Business of the House

David Mowat Excerpts

Thursday 17th March 2016 Commons Chamber

[Chris Grayling]

The evidence that we are on the side of workers and young people is the massive increase in the number of apprenticeships and the substantial drop in the number of unemployed young people. We are making real progress in creating opportunities for young people. When I took over as Employment Minister in 2010, I regarded with some trepidation those sessions I had with sixth formers and college students talking about their future prospects; I would have no such trepidation today. They have real opportunities, low unemployment and business investment. It is a transformed picture compared with six years ago.

[David Mowat (Warrington South) (Con)]

For the past two decades, transport infrastructure spend per capita in London has dwarfed that in the English regions, with a ratio of 10:1 with the north-west. The Government now propose to build Crossrail 2 for £28 billion, but it has so far not received any scrutiny in this House. Could the Government make time for a debate on Crossrail 2 so that we can consider it vis-à-vis other transport priorities?

[Chris Grayling]

My hon. Friend is absolutely right about the need to provide balance across the country in investment in infrastructure. If we look back at the Labour Government years, we will see that projects sat on the shelf. When in opposition, I would go around the country and spend time as shadow Transport Secretary talking about the need for projects, but when I go around the country now, I see that they are being built. I was in Newcastle last week, where the A1 is being improved, and the link road between the M6 and the M56 is being built in Cheshire. There is real improvement and change happening around the country in a way that simply did not happen when the Labour party was in power.

Business of the House

David Mowat Excerpts

Thursday 2nd July 2015 Commons Chamber

[Chris Grayling]

My hon. Friend makes an important point. It is very important that we in this country do not criminalise people for making honest mistakes. We criminalise when there is wilful negligence, but not when people make errors in the course of busy jobs. Health questions is next week, and I suggest that he raises that matter directly with the Secretary of State when he is in the House.

[David Mowat (Warrington South) (Con)]

This year marks the 120th anniversary of the sport of rugby league. May we have a debate on the contribution made by the sport, particularly in the north of England? Will the Leader of the House join me in the 120-mile walk, or in part of it, that is taking place this summer?

[Chris Grayling]

My hon. Friend represents the great northern town of Warrington. I once stood there as a candidate, and I visited the local rugby league team to watch it play. I want to take this opportunity to wish the English rugby league team the very best when it takes part in this autumn’s world cup. I also wish all those involved in promoting the anniversary—including those going on the walk in a few weeks’ time—the very best in celebrating a sport that has been and continues to be a really important part of our northern communities.

Business of the House

David Mowat Excerpts

Thursday 6th November 2014 Commons Chamber

[Mr Hague]

The steel industry is very important for this country. The hon. Gentleman will be aware that steel production here has risen in recent years. The Prime Minister commented on the matter recently at Prime Minister’s questions and there was an urgent question within the past two weeks on the future of the industry. It will remain an important topic of discussion in the House. As I said, BIS questions will be on 20 November, which might be the next opportunity to pursue the matter.

[David Mowat (Warrington South) (Con)]

A continuing concern in our country is the disparity in infrastructure spend between London and the English regions—roughly speaking, it is a ratio of 10:1 in terms of spend per capita. Much of that has been driven by Crossrail 1. Will the Leader of the House give an assurance that Crossrail 2 will not have significant sums spent on it without a proper series of debates in this House?

[Mr Hague]

Debating infrastructure investment in many different places and in many different ways is very important for the House, so I can assure my hon. Friend that there will always be plenty of discussions on these matters. He will also be aware that part of what we are trying to do with our regional growth fund and city deals is ensure that there is investment in infrastructure, transport and science across the regions of the United Kingdom. We now have the largest rail modernisation programme taking place since Victorian times. We are investing nearly £800 million in superfast broadband. There are many infrastructure developments benefiting the whole of the country, and we must ensure that they continue to do so.

Devolution (Scotland Referendum)

David Mowat Excerpts

Tuesday 14th October 2014 Commons Chamber

[Mr Jenkin]

No, I think it was a panic reaction to a late poll. It was something that they were desperate to do. I believe that the very fact that it was a close poll was enough to turn people away from voting yes, because they suddenly realised that their vote might make a difference. Most pollsters would agree that that was the effect of the very close poll.

The vow stated:

“We agree that the UK exists to ensure opportunity and security for all by sharing our resources equitably across all four nations”.

That is fine; I think we would all agree with that. Then, however, it goes on to reaffirm the Barnett formula. There are two things about the Barnett formula, the first of which is that if Scotland is to raise more of its own resources, the formula will become a much less significant component of the allocation of resources. Secondly, the formula actually represents the opposite of

“sharing our resources equitably across all four nations”.

