Budget Resolutions and Economic Situation

David Heath Excerpts

Friday 20th March 2015 Commons Chamber

[Mr David Heath (Somerton and Frome) (LD)]

I think that I can confidently predict that this will be the last Friday morning sitting to which I will contribute. It is a great pleasure to follow the hon. Member for Luton South (Gavin Shuker), who is proving the exception to the unhappy feeling that this is a special Budget debate, organised for elderly Members of Parliament not seeking re-election.

With any Budget, there is almost a parallel with the Hippocratic oath, which I swore so many years ago, or particularly the gloss to it, which is “primum non nocere”—“first, do no harm.” The first principle of any Budget is that it should not actually make things worse. By common consensus—I include the shadow Chancellor—this Budget certainly does no harm, but I would say that it actually does an awful lot of good. I shall refer to some of the things that leapt out of the pages of the statement that I believe to be substantial contributions to the benefit of the country.

On the continuing changes to the pension system, I think that history will suggest that my right hon. Friend the Minister for Pensions is one of the highest-achieving Ministers in this Government, because he has transformed public policy on pensions and done so to the good. I am particularly pleased to see the finance for mental health—so often the forgotten service—advocated by my right hon. Friend the Minister of State, Department of Health, and others, because that is a missing component of the national health service.

I am pleased to see the investment in science, so ably advocated by the right hon. Member for Havant (Mr Willetts), when he was in office, continuing through the election and, I hope, into the next Government. I share his pleasure at the announcement of additional investment in broadband, although I have to say that, in Witham Friary in Somerset, I will believe it when I see it, because we have been waiting a long time for broadband to arrive in any meaningful sense of the word. [Interruption.] And here is the Minister for Culture and the Digital Economy—the man himself—who will deliver that commitment in the next few days.

I am pleased from a parochial point of view to see the additional announcement of infrastructure development in the south-west. We have been a long time waiting for major projects to be done in the west country. Now they are being delivered after many, many years, and I feel that I can retire from the House at least having achieved something happening on the A303, as that has been one of my most devout intentions over the years. I am pleased to see an additional freeze on fuel duty. That has a huge effect on people in rural areas who depend on their cars not for pleasure but because cars are the only way to get about. I am pleased to see something I advocated when I was farming Minister: the averaging of farming profits over five years, which will make a big difference and help a lot of farmers who suffer from inevitable fluctuations in their fortunes year by year.

Of course I welcome the reduction in cider duty. I am rather a cliché, I am afraid: if no one else will speak up for cider drinkers and cider makers in my constituency, it has to be me. The 2% reduction in duty is, of course, enormously welcome, but I am still worried about the EU ruling on the exemption of small producers. I hope that the Treasury is taking that very seriously indeed and will find a way around it.

Of all the measures in the Budget, the increase in the tax threshold to £11,000 is beyond even what my colleagues and I promised at the last election. This is a serious change in tax policy, delivered over five years, reducing the rate of tax for 27 million of our fellow citizens and taking nearly 4 million people out of tax altogether. What a superb achievement from a coalition Government.

When I look at the overall background to the past five years, I believe that the measures taken have been crucial in taking us back from the brink of potential economic disaster, which we faced in 2010. I echo what the right hon. Member for Havant said: we have imposed rigour. Goodness, we have imposed rigour! Anyone who has sat through Cabinet Sub-Committees where they have been quizzed on their departmental spending knows the rigour that has been applied to Government spending, but it has been tempered by pragmatism constantly. When the eurozone collapsed, yes, the Chancellor recognised that this would affect the country’s revenue and trade and adapted the plans accordingly. Even last year’s autumn statement has been revised in this Budget to take account of reality. Even as late as yesterday, we discovered that orchestras now include brass bands, and as a former flugelhorn player for the Burnham-on-Sea and Highbridge town band, I am very happy about that.

The result of all this is a transformation in the country’s economic circumstances. It is all very well for people to say, “Well, it’s not quite as fast as we would have wished.” No, it is not, but I remember the 1980s when I had 17% unemployment in Frome. I now have a constituency that has statistically full employment: there is less than 1% unemployment in my constituency. That is a fantastic achievement, and it is down to the common sense and hard work of the Government in which I was privileged to play a small part.

