Global Economy

Anne Main Excerpts

Thursday 11th August 2011 Commons Chamber

[Mr Osborne]

It sounds like the shadow Chancellor wrote that question. Let me repeat what I said earlier: the proposal Barack Obama put forward in his speech at the George Washington university is for a deficit reduction in the United States of the same pace and scale as the one we are pursuing in Britain. That is because in America, too, they understand that they have to deal with their budget deficit.

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

Europe is making increasing demands on our pension pots and our benefit pots and, indeed, it recently made a demand on our VAT. Is it not time that we had a debate on how much we pay towards Europe? The Chancellor says it would be economically disastrous if it broke up, but there should be a debate. Some 75,000 people have signed a Daily Express petition asking for a debate on this, so surely there should be an autumn debate?

[Mr Osborne]

We do debate the European budget in this Parliament, and they are often quite lively debates. We are fighting hard for a real-terms freeze in the European budget not just for next year but for the coming new financial perspective from 2014, and we have enlisted a number of allies. There is now an understanding across Europe that, with very tough public expenditure decisions at home in every European country, we also need to get control of the European budget.

Private Finance Initiative

Anne Main Excerpts

Thursday 23rd June 2011 Westminster Hall

[Paul Uppal (Wolverhampton South West) (Con)]

First and foremost, I congratulate my hon. Friend on securing such an important debate. It is a testament to his tenacity, research and expertise in this field that this debate has been attended by so many Members. I concur with his view that the PFI picture is mixed—

[Mrs Anne Main (in the Chair)]

Order. I remind the hon. Gentleman that interventions must be brief.

[Paul Uppal]

I will attempt to be brief. Does my hon. Friend concur with my view that, although the picture is mixed, the fundamental issue is that the PFIs are often short-term solutions to the long-term problems that we face in government? That is illustrated exactly by the issue with Southern Cross, which has often used sale and leaseback to finance its own businesses.

--- Later in debate ---

[Several hon. Members]

rose—

[Mrs Anne Main (in the Chair)]

Order. Before I call the next speaker, I remind hon. Members that a lot of people want to participate in the debate. I hope everybody will be called, and I am allowing for interventions, but I ask hon. Members to bear that in mind.

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[Andrea Leadsom]

Again, my hon. Friend takes me to my next point: the other side of the equation is the very apparent disadvantages of PFI, the primary and key one being the lack of flexibility. The reason for it is that often a special purpose vehicle sets up the project, and therefore the project is inexorably linked to its financing. For example, you may build a school and decide you want an extra classroom or two. A PFI school in the constituency of a member of the Treasury Committee built its hockey pitch 2 feet too short for internationals, so it tried to extend it by 2 feet, but therein lay a can of worms. It was impossible to do it other than at exorbitant cost, because the contract and its financing are inextricably tied together within the special purpose company. What happens, and the reason hon. Members have spoken of money being made out of the contract as it proceeds, is precisely that if you want to change the spec—which of course you do—

[Mrs Anne Main (in the Chair)]

Order. The hon. Lady has on occasion referred to my wanting to do many things. I do not want to do any of them, but I am listening with interest.

[Andrea Leadsom]

I am sure that, privately, you might be interested Mrs Main, but thank you for keeping me in order.

What you—[Hon. Members: “One!”]—or rather not you, Mrs Main, but an LEA wanting to build a school, would need would be to have the entire specification for the school for the subsequent 25 years up front. That is clearly impossible, and the banks make their money by charging enormous arrangement fees and ongoing charges as schools change their requirements. That is how the money continues to come in from those projects.

--- Later in debate ---

[Several hon. Members]

rose—

[Mrs Anne Main (in the Chair)]

Order. As I have said, a lot of people want to catch my eye. If right hon. and hon. Members can confine their speeches to 10 minutes or under, they will all have a chance to speak.

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[Neil Carmichael]

I think that you are absolutely right if you agree with me that we need more accountability in the procurement and specification systems.

[Mrs Anne Main (in the Chair)]

Order. I do not disagree with the hon. Gentleman. He is making an interesting speech, but I keep hearing “you.” I do not want to disrupt the flow, but I am aware that it happens sometimes.

[Neil Carmichael]

Thank you for being so understanding, Mrs Main. This is such a complex subject that you have to marshal your thoughts clearly.

The discussion of procurement leads me to the next big issue—the competitiveness of the tendering process. One of the difficulties is that there are not often enough bidders. That is not surprising, because the bidding costs are sometimes far too high. We therefore need to think about the competitive process and the bidding issue together. I believe that the answer is to make the contractual arrangements and the contracts simpler and more adaptable. You cannot alter a system as complicated as this by looking at one part of it and making some changes, because that will have consequences further down the line, but I think that bidding costs are indeed too high, largely because contracts are too rigid and too few organisations are looking into that as a mechanism.

One or two Members have mentioned income streams. That is a really good point. Most schemes with strong income streams have worked rather well. Those with no proper measure of income or service have not worked so well. We need to divide the concept of the private finance initiative into those schemes with strong and reliable income streams and those mainly to do with service and operation. The difficulty is that we apply the strict definition of the private finance initiative to virtually everything, when we have a much more flexible phrase—public-private partnership. That is what we should be thinking about, so that we do not get ourselves tied up in knots.

[Neil Carmichael]

Thank you very much. [Laughter.] You know, it is always great when someone makes a point in opposition that proves the point that is being made. If you keep changing the specifications, you will increase the complexity, making it harder for those who are procuring to understand, and the bidding process just goes awry. The real problem is that various organisations have not specified clearly enough and have not stuck to the specifications as first announced. Therefore, there have been far too many changes, sometimes as late as just before contract signing. That is what I am getting at. It is totally unacceptable. It wastes huge amounts of money—millions of pounds—and it puts off other bidders because, of course, they think to themselves, “Where are we in this? It’s a movable feast.” That is not what we want. We need to bolt it down, and that is why I emphasised the importance of specification. It is a really important point, and my hon. Friend has just proved it. If you keep changing the specification, you will always end up having a problem with a contract of any description. That is where I stand on that issue.

Finally, I want to mention the ridiculous business about light bulbs, car parking at hospitals and so on—the sort of things that we must get away from. That is really important. It is what the Treasury and indeed any organisation involved in such a situation should be moving away from. It is not acceptable; it causes a huge number of problems. It is nonsense to argue that an income stream for a hospital will be the car park for the patients who turn up to it. That needs to be stated. We need to get a grip on what the hospital is actually for and apply the logic of the contract to that. That is the answer to the second point made by my hon. Friend.