It cements in place an artificial bias in favour of funding in Scotland, which is no doubt why Scottish politicians campaign so vociferously in favour of it.

[David Mowat (Warrington South) (Con)]

Will my hon. Friend give way?

[Mr Jenkin]

I have given way twice already; I do apologise.

The House of Lords produced a very good report in 2009 which concluded

“that the Barnett formula should no longer be used to determine annual increases in the block grant for the United Kingdom’s devolved administrations.”

It stated:

“A new system which allocates resources to the devolved administrations based on an explicit assessment of their relative needs should be introduced.”

The question is: how are we going to get from A to B? Lord Strathclyde has recommended a convocation in which the four component parts of the Union should be represented on equal terms in a single body. The question of the fair allocation of resources among the four parts of the United Kingdom deserves to be discussed in such an impartial forum. This cannot be imposed by the Treasury. It cannot be imposed by a system that we have inherited from a period when there was no devolution and no devolved tax-raising powers at all, so we need a new system. If we are going to learn from this referendum, it would be much more honest if we all agreed that, over time, we will need to move on from the Barnett formula.

Let us deal with the question of what the promises mean. If we ever want evidence of the chaos in the no campaign, we need only see that, even after the referendum, we still have three separate proposals in this Command Paper for what is to be devolved, and an unseemly scrap between the Westminster parties over what should be devolved. I have no doubt that agreement will be reached, and I commend the SNP for being determined to bring its good will to the party in order to get an agreement, because that has to be our objective. However, as part of that agreement, there is now huge awareness across the United Kingdom of English votes on English laws.

--- Later in debate ---

[David Mowat (Warrington South) (Con)]

I will try to limit my remarks to two minutes.

Three years ago I was on the Scottish Affairs Committee and we had some discussions about the nature of the question that should be asked in this referendum. One of the options was to have devo-max as the third option. It is perhaps instructive to think about why at that time we did not think that was right. There were two reasons. First, it was felt that without resolving the West Lothian question, it would not be right. Secondly, it was felt that it would not be easy to define what devo-max was, and if the last five hours have taught us anything, it is that those reservations were clearly correct.

However, we are where we are. The vow has been made, we must meet that commitment and I fully endorse that. We have talked a lot about the West Lothian question, but for my constituents the more important part of the vow is that pertaining to the Barnett formula. The Secretary of State for Scotland answered a question from me yesterday and said the Barnett formula will stay for ever. I am not sure what that means, but at the moment the differential between Scotland and England is £1,623 per head this year. That is about £6,000 for a family of four. The consequence of that is that prescriptions and tuition are free in Scotland. Indeed, even yesterday the NHS in Scotland was able not to go on strike because it was able to fund things that much better. At some point, this issue is going to need to be addressed. By the way, this is not a subsidy to Scotland. I readily acknowledge that, historically, the Barnett formula has been paid for by the proceeds from Scottish oil, although that might not be the case in future. However, this is not a question of subsidy; it is a question of fairness. A number of hon. Members have talked about fairness today, and I put it to the House that the issue needs to be resolved.

Business of the House

David Mowat Excerpts

Thursday 27th March 2014 Commons Chamber

[Mr Lansley]

I am sorry, but I have to disagree with my hon. Friend. First, the amount of time spent in scrutiny of legislation in the two Houses is broadly comparable. Secondly, the time spent in scrutinising Bills—not least by allocating two days to Report in this House—is substantially higher in this Parliament than it has been in previous Parliaments, and is providing exactly the opportunity for scrutiny that he seeks. Thirdly, it is a matter of participation by Members. For example, on the Second Reading of the Criminal Justice and Courts Bill, I was staggered that only three Opposition Back Benchers were willing to debate that important Bill—and one of them was a Whip sent to the Back Benches to make up the numbers.

[David Mowat (Warrington South) (Con)]

For the last decade or so, there has been a significant gap in transport and infrastructure spend between London and the English regions—perhaps as much as 15 to 20 times per head. Much of that has been caused by Crossrail 1, which has been very successful but has been responsible for part of that gap. Before we commit money to Crossrail 2, may we have a debate on its relative priority to similar projects in the English regions?

