Government talk about the value of nurses and doctors in the public sector, but they never put their money where their mouth is. They should have given them a decent wage increase. In the past five or six years, we could argue that the 1% increase is actually a 6% cut in their living standards. Of course, in general terms there has been a 6% or 7% cut in wages throughout the public and private sectors. We should bear these things in mind when we listen to what the Government have introduced in the Budget.
Mr Gregory Campbell (East Londonderry) (DUP)
Does the hon. Gentleman agree that the Chancellor also appeared to miss the geographical distribution of private sector jobs? The problem in the UK is that so much of our economy is concentrated in the south-east of England. The regions of the UK need to see the benefits from this and future Budgets.
Mr Cunningham
I agree with the hon. Gentleman. The Government, and sometimes previous Governments, have governed on the basis of what London and the south-east think, forgetting there are about 45 million people in this country outside London and the south-east. Any Government pursuing an economic policy should remember that.
As many Members have mentioned, the Budget contains cuts to tax credits that leave the poorer worse off. I will not waste everybody’s time repeating the figures that others have already mentioned, but I thought it interesting that, despite the Government’s talk of manufacturing, only once in the Budget did they talk about exports. This country, being a trading nation historically, thrives on exports, so I am surprised that a Government who want to improve the economy did not talk much about exports.
Robert Flello
I am listening intently to my hon. Friend, but there is another side to it: the UK is being flooded with cheap imports subsidised by overseas Governments. This Government are not acting strongly enough to deal with the issue at the point of entry or to address the safety of some of these imports.
Mr Cunningham
I am sure you will remember, Mr Deputy Speaker, that when we were on the Trade and Industry Committee, we discovered that the Americans were using their defence budget for research and development. The private sector benefited from that because it did not carry that overhead of research and development, which can be at least 50% of any company’s budget and even more than wages. I agree with my hon. Friend, therefore, that the Government should be looking at that.
The Chancellor’s boast—if you want to put it like that—about the living wage is, when we actually analyse it, a con. The living wage as proposed by the Living Wage Foundation is 60p an hour higher than the Chancellor’s proposed amount, and much more inside London—although I do not have the exact figure for London. His proposals have even been criticised by the Living Wage Foundation. The cost of living varies between regions, and for those on low pay, each penny matters. We can only assume that he is rebranding the national minimum wage to muddy the waters. It is political smoke and mirrors to avoid comparisons with the recommendations of that independent charity and to avoid criticism of his low-pay economy. Once again, he has also ignored young people by excluding under-25s from the proposals.
The massive cuts to tax credits will utterly undermine any positive outcomes from the increase to the minimum wage and leave 13 million families worse off, according to the independent Institute for Fiscal Studies analysis, which has also shown that the poorest will be negatively impacted far more than the well-off. Once again, the low-paid suffer. Much is paid in tax credits because of the Chancellor’s low-pay economy, but slashing tax credits will not make the problem of low pay go away.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The hon. Gentleman needs to hear a lot more of Mr Cunningham.
Simon Hoare
Thank you, Mr Deputy Speaker, but you have now put me off my stride.
Given that we have had tax credits for so long and that low pay is becoming endemic, tax credits have clearly not incentivised employers to increase pay. Why then is the hon. Gentleman opposed to their reduction to encourage employers to do just that?
Mr Cunningham
The hon. Gentleman is entitled to his opinions. I do not think tax credits are endemic. Most people I have ever come across prefer to work for a decent wage. They do not want a subsidised wage, but the employer is never going to pay that decent wage on the basis of the Government’s proposals. If they really believe that, they are deluding themselves, because quite frankly employers do not like spending money.
The Chancellor has announced plans to scrap maintenance grants and replace them with repayable loans. These grants are offered only to the poorest students, so that will saddle more debt on those who already get the least help and support, while well-off students remain unaffected. This, along with the under-25s not receiving the new minimum wage and the under-21s not receiving housing benefit even if they have no parental support, shows that the Chancellor is not interested in helping young people to succeed and get on in life.
The Budget shows, once again, the Chancellor’s contempt for the west midlands. He mentioned the northern powerhouse three times in his Budget speech and the north more generally seven times, yet he mentioned the midlands only once, with no distinction made between east and west and no mention of the vital infrastructure investments required to ensure a balanced economy across the UK. Once again, the west midlands has been overlooked in favour of the Chancellor’s pet projects. This is a Chancellor who cares more about press headlines than pressing need. A future west midlands combined authority would represent the second biggest economic area after London, yet the Chancellor ignores it at every turn.
The rise in the minimum wage is welcome, but the fall in tax credits will leave millions worse off. The Chancellor’s changes to inheritance tax also benefit the wealthy few at the top of society, not those at the bottom. He has made scant proposals to remedy the housing crisis. The number of homes and the cost of rent and mortgages have been ignored. Rent has become a very big issue in this country.
This is a Budget that ultimately fails young people. Once again, the Chancellor has failed to give the west midlands either the time or support it deserves. All his changes are an attempt to paper over the cracks of a low-pay economy that only works for the few.
Robert Flello (Stoke-on-Trent South) (Lab)
This was a shambolic, shameful, pitiful Budget, more interested in grabbing headlines, trying to get the Chancellor in the slot for a future place in No. 10 and trying to lay political traps. This was not a Budget for the future of Britain. My right hon. Friend the Member for Oldham West and Royton (Mr Meacher) had it down to a T: this is a Budget to provide cover for the Chancellor to shrink the size of the state. That is all that this has been about.
The Secretary of State for Business, Innovation and Skills talked about security, but security for who? There is certainly no security for the working poor of this country, those on zero-hours contracts or the people who provide care on the minimum wage who do not get paid for their travelling time or travelling costs, who have to provide their own uniforms and who quite often have to contribute towards any training they receive, if they are lucky enough to get any. In short, this was a Budget providing no security whatever for the poorest, the most vulnerable or the weakest in our society, but plenty of security for multimillionaires looking to pass on assets and for other people.
The Secretary of State also talked about this great plan that the Government have got. They had a great plan in 2010 that was supposed to pay down the deficit over five years. That great plan failed to do that because it stalled the economy for three and a half years—three and a half years to get back to the same level of growth we had in May 2010. So much for hard work rewarded. No matter what the Chancellor thinks, there are people who work very long hours who can only dream of limiting their hours to those in the working time directive and who can only dream of a decent wage and being able to come back to a home that they can afford to live in. Hard work rewarded? There has been a lot of hard work from those people and very little reward for what they do.
I want to take a quick canter through some of the measures in the Budget. Much has been made about the supposedly national living wage. What an absolute con! The living wage has been put at £7.85 or £9.15 in London. The aspiration over the term of this Parliament will be to reach £9 by 2020.
So talk about this being a living wage is simply not the case. The proposal for it to be set at £7.20 is already well short of the necessary £7.85. As has been said many times, including by my hon. Friend the Member for Sheffield Central (Paul Blomfield), setting the living wage takes into account tax credits and additional support. Actually, the real living wage should be recast at a higher figure now that so much of people’s tax credits has been wiped out. This aspiration for what amounts to a rebranded minimum wage is nonsense.
To pick up on an earlier exchange, many employers have, sadly, seen the national minimum wage as a reason to dumb down wages rather than to use it as a baseline. Here there is an issue with tax credits because some employers have indeed said, “Hang on, let the state subsidise our profits and we’ll pay the minimum wage.” Those self-same employers will not now say, “Well, we should not have done that even though we did, but we are now going to put the minimum wage up to a proper living wage level”. Of course not. They will keep people working on the same minimum wage and see that their workforce are worse off on account of the reduction in tax credits.
Yet again, this is all about pulling the rug from under the working poor. The Chancellor makes great play of how the Government want to help people in work. These are people in work; they are people who are doing their best and working very long hours, but they are having the rug pulled from under them.
We hear talk about tackling aggressive tax avoidance and evasion, yet this Government have made various attempts to deal with it. We have seen various attempts to introduce general anti-avoidance type provision, but none of them had teeth and none was really designed to address the situation. I remember from when I was a tax and finance adviser in a previous life that people were capable of coming up with schemes to get round legislation within minutes. The Government have known about this for a long time; this is not new. To be fair to the Government—I rarely try to be fair to this particular Government, but I will be on this occasion—from time immemorial, Governments have not seized the opportunity to provide for proper anti-avoidance measures that will have teeth and will work. There are simple ways of achieving that.
As we have heard, reductions in public spending are about trying to take us back to a small state. The proposal to increase personal allowances, much heralded at the Dispatch Box, sounds wonderful, but it is all jam tomorrow. It is a £400 increase in the personal allowance, which is nowhere near the level it should be and nowhere near the level necessary to provide a genuine living wage in the sense of a basic amount that people need to live on. People will continue to earn less than they need to survive—and will be taxed on it, thrown into the bargain. Raising the threshold for higher rate taxation and raising the personal allowances has provided double help for those on higher incomes, who will see less of their income taxed.
Nia Griffith
Does my hon. Friend suspect that the Chancellor has deliberately renamed this “the living wage” so that he can break the promise of taking everybody on the national minimum wage out of tax?
Robert Flello
Absolutely. That could well be one of the motives behind it: it is certainly not about giving a genuine living wage to people, and it is certainly not about ensuring that people who work 40, 50 or 60 hours a week just to make ends meet will actually be able to secure a decent living wage. As I say, £7.20 from next April is already short of the £7.85 needed to take tax credit changes into account.
Let us move on to some of the Chancellor’s real friends in all this and consider inheritance tax and the increase to a £1 million threshold. How many people will benefit? It will be a tiny number, and that has to be set against the millions of people who are, to quote the Secretary of State’s words, “hard work rewarded”. It is nonsense, and it shows where the Chancellor’s thoughts lie and who he is really concerned about.
The reduction in corporation tax is another issue. On the face of it, it might seem very good. We already have one of the most competitive rates of corporation tax, but what about the small businesses that are not corporations or not incorporated companies? What about those small businesses that, as sole traders or partnerships, are the lifeblood of our country? What of the small businesses that do not pay corporation tax, for which it is not an issue?
Another item on this long list of measures is the introduction of a supplementary tax on banking sector profit versus the bank levy. I suspect—and I fear that I am right—that more smoke and mirrors has been going on in respect of what the levy was levied on and what profits will be subject to the supplementary tax; I suspect that this will work in favour of the banks.
The increase in insurance premium tax is another measure that will hit those on the lowest incomes. The Minister shakes his head, but there are no two ways about it. People who are already stretching their budgets to try to afford their contents insurance, for instance, will then be hit by a massive increase in insurance premium tax, from 6% to 9.5%.
As for the proposals for the Chancellor’s good friends, those with non-domiciled status, they are welcome on the face of it, but how soon will it be before someone comes up with a great ruse to get around the “15 of the previous 20 years” residence rule? How soon will it be before someone says, “That is OK; I will go abroad for a year, and then restart my clock”? How soon will it be before someone takes advantage of some scheme or other? Why not be more assertive, and take much stronger action?
I am conscious that time is beating me again, Mr Deputy Speaker, but I want to draw attention to a few more points. There are to be more apprenticeships, but the question is the quality of those apprenticeships. The ending of student maintenance grants will hit the poorest yet again—in this instance, the poorest students. I have already made my point about the public sector pay increase.
Buried among these measures is the reduction in the backdating of housing benefit from six months for working-age claimants and three months for pensioners to a maximum of four weeks. It is not really about reducing benefit; it is about saying, “If you were not quick enough to spot the benefit that you were able to claim, or if the paperwork was not processed, or if you are a pensioner who struggles with paperwork, you will lose out.” That will save £10 million, which is outrageous.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Will the hon. Gentleman speed up a bit? I shall have to impose a limit on speeches if he does not finish his speech very quickly.