I have three concerns, which I want to express briefly, as I have the opportunity to do so. First, I very much welcome what the Chief Secretary said yesterday about further measures to deal with tax avoidance. All Governments say that they will deal with tax avoidance. All Governments try to factor in substantial receipts from dealing with avoidance and evasion. Very few of them actually achieve the results that they say they will achieve, so I hope that the next Government will redouble even the substantial effort that has been made. One of the things that I want the Government to look at is the role of the accountancy profession and auditors. It beggar’s belief in my view that the big accountancy firms, which are paid an enormous amount of money to provide audited accounts, never seem to notice what the individuals and companies that they are auditing are doing with their money to prevent themselves from paying tax. So how about holding the accountants to account in the execution of their professional duties?

Secondly, our difficulty in achieving the £30 billion fiscal consolidation, which all parties in the House are signed up to, is that by protecting 50% of departmental spending the entire load is put on the remaining 50%. I know how difficult it was in the Department in which I was a Minister to achieve that. My concern here is that we are getting to the point where the resilience of Departments, particularly those that have to respond to emergencies and even those where the baseline may be fine, will be stretched beyond breaking point. That must be reflected in the measures that are taken.

The last point that I want to make is that we often talk about inequality. Some people suggest that inequality is increasing, whereas the statistics actually show that it is not. The inequality between rich and poor has marginally decreased. It has moved in the right direction, not fast enough in my view, but it has moved. There is a different inequality: the inequality between generations; the inequality between young people growing up now and finding their way into the job market and the elderly and the baby boomers who have had a pretty good time of it. That needs to be addressed by the next Government. That inequality is just as corrosive as that between the rich and the poor or anyone else. I hope that future Budgets will address that issue.

It has been a great privilege to have had the opportunity to speak in this debate and so many others over previous years, and I look forward to doing so for at least another four days yet.

Oral Answers to Questions

David Heath Excerpts

Tuesday 10th March 2015 Commons Chamber

[Mr Gauke]

First, may I reassure the hon. Gentleman that there is a long-term economic plan, and thank him for using the phrase? Credible public finances will benefit the younger generation, who will not face many years of paying off higher debt levels.

[Mr David Heath (Somerton and Frome) (LD)]

While the Financial Secretary is looking carefully at the duty on English wine, will he redouble his efforts to support artisan and small-scale cider makers, who risk being put out of business as a consequence of a disastrous recent EU decision?

[Mr Gauke]

I appreciate the point made by my hon. Friend. The Government’s support for small cider makers across the piece has helped to create a diverse and vibrant market in this area, and we will continue to study the Commission’s arguments carefully because we want to support this industry.

Oral Answers to Questions

David Heath Excerpts

Thursday 3rd July 2014 Commons Chamber

[Mr Vaizey]

After a question such as that, it beggars belief that the Labour party would not have such a man on its national executive committee. On this side of the House, when the hon. Gentleman speaks, we act.

[Mr David Heath (Somerton and Frome) (LD)]

I am tempted to just say to the Minister, “Somerset—get it sorted.” The good news is that two more communities in my constituency—Fivehead and Milborne Port—will be connected over the next few months, but there are a lot of villages in exactly the position described by the hon. Member for Thirsk and Malton (Miss McIntosh) that will not be connected. Does the Minister recognise how critical Somerset’s bid to the superfast extension fund is in filling in some of those gaps and getting broadband to the rural areas that desperately need it?

[Mr Vaizey]

Yes, I do. The whole point of all the completely justified questions that have been asked is that people want broadband. That is why we are putting £1.2 billion into rolling out rural broadband and why total funding of something like £70 million from BT, European funding and Broadband Delivery UK is going into connecting Devon and Somerset. More than 250,000 premises are planned to be networked and we have allocated a provisional £22 million for the next phase.

Oral Answers to Questions

David Heath Excerpts

Thursday 1st May 2014 Commons Chamber

[Sajid Javid]

My hon. Friend makes his point well. Well over 100,000 premises in Wales have been connected to superfast broadband under this Government, but obviously there is a need to do more. I am keen to consider ways in which we can make the process quicker.

[Mr David Heath (Somerton and Frome) (LD)]

I also welcome the Secretary of State to his new post.