In summary, PFI has a role to play, but we must be imaginative about making sure that it works better. If we are going to be spending more than £200 billion on our infrastructure alone in the next decade or so, we will have to appeal more effectively to the private sector to dip into its pocket. Properly modified, PFI can do that. That does not mean that we should not be looking at rebates, and it does not mean that we should not be concerned about what is on or off the balance sheet and so on. It does mean that we must apply value for money on the scheme and ensure that it works for those who need it.

[Mrs Anne Main (in the Chair)]

Before Dr Thérèse Coffey makes her very eloquent speech, I am sure she will bear in mind that I have had very little to do with PFI schemes, and I would appreciate it if she were mindful of that.

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

Thank you, Mrs Main. I appreciate your candour in admitting that you have had very little to do with PFI.

I thank my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) for securing the debate. I commend his initiative and his ongoing campaign. I am not sure whether he has been nominated, but he is certainly my Back Bencher of the year for the work that he has done on PFI. It is a great scandal, Mrs Main, that this debate is being held in Westminster Hall. It is always good to debate PFI, but I feel that something of such importance—an emerging scandal that people are only just waking up to—should have been debated in the Chamber, with the full prominence that would be given there.

I was also concerned to hear earlier that evaluation of PFI projects is not being undertaken by the Treasury. Will the Minister tell us whether that can be reversed? Before I talk about some of the challenges of PFI, I want to assure people that I am not fundamentally opposed to PFI in principle; my concern is the legacy. We have heard many stories about that. The legacy has been a disaster and has tarnished the name of PFI, which could have been a force for good. It is a classic case of off-balance sheet financing. Not only will our generation pay for it, but future generations will continue to pay for that, as well as all the other debt accumulated by the previous, profligate Government.

On early memories and anecdotes that hon. Members were relating, I will not go on about light bulbs costing God knows what. However, I remember the first meeting of the all-party group on rural services when we heard from the deputy chief fire officer of a particular authority. His very last comment was, “For God’s sake, never allow me to sign another PFI contract again, because I didn’t have a clue what I was doing. In hindsight, I recognise that I made a huge problem for my fire authority. Because of that, I shouldn’t be here.” But he then went on to use the usual defence: “I didn’t know what I was doing. My accountant said it was fine, so I just signed the contract.” He was embarrassed, and it was good of him to say that, but that story is not unique. I am sure other hon. Members have heard such stories.

Indeed, we all received a briefing from the NHS Confederation: a wringing-their-hands exercise about “It was early in the ’90s; we didn’t know what we were doing; we’ve learned the practices now.” I wonder whether they have. I sent a message back to the confederation to ask what advice it gave to its member hospitals and trusts. It said, “It wasn’t our role to do so. It was the role of the Treasury and the Department of Health.” So I feel that a lot of buck-passing is going on. I know that that is in the past, but we are living with the costs today and will do so in future.

I logged on to the Partnerships UK database to see what PFI projects were awarded to Suffolk. There were only four listed, which surprised me, because I know of at least two others. The most recent PFI contract is a 30-year contract to be shared with Norfolk, and it is for six new police investigation centres, as they are called. Basically, they will be the new police cells. This contract dwarfs all the others: the East Anglia courts; the Wattisham married quarters; the hospital trust’s Garrett Anderson treatment and critical care centre in Ipswich; and indeed the fire and rescue service serviced accommodation PFI project.

We are spending £61.3 million on six centres that will be the new places where people are detained. I challenged that before I was elected. I was told that we had to have the new centres because of the recommendations of the National Policing Improvement Agency. The cost over 30 years for the contract, including the servicing, is £294 million. The budget goes from about £6.7 million spread across the two authorities to more than £11 million. My hon. Friend the Member for Rugby (Mark Pawsey) alluded to that. In the days of decreasing budgets, when we are trying to tighten our belts, we face the enormous cost of a brand-new building, which, frankly, is going to be used by prisoners. I am sure many people in Suffolk will be disappointed to hear that we will probably be losing front-line police officers to pay for what I see as a rather gold-plated building.

I genuinely hope that other savings will be found. I hope that we will improve our detection rates so extraordinarily that we will make the savings. I hope that people will not feel that they have got the bobby in the car driving people hundreds of miles back and forth between the detention centres, homes and courts instead of having the bobby on the beat. I hope that we will not be regretting this in the next few years.

Other projects have caught my eye. Apparently, the M1-A1 link road is a shadow toll road. As part of the PFI contract, the Government pay a fee—a toll—to the company. The numbers of journeys are more than double what was originally estimated, so the Government are happily paying through the nose for that. To be fair, as has already been suggested, I do not believe that we should condemn the private sector for how it has made significant amounts of money. Much of the fault lies with us as clients. People should look themselves in the mirror when they recognise the profits that they make from PFI. I have a wealthy constituent who stopped speaking to his brother because he was so ashamed of how much money he was knowingly making out of some of the contracts. He recognised that he did not have a sophisticated client.

Just a few weeks ago, the Government released their construction strategy in which they recognised that 80% of the challenges have been within internal processes. Change orders, which were mentioned earlier, classically add so much to the cost of a project, as does the lack of sophisticated negotiating. The Government are trying to change that, which is to be welcomed. The last piece will be for the construction team, along with financing, to come together and ensure that we have a simpler, focused contract that is flexible and appropriate for future needs.

As for the way ahead, I wish my hon. Friend the Member for Hereford and South Herefordshire would name and shame those institutions that have thus far not consented to voluntary repayments. I would also like to hear the results of Lord Sassoon’s review on the renegotiation of contracts, which was initiated in February.

I am delighted to hear that PFI is no longer the default place in which to look for capital; there are other sources available. Unlike under the previous Administration, it is not the only game in town. I am glad to see that we have a more balanced potential source of capital funding for the future. I shall conclude, because I recognise that others wish to speak. PFI will be one of the greatest scandals, so I congratulate my hon. Friend on bringing it to the attention of the House. Let us keep up the volume to ensure that this scandal is not repeated.

[Mrs Anne Main (in the Chair)]

We have four hon. Members still hoping to catch my eye and there are 30 minutes left before the wind-ups. I will now call Mr Mark Garnier, who I hope will be mindful of his colleagues.

--- Later in debate ---

[Steve Baker (Wycombe) (Con)]

It is a pleasure to serve under your chairmanship, Mrs Main, and I will try not to attribute too many of the flaws in PFI to you.

[Mrs Anne Main (in the Chair)]

I would be grateful.