[Mr Lansley]

During the Budget debate, and later this year when the announcement is made on the national infrastructure plan, I hope that my hon. Friend and the House will see our continuing commitment to developing infrastructure across the regions of England, as well as across the United Kingdom as a whole. He will have noted that, as the Prime Minister made clear the other day, we have spent £8 billion on supporting rail and transport infrastructure in the north of England, and we will have an opportunity, ere long, for the House to support the High Speed Rail (London – West Midlands) Bill, which potentially will be the most important project this century for providing access to, and improving, rail infrastructure in the north of England.

Business of the House

David Mowat Excerpts

Thursday 16th May 2013 Commons Chamber

[Mr Lansley]

I fear that I cannot give the right hon. Gentleman the answer he is looking for, but I will of course be in contact with the Home Secretary to see if I can procure an answer for him.

[David Mowat (Warrington South) (Con)]

Over the last decade, transport capital spending in London has been about 10 times that of the regions. Much, but not all of that, has been caused by spending on Crossrail. Recent comments by the Mayor of London imply that he has momentum and Government support for Crossrail 2. Will the Leader of the House confirm that there will be no money spent on even preparatory work for Crossrail 2 without a full debate in this House?

[Mr Lansley]

My hon. Friend refers to the momentum of the Mayor of London, which is, frankly, unstoppable. On his point about infrastructure investment, I hope he knows that, in addition to the investment in London, which is vital to the economy of the country as a whole, we are proceeding with many important investments in other parts of the country, including £1.8 million for local authority major schemes, and the pinchpoint fund, which provides £317 million for 123 projects across the country. Of course, the benefits from the biggest item of infrastructure planning, High Speed 2, will assist major cities right across the country, including those in the north-west.

House of Commons Administration and Savings Programme

David Mowat Excerpts

Thursday 8th November 2012 Commons Chamber

[Andrew Miller (Ellesmere Port and Neston) (Lab)]

I am happy to support the amendment tabled by the hon. Member for Windsor (Adam Afriyie), but I also congratulate the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) on a thoughtful report and the work of his Committee. He could shave a few pence off the House of Commons print budget by shortening the name of his constituency, but that is not the only inconsistency that I want to bring to his attention. He spoke with some expertise on the issue of generating income. He has now heard the contribution from the hon. Member for Windsor on the role of POST, and I hope to point out the inconsistency of the position that has been adopted in the report in respect of that budget head.

I am the chairman of the Parliamentary and Scientific Committee, which is the oldest all-party group. It was formed in 1939 and its first report was on the role of brown bread in the war effort. I therefore declare an interest. Some of my predecessors had a cross-party discussion with Baroness Thatcher when she was Prime Minister, and from that the Parliamentary Office of Science and Technology was formed. It was originally an external body funded through a charitable organisation, with the Parliamentary and Scientific Committee appointing the trustees. Lord Morris, who was one of the trustees, sadly died recently, and his contribution to that body was exemplary, along with that of others on a cross-party basis.

That charitable body, which has received significant funds over the years from the Wellcome Trust, the Gatsby Charitable Foundation and others, put all the original money into the pot that created POST and still supports some of its activities. Incidentally, I have a responsibility in that regard, because the PSC will appoint the successor to Alf Morris. The project that we conducted through POST in Africa was entirely funded through that process. The point has been made that this House has influence well beyond the shores of the United Kingdom, and when I was in Uganda with the Select Committee, I was delighted to meet a fellow who had been on one of the POST fellowships through that scheme.

The scheme has leverage, but to lose senior posts will do a disservice to that, and that is the point that I want the hon. Member for Caithness, Sutherland and Easter Ross to consider. There are 32 letters in that constituency name—it is even longer than Ellesmere Port and Neston. Every senior post in POST levers in a number of research fellows, and that is a contribution to the House in kind from the wider research community that should not be underestimated.

We have some wonderful people on the Library staff, starting with our chief librarian, John Pullinger. He has just had the honour of becoming president-elect of the Royal Statistical Society, following in the footsteps of the late Harold Wilson. The team John leads have an extremely difficult job, and having the extra leverage from the work done by POST makes a significant difference.

The PSC recently asked Lord Oxburgh to conduct a review of what is happening with science in Parliament. It has just been published and we are working on it. Lord Oxburgh identified the importance of the role of POST in helping to inform Parliament about scientific matters, and I am happy to make that report available to the hon. Gentleman and his Committee.

The hon. Member for Windsor referred to the external views that have been expressed. A letter was sent yesterday to Mr Speaker in his role as Chairman of the House of Commons Commission which is signed by some extraordinarily eminent people, including the director of the Science Museum Group; the managing director of Sense about Science; Lord Krebs, who is my opposite number in the Lords; and Harry Kroto, a Nobel laureate. They all signed a letter pleading with Parliament to think again about how it carries out this work. I urge the Speaker to place a copy of that letter in the Library because it informs this debate in an important way.