Robert Flello
I thought it important to put that point on the record, Mr Deputy Speaker. As you will have noted, I have just discarded most of my speech.
Let me say just four more words. Well, eight: infrastructure spending, fuel duty, investigation of immoral or illegal economic issues such as the farming of dogs and cats, and a huge shortage of commercial drivers. Where was the Government’s help when it came to putting more drivers into the economy?
Thank you for your patience, Mr Deputy Speaker.
Mr Deputy Speaker
I do not think that I have much more. If Members aim for eight minutes from now on, everyone will have the same amount of time. I call Nia Griffith.
Nia Griffith (Llanelli) (Lab)
Thank you, Mr Deputy Speaker. Did you say 10 minutes?
Nia Griffith
In that case, let me very briefly congratulate those who have made their maiden speeches today, before turning to the subject of the steel industry.
Let me begin by thanking the Minister for Small Business, Industry and Enterprise for being so helpful last week by voting to retain anti-dumping measures for wire rod. The steel industry is being flooded out by a massive increase in imports from China, and it is important for us to work with other EU countries on anti-dumping measures. I hope that the Government will take the same approach to measures in relation to steel reinforcing bar, grain oriented electrical steels, and cold rolled steels.
Let me now say something about the EU compensation package. As we know, the Government set the carbon floor price too high, thus causing considerable difficulties to the steel industry. They have now come up with a compensation package for energy-intensive industries, but it is still a long time until April 2016. Will the Government think again about whether the date could be brought forward, and will they make absolutely certain that the package will not be cut?
As well as the problem of the carbon floor price, the steel industry faces the challenge of the EU emissions trading scheme. I firmly believe in working with the EU to create a level playing field, and I believe in the need to reduce our carbon emissions, but the energy-intensive industries need special consideration. It is important that the Government work with them so we actually achieve those goals, rather than achieving what is called carbon leakage—manufacturers going elsewhere where they are allowed to get away with higher emissions levels. There is a lot of work to be done here.
Business and industry need absolute certainty as they plan ahead and invest, and I am disappointed at the infrastructure projects that have been scrapped. The cancellation and postponement of rail projects and other infrastructure projects is very serious both to our skills base and our manufacturing industry. I am pleased that electrification is still planned for the railway line to Swansea, although I would like to see it come a lot further west, but it has still not started. I urge the Government to make sure that goes ahead with full speed.
I would like the Government to make greater efforts to maximise the UK input into the supply chains for such infrastructure, too. It is possible within EU regulations to include in tendering criteria a recognition of the benefit to the local community. Other EU countries manage that very effectively, and we should do a lot more in this regard.
Roger Evans from Schaeffler in my constituency of Llanelli is working with the Swansea tidal lagoon to maximise the proportion of supplies for the construction of the lagoon that is sourced locally in Wales and the UK. He is to be applauded for his efforts and I hope the Government will take note and do likewise, and that they will also strike the right price for the tidal lagoon to make it economically viable.
Business and industry need absolute certainty. We saw the Government cut the feed-in tariffs unexpectedly sharply without consultation, resulting in manufacturers and installers—many of whom had spent a lot of money training up as solar panel installers—going out of business, and now the Government’s sudden cut to the wind turbine incentive is again threatening manufacturers. When such decisions are made, they should not be knee-jerk, politically motivated decisions; there should be proper consultation with the industry and sensible lead-in times for any changes. There will now be a massive knock-on effect on the manufacturers and installers of wind turbines.
On the financial changes in the Budget, I welcome the national minimum wage going up to £7.20 next April, but it is, after all, a national minimum wage and it is high time it did go up to that amount—and the Chancellor promised ages ago it would go up to £7. I am very concerned, however, that it does not apply to those under 25, and I am extremely concerned about the loss of tax credits. They are an important part of our current taxation system. As has been mentioned, a couple on the current minimum wage with two children gain £1,500 but lose £2,200 in tax credits. We must raise the wages first, before scaling down any tax credits. This hits those on the lowest incomes who are often dealing with problems of insecurity, juggling more than one job to make ends meet, and working antisocial hours.
We still need a crackdown on zero-hours contracts as well. It is not enough to do what the Government did, which was say “You shouldn’t be prevented from taking another job.” They must do a lot more to try to ensure people can have proper contracts. USDAW has done a lot of work in this regard by getting annualised contracts that allow flexibility for employers and employees, but guarantee an agreed number of hours, so offering some security and chance of planning ahead for workers.
The cuts to tax credits will have a massive knock-on effect on local economies. People on low incomes out of necessity use their money immediately, putting it back into the local economy. There are wards in my constituency where Government changes over the past five years have already led to a loss in income of an average of £800 to £1,000 per person per year. Add to that the new cuts to the tax credits and we will see even more money sucked out of local economies. That is bad news for local business and could lead to further job losses.
I was shocked a fortnight ago to hear the Secretary of State for Work and Pensions say that the way for families to get out of poverty is through education and getting higher paid jobs. Of course it is, but in the meantime they need help. They cannot get that education and move into higher paid jobs in two minutes; we are talking about very long-term goals. What we are seeing in this Budget is a cut to what was a grant and has now become a loan for going into higher education for those very families on the lowest incomes.
We are also worried that the Government are removing the cap on the £9,000 fees for what are probably going to be the most sought-after and prestigious universities. Again, they are creating disincentives for people from less well-off homes to achieve the best and go to the very best universities. These are extremely worrying features of the Budget. Obviously, people want their children to do well—
Nia Griffith
I am sorry, Mr Speaker, are you suggesting that I should finish? I thought I was allowed eight minutes.
Mr Speaker
Order. There is not a formal limit at this stage, but colleagues are being encouraged to stick to eight minutes to give everyone a decent chance of getting in. However, it is up to the hon. Lady at this point.
Nia Griffith
Thank you, Mr Speaker.
Very briefly, tax credits are extremely important for those who work part time, who have to juggle childcare responsibilities or who simply cannot find enough hours’ work, and I would have liked the Government to ask those with the broadest shoulders to bear a great deal more of the burden, perhaps by putting up the 45p tax rate to 50p for those earning more than £150,000 a year. Instead, I believe that there is to be legislation that will limit income tax rises for millionaires. It is completely the wrong priority that it is those with the least money, rather than those with the broadest shoulders, who will be bearing the greatest burden.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
The Budget we have just seen was a masterclass in presentation, but a poor one for facing up to the real problems of the British economy. Before we begin, it is worth recalling the recent history of these debates and the economic state of the nation. Both major political parties went into the 2008 financial crisis with identical spending plans, because this Chancellor had pledged to match the Labour Government’s spending plans of the time. The UK’s banking regulation comprehensively failed in 2008, but then so did the system of banking regulation in nearly every other country. Both parties then backed the bail-out of the banks, to protect the people from the banks’ mistakes.
The only other major point of difference between the parties was that on our side we favoured a stimulus, a decision replicated in most other countries at the time, and which I believe was correct, but which the present Chancellor and the Conservatives opposed. The Chancellor also made a serious error of judgment in opposing the nationalisation of Northern Rock.
It is worth saying all that because I believe that the standard of debate on the economy in the last Parliament was fairly poor, given that it was the major issue of that Parliament. The partisanship of Government Front Benchers and Back Benchers reached moronic levels at times, reducing serious questions about the prosperity of the UK to slogans with no real content. I hope that we will see a change in this Parliament.
This Budget has proved one thing above all—there really is no long-term economic plan for this country. Deficit elimination has been put back a further year, which is no surprise to any of us who were here in the last Parliament, because that is what happened every time the Chancellor gave us one of his set-piece presentations.
Jonathan Reynolds
I will not give way, because of the direction from the Chair. I hope that the hon. Gentleman will forgive me.
It is surely worth noting that the Chancellor has now failed to match either the Darling plan or the original Balls plan for deficit reduction, mainly because his emergency Budget in the last Parliament damaged the economy so much. We are now debating an emergency Budget in this Parliament, and let me say that there are some good things in it: the apprenticeship levy; the super-tax on bank profits; the reforms to the non-dom rules, creating just one tax regime no matter how wealthy someone is; and of course the increase in the minimum wage. That is all good social-democratic stuff. I hope we will see those commitments maintained, and that we can soon implement the actual living wage, now that the intellectual argument for it has been so comprehensively won by those of us on the left. I also have no hesitation in welcoming the sustained fall in the unemployment rate in the last few years. Like most people, I am concerned about the relatively poor pay and conditions of some of those jobs—that is a very valid point—but work is a very good thing and the more people who are in it, the better.
However, I put it to the House that if we look seriously through the Chancellor’s presentation, we find some fundamental problems with the British economy that he does not seem eager to address. For instance, we are a country with a terrible current account deficit. We simply do not export enough, but even more worryingly we do not have many sectors of the economy that look as though they could substantially increase exports. There have been many warm words from the Government on this matter, but there has been little improvement over the past three to four years, and the sectors that could provide growth, such as the green economy, have been consistently undermined. We need a proper industrial strategy and a smart interventionist state, with the kind of policies pioneered by the Labour Government during the financial crisis, to address that.
We also have poor productivity, as has been fairly well documented, yet the Government are pausing key infrastructure upgrades, such as the electrification of the trans-Pennine rail line through Stalybridge and, even worse, are making it even more expensive for people to go to university and get a degree to improve their skills.
The replacement of university grants with loans is one of the changes that I absolutely abhor. Of course, students should make a contribution—that issue is now settled—but £50,000 of debt for a three-year degree is surely far too high. I do not feel that Government MPs really understand what that means. It is effectively a 3% rise in income tax for some young people for the first few decades of their working lives. At the same time, they face much higher pension contributions and housing costs than their parents’ generation. There are limits to how hard those people can be squeezed and choosing to squeeze young people simply because older people are more likely to vote is the height of short-term political cynicism.
Housing is surely the most dysfunctional part of our economy. Whether someone is on the right or the left of British politics, how can it make sense that buying a house as an asset will always be a better investment than starting a business or investing in their skills and training? Housing costs for British workers are absurd compared with those in other European countries and we must not only build more houses but start to tax assets more and income less.
That brings me to the part of the Budget that I completely oppose, which is the inheritance tax cut. To put it quite simply, if somebody has mediocre talents but wealthy parents, this is most certainly a Budget for them. In his speech, the Chancellor said that wanting to leave a house worth £1 million to one’s children was a thing that the left would never understand. My hon. Friend the Member for Blaydon (Mr Anderson) also made this point. What I say back to the Chancellor is that what the right needs to understand is the anger and resentment of hard-working and talented people from modest backgrounds who find their paths regularly blocked by the less able but more gilded sons and daughters of the very wealthy. I believe that even right-wingers should oppose inheritance tax cuts on grounds of meritocracy and instead support a society in which hard work and ability make a difference to one’s life, not inherited wealth.
We have had much talk of tax credits today. There is some evidence that in some sectors and with some employers, such as the big supermarkets, tax credits have subsidised employers, but the scale of what the Government are doing is extremely worrying. Families with two earners but a modest income and with two children face eye-watering reductions in their household budgets. I would certainly notice if someone took more than £2,000 a year from my household income and there needs to be some acknowledgement from the Government that this will cause real pain. In addition, and crucially, it could also cause a disincentive to go out to work. One of the most compelling reasons for the tax credit system in the first place was that it made work pay. Tax credits also served as an incentive to hire and there could be a negative affect on employment figures as a result of the changes.