[Steve Baker]

I, too, would like to congratulate my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) on securing the debate, and to pay tribute to his leadership, his courage and his intellect. As I listened to the debate, I noticed a strange thing: Conservatives verging on sounding like anti-capitalists.

Eurozone (Contingency Plans)

Anne Main Excerpts

Monday 20th June 2011 Commons Chamber

[Mr Hoban]

The right hon. Gentleman raises a series of points in his speech, but he makes a strong argument for why it is important that the eurozone is strong and stable. That has broad economic and social benefits. Clearly, if that is to happen, it is important for the Greek bail-out to work and be effective.

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

I am very concerned. The next debate is about trying to cut back on pensions and save taxpayers’ money, yet we are still planning to put through the IMF—a third party—taxpayers’ money that we are having to scrimp and save at home. My constituents will not stand for it. I am disappointed to hear the language of the Government at the moment, which seems to imply that Greece is an economy that is too big to fail. That is the same thing we had with the banks. We should put Greece out of its misery—it is flatlining—and no more of our public money should be sent abroad to Greece, even through the IMF. There are riots on its streets. Its people do not like the medicine being offered to it, and we cannot expect it to take any more. Let it depart peacefully from the euro. It cannot be sustained as it is; it is just good money after bad.

[Mr Hoban]

My hon. Friend will be aware that these are matters for the Greek Government, but I would say this. When money has been lent to the IMF, that does not reduce the amount of money available for public spending. We get interest on the balances that we lend to the IMF, and it has never defaulted on a programme yet. We need to recognise the importance of support provided through the IMF, although I do not really think that my hon. Friend is suggesting that we should withdraw from it. On fiscal consolidation, let me reiterate to my hon. Friends and to the Opposition, who have ignored this crucial fact, that if we had not taken the tough action that we took a year ago in our emergency Budget, it would be the UK, not Greece, in the firing line.

Regulatory and Banking Reform

Anne Main Excerpts

Thursday 16th June 2011 Commons Chamber

[Mr Hoban]

There is no dispute between the two. It is very clear that we need banks to hold more capital and, based on the work done at Basel III on the implementation of the higher level of capital, that should not restrict the amount of credit available. Yes, we need to see banks deleveraging and reducing the size of their balance sheets, but that should not be at the cost of businesses in our constituencies and across the country that need capital in order to grow and expand. Banks should be reducing their lending to each other, rather than reducing the exposure to businesses in this country.

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

I welcome the Financial Conduct Authority if it genuinely gives consumers greater protection. Under the current regulations, a constituent of mine, Mr Joseph Choonos, was pressured into taking out a Barclays loan in the most inappropriate way by a course provider, which then dumped the course. Barclays is now pursuing him dreadfully for the loan, which he has no way of paying back. He has no way of having a good dialogue with Barclays. If the proposals help vulnerable consumers in any way, I will be truly grateful.

[Mr Hoban]

I cannot comment on the case my hon. Friend raises, but we have corresponded about it. We need to see better outcomes for consumers of retail financial services. As she may be aware, we are also consulting on the future regulation of consumer credit and will announce our response to the consultation proposals shortly. One of the challenges we face is the disjointed regulation of consumer financial services. Credit, in the situation she raises, is regulated by the Office of Fair Trading, and other aspects of financial services are currently regulated by the Financial Services Authority and, in future, the Financial Conduct Authority. Whatever body is the regulator, we need to see better outcomes for our consumers, which will help to restore the trust in regulation that we all recognise is so vital.

Eurozone Financial Assistance

Anne Main Excerpts

Tuesday 24th May 2011 Commons Chamber

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

rose—

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

rose—

[Kate Hoey]

I will not give way again.

Does anyone in the House really think that our Government would be listened to if they went along to the Council of Ministers and said that they were very concerned about this issue? They have not even managed to get Parliament to give a clear signal about what it thinks. They have fudged the vote today so that it will be pretty meaningless. This fudging on Europe goes on all the time among the cosy establishment, and it makes people angry and frustrated, not only in the House but out in the country.

I recently asked the Foreign Secretary

“if he will have discussions at EU level on reducing the funding spent by the EU on publicity campaigns.”

This matter arose because the European Union has decided to put by even more of our money to ensure that ordinary people throughout the EU are told how wonderful the EU is. We are spending money directly on European Union propaganda. The answer came back from the Minister for Europe, and the first bit sounds great:

“While it is important for institutions such as the EU to communicate effectively…spend on this should be efficient, affordable and proportional. Funding levels for the EU to communicate its work publicly, as for all other EU activities, will be decided within the negotiations on the EU 2012 Budget. With those negotiations, this Government are seeking substantial reductions in spend and greater efficiency across all areas of the Budget.”—[Official Report, 23 May 2011; Vol. 528, c. 448W.]

Once again, fine words. The previous Government said exactly the same thing, but nothing ever changed. Nothing relating to the European Union ever changes. The sums of money involved never go down. We never pay less; we pay more and more.

With regard to what my hon. Friend the Member for Blackley and Broughton (Graham Stringer) said, I believe that it is time for us to have this debate out there in the country. Let us stop being afraid of our constituents’ views, and listen to what many people out there want to say. This Government need to accept what the previous Government would never accept—namely, that we are here to stand up for our constituents and our country on this issue. It is about time that we started to say no to Europe, and to mean it.

--- Later in debate ---

[Chris Heaton-Harris]

I shall come to that point directly.

Members on both sides of the House know that the Government would not have accepted the motion tabled by my hon. Friend the Member for Rochester and Strood (Mark Reckless), and that if we were to vote on the original text it would be probably be defeated, and the House would be left without a view on this matter. My amendment, which I should like to think has a good chance of being passed, would enable the House to adopt the words of the European Scrutiny Committee.

I believe that the legality of the EFSM, and indeed that of the European financial stability facility—the EFSF—has been questioned in relation to the EU treaty’s “no bail-out” clause, which states that the EU and member states

“shall not be liable for or assume the commitments of”

other member states.

[Mrs Main]

I appreciate that my hon. Friend was trying to be helpful, but his amendment seems deeply unhelpful to those who wanted the strength of the original motion to be negated, and to have been able to vote on it.

[Chris Heaton-Harris]

I will say more about the politics later in my speech. In any event, I believe that if either my amendment or the original motion is passed, the House of Commons will be the first member state Parliament to question formally the legality of the stability mechanism.

