Oral Answers to Questions

Hugh Bayley Excerpts

Thursday 3rd July 2014 Commons Chamber

[Mr Vaizey]

It is important that roll-out is as transparent as possible—people need to know when broadband is coming to their area. More than 160,000 premises have been passed but I am sure that Opposition Members will have a word with their Labour colleagues in Wales to encourage them to be more transparent with my hon. Friend.

[Hugh Bayley (York Central) (Lab)]

13. What long-term cycling legacy he expects from the Tour de France Grand Départ in Yorkshire.

[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mrs Helen Grant)]

There has been a strong legacy of cycling from the London 2012 games and I am sure that the Grand Départ in Yorkshire will inspire cycling across the region and the UK as a whole.

[Hugh Bayley]

I sincerely hope so. I know the Minister will join me in congratulating City of York council and the other local authorities involved, along with the cycling organisations, on all the preparations they have made for the race. In terms of public participation, cycling is the third most popular sport in the country. The biggest single disincentive for cyclists is the state of the roads and the danger. Will her Department set up a joint initiative with the Department for Transport to improve road safety and so get more people on their bikes and cycling?

[Mrs Grant]

I think that the Tour de France Grand Départ will be a tremendous success. All plans are on track, and I join the hon. Gentleman in thanking all those involved in the preparations—the teams in Yorkshire, Essex, London and Cambridge. It will be an amazing highlight for the year and one we will never forget. I am happy to have a chat with him about his suggestion. Thank you.

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[Nicky Morgan]

The hon. Lady is right, and it is important and extremely welcome that the Government set up last month’s global summit. Those who seek asylum in the UK need to be offered protection, and the Government are committed to making our asylum system more gender sensitive. We have made significant progress, including putting in place new enhanced guidance supported by high-quality training for all decision makers. Women who seek asylum can request a female interviewing officer and interpreter. They can also bring a friend with them to interviews to provide emotional support if needed.

[Hugh Bayley (York Central) (Lab)]

In last night’s Adjournment debate, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) talked about the case of the abducted girls in Nigeria. He made the point that the problem is not that those girls were abducted, or that others have been abducted since, but that many are at risk and are no longer going to school. Will the Minister look at that speech and prepare a written statement on behalf of her Department to respond to the points my right hon. Friend made?

[Nicky Morgan]

I certainly will look at that speech—I am afraid I did not have a chance to read it in full before this morning’s Question Time. The hon. Gentleman is absolutely right that one of the tragedies of the situation that has evolved in Nigeria is that the girls who were abducted were doing exactly the right thing—they were in school and taking exams. We absolutely do not want to put girls around the world off their education. The UK remains committed to helping to find the schoolgirls. I shall look at the speech and think about how best to respond.

Sixth-Form Colleges (VAT)

Hugh Bayley Excerpts

Tuesday 17th December 2013 Westminster Hall

[Mr Graham Stuart (Beverley and Holderness) (Con)]

rose—

[Hugh Bayley (in the Chair)]

I have not had a note—

[Mr Stuart]

Yes, in both cases.

[Hugh Bayley]

If it is yes and yes, I am glad to give the floor to the Chair of the Select Committee on Education.

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[Sir Peter Bottomley (Worthing West) (Con)]

I am sorry that I missed the earlier remarks about 18-year-olds and the £700 cut in funding, which will mostly affect people in poorer postcodes. Does my hon. Friend the Minister accept that if the schools budget was increased by 0.8% rather than 1%, there would have been no need for a 17.5% cut in 18-plus funding to Worthing college and other sixth-form colleges?

[Hugh Bayley (in the Chair)]

Order. Minister, you have two minutes.

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[Sir Peter Bottomley]

rose—

[Hugh Bayley (in the Chair)]

Order. The Minister having sat down, I am bringing this debate to an end.

I want to put on record—an unadvisable thing to do to any statement from the Chair—that more than 20 Members were present for a half-hour debate, which is extremely unusual and indicates the importance that many hon. Members attach to the subject. I apologise to the Minister and the hon. Member for Wigan (Lisa Nandy) for the manner in which the debate was interrupted by a Division in the House.

Money Transfer Accounts

Hugh Bayley Excerpts

Wednesday 17th July 2013 Westminster Hall

[Hugh Bayley (in the Chair)]

Order. Colleagues who want to take their jackets off are free to do so.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Bayley.

I am delighted to have secured this debate on the provision of money transfer account services by banks and their impact on Britain’s ethnic minority communities in particular. Remittance plays a vital and complementary role in helping to lift millions of people out of poverty across the world, and it plays a vital role in ensuring that, as well as our commitment to aid, we engage the public in giving to their loved ones, who are often on the verge of poverty and would not qualify for development aid. This is a vital debate because we need to consider how we support individuals to give to family members across the world.

Remittance helps to save lives through direct support by providing for loved ones in remote areas of the world. It helps save lives in the Indian subcontinent, for instance in Pakistan and Bangladesh, and in many other places, especially during times of crisis such as Cyclone Sidr in Bangladesh a few years ago and the earthquake and floods in Pakistan. Many of our constituents from various African and Latin American countries send money through remittance.

I will focus on the recent decision that has propelled us into calling for this debate. Barclays made the decision to withdraw banking facilities from small and medium-sized community-based money transfer agencies, which provide low-cost, legitimate routes for sending money to remote places across the world. In some of those places, it is very difficult for mainstream money exchange and money transfer companies that do not have networks, agents or structures to get assistance to family members. Taking the example of disasters, those are the times when people need to get assistance to their families immediately, which is certainly what happened in countries such as Pakistan and the many others that I mentioned.

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[Rushanara Ali]

Absolutely. I would be interested to hear whether the Minister has had any representations from such companies. I understand that some lobbying has been done, certainly in America. It would be useful to know whether he has had representations from bigger agencies, including MoneyGram and Western Union. One concern is that the underlying agenda is to shut down small operators because they do not charge as much and banks do not get as much revenue, and that this is about profit as much as anything else. We need clarity on the criteria that Barclays and other banks have used to stop providing banking facilities.

It is depressing that, unfortunately, the banking sector seems to have learned nothing from the past few years. Small community-based businesses are being hurt while they are trying to run decent businesses and support people. They should come together to consider how to address some of the underlying problems. We understand that there are grave concerns in the banking system about being fined by the US authorities. It is right that we should support the banking sector in ensuring that their due diligence processes are done, but that cannot be an excuse to shut down smaller companies just because they provide competition.