[David Mowat (Warrington South) (Con)]

The hon. Gentleman is making a very rational argument for POST and I am listening to it carefully. Is there not perhaps a more symbolic argument to be made at this juncture of our country’s development and given the need for science and technology? We could learn from the fact that the Government exempted science and technology from their cuts. It would be hugely symbolic if we were to cut POST more than other areas—and it would just be wrong.

[Andrew Miller]

I could happily have a debate with the hon. Gentleman about whether flat cash is a cut or not, but in the spirit of working together on a collegiate basis on this matter, I am happy to agree with the point he makes.

All parties in this House regard the science base of the nation as critical to our success in the future. It therefore behoves us to have a better understanding of science. If we do not find better ways of engaging with the science, engineering and maths community, we will be doing ourselves a massive disservice. There are some fantastic schemes. The Royal Society pairing scheme got a good airing on the radio last week. A number of projects are run by a wide range of all-party groups to help to inform parliamentarians. For example, the next meeting of the Parliamentary and Scientific Committee, on 27 November at 3 pm, will bring experts into the House to address the issue of ash dieback. Members should put it in their diaries, because that problem will be much wider spread than it is now.

There are hugely important challenges that none of us, whatever our backgrounds, are properly equipped to deal with. Even if one was, in a previous life, working in a STEM background, inevitably one falls behind the times when one spends any time in here. I urge the House to take the matter seriously. I invite colleagues to support the amendment in the name of the hon. Member for Windsor, and adopt what is a very important report.

Whitsun Recess

David Mowat Excerpts

Thursday 24th May 2012 Commons Chamber

[Mr Thomas]

I am grateful for the support of the hon. Gentleman and, I think, the support of my right hon. Friend the Member for Rotherham (Mr MacShane) for this great cause.

London Welsh players responded in the best way possible to the news last night when they won the away leg at the Cornish Pirates’ ground 37 points to 21. We take a 16-point lead into the home game at the Oxford Kassam stadium next Wednesday evening. I hope that members of the RFU board will come to that stadium to see just how well that ground could house premiership rugby next year.

[David Mowat (Warrington South) (Con)]

I thank the hon. Gentleman for giving way and I note that the fourth issue he has addressed, rugby, has attracted a lot more interest in the Chamber than the previous three. I endorse the comments that we have just heard about the quality of administration in the RFU. If he or his club would like to come to the rugby league to see an example of fine administration they should do that.

Let me make a serious point about London Welsh, which I think would be replacing Newcastle in the premiership. I have nothing at all against London Welsh, but it would be a pity if the whole of the rugby union premiership became dominated by teams from the south and did not include fine teams such as Rotherham and Newcastle, which have dropped out of that league.

[Mr Thomas]

The hon. Gentleman makes an important point about the need for rugby union to have a very diverse base across the country. I certainly hope that when Newcastle takes its place in the championship, as I hope it will, it continues to benefit from the RFU’s support and largesse so that it can have a genuine chance of winning a place back in the premiership. Nevertheless, we have to allow proper promotion and relegation to take place. I do not think London Welsh has been properly treated thus far. I raise this issue in the House today because I hope that the Deputy Leader of the House might encourage the Minister for Sport and the Olympics to use his influence to encourage the RFU to publish the full details of its assessment and how it reached the decision to reject London Welsh’s application for the premiership, so that London Welsh has all the facts in front of it as it prepares its case for appeal.

--- Later in debate ---

[Mr Denis MacShane (Rotherham) (Lab)]

It is a pleasure to follow the hon. Member for Rugby (Mark Pawsey), whose suggestion I entirely endorse. He revealed, though, two of the biggest problems that all hon. Members and, indeed, Government Front Benchers, face: the “not invented here” syndrome; and the Whitehall expert who knows best and will always find a reason why something cannot be done and should not be changed.

I always admired Gladstone, who brought in a tax for just six months. We should experiment, try the graduated driver’s licence scheme for a year or two and see whether it produces good results. I have seen it work over a number of years in France. After someone passes their driving test in that country, they have to drive around for a year with a large letter “A” on the back of their car, for “apprentice”. That is what it means in French.

The hon. Gentleman’s point about people not going out late at night when they have taken drugs or had a drink is extremely important. Fatalities in France are much higher for lots of other reasons, such as bad road management, speed limits and drink driving, but they are coming down fast. We have a good record, but each life lost—particularly that of a young person—is a terrible tragedy for the families concerned, so I wish him all the very best with his campaign.

