European Union Referendum Bill

Edward Leigh Excerpts

Tuesday 16th June 2015 Commons Chamber

[Sir William Cash]

My view about the clause is that we have managed to have a wide-ranging debate. In the interests of brevity, I do not think much needs to be said on the subject. We really ought to get on to other matters, including the question of European Union financing. I have no further comments to make on clause stand part.

[Sir Edward Leigh]

(Gainsborough) (Con) rose—

[The Temporary Chair]

Order. I am at the disposal of the Committee and looking for hon. Members to speak, but there appears to be no one but Sir Edward Leigh.

[Sir Edward Leigh]

Is it appropriate that I speak to my amendment 53, Sir Roger?

[The Temporary Chair]

indicated assent.

[Sir Edward Leigh]

Amendment 53 would state that

“the total number of permitted participants shall be limited to a number specified by the Electoral Commission to ensure broad equality of resources between those campaigning for each of the outcomes of the referendum”.

I refer the Committee to the Member’s explanatory statement, which states:

“The amendment would require the Electoral Commission to ensure that during the referendum campaign, the total spend of the campaign”—[Interruption.]

[The Temporary Chair]

Order. Will Members leaving the Chamber please do so quietly? There are people who wish to hear the debate.

[Sir Edward Leigh]

I was just referring to the explanatory statement. It is very helpful that the Public Bill Office now publishes explanatory statements, as it makes it much easier for us to understand amendments.

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[Mr Chope]

Do the figures my hon. Friend is referring to include Government expenditure? The Minister, responding to the debate on the previous group of amendments, said the Government should not be a lead campaigner in a referendum, thereby implying that it will be a campaigner and spend Government resources. Are Government resources restricted in any way?

[Sir Edward Leigh]

That is why this debate is important. When the Minister replies, we want further and better particulars. We really want to know whether Government expenditure will be a part of this. The Government have enormous resources through all the Government Departments and it would be unfair if there was a mismatch in total spend for both sides of the argument. The yes campaign in 1975 spent the equivalent in today’s money of £11 million, compared with £1 million by the no side. The no side in 1975 were outspent 10:1, and that simply cannot be fair. Such things may have been more accepted in those more forgiving days, but I do not think they would be accepted now when there is widespread disillusionment about politics and a widespread feeling, which may be unfair and I know the Government want to act in an entirely honourable way, that the result could be fixed by the political establishment. The political establishment, encompassed by all the leading political parties except UKIP, big business and the European Commission, could have a massive and decisive preponderance of spending.

The 2000 Act provides for an entirely different regulation to what existed in 1975. It still looks far more likely that one side will have much higher spending limits than the other, which is inimical to our sense of democratic fair play. It is possible that the voters will be—or could feel, which is just as important—overwhelmed by spending on one side. Spending caps in constituency elections are basically equal. I know this is a UK-wide referendum, but that actually makes it more important, because there is huge interest both within and outside the country. The coverage in the European press is massive and will only get greater, and the European Commission and foreign Governments are very exercised about it. It is incumbent on the Minister to tell us what he plans to do about it and how he will address the problem I have articulated. If I am wrong, I am happy to listen to the Government and to be reassured, but they have to reassure the Committee.

Aside from the inherent inequality, there are deeper concerns about the potential effects. Let us consider the results of the Scottish referendum and the following general election: one side can win a referendum, but afterwards, if people feel the arguments were not entirely fair, there can be a massive shift of opinion. If a yes result is secured through massive overspend, there is a danger—dare I say it?—of a UKIP backlash, just as we have seen an SNP backlash, and this tidal wave can overwhelm people. It is essential, therefore, that there is a feeling of fairness. We need an open debate in which both sides are funded broadly the same and can put their arguments. If the yes campaign wins by the force of its arguments, I, as a democrat, would be the first to accept that it won fair and square, but there has to be a feeling of fairness.

[Stephen Gethins]

The hon. Gentleman talks about an SNP backlash, but by the time of the independence referendum the SNP had been in power in Scotland for seven years.

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[Sir Edward Leigh]

I do not want us to repeat yesterday’s debate, but we all know that there was a shift in public opinion following the Scottish referendum, so we have to be careful.

The UK is lucky not to suffer from the money-infused politics of the United States, where power goes to the highest bidder or spender. As we all know, it is virtually impossible to have a serious intention of becoming President without access to millions of pounds of spending or unless your name is Bush or Clinton. We do not want to replicate that situation here. British voters are very resistant to such a culture. We have been brought up in our constituencies knowing there is fairness and that all sides roughly spend the same.

[Sir William Cash]

Has my hon. Friend noticed my own amendment about restricting the money that will surely come from the EU and European Commission? They are described by the Electoral Commission as foreign sources, but they are not. Are they not actually part and parcel of what applies to us under the European Communities Act 1972?

[Sir Edward Leigh]

It would be ironic if the European Commission were a major player—but actually why should it not be? It is entitled to its point of view and to put its case. It has massive resources, however, to which we have contributed greatly, as my hon. Friend says. Nobody minds the Commission having a point of view, but we know what it will be, and we do not want its spending to come on top of all the rest, as it would create a sense of unfairness.

The official yes side in the AV referendum spent £3,436,000, and the official no side spent £2,595,000, so although the no side was outspent, spending was broadly not too dissimilar and fairly low, and voters still rejected the proposal. That is fair enough. Although the yes side spent a bit more, the arguments were well put. We all understood the arguments and there was broad acceptance of the result. There was no backlash and people felt the whole thing was fair, and in any event the result was clear: two thirds voted no.

Now, let us consider other referendums that I do not think have been conducted as fairly as our AV referendum. In 2008, voters in Ireland rejected the Lisbon treaty, only effectively to be told they must vote again, until the “correct result” could be obtained. The behaviour of the pro-EU side in the subsequent 2009 referendum campaign has resulted in several legal challenges in Ireland. One campaigning group even offered Irish citizens resident on the continent free Ryanair flights home, provided they canvassed for a yes vote. Before Lisbon, Irish voters also rejected the treaty of Nice in a 2001 referendum, but the Government pushed through a law on the last day before the Irish Parliament broke up for Christmas to remove the responsibility of the Referendum Commission to ensure that voters were informed of arguments on both sides in a balanced way. There is a great deal of unhappiness about that in Ireland. I should have thought that the yes campaigners could have won anyway.

We want to ensure that when it comes to our own referendum it is clear to everyone that there has been fairness. In the case of other EU referendums, when the stakes have been incredibly high and when it has been possible for huge amounts of money to be spent, there have been allegations of dirty tricks. We do not want that to happen in our own country. Our Government must show that they will insist on a free, fair, balanced and clean referendum, with equitable arrangements for all sides. As we know, a large proportion of the populace is already somewhat disengaged from and disenchanted with politics, and allowing such an overspend by one side would only deepen those feelings. It would reinforce the idea that the deck is stacked and the game is rigged.

Members in all parts of the House are profoundly aware of how difficult it can be to engage ordinary people in the political process. Too often, we meet with responses such as “What is the point?”, “It will not change anything”, “It is all fixed anyway”, and “If voting changed anything, they would abolish it.” We reject that, as politicians and as people who value debate in the House of Commons. We want the referendum to be fair. However, the mindset of many people out there must be acknowledged and challenged.