The remaining part of my amendment involves a fairly academic argument. Does any Member in the House truly believe that, with the Greek economy running out of cash, market fears that the eurozone contagion will spread and reveal itself at the heart of the Spanish and Italian economies, and the continuing problems in Ireland and Portugal, this matter was not going to be up-front and central at the next meeting of the Council of Ministers or the European Council? I should like to think that those problems are not only the first item on the agenda for such meetings, but being discussed every day throughout the Governments of Europe.

Bail-outs have become what they were always going to be: politically toxic, not only for those who provide the cash—the local election results in Bremen at the weekend underlined that—but, much more, for the Governments of the countries receiving the money, who have to introduce economic measures that are politically unpalatable to the people, as so many Spanish socialists found last weekend. Whatever senior advisers of Governments across Europe may think, the markets have already decided—and I consider it to be a matter of fact—that the Greek bail-out has not worked and will be renegotiated.

What I believe my hon. Friend for the Member Rochester and Strood is after is a vote that will prevent us from providing any more money for these bail-outs through the EFSM. Alas, although the UK could vote against any proposal presented—and I should like to think that it would—the simple fact is that because of the disastrous advice given to the former Chancellor of the Exchequer and the consequent actions that he took at meetings on 9 and 10 May last year as the previous Government were leaving office, the UK entered the mechanism. Moreover, the Council decides on these matters now, and will do so in the future, by means of qualified majority voting.

Bank Bonuses

Anne Main Excerpts

Tuesday 11th January 2011 Commons Chamber

[Mr Osborne]

The right hon. Gentleman may not know it, or perhaps he did not really believe it, but he fought the last election on a manifesto—written, incidentally, by the Leader of the Opposition—that committed the then Government to opposing a unilateral levy. We have introduced such a levy, and it will raise almost £10 billion in the current Parliament. We are extracting from the banks revenue that the last Government did not extract. Indeed, they opposed the method that we have introduced.

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

In the future, will my right hon. Friend come to the House and let us know the extent to which the banks have complied with the requirement to lend more to businesses in my constituency? There was little sympathy for them under the last Government, when big bonuses were provided and they received little help from the bankers who received those bonuses.

[Mr Osborne]

An absolute central part of any settlement we might reach with the banks will be a material and verifiable increase in the amount of lending to British businesses, especially medium and small businesses. [Interruption.] Labour Members mutter, but they secured absolutely nothing for British business when they bailed out the banks. They had the money in their hands to give to the banks, and they secured absolutely nothing in return.

Loans to Ireland Bill

Anne Main Excerpts

Wednesday 15th December 2010 Commons Chamber

[Mr Osborne]

Obviously we are not going to prejudge the outcome of any Irish general election. Of course we—not just us, but the IMF and others—negotiate with the Government of the day. Although the principal Opposition parties in Ireland have concerns about the Irish budget and the like, I understand that they have accepted the principle of international assistance, and the IMF has been in direct contact, and has engaged in discussions with them. The international community, including the UK, is satisfied that we are in a position to make this offer to the Irish Government, which is why I am bringing the Bill to the House today.

As I was saying, Ireland agreed to seek IMF and other support worth €85 billion, and the money will be used as follows: €35 billion will be used to support Ireland’s banking sector, with €10 billion going towards immediate bank recapitalisation; and the remaining €50 billion will be used for sovereign debt support. In terms of contributions to the cost of the package, Ireland itself will provide €17.5 billion towards the total. The remaining €67.5 billion will be split, with one third coming from the IMF, one third from the European financial stability mechanism, and one third from the eurozone facility and bilateral loans from the UK, Sweden and Denmark. I have agreed that our contribution should amount to €3.8 billion, or £3.25 billion at today’s exchange rate.

This significant package will help Ireland to deal decisively with its problems. It will help it to recapitalise its banks and set up a contingency reserve for future problems. It will also help the Irish authorities to cover the shortfall in their budget, which was passed by the Irish Parliament earlier this month. Their budget will see a fiscal consolidation of €15 billion by 2014, of which €6 billion will be implemented next year, as part of their strategy leading to a target budget deficit of 3% of gross domestic product in four years’ time.

Of course people ask why we are extending the loan to Ireland. We are doing so because it is overwhelmingly in our national interest to have a strong Irish economy and a stable banking system. This is not just about the Irish economy and Irish jobs; it is about the British economy and British jobs. A loan does not add to our deficit, and any increase in borrowing is matched, of course, by the commitment of the Irish to repay with interest. The answer to the question asked by my hon. Friend the Member for Stratford-on-Avon earlier is that if Ireland takes out all the loan that is being made available to it and pays it back with the interest that has been forecast, it would pay us £440 million in fees and interest over this period.

Let us remember that Ireland is the fifth largest market for British exporters and accounts for 5% of our total exports abroad. An interesting way for the House to think about it is that every man, woman and child in Ireland spends an average of £3,600 per year on British goods—that is how connected our economies are. Indeed, as has often been pointed out, we export more to Ireland than to Brazil, Russia, India and China put together, although we are trying to increase our exports to those four very large emerging markets. For some of our industrial sectors, such as food and drink or clothing and footwear, Ireland is our top export market. Ireland is also the only country with which we share a land border, and in Northern Ireland our economies are particularly linked, with two-fifths of exports going to the Republic.

I wish to reassure Members representing Northern Ireland that I am very aware of their constituents’ worries and the difficulty they face as a result of the problems in Ireland. That is why my hon. Friend the Financial Secretary recently visited Belfast to discuss these issues directly. I am open to any discussions that Members from Northern Ireland wish to have with me or the Treasury about the economic situation and indeed the banking situation in Northern Ireland. Just as our two economies are linked, our businesses and banking sectors are also interconnected. More Irish companies are listed on London exchanges than companies from any other foreign country. The two main Irish-owned banks have an important presence in the UK, holding between them about £30 billion of customer deposits. In Northern Ireland, two of the four largest high street banks are Irish-owned, accounting for almost a quarter of personal accounts.

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

My right hon. Friend has stressed the importance of the export market and our strong links with Ireland. So why did he find it necessary for paragraph 6(h), under the heading “Events of default”, in the summary document to set out that

“the Borrower not being or ceasing to be a member of the European Union”

would constitute a default? I would hope that we would support Ireland if we chose to do so, and not bind it into necessarily having to stay in the European Union, given the length and operation of the loan.

[Mr Osborne]

It is merely an observation that the fact that Ireland is a member of the European Union is not why we are making this loan; it has nothing to do with that. It has to do with the fact that Ireland is deeply connected to us. Indeed, we have just made a loan agreement with Iceland, which of course is not a member of the European Union, in order to seek to recover moneys that were spent on savers in Icelandic banks here in the UK.