The Under-Secretary of State, the hon. Member for Wantage (Mr Vaizey), was in my constituency a couple of weeks ago and may have heard one or two things from my constituents about the hard-to-reach rural areas where broadband will be difficult to install. Will he look again at the requirement for match funding for very rural areas? Quite simply it will not work, by definition, in areas where there are very few people.

[Sajid Javid]

I can tell my hon. Friend that the rural broadband programme is making good progress. I accept that it is patchy in certain parts of the country, but a number of projects have gone live as the roll-out has begun. I will examine the issue that he raises, but the current evidence shows the rate of connectivity rising and suggests that the match funding programme is progressing well.

Amendment of the Law

David Heath Excerpts

Thursday 20th March 2014 Commons Chamber

[Mr David Heath (Somerton and Frome) (LD)]

In contrast to the economic amblyopia of the hon. Member for Coventry North West (Mr Robinson), I honestly believe that there are many things to welcome in this Budget. Chief among them is the greatly improved economic situation in which this country now finds itself. I must say that I had my doubts that we would achieve our employment objectives, but we have, and in full measure. Unemployment in my constituency is now at 1.6%, compared with 17% in the mid-1980s. That shows just how far we have gone. I am also enormously encouraged by the 1.5 million new apprenticeships that have been put in place by this Government, because that seems to be at the core of our economic recovery.

There is a strange process in this House by which the Budget is separated from the autumn statement, which is not entirely logical. I find it difficult to talk about the money-raising capacity of the Government without mentioning where that money will be spent. May I give due notice that when we come to the autumn statement, I will expect to see clear commitments to flood alleviation schemes, such as the sluice on the River Parrett, and the long-term changes for sustainable maintenance of our flood systems. I will expect to see the A303 explicitly mentioned as part of the capital programme. I will also expect to see the long-promised improvements in our rail infrastructure in the west country, including the opening of Somerton and Langport stations, which will offer long-term economic benefits to our area.

Let me deal with what is in Budget. I wholeheartedly welcome the increase in the tax threshold, which is a commitment that I made before the election. Not only does that take millions of people out of tax altogether, but it represents, by 2015, an £800 tax cut for people on modest incomes in my constituency and across the country. That is enormously important. From a parochial point of view, I would have welcomed the freeze in cider tax, except that I felt it was slightly undermined by the cut in beer duty, and I felt that perhaps cider drinkers did not have parity with beer drinkers. None the less, the freeze is welcome.

I welcome the changes announced by the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb). We have campaigned for many years for this straitjacket of the annuity-buying system to be released.

I welcome the industrial strategy that the Business Secretary has developed over recent years. I am talking about the encouragement to invest and the support for exports. One sector in which I have had direct involvement is the food and drink sector. That is the biggest manufacturing industry in this country, with a £90 billion turnover and 400,000 workers engaged in it. Exports form a key part of the sector, providing £9.3 billion, which is a 5% increase year on year. None the less, we still have far more to do. There are still many opportunities that need to be realised. The fact that 90% of small and medium-sized enterprises that produce food and drink still do not export suggests that we need to do an awful lot more in the way of encouragement.

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

My hon. Friend is absolutely right that investment and exporting are key to our growth. Does he therefore welcome the other announcement that was made yesterday, which is the doubling of the tax allowance when it comes to capital investment, from £250,000 to £500,000?

[Mr Heath]

Absolutely. We are getting an industrial strategy that makes sense for this country. The point was made that we need to offer direct encouragement to firms to export, but what is lacking is aspiration. What we need to do is increase the level of aspiration of many of our smaller firms.

There has been mention of the national minimum wage and the difficulties caused by not uprating it. May I remind the House that there are still abusive employers who do not even pay the national minimum wage and who are not investigated and prosecuted? There are also many abusive contractual relationships, especially in some sectors. That is not to damn every employer in those sectors; a lot of them are very good and conscientious employers. However, it worries me that in the catering and entertainment, care and construction sectors there are still bad employers who need to be brought to book. We already have a model to deal with them. It has been shown to be successful and I used to use it when I worked with the Gangmasters Licensing Authority. I do not believe that the GLA can simply expand into other sectors; that would be beyond its capacity. It also runs the risk of breaking an organisation that is doing a very good job in its sector. We need to replicate that in the other sectors because, for me, avoiding abusive relationships between employers and employees is one of the key issues that remains. Some of the virtually indentured labour that goes on is linked to our work on modern-day slavery. I believe that the Government can and should take action to end it once and for all.