Public confidence in our parliamentary democracy is a matter of grave concern, and this referendum is a crucial turning point. The very fact that it is taking place is testimony to the Prime Minister’s having kept his word, and that has meant a great deal in the context of restoring confidence in the whole EU debate and in our democracy. As I have said several times, and as everyone knows, no one under the age of 55 has yet had a chance to vote yes or no in a referendum such as this. There is now a great opportunity for a really good debate, and for both sides to be given broadly equal funding to enable them to put their arguments.

Finally, let me say to the Minister that more needs to be done. The Government need to ensure that this problem is addressed.

[Stephen Gethins]

As Members will know, my party has some experience of referendums. I assure Members in all parts of the House that SNP Members will act constructively when it comes to this referendum—if it goes ahead—and that, like the hon. Member for Gainsborough (Sir Edward Leigh), we want to see a fair referendum.

It must be said that we were not originally in favour of the referendum. It was not in our manifesto, and, given that—as Members will know—we won the election in Scotland, we think that we have a mandate to bring that manifesto to the House. We also think that there has been no significant change in the position. I struggle to see where the Prime Minister is gaining any of the friends whom he will need to gain if he is to see the concessions he wants. He seems to be going about things in a way that is losing him friends and influence throughout Europe.

However, if—as appears increasingly likely—the EU referendum is indeed to go ahead, we want it to meet the gold standard that was set by the Scottish independence referendum, which featured a level of democratic activity that Members in all parts of the House will have welcomed. The turnout of between 85% and 86% was far higher than any election turnout in recent times, and the public became involved in the democratic process to an extent that we had not seen before. Our wish for public involvement was one of our reasons for wanting 16 and 17-year-olds to vote in the referendum, and 75% of them took the opportunity to do so.

The Scottish referendum was notable for the diversity of the campaigning groups—many of which my hon. Friends were involved in—and the huge upsurge in democratic involvement. All of us, in all parts of the House, think a great deal about how we can involve young people more often, and how we can ensure that more groups are involved in the democratic process. Regardless of whether people voted yes or no in that referendum—I know that Members of this House campaigned on both sides—I think it valuable for us to draw lessons from a robust experience of democracy that won plaudits throughout the world. None of us should ever lose sight of that, and all of us should take some pride in it.

We will support any amendments that provide for a fair playing field and a positive campaign. What turns people off—as we saw in the independence referendum campaign—is negative campaigning and scaremongering. Members in various parties will be well aware of that. We want to talk about the benefits of Europe. The Prime Minister talks about powers that may need to be returned and we all talk about areas in need of reform, but why do we not have a positive debate about where we can have more Europe and more engagement with the EU? I am talking about areas like security issues and the challenges we face in the Mediterranean and a resurgent Russia and the problems in Ukraine at present.

--- Later in debate ---

[Alex Salmond]

That is an excellent point. I bow to the hon. Gentleman’s memory as to the White Guard as opposed to the White Rose group. I am delighted to receive the information that Mr Speaker was a member. I cannot believe that he was unsuccessful in an election anywhere, but I am delighted to have that information. No doubt I shall use it at some point in the future.

I am afraid that I have just got the letter through Twitter and have not had a chance to examine it fully. The hon. Gentleman makes a serious point that goes to the heart of the profound issues that he and others have raised.

[Sir Edward Leigh]

I thought that the white rose was a Jacobite symbol and then a Tory symbol. I am surprised that the SNP has adopted it, but I am grateful to the right hon. Gentleman for adopting our symbol. Notwithstanding the arguments about purdah—he makes some good points—does he agree that it is important that there is broad equality of spending on both sides?

[Alex Salmond]

The hon. Gentleman should be aware that there is a Jacobite white rose. I have always had the hon. Gentleman down for a Jacobin rather than a Jacobite, but there is also the MacDiarmid rose in the poem:

“The rose of all the world is not for me

I want for my part

Only the little white rose of Scotland

That smells sharp and sweet - and breaks the heart.”

SNP Members were adorned by the MacDiarmid rose during the Queen’s Speech.

The point about spending limits is well made. Fairness in terms of spending capacity is one important part of elections and referendums. There is an enforcement mechanism—some may say that it is not always used as rigorously as it could be—for election or referendum spending rules and there are severe penalties for breaching them. There is no such effective mechanism for breaches of purdah or when Ministers or civil servants go clearly outside the purdah rules. I commend to the hon. Gentleman the new clauses, which we will vote on later, which would introduce exactly such an enforcement mechanism to ensure fairness not just in our debates but in a referendum.

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[Mr Rees-Mogg]

I was making a slightly different point. I was saying that it is going to need to be tougher than the Government would have got away with had they come through with a limited change at an earlier stage. The Government said they would scrap the whole of section 125, and there is now suspicion that there was an ulterior motive for that. To allay that suspicion, the Government have to be very specific about the exemptions they want. It might be an exemption to vote in the Council of Ministers, and that would not be unreasonable, but would I give them an exemption to announce from the hilltops that they had lots of money from the EU to build a new factory in a key swing area of the country? No, I would not; I would think that would be about fiddling the result, if they wanted a yes.

[Sir Edward Leigh]

A lot of nonsense is talked about restricting the Prime Minister in what he can say. I do not remember the Prime Minister being particularly reticent during the general election campaign, and there is no reason why he would need to be reticent during this referendum campaign. If he is leading the no campaign, or more likely the yes campaign, of course he can say exactly what he wants. All we are arguing is that the machinery of government should not be used. We do that perfectly well during general election campaigns, and we know the difference.

[Mr Rees-Mogg]

My hon. Friend is right and will no doubt recall the 1970 general election when Harold Wilson, as Prime Minister, was not allowed to reveal the trade figures that came out immediately after the general election even though he knew them and they would have been very helpful to him. So there have been cases in which Prime Ministers were prohibited from making announcements on the basis of purdah, and I think it would be quite right to follow them in the context of a European referendum.

It was pointed out earlier that the reason the Government are so worried about this is part of the problem—namely, that the EU is involved in so many aspects of our lives that what they are restricted from doing will be much broader than it would be for a normal referendum. That makes it all the more important that this purdah is strictly observed.

We are arguing about whether the situation in which our lives are organised by the EU should remain or whether we should do something different. If, in the month or six weeks before the referendum, popular announcements about the EU were made but unpopular ones were held back—or vice versa—that would be completely improper.

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[John Penrose]

My hon. Friend has confirmed my view, and I am sure that we will continue these discussions.

I move on to amendment 53, tabled by my hon. Friend the Member for Gainsborough. I think his intention is to ensure equal force of arms on both sides of the debate. I was starting from a slightly different presumption: I think that both sides will be pretty well funded—there are well funded and strong views on both sides. There is no tradition in this country of overall, global limits on total campaign spending. As colleagues, including my right hon. Friend the Member for Wokingham, have mentioned, there are individual limits on constituency spends and national limits on individual political party spends. However, there is no overall global limit on the total amount that can be put behind a movement or campaign because other third party campaigning organisations, even after the closer regulation following the Transparency of Lobbying, Non-party Campaigning and Trade Union Administration Act 2014, can also contribute to the campaign behind a particular cause. As there is no limit to the number of organisations that can contribute, there is de facto no overall limit on the total that can be spent.