I wish to talk briefly about the steel industry and my region of south Yorkshire, and it is an enormous pleasure to do so in the company, on the Opposition Front Bench, of my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith), because she has one of Britain’s most important steel engineering plants in her constituency and is a doughty champion of it. That plant is linked to a major one in Rotherham, and on this issue we have been able to combine action over a number of years.

The issue has to be set in the broader context of today’s extraordinarily sad news from the Office for National Statistics, which reports that our economy is again contracting. We are shrinking. We have that extraordinary malady of the ever-shrinking British economy under this Government. In the first quarter of this year it was down 0.3%, which is an increase in negative growth on the first estimate of 0.2%, but within that overall figure we have some rather more worrying statistics, which impact on the broader south Yorkshire manufacturing economy, including not only steel, but engineering, construction and all the things that go into “making” Britain, rather than the financial services or the huge amounts of money that the City makes. Indeed, one of the huge problems with the current Government is that the Cabinet knows the south of France better than it knows the north of England.

According to the ONS, construction output declined by 4.8% in the first three months of this year, after a 0.2% decline in the fourth quarter last year. That is absolutely catastrophic, and one of the biggest components of any aspect of construction, from roads, to houses, office blocks, new schools and hospital wings, is steel, so, when the construction industry declines by 5% under our nation’s current economic stewards, that signals very bad news for steel.

There has been no growth at all in manufacturing. There are of course some pockets of growth, and, as my right hon. Friend the Member for Warley (Mr Spellar) pointed out earlier today, the car industry is doing better, so I accept fully that the situation is uneven, but we are a United Kingdom Parliament, not a south of England Parliament or a Parliament just for the City, and our policies have to help all of the country, not just parts of it.

Debt is the enemy of any good stewardship of the nation, although I have to say that I have probably been in debt all my life: it is called a mortgage. But, providing I have been able to manage that debt and to pay the interest rates, I have not been crippled by it. When William Pitt became Prime Minister in 1784, the average national income of Great Britain was £23 million and the national debt of Great Britain was £240 million. In other words, the national debt was 10 times the national income. That did not faze Pitt, but it seems to faze his old Etonian successor, our current Prime Minister, who thinks that an infinitesimally smaller level of debt is something that has to bring the entire UK economy to a juddering halt. I am not suggesting that we return to Pittite days of massive debt to national income ratios, but we have to strike a balance, and we will certainly not tackle any of our debt if we do not swiftly move to growth.

I accept that some Ministers, including the Secretary of State for Business, Innovation and Skills, are interested in steel and have come to the advanced manufacturing plant in Rotherham, on the border with Sheffield, to see the excellent work done there by Rolls-Royce, Boeing and other companies. I invite a Minister to come to a steel plant, either in my constituency or that of my hon. Friend the Member for Penistone and Stocksbridge, where they will be told about the extraordinarily international nature of the steel industry and about the fact that what goes into making steel entirely determines its profitability and the future sustainability of any part of the industry.

The big problem that we face is the obsession with front-loading on to the steel industry the general problem of climate change. I am talking about steel, but I am not excluding other industries. I am sure that hon. Members with connections to the glass or ceramics industry, or to other high-energy-using industries, would make the same point on their behalf. There has been a culture, not necessarily under this Government, of saying, “Heavy industry bad; anything else good.” Well, I am sorry, but we are not going to move away into an economy of which steel does not remain an essential component. Steel is vital, sometimes in very small elements, whether it be in our cars, our mobile telephones or the planes we travel in—modern steel, high-tech steel, flexible steel. Steel is also a huge recycling industry. It is not generally understood that steel production is based on gobbling up and reusing old, unused steel that would otherwise have to go into landfill or clutter up the landscape.

In this year’s Budget, our southern-oriented Chancellor outlined policies that will have a detrimental effect on the UK steel industry. He confirmed that the Government will calculate the 2014-15 prices support rates, equivalent to £9.55 per tonne of carbon dioxide, in line with the carbon price floor, using the methodology set out in the 2011 Budget. This has increased from the indicative rate set last year of £7.28 per tonne. That is a response to the dramatic fall in carbon prices seen last summer. EU allowances reached record lows at the beginning of this year, so the support rate or tax applied in the UK needs to go up to achieve the floor. That means that next year the rate will be nearly double that in 2014, which was meant to stand at £4.94 per tonne but is now set much higher.