One of the Government’s plans that I want to succeed is the northern powerhouse initiative. I must admit that the branding of the policy amuses me somewhat as when I was a teenager growing up in the north-east, the Northern Powerhouse was the name of the biggest gay club in Newcastle, although I am sure that the Chancellor did not mean to name his policy after it. The premise behind the policy is strong. As a country, we are far too geographically concentrated—much more so than comparative European nations—to the detriment of both north and south. The centralising of the British state has not just led to poor decision making but has, in my view, infantilised the great northern cities that were once the masters of their own destiny and the drivers of British prosperity. The Government must be aware that there is a great deal of cynicism in the north about this plan, which has been compounded by the recent pause in the rail electrification programme. If the Government want to show that they are serious about the policy, they need not just warm words but an announcement and some progress in the months ahead. I for one would be happy to work with them to make that happen.
We have a Chancellor whose political skills are largely unmatched but whose economic credentials for promoting the national interest are much more questionable. I hope that in this Parliament and in subsequent Budgets we will start to see a much more effective focus on the real economic problems our country faces, which I believe can be overcome. In all seriousness, I believe that in my lifetime the UK could become the biggest economy in Europe and in doing so could create a society in which wealth and opportunity are much more readily available and much more widely shared. The Budget did not contribute to that and in some ways made it even harder to achieve, and I hope that we will start to see better in the future.
Danny Kinahan (South Antrim) (UUP)
I thoroughly enjoyed listening to the passion and wit of the new Members who spoke today. Such speeches are a fantastic way to learn about other constituencies and we should all listen. I particularly enjoyed the comments of the hon. Member for Paisley and Renfrewshire South (Mhairi Black) about the weathercock and signposts, although perhaps not for the right reasons. She and I are not necessarily on the same page.
I thought that when I left Stormont I had moved away from trying to get nationalism and Unionism working together and to agree. In my first few weeks here, listening to Members speak, I began to wonder whether left and right would ever learn from each other. I was impressed when, in the Budget, the living wage was introduced and to see signs that, actually, people do listen to each other. Today, listening to people’s detailed speeches, I have found it wonderful to see that there is a lot of input and a lot of detail. I think we can all learn from it.
From the point of view of the Ulster Unionist party and many others, the biggest concern is that the Budget measures will be brought in without proper safeguards and that provision will be taken away before the new system is in place. Given the farce of the welfare reforms in Northern Ireland, my fear is that we will not be able to look after people because the old system has been taken away. This morning, at a meeting of the all-party group on social science and policy, I was appalled to hear about a woman on this side of the water who had had no benefits for four and a half months, and who had turned to prostitution. That is a complete disgrace. We must have back-up all the way through the system, so that no one is ever let down and has no money.
I share colleagues’ concerns about tax credits being reduced and the effects on SMEs and, in Northern Ireland, on families with more than two children. Those changes could work very much against us. I welcome the lowering of corporation tax—we have the powers in Northern Ireland to do that and I wish we would get on with it, but we do not necessarily have the will and understanding that are needed. However, we need a lot of other things as well. When I was at Stormont, I was briefed by manufacturers who said that the basic costs they struggle with are high energy costs, high labour costs and high rates. We need to look at business rates, as action there could lift the whole British economy. I am pleased that there was no rise in fuel duty, and there are many other measures in the Budget that I like, but what really concerns me is not having back-up and safeguards.
From the Union point of view, I am concerned that as we focus on devolving government and giving more powers to cities, countries and everyone else, we will all be forced into just fighting our corner. We have to remember that we all need to work together all the time while we fight our corner.
In Northern Ireland, unemployment is running at 6.1%. That is way better than in my younger days, when it was about 18% in some places, but there are two aspects of those figures that I want to mention. First, a large number of the people in that 6.1% do not have the skills that the world of modern technology requires; they may never have them. We need to find some way of bringing large numbers of suitable jobs to the Province, because without employment, the planned welfare changes will never work. We need apprenticeships and assistance. I know the matter is devolved, but we must not adopt the attitude of “devolve and forget”. We all need to work together. Years ago, I worked at Short Brothers in Belfast. I remember visiting Harland and Wolff to see a model of that company building seven aircraft carriers. I know we should not hark back to the past too much, but we need to find jobs—the sort of jobs that the people can do.
I hope that the Government will keep the basis of the Stormont House agreement in place, whether it fails or succeeds, because it contained many measures agreed to help the Province. We are very grateful for them, but we must find a way to move forward. I hope the Minister will promise that those measures will stay. I hope also that the Barnett formula will remain in place and will certainly not go down.
The second matter that I want to raise in relation to the 6.1% unemployment rate is mental health. Last week we rightly heard praise for all those who helped after the bombings in London and learned how to look after those who had lost limbs, lost family or witnessed something awful that still affects them today. Think of the number of people affected by 45 years of the troubles in Northern Ireland. I hope the Minister will put funding in place to enable us to continue learning how to help people cope with the mental issues and difficulties in their lives.
I hope some funding, which is not in the Budget, will be put aside for the victims of the guns and Semtex supplied by Libya. The Americans, the Germans and the French all received compensation, yet nothing has happened for the British. Enough resources should be put in place to make sure that the grit and determination are recognised.
I mentioned “devolve and forget” when it comes to the Northern Ireland governing process. I do not think Members in this place know what is going on. We have Departments in Northern Ireland that do not even work with each other. When I was working on education in the past few years, the Education Minister would not share the funds and the spending reviews; he kept them all to himself. That is the sort of problem we have in Northern Ireland. I thank the House for all the help that it has given us. I hope it will keep the pressure on and get Northern Ireland working. The Budget is one way of doing that.
Carolyn Harris (Swansea East) (Lab)
Over the past few days there has been a great deal of debate and analysis of the Budget. Some who would not necessarily be expected to do so have praised proposals to increase the minimum wage and to increase the personal allowance. However, it is extremely important that we do not lose sight of the fact that, despite those measures, as the Institute for Fiscal Studies confirmed, the Budget is regressive. Contrary to the Chancellor’s rhetoric, it is those with the least broad shoulders who must carry the burden of reducing the deficit.
Cuts to tax credits will have a significantly detrimental impact on families on very low incomes. Neither the increase in the minimum wage nor the increase in the personal allowance will make up for these losses. The changes mean that working parents eligible for child tax credit will lose more support more quickly than previously, from the moment they move into work or their salary starts to increase. Many parents will be worse off when the full impact of the Budget is taken into account. Barnardo’s has calculated that a single parent with two children working full-time on the minimum wage will lose £1,200 a year from April 2016, even when the increase in the minimum wage is accounted for.
It gets worse: from April 2017 some of the very poorest families—those with more than two children—will face further reductions in income. They will not be able to get financial assistance through tax credits or universal credit to account for the costs of having a third child, or any child beyond that. We are talking about a significant amount of money for families on very low incomes—about £2,700 a year, or £53 per child per week. New claimants of universal credit will also be affected by this change. A family who already have three or more children and are currently earning above the earnings threshold but lose their job or find themselves unable to work due to ill health will, after April 2017, be able to claim support for only two of their children. As a result, there is no escaping the fact that, from April 2017, families with more than two children will be more likely to live in poverty. Children with more than one sibling are already 40% more likely to be in poverty than their peers.
To illustrate that point, let me give just one example from a Barnardo’s children’s centre. Sarah is a working mother of three whose husband, John, looks after the children, one of whom is not yet of school age. John asked the centre for some nappies. When a project worker visited their home, she noticed that the only food in the cupboard was biscuits and crisps. Sarah and John said that their finances had become unmanageable after their house was deemed too big for their family and they were hit by the bedroom tax. That pushed them over the edge. Now the parents are skipping meals so that the children can eat, and they are too proud to ask for help.
Cutting tax credits will hit some of the poorest and most vulnerable the hardest. The Government keep telling us that it is about making work pay and incentivising those on out-of-work benefits to move back into work. We know that more than six in 10 children are currently living in poverty, with at least one parent in work. It is absolutely absurd that in 2015, and in the fifth largest economy in the world, parents are having to decide who can eat and whether they can afford to put the heating on.
I will finish with two questions for the Government. First, how do they intend to monitor the impact of the cuts to tax credits, and of the Budget as a whole, on child poverty? Secondly, given that they have said that the income measure of child poverty is to be scrapped, to ensure transparency and fairness in relation to measures announced in the Budget and in legislation such as the Welfare Reform and Work Bill, how will they continue to monitor levels of child poverty?
Stephen Kinnock (Aberavon) (Lab)
The Chancellor’s Budget, far from fixing the roof while the sun is shining, will send roof tiles flying while the storm clouds gather. Economic growth is crucial. It brings tremendous benefits. Between 1997 and 2008 it lifted millions of people out of poverty. An economy that is not growing is failing, but the question is: what kind of growth do we need?
The fact is that Britain in 2015 is more unequal, divided and insecure than it has been at any time since 1945. We know that inequality between rich and poor in the United Kingdom has widened in recent years. We also know that inequality is bad for economic growth because the majority of the population are not feeling the recovery at all and so are unable to contribute to it.
If the Chancellor wishes to do away with state support for the working poor, he must commit to investing in a genuine, broad-based and deep recovery that works for everyone, based on a real industrial strategy and a plan for long-term economic growth. That has to start with a renaissance in our manufacturing sector. In 1970 manufacturing accounted for one third of the British economy, and now it accounts for barely 10%.
The need to drive such a renaissance is imperative for three reasons. First, the manufacturing sector achieves far higher levels of productivity than the service sector. Secondly, it produces much higher quality and higher-income skilled jobs than the rest of the economy, as well as a far greater geographical spread of skills and jobs than the financial sector produces. Thirdly, it enables us to pay our way in the world. Our balance of trade deficit is currently higher than it has ever been since the 1830s. That is a huge drag on our economy, and it can be dealt with only by increasing manufacturing for export.
Given the central part that manufacturing has to play in building that new kind of growth, it is absolutely imperative that the Chancellor now sets out a new industrial strategy, which I think should be based on six key pillars. First, we must produce highly motivated and skilled young people who are capable and willing to enter manufacturing, engineering and wider industry.
Secondly, the UK has a strong research capability, but we struggle when it comes to driving our new ideas and technologies into the business sector. A proper industrial strategy would provide enhanced support to the Catapult centres, which have provided a welcome boost to the commercialisation of research and development, but much remains to be done and they need more resources.
Thirdly, on energy, there is a pressing need for a 10-year plan that lays out the investment path required to build a secure, competitively priced and clean energy supply. The growth of clean energy is a huge opportunity for the UK economy, with projects such as the Swansea Bay tidal lagoon promising to deliver thousands of high-paid, high-productivity jobs.
Fourthly, there is the UK’s inadequate transport and digital infrastructure. This is particularly important, as it contributes to the chasm that exists between London and the rest of the country. There is a pressing need for a long-term infrastructure plan that would properly connect the country and provide a launch pad for a nationwide manufacturing renaissance.
Fifthly, on finance, the UK’s banking system is fundamentally skewed towards the stimulation of private consumption, asset value inflation, and personal debt. It is essential to create a new financial support system for manufacturing that is geared towards enabling the growth of the manufacturing sector. Germany’s Sparkassen should be the model—truly local banking that is an integral part of the regional economy, focused exclusively on lending to start-ups and small and medium-sized manufacturing businesses.
Finally, on procurement, the Government manage a multi-billion-pound budget for the procurement of everything from care services to steel for major infrastructure projects, and their approach is far too laissez-faire. Far more can and should be done to ensure that UK products and services are prioritised for procurement. This can be done without violating EU competition rules simply through tighter definition of value-for-money clauses in tender documents. It is right that contracts funded by the British taxpayer should be won and delivered by British companies.