Opposition colleagues may dislike this example, but it may have resonance on the Government Benches. It is possible and entirely legal, under the right conditions, for trade unions to contribute to and campaign strongly in elections. There are constraints on what they can do, but it is entirely open to one union or 10 to contribute. If 10 contribute, the money that unions could spend goes up by a factor of 10. There is no overall global limit on the amount of money that traditionally can be spent in British elections, although there have been individual limits in specific constituencies.

I caution my hon. Friend a little. The hon. Member for Glenrothes rightly pointed out that people get enthused, excited and involved in political debate at different points and in different ways. If a campaign on either side captures the popular imagination and engages people, people who were not involved at the start can decide to become involved part of the way through. My hon. Friend’s amendment would limit the number of people to only those who were organised and enrolled at the start; once the maximum number had been reached, the gates would close and no one else could enrol.

It is an entirely unworthy thought, I know, but the Chief Whip and I suggest that one side could grab all the slots of eligible campaigners on the other side and then do absolutely nothing with those slots. That would effectively kibosh the other side. I understand my hon. Friend’s attempt to equalise force of arms, but I am afraid that things will not work as he has described. The amendment would also run counter to some deep-rooted, fundamental principles about how British democracy has worked.

[Sir Edward Leigh]

rose—

[John Penrose]

I give way very briefly, but then I must make progress and finish.

[Sir Edward Leigh]

Although my hon. Friend believes that my amendment is not the way forward, as it would limit the number of participants, he understands the general view that there should be some sort of equality of force of arms. I remind him of the point that I made: during the 1975 referendum, the yes campaign outspent the no campaign by 10:1. Given that the major parties generally have the funding and are allowed to spend it, if the yes campaign had £17 million to spend and the no campaign had only £8 million, would my hon. Friend agree that the Government would have to think about that, take it away and worry about it?

[John Penrose]

I understand my hon. Friend’s concerns. At the risk of quoting one of the Opposition Members, I notice that none of us was that concerned when there was a difference in the force of arms at the recent general election on a party political basis, but I appreciate my hon. Friend’s concerns. I do not think that the amounts of money raised on each side will be as unequal as he fears, but I may be underestimating either the yes or the no campaign.

Finally, my hon. Friend the Member for Harwich and North Essex tabled a number of amendments that would remove bodies incorporated by royal charter and charitable incorporated associations from the list of those eligible. He specifically asked me to give him this reassurance, and I am very happy to do so: nothing in this Bill will change anything to do with charity law. Charities are already subject to some very severe and thorough crimps on what they can do when it comes to political campaigning. There are only a very small number of occasions when they are allowed to get involved, and even then, they are very closely scrutinised by the Charity Commission. That will continue: nothing in the Bill will alter any of that.

Question put and agreed to.

Clause 3 accordingly ordered to stand part of the Bill.

Schedule 1

Campaigning and financial controls

Amendments made: 14, page 12, line 4, at end insert—

“( ) Paragraph 1(2) of that Schedule (limit on expenses incurred by permitted participants during referendum period) has effect for the purposes of the referendum as if—

(a) in paragraph (a) (designated organisations) for ‘£5 million’ there were substituted ‘£7 million’,

(b) in paragraph (b) (registered parties that are not designated organisations)—

(i) in sub-paragraph (i) for ‘£5 million’ there were substituted ‘£7 million’,

(ii) in sub-paragraph (ii) for ‘£4 million’ there were substituted ‘£5.5 million’,

(iii) in sub-paragraph (iii) for ‘£3 million’ there were substituted ‘£4 million’,

(iv) in sub-paragraph (iv) for ‘£2 million’ there were substituted ‘£3 million’, and

(v) in sub-paragraph (v) for ‘£500,000’ there were substituted ‘£700,000’, and

(c) in paragraph (c) (certain other persons and bodies) for ‘£500,000’ there were substituted ‘£700,000’.”

This amendment modifies, for the purposes of the European Union referendum only, the spending limits for permitted participants in paragraph 1(2) of Schedule 14 to the Political Parties, Elections and Referendums Act 2000 to take account of inflation.

Amendment 15, page 14, line 38, at end insert—

“Declaration where no referendum expenses incurred in referendum period

21A For the purposes of the referendum, the following section is to be treated as inserted after section 124 of the 2000 Act—

‘124A Declaration where no expenses in referendum period

(1) Subsection (2) applies where, in relation to a referendum to which this Part applies—

(a) a permitted participant incurs no referendum expenses during the referendum period (and no such expenses are incurred on behalf of that participant during that period), and

(b) accordingly, the responsible person in relation to the permitted participant is not required to make a return under section 120 or a declaration under section 120A.

(2) The responsible person must, within 3 months beginning with the end of the referendum period—

(a) make a declaration under this section, and

(b) deliver that declaration to the Commission.

(3) A declaration under this section is a declaration that no referendum expenses were incurred by or on behalf of the permitted participant during the referendum period.

(4) The responsible person commits an offence if, without reasonable excuse, that person fails to comply with the requirements of subsection (2).

(5) If a person who is the responsible person in relation to a permitted participant knowingly or recklessly makes a false declaration in purported compliance with the requirement in subsection (2)(a), that person commits an offence.

(6) A person guilty of an offence under subsection (4) is liable—

(a) on summary conviction in England and Wales, to a fine;

(b) on summary conviction in Scotland or Northern Ireland, to a fine not exceeding level 5 on the standard scale;

(c) on summary conviction in Gibraltar, to a fine not exceeding level 5 on the Gibraltar standard scale.

(7) A person guilty of an offence under subsection (5) is liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding 12 months or to a fine, or to both;

(b) on summary conviction in England and Wales, to imprisonment for a term not exceeding 12 months or to a fine, or to both;

(c) on summary conviction in Scotland, to imprisonment for a term not exceeding 12 months or to a fine not exceeding the statutory maximum, or to both;

(d) on summary conviction in Northern Ireland, to imprisonment for a term not exceeding 6 months or to a fine not exceeding the statutory maximum, or to both;

(e) on summary conviction in Gibraltar, to imprisonment for a term not exceeding 12 months or to a fine not exceeding level 5 on the Gibraltar standard scale, or to both.

(8) The reference in subsection (7)(b) to 12 months is to be read as a reference to 6 months in relation to an offence committed before the commencement of section 154(1) of the Criminal Justice Act 2003.

(9) In this section “the Gibraltar standard scale” means the standard scale set out in Part A of Schedule 9 to the Criminal Procedure and Evidence Act.

(10) Schedule 19C (civil sanctions), and any order under Part 5 of that Schedule, have effect as if the offence under subsection (4) of this section were an offence prescribed in an order under that Part.’”—(John Penrose.)

This amendment requires permitted participants who do not incur referendum expenses to submit a declaration of that fact to the Electoral Commission within three months of the end of the referendum period.

Amendment proposed: 11, page 17, line 37, leave out paragraph 25 and insert—

“25 (1) Section 125 of the 2000 Act (restriction of publication etc of promotional material by central and local government etc) applies in relation to the referendum during the referendum period with the following modification.

(2) Section 125(2)(a) of the 2000 Act has effect for the purposes of the referendum as if, after ‘Crown’, there were inserted ‘including ministers in the Scottish Government, the Welsh Government, the Northern Ireland Executive and Her Majesty‘s Government of Gibraltar’.”—(Sir William Cash.)