--- Later in debate ---

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

I wish to reflect on one or two significant changes that this Budget and the Government’s long-term strategy are delivering, and to look at how they impact on the businesses and the people in my constituency.

First, I welcome the further steps that have been taken on tax-free personal allowances. Some 39,000 people in my constituency will benefit from the £800 tax cut. In addition, my local council has frozen the council tax for the fifth consecutive year, which is good news for local families. None the less, we still need to go further. In due course, I hope we will be able to align the tax-free personal allowance with the national minimum wage, so that no one on the national minimum wage pays income tax.

Secondly, I want to welcome the pension changes that were announced yesterday. The Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb) has his fingerprints all over those proposals. Pensioner security has been his goal for a very long time. Linking the basic pension to rises in prices or earnings or 2.5% whichever is the higher has delivered an extra £650 to 14,879 pensioners in my constituency. That feature of our pension system should be made permanent. It would help to guarantee the foundation on which individual retirement savings are built. I also welcome what my hon. Friend said in response to me earlier on when he made his statement.

That leads me to the radical change to the way in which people take their pensions. The change is the most radical for nearly a century, giving people greater choice on how to access their defined contribution pension savings. The current arrangements are complicated and leave pensioners feeling short-changed. By lifting restrictions on individuals who have made the right choice to save can empower people to plan for their later life. The changes reflect the longevity revolution that is taking place in our country. As life spans increase and healthy life expectancy rises, we need our pension system to adapt to support people in their third age.

The quality of the guidance available to people when taking decisions will be critical. The fact that this guidance will be free and face to face is good news. I hope Ministers will take the opportunity to join up later life planning. The way in which long-term care is paid for in this country introduces a duty to provide information and advice, including financial advice. It must surely make sense to ensure that people are presented with a rounded picture of their later life needs. We all want to plan for our third age of active retirement, but impartial guidance should also help us to plan for our fourth age of frailty, when we sometimes need support and care. I welcome what my hon. Friend said on that, too.

It is great news that the UK is forecast to grow faster than any other G7 economy in the first half of this year. Sustainable growth will come from a more balanced economy. We want to prosper from what we make and from our ability to translate scientific discovery into jobs and growth for UK plc.

In my constituency, we already have a world leader in the life sciences—the Institute of Cancer Research. The institute discovers more new cancer drugs than any other academic centre in the world, as well as generating more invention income per capita than any other UK higher education institution. My council’s Successful Sutton growth plan, which has already attracted £319 million of inward investment and created many more new jobs, will form the heart of an extraordinary life science campus. What makes that plan so exciting is that the institute shares its Sutton home with the Royal Marsden, which is one of the world’s best cancer hospitals. That ability to translate discoveries from the lab bench to the bedside and to operate a close collaboration between clinicians and scientists provides a huge competitive advantage.

[Mr Heath]

I am interested to hear what my right hon. Friend says about the investment in his constituency. It is exactly what the Science and Technology Committee, on which I serve, is looking for in terms of the correlation between original research and market-ready bioscience and high-tech solutions, which we can use both in this country and abroad.

[Paul Burstow]

My hon. Friend is absolutely right. The two organisations in Sutton have an exceptional working relationship, which makes the site unique in the UK and up there with the best organisations in the world, such as MD Anderson in Houston and Sloan-Kettering in New York. My right hon. Friend the Business Secretary is aware of these emerging plans, and I know that my right hon. Friend the Chief Secretary to the Treasury was very impressed when he visited the Institute of Cancer Research in January. The potential from the site is huge. There is space for life science businesses to cluster; 10,000 direct jobs; a £350 million contribution to the economy; and increased research income. These are huge opportunities and I hope that the Business Secretary and his colleagues in the Department will ensure that his officials fully engage with them so that we can realise the full potential of the project.

Let me end my speech by making some comments about housing. What was announced in the Budget was welcome, but I think it missed an essential ingredient—a focus on the fastest-growing source of demand for housing, people over the age of 65. There is a chronic shortage of the right housing options for people in the second half of their lives. Too often, moves in later life come as a result of a crisis rather than an attempt to fulfil aspirations for a better quality of life. The Help to Buy scheme and the rules governing the community infrastructure levy need to be reviewed to help grow the market for later life housing. The impact on the housing supply chain could be profound, freeing family homes, creating jobs in renovation and helping people to make the most of their third age.