This industrial strategy sounds wonderful on paper, but it is worthless if not underpinned by strong support for the steel industry, which is the critical foundation industry for our manufacturing renaissance. Steel plays into every aspect of the long-term strategy we need. As the Member of Parliament for Aberavon, which hosts the largest steelworks in the country, I must draw the House’s attention to the importance of the steel industry. No longer can Government-tendered projects such as the refurbishment of the Severn bridge be allowed to go ahead using French steel when the best steel in the world is British.
This Government also need to take into consideration the importance of compensating heavy industries such as steel for the cost of the carbon tax, which eats into productivity. Going back on promises that were made in the previous Parliament would leave steel companies exposed to 70% of the cost of the EU renewable levy policies. That would be seriously detrimental to the steel sector and wider manufacturing, and ultimately harmful to the UK economy.
The time has come for a Government who are prepared to plan for a new type of long-term, sustainable growth that produces high-wage, high value-added jobs and gets the country making and exporting rather than perpetuating the agenda for the status quo of growth fuelled by debt and consumption. Until we have such a plan, I cannot support this Budget. I exhort the Chancellor to go back to the drawing board, roll up his sleeves, and come back with a strategy for a new kind of growth that will build a United Kingdom of strength, purpose and resilience.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
I thought that I would use my time in this debate to speak about the real victims of last week’s Budget: children in this country who have suffered because of the savage blows that have been imposed on their services and the support structure that we provide for them. This savage attack is twofold. First, child benefit has been frozen for the next four years, not taking into account the rising cost of living. Secondly, child tax credit is now going to be restricted to families with no more than two children. Have the Government thought long and hard about what impact these changes will have on disabled children living in families, on single mothers, and on families with low and modest incomes?
My problem with these changes is that they will in no way address the deep-rooted problems that we have in our low-wage, low-productivity economy, with the huge discrepancy between the very well-paid and the very poor. These changes will not deal with the problems that we face in the economy.
There is little recognition of how much tax credits have contributed to alleviating child poverty. By the end of the last Labour Government, the proportion of children living in families below the poverty line had fallen from 35% to 19%. It is the Labour Government who can claim credit for lifting more than 1 million children out of relative poverty. Those are things that we are proud of.
The Tories use rhetoric that speaks of tax credits encouraging workshy people, says that people are lazy because they claim tax credits and uses that dreadful word, “scroungers” for people who abuse the welfare state. Well, guess what? The majority of people who claim tax credits are in work. The Government need to realise that. The IFS has pointed out that reducing tax credits weakens the incentives for people to work. At every turn, the Government’s rhetoric on tax credits is wrong. The single largest revenue raiser in last week’s Budget was the scaling back of tax credits, which almost exclusively hits people who are in work.
The Social Mobility and Child Poverty Commission has said that relative and absolute child poverty will increase in the next decade. Given that those figures are about to be released, is it surprising that the Government have said that they will scrap the legally binding child poverty reduction target and are busy trying to redefine poverty?
Ministers do not need to spend time redefining poverty. Instead, they should take the 15 minutes that it takes to leave Parliament and go to my constituency of Hampstead and Kilburn. They should go around the estates of south Kilburn—the most deprived parts of my constituency—and see the families giving up their dignity to queue up for food banks. In winter, those families have to make the choice between eating and putting the heating on. Those are the families who go to work, but for whom work does not pay because we live in a low-wage economy. Those are the things that we have to assess before we make these dramatic changes.
Before we rush through this Budget, which will be damaging to my constituents and constituents across the length and breadth of this country, I ask the Government to consider two things. First, they should think about the impact that the changes to working tax credit and child tax credit will have on women. Child tax credit is claimed more by women, because the main carer in the family tends to be a woman. Working tax credit is needed by women more because there are more women in low-paid jobs, as was demonstrated by the recent debate on equal gender pay in Parliament. Bearing that in mind, they should think carefully about whether they are doing something that takes away the economic empowerment of women in our country. Will the changes mean that women do not feel empowered to go out and work? They must think carefully before making those changes.
Lastly, the Government should think about the impact that restricting child tax credit will have on families with more than two disabled children. At the moment, there is a top-up on child tax credit of £3,000 if families have a disabled child and up to £4,000 if they have a severely disabled child. What will happen to families who have three severely disabled children? What will happen to families who have two severely disabled children and one child who is defined as disabled? We need to think carefully before we rush the Budget through.
My plea to the Government is that they go back to the drawing board, listen to what Opposition Members have been saying and think about the effects that the Budget will have on women and disabled children across the country, and on families who want to work, but who cannot get the right wages from that work.
Geraint Davies (Swansea West) (Lab/Co-op)
It is a great pleasure to follow my hon. Friend the Member for Hampstead and Kilburn (Tulip Siddiq), who made an excellent speech underlining the cruel regressivity of this awful Budget. She particularly mentioned the impact on child poverty, families and women, and the inter- generational poverty that will scar families for life. It is also a pleasure to follow excellent speeches by colleagues from the Swansea Bay city region, my hon. Friends the Members for Aberavon (Stephen Kinnock), for Llanelli (Nia Griffith) and for Swansea East (Carolyn Harris), and a number of maiden speeches, particularly that of the hon. Member for Paisley and Renfrewshire South (Mhairi Black).
This was a Sheriff of Nottingham Budget, robbing from the poor and giving to the rich. In fact, The Economist has commented that taking from the very poorest through tax credit changes and giving to the very wealthy through inheritance tax changes is “indefensible”. That is not some sort of left-wing ragbag but a keenly focused magazine that says it as it is.
We have the Sheriff of Nottingham, the Chancellor, living within his castle walls and feeding his fat noble friends with inheritance tax reductions, while the ordinary people just outside are being hoaxed. With one hand they are being given higher tax thresholds, but with the other they are being pick-pocketed, with something like £16 billion of stealth taxes on things like insurance for housing and cars, and with the vehicle excise duty changes. Even the withdrawal of climate change subsidies will come back and hit them through energy prices, and the withdrawal of BBC funding will hit them through the licence fee.
The Sheriff of Nottingham is also trying to persuade the ordinary people around the castle walls that the poorest people in the forest will not be painfully abused by the tax credit cuts. Instead he is trumpeting the minimum wage increase, which of course will not compensate families on tax credits. In 2012 the Chancellor gave a speech describing the “strivers” and the “skivers” and asking whether it was fair for a shift worker to get up in the morning to go to work and see the closed blinds of his neighbours who live off benefits. Of course, skivers are not eligible for working tax credits and child tax credits, because they are only given to people in work. They are based on the American earned income tax credit, as an incentive to work. Their withdrawal will undermine not only the individuals who are paid the money but business start-ups. The change is thoroughly regressive and counterintuitive to economic growth.
The Budget was more about politics than economics. On the minimum wage, the Chancellor has taken the Labour party’s clothes and hoped that people will not notice what he is doing to working families, and the Opposition cannot support him in that. Of course, the cost of tax credits has grown to something like £30 billion, but that is because productivity in the British economy has been so woefully poor that wages have gone down, leading to tax credits going up. In fact, 800,000 fewer people are earning more than £20,000 than was the case in 2010, which is an appalling failure. That is why this Government have borrowed more in five years than Labour did in 13. The Government should have focused on productivity growth in the Budget, rather than on fiddling around with tax and spend so that the Chancellor can position himself against the flamboyant part-time Mayor of London as the next Tory leader.
There is also the appalling situation whereby the third-born in each family will have their tax credits taken away. I wonder if that will be extended to education and health. When the third child, Johnny, has a broken arm and goes to the NHS, will he be told, “Sorry, we can’t treat that, you’re the third-born. Oh, don’t worry, your oldest sister has just died—so it’s alright now”? What is the change about? Is it an incentive for poorer people in society not to breed? Is some sort of positive eugenics returning to the Tories? It really is appalling.
Geraint Davies
No, I will not. There is a time limit, and it is not really worth the air.
The overall welfare budget is £220 billion, only £2 billion of which is spent on people on the dole. A great amount of it is spent on pensioners, who are protected because they are more likely to vote. The political calculation is that poorer people are less likely to vote, and certainly less likely to vote Tory. This is a cynical Budget.
Oxford University has suggested that the number of people going to food banks will increase by 1 million to 2 million. I pointed that out to the Prime Minister, and he said, “Oh well. It doesn’t really matter. We won the election.” When I pointed it out to the Work and Pensions Secretary, he said, “Oh well. What can you do? Lots of people in Canada and Germany use food banks.” The Chancellor said, “Well, you know, we’ve got 1% of the people and 3% of the wealth of the world, and we spend 7% on welfare,” as if we should be ashamed and not proud that we, as a developed country, invest in the most vulnerable people to help them into work.
What sort of future is the Chancellor suggesting? Is he suggesting that we cut our welfare down to the levels of developing countries and provide taps and buckets at the ends of streets? What are the values of this Tory Government? The answer is that their values are squeezing the poor because they will not vote Conservative, and squeezing the state with a fraudulent proposition as a backcloth—that minimum wages can replace tax credits that are focused on poor families. The reality is that, under the last Labour Government, the economy grew by 40% in the 10 years to 2008. The banking crisis caused a problem, but by 2010 there was growth in the economy. Since then, debt as a share of the economy has grown from 55% to 80%, basically because a low-wage, low-productivity, austerity-driven Budget does not work.
The Government have driven down wages at the same time as they are putting up tax thresholds, which is obviously not a way of generating significant tax revenues. Therefore, the business model is bust. We need investment in productivity, skills and infrastructure. Why are we seeing another situation? Why has the train infrastructure in the north of England been removed or delayed? Why are the poorest given loans rather than grants to go to university?
The Budget is not the way forward for a high-skilled, high R and D, high-productivity and high-wage economy to pay its way. It is flawed economically and it is a political stunt. The sooner we get a Labour Government the better.
Rachael Maskell (York Central) (Lab/Co-op)
It is a pleasure to follow my hon. Friend the Member for Swansea West (Geraint Davies). I congratulate the new Members on making their excellent speeches, particularly the hon. Member for Paisley and Renfrewshire South (Mhairi Black), who drew on the wise words of the late Member for Chesterfield, who is a political hero of mine, too.
At the weekend in York, I talked to local businesses, our public services and those who support the poorest in our community. There were no cries of “Fantastic!” for the Budget—quite the reverse. Those are the people who will live with the consequences of what the Budget creates.
Three themes stand out from my conversations, but they were all left out by the Chancellor, who is more set on driving down our public services and our public sector workers, who, we must remember, have already had a 15% cut to their pay, than he is set on driving up exports and the prospects of so many who are left to flounder as they are stripped of essential resources to help them get by each week. The first theme was generating productivity and good-quality, high-skilled jobs; the second was strengthening public services; and the third was addressing the shameful inequality in our nation that the cuts to 30 million people will increase, and addressing the staggering nearly £2 trillion of personal debt that is being built up.
Today, I will focus on productivity. Unless we grow our productivity—our base—the long-term poverty in our country will be sustained. It is therefore not an either/or strategy, but both. We need to address inequality and to drive up our economy: investment now for future growth.
Obviously, there was deep concern at what came out last week not just in the Budget, but in the productivity plan, which should fix the foundations to create a more prosperous nation. I took the plan and put it through what I call the York test. I asked how the plan would drive the economy in the city I represent, a northern city that is so much at the centre of rhetoric at the moment.
York has so much potential. It could have high-quality, well-paid jobs, and with the considered interconnectivity of a productivity plan we could recreate the city as an engine in the north. I read in the plan lots of suggestions to bring together experts to write a strategy for productivity. If there are many gaps in the road map, having experts come together can help to grow the economy for the future, but time is wasted as we wait for the plan to be developed.