I will press on quickly to a few final points so that others can speak. Somalia presents a unique problem: it does not have a banking sector. That means not only that Somalia will be affected when remittance flows stop, but that humanitarian aid organisations such as Oxfam will lose the ability to send money to the region. Some 40% of people in Somalia who depend on remittance would be affected by that decision. Last year, the Somali authorities said that about $2 billion, or one third of the country’s GDP, is channelled to Somalia through small money transfer agencies.

The country has come out of a conflict that went on for a long time and cost many lives. It relies on the Somali diaspora around the world, who are working hard to rebuild Somalia and Somaliland. This decision would cripple the country. We cannot afford to let that happen, not least because it is in our interest to have a stable, prosperous and effective state in Somalia and Somaliland. That is what my constituents, many of whom are from Somaliland, want. I hope that the Minister will see the connection between this decision and its effect on undermining our aid and peace-building efforts in countries such as Somalia.

Although it could be said, and the Minister may have been told, that this is not as much of a problem for other countries that have a banking sector, the reality is—as he will know from his experience and background, as I do—that in remote places such as the Indian subcontinent, where we have our origins, during floods and in areas where there is no proper infrastructure and no proper roads, getting money to people is difficult. The banking sector is not localised enough. Banks such as HSBC might call themselves the world’s local bank, but they are not local enough. Our response must address the fact that it is impossible to get money to people, in particular at times of crisis, in countries throughout Africa, where there are still major infrastructure problems, and in many Asian countries, so that the banking sector—Barclays in particular—does not fob the Government off by saying, “Well, there are plenty of other operators available,” or, “The Government own a couple of banks, why don’t they to do it?” We need an industry-wide solution that is constructive and that safeguards the remittance industry and companies providing remittance services at low cost.

I have a few final points. On competition, I hope that the Government and the regulatory authorities will look closely at what is really going on. To what extent is this about trying to respond to the fact that these organisations are giving—to use a metaphor—the larger money transfer agencies a run for their money? To what extent is this about the regulatory pressures? I believe that to some extent it is. Where the regulatory concerns are legitimate and genuine, what can the Government and the regulatory authorities do so that we have a set of criteria for those companies to fulfil? Barclays and the regulators certainly have not provided any criteria or explained why banking facilities are being withdrawn. That is the least that these businesses should expect when they employ more than 3,500 people here in the UK and provide desperately needed assistance, not to mention trading opportunities between our country and developing countries.

I hope that the Minister will be able to look broadly at those interconnected issues. I have been told by his fellow Minister in the House of Lords that Barclays is merely making a commercial decision, but we have a responsibility to developing countries, where remittances support millions of people, taking pressure off our international aid budget. We also have a responsibility, if the sector is pretty much eliminated through those decisions, to ensure that money transfers and flows are not driven underground. How do the Minister and his colleagues in the Department for International Development intend to address this? Will he work with our American allies on an international solution, because we recognise that they are calling the shots on fines? Will he make representation to Barclays to provide six months of breathing room to allow the industry, working with the Government, to come up with a framework that can protect this vital industry?

As we speak, thousands of people are signing petitions; the diaspora community, in particular, and the aid agencies in the different sectors believe that people’s lives will be devastated. I hope that the Minister will work with the regulatory authorities on a solution—my colleagues and I are also happy to work with him—because we do not want to return to a debate in years to come and hear that, because of the decision today, many of the agencies stopped operating and people ended up being exploited. In some cases, money might be stolen—we have seen past examples of that—because the sector is not regulated at all, and in some cases remittances might end up in the hands of the wrong people, such as terrorists, and that would be a dereliction of duty on our part. The international community has a responsibility to ensure that people can get money safely and securely, and at an affordable rate, to their loved ones around the world.

[Hugh Bayley (in the Chair)]

I intend to start the wind-ups at 3.40 pm, which leaves us about 45 minutes. With six people wanting to speak, that works out at about seven and a half minutes each.

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[Hugh Bayley (in the Chair)]

A colleague whom I was expecting to speak has left the Chamber, which leaves us with three speakers and 10 minutes each.

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[Stephen Doughty]

My hon. Friend makes the point perfectly. As I said, there was a great willingness on the part of Barclays to sit down with Departments. I hope the Minister can reassure us by telling us what steps have been taken—perhaps in the past week—so that we can know that these conversations are going on and will involve all the crucial Departments. Obviously, numerous Departments, banks, organisations and Members have an interest in resolving this matter. Barclays had a number of technical solutions, which I was unable to comment on, but I hope that Treasury officials and the Minister might be able to.

I second the comments made by the hon. Member for North West Norfolk regarding the need for the Government to engage in urgent discussions with the United States, where a lot of the regulatory pressures are coming from, so that we can secure answers.

In conclusion, this is a huge problem with serious implications not only for my constituents and their families, but, ultimately, for this country’s national interests in international development financing and our security needs. We urgently need to find a solution because time is pressing and will run out at the end of August; otherwise we will find ourselves in a very difficult situation.

[Hugh Bayley (in the Chair)]

I should do a commercial between each speech: the Minister is asking to have a little more time, if possible, so that he can better answer your questions. I leave that thought in your minds.

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[Sajid Javid]

I take those points on board. The hon. Gentleman is right to suggest that Barclays has made the decision. It is however showing flexibility over the timing of closing certain accounts, and that flexibility is better than no flexibility.

I shall turn to a few questions raised by hon. Members. The hon. Member for Bethnal Green and Bow asked whether I had received representations from the large money transfer companies. I have not received any representations from such companies. She also suggested—if I understood her correctly—that the banks’ behaviour could be anti-competitive. There is no evidence that banks are acting in concert or are distorting competition. They appear to have acted in accordance with their commercial interests and their desire to minimise risk.

The hon. Member for Rochdale (Simon Danczuk) asked why larger organisations, such as Western Union, are not affected by the decisions of the banks and whether the banks would benefit from the withdrawal of some services. The short answer to why some larger institutions are not affected is that their internal compliance procedures are in many cases similar to what the banks themselves adopt internally; in many cases, they spend more resources on compliance and transparency issues, which they are clearly in a better position to afford than smaller operators; and in many cases they are regulated differently. All companies are supervised by HMRC, but there is a difference between a company registered with the FCA and one fully authorised with it, and banks take that into account.

The hon. Member for Rochdale and others, including the hon. Member for Nottingham East, asked whether we were having discussions with the US. We work closely with the US Treasury and State Department at all times on all regulatory matters, including money transfer. It is important to point out that since many transfers are ultimately in US dollars, there is a US interest. Lastly, I asked the British Bankers Association for a round-table meeting and it has agreed. We will have one, the Government will of course take part and I look forward to it.