The purpose of the amendment is to apply the “purdah” arrangements that govern ministerial and official announcements, visits and publicity during general elections to the campaign period before the referendum.

Question put, That the amendment be made.

Finance (No. 2) Bill

Edward Leigh Excerpts

Wednesday 25th March 2015 Commons Chamber

[Mr Gauke]

My hon. Friend makes a good point that is very relevant to the debate we are having about VAT.

The three main parties in this House have agreed that we will deliver a cyclical current budget surplus by 2017-18; that is what the charter of fiscal responsibility states. The vast majority of Labour Members trooped through the Lobby to support that measure. Independent analysis, as well as the Treasury’s analysis, confirmed that that requires some £30 billion-worth of fiscal adjustments. From my party’s point of view, that would be made up of £13 billion from departmental spending, £12 billion from welfare spending, and £5 billion from anti-tax evasion and tax avoidance measures.

The Liberal Democrats have set out how they will get their £30 billion. Their plan has a different balance and make-up from the Conservative plan, but they have set it out. The Labour party has not set out how it will reach that £30 billion. If Labour is not going to cut welfare in the way the Conservatives are, and if it is not going to cut departmental spending as we are—as far as I can see, that, after all, is the heart of Labour’s election campaign—more money must come from tax. That is why the question of who will raise taxes and what taxes will be raised is much more acute for Labour Members. They have questions to answer. There is a gap in their public finance plans, whereas we have set out plans that do not require us to put up taxes on hard-working people.

[Sir Edward Leigh (Gainsborough) (Con)]

The Minister is being unfair to Labour Members. They will manage to reduce the deficit by not opening any more free schools, and by abolishing police and crime commissioners. That will undoubtedly solve the problem.

[Mr Gauke]

We must not forget that Labour will put up gun licences—that is also on the list.

I note that the shadow Secretary of State for Work and Pensions, the hon. Member for Leeds West (Rachel Reeves), announced yesterday that she will “abolish the bedroom tax” and use the savings for something else. I am not sure that I understand how there can be savings from that measure.

Budget Resolutions and Economic Situation

Edward Leigh Excerpts

Friday 20th March 2015 Commons Chamber

[Sir Edward Leigh (Gainsborough) (Con)]

It is a great pleasure to be the last Back Bencher to speak in this debate and to follow my hon. Friend the Member for South Thanet (Laura Sandys). Ann Treneman, the sketch writer for The Times, described her as one of the few eminently sane Members of the House. I am still looking forward to a sketch writer describing me that way—one lives in hope.

I am the last Back Bencher to speak, and I sometimes think that I am the last Thatcherite standing. I have spoken in most of the 32 Budget debates in my time in Parliament. I have some bad news for you, Madam Deputy Speaker: I hope that this is not my valedictory speech, but you at least will not have to hear me again, and that will be a great solace to you. I am standing for election again and hope that the good people of Gainsborough will re-elect me. I will be standing on the same platform on which I have stood at all the previous election. It is a pretty simple message—speaking up for a strong Budget and a well-defended country—and it is worth repeating.

My predecessor in Gainsborough had quite a relaxed view of campaigning in the constituency. Having ridden for a couple of hours in the morning, he would return to the White Hart hotel in Lincoln for a large breakfast before pondering his sole press release of the entire campaign, which he used to deliver on a certain day to the editor of the Market Rasen Mail. At one general election—perhaps it was his last—when he went to deliver the press release the editor was out, so my predecessor, Sir Marcus Kimball, said he would come back tomorrow. When he came back the next day, the editor said, “Don’t worry about a new press release; I’ll just use the one from the previous general election.”

In a sense, times do not change, because the same themes come back again and again. I apologise if sometimes I weary the House with the same themes in these Budget debates, but they are two incredibly important ones that need emphasising again and again. The first is the need for tax simplification, and I shall say a bit about that in a moment.

The second theme is budgetary and fiscal responsibility. I said earlier that I may be the last Thatcherite left standing; in fact, I sometimes think that I am the last Gladstonian Liberal in this place. I believe that if Governments restricted themselves to avoiding foreign entanglements, or foreign wars—I have, I think, voted against every single one that has come up during my time in Parliament—and attempting to balance the budget, that would do more for human happiness than virtually anything else they could do. Balancing the budget is the first duty of government. It has to be said again and again that we are still borrowing £93 billion every year.

After five years of austerity from this Government that has been roundly criticised by Labour Members, we are still spending £93 billion more than we earn every year. When we came to power, the figure was £141 billion a year. That was completely unsustainable five years ago, and it is still unsustainable. The national debt stands at a staggering £1.5 trillion. One can criticise the present Government, but at least, without getting involved in clichés, they have a long-term economic plan to try to ensure that by next year, or the year after, that massive debt as a proportion of GDP at last starts to decline in cash terms by the end of the next Parliament.

These are not just figures. This is a matter of desperate importance to everybody in the country. Debt on that scale is simply unsustainable, and any incoming Government —I say this to my Labour friends—must have some sort of plan for dealing with it. Yesterday I intervened on the shadow Chancellor, who gave a good, knockabout speech. He portrayed himself as a minor Shakespearean poet and it was all quite good fun. It was extraordinary, however, that he spent very little time outlining how he was going to reduce the deficit. Perhaps we have been too complacent in making these arguments to the British public. When we argue that we have halved the deficit, perhaps some members of the public say, “Well, problem solved. If our debt is halved, does that mean we’ve already arrived at the end?” No, it does not—it means that we were borrowing £141 billion a year and we are now borrowing £93 billion a year. Perhaps this has given the Labour party an opportunity to relax the public mood on deficit reduction.

What are the plans of the Labour Opposition to reduce the deficit as they prepare, they hope, for government? When we questioned the shadow Chancellor yesterday, he said he was going to prevent more free schools opening, abolish police and crime commissioners, and try to get more efficiency savings in the NHS. Is that really a plan that holds water? Can we really believe that it will solve the problem that I have been emphasising in the past few minutes? I do not think so. Labour Members are very proud of the fact that they dramatically increased spending on the national health service and on education, but the problem with dramatically increasing spending on the national health service was that they dramatically reduced productivity in the national health service. There is nothing to suggest that if one increases spending on the NHS by more, roughly, than the real rate of inflation, one will avoid, once again a massive reduction in productivity.

The Labour party must ask itself this question: how it is going to balance the books? I believe that, fundamentally, it is the central economic questions that decide general elections. I do not think that they are decided solely on the basis of what has been said during the latest television debate on television. What is important is how much confidence the public have in those who are charged with the public finances. I know that we are about to hear a speech from the shadow Treasury spokesman, but so far I have waited in vain for proof that the Labour Opposition are ready for government, and ready to deal with the budget deficit.

I have said enough about that subject, but I think it is one to which we must continually return. If we are fortunate enough to be re-elected in 47 days’ time, we must not let up for a moment. However unpopular and difficult it is and whatever the pressures, we must sustain our absolute determination to start reducing the total national debt, in cash terms, by the end of the next Parliament.

I suspect—although no one quite knows—that if the Labour party is to fulfil its proper and understandable ambition to spend more on education or the national health service, it may have to borrow an additional amount of up to £30 billion a year. In good times, that is sustainable, but what happens if there is another downturn? What happens if the cost of borrowing rises, as it inevitably will? It will all have to be paid for. That is the central argument of the campaign, and the Labour party must deal with it.