In conclusion, there is more to be done, but the Government have ensured that growth is back, employment is rising, unemployment is falling and inflation is under control. The Government are doing the right thing and providing a sound platform for this country to move forward and that is why I support the Budget.

Oral Answers to Questions

David Heath Excerpts

Tuesday 28th January 2014 Commons Chamber

[Nicky Morgan]

I thank my hon. Friend very much indeed. He ran a magnificent campaign before the Budget last year in representing Burton, which I understand is the home of British brewing. By ending the beer duty escalator at Budget 2013, it is already assumed in the public finances that beer duty will rise by less than other alcohol duties this year. Pubs and brewers will also benefit from other actions that we have taken to support businesses, including support with business rates and ending employer national insurance contributions for those under 21, but I hear what my hon. Friend says.

[Mr David Heath (Somerton and Frome) (LD)]

Knowing that the Government would always wish to recognise and celebrate cultural diversity, will the Minister ensure that anything done for beer is also done for cider?

[Nicky Morgan]

I hear the hon. Gentleman’s request. I am sure he is aware that in the 2010 Budget the Government reversed the previous Government’s 10% above-inflation rise on cider duties, and as he will know, the Treasury keeps all duties under review.

Oral Answers to Questions

David Heath Excerpts

Tuesday 5th November 2013 Commons Chamber

[Mr Osborne]

I remind the hon. Gentleman that the shadow Chancellor said that our economic policies would choke off the recovery in the spring of this year—the very moment when the recovery was under way. When will a Labour MP welcome the fact that our GDP has grown by 0.8% and unemployment is coming down? When will Labour acknowledge that it is our economic plan that is delivering that?

[Mr David Heath (Somerton and Frome) (LD)]

T5. One of the frustrations of losing ministerial office is that one cannot see through the things that one started. Will the Chancellor look carefully at the recommendations of the independent future of farming review, which I commissioned, because it has made far-reaching suggestions for changes in taxation that will benefit rural areas?

[Mr Osborne]

I pay tribute to the work that my hon. Friend did in government. I will make it a personal priority to ensure that his review sees the light of day and is acted on.

Interest Rate Swap Derivatives

David Heath Excerpts

Thursday 24th October 2013 Commons Chamber

[Guto Bebb]

That is an important point—that the banks are possibly playing for time—which I think will be touched on in other speeches in this debate. As for the ability of businesses to try to get compensation through litigation, it is important that they take action to protect their positions. The redress scheme is a step forward. It is not working perfectly, but I would still advise businesses to protect their position from a legal point of view.

[Mr David Heath (Somerton and Frome) (LD)]

Will the hon. Gentleman give way?

[Guto Bebb]

I will take a final intervention for the time being.

[Mr Heath]

I thank the hon. Gentleman for giving way and for his work. He said earlier that he could not name his constituents or the bank involved, but I will certainly name Chris and Angela Hays, whom I am trying to help, and the Royal Bank of Scotland. Is it not the case that we have seen a double whammy? We have seen a big bank using a scam on its customers and then using every device to prevaricate and procrastinate to avoid paying the money that those businesses need to survive.

[Hon. Members]

Hear, hear.

--- Later in debate ---

[Mr McFadden]

That is a really important point. Having heard the speech by the hon. Member for Wyre Forest, I wonder how many of the people selling these products would have been in a position to explain the consequences to their customers. I think we know the answer.

Products were being sold, allied to another product, that may or may not have been suitable for the person buying them. The customer may or may not have fully understood what they were buying, but they were left fully with the consequences of having bought it, to the extent that we had the situations highlighted in this debate whereby the banks pursued customers to such a degree that they were put out of business. We should recognise that hedging is not always wrong, and trying to insure against risks is not always wrong, but a degree of understanding is important. People have to understand what they are buying and the product has to be suitable for them. When the lifetime of the hedging product is completely different from that of the loan, there is a serious problem about that product’s suitability.

This issue provides a really important test of the standards and culture in the banks after everything that has happened. They have to show whether they have learned the lessons of previous mis-selling scandals or whether there has been a repeat of the pattern of behaviour that we saw before in which there was first a refusal to face up to responsibility. That was followed by increasing anger among the customer base and the destruction of trust, followed by a redress scheme that might have ended up being more expensive than the one that might have been put in place earlier.