[Hugh Bayley (in the Chair)]

I thank all hon. Members for co-operating on the time limit.

Trident Alternatives Review

Hugh Bayley Excerpts

Wednesday 17th July 2013 Commons Chamber

[Dr Julian Lewis (New Forest East) (Con)]

In the past few months we have had several opportunities to debate nuclear deterrence. The hon. Members for Islington North (Jeremy Corbyn) and for Brighton, Pavilion (Caroline Lucas) and I, from our respectively opposite sides of the argument, successfully procured a debate on 17 January. Strangely enough, I did not hear many of these Liberal Democrat midway positions articulated on that occasion. The hon. Member for Islington North then secured a debate in Westminster Hall on nuclear deterrence and the non-proliferation treaty on 22 June, and I seem to remember that there were no Liberal Democrat contributions to that debate at all.

I think that it is possible to make a principled and coherent case either that we should have an effective and continuous nuclear deterrent or that we should not, but one cannot make a sensible case for having a part-time deterrent. I have looked at the report in some detail and will pick out a couple of elements that I regard as particularly significant. The very first sentence of the executive summary states:

“Deterrence rests on the notion of ‘unacceptable loss’—the ability to inflict a level of damage that a potential aggressor would judge outweighed any benefit they might gain by a particular course of action.”

Well, yes and no. It does not just rest on the notion of unacceptable loss; it rests on the twin notions of unacceptable loss and unavoidable loss. That is where the whole concept of continuous-at-sea deterrence is central, because if one thinks one has a chance of avoiding an unacceptable level of retaliation, one might well take that chance in the hope that one will not have to face up to it.

I have quoted before, and I will quote it again tonight, what was stated the first time a senior British defence specialist considered the concept of what in those days would have been called atomic deterrence. That was in June 1945 in a top secret report drawn up by a committee of defence scientists headed by Professor Sir Henry Tizard. He made a comparison between the atomic bomb, which at the time had not yet been tested or used against Japan, and the concept and practice of duelling:

“Duelling was a recognised method of settling quarrels between men of high social standing so long as the duellists stood twenty paces apart and fired at each other with pistols of a primitive type. If the rule had been that they should stand a yard apart with pistols at each other’s hearts, we doubt whether it would long have remained a recognised method of settling affairs of honour.”

However, if the duellists do not know whether the pistol is loaded, then even if they are standing only a yard apart they might just be reckless enough—“reckless” is the word that we hear time and again in the context of this Lib Dem policy—to take a chance. The whole point about nuclear deterrence is that it is unacceptable and unavoidable that a country will suffer nuclear destruction if it uses its nuclear weapons against a similarly armed country.

In the document, which was prepared by two civil servants in the Cabinet Office specially seconded from the Ministry of Defence, a number of strange concepts are articulated. One of them is familiar—continuous deterrence, which is referred to without quotation marks. Then the document refers to things called “focused deterrence”, “sustained deterrence”, “responsive deterrence” and “preserved deterrence”. I have studied this subject for at least 31 years and I have never come across those terms before. At a briefing earlier today, the two civil servants were good enough to admit that in fact they had made them up. That is perfectly okay, except for one thing—the use of the word “deterrence”. They could just as easily have referred to something like “intermittent deterrence”, “semi-deterrence”, microscopic deterrence” or “virtually zero deterrence”. It is not really deterrence unless it is certain; that is why it used to be called “mutually assured destruction”. It is not enough to be able to threaten destruction; it has to be assured because otherwise the person may not be deterred.

It may seem as though the Liberals’ policy is in disarray, but they could still emerge, at the end of this process, as the winners. I will explain why. At the next general election, we could have another hung Parliament, as my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) suggested. The Liberal Democrats could then say to the Leader of the Opposition, “All that stands between you and entering No. 10 Downing street is to get rid of this weapons system.” They would not say, “Go down to two boats”; they would say, “Get rid of it completely”, because that is what they have wanted all along.

[Hugh Bayley (York Central) (Lab)]

In the unlikely scenario that the hon. Gentleman paints of our having another hung Parliament, the Liberal Democrats would presumably negotiate both with his party and with mine. I think he is going to give me a firm view of what the answer would be from his party, and our Front Benchers have already given a firm view of what the answer would be from our party.

[Dr Lewis]

I am delighted by that intervention, because it not only gives me an extra minute but anticipates the next part of my argument.

If the Leader of the Opposition accepted that deal, then knowing the Liberal Democrats, they would start making the same offer to the current Prime Minister, who would have to think to himself, “Well, if I say no and the leader of the Labour party has said yes, Trident is doomed anyway, so I may as well say yes as well.” Who knows how these things might work out?

However, a solution is at hand: we could sign the main-gate contracts for some or all of the submarines in advance of the next general election. The only reason we put that off was to enable the Liberal Democrats to have their alternative study. They have had their alternative study, and it did not even consider a two-boat solution; it considered only a three-boat or four-boat solution. It could hardly be a breach of the coalition agreement if we were to challenge the Liberal Democrats to accept signing the contracts on the first two boats, if not the first three. That would at least prevent them from blackmailing either party, in the event of a hung Parliament, to get rid of the deterrent entirely.

At the most recent Defence questions I think I heard from the Opposition a commitment to try to bring forward the main-gate decision to this side of the election. I urge Opposition Members who believe in deterrence to join Conservative Members and put relentless pressure on our leaders for a grand coalition to bring forward the main-gate decision and secure the future of the nuclear deterrent—

Investing in Britain’s Future

Hugh Bayley Excerpts

Thursday 27th June 2013 Commons Chamber

[Danny Alexander]

First, every insurance company will have to sign up to the Flood Re deal in order to be valid, and as I said in my statement, we will bring forward amendments to the Water Bill to take backstop regulatory powers in case that does not happen.

[Hugh Bayley (York Central) (Lab)]

Some of my constituents cannot sell their homes because when they, or the new buyer, seek flood insurance, it is completely unaffordable; one person was told the excess would be 20% of the value of the home. When will this initial agreement become a substantive agreement, so as to allow these people to get on with their lives?

[Danny Alexander]

As part of the proposed arrangements, excesses would be capped to deal with the problem the hon. Gentleman mentions. We will bring forward the amendments to the Water Bill in the autumn.

Infrastructure (Financial Assistance) Bill

Hugh Bayley Excerpts

Monday 15th October 2012 Commons Chamber

[Chris Leslie]

It is very difficult to find an explanation for this Keystone Cops approach to infrastructure schemes, other than that the Government are incapable of getting to grips with the detail. I welcome the Minister to his position—he may be a new broom who will sweep everything clean, deal with the issues firmly and move many of these infrastructure projects forward—but I want to hear about his strategy for improving infrastructure on these shores, in the United Kingdom.