Let me now say a little about tax simplification. I know that it is hard when there has been a recession; I know that the Chancellor has had to struggle with the difficult campaign to attempt to start reducing the deficit; I know that every type of tax simplification is extraordinarily costly, in both monetary and political terms; and I understand the difficulties that the Chancellor had three years ago when he tried to simplify VAT. I know all those things. Nevertheless, tax simplification, along with a flattening of the system, is right in the context of entrepreneurship and efficiency. It may not be politically apparent every year—Chancellors obviously want to present popular Budgets—but in terms of financial orthodoxy and the right way to manage the Government’s finances, tax simplification makes sense.

We have already been given a bit of tax simplification. We are to see the end of the tax return, the creation of online tax accounts, a new personal savings allowance, and the phasing out of class 2 national insurance contributions for self-employed people. They are all good steps, but they are only the first steps. I hope that, if the Chancellor is fortunate enough to be back in his job in 50 days’ time—and I pray that he will be, for the reasons that I gave earlier—he will make not just dealing with the public finances but simplifying taxes his guiding light for the next Parliament. We still have one of the longest tax codes in the world; I believe that it is the longest after India’s.

Labour portrays itself, quite rightly—why shouldn’t it?—as the party of the labourers, but it does not help the people who labour for profitable companies if we increase taxes on those companies, because that puts pressure on them to reduce the number of people they employ. What I have been talking about today is not some airy-fairy, ideological point that has been made just for the sake of it, but an attempt to help ordinary hard-working people in jobs, to help those people to keep their jobs, to make companies profitable, and to enable the country to have confidence in itself. That is why I shall be proud to be standing as a Conservative Member in 47 days’ time, and why I shall be praying that my right hon. Friend is back in his job as Chancellor of the Exchequer.

Amendment of the Law

Edward Leigh Excerpts

Thursday 19th March 2015 Commons Chamber

[Ed Balls]

I don’t know. That was all Greek to me.

Let us stop wasting time with the ridiculous Liberal Democrats and return to the Chancellor’s Budget. The Chancellor claimed, first, that working people are better off than they were in 2010. How out of touch can you get? No wonder Conservative Back Benchers were so muted in the House of Commons yesterday. They know, as we know, the reality of people’s lives. Unlike the Chancellor, they hear it on the doorstep. They know that with wage growth stagnant over the past few years, energy bills rising, and 1.8 million zero-hours contracts, when the Chancellor says there is a recovery, most people say, “Where is the recovery for me? It is not a recovery for me, our family and our community.”

The Chancellor tried to invent a new measure of living standards yesterday. It was a flawed measure because it includes income to universities and charities, but, compared with the first quarter of 2010, in the first quarter of 2015 the Chancellor’s measure has not gone up; it has gone down. Even on his own measure, people are worse off than they were in 2010. We know from the independent Institute for Fiscal Studies and the Resolution Foundation that on more sensible measures confirmed by the IFS two weeks ago, household incomes are down compared with 2010, and wages after inflation are down by more than £1,600 a year since 2010. This is the first Parliament since the early 1920s when the average person in work will be worse off at the end of the Parliament than they were at the beginning. In answer to the famous Reagan question, “Are you better off than you were five years ago?”, the answer is a resounding no.

We welcome the action to help savers and increase thresholds, but where was the action to help working people? Why did the Chancellor not announce an ambition to raise the national minimum wage to £8 an hour? Why did he not commit to expanding free child care for working parents to 25 hours? Why not cut business rates for small companies? Why not ban exploitative zero-hours contracts? Why not repeat the bank bonus tax and have a compulsory starter job for our young people? Why not scrap his absurd married couples allowance, which he barely mentioned yesterday, because it goes to only a third of married couples, and instead use the money to cut the taxes of working people? That is what he should have done. That is what a Labour Budget will deliver.

The Chancellor’s second claim is that he is rebalancing the economy. We all remember his claim of

“a Britain carried aloft by the march of the makers”—[Official Report, 22 March 2011; Vol. 525, c. 966.]

but the independent Office for Budget Responsibility said yesterday that growth is still lower than was forecast in 2010. Growth is set to be slower this year and next year than last year. The OBR confirmed that the Chancellor is on course to miss his 2010 target to double exports to £1 trillion—off course by more than £600 billion, and business investment has been revised down this year. The OBR says that “the growth of potential productivity per hour remains below its historical average throughout the forecast” and that “actual hourly productivity growth has again been weaker than expected”. The only thing it has revised up is its forecast for net migration.

Why did the Chancellor not act to deal with the housing crisis by committing to build 200,000 more homes a year by 2020? Why did he not establish a proper British investment bank for small and medium-sized businesses? Why did he not take up our idea, now the subject of consensus across our country, and establish an independent national infrastructure commission to stop long-term decisions being kicked into the long grass? Why did he not go further and devolve powers, including the uplift on business rates, to all areas in our country, rather than just to some? Why did he not commit to securing Britain’s place in a reformed European Union?

[Sir Edward Leigh (Gainsborough) (Con)]

I would not want the right hon. Gentleman to forget to mention the deficit, so can we get back to that? It is quite important. When we came to power, following the Labour Government, the annual budget deficit was £141 billion a year. It is now £93 billion a year—still far too much. Will the right hon. Gentleman explain his plans for matching our plans to keep that budget deficit under control and preferably get rid of it by 2020?

[Ed Balls]

I understand the hon. Gentleman’s concerns. I know from reading Hansard that he said to the House a year ago that

“for all the huff and puff, when it comes to what it actually puts into and takes out of the economy, the Budget represents a 0.3% change . . . That is somewhat worrying when we consider the very big challenge we face on deficit reduction”.—[Official Report, 20 March 2014; Vol. 577, c. 993.]

I share his concerns about the Chancellor’s track record, and I am going to set out our alternatives in a moment.

Before I do that, let us go back to the Chancellor’s claims yesterday. He seems to have been telling the media this morning that he has retreated from his commitment to austerity, but the OBR’s document sets out the truth. Its verdict on the Budget is that it represents

“a much sharper squeeze on real spending in 2016-17 and 2017-18 than anything seen over the past five years.”

It goes on to give the details on page 130, where it sets out in graphical form the cuts in public spending that we shall see from the Chancellor. Paragraph 4.108 states:

“One implication of the Government’s spending policy assumptions is a sharp acceleration in the pace of implied real cuts to day-to-day spending on public services and administration in 2016-17”.

I am going to set out a better way to do this, but first I will highlight what the Chancellor is actually doing. The reason he has to set out such deep cuts to public spending—deeper in the next Parliament than in this Parliament—is that, as the OBR confirms, and as the hon. Member for Gainsborough (Sir Edward Leigh) knows very well, in this Parliament he has failed to balance the books. Yesterday’s numbers confirm, according to the OBR, that the Government are borrowing £200 billion more than they planned in 2010. The deficit is set to be not balanced, but £75 billion. For all this Chancellor’s boasts about national debt falling, public net debt in 2015-16 is £217 billion higher than he was forecasting in 2010. He now claims that the national debt is going to be falling. That is based on his forecasts of short-term, one-off money coming in from the sale of bank shares. In 2014-15, he was planning on the national debt falling from 69.4% to 67.4%. In fact, his forecast yesterday has the national debt in 2015 at 80.4%, falling to 80.2%. It takes some hubris for a Chancellor to borrow over £200 billion more and then claim he has succeeded. That is the reality, and we know why. As the OBR confirmed yesterday, income tax and national insurance receipts have come in short of the 2010 forecasts by £97 billion cumulatively across the Parliament.