This is also a test of the FCA. We are in the early stages of a new regulatory system, as the FCA has been in existence for only about six months. The system of redress that it has proposed is an important test of whether it is going to be able to do its job in restoring trust between banks and consumers in the face of sometimes increasingly complex financial products;

[Mr Heath]

The right hon. Gentleman is absolutely right to say that restoring trust between customers and banks is a crucial element. Businesses must not only get redress for what they have lost but be put back into the position that they would have been in and that includes the relationship with the bank, credit lines, and everything else that makes small businesses work.

[Mr McFadden]

The hon. Gentleman makes a good point. Culturally, we should be trying to get to a situation in which the banks have a duty of care to their customers instead of marketing and developing products that are driven by a sales and bonus culture that, in effect, says “Buyer beware” and puts all the onus on to the customer.

The proposed system of redress is based heavily on the sophistication test. That leaves a lot to be desired, because unless it is very carefully designed it cannot take account of the wide variety of types of business. Size and sophistication are not the same thing. It cannot take account of the wide variety of circumstances in which these products were sold or the wide variety of difficulties that businesses find themselves in.

Previous mis-selling scandals have been characterised by years of unnecessary delay that have caused incredible grief to those subject to them. If there is one further lesson that should be learned about interest rate swaps, it is that this process should not drag on for years. We need a system of redress that learns the lessons of the past and is implemented as quickly as possible.

Summer Adjournment

David Heath Excerpts

Tuesday 19th July 2011 Commons Chamber

[The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath)]

Somerset.

[Mr Paice]

Well, there are a lot of counties.

--- Later in debate ---

[The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath)]

I am grateful to everyone who has contributed to this debate, which I consider to be the anchor leg of the relay race that is the Hollobone pattern of pre-Adjournment debates. I shall have to sprint even to recognise all the Members who spoke, let alone to respond to them properly. As usual, however, I shall ensure that those to whom I, inevitably, will not be able to give an adequate answer will receive a substantive reply from colleagues in the relevant Departments.

I normally try to weave a connection between contributions, but that is impossible today—they were all on different subjects and there is no logical connection—so I shall simply deal with them as they came. The hon. Member for Carlisle (John Stevenson) talked about the importance of local radio stations, local newspapers and regional television. Of course, he is absolutely right. There is a saying that all news is local. It is essential that we maintain the local media that give people a sense of what is happening in their areas, and the issues that are important to them. I know that he has been a strong advocate of Radio Cumbria. He raised the threat that he perceives to its future, but which I do not think the BBC entirely accepts. I know that he will continue to argue for the existence of that station. I think that Members across the House will recognise the importance of BBC local radio.

The hon. Member for Gower (Martin Caton) raised a matter of particular relevance to myself and the Leader of the House, because we are both more often seen on our bicycles than in a ministerial car. Cycling safety is a crucial issue. I know that the Department for Transport has recently launched the strategic framework for road safety, and that it is particularly conscious of the dangers to cyclists as road users. It strongly encourages a wide range of measures that local authorities and others can take to make the roads safer for cyclists. He has raised a particular issue—that of stricter liability—and he knows that the Department does not currently accept that rationale for a change in the law, but I hope that he will accept that the Government are very aware of the dangers to cyclists and the need to provide better protection. He has raised an important point, which I shall make known to my ministerial colleagues.

My hon. Friend the Member for East Dunbartonshire (Jo Swinson) talked about something on which she has been campaigning very effectively—body confidence. It seems to me a basic tenet of education that we help young people to feel positive about who they are. That is essentially what she is saying. She knows about Reg Bailey’s review of the commercialisation and sexualisation of childhood. It has reported and the Government have accepted the recommendation that children should always be helped to develop their emotional resilience—the word that she, too, used—in the face of the pressures put on them by what are often impossible images propagated by the press and media. We should support those efforts, because it is important for kids to realise that we do not all have to look the same, and that there is not a “good” sort of person and a “bad” sort of person based on appearance. I hope that she will continue with her effective campaign.