I am sorry that this is quite complicated, technical stuff to bring to the House. I am not trying to make a partisan point; indeed, I pay tribute to Ministers, who have always been willing to receive delegations of MPs from steel industry areas. Part of the problem is that such a level of technical detail is impossible to get across in parliamentary questions. One has to dig into fairly technical steel technology and steel industry publications to find this material, because it never features on the front page of any newspaper or business section.

In response to the increase in the carbon price floor, BIS has allocated £250 million in compensation to cover the 2013-15 period. Given that our steel industry has a value of about £3 billion a year, £250 million will not be sufficient to counteract the negative effect of the carbon price floor. That might cause lasting damage to the British steel industry.

I plead with the Government—the Department for Business, Innovation and Skills and the Department of Energy and Climate Change—to rethink their policies. They can, by all means, insist that we reduce CO₂ emissions. However, they should not use methodologies and prices that are changing so rapidly that they will do damage when rigidly applied. Believe me, when civil servants want to apply something rigidly, they do. On the whole, Ministers, however well-intentioned they are, are not across every detail of such decisions. Without it being an intended consequence, if we allow the present structure of carbon reduction through price support mechanisms to continue, we may face serious damage to our steel industry.

Secondly, there is the pledge to consult on simplifying the carbon reduction commitment energy efficiency scheme, or CRCEES as it is known in the trade, to attempt to reduce the administrative burden on business. The Government have said that they are ready to look at replacing those revenues with an alternative environmental tax. However, they have not specified how an environmental tax will be paid and which industries it will affect. We also had the statement on feed-in tariffs earlier today.

Last night, I had the most extraordinary exchange with Mr Nigel Farage on LBC. His new term for the Prime Minister is a “warmist”. I had never heard of warmism before, but in the lexicon of the UK Independence party, it is apparently used to denounce people who like renewable energy and wind turbines, and who think that we are facing global warming. Mr Farage obviously knows better that global warming is an EU conspiracy to undermine Britain. He thinks that the louder he calls the Prime Minister a warmist, the more people will flock to vote for UKIP. I do not know whether that is the case.

At the moment, only non-energy-intensive firms and organisations are bound by the carbon reduction commitment. We have to look at other ways in which we can support energy intensive industries, and the steel industry in particular. It is the most extraordinary sight to see steel being melted in Rotherham. Scrap is poured into a giant metal pot and a red-hot electrode goes in at about 2,000° or 3,000°. There is a huge explosion, upon which I have seen distinguished colleagues shake. It demonstrates the raw power of industry. In a sense, it is a process that has not changed since the days of Vulcan—heat is applied to iron ore or scrap metal and out flows molten steel—except that the process is magnified in temperature and size many times over. It is fantastically dramatic; sometimes tragically so, as accidents still happen. That is the raw nature of what has to be the core of our economy, because however high-tech, Googley and Facebooky we want to make the British economy, and however much we want to base it on the City and the financial services industry, it will still need houses, cars, hospitals and metal manufacturing.

The third problem is the extraordinary discrepancy between the fuel costs in this country and those of our major competitors. The most dramatic difference is with the United States, where shale gas is significantly reducing the cost of energy. I have graphs here, but I do not really want to give more figures. The price of fuel in the US is about 50% lower than that in the United Kingdom. That is why I support a dash for gas, based on shale gas. That could significantly reduce the UK’s dependence on imported energy sources. I am not against wind farms—how can one be?—but they will never provide the electricity that is needed to melt steel. Everybody wants to be able to press a switch and on comes the light, on comes the heating, on comes the hot shower, on comes the air conditioning or on comes whatever else, but that ain’t gonna happen from renewable sources.

Finally, I want to consider the problem of electricity prices. I have a chart illustrating the estimated prices in 2015. I cannot hold it up, because we cannot do PowerPoint stuff in the Chamber, but the best estimates show that the cost per megawatt-hour delivered in Germany will be about €50, and in the United Kingdom €70. In the United States it will be €35, in the Nordic countries €45 and in France a bit less than in Germany, maybe €48. Those are estimates, but we—by “we” I mean our steel industry—pay higher tax on electricity than the United States or our main European steel-making competitors.

I understand the desire to reduce our carbon output and the Treasury’s perfectly reasonable desire to get what tax it can from whatever source it can. I know that my speech could be described as special pleading, but the comparators with most other countries show that the British steel industry remains fundamentally disadvantaged by the higher cost of electricity, which is needed for melting steel. It cannot be done with a Bunsen burner or by putting the gas cooker on, it needs 2,000° C to 3,000° C-worth of electricity delivered fast and hard.