The result is the deeper spending cuts that the Chancellor had to set out yesterday. The IFS said back in the autumn that these were colossal cuts; they are still colossal cuts. The OBR said in the autumn that this would take spending on day-to-day public services back to the level of the 1930s. The Treasury tried to tell us yesterday that that was no longer the case. Its special advisers tweeted that they are only the deepest cuts since 1964. It comes to something when they have to boast that we are cutting our public spending to a level not seen for 50 years. In fact, the small print of the OBR tables reveals that 2018 spending, on the historical comparative measure that the OBR uses—day-to-day spending on public services—falls to its lowest level since not 1964 but 1938.

The Chancellor claimed that he had changed the position, but he has confirmed the reality—even deeper cuts in the next three years than in the past five years. That is the truth. These are, in my view, cuts that will be impossible for our police services, our defence and armed forces and our social care to bear. Even this Chancellor cannot make this scale of cuts to our armed forces, our police forces or our social care, so he is going to have to end up doing what he always has to do—raise VAT and cut the NHS. That is the reality.

The Chancellor wants us to believe that this does not have to happen. He says that he can instead cut welfare and tackle tax avoidance. The problem is that his record on both is miserable. He is promising £12 billion more cuts to welfare, but he cannot tell us where they are going to come from. We know he has brought in the bedroom tax, but he cannot tell us what else he has in store. In this Parliament, he has overspent on his welfare plans by £25 billion.

Apparently the Chancellor is now going to crack down on tax avoidance. This is the Chancellor who has seen the tax gap—uncollected tax—rise by £3 billion. This is the Chancellor who, with the Prime Minister, appointed Lord Green—who, it turns out, had presided over HSBC’s industrial-scale tax avoidance. Despite repeated questioning, the Chancellor still cannot tell us whether he actually talked to Lord Green about tax avoidance. Why will he not, between now and the general election, come clean and tell us whether he had conversations with Lord Green about tax avoidance? No wonder the Chancellor did not come to Treasury questions a couple of weeks ago. No wonder he does not want a head-to-head debate. We now know why. One member of the Tory Cabinet does not want to talk about Michael Green, and another member of the Tory Cabinet does not want to talk about Lord Green. One is a deluded fantasist who has great problems with the truth, and the other is the chairman of the Conservative party. To be fair, only the chairman of the Conservative party changed his name—although, then again, perhaps the Chancellor did too.

This is the truth: the Chancellor promised to make people better off, and they are worse off. He promised to balance the books in this Parliament; that pledge lies in tatters. He promised, “We’re all in this together”, and then cut taxes for millionaires. Now he is forced to confirm extreme and risky cuts to public spending in the next Parliament, bigger than in this Parliament.

We need a fairer, more balanced approach to the deficit and living standards. That is why Labour is now the only centre-ground party in British politics. We will cut the deficit every year and balance the books, with a surplus on the current budget and the national debt falling, as soon as possible in the next Parliament. Unlike the Conservatives, we have no unfunded commitments on welfare or on taxes. We were the party that wanted the independent OBR to audit all our manifestos—blocked by this Chancellor.

--- Later in debate ---

[Vince Cable]

The hon. Gentleman is absolutely right. Indeed, UKTI’s work these days concentrates on supporting SMEs. As a country, we underperform on the contribution of the SME sector to exports, compared with countries such as Germany, and that is the focus of UKTI’s work. I would also emphasise his other point on the need to build up our relationship with China. We have worked very hard on that, and the Prime Minister and the Chancellor have led from the front on our relations with China, which are good. The establishment of the new financial institution, in which Britain is a co-investor, is a signal of the importance we attach to our relations with China, and that will continue.

[Sir Edward Leigh]

My right hon. Friend is making a very thoughtful speech, in marked contrast to that of the shadow Chancellor, who was more Henry VI than Henry V. Will he comment on the staggering paucity of the cuts the shadow Chancellor will make? They appear to have been dreamed up on the back of a plain-packaged fag packet. How will the shadow Chancellor get rid of the deficit just by abolishing police and crime commissioners and by not opening a few more free schools? I still do not understand how he is going to solve the problem of the deficit.

[Vince Cable]

The hon. Gentleman is absolutely right. I thought it might be useful to take one element of the Opposition’s policies to see how utterly incoherent it is. I want to home in on the particular issue of how they would fund a reduction in tuition fees. To be frank, this is a tricky subject for all parties. All parties, including the Labour party, have gone back on their commitments. My party has done so, and I know that the Conservatives had some embarrassment in 2005. I would have thought that common sense suggested we ought to draw a line under this episode. I know from the feedback I get from the shadow Cabinet that the shadow Chancellor has been a voice of sanity in this debate, but his leader has not listened to him. Clearly, I am parti pris on this matter, but let me read a comment made yesterday by a man who describes himself as having been

“responsible for delivery in Downing Street under Tony Blair”.

I am not sure that I would want that on my CV, but he is very happy about it. Referring specifically to this proposal, he said:

“The result would be to spend almost £3bn to subsidise high earners of the future. The present system is attracting more students than ever, especially from low-income families. In 2004, before fees were introduced”—

by the previous Government—

“14 per cent of the lowest socio-economic fifth…went to university; last year 21 per cent did. Labour’s proposal therefore offers not ‘more for less’ but ‘less for more’.”

The position is actually worse than that, because we do not understand how it will all be paid for. A £2.6 billion gap needs to be filled to pay for the cap. The original idea was that there would be some kind of granny tax, with grannies paying extra into their pensions. That comes down to the proposal about the pension pot. The proposals that the Chancellor made yesterday diminished considerably the resource available from that source, so where will the money come from? Even if the Labour party can identify where the money will come from, how can it guarantee to universities that the money will get from the grannies to the Treasury to the universities? How exactly will that be sustained in the years ahead?

This is not just a debating point; these issues really matter. The feedback that we are getting from universities is that they have stopped investing because there is a political risk—although it may not be high—of a Labour Government. Universities have stopped investing and are having to fall back on their reserves. Some universities, such as Cambridge, have said that if this policy were to happen, they would drastically reduce the number of students they admitted and cut back on their supervision. The quality of education would suffer.

It requires a particular kind of genius to dream up a proposal of such transcendental stupidity. I was going to ask the person responsible to stand up and tell us what it is all about, but the shadow universities Minister is not here. He is the same guy who left the note saying that there was no money left. What he is now proposing is that universities should experience precisely the same treatment.

Oral Answers to Questions

Edward Leigh Excerpts

Tuesday 10th March 2015 Commons Chamber

[Andrea Leadsom]

The hon. Gentleman should surely be delighted that since 2010 youth unemployment in his constituency is down by 47%, so I cannot agree with him, and that since 2010 unemployment is down by 34%. In the past 12 months, long-term unemployment is down by 38%. Surely he should be celebrating those numbers.

[Sir Edward Leigh (Gainsborough) (Con)]

13. What his policy is on the future of tax allowances related to marriage.

[The Financial Secretary to the Treasury (Mr David Gauke)]

The Government have introduced the marriage allowance for married couples and civil partners, which takes effect from 6 April 2015. The transferable amount has been fixed at 10% and will rise in proportion to the personal allowance.