[Hugh Bayley (York Central) (Lab)]

May I intervene on my hon. Friend before he leaves the subject of the regional spread of investment? He will recall that on Second Reading I informed the House of changes in the level of infrastructure investment region by region. Some regions experienced an increase in investment between 2009 and 2011—most notably London, whose 18% increase was probably fuelled by the Olympics—but all the rest of the country, apart from three regions, experienced a reduction. Investment fell by 31% in Yorkshire and the Humber and the north-west, and by 32% in Wales. Does my hon. Friend think that the Bill, and the fund that it will establish, will provide an opportunity for some of those regional imbalances to be redressed?

[Chris Leslie]

I would like to hope so, but I do not advise my hon. Friend to hold his breath. We are not even talking about a fund; we are talking about promises to under-run funds in order to guarantee other schemes as they come forward. Where is the confidence? Where is the demand in the economy? Where are the private sector schemes whose organisers want to come forward? Far greater efforts must be made, and the Government must take the economic climate more seriously. We should be bringing forward schemes, prioritising UK infrastructure, and kick-starting construction here at home. We have suggested that revenue from the 4G spectrum auction should be used to fund the building of 100,000 new homes, and we are more than happy for the Chancellor to steal our thunder in the autumn—or should I say Christmas—statement on 5 December. Our amendment would ensure that the Bill focused on the British economy, and that should surely be the starting point.

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[Mr Redwood]

That is a helpful contribution, but it shows the dangers of this clause, because it demonstrates that if these projects are not properly evaluated they could be more expensive overall. My hon. Friend has recent experience as Minister with responsibility for prisons and he is saying that in the short term they will definitely be dearer, because the state will have a big cash outflow in order to buy the new prison. It will take time to close down the old one and find some alternative use for it, and that process might not produce anything like the amount of money that the new prison costs. He is arguing, with his former brief in mind, that this may still represent a good bargain for the taxpayer, but when we come to account for it, we will have to account for the fact that a lot more has been spent in the first couple of years; there may be benefits for Governments to come if, as he hopes, the thing is cheaper and better in the longer term.

In debating this clause, we need to unpack the three types of project we are talking about. The first is a genuine private sector project, where we hope that there will be no ultimate call on the taxpayer and it may just involve a facilitation guarantee that will be properly rewarded. The second is a mixed project, where a lot of accounting has to be done—as the Department for Transport is discovering, such projects are difficult to evaluate. The third is the pure public sector project, where we need to go into the departmental budget. So I hope that the Minister will give me some reassurances about this.

[Hugh Bayley]

I follow the argument that the right hon. Gentleman is making, although I do not necessarily share his conclusion. Health facilities are defined as one of the fields of infrastructure that this fund could be used to support. The recent health Bill showed that the Government favour more NHS services being provided by private contractors and private hospitals. Is he telling the Committee that he would be happy for this fund to be used to finance a private clinic or a private hospital, but not happy for it to be used to fund an NHS hospital trust?

[Mr Redwood]

I am not trying to say anything that contentious. I am trying to unpack what is going on in this clause, because we are in Committee. I was not going to presume to give my views on total public spending, because that is a matter for another day and another debate. I am trying to get the Committee to understand that we are dealing with three different types of project, and the health one is closer to the pure public sector project. Even if it is carried out in a private sector facility with some so-called “private sector risk”, all the patients will be paid for by the NHS if it is for the NHS and so it is a flow of public revenue. We have to account for it in the proper way and be realistic about that.

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[Mr Raynsford]

I said that I did not intend to engage in a debate on that subject. I believe that we need a great deal more housing in this country, but I will not engage with the hon. Gentleman in a debate about his constituency, which he knows much better than I do, and I certainly would not advocate extensive building on the green belt, which would be entirely inappropriate. I was simply drawing attention to the fact that the Secretary of State’s recent decision on planning, which came a mere three or four months after the national planning policy framework was put in place, withdrew many of the original localist hopes about allowing decisions to rest with the local authority and made it clear that he would refer items over the local authority’s head to the Planning Inspectorate. To me, that is not localism, but let us leave it there.

I tabled the amendments simply to try to get clarity and focus on the uses and application of the Bill. As drafted, it is incredibly broad. I do not object to the definition set out in clause 1(2), but the definition in clause 1(3) states:

‘“Provision” includes acquisition, design, construction, conversion, improvement, operation and repair.’

As the right hon. Member for Wokingham (Mr Redwood) pointed out, subsection (4) defines financial assistance as covering a whole range of activities, including

“loans, guarantees or indemnities, or any other kind of financial assistance”.

In theory at least, that definition would allow the Government to offer a guarantee literally on the repair of a door in a school or prison. Although that work might be entirely necessary and desirable, it is clearly nonsense for the provisions in this Bill, which are designed to allow major infrastructure schemes that are stalled for financial reasons to proceed. That is the purpose of the Bill.

[Hugh Bayley]

I am following my right hon. Friend’s argument. I am slightly concerned about how he would define “national significance”. I can think of a number of important infrastructure projects in my region that could be described as being of national or regional significance. For instance, would dualling the A-road that goes around York be seen as nationally significant? Flood defences, a matter that I hope to raise later if I catch the Chairman’s eye, need to be designed on a region-wide basis. Would my right hon. Friend regard flood defences as being of national significance—if they affected the Thames, perhaps?

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[Ian Swales (Redcar) (LD)]

I shall speak briefly against amendment 1, which would have the effect of limiting the definition of infrastructure to the items listed. That could mean that key elements of economic infrastructure would be omitted. We have already heard reference to broadband and flood defences, but I am thinking in particular of the installation of carbon capture and storage networks, such as the one proposed for Teesside, which already has strong private sector support.

Those networks will be vital for future economic growth and that type of investment must be included in the scope of the Bill. I would welcome clarity on that from the Minister and I ask him to consider adding such schemes to the list. Having said that, I accept the excellent inputs from my right hon. Friend the Member for Wokingham (Mr Redwood) and my hon. Friend the Member for Reigate (Mr Blunt) on the need to limit how the Bill is implemented.

As a member of the Public Accounts Committee, I certainly do not want any suspension of proper process, judgment or value-for-money assessment of any project that comes through under the Bill.