One of the loudest cries that I hear from my constituents —but it is not in the plan—is the need to address the needs of small businesses in York. They desperately want business rates to be addressed, so that our local entrepreneurs and business leaders can confidently build a sustainable employment strategy in the light of the ridiculously high cost of premises—another issue that must be addressed.
Kevin Hollinrake (Thirsk and Malton) (Con)
Does the hon. Lady welcome the 75% reduction in unemployment in York since 2010, and the 45% reduction in 2014?
Rachael Maskell
I do not accept that those are the high-quality, highly skilled jobs that are so important for growing our economy. In fact, many jobs in York are now zero-hours contracts in the tourism industry, retail and other trades, and the number of people on the minimum wage is a real concern.
While the apprenticeship levy sounds good—I will examine the initiative as it makes progress, in particular to ensure that the apprenticeships are of high quality and not just learning experiences for people in work—we need to view that alongside the cuts in education. York college has experienced a 24% cut in funding for adult courses. Those cuts are in direct conflict with the warm words about supporting a technical curriculum. The small print of the plan also includes higher and higher tuition fees, at the same time as the removal of the maintenance grant—money that people will be expected to pay themselves. Those are disincentives for people to engage in education in the future, so the plan fails the York test on skills.
It is a scandal that the links between education and work have been severed in this country. In schools, colleges and universities, courses do not lead directly to high-quality, good jobs. Education is often in one silo and work in another, and the bridges have not been built between the two. How is it that someone can spend £50,000 on their development to end up in a zero-hours job or having to volunteer to get the necessary experience to get a decent job—experiences that a couple of people reported to me over the weekend? When people embark on a course, we want to see a guaranteed good-quality job at the end of it—a student to job guarantee. That is the sort of initiative that I expected in the Budget last Wednesday to kick-start careers and growth, and to start to help to clear up student debt, which is a scandal in itself, but one for a separate debate.
When I looked at the productivity plan, I had to ask, “Where is the manufacturing strategy?” I could not find it and I did not hear it in the Budget—nothing on good-quality, highly skilled jobs. Where was the real opportunity to develop the housing infrastructure—and the construction jobs that would go with that—that we desperately need? The plan talks of a growth in the number of houses of 40,000 a year, but we need at least 200,000—possibly 300,000—a year. Labour had a programme to ensure that by 2020 we would be building 200,000 houses a year. Of course, the OBR and the IFS believe that the right to buy and the cuts in social rent will slash that already under-ambitious building programme. So the productivity plan fails the York test on housing, even though more housing is central to the city’s ability to grow the local economy.
Where was the environmental strategy on retrofits for our businesses, public services and the domestic market, on growth in renewables, and on science and manufacturing? As Labour promised, that would create 1 million more jobs. I am committed to developing a sustainable economy, but the Government’s approach to climate change puts us at further risk of missing our 2050 carbon reduction targets. Not only is there investment in road instead of rail, but the removal of subsidies for onshore wind and the charging of renewable energy users through the climate change levy. This will chase away another potential boom area for our future economy. The Budget fails the York test on sustainability and productivity.
There was nothing in the Budget on upgrading our infrastructure and providing good construction jobs in our schools and hospitals through new build. The state of our schools and hospitals means that this is desperately needed in York. We are seeing a strategy that will not deliver.
I would like to question the Minister more closely on investment in science and research, and on whether any of the money will be coming to our universities to give us the opportunity to ensure that York benefits from good solid jobs by 2020. I would be interested to hear his reply.
Finally, on the northern powerhouse, we have heard much about rail and the northern power cut. York is famed for its rail heritage and the national rail museum. We are at the intersection of the trans-Pennine route and the east coast main line, so we should be the rail hub of the future. We have a real opportunity to grow the northern economy, but that was not in the Budget and that was not in the productivity plan. Will the Minister sit down with me and local MPs to ensure that we have an opportunity to kick-start the economy?
Mr Speaker
Order. The Front Bench wind-up speeches will start at 6.40 pm and there are two colleagues who have been waiting for a considerable time. I call Seema Malhotra.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
The political presentation of the Chancellor’s Budgets has improved year on year. Sadly, we cannot say the same about his economics. That is not to say there were not some good things in the Budget—indeed, many of them were proposed in the Labour manifesto—but there are holes, contradictions and poor judgments running right through it.
The Budget fails as a coherent and strategic plan for Britain’s growth and prosperity. It is also unfair and unjust. Women will be hit twice as hard as men. A couple working full time on the minimum wage with two kids will be £700 a year worse off. People currently paid more than the minimum wage will be even harder hit.
In 2011, the Chancellor stood at the Dispatch Box and proclaimed a march of the makers. He painted a picture of how he saw Britain’s economy growing and being rebalanced away from financial services. There was, however, no plan behind it and it proved to be more of a mirage than a reality. Manufacturing output began to fall in 2012 and 2013, in part as a consequence of the Chancellor’s reckless rate of cuts. It was only when he began to slow the pace of cuts that manufacturing output began to recover. Some economists argue that had he embraced Alistair Darling’s balanced plan for reducing the deficit this might have been less likely. The Office for Budget Responsibility forecasts that the Chancellor will miss his export target in 2020 by a massive £370 billion.
Today, I would like to focus on two specific issues: investment in logistics and further education. Local businesses in Feltham and Heston tell me that there is an acute shortage of qualified HGV drivers that is crippling the British road haulage industry, and a shortage of qualified forklift truck drivers for manufacturing and distribution. If our businesses do not have enough support to get their products to domestic and foreign markets, we are holding back growth. There are some welcome proposals in the Chancellor’s Budget, but they do not go far or fast enough for the UK logistics sector.
I welcome the proposed compulsory levy on large companies to fund new apprentices, but it will not come into effect until 2017. We have a national shortage of more than 45,000 lorry drivers, and more than 60% of HGV drivers are over 45, which means that the problem is likely to get worse, not better. At least 40,000 drivers are expected to leave the industry over the next two years, but road haulage firms are able to train only 17,000 drivers a year.
Recently, I attended the launch of West Thames College’s logistics centre at Feltham skills centre, near Heathrow. It is an excellent college delivering key skills training for the logistics sector in the local and national economy. The college, from its reserves and with support from the local enterprise partnership, has funded the new centre, but it is now struggling to fund the courses. In his March Budget, the Chancellor cut the adult skills budget, which funds this training, by 24%, and on 4 June, he announced further departmental spending cuts, which might reduce this even further. In his March Budget, he also promised that the Government would work with road haulage firms on an industry-led solution to the HGV drivers’ shortage, including access to, and funding support for, training, yet last week he proposed no resources to tackle these problems, which was a huge disappointment.
While the apprenticeship levy will help from 2017, the crisis is now. The Road Haulage Association has asked for funding for the “driving Britain forward” scheme, developed with Jobcentre Plus, to train new HGV drivers between now and the introduction of the industry-wide HGV apprenticeship scheme. The logistics industry and the British economy need this support, which is why I shall today be writing to the Chancellor urging him to provide the funding the RHA has requested to tackle the HGV driver crisis between now and the introduction of the industry apprenticeship scheme; to stop further cuts to the adult skills budget; and to allow colleges such as West Thames to provide the logistics training that the industry needs and that Feltham and Heston businesses have called for.
The Chancellor has failed to rebalance the economy. His march of the makers appears yet to have taken its first step. I urge him to show leadership and provide the highly skilled workers that the UK logistics sector needs—a capital investment in the British people and British businesses. Keeping people jobless while companies call out for highly skilled employees makes neither economic nor moral sense. If he really wants to get Britain back on the road to recovery, rather than stuck on the hard shoulder, I urge him to take action now.
Keir Starmer (Holborn and St Pancras) (Lab)
I wish to raise two points, the first being the impact on my constituency of the £40,000 household income threshold before council tenants pay market rents. This is going to hit a lot of people on very modest means. In my constituency, it is estimated that 2,000 council tenants will be hit. In Camden, with market rents as they are, a family in a two-bedroom flat would be left, after paying the rent, with about £133 to pay the rest of their bills. These are people of modest means who will be disproportionately impacted by this provision.
Secondly, the limit on the child element of tax credits and universal credit will have a hugely detrimental impact, but I wish to draw particular attention to paragraph 2.103 of the Red Book, because it is an issue of real concern to Members on both sides of the House:
“The Department for Work and Pensions and HMRC will develop protections for women who have a third child as the result of rape, or other exceptional circumstances.”
That would introduce a rape test into our welfare benefits system. In the limited time I have had to look into it, that is the first test of its kind I have found, and it is an extraordinarily worrying development. I have spent many years working with victims of rape and understanding the difficulties they have in coming forward, in any context, to explain and report what has happened. The idea that women will have to introduce evidence, in some shape or form, of rape to prevent their benefits from being cut is abhorrent to any human being and will cause real concern. I do not think there is another test of its type in any system we have ever run or any European system that I can see, and I urge that real consideration be given to that provision. A rape test in a welfare benefits system is a regressive step.
Jo Churchill (Bury St Edmunds) (Con)
Some on the Opposition Benches crow that we have stolen some of their policies, but surely, with just a dash of intellectual honesty, they should welcome this Budget. Perhaps if they stole some Conservative policies, one could argue—as I think the right hon. and learned Member for Camberwell and Peckham (Ms Harman) did on Sunday—they might earn the trust of the British people on running the economy. Because if any of those across the Floor of the House want to know what true austerity is, they need look no further than 2008-09. This country was in recession. People found themselves without jobs, without stable incomes and without hope. That is a legacy; that is austerity.
Instead of that, last Wednesday the Chancellor told us that our economy is now the fastest-growing in the G7 and will continue to be so. We have record employment, and the deficit and debt are coming down. May 2015 marked the British people’s belief that we were on the right track; 2010 marked their rejection of “Spend now, ask questions later.” The Budget we heard was what our economy needed and what the election mandated: a Conservative Budget, and I welcome it. Hard-working people across the country welcome it. A gentle nudge to make it more stable—that is what we do when we balance something: we give it confidence and certainty.
Our economy is still too unbalanced; however, I want first to add a few notes of caution to what was said last week, and I would like to ask my right hon. Friend the Chancellor what he is going to do to address these concerns. Our national living wage goes further than the SNP’s pledge to increase the minimum wage to £8.70 by 2020 and further than the Labour party’s pledge of an £8 minimum wage, but a number of my constituents have contacted me and said that such a steep rise will put a strain on their businesses. In particular, small shops and rural post offices will find it difficult. Many argue that the higher costs will not be paid for through redundancy, but through higher prices for the consumer. Many small and medium-sized enterprises are already working with minimal staff, and hope alone will not increase their turnover. My family-run local baker suggests that his wage bill will increase by 2020 by £2,000 a week. He is working—as the hon. Member for Stoke-on-Trent South (Robert Flello) put it, speaking from the back of the Chamber—that 60-hour or 70-hour week. Small business owners run this country and they work hard. [Interruption.] Let me tell the hon. Gentleman that they do pay corporation tax, if they make a profit, and we have helped them by taking it down to 19% and then 18% in 2020.
That family business has also raised concerns, as have many others, about differentials in the wage process. Things will need to be reflective in order to keep staff. It will be challenging to raise wages from £6.50 to £9, and productivity will need to increase, but—I say this to the hon. Member for York Central (Rachael Maskell)—it is those small business owners who will make highly productive, highly well-paid jobs. They do not grow on trees. Those businesses have to start as seed organisations; they have to start from small beginnings. We cannot just magic high-paid jobs out of the air.