--- Later in debate ---

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

I congratulate the Chancellor on the proposal, which I fully support. It is my understanding that this step is being taken because there was a potential domino effect, in that any damage in the Irish Republic could have led to further damage to British banks that operate there and to damage to the Northern Ireland economy, and that in turn would have had a very significant effect on the British economy and British interests. I therefore see this as a generous move, but also a move of enlightened self-interest.

The Irish economy is in its current situation because it had a banking crisis, not an economic crisis. The underlying economy is sound; the potential for growth exists, and that growth will come forward. The pharmaceuticals and other major industries in the south of Ireland are thriving. The economy is expected to stabilise this year and to begin to expand at between 2.5 and 3% in the period 2011-14. The package of measures that is in place is required in order to restore the public finances and banking liquidity by 2014. The Irish Government have rapidly moved to curtail expenditure dramatically and to raise revenue themselves. The adjustment is expected to bring the economy back into balance within four or five years.

Ireland is a small open economy in which long-term sustainable growth depends on healthy international trading, and the conditions for export-led growth are in place: good infrastructure, high-quality human capital, a favourable taxation environment and available credit for viable businesses. The national recovery plan has been put in place, and it is tough and will be difficult. Export-led growth will foster recovery in domestic trading sectors. The growth in GDP is expected to bring unemployment down fairly rapidly, and certainly well below 10% within two to three years. The balance of payments will return to surplus in 2011, so Ireland will be earning its way out of the difficulty that it is in within the next 12 months.

Some Members have referred to Ireland’s membership of the eurozone as a major difficulty, but I do not agree. It is a handicap, but it is not as massive a disadvantage as some claim. Ireland’s membership of the eurozone obliges it to adhere to stability and growth rules and to bring the general Government deficit to below 3%. The Irish Budget contained a very tough package. Initially, the 2010 Budget presumed an adjustment of about €7.5 billion over a four-year period. With hindsight, we know that the figure proved to be almost double that—some €15 billion—as we crept towards the year end. Two thirds of that is coming out of budgetary adjustment achieved through reduced expenditure, and a third out of taxation. However, by 2014, Irish expenditure will be back to 2007 levels. Total Government expenditure as a percentage of GDP will be reduced from 49% to 36% in the next three years.

[Mrs Main]

I heard what the hon. Gentleman said earlier in his speech about why we should support southern Ireland, but I am struggling somewhat with his non-condemnation of membership of the eurozone. The euro seems to be a large part of the problems, but he seems to have glossed over that fact.

[Dr McDonnell]

Some of us see the euro as a problem and some of us do not. Being in the euro has been an advantage to Ireland for many years. It has become a handicap at present because of the restrictions and constraints, but the eurozone works and has worked very well for many years. In the present crisis it has its handicaps and limitations. Some people are predicting that the eurozone will collapse shortly; I do not accept that, and that is not the view of everybody.

The point I am trying to make is that Ireland’s underlying economy is healthy. Its membership of and involvement in the eurozone is healthy, and in the long-term it will come round and sort itself out. Ireland has a financial crisis—a banking crisis—that was brought about largely by a property bubble and a lack of liquidity, rather than a flaw in the underlying economy. I want to assure people that the money will be paid, in my opinion and assessment, and that in due course—

Equitable Life (Payments) Bill

Anne Main Excerpts

Wednesday 10th November 2010 Commons Chamber

[Mark Durkan]

Yes, I do. There is no escaping the constraints that the cap will create. In the last group of amendments, we considered the questions that arise when the cap comes together with the cut-off. That conspires to create a pretty selective injustice for a group of people who are then left with very marginal compensation.

Even a very independent process, such as that proposed in the amendments, will be constrained by the cap. However, people would trust a credible independent process applying that cap with due consideration for all the concerns, rights and needs of policyholders more than they would trust the Treasury. In the last debate some Government Members said confidently how impressed they had been with the Treasury since they came into the House. That might well be—we are in the early stages of this Parliament and this Government and the first few pages of the exercise book are lovely, neat, impressive and perfect—but degeneration creeps in later on and even the Treasury will revert to its traditional roots and habits.

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

I have confidence in the Treasury trying to sort this out—I am sure that the hon. Gentleman will not be surprised to hear that. However, I am concerned about anything that pushes this matter into the long grass. We do not need any more delays caused by trying to set up other bodies. That is why I would like to say, “Get on with it and get the Treasury doing it.”

[Mark Durkan]

I do not believe that the hon. Member for Harrow East, for example, is trying to sow or fertilise long grass. This is about getting something that is credible, competent and reliable and the Committee should try to help in that regard. That is the spirit of these amendments.

There has been much criticism of the underperformance, to put it mildly, of the previous Government on this issue over more than one Parliament. Let us remember that those Ministers were not deliberately ignoring the plight of their own constituents who were coming to them or the problems highlighted by many of us from constituencies across the United Kingdom. They were constrained by the advice that they were getting from the same Treasury that people are now so happy with. The Treasury was advising that serious precedents and problems would be created.

--- Later in debate ---

[Charlie Elphicke (Dover) (Con)]

rose—

[Mrs Main]

rose—

[Chris Leslie]

I will give way first to the hon. Member for Cardiff North (Jonathan Evans) as he has attended the entire debate.

--- Later in debate ---

[Mrs Main]

Will the hon. Gentleman give way?

[Chris Leslie]

I think the hon. Lady was one such Member.

[Mrs Main]

I rise to gently chide the hon. Gentleman. We have had discussions with EMAG representatives, and I do not think they were under any illusions that they were necessarily going to get back every single penny that was lost. I have talked to my local representatives, and I think they are realistic enough to realise that we have done the best we possibly can. I am not happy with the situation for the pre-1992 annuities, but even so, what we are giving them is 100 times better than previously. They look to us to deliver that, but they are realistic enough to know that, in these hard times we cannot give them everything. I think for the hon. Gentleman to say, “I didn’t sign the pledge” is just copping out.

[Chris Leslie]

I disagree about the pledge, and I did not sign it for particular reasons, but my point is simply that the hon. Lady signed the pledge before the general election and it committed her to a number of things, one of which was somehow to fulfil the aspirations of those policyholders who interpreted the pledge in a particular way. I, too, have met EMAG representatives and they are not as happy and understanding as the hon. Lady suggests.

[Mrs Main]

Will the hon. Gentleman give way?