[Hugh Bayley]

When we discussed the Bill on Second Reading on 17 September, I had no idea that just one week later the River Ouse was going to rise 5 metres higher than its normal summer level and put York once again in the national and international news as a flood-prone city. I am glad to say that the emergency was well managed by the local authority, the Environment Agency, Yorkshire Water and the police, who led the silver and gold command, of course.

The consequence was far less dramatic than 12 years ago, when the Ouse rose just 10 cm higher—about 4 inches, for those who are metrically challenged. On that occasion, some 230 homes were inundated. Some homes were affected this time, but the damage was much lower, in part as a consequence of investment in flood defences and other flood alleviation schemes.

Hard flood defences have been built in the city of York to provide better protection for houses flooded during the previous high flood 12 years ago. Other alleviation measures have also been taken upstream. There has been funding to encourage farmers to build ponds—in one case, a major dam that stores millions of gallons of water during a high-flood event—and to plant more trees to slow the run-off so that the peak height is a few inches lower than it would otherwise be. I have asked the Environment Agency to calculate whether those measures made the 4 inches of difference between this occasion and 12 years ago, so preventing hundreds of thousands of pounds’ worth of damage to hundreds of houses and commercial businesses, as happened then.

I should stress that throughout the flood, 99.9% of York was open for business. It gets a bad press whenever there is a flood because journalists are lazy and know that a pub called the King’s Arms in York floods four or five times a year, and it is as easy as pie to get a picture of somebody in waders pulling pints behind a bar. When people see such photos, they need to realise that York is up and running and not closed for business.

On Second Reading, I posed the question of whether the list of types of infrastructure in the Bill would include funding, or support through loan guarantees, for flood defence schemes. The Economic Secretary took advice between hearing my remarks and replying to the debate. He said:

“I am advised that there is no reason for them”—

that is, flood defences—

“to be excluded, and we envisage their being part of the infrastructure that is being considered.”—[Official Report, 17 September 2012; Vol. 550, c. 747.]

Since the Economic Secretary has had an opportunity to consider the matter a little further in the weeks since Second Reading and was notified by an amendment that I tabled, which has not been selected, that I would raise this issue, will he go slightly further and reassure me and other hon. Members representing constituencies with considerable flood risk that it is not that there is no reason for such schemes to be excluded, but that they will be open for consideration if it is deemed appropriate?

I say to my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford), whose knowledge about these matters is enormous and whose judgment I respect—I normally consult him about matters of housing, planning or infrastructure—that I would be concerned if we limited the schemes to those of national significance. Some of the infrastructure that badly needs investment is important and will help to generate economic growth. Flood alleviation schemes, for instance, can support economic output by keeping businesses open and avoiding diverting expenditure to repairs when the funding could instead go to a future profitable investment that would generate a return.

I caution against limiting investment to matters of national significance. My right hon. Friend makes a telling point about the school door, but many schemes of local or regional, rather than national, significance ought to be candidates for consideration for the funds provided in the Bill. When the Minister responds, I hope that he will say something further about flooding and give an assurance that although we ought to be supporting schemes of national significance with this fund, we should not limit it to supporting such schemes and it should be open for the support of other schemes of local or regional importance.

[The Economic Secretary to the Treasury (Sajid Javid)]

We have heard excellent contributions from Members on both sides of the House. The shadow Minister rightly noted that the time for the debate has been restricted. That is not unusual when we first come back after a recess, but he made a fair point. However, I was taken aback when he then went on about many different issues that did not much focus on the nature of his amendments, as he could have saved some time for hon. Members to continue with a proper debate.

On the Opposition amendments, amendment 11 is designed to limit the Bill’s geographical ambit. My response is that it is clear that the scheme relies on the spending cover provided by the Bill and is designed to facilitate and accelerate infrastructure investment throughout the United Kingdom economy. The eligibility criteria have been published. For example, the guarantee scheme contains provisions requiring the infrastructure to be of national significance to the UK. Such conditions will be sufficient to achieve protection against the UK supporting other economies. If I understood the hon. Gentleman correctly, he was concerned about the potential effect on economies outside the UK.

--- Later in debate ---

[Simon Hughes]

I shall make one short point and then give way.

The other really important thing—this is the purpose of new clause 3—is that we should require due diligence to be carried out in the same way as we require it for money-laundering prevention. The trouble is that it is not done properly and is not effective.

[Hugh Bayley]

On a point of order, Mr Gale. I apologise for interrupting the hon. Gentleman. Surely, the point of a Committee stage is to allow a Bill to be considered at greater length and in greater detail than is possible on Second Reading. Owing to reasons beyond your control, Mr Gale, we have less than half the time for debate in Committee that we had on Second Reading. We have not yet finished clause 1. All the other clauses will go unconsidered in Committee. Would it be in order, Mr Gale, for you to make a report to the Chairman of Ways and Means about how this Committee stage went, so that he and the Panel of Chairs can consider whether it is appropriate for us to have such short Committee stages on the Floor of the whole House?

[Temporary Chair (Sir Roger Gale)]

The Chairman of Ways and Means will undoubtedly read what the hon. Gentleman has said, but the proceedings are in order according to the programme motion agreed by the House.

Infrastructure (Financial Assistance) Bill

Hugh Bayley Excerpts

Monday 17th September 2012 Commons Chamber

[Mr Crispin Blunt (Reigate) (Con)]

I fear I shall use them, Mr Deputy Speaker.

I am grateful for the welcome I received from my hon. Friend the Member for Northampton South (Mr Binley), who said how glad he was to see me. It has taken me 15 years to arrive on the Government Back Benches and this is my first speech as a Back Bencher for more than eight years. I enjoyed the fact that the first constituent to seek my help after I was relieved of my responsibilities as one of Her Majesty’s Ministers was a gentleman who needed assistance at an employment tribunal in a case of unfair dismissal. I was able to look him squarely in the eye and tell him that he had to take whatever he got from the employment tribunal, and once that was done, he must put matters behind him and get on with the rest of his career and his life. I have every intention of doing that, and enjoying the freedoms of the Back Benches.

It was interesting to follow the Gatling gun-like delivery of the shadow Chief Secretary, the hon. Member for Leeds West (Rachel Reeves), who rattled through her speech. When I sat on the Opposition Benches, I heard similar speeches from colleagues about Government announcements that were made but not immediately delivered. When they relate to infrastructure, things take a tiresome amount of time.