[David Mowat]

I agree with the right hon. Gentleman that every Member should spend some time looking at a blast furnace. The one that I saw was in Port Talbot. It is quite an emotional experience.

The right hon. Gentleman is making a case about high energy prices, and it is a fact that they destroy jobs and value in industries of the type that he is representing today. However, I am not quite so clear about what his solution is, given everybody’s apparent desire to have more windmills.

[Mr MacShane]

It is to invest in a mixture of energy sources, and I would focus on nuclear. We simply need a wider national debate about what is important, including maintaining a steel and manufacturing sector as part of the broader economy. It is reducing in size and will never generate millions of jobs again, but we need a debate about whether it is worth while, particularly in the part of England that is getting less and less attention from this very southern-focused Government. The hon. Gentleman made the point that if Newcastle were knocked out of the rugby union premier league, rugby union would become an entirely southern-based sport. I want more balance in our economy and our sport, much though I am delighted that Chelsea beat the Germans on Saturday.

I will finish by quoting Karl-Ulrich Köhler, the managing director of Tata Steel here in the UK. He praised the Budget, saying:

“The Chancellor is rightly aiming to reward work”,

but he said that it

“did little to ease the additional unilateral energy costs that UK industry must bear. The benefits to industry pale into insignificance against the costs imposed on them from existing energy and climate change regulations, which are rising alarmingly in the UK.”

That is “Made in Britain” regulation. It has nothing to do with the EU. I am going to sit down now, but I could make the case that the European model of manufacturing, steel and energy prices is much more intelligent and co-ordinated than ours. If we had the same model, it would hugely benefit manufacturing, particularly the steel industry. I urge Ministers to pay particular attention to the matter.

I would get on my knees to say that even if we have much better and fairer electricity prices, we can make all the products we want, but while we have a recession-focused Chancellor who seems to draw some weird pleasure from the British economy shrinking, there will be no money to buy those products and the firms of Rotherham will face a very bleak future. That goes not just for our huge steel industry but for every firm that needs a decent level of demand in the economy, which is currently being denied the UK.

--- Later in debate ---

[David Mowat (Warrington South) (Con)]

I will endeavour to speak succinctly on one issue. I rise as a Back Bencher, and I am aware that many of us make suggestions to the Government about policies that usually have the characteristic of costing money. I am delighted to say that the proposal I am going to outline will save the Government about £30 billion per annum. The case I wish to make is for the abolition of tax relief on pensions. If we were to get rid of that relief, it also would enable us, if we so wished, to increase the basic pension by between 50% and 60%, and to reverse the tax raid that resulted from the previous Government’s changes to private pension arrangements. Private pension arrangements in this country are a disaster.

The question might arise as to who would lose from this proposal. They would not be the people who are saving for their retirement, because the industry with which they have saved has failed completely to enable them to do that. I will develop that point a little further later. As far as I am able to make out, the only significant losers from this proposal would be estate agents in Kensington and Chelsea, which is where the supernormal profits from the industry that is supposed to look after our retirements are going.

In broad terms, there are two models for pensions. One is the one we have, whereby tax relief is given, people are encouraged to save in their own right and they then have their pots, which they can use at the end. The other model is that used in most of the rest of Europe, whereby the state has a much higher position in helping and the consequence is higher basic pension provision by the state. In general, I would prefer our model, if it worked—it would be a model that I am more comfortable with. It is a market-based model that encourages people to do the right thing and then have more money in retirement. Unfortunately, it has not worked and is not working, and there is a real policy issue to address for Governments of whatever type.

Let me give some evidence of the failure: approximately 50% of people have a poor view of the retirement industry; one third of people in the private sector do not save at all for their pensions; and another third who do save have an average pension pot in the order of £35,000, which will buy them a pension of about £1,500 per annum. The further evidence of failure in this area is that the Government, rather than reforming the current system, are introducing compulsion, because people will not save under the existing structures.

All this has happened because we have a market failure. As I say, I would prefer a market-based solution. We have a market that is too complex, in which there is no transparency and, most seriously, a massive asymmetry of information between the suppliers of these financial products and the people buying them. Punters need to demonstrate a massive degree of intellectual self-confidence in challenging the people who are selling pensions, the fund managers and so on. That is not going to be fixed by better financial regulation, although the situation could have been fixed with better advice—that is really what should have happened. The difficulty is that the advice industry of individual financial advisers was entirely hijacked by the pension fund provision industry in terms of commission, trailing commission and all that goes with that. As a result, independent advice has not been available and that has compounded the issue.