[Chris Leslie]

Well, if the hon. Lady understands something different, I will give way to her again.

[Mrs Main]

Did those EMAG representatives give the hon. Gentleman some reason to suspect that they were happier with his stance of delivering a much lesser amount?

[Chris Leslie]

The difference is that I did not raise people’s hopes for electoral purposes—because I wanted to harvest their support—only to dash them after the general election. We are very used to Conservative Members making pledges on a whole series of things—not least student finance, which is quite pertinent right now—and then breaking their promises. I am not saying that Members are necessarily in breach of their pledge. All I am saying is that it is for them to honour it, in accordance with their consciences and what their constituents will say to them as to whether the compensation outcome amounts to a fair payment scheme and proper compensation.

--- Later in debate ---

[Chris Leslie]

I disagree with that. The hon. Gentleman certainly did not say before the general election that this would be £1.5 billion—[Interruption.] Oh, did he? Where did he say before the general election that this would be £1.5 billion? I shall give way to him if he can give a reference for that. Answer came there none—proof in point that after the general election a different set of expectations was set out by the Government than those that might have been an interpretation of the Minister’s words before the election.

[Mrs Main]

Will the hon. Gentleman give way?

[Conor Burns (Bournemouth West) (Con)]

Will the hon. Gentleman give way?

Draft EU Budget 2011

Anne Main Excerpts

Wednesday 13th October 2010 Commons Chamber

[Kerry McCarthy]

Again, we are not here to answer questions. We are here to put the questions and to get—[Interruption.] The Minister should accept that the Conservatives are now in government. She cannot just do what she did in opposition and talk tough—

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

Will the hon. Lady give way?

[Kerry McCarthy]

I want to make progress. The Minister cannot just talk tough on European issues and pander to people who want to take us out of the EU. She is here to make progress in negotiations and to fight Britain’s corner. I have asked her what she would see as success in doing that.

On the specifics, we are here to debate whether, when EU member states and regions are all engaged in belt tightening, the EU itself should engage in a similar exercise. The Minister has said that sizeable austerity measures are being implemented across the EU. Does that not in itself prove that this economic situation is a global phenomenon that affects all EU member states and not, as the Government say every time Ministers get to their feet in the Chamber, the result of profligate public spending by the previous Government?

--- Later in debate ---

[Mr Douglas Carswell (Clacton) (Con)]

I am grateful to my hon. Friend the Member for Stone (Mr Cash), who has done as much as any Member to encourage this House over many years to consider its duties in a wider European context. He is the best kind of Committee Chairman—one who never forgets that the role of his Committee is to hold the Executive to account, regardless of which party is in government. I thank him.

All hon. Members face spending cuts in their constituencies—cuts that none of us wanted and cuts made all the more painful by the economic downturn. With the exceptions of health care and overseas aid, every Government Department is looking for budget reductions of between 25% and 40%. At the same time, however, our net contributions to the EU are rising by 60% over the next two years—from £6.4 billion this year to £8.3 billion in 2011-12 and to £10.3 billion in 2015.

Our gross contributions, of course, are higher still. Currently £13.3 billion, they are scheduled to rise to £19 billion. Although it is true that some of that money is spent in the United Kingdom, it is by no means always spent on projects that we ourselves would have chosen to spend it on. In any case, normal practice in politics is to measure what people actually pay rather than to deduct the notional cost of services they receive in return. Would any Member argue that the basic rate of income tax is not 20p in the pound but zero, on the grounds that the entire sum is given back in the form of roads, schools, hospitals and so forth?

The sum of £19 billion is, of course, colossal—enough to give the entire country a 50% rebate on council tax in perpetuity or to pay off our Olympic debt in a single year. The scope of amendment (b), however, is not nearly so ambitious. It would not strike out the entire EU budget—it is not about that—and it would not even strike out the increase in the year-on-year EU budget. All this modest proposal is designed to do is to reject the additional sum that the European Commission demanded over and above the increases already built into the 2011 budget.

At a time when every one of the 27 member state Governments are struggling to find savings, the EU must show some willingness if not to reduce its budget, at the very least to be satisfied by the increases we have already given it. Why has the EU come back on 15 September and asked for more resources? The Commission has been admirably frank that the additional funds are earmarked for three institutions: the European External Action Service, Europol, and the three supervisory agencies that will regulate financial services. I remind Members that the European External Action Service is the EU’s diplomatic corps. It already has about 20 times the budget of our Foreign and Commonwealth Office. Europol is the EU’s police agency, and the three new supervisory agencies have been widely denounced as likely to drive revenue away from the City of London to non-EU financial centres.

In other words, we are being asked for this extra money to fund three projects that are not in the interests of this country to start with. How much is the bill? To be precise, the EU has awarded itself a €3.6 billion budget increase this year, and Britain’s share of that increase—not its share of the budget—is £380 million. The bail-outs and the financial stimuli around the world have, of course, recalibrated our sense of monetary value, but even by today’s standards we are talking about significant sums. Given this morning’s headlines about the pressure on public sector jobs, it might be helpful to calculate how that £380 million could be translated into Government spending. It would pay for 6,022 NHS doctors, 12,666 NHS nurses, 14,600 police constables, or 22,332 Army privates.

The purpose of the legislature is to control the Executive. In the last analysis, that is why we are all here. The additional work that we do in scrutinising laws, taking up cases for our constituents and participating in debates is valuable, but essentially supplementary. When we strip it down, we see that Parliament exists to ensure that the Government do not spend our money wrong-headedly. That has been the elementary function of our predecessors since the Tudors, if not the Plantagenets.

[Mrs Main]

I will support the amendment, because I could not look the people of St Albans in the eye if I asked them to make economies and explain why cuts are necessary, and then voted for a measure that would mean the EU’s sucking out more and more of our money. I do not think other Members could explain that to their constituents either.

[Mr Carswell]

I am grateful to my hon. Friend, and to the other 32 hon. Members—many of whom are present—who supported the amendment. The £380 million increase comes at a time when there will be costly cuts in my hon. Friend’s constituency and in others—cuts that none of us wants to see—and when it is surely wrong to reduce spending on public services in order to increase the money that we give to EU institutions.

--- Later in debate ---

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

It is a delight to follow the hon. Member for Glasgow South West (Mr Davidson) and I agree with much of what he had to say. I have no intention of criticising the Economic Secretary tonight. Indeed, I support the new Government’s position on the European budget and it is much more robust than was the previous Government’s. In fact, I pay tribute to the Economic Secretary’s contribution to the debate, which contrasted starkly with what we heard from Ministers in the previous Government. There is no suggestion that any one part of the coalition is directing another. It is especially unfair to suggest that the Liberal Democrats are not here for the long run. I fully understand that a Lib Dem is not just for Christmas—if you’re lucky, there will be some left over.