I wondered about the economic analysis that underlay the hon. Lady’s critique. What kind of economic la-la land are the Opposition living in that they think the financial markets would have confidence in underwriting the Government’s debt if it continued to be managed by Labour? They had got us into the most appalling trouble by May 2010. It took the formation of the coalition and the urgent need for all Ministers to attend to their departmental expenditure to drive down debt so that the Chief Secretary could deliver credibility to the financial markets and our nation could continue to enjoy borrowing rates that are at an historic low. The difference between us is that if Labour had been in charge, we should probably have been enjoying borrowing rates something like those of Spain, which would be costing us £40 billion a year in the extra interest charges we would have to pay on the monumental national debt that was built up under the previous Government.

Having achieved a level of market confidence, it is absolutely proper that we now look to capital expenditure. That is why in principle I welcome the Bill and the fact that under the so-called Baldwin convention the Government are seeking specific authority for capital expenditure of this type. However, better explanations are required of the detail.

[Hugh Bayley (York Central) (Lab)]

If business confidence in the previous Labour Government was as bad as the hon. Gentleman suggests, it would have been reflected in interest rates, yet in fact when his party came to power we had interest rates at a record low. I acknowledge that they have continued at that level, but it was a record low that his party and the coalition Government inherited from Labour.

[Mr Blunt]

That would be fine if the markets had not entirely discounted the prospect of the hon. Gentleman’s party being retained in office in 2010. It was perfectly clear that Labour was being sent firmly through the exit door. I assure the hon. Gentleman that if the markets felt there was any chance of the former Prime Minister and his henchmen remaining in office, we should have faced a quite different picture.

Having just held a Ministry of Justice portfolio, I turn to the subject of prisons, which are mentioned in the Bill as a potential source for capital expenditure. There is a case for measures that enable capital expenditure on prisons. There is a very strong case, which I shall continue to press from the Back Benches, for building new prisons, not to increase the number of prison places but to modernise the prison estate and make it fit to deliver rehabilitation, work and security at a sensible, affordable price in a prison infrastructure for the 21st century.

Oakwood prison offers an example. It was built with running costs of more than £10,000 a prison place less than other category C training prisons of its type. With capital expenditure at about £100,000 per prison place, one can easily see the rough order of magnitude in a 10% return on that scale of investment. If we then take into account the fact that we could sell off the old prison sites, that we will not have to deal with the accumulated maintenance deficit in the older parts of the prison estate and that we will get much better implementation of policy in prisons that are built with work, security and rehabilitation in mind, we can see that the case for including prisons in the Bill is extremely strong.

I am, and will remain, an advocate of wholesale reinvestment in our prison estate. It means new prisons that will be more efficient and older ones closing so that we end up with the estate we should have for the 21st century. There is currently a competition process for nine prisons, the second such round of competitions—eight are currently in the public sector and one is in the private sector. All the bids I have seen, from both the public and private sectors, show the enormous benefit of competition in coming forward with better ideas on how to run our prisons.

At this point it would be appropriate to pay tribute to the officials in the Ministry of Justice and to Michael Spurr and all the people at the National Offender Management Service with whom I have had the privilege of working over the past two and a half years. I put on record my gratitude to them and, as prisons are in the Bill, to Peter McParlin, chairman of the Prison Officers Association, the biggest trade union representative in the Prison Service. In an era of considerable change in the service, I commend the constructive relationship and dialogue I had with him and with other union officials and staff, including those from the National Association of Probation Officers.

I turn from my former responsibilities to the application of the Bill to my constituents. Reigate plays host to some serious national infrastructure. We have two prisons, but we are adjacent to Gatwick airport, the M25 runs through the middle of the constituency, and the London to Brighton main line is another key piece of infrastructure. The constituency has been under constant developmental pressure throughout my time as Member of Parliament. The borough of Reigate and Banstead has more than met the housing targets imposed by the previous Administration. It is not housing we are short of; it is infrastructure. For example, we are woefully short of primary school places, the M23 has yet to be finished and brought to an end at the Hooley interchange, and there needs to be a reorientation of the railway line that cuts across the London to Brighton main line and runs between Guildford and Tonbridge.

I share the criticism of others about the delay in the decision over the future of airport capacity in the United Kingdom. For me, the answer is blindingly obvious: we need an airport in an estuary that can operate 24 hours a day and that has the capacity to deal with the primary needs of the United Kingdom, which is to have a proper hub airport. That has been fairly obvious since people were looking at Maplin Sands about 50 years ago. Frankly, it is about time we got on and made the decision. I seriously regret its being put off for another three years.

I will conclude by expressing my concern about housing appearing as infrastructure in the Bill. I do not think that housing is infrastructure. The financing of housing should come from other mechanisms. I hope that my right hon. and hon. Friends will understand my concern about housing appearing in the Bill in conjunction with the Chancellor’s remarks about the green belt and the potential threat to it. I will be examining the Bill very carefully.

--- Later in debate ---

[Hugh Bayley (York Central) (Lab)]

This Bill is a small but necessary step in the right direction. The hon. Member for Witham (Priti Patel)—and not just her, but many members of both coalition parties—has repeated the mantra, which we hear time and again, about Labour’s borrowing being the cause of all evil. They sound like a record stuck in a groove. It is not surprising that the public are losing confidence in the coalition parties. Two years ago they told the public that the Government were borrowing too much and that they would clear the deficit by the end of this Parliament in 2015. My party agrees that the deficit, which was necessary to stop the 2008-09 meltdown, has to be cleared, but we warned the coalition that if it cut too fast, it would snuff out growth, which would reduce tax receipts and increase the national debt.

Let us look at the debt figures. When the coalition came to power, the national debt stood at £779 billion. The latest figures, for July this year, show that in just over two years under this Government’s stewardship, the national debt has risen by 33% to £1,032 billion—above £1 trillion for the first time in this country’s history, as a result of the economic policies that the two Government parties have been pursuing, and this from a party that is worried about borrowing. There is no prospect whatever of the deficit being eliminated by the end of this Parliament. That was a brave promise, but one that will not be met. According to the Office for Budget Responsibility, the national debt is set to rise to £1,437 billion by 2015-16—getting on for double what it was when the coalition parties came into government.

[Mr Newmark]

But under the hon. Gentleman’s party’s proposals the national debt would be increasing by even more, so what is the logic in what he says?

[Hugh Bayley]

No, it would not, and that is the central fallacy. If we snuff out growth, we snuff out revenues and the Government spend more on benefits for people who are unemployed. If we promote growth, we increase the Government’s revenues and we are thereby able to reduce the deficit.

I would acknowledge that the UK went into recession in 2008. Labour policies, including our policy to go for short-term borrowing to jump start the economy, pulled the UK out of recession in the middle of 2009. By the time of the general election, under Labour there was a recovery that had delivered four quarters of growth. Since the general election, there have been three further quarters of growth and five quarters, under the coalition Government, in which the economy has been shrinking—quarter 4 in 2010, quarters 2 and 4 in 2011, and the first two quarters of this year. It is therefore quite clear to me that plan A has failed.