The hon. Member for Barnsley Central (Dan Jarvis) has a great deal of experience in defence matters, and I listened carefully to what he said. I have to argue with him, however, when he says that it is a disgrace that my right hon. Friend the Defence Secretary came to the House to make a statement yesterday. I think that it would have been a disgrace had he not done so, and not made the House aware of the Ministry of Defence’s current thinking. Let us be clear: the strategic defence and security review was a huge challenge, partly because it had not been done by the previous Government. If they had not failed to do what was necessary, perhaps it would have been easier to bring forward sensible planning for our military. However, the decision to take an adaptable posture with flexible forces was right, and has been proved right by subsequent events.

The hon. Member for Keighley (Kris Hopkins) raised an important point about what happened this afternoon. I am not aware of the circumstances, so I make no judgment. I simply say this: it is absolutely and wholly wrong that a witness before a Select Committee should be assaulted in this House. Let us be in no doubt about that. That is a shameful act, and cannot be acceptable in any circumstances.

The hon. Gentleman then raised a number of other issues, which he asked me to pass on to the relevant Secretaries of State, and of course I shall do so. He talked about the teaching of English, and about independence for Keighley from Bradford. My right hon. Friend the Secretary of State for Communities and Local Government knows a thing or two about Bradford, and he may have some opinions on that subject. The hon. Gentleman also talked about tax exemption for charities, and Worth Valley young farmers club. I used to be on the executive of a young farmers club in Somerset, and I know the value of the work done by young farmers. The hon. Gentleman also talked about tourism in his constituency, and about Kashmir. He knows that I cannot respond to all those points adequately, but I will ensure that he receives appropriate answers.

The hon. Member for Bridgend (Mrs Moon) raised work capacity assessments, with which there has been a continuing problem—I remember raising it under the previous Government—and the inability to deal with mental health issues effectively. She knows about Professor Harrington’s review, because she talked about it. That review is an important step forward on the part of this Government.

The hon. Member for South West Bedfordshire (Andrew Selous) talked about returning officers. He engendered great sympathy from me—as a Minister without salary in this Government—when he talked about having additional responsibilities without any additional salary. He will be aware that the Parliamentary Voting System and Constituencies Act 2011 allows the Electoral Commission to withhold all or part of the fee available to counting officers. The Government are considering whether that should apply to returning officers as well. However, on the other hand, returning officers have considerable responsibilities and they have them—to coin a phrase—all the year round, not just at elections.

The right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke) talked about a number of issues in his constituency. Many of them are devolved issues, as he understands, and are the responsibility of the Scottish Government. However, he made a specific request for a meeting with colleagues in the Department for Business, Innovation and Skills. I will pass that request on, and hopefully that can be arranged.

The hon. Member for Southend West (Mr Amess), as always, put in a wonderful performance, in which he managed to include more subjects than I can possibly respond to: constituents with a number of problems, buses—I am afraid that I cannot guarantee that I will attend his public meeting—rate relief for empty properties, animal testing, hepatitis C, midwives, free schools, Parliament square and phone hacking. He knows—because he has enough experience to know—that I will ensure that he receives replies to his queries from the relevant Departments.

The hon. Member for Harrow West (Mr Thomas) raised some important points about Davenham Trust Ltd. I do not know the answers to those, but I shall pass them to the Treasury to reply to him directly. He also raised an important issue—on which it sounds as if he has been fighting on behalf of his constituent Mr Chatterjee for some years—concerning the Ministry of Defence. Again, I will pass that on to the MOD.

Last but not least, the hon. Member for Tamworth (Christopher Pincher) raised the CSA and CAFCASS. I take careful note of what he said. As for the particular circumstances involving the CSA to which he referred, I will read out the note that I have here: “In short, the situation described can arise only where the income a non-resident parent derives from a property—which must be a second property and not their home—is not declared as part of the non-resident parent’s net income, and if the parent with care of the child believes the non-resident parent has undeclared income and asks the agency to include any such income in the maintenance liability.” I have no idea whether that satisfactorily answers the hon. Gentleman’s point, but if it does not, I will ensure that he receives a more satisfactory response in due course.

The hon. Gentleman also mentioned the Staffordshire hoard. In return, I shall ask him to come and see the Frome hoard, found in my own village, which is on display in Taunton castle.

Mr Speaker, may I wish you and your colleagues, and all Members of the House, a very positive and valuable recess? I also thank all the Officers of the House for all the hard work that they do on our behalf.