I also thank the shadow Minister for her remarks. She did a great deal of good for the argument made by those of us who believe that the European Union and its budgetary processes have gone too far. In fact, by confirming that the Opposition have no policy on the issue of the European Union, she has made our job much easier. The Opposition’s position is very strange. They complain about spending cuts across the country, but they fail to say what they think about the European budget. Do they think that their constituents should be deprived of spending commitments in this country for the sake of an increase in the EU budget? That is a bizarre and strange position, but it is one that I do not have to defend to my constituents.

I urge the Economic Secretary to ignore the advice of the right hon. Member for Rotherham (Mr MacShane), who suggested that we should engage in some sort of trail of dinner parties—presumably paid for by EU taxpayers’ money—as, he said, the previous Government did. Where did that get us? It lost us our rebate and saw the previous Government committing to increasing the EU budget even further. We need no lectures from the Opposition on how to address this process.

I am a committed Eurosceptic. My antipathy to our membership of the European Union is widely known, and I made it very clear to my constituents at the election that I would seek a different relationship between this country and the European Union. However, that is not the debate we are having tonight. We are talking about whether we should approve sending more of my constituents’ hard-earned cash to Brussels to be spent elsewhere. I am not happy to support that position, and I will certainly not support it.

What are we being asked to pay for? We are being asked to pay for a 2.5% increase in the administration costs of the European Union, at the very time when we are telling councils and Government agencies across the country that they have to reduce their administration costs. How can I square that circle to my constituents? We are being asked to approve a 5% increase in contributions to the pension budget. At the same time, I am telling my constituents that their public sector pensions will be linked to the consumer prices index, rather than the retail prices index. We are also proposing to spend an extra 4.15% on the EU schools budget, at the very moment when we will be asking schools in this country—including, possibly, the one at which I taught just a few months ago—to spend less.

We are also asking Government Members and taxpayers to approve more money for the European External Action Service. I am pleased to say that when we had the debate on the European External Action Service, I was one of the Members in the No Lobby. As was mentioned earlier this evening, we were assured that the programme would be cost-neutral, but we now know that we will spend an awful lot more taxpayers’ money on a body to represent my constituents overseas for which they did not vote.

I do not need to talk about what the extra money going on this budget increase could be spent on. We have heard about the 12,000 extra nurses or the 14,000 police constables on which it could be spent. I am not certainly going to go back to my constituents and tell them that I have voted to spend money that could have been spent on front-line NHS nurses, teacher support in schools or our brave servicemen.

We have heard a great deal today about the previous Government and what they gave up. It is an absolute disgrace that they gave up our rebate, for absolutely no reform. For the past 30-odd years, we have repeatedly been told, “Well, we’ll accept this little budget increase in Europe in return for some reform.” We have always been told that some reform is coming down the line, but it never comes, because the European Union is institutionally incapable of reform. There can be no doubt about that at all.

[Mrs Main]

There is no incentive.

[Andrew Percy]

Indeed, as my hon. Friend says, there is no incentive for any sort of reform.

Those who support the budget increase have made great play of the fact that the amount spent on the common agricultural policy has reduced. It has indeed reduced: it is down to about 42%. However, even without the fraud and mismanagement that we all know about, the OECD has warned that the real cost of the CAP is £125 billion a year, so we could go a great deal further. The hon. Member for Glasgow South West mentioned the fact that we are now in the strange situation whereby farmers are effectively farming subsidies. However, I have talked to many of the farmers in my constituency, and I have to say, “If only they were.” Instead, we are asking them to manage environmental schemes, and at the very time when we are becoming more and more reliant on imported food.

I mentioned in an intervention on the shadow Minister that we cannot get away from the fact that the EU budget has not been signed off for some 15 years, and there is no doubt that it will not be signed off again, as my hon. Friend the Member for Daventry (Chris Heaton-Harris) said. Like other right hon. and hon. Members who are present, I am expected to go to my constituents and tell them that we would like to take more of their money to put into an institution that cannot guarantee that the money will be spent where it says it will be spent. I am not prepared to do that on behalf of the good people of Brigg and Goole who sent me here and whom it is my privilege to serve.

There is a broader issue, about the relationship between this country and the European Union, which touches on people’s engagement with and perception of the European Union, which was mentioned in earlier speeches. I note that Open Europe, which is a very sound pressure group, conducted a poll that found that 54% of people agreed with the statement that the Government should drop the Lisbon treaty and not try to ratify it. That 54%, as was proved in other polls, was ignored; the previous Government forced the Lisbon treaty through and broke an election promise. Some 65% of people believe that the European Union is out of touch with normal people, but sadly it is normal people’s hard-earned cash that is used to fund the EU, while 88% could not name their MEP. I wish that I did not know the names of some of my MEPs. Turnout for European parliamentary elections was at its highest in 2004, an abysmal 38.5% when I was up for election as a councillor, and it is a pretty poor pass when councillors such as me are used to drag up the European election turnout.

There is a general view in this country that the political elite is out of touch with the British public on the issue of Europe. My concern is that, if we approve yet more cash for the wasteful institution that is the EU, the gap between what the public expect and the position of the political elite will widen yet further. That would not be healthy.

Finance (No. 2) Bill

Anne Main Excerpts

Monday 11th October 2010 Commons Chamber

[Ms Eagle]

I shall give way in due course, but not at the moment.

I was just saying that the Somme offensive cost—

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

On a point of order, Mr Deputy Speaker. Is this rather long revisiting of first world war history directly related to the Finance Bill’s Second Reading?

--- Later in debate ---

[John Mann]

Of course the British Government, cowardly as they are in their relations with China, cannot do so alone—it has to be done on an international level among all the capitalist economies of the world.

If that issue is not dealt with, the danger of a second recession will loom—for whoever is in power in whatever country, to be fair. We are shying away from that. It is not tenable to develop economies where everyone proceeds on the basis that we will continue to export to China as many aggregates and other raw materials as we can, to import the cheapest possible—virtually slave-labour—products, and hope that we will regenerate our economy based on the sale of those products. My own local economy benefits more than most from that in distribution networks, but I can see that it is not a sustainable model in the longer term. The China syndrome has to be dealt with in the near future, because if China fails to rebalance its currency there will be a second, much greater world recession.