This Bill represents a U-turn, and it is a U-turn I welcome. I wish it had come earlier, but the Government are right to bring forward these proposals. However, if the Bill is to make a significant difference to growth, and therefore to the Government’s ability to reduce indebtedness, they will have to drive forward investment with real determination and vigour. I therefore have some questions that I would like to put to the Minister. First, last year, in 2011, the value of new orders in the construction industry was £46 billion. Clause 2(1) permits the Government to commit a further £50 billion to infrastructure, but I would like to know against what time scale they expect that level of investment to be committed. Are the Government going to commit to £5 billion in new orders for the construction industry—a 10% increase in round terms—in the year to come, or do they hope to commit the lot in one year and thereby double the level of investment? These are crucial questions. Will the Government provide a quantum change in the level of infrastructure investment in this country, or will they tinker at the edges?

My second question relates to clause 2(2), which we have already discussed a bit, which says that the £50 billion ceiling will apply to expenditure and contingent liabilities. However, despite the Chief Secretary’s clarification, I am still not quite clear whether the Government intend to count the full value of the loan guarantees against the £50 billion or a lower figure, tied to their estimate of a proportion of the guarantees which they expect would be drawn down in hard cash.

Thirdly, will the Government guarantee that their assistance will go to all regions, with extra help for those parts where infrastructure investment has taken the hardest hit? I have looked at the change in the value of orders for new construction in Great Britain between 2009 and 2011, and the figure varies enormously from region to region. In London, infrastructure investment in 2011 was up 18% on what it had been in 2009, in the last year of the Labour Government. In the south-east the figure was up by 6% and in the north-east it was up by 14%. However, in all other regions of England, as well as in Wales and Scotland, there was a decline, with infrastructure investment down 3% in the south-west, 9% in Scotland, 15% in the east midlands, 21% in the west midlands, 23% in the east of England, 31% in Yorkshire and the Humber and in the north-west, and 32% in Wales. Will the Government target money on those regions, including my region of Yorkshire and the Humber, that need help most?

Fourthly, clause 1(3) defines “provision”—the uses to which the £50 billion will be put—to include design and construction, as well as operation and repair. It looks to me as though the Government intend this new vehicle to be the substitute or replacement for the PFI model. If that is their intention, I would like the Minister to describe a bit more what the Government have in mind.

Fifthly, the Government’s national infrastructure plan, published in November last year, included flood defences and communications in its definition of “infrastructure”. We have heard that the Government would regard it as possible to use the resources that the Bill will make available to improve high-speed broadband, for instance, in rural areas such as north Yorkshire. However, flood defences are not mentioned in the Bill. I would therefore welcome a clarification from the Minister about whether flood defence schemes will be seen as infrastructure under the terms of the Bill, and therefore fundable from the £50 billion that is being set aside.

My final point relates to apprentices, a subject that I asked questions about when the Government first started to introduce measures to promote capital investment, in the autumn statement last year. The use of £50 billion of extra public money—or more, if the Government are successful in using their contribution to leverage in more resources from the private sector—to support infrastructure investment will provide a tremendous opportunity to boost the number of apprenticeships in the UK construction industry. We could end up with far more people being trained in the skills that our economy needs, now and in the future, and become less reliant on bringing those skills in from abroad. Will the Minister explain what conditions the Government will place in contracts for which they provide guarantees or loan finance to ensure that the contractors increase the number of apprentices they take on and train?

--- Later in debate ---

[Hugh Bayley]

rose—

[Sajid Javid]

Please sit down; sorry.

The Bill contains measures that will support growth, jobs and families. It will support the UK’s infrastructure sector by providing access to finance for financially credible, high value for money projects. It will unlock the investment that the UK needs to make it one of the best places in the world to do business. I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Infrastructure (Financial assistance) Bill (programme)

Motion made, and Question put forthwith (Standing Order No.83A(7)),

That the following provisions shall apply to the Infrastructure (Financial Assistance) Bill:

Committal

1. The Bill shall be committed to a Committee of the whole House.

Proceedings in Committee, on consideration and Third Reading

2. Proceedings in Committee, any proceedings on consideration and proceedings on Third Reading shall be taken in one day in accordance with the following provisions of this Order.

3. Proceedings in Committee and any proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.

4. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

Programming committee

5. Standing Order No. 83B (Programming committees) shall not apply to proceedings in Committee, any proceedings on consideration or proceedings on Third Reading.

Other proceedings

6. Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or any further messages from the Lords) may be programmed.—(Mr Evennett.)

Question agreed to.

Infrastructure (financial assistance) bill (money)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Infrastructure (Financial Assistance) Bill, it is expedient to authorise—

(1) the payment out of money provided by Parliament of expenditure incurred by the Treasury, or by the Secretary of State, in giving, or in connection with giving, financial assistance to any person in respect of the provision of infrastructure; and

(2) the payment out of the Consolidated Fund, in certain cases, of expenditure which would otherwise be paid under the Act out of money provided by Parliament.—(Mr Evennett.)

Question agreed to.

VAT on Air Ambulance Fuel Payments

Hugh Bayley Excerpts

Wednesday 11th July 2012 Commons Chamber

[Hugh Bayley (York Central) (Lab)]

Like the hon. Member for Hexham (Guy Opperman), I congratulate my constituent Ken Sharpe and his wife Helen, who have got this important issue on to the agenda of the House of Commons by launching an e-petition that calls on the Government to refund to air ambulance services the VAT that air ambulances pay on the fuel they use. Ken Sharpe has promoted this issue with flair and passion. He achieved the 100,000 signatures needed to trigger a debate in this place within a record 39 days, and the petition now has 150,000 signatures. To any members of the public who are listening to this debate, I would say this: sign that petition now!

I have known Ken for some 20 years. He is an active member of the RMT union and served for several years on its national executive committee. The same principles of voluntary action and social service that underpin his trade union work support his passion for charities and the air ambulance service; it is what the Government call the big society. I know him to be a brilliant and effective campaigner. When this man starts a campaign—I hope that the Minister is listening—he never gives up.