Budget Responsibility and National Audit Bill [Lords]

David Heath Excerpts

Monday 14th February 2011 Commons Chamber

[Kerry McCarthy]

I knew it began with a W. Anyway, she is probably very familiar with this quote:

“The only function of economic forecasting is to make astrology look respectable.”

The hon. Member for Macclesfield said that he was not a great fan of J. K. Galbraith. I happen to be a great fan, although I had not heard that quote before. His “A Short History of Financial Euphoria” ought to be required reading for anyone who takes up a job in the City these days. The hon. Gentleman resisted the temptation to resort to political point scoring. His point that the OBR can in time become a respected and trusted reference point is valid—I certainly hope it will be achieved.

What the hon. Member for Macclesfield said about greater powers being given to the Treasury Committee was interesting. I was a member of the Committee for a couple of years when first elected to Parliament in 2005, and I remember spending many sittings seeking assurances from the Financial Services Authority and the Bank of England about regulation, the risks that derivatives trading imposed, and so on. I remember receiving blithe assurances that it was difficult for Committee members— with their limited resources—to challenge on an ongoing basis. If increased powers are given to the Treasury Committee to vet appointments, to scrutinise the work of the OBR, particularly its funding, and to ensure that it has the necessary resources to do its job, thought needs to be given to whether the Committee has the resources necessary to do that job.

The hon. Member for Bristol West (Stephen Williams) slightly lost me at the beginning with his talk about Disraeli and fridge magnets, but then moved on to talk about Bank of England independence, which he claimed was a Liberal Democrat manifesto—

[The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath)]

It was.

[Kerry McCarthy]

I am not denying it. The hon. Member for Bristol West said that it was an example of Liberal Democrat manifesto policy being implemented 13 years before they got into government. I would suggest that the reason he is claiming credit for that is that there are very few examples of that now that they are in government.

Let me move on to the Bill. The plans for the National Audit Office have received very little attention in this debate, because there is a general consensus that they are the right thing to do. They are almost exactly in line with our plans for the National Audit Office that we set out in our Constitutional Reform and Governance Bill, which we did not get through the parliamentary process before the May 2010 election was called.

We support the creation of the Office for Budget Responsibility, which we see as continuing the direction of travel that we set in government by giving independence to the Bank of England and the Office for National Statistics. However, we have a number of concerns about the details of the proposals. We welcome the amendments that were introduced in the other place—with some, limited success—to try to make the OBR more independent from the Government, for example by giving it budgetary independence, so that we can be sure that it has the resources that it needs to do its job and produce genuinely independent forecasts without being compromised by Treasury control. We intend to explore that further in Committee, to see whether we can give the OBR greater independence. It is also important to explore in Committee how we make the OBR more accountable to Parliament, rather than to the Treasury.

However, we will not let this Government hide behind the OBR or use its independence as a shield to protect them from valid criticism of the impact of their economic policies. The Government are wrong if they believe that the OBR will protect us from the consequences of the Chancellor’s misjudgments. Indeed, the OBR will help to hold the light up to the Government’s record. It is notable that the OBR has already predicted that unemployment will be higher under this Government than under Labour plans, that growth will be lower under this Government, and that consumer prices index inflation will be higher. In fact, as has been mentioned—I think by my hon. Friend the Member for Glasgow North East, or perhaps by my hon. Friend the Member for Wirral South—the OBR has already had to revise its growth forecast downwards twice, down from 2.6% to 2.3% after the emergency Budget, and down again, to 2.1%, after the spending review. That is a telling verdict on this Government’s policies for growth—or lack of them—and the Chancellor’s failure to produce a growth plan. We wait to see whether the March Budget will force the OBR to downgrade its growth forecast yet again.

The OBR has also confirmed—although the Government seem to have ignored this because it is politically inconvenient for them to acknowledge it—that the deficit was more than £20 billion lower in 2009-10 than expected, owing to firm and decisive action taken by the Labour Government. What is clear—we do not need the OBR to tell us this—is that under this Government unemployment and inflation are rising, living standards are falling and the recovery has stalled. Although we support the substance of this Bill to a large extent and we shall not seek to push its Second Reading to a vote this evening, we remain deeply sceptical about whether the Government have learnt any lessons from the past eight months during which the shadow OBR has been in place. We hope that lessons will be learnt going forward.