Instead of that, we have this piffling little Bill with virtually nothing in it, not even the break-up of the big banks promised by the Liberals—the only Liberal economic policy that seemed to get adopted by the Conservatives, and an absurd irrelevance in the context of where we are. How the banks are run and regulated is absolutely vital to all of us, but who cares how they are structured? At the start of the crisis, Lehman Brothers, an investment bank, and Northern Rock, a building society, both collapsed. Such infantile politics is not surprising coming from the Liberal former so-called shadow shadow Chancellor, from Twickenham in south London, who is now in an important position in government, but it is quite extraordinary coming from the Conservative party. It is an incoherent economic policy based purely on political expediency. I note that it is not in the Bill, and it will never be put forward. It is just pure politicking to try to hide away from the fact that this is a Government whose economic policy is based on hope.

I want to make a few points about what the Opposition’s policy should be on the Bill and the economy. It is not consistent to argue that there should be no tax increases or spending cuts. That is economic illiteracy, which needs to be broken. In the current economic crisis, I have no problem with taxation going up as part of rebalancing the public finances. Therefore, if the Government propose increasing the higher rate of taxation, I am relaxed about that being necessary. Similarly, I am relaxed about VAT going up. The alternative would be to raise income tax. If the Opposition support that, they should state that view. I would disagree with it; for all its flaws and regressive nature, it is more sensible to increase VAT. I believe that £8 billion is the agreed figure that derives from the VAT increase. I will not argue against such an increase, which would thereby suggest a further £8 billion-worth of public sector cuts and job losses in my constituency, leading to a further recession based on the multiplier effect of those job losses. That would be a wishy-washy cop-out.

The Opposition need to strengthen their economic policies. They need more courage in working through what is happening—it is lazy to do otherwise. It is nonsense to suggest that there are other ways of increasing the tax take, based on projected economic growth—the current position—instead of the VAT increase. Again, that is economic illiteracy. Of course we want economic growth—so do the Government and so does every party in the House—but that is not an economic policy; it is a hope. Labour Members know that the incoherent coalition has a weak policy—the Bill lacks proper ideas and procedures for dealing with what the private sector needs. We will not, therefore, experience such growth and we, as an Opposition, cannot predicate economic policy on growth that the Government will not achieve. That is nonsense. Some serious thought and discussion should take place about the taxes that should increase and the cuts that should be made.

I ran a private sector business—that makes me rather unusual in Parliament. I set one up from my garage, so I know about the decisions that people who have no inherited wealth or banks lending to them make about how to invest. I had a capital-intensive business with my family. I know how interest rates work, and what that means for making decisions. I know about capital investment policies and how to squeeze a bit of extra capital out of them, and about decisions on the best timing. We were successful, and, like hundreds of thousands of other small businesses across the country, we made a profit—there is nothing wrong with that. We contributed an appropriate bit of tax—every business thinks that it is too much—to the Exchequer. However, we were not operating in a vacuum. Who will buy the products and services if people have been thrown out of work? Again, that underlines the coalition Government’s economic illiteracy. They have a vain hope that the private sector will turn up, but it will not, based on rational decision making. That is why the Deloitte survey, which was published today, should be so concerning to the Government and to us all.

We all like to criticise the Government—I love to criticise a Tory Government—but I do not want my constituents to suffer from recession and job losses because you lot have got it wrong. My people will be hurt first and my economy will be hit hardest. That has happened before and it will happen this time, so I want to help the Government by making some suggestions. I hope that they are making notes. The private sector cannot fill the void because of the pace of the cuts. That is the big error that needs to be put right. The speed at which the cuts are made and how they are made are crucial matters.

There is another fundamental error, on which I want to elaborate because it is a critical point. I know, Mr Deputy Speaker, that it is important to the people of Chorley. The Government’s cuts will have a disproportionate impact on the traditional English towns. The Government have the same civil servants, with the same civil service mentality, who failed to crack the problem previously. They are therefore making the cuts in the same way as other Governments made them. The civil servants think, “Ah—centralise.” The Secretary of State for Justice decides to cut magistrates courts. Which ones does he cut? He cuts those in the small English towns more than anywhere else. In Worksop, that means 16 jobs, and a couple more than that in Retford. Those are small numbers, but the jobs are relatively well paid. Those people buy sandwiches, go to jewellers and other small traders in the town centres.

I am newly elected to represent the town of Retford, due to boundary changes. It was previously Tory for a few years, but it is Labour now. The magistrates court in Retford is going. The police face a 13% cut. Which police stations might go? One of the early candidates for closure is Retford. The fire service in Nottinghamshire faces a 30% cut. Which fire stations will go? Retford is rather old and needs capital investment. Merging it with somewhere else is already being considered. What about social services? Nottinghamshire county council—one of the worst run local authorities in the country—is shifting social services, and Bassetlaw district council is also shifting its workers. Her Majesty’s Revenue and Customs is cutting the tax office. All those cuts could be rationalised individually, but add them all up. Who else works in town centres? The butcher, the baker—the candlestick maker has gone—the sandwich maker and the small pub are there, and the public sector workers provide the key income in the small towns.

[Mrs Main]

I am really enjoying the hon. Gentleman’s speech as he canters through all the things that he does not like. He promised that he would give us some encouragement about what should happen. When will he do that instead of listing all the things he thinks are dreadful and should not happen?

[John Mann]

It is very simple. You do not make the cuts so fast. You do not decimate small English towns such as Retford and Chorley—I am sure that the hon. Lady represents a small English town as well.

[Mrs Main]

It is a city.

[John Mann]

Well, the majority of the Tory heartlands—they may be former Tory heartlands in future—will get the cuts. It is fundamentally wrong that small English towns should bear the brunt of the cuts. If 50 jobs are lost in a big city, it is bad for those people, but it does not affect all the businesses. If 50 jobs in Retford, Skegness or Boston, or 100 jobs in Worksop are lost, there is a major crisis in those town centres. What do you think the very people whom you are rightly trying to get off incapacity benefit, perhaps to start small businesses in Worksop or Retford, will start doing—major, advanced science and technology? No, they will think, “I could run a sandwich shop.” Good luck to them—it is entrepreneurship, and it would be brilliant, but not if there is no one to buy the sandwiches. Who owns the small businesses and the market stalls? Those people will lose their jobs because they are on the cusp and the banks are not lending them money; they are lending even less than they were previously. Those people and the taxi drivers and the small builders come to my surgery—they suffer the knock-on effects. That is why you have got it wrong and why you should think again and slow down the cuts—