A fairer society is a two-way street: fairness to those who have little, but also fairness to those who pay—those who make the jobs and pay the wages. There must be recognition that some SMEs may suffer. It will be challenging to keep people employed, and that leads me to the question: where do we find this extra money and who does it come from? It will be from small business and large businesses; and that is what this Budget did: it encouraged them.
My second area of concern is about the delivery of adult care. Many of my constituents are elderly; indeed, one of my wards has the highest longevity in the country, but a great number of people are required to care for them. Many of these carers are over 25 and occupy some of the lowest-paid jobs in our economy. They will receive the enhanced living wage. The care is essential—it keeps many constituents in their own homes, living independently and not putting a strain on the NHS—but adult social care is feeling the strain, as are private providers, and their ability to absorb costs is challenging. Where statutory obligations place pressure on businesses, adult care and nurseries providing childcare, to name but two—
Angela Crawley (Lanark and Hamilton East) (SNP)
Will the hon. Lady give way?
Jo Churchill
No, I do not have time.
I welcome this Budget, but I also welcome the fact that its aspiration is to be fairer. We should not forget who creates our jobs and who invests. Business investment is up by 32% since 2010. About 95% of all firms are SMEs, while 90% are micros. I need them to thrive, to take on apprentices and to invest. To encourage more entrepreneurs, we need those businesses to grow, which is just what this Budget will achieve. I ask the Government to keep giving businesses their support.
Shabana Mahmood (Birmingham, Ladywood) (Lab)
We have had a good debate—today and over the last few sitting days. It is a pleasure to close our Budget deliberations on behalf of the Opposition. I would like to start by congratulating the hon. Members for Kensington (Victoria Borwick), for Paisley and Renfrewshire South (Mhairi Black), for Brecon and Radnorshire (Chris Davies), for Airdrie and Shotts (Neil Gray) and for Linlithgow and East Falkirk (Martyn Day) on making their maiden speeches today. I am sure all Members will join me in wishing them well as they begin their journey of standing up for their constituents in this place.
Last week, the Chancellor delivered his first Budget of this Parliament. Although his rhetoric might have delivered him positive headlines on Thursday morning, the reality is that his Budget will deliver misery and hardship for ordinary working people because it leaves them worse off, penalised for doing the right thing in working and punished for circumstances outside their control. Not only does this Budget penalise people in low-paid work; it fails the test of building a more productive economy, because the Chancellor has either flunked or ducked the big long-term decisions that need to be made on infrastructure.
What ordinary working people in our country needed was a Budget that would make their lives easier, make work pay and help people not just on to the first rung of the work ladder but on to the next one—into better jobs with better prospects and better pay. Instead, the Chancellor focused his energies on his own bid for a better job, better prospects and better pay. Rather than help the working poor to move up, he focused on his own move next door.
The truth that Government Members have to confront is that 3 million working families will bear the brunt of the Chancellor’s £4.5 billion-worth of cuts to tax credits. These cuts will hit working people on middle and lower incomes, completely undermining the Tory argument that this is a Budget for working people. They penalised the very people in work who are trying to do the right thing and who do not earn enough to make ends meet. As I said only a week ago, it is wrong and unfair to remove tax credits from working people without first creating the conditions that would allow it to be done in a way that does not pull the rug from under people on low incomes—by hitting them with what is effectively a hefty work penalty. We all want to see a higher-wage economy, in which people are less reliant on tax credits to make ends meet, but we need to embed higher wages in the economy before we consider going ahead with any changes to tax credits.
Kevin Hollinrake
Does the hon. Lady agree with her leader when she said that she should accept the changes to welfare and tax credits contained within this Budget?
Shabana Mahmood
That was hardly worth the wait. I have to say that the hon. Gentleman should have been paying attention to what my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman) actually said. She came out very strongly against the whole package of working tax credit changes. If he had listened to my remarks, rather than try to intervene with a Whip’s question, he would have realised that that is exactly what I am doing myself.
The Government will say that they have moved on pay. Again, however, there is a big difference between rhetoric and reality. The Government’s cuts to tax credits overwhelmingly outweigh their measures on pay. I welcome the proposed rises in the national minimum wage, which is still what it is. [Interruption.] I am pleased to see that the Chancellor has joined us. He has failed to explain why raising the minimum wage was so wrong only a few short weeks ago during the general election campaign, in view of our manifesto commitment, or how he came to agree with us so soon after the general election. Nevertheless, imitation is indeed the sincerest form of flattery. We are pleased to observe that the party that forced the last all-night sitting in the House in an attempt to block the introduction of the national minimum wage by the last Labour Government now agrees with us not only that it is important and necessary, but that it should go up. However, we should be clear about the fact that it is not a living wage.
There has always been a difference between the minimum wage and the living wage. Re-badging the new national minimum wage as a living wage will not help the Chancellor, because ordinary working people can see a political con for what it is. The Living Wage Foundation was quick off the mark on Budget day in making that very point. The inconvenient fact for the Chancellor is that the living wage—the real living wage—is calculated on the assumption of a full take-up of tax credits, the very tax credits that the Chancellor has just cut. To make up for the loss of those tax credits, a real living wage would have to be considerably higher than what the Chancellor is now promising working people in Britain.
The new national minimum wage rate of £7.20, when it is introduced next year, will be lower than the current living wage of £7.85. In effect, the Chancellor, who says that he stands with working people, will offer working people in 2016 the 2011 living wage, and we will not let him pretend otherwise. In the end, the simple truth is that the wage increases that are on their way are not enough to make up for the loss of tax credits.
Twenty-four hours after the Chancellor delivered his Budget, the Institute for Fiscal Studies dismissed his claim that increasing the minimum wage would compensate working people. The IFS said:
“the key fact is that the increase in the minimum wage simply cannot provide full compensation for the majority of losses that will be experienced by tax credit recipients. That is just arithmetically impossible.”
The IFS also said that the biggest change, which sounded very technical, was the reduction in the work allowance. It explained:
“The work allowance is the amount that a claimant can earn before benefit starts to be withdrawn. Significant allowances were an integral part of the design of UC”
—universal credit—
“intended to give claimants an incentive to move into work. This reform will cost about 3 million families an average of £1,000 a year each. It will reduce the incentive for the first earner in a family to enter work.”
A regressive Budget with a work penalty of £1,000 a year: that is what the Government have delivered to ordinary working people in our country—and while they hit those ordinary working people, they also fail to address a central economic challenge—productivity. That is the puzzle that it is crucial for us to crack and solve, because getting it right is vital if we are to achieve higher living standards, sustained GDP growth, and effective deficit reduction, but this Budget failed the productivity test.
Shabana Mahmood
I will not give way for another Whip’s question. I must make some progress.
Productivity has stagnated under this Government, and the Office for Budget Responsibility has revised its productivity forecast downwards for next year and the three years after that. It has also confirmed that the Chancellor will miss his target of increasing exports to £1 trillion by a staggering £367 billion by 2020. Productivity has been revised down and the current account deficit has widened to 5.9% of GDP, becoming the largest annual peacetime deficit since at least 1830. However, all that the Government had to offer was a damp squib of a productivity plan on the Friday after the Budget—a patchwork of existing schemes rather than a substantial reform to boost skills, business growth and wages, and, in relation to infrastructure, output that is lower than it was five years ago.
There are, of course, some measures in the Budget that we will support, not least those that started life—[Interruption.] I am glad that Conservative Members are cheering, because the measures that I am about to mention started life on our Benches as our manifesto commitments. I welcome the Government’s new-found zeal in dealing with non-doms and with the so-called carried interest loophole involving private equity managers. Conservative Members were not so vocal on such matters just a few weeks ago, but I am glad that they have had a rethink since the general election, and have found their voices when it comes to our policies.
We will, however. stand against measures that are wrong and unfair. Apart from the overall package of measures on tax credits, we are deeply concerned about the impact of removing student maintenance grants from the poorest undergraduates, about the lowering of the level of benefit for those who cannot currently work and are in the work-related activity group, and about the Government’s strategy on child poverty, which essentially boils down to their changing the definitions because they will miss their target otherwise. Every Budget is about choices. This should have been a Budget to bring the deficit down and help people into work and into better work by creating the high-skill, high-pay jobs needed to boost productivity. Instead, it penalises those already in work. It is people on low and middle incomes, the ordinary working people of Britain, who will pay the price for this Chancellor’s choices, and we will stand with the ordinary working people of Britain by voting against this Budget tonight.
The Chief Secretary to the Treasury (Greg Hands)
I am very pleased to be closing the debate on this historic Budget as the first Conservative Chief Secretary on behalf of the first Conservative-only Government since 1997.
We have had a good debate. Indeed, we have had four good days of debate. For me, the most remarkable parts were the commanding speech from my right hon. Friend the Chancellor on day one and the real passion from my right hon. Friend the Work and Pensions Secretary. Almost as remarkable were the opening exchanges on Thursday; for the last five years of the Budget, day two saw set pieces between Ed Balls and Vince Cable, but not this year, as we, the Conservatives, took both of their seats on 7 May.
Today we have had five high-quality maiden speeches from the three great nations of England, Scotland and Wales. It was a particular pleasure to hear from my constituency neighbour, my hon. Friend the Member for Kensington (Victoria Borwick). She made a marvellous maiden speech, with a great tribute to her predecessor Sir Malcolm Rifkind, who is actually my predecessor as well. We have another common predecessor; she told us how she appeared in the index of Alan Clark’s “Diaries” and the concern that had caused her husband.
Equally impressive was the maiden speech of the hon. Member for Paisley and Renfrewshire South (Mhairi Black), who spoke with great poise, engagement and passion, although I have to say that most of her speech seemed to be directed at the Labour party. She said that Labour had left her family, not the other way round. I congratulate her on a memorable maiden speech and on her first-class honours degree.
From Wales, we heard from my new colleague my hon. Friend the Member for Brecon and Radnorshire (Chris Davies). In what was a very entertaining speech he took us through his first day here—how he saw the mosaic of St David in the Central Lobby and his pride at being both Welsh and a Unionist, and how the Whips approached him sternly, with one Whip reminding him somewhat of his wife back home. I am wondering which member of the Whips Office that might have been. His speech was also peppered with references to all kinds of other battles and heroism.
Also from Scotland, we heard from the hon. Member for Airdrie and Shotts (Neil Gray). He made a very competent maiden speech and talked about life in Westminster and missing his family back in Scotland. I can tell him that that is not unique to those travelling from Scotland; it can happen to those of us who are MPs for London constituencies as well. He was generous about his predecessor, Pamela Nash, and talked about being the first Orcadian for 200 years to be an MP.
Again from Scotland, the hon. Member for Linlithgow and East Falkirk (Martyn Day) was generous to his predecessor, Michael Connarty, whom I knew well and served under on the European Scrutiny Committee, and gave us a radical, passionate and humorous speech. I wish him well.
A number of other Members also contributed to the debate, but I will not go into their speeches in detail. I was struck, however, by the fact that, although some Labour Members raised interesting points, so many of their speeches sounded like they were cut and pasted directly from their election hustings speeches and showed no recognition of what had happened on 7 May or what happened last week.
Let me now conclude the Budget debate. This is the Budget that gives Britain a pay rise and that cuts taxes for 29 million people. It is the Budget that protects our national security and that gives Britain the security of living within its means. To be fair, not all Labour Members ignored the results of the election or the Budget last week. The acting Leader of the Opposition, the right hon. and learned Member for Camberwell and Peckham (Ms Harman)—[Hon. Members: “Where is she?”] That is a very good question. She might be in hiding. She reprimanded the shadow Health Secretary over the benefit cap, reminding him:
“You may have noticed that we lost the election”.