I want to say a couple of things about charges. The Financial Services Authority estimates that 31% of private pension pots go in charges. That does not include the so-called churn charges, which are the cost of buying and selling shares at differing rates and the equity within that, as the average pension fund churns every seven months. If we take churn charges into account, it is nearer to 50%.

Over the past decade, at a time in which pension funds have been increasing in size, one would expect economies of scale to have taken down the average pension percentage charge. In that decade, charges have risen because of the market failure. Significantly, a lot of academic research says that the difference between the pension fund industry in this country and that of the US is about 100 basis points a year—1% a year in extra charges that are almost certainly going on supernormal profits. That is the money that the Government are providing through pension tax relief.

I am keen not to take too long, so I would like to leave my hon. Friend on the Front Bench with a figure for the savings, with a description of how I got to that number. In broad terms, the fund industry in this country is worth £2.5 trillion a year. So, the funds under management are £2.5 trillion and if we accept—it is pretty clear that it is true—that 1% of that represents the supernormal overcharging caused by the market failure that I have described, which does not exist in other countries, there is a supernormal profit of £25 billion to £30 billion a year. Conveniently, that is pretty close to the amount of money that we give the industry in tax relief. I do not think that the industry expects it to continue, as it is as astonished about it as many of the rest of us are.

It is not good enough for the Government to make proposals for compulsion through auto-enrolment when they are superimposing them on the rotten industry, which continues to fail, rather than reforming it. The reform could take place through caps on charges, which the Government introduced for the stakeholder industry and will not do for this. The National Employment Savings Trust, the Government’s own provision of auto-enrolment fund management, could then be given a higher profile. Some of the restrictions on NEST should not remain, either.

I leave the Deputy Leader of the House with the thought that my proposal offers £30 billion to £35 billion and I do not even want any commission.

Business of the House

David Mowat Excerpts

Thursday 22nd March 2012 Commons Chamber

[Sir George Young]

The right hon. Gentleman rightly draws attention to the problems in Sudan. I commend the publicity that was generated last week in the United States. I cannot promise a debate in the near future, with the House rising next Tuesday for the Easter recess, but the right hon. Gentleman might like to apply to you, Mr Speaker, for a debate in Westminster Hall or on the Adjournment so that we can address this urgent matter when we return.

[David Mowat (Warrington South) (Con)]

The Leader of the House will recall the “Newsnight” revelations before Christmas that the head of the Student Loans Company was not having tax deducted at source. The Government subsequently initiated an inquiry across all areas of the civil service, but that did not include the BBC. Having submitted a freedom of information request to the BBC, this week I received a reply indicating that 41 non-talent-based members of its staff are being paid over £100,000 a year and are not having tax or national insurance deducted at source. Will the Government find time for a debate on the abuse of tax regulations in the public sector?

[Sir George Young]

I am grateful to my hon. Friend. The Government have made the position clear in so far as the civil service is concerned. As he will know, the BBC is an independent organisation, but I am sure that his question will have been heard by those at the BBC and that they will want to respond to the points that he made in the light of the FOI request that he has recently had answered.

Oral Answers to Questions

David Mowat Excerpts

Thursday 9th February 2012 Commons Chamber

[Mr Hunt]

First, the right hon. and learned Lady, like me, knows that it is important that we respect the BBC’s editorial independence. There is cross-party agreement on that. I am sure that she will welcome the huge progress that the BBC has made, including the clear acceptance by the director-general of the BBC today that something needs to be done to address this issue urgently. The Under-Secretary of State for Culture, Olympics, Media and Sport, my hon. Friend the Member for Wantage (Mr Vaizey) has made big efforts in this respect. We have arranged for my hon. Friend the Member for Mid Bedfordshire (Nadine Dorries) to meet the director-general to talk about this issue. I am hopeful that we will make progress without the need to resort to legislation or regulation.

[David Mowat (Warrington South) (Con)]

T3. Each year, the Football Association raises a surplus of about £100 million, mostly from the England football team. By convention, 50% of that money goes to the professional game, where it is not needed, and not to the community and grass-roots game, where it is badly needed. I declare an interest as a director of Warrington Town football club, which badly needs the money. When will the Minister address this governance issue?

[The Minister for Sport and the Olympics (Hugh Robertson)]

I can tell my hon. Friend exactly when we will address the issue. There has been a Culture, Media and Sport Committee report into the entire issue and we are awaiting a response that will come by the end of February. Only when the FA board has a better governance structure will it be able to tackle such issues. At the moment, it is simply divided on the basis of the vested interests inside the game.