[Sir Edward Leigh]

More than 4 million people could benefit from the marriage allowance, for which they have been able to register since 20 February. Does my hon. Friend agree that this is about much more than just pounds or pence—it is about valuing commitment and marriage as a bedrock of society?

[Mr Gauke]

As the Prime Minister made very clear in the 2010 general election, it is right that we recognise marriage in the tax system, and that is precisely what we have done. As my hon. Friend rightly points out, it is now possible for people to register to be able to benefit from the transferable tax allowance.

Future Government Spending

Edward Leigh Excerpts

Wednesday 4th March 2015 Commons Chamber

[The Financial Secretary to the Treasury (Mr David Gauke)]

Well, here is another opportunity to tell the House about the successes of our long-term economic plan. I must say that I am impressed by the Labour party’s courage in selecting the economic recovery for the last Opposition day debate of this Parliament, but not by its judgment. Given the catastrophic situation in which Labour left the country after 13 years in charge, Members might have thought that it would have the good grace to accept that our economic plan is putting Britain back on track, delivering growth, jobs and prosperity for hard-working households up and down the country.

[Sir Edward Leigh (Gainsborough) (Con)]

It is right that we focus on spending totals, but there is an even better argument. A careful academic study of National Audit Office and Public Accounts Committee reports over Labour’s time in government recently found that a staggering £230 billion was wasted on incompetence, inefficiency and undelivered programmes. That is a real legacy of 13 years of wasted Labour government.

[Mr Gauke]

My hon. Friend is absolutely right. Indeed, as a distinguished Chair of the Public Accounts Committee, he was heavily involved in identifying that wasteful spending. One of this Government’s achievements is the measures we have introduced to reduce such wasteful spending. In particular, the efforts of the Minister for the Cabinet Office in pushing forward reform and identifying efficiency savings have reduced the cost of Whitehall strikingly.

--- Later in debate ---

[Sir Edward Leigh]

I am not sure that it is wise for us to go on all the time about the fact that we have cut the deficit in half. We have cut it in half, but that disguises the real crisis that we are still experiencing. We are still borrowing £90 billion a year, which means that we cannot relax for a moment. It is madness to make unfunded borrowing and spending commitments.

[Mr Newmark]

My hon. Friend is absolutely right. That is why we had an emergency Budget which laid out clearly our long-term economic plan.

Let us consider our record in government since we picked up the pieces that were left by the last Government. As my hon. Friend has just said, we have halved the deficit. That is important, because it has kept interest rates low for mortgage holders and for business. Income tax has been cut for 25 million people, by about £705 per person. The personal allowance has been raised from £6,500 to £10,600, and some 3.4 million people have been taken out of tax altogether. Benefits have been capped to reward hard-working people. Employment is up, and youth unemployment is down. The Million Jobs campaign, which I put together, managed to persuade the Chancellor to abolish national insurance payments for those who hired people under 21. That has paid dividends, because it has accelerated the decline in youth unemployment. The state pension is also up by £800. Fuel duty has been frozen. Energy costs are down. Overall, wages now are rising higher than inflation; on the latest statistics, total pay is up by 2.1%, whereas inflation is only up by 0.9%.

Charter for Budget Responsibility

Edward Leigh Excerpts

Tuesday 13th January 2015 Commons Chamber

[Mr Osborne]

The last time it was not in deficit was when people followed Tory spending plans: there was a surplus at the end of the 1990s and 2000. That is what we advocate again.

At the moment of maximum danger five years ago, as much of the rest of Europe became engulfed in a sovereign debt crisis, Britain faced a choice: did we have the resolve to cut our spending, cut our deficit and set a course for economic stability, or did our country go on borrowing and spending our way to economic ruin?

[Sir Edward Leigh (Gainsborough) (Con)]

But surely we cannot relax for a moment. When we say we have cut the deficit by half that is good, but it gives the impression that the problem is solved and we are still borrowing £90 billion a year. The debt is still at about £1.7 trillion. Therefore, we cannot relax for a moment and we cannot allow there to be any sort of Government who let the anchor off. We therefore have to say no to a Labour Government.

[Mr Osborne]

My hon. Friend is absolutely right. Having brought the deficit down, we have to complete the job. We have to run a surplus and get our national debt down—that is what this debate is about. We remember Opposition Members in this House five years ago urging on us a ruinous course of more borrowing and more spending, the very same people who had presided over the borrowing and spending that had put Britain into such a perilous position.

EU Budget (Surcharge)

Edward Leigh Excerpts

Monday 10th November 2014 Commons Chamber

[Mr Osborne]

I agree that this was a totally unacceptable approach from the previous European Commission. To be fair to the new budget Commissioner, she has engaged constructively and got the rules changed so that it does not happen again. On the hon. Lady’s comment about finding a serious commentator who thought the rebate might not apply, I know the shadow Chancellor is not a serious commentator but he did not at any point raise this issue. The calculation on interest payments that he used in The Guardian on Friday was based on the assumption that we would pay £1.7 billion—that is how he came up with the number that he used to make his point. As a result, he did not expect the rebate to be applied or to be applied at this rate.

[Sir Edward Leigh (Gainsborough) (Con)]

The shadow Chancellor says that this reduction is entirely down to the rebate. So, if Tony Blair had not given away half the rebate, would we have got a 100% reduction?

Oral Answers to Questions

Edward Leigh Excerpts

Tuesday 4th November 2014 Commons Chamber

[Mr Speaker]

It is time to hear from a Lincolnshire knight—Sir Edward Leigh.

[Sir Edward Leigh (Gainsborough) (Con)]

If someone comes here to work from the European Union, and if they are in a relatively low-paid job and receive tax credits as a form of benefit, they might effectively be paying no tax at all. Will the Government tell the European Commission that we should have a new system by which people have to pay tax for at least three years before drawing any tax credits or benefits?

[Priti Patel]

We have already made changes to that whole area, and that is something we will look at further.

The Economy and Living Standards

Edward Leigh Excerpts

Thursday 12th June 2014 Commons Chamber

[Ed Balls]

In a second.

As I said, the first mistake is to bury our heads in the sand. The second mistake is to attempt to appease those who say that the problem is rapid globalisation and technological change and that therefore the simplest thing to do is to put up trade barriers, stop all migration to Britain and leave the European Union. That is the wrong approach as well.

We all know the depth of concern about immigration in our country, but when the Prime Minister claimed, foolishly, that he would reduce net migration to the tens of thousands, “no ifs, no buts”, he did the cause of sensible and progressive immigration reform no good at all, because he has failed. Net migration has not come down to the tens of thousands; it has stuck stubbornly above 200,000 a year. Even the Chancellor has admitted that the Government will not meet their immigration target. Sending ad vans around the country urging immigrants to go home has only undermined their credibility. That is not the right approach on this issue.

We need clear reform on this matter. We need tough new laws to stop agencies and employers exploiting cheap migrant labour to undercut wages and jobs. We need to strengthen our border controls, not weaken them. We need to ensure that people who come to this country can learn English, and we must provide the support to make that happen. We need fairer rules to make sure that people who come here contribute, cannot claim benefits when they arrive and can more easily be deported if they commit a crime. We need to reform the free movement of labour in Europe through longer transitional controls, stronger employment protection and restrictions on benefits. Those are the things that we have to do. We need reform, not posturing and pandering.