It is remarkable that he or anyone else could possibly have missed that fact. It is equally remarkable that she now appears to be on the right of her party. I do not think that she moved; I think the party has moved to the left. We have heard from the right hon. Member for Birkenhead (Frank Field), who is so enthusiastic about our new national living wage that he wants it to be brought forward and to start sooner. It is resoundingly clear from this Budget debate that Labour has made no progress in economic policy since May.
Geraint Davies
Is not this a Sheriff of Nottingham Budget? Is not the Chief Secretary to the Treasury robbing the poor by removing their tax credits and giving to the rich by increasing the inheritance tax threshold? This Budget stinks, and his grubby hands are all over it.
Greg Hands
There you have it, Madam Deputy Speaker. The hon. Gentleman’s remarks epitomise everything that we have all been suspecting about the Labour party over the past 10 weeks—namely, that it has learned nothing from its defeat right across the UK on 7 May. It looks as though it intends to start this Parliament as it started the last one: in disarray, denying the deficit and failing to apologise for its past mistakes.
The right hon. Member for Doncaster North (Edward Miliband) lost the election, and the turning point was surely that moment in the TV debate when he denied that the Labour Government had spent too much. If they had not spent too much, how come there was no money left? Labour’s economic credibility was so bad that, at the election, it even lost the constituency of its own shadow Chancellor as well as those of half its Treasury team.
There was one senior Labour figure who avoided losing his seat, but he did so only by standing down voluntarily. That was the last Labour Chancellor, Alistair Darling. He is reported to have said something very interesting the day after the Budget, which was that Labour was “in disarray” and that it was
“paying the price of not having a credible economic policy.”
He hit the nail on the head. Labour’s response to the Budget has been totally incoherent. Who would have thought that a Labour Opposition could attack a policy to bring the minimum wage for workers from £6.50 up to a national living wage of £9 in the course of a Parliament? I invite the other parties to consider their positions. By the way, only the Labour party could have a leadership crisis without actually having a leader. If Labour Members vote against the Budget in a few minutes’ time, they will be voting against a national living wage, against dealing with the deficit and against meeting the UK’s NATO defence commitments. They will also be voting against £10 billion of extra investment in the NHS.
This is not a Government who shy from the tough decisions. It is right that higher wages, not welfare subsidies, should raise the standard of living of working families. It is right that those with the broadest shoulders should bear the biggest burden. It is right that we should help and support our businesses to bring prosperity to this nation and it is right that we should build ourselves strong, stable and secure public finances. We are doing that. This has been a landmark Budget, delivering for the entire country a bright and prosperous future. There are still tough choices ahead, but I commend the Budget to the House.
Question put, That the amendment be made.
2. Future taxation: rates of income tax
19:26 - The House divided: - Ayes: 329 / Noes: 67 - Question accordingly agreed to.
3. Inheritance tax
19:40 - The House divided: - Ayes: 330 / Noes: 280 - Question accordingly agreed to.
4. Banking companies (surcharge)
5. Controlled foreign companies
6. Compensation payments
7. pENSIONS
8. Enterprise investment scheme
9. Venture capital trusts
10. Meaning of “farming” and related expressions
11. Expenditure on research and development
12. Loan relationships and derivative contracts
13. Intangible fixed assets
14. Investment companies: currency to be used in corporation tax calculations
15. Group relief
16. Tax avoidance involving carried-forward losses
17. Trade profits
18. Carried interest and disguised investment management fees
19. Insurance premium tax (standard rate)
20. Aggregates levy: restoration of exemptions
21. Climate change levy: removal of exemption for electricity from renewable sources
19:53 - The House divided: - Ayes: 325 / Noes: 77 - Question accordingly agreed to.
22. Relief from tax (incidental and consequential charges)
23. Future taxation: other
20:05 - The House divided: - Ayes: 327 / Noes: 6 - Question accordingly agreed to.
Thomas Cook: Christi and Bobby Shepherd
Mary Creagh (Wakefield) (Lab)
The subjects of tonight’s debate are known to everyone in this country, their faces familiar from the iconic Horbury School photograph: big sister Christi in plaits, with her little brother Bobby smiling at the school photographer; one of millions of school pictures treasured by parents, grandparents, family and friends. This photo is extra special. It is different because those children will have no more photos, no weddings, no 18th or 21st birthdays, no more laughter, no more tears. They have never met their four younger brothers and their little sister. Christi and Bobby are dead. That school photo has become a symbol—a symbol of their parents’ long, difficult and arduous fight for justice. It has become a symbol too of the cold-hearted indifference of Thomas Cook and of this Government to ordinary people who find themselves in extraordinarily difficult circumstances.
Tonight we debate the saddest of subjects, the tragic deaths of Christianne and Robert Shepherd from Horbury near Wakefield. They were just seven and six years old when they died from carbon monoxide poisoning from a faulty boiler on a Thomas Cook holiday in Corfu in October 2006. I know, Madam Deputy Speaker, that you and the whole House will wish to join me in putting on record our deepest condolences to their family and friends.
Sharon Wood and Neil Shepherd, the children’s parents, and their partners Paul Wood and Ruth Shepherd, have shown an unwavering commitment to get to the truth. Their greatest wish is that no other family should suffer a tragedy like theirs. Theirs is a tale that will fill any thinking person with horror. The police knock on the door. At first, the mystery of how the children had died. The press speculation that Neil had somehow carried out a murder/suicide. Neil and Ruth awaking in Corfu after days in a coma to discover that the children were dead. Sharon and Paul taking their own photographs of the room where the children died. Visiting Christi and Bobby in the chapel of rest and finding them dressed in other children’s clothes. Bringing the children home in their coffins, on a plane packed with holidaymakers. The press intrusion.
After the children’s deaths, the family were forced to wait years before the criminal trial was held in Greece. The Foreign Office, under a Labour Government, gave them no advice and did not tell them they could get a daily attendance allowance from the Greek courts. That caused the family grave financial hardship. They had to remortgage their homes to pay for expensive out-of-season flights and accommodation. On several occasions they flew out, only to discover that the case had been suspended or postponed. They struggled to follow the court case as it was conducted in Greek.
In 2010, the court in Corfu found three hotel workers, including the hotel’s general manager, guilty of manslaughter by negligence. They were sentenced to seven years in prison, but those sentences were reduced on appeal to a three-year suspended sentence. Throughout the process, Thomas Cook refused to apologise to or meet the family.
In February 2014, eight years after Christi and Bobby’s deaths, the inquest into their deaths reopened in Wakefield, yet the family faced another battle. The Government refused them legal aid, saying that their case was not in the wider public interest. The Government expected the bereaved parents to cross-examine witnesses after sitting through the harrowing details of how their children had died. Thomas Cook, of course, would have had some very good lawyers. Those lawyers made a bid to prevent the inquest from even taking place and requested that it should take place without a jury. Thankfully, David Hinchliff, the coroner, dismissed that request.
I want to put on record my thanks to the Wakefield Express. Its #TimeForTheTruth petition to grant the family legal aid was signed by 4,500 people in Wakefield. The then editor, Mark Bradley, Gavin Murray and the Express team have supported the parents’ fight for justice with great passion, as have the people of Wakefield.
Research by my office revealed that at least 43 holiday- makers died of carbon monoxide poisoning in Europe in the years since Christi and Bobby died. I raised the issue at Prime Minister’s questions, the Prime Minister met the parents, and legal aid was finally granted in April 2014. I am grateful to the Under-Secretary of State for Justice, the hon. Member for North West Cambridgeshire (Mr Vara), for his help in that matter, but the parents should never have been put in that position.
The inquest into the children’s deaths opened in April this year. I sat with Sharon and Neil and Paul and Ruth at the start and close of the inquest. I saw how hard it was for them to hear how and why their children had died, overcome by fumes from a faulty water heater that had been botched and bodged.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
Six months almost to the day before Bobby and Christi Shepherd were killed, my brother Edward was killed by carbon monoxide poisoning while abroad, so I am doubly grateful to the hon. Lady that this debate has been secured. Does she agree with me that having devices such as an audible CO alarm would be a concrete way to help to ensure that Edward Tomlinson’s family, the Shepherd family and other families never have to go through this again?
Mary Creagh
I begin by expressing my deepest condolences to the hon. Gentleman. I had no idea until he approached me in the Lobby that his family shared the experience of this tragedy. I believe there is a cross-party desire for change, and that is what we need to hear about from the Government this evening. We know that carbon monoxide monitors, which bought in bulk cost pennies, save lives. We also know that we need to raise awareness of the risks of carbon monoxide poisoning, because people do not understand how dangerous it is—two breaths can kill. This is incredibly important. Just as we would not go on holiday to a hotel that did not have smoke alarms, we need new industry standards for the tourism and hotels industry wherever gas is present. I hope that the hon. Gentleman will join us in our campaign. He is a new Member, and I am sure that he will be committed to this cause throughout his parliamentary life.
I saw the parents hear, during the inquest, how and why their children had died. They had to sit as the former chief executive of Thomas Cook, Manny Fontenla-Novoa, declined to answer the questions from their barrister; and they gasped, along with the whole country, when the current chief executive of Thomas Cook, Peter Fankhauser, said that Thomas Cook had “no need to apologise”.
Finally, in May, the inquest jury concluded that the children had been unlawfully killed and that Thomas Cook had
“breached its duty of care”.
The Mail on Sunday then revealed that Thomas Cook had received compensation for the children’s deaths from the hotel. The compensation covered the cost of sending “media advisers” to Greece to limit reputational damage and loss of profits from cancelled bookings. To be fair, Thomas Cook announced it would donate the compensation to UNICEF, the children’s charity, yet even that gesture was a clumsy one, done as it was without consulting the parents and announced first to the media in a desperate damage limitation PR exercise.
ITV’s consumer affairs editor Chris Choi discovered that the hotel manager convicted over the children’s manslaughter was working at a different Thomas Cook hotel. Then came the news that the electrician who was also convicted over the tragedy was still employed at the same Corfu hotel where the children died.
The Mail on Sunday then reported that Harriet Green, Thomas Cook’s chief executive when the company tried to stop the inquest taking place, was to receive a multimillion-pound pay-out. Ms Green has now chosen to donate one third of her bonus to charity, and the parents are satisfied that some of the funds can be put to good use in the new carbon monoxide initiative that they will be involved with, in memory of the children. I am grateful to Ms Green’s law firm, Withers, which sent me an email at 5 o’clock in the morning to help my “fact checking” when I tabled early-day motion 42. If Ms Green’s lawyers ever find the letter which she alleges she wrote to the parents and which they say they never received, I am sure that they and we would be very glad to see it.
I recently met Mr Fankhauser, Thomas Cook’s chief executive. I know that he has spoken privately with the family and apologised to them, and that there has been a financial gesture of goodwill to them. He has launched an internal inquiry into the company’s response to the deaths of Christi and Bobby. Thomas Cook must never again fail another family.
Next year the building where the children died will be demolished and made into a play area. Thomas Cook is underwriting a new charity to the tune of at least £1 million to raise awareness of carbon monoxide poisoning. The family are satisfied with Mr Fankhauser’s new approach and his attempt to put things right. They would like to see the Government match-fund Thomas Cook’s contribution and do their bit too to put things right. I look forward to working with the family, Thomas Cook and hon. Members across the House on a new EU-wide carbon monoxide safety campaign. I hope we can organise a conference in this place, perhaps during carbon monoxide awareness week in November.
It is important to put these facts on the public record so that we do not forget those children. Bobby and Christi should not have died and the family should not have had to fight so long and so hard for justice. The travel industry and the Government must learn from their mistakes because tourism is responsible for around 9% of total GDP in the EU and over 9 million jobs. Consumer confidence is vital to the success of that industry.
As millions of British families get ready for their summer holidays, they want to know that they will all come home safely.
My colleague Linda McAvan, Yorkshire’s Labour MEP, has held five annual carbon monoxide round tables in the European Parliament with Victims of Carbon Monoxide, the Health Protection Agency, the Gas Safe Register, the Health and Safety Executive, energy retailers, the Association of British Travel Agents and countless others. In November last year, the European Commission launched a Green Paper on the safety of tourism accommodation services. ABTA’s submission to that Green Paper quotes Eurostat figures that 6% of European citizens experienced some form of safety issue on holiday. That equates to over 52 million tourists.
ABTA commissioned work from John Gregory, a CORGI gas safety expert. He condemns
“a lack of legislative consistency throughout Europe”,
and the fact that there is
“no Europe-wide statistical database providing data on serious incidents caused by carbon monoxide poisoning”,
which means that the extent of the problem is unknown owing to a lack of data, with each individual case presented as a tragic occurrence rather than as a systematic failure. He notes that
“the competence, training and knowledge of the operative undertaking servicing and maintenance of gas appliances across the European Union are of a lesser standard than that required in the UK.”
Contrast ABTA’s submission with that of the UK Government. Paragraph 27 of the Government’s submission says that
“a European safety standard would impose an unnecessary cost on tourism businesses in England.”
Paragraph 42 states that
“the Secretary of State for culture, media and sport”—
the reference is to the present Secretary of State for Business, Innovation and Skills, the right hon. Member for Bromsgrove (Sajid Javid)—
“has asked that we make clear in our response that…he felt it was not a good use of EU time.”
British families planning their summer holidays will be shocked to hear the former Secretary of State’s cavalier approach to their safety. British families need and deserve good safety standards across Europe and across the UK. The opposition of the Government and of other member states means progress on carbon monoxide safety has stalled. The EU Commission has decided that there is no case for introducing legislation on carbon monoxide safety in holiday accommodation after its Green Paper. That must change. The Government, too, have a duty of care to British citizens. The Prime Minister should make the safety of British tourists a priority as he seeks to renegotiate the UK’s relationship with the EU.
Carbon monoxide is a silent killer. Nothing will bring back Bobby and Christi, but their parents’ dearest wish is to spare other families the heartbreak they have suffered. I hope the Minister will today commit her Government to push for better carbon monoxide safety standards across Europe and in the UK. I hope Thomas Cook will live up to its promise to improve carbon monoxide awareness. The joys and heartaches of family life are known to every Member of this House, but no parent can imagine the feeling of losing one child on a holiday, let alone two children on the same night.
There is a photo missing from Sharon and Neil’s homes. It is the photo of Christi on her prom night, dressed up and having fun with her friends. She would have been 16 this year, waiting for her GCSE results and about to go to college for her A-levels. Another photo is missing. It is of Bobby. He should be studying for his GCSEs, hanging out with his friends and playing with his brothers and sisters. All that joy, all that future, all that hope and all that life have been stolen from them. Their parents have told me that they will never again have a perfect day.
The powers that be, whether in the Government and at Thomas Cook, should be in no doubt that I intend to use whatever power this place gives us to campaign for justice for Christi and Bobby and their parents. Theirs is a cause that cries out for change, for attention and for justice. We must see that they get it.
Andrew Bingham (High Peak) (Con)
I congratulate the hon. Member for Wakefield (Mary Creagh) on securing the debate and offer my sympathies to the family of Christi and Bobby in this truly tragic case, and indeed to my hon. Friend the Member for Mid Dorset and North Poole (Michael Tomlinson) on losing his brother. The hon. Lady made an impassioned speech.
I have long campaigned on carbon monoxide poisoning, because before being elected to this place there was a similar tragedy in my constituency. Carbon monoxide is known as the silent killer; we cannot see, taste or smell it. Last year I had an opportunity to introduce a private Member’s Bill. Rather than selecting a subject myself, I came up with three or four options and asked my constituents to choose which one they wanted me to introduce. They chose a Bill to make carbon monoxide detectors mandatory in rental and new-build properties. That showed that people are aware of the dangers of carbon monoxide, although not as aware as I would like them to be.
Nowadays people have smoke detectors without thinking about it, and carbon monoxide detectors should be just as prevalent. As many have said, including me, carbon monoxide detectors are not expensive and they save lives. Some people take them on holiday, having heard of cases such as the one the hon. Lady has talked about tonight. I did not succeed in getting my private Member’s Bill through, but I am pleased that the Government acknowledged the problem and introduced legislation on carbon monoxide detectors in rental properties, because that is where many of the tragedies happen.
I am vice-chair of the all-party group on carbon monoxide, which meets regularly. The case that the hon. Lady’s has raised relates to a holiday abroad, but there are also cases of carbon monoxide poisoning on holidays in this country, even on camping holidays, in caravans and in tents. I struggle to understand why, but some people have brought the embers from barbecues into their tents, presumably unaware of the dangers.
I commend the hon. Lady for securing a debate on this important subject, which is close to my heart. I will continue to campaign on it, because I want us to do everything we can, in this place or beyond, to make carbon dioxide detectors as ubiquitous as smoke detectors. As I have said, they are not expensive and they can easily be installed in rooms with appliances that could leak.
We must raise awareness of the consequences of carbon monoxide poisoning. Often people do not realise that they are affected. They could be sitting and watching television for a few nights and just think that they are feeling tired or drowsy, unaware—I am sorry for putting it so starkly—that they are slowly being poisoned. That is what carbon monoxide does; it poisons people without their knowing. We then have tragedies of the sort the hon. Lady has so eloquently set out tonight. I, for one, do not want to see any more tragedies like that, either in this country or abroad.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Tracey Crouch)
For nearly a decade now, the family of Christi and Bobby Shepherd have faced an extraordinarily difficult time, but for the past year, in particular, they have shown incredible resilience throughout the investigations into the cause of this terrible occurrence. The strength that they have exhibited over the past nine years is matchless, by any account. I know that the whole House will want to extend its deepest condolences to Mrs Sharon Wood and Mr Neil Shepherd, and to all of Christi and Bobby’s loved ones. Our thoughts are very much with them at this time. I would not wish what they have gone through on anyone.
I would like to take this opportunity to pay tribute to the hon. Member for Wakefield (Mary Creagh), not only for her efforts in securing this debate but for all that she has done over the years to support the family of Christi and Bobby Shepherd. The hon. Lady and, indeed, my hon. Friend the Member for High Peak (Andrew Bingham) have become champions of greater carbon monoxide safety within the UK and across the European Union. Their ongoing efforts in this area of consumer safety should be recognised for the important work that it is, and I commend them for their dedication. My hon. Friend the Member for Mid Dorset and North Poole (Michael Tomlinson) made a really powerful intervention. I hope he will join cross-party colleagues in this incredibly important campaign. The deaths of Christi and Bobby Shepherd were a horrific tragedy. They should not have been allowed to happen and they should never happen again. UK residents enjoy foreign travel and made 60 million visits last year. Their safety must be an absolute priority.
The hon. Lady went through the sequence of events in some detail, and I want to reiterate some of the fundamental details of what happened, but I am conscious of time and of the fact that she will want some proper answers to the points that she raised. At the end of the day, we should remember that four people were found in a hotel by a chambermaid having been overcome by carbon monoxide from a faulty boiler. While Neil and Ruth were unconscious, the two children, Bobby and Christi, tragically, had died.
Investigations were conducted by the Greek authorities. A UK coronial inquest into the cause of death of the two children concluded earlier this year that Christi and Bobby Shepherd died unlawfully as a result of carbon monoxide poisoning. As the hon. Lady said, the coroner in charge of the inquiry, David Hinchcliff, found that although the holiday operator was misled by the hotel about safety, Thomas Cook’s own practices for ensuring guest safety were insufficient.
The hon. Lady mentioned the compensation that Thomas Cook received and a recent donation it made, so I will not go over that again. However, it is absolutely clear that the extended and ongoing dialogue between it and the family has contributed to the family’s distress. There are clearly lessons that Thomas Cook must learn from this dreadful episode. The coroner’s report makes it clear that the company needs to review and improve its safety practices. Robust safety procedures are enshrined in law, and they were not followed. Thomas Cook should also reflect at length on how it has treated a grieving family. Its duty of care extends beyond the physical and the letter of the law. There is a fundamental standard of human decency that must be met in future.
Of course, the letter of the law matters too. UK holiday companies are subject to specific regulations regarding the performance of the package contract. The Package Travel, Package Holidays and Package Tours Regulations 1992 clearly state that the organisers of a package holiday sold or offered for sale in the UK are responsible for the proper performance of the contract, including for elements supplied by third parties such as hoteliers. Madam Deputy Speaker, if you were to take your family on holiday here in the UK, you would rightly expect adherence to all proper safety measures. You would also be forgiven for assuming that this would be the case when you take your family abroad. Unfortunately, as this tragic case proves, that is not always so.
In the light of this, the hon. Lady was concerned by the Government’s response to the European Commission’s green paper on the safety of tourism accommodation services. The purpose of this paper was to ascertain whether the current legislation, adopted by member states, adequately protects tourists travelling within the EU. In response to this publication, the previous Government determined that current UK legislation does make necessary safety provision. Subsequently the European Commission also concluded that there was no established connection between the existing regulatory framework across member states, the absence of EU regulation, and risks to consumers. It is therefore not considering European-level consumer protection in the area of tourism accommodation at present. However, the issue in this case was adherence to standards. Had the standards been adhered to, Bobby and Christi would not have lost their lives.
Mary Creagh
The European Commission has withdrawn or paused—I think that is the word—its proposals on improving the protection from carbon monoxide because there was no will from member states, including from our Government, to act in this area. However, there is a clear will among the British public and across this House, so will the Minister undertake to look afresh at the Government’s position? This issue will not go away. Indeed, as Greece receives piped gas, it will become a bigger issue in the Greek holiday industry. While these tragedies are happening, we cannot say, “All is well; there’s nothing to see here,” and move on.
Tracey Crouch
I was just about to say that we need to keep this issue under constant review. There is no room for complacency. Although the Government do not think that there is a need to amend the primary legislation at the moment, there is a strong case for considering how effectively the laws are enforced.
As the hon. Lady pointed out, ABTA and its partners have long campaigned on this issue. I can tell her and the House that, as a direct response to this debate, I will be meeting ABTA and the industry to ensure that it fully understands its duty of care to consumers. It is imperative that the sector commits itself to upholding best practice, from industry suppliers all the way to the end user—the customer.
I hope that the appointment of Justin King, who has been tasked with the responsibility of leading an internal review of Thomas Cook’s customer health, safety, welfare, relations and crisis management practices, will mark the beginning of a healing process between the family of Bobby and Christi and the holiday operator.
Now that the relevant criminal proceedings and verdicts have been considered, I urge tourism operators across the UK to reflect on the lessons learned and to be ever vigilant. The safety of tourists, both here and abroad, must come before all other concerns. I will reinforce that message to the industry in the coming months, and I hope that the hon. Lady will support the Government in this work, which will protect the safety of future tourists and honour the memory of Bobby and Christi Shepherd.
Mary Creagh
I thank the Minister for her response to the debate. I want to leave her in no doubt that people across the country—medics, campaigners and all sorts of people—have come forward to Members from across the House as a result of this case, and this is an issue that really will not go away. Just like in my long campaign for scalding valves to be fitted, in the end the moral arc will tend towards justice for these children. As I said at the end of my speech, there are many people in the House who, having heard this story, will not rest until we see a minimum European safety standard across all EU member states to ensure that we protect—