[Sir Edward Leigh (Gainsborough) (Con)]

But the fact remains that too many traditional, working-class voters voted UKIP in the European elections. That is a serious problem for both political parties. Should we not now regret that there was such unrestricted immigration from eastern Europe? Can we not learn the lessons of that?

[Ed Balls]

I am very happy to say to the hon. Gentleman that not having transitional controls in 2004 was a mistake, and one that we all still deal with the consequences of. The question is whether we should have allies in Europe whom we can persuade to do things better for the future or walk away from our European partners and find that we are treated with disdain in the decision-making halls of Europe. That is the real question for statesmanship and politics in our country at the moment.

Our view on that question is clear. We say that there is no future for Britain in walking away from the European Union. It is the biggest single market for the companies, regions and countries of the United Kingdom. We have to reform Europe to make it work better for Britain, but we are much more likely to win the arguments if we are fully engaged, rather than having one foot out of the door.

The Prime Minister and the Chancellor used to agree with that argument. They came though the Lobby with us in 2011 to oppose an arbitrary timetable for an EU referendum. Then, they changed their minds. The Prime Minister flounced out of a summit and decided to appease Tory Back Benchers by performing a U-turn. In the memorable words of Lord Heseltine,

“To commit to a referendum about a negotiation that hasn’t begun, on a timescale you cannot predict, on an outcome that’s unknown, where Britain’s appeal as an inward investment market would be the centre of the debate, seems to me like an unnecessary gamble.”

--- Later in debate ---

[Sir Edward Leigh (Gainsborough) (Con)]

The whole House has great respect for the right hon. Member for Blackburn (Mr Straw), who, as always, was careful to acknowledge that the previous Labour Government did make some mistakes. One of those has been all over the newspapers this morning. It was a decision that he was closely involved in and that I voted against: the decision to invade Iraq. That has proved to be one of the single most disastrous decisions ever made in foreign policy, and we have reduced that country to chaos. There are also lessons to be learned for the future, when next we think of involving ourselves in foreign countries with military ventures, whether in Ukraine or Syria.

The right hon. Gentleman was also generous in his description of the very difficult economic decisions that both Governments have grappled with. Of course he is right to say that the roof has to be fixed, but I am sure he would accept it when I say, as a former Chairman of the Public Accounts Committee, that there were productivity declines in areas such as the NHS and that extraordinary waste was involved in the rapid increases in expenditure, particularly on health and education. I am sure that both Governments have a lot to learn about that. I agree with him that we were probably wrong to agree to commit ourselves to accepting Labour’s spending plans, which were too high, and I have consistently argued that we should have addressed the deficit even quicker. It is a matter of regret that we are still spending more than ever before. That highlights the key challenge that both parties face: we have to keep addressing this deficit.

The current Government are winning the economic argument because there remains a lack of coherence in Labour’s spending plans. The whole country realises that there has been this monumental waste and the Government are addressing it. Perhaps we could have done more and we could have done it in a better way, but we are seeking to address it. This Labour Opposition, unlike the Labour Opposition before 1997, who accepted our spending plans before 1997, do not apparently have a coherent economic message to address that. We know that elections are won on the economy.

At the moment, we cannot deny that 2 million extra jobs have been created in the private sector, and I have to say, following an intervention from the Opposition Benches, that they have not all come from ex-members of the Bullingdon club. There are a lot of ordinary people who are getting these jobs. The Opposition have to address that problem, and we have to concentrate on the economy. It was significant and a bit of an innovation that, in the Gracious Speech, the Queen often mentioned the economy.

[Mr Straw]

I am extremely grateful to the hon. Gentleman for giving way and for his generosity towards me. Yes, of course I accept the 2 million figure that he mentioned, but does he acknowledge that a significant element of that 2 million, whether we like it or not, is composed of those migrants who have come in, about which he so much complains?

[Sir Edward Leigh]

Yes, of course I acknowledge that, but the point I want to make is that it is by concentrating on the economy during the last year of this Government that we will establish our credibility as a party of government. What worries me is that although there is so much in this Queen’s Speech that is excellent, especially the Bill dealing with pensions, we still sometimes forget the essential lesson that, as a Conservative party and a Conservative Government, where we do conservative things and address the economy in a conservative way, we win. Where we indulge in modernising gimmicks, we stumble and start to lose. Sometimes, we forget that. When we do conservative things, such as cutting the deficit, introducing a benefit cap and attempting—not enough—to deal with immigration, we win.

I am still worried about a couple of things in the Queen’s Speech. Is it really essential, when we are trying to address record spending and difficulties in the economy, to start talking about eradicating plastic bags in supermarkets? Is that a priority? Is it essential to start talking about the recall of MPs? It may at first sight be populist and popular, but it is very difficult to administer and probably will not solve any problems. For centuries, rogue MPs have consistently been kicked out of this place, so let us concentrate on the economy.

[Mark Hendrick (Preston) (Lab/Co-op)]

By modernising, which the hon. Gentleman is very much against, does he mean reneging on the pledge to commit 0.7% of the gross national product to international aid, which was a manifesto promise of the three major parties in this country?

[Sir Edward Leigh]

That is a manifesto promise. My views on that are well known. I have two daughters working in international development in Africa, and I am proud of the efforts that we have made on international aid. I am totally committed to spending properly on international aid, but the Department for International Development, like every other Department, must spend what we can afford to spend and what we need to spend. Frankly, it is somewhat economically illiterate to insist by legislation or by other means that a Department sets a fixed percentage of GNP on aid, health or anything else. What happens if there is a recession and the economy contracts? We could end up spending less on aid. I have consistently made that argument, but I am grateful to the hon. Gentleman for his intervention.

My point is that we must concentrate on the economy. We still face enormous challenges. It is very difficult to get to grips with some of these challenges while we are in a coalition Government. A lot has been made of immigration in this debate. The truth is that we have made a mistake—the shadow Chancellor was generous enough in response to my intervention to accept that—in allowing such high immigration from eastern Europe. We all accept that, especially when economies diverge so greatly, as happens between Bulgaria and Romania and ours. It cannot be accepted in the long term that there should be an untrammelled right of immigration from poorly performing economies to our own. We just have to accept that. Therefore, the European Union rules on this must be reformed. I should like to see legislation put in place, but it will not be possible while we are in a coalition.

We also have to address the problem of the referendum. The British people deserve a referendum. Nobody under the age of 55 has been given a referendum. It is virtually impossible to get a referendum Bill through via the private Member’s procedure. The referendum Bill should be in the Queen’s Speech. It should be a Government Bill. I say to my hon. Friends the Liberal Democrats, who are sitting in front of me, that they cannot deny the right of the British people to have a choice.

We need to address the concept of human rights. I am a great supporter of the Council of Europe and all its work; I am a member of it. The fact is that we cannot continue to have a proactive European Court of Human Rights in Strasbourg, which is defeating the efforts of the former Home Secretary, the right hon. Member for Blackburn (Mr Straw), and many others to deal with terrorism. There is much more that we need to do, which is why, for all that the coalition has achieved, we must get a clear result at the next general election. I hope from the bottom of my heart that it is a Conservative victory, so that we can address the very serious problems that still afflict our nation.