Many people will be aware of the work of the Yorkshire air ambulance service from the BBC1 fly-on-the-wall—perhaps I should say fly-in-the-sky—series, “Helicopter Heroes”, a new series of which starts in the autumn. The Yorkshire air ambulance service made the national news in 2006 when it airlifted “Top Gear” presenter Richard Hammond from Elvington airfield in York to Leeds general infirmary after he sustained life-threatening injuries in a crash in a jet-powered car. I know that Richard would say that he owes his life to the Yorkshire air ambulance service. That is one of many cases. I can think of a case of a young boy who had his ear bitten off by a horse. The air ambulance got him to hospital in time for surgeons to sew his ear back on.

The Yorkshire Air Ambulance, like the 18 other air ambulance services, is a registered charity. The Government help it, for example by seconding NHS paramedics to fly in the helicopters to provide ambulance services to patients. The paramedics also provide services to the pilots. In Yorkshire, it is the paramedic who navigates for the pilot. However, Yorkshire Air Ambulance still needs to raise £2.6 million a year—that is about £7,200 a day—to keep its two helicopters flying.

As the hon. Member for Hexham said, the lifeboat service, unlike the air ambulance service, does not have to pay VAT on the fuel that it uses. We are calling on the Government to treat the air ambulance service in the same way as the lifeboat service. I recognise that EU Finance Ministers are unlikely to extend the exemption that applies to sea rescue services such as lifeboats to air ambulances. However, the United Kingdom Government could act on their own by refunding to air ambulance services the VAT that is charged on the fuel that they use.

Linda McAvan, the Labour MEP for Yorkshire and the Humber, recently asked a question on this matter in the European Parliament. The spokesman for the European Commission replied:

“Member States are free to address the problem of unrecoverable VAT by the introduction of so called compensation schemes.”

I am assured that that means, in EU-speak, that if the Government chose to provide air ambulance services with sums equivalent to the VAT that is raised from them, there would be no objection from the European Union. The Exchequer Secretary, who is responsible for VAT, accepts that that is the case. When the hon. Member for Hexham and I went to see him a week or so ago to discuss our motion, he assured us that if the motion was unamended, the Government would raise no objection to it. I hope that that is the case. We will hear whether it is from the Financial Secretary, who will speak for the Treasury this evening.

The motion calls on the Government to carry out a study over the year ahead into whether they can accede to the request in the e-petition. Members on both sides of the House hope that the study will be completed in time for the answer to be given as part of the Budget statement next spring.

I have been a Minister in a spending Department and know what it is like to get a dozen requests a day for new Government spending commitments. I also recognise that this is a time of austerity. So why do I think that the Government should agree to this request? First, the proposal has caught the public imagination. Ken Sharpe’s e-petition has been signed by 150,000 citizens. We agreed at the end of the last Parliament and confirmed at the start of this Parliament that when more than 100,000 citizens make a request, Parliament should debate it.

Secondly, as the hon. Member for Hexham said, the request is modest and affordable. Yorkshire Air Ambulance paid less than £6,000 last year in VAT on fuel. It serves a population of 5 million. The population of the UK is 60 million, so if all air ambulance services use the same amount of fuel per the size of the population they serve, the total cost will be something in the order of £75,000 a year. Even if I am out in my calculation by a factor of two—the Treasury will check that carefully when it conducts its study —and the cost is £150,000, it will still come to just £1 per person who has signed the e-petition.

The air ambulance petition has attracted more signatures than the e-petition pressing the Government for a change in policy on fuel duty. The Treasury estimates that the recent decision to postpone the August fuel duty increase will cost the Exchequer £550 million. If we divide that by the 148,000 citizens who have signed the fuel duty e-petition, it comes to £3,700 a petitioner, which makes the air ambulance request, at just £1 a petitioner, rather cheap.

[Stuart Andrew (Pudsey) (Con)]

I have spent my working life in the charity sector, and in fundraising in particular. Does the hon. Gentleman agree that groups such as the one that organises the Rawdon fun day in my constituency, which raises £14,000 a year for the air ambulance, find it objectionable that some of that money is going on VAT? If we lost the air ambulance service, the effect on the Treasury would be immense.

[Hugh Bayley]

The hon. Gentleman makes a powerful point. It is important that the Treasury focuses on the fact that the air ambulance service is an emergency service that saves lives, just like the lifeboat service. I used to run a charity, and much as I would love every charity to be exempt from paying VAT, that would be a very expensive ask. This is a limited and specific ask of the Government. As I said, it would not be too costly. More importantly, as I am sure he will acknowledge, it is the right thing to do.

If the motion is agreed to, Ken Sharpe and the 150,000 members of the public who have signed the e-petition will move into a slightly difficult period. They will have got over the hurdle of securing the Government’s attention, but there will then be a period, at least until the Budget in the spring, when the Government are considering the position. It will appear to the public as though not a lot is going on. My advice to members of the public who support the cause is: do not let up on the pressure, and keep reminding the Government that this issue will not go away. The best way for a citizen to lobby the Government is through their Member of Parliament. I invite every single one of those 150,000 people to e-mail or write to their MP and ask them to contact the Treasury, asking how the study is going. In that way, we can continue to remind the Government that this change is both the right thing to do and has a high level of support from the public.

--- Later in debate ---

[Mark Pawsey]

That serves to highlight the unique nature of the air ambulance organisations.

On the payment of VAT, or any other tax, let me quote from a representation from Warwickshire and Northamptonshire Air Ambulance:

“Along with the rest of the world, we would welcome any reduction in taxation levels and in an ideal scenario we would pay no VAT on any aspect of our service.”

That is right, of course. In an ideal scenario—when we are enjoying periods of sustained economic growth and there is no pressure on Government finances—many different kinds of concessions can be made, but unfortunately this Government have been left with a structural deficit, so they may not be able to fund all the items of expenditure that we might want. The air ambulance service made this point to me:

“In the current fiscal climate we believe that charities and organisations like ourselves whose sole aim is to benefit our communities, should not seek further strains on the public purse.”

There is a contrary view, therefore, and it is held by the air ambulance service based in my constituency.

[Hugh Bayley]

I imagine that the hon. Gentleman’s points will be considered by the Treasury if the motion is passed tonight, and so they should be. However, the Royal National Lifeboat Institution has the VAT exemption, but that does not act as a bar to its raising funds for its services. Is he aware that the Association of Air Ambulances—which represents the 18 air ambulance services in the country, including his—put out a press release calling on the Chancellor

“to introduce a balanced and fair approach to the application of VAT and duty charged on Aviation Fuel where it is used in helicopter emergency medical services”?

Although his points are valid, could they not be considered as part of such a Treasury review if we pass the motion tonight?

[Mark Pawsey]

I shall support the motion, but I am putting to the House the contrary view, which is about the unique nature of our air ambulance services.

On the basis of the quote I have just read out, we should applaud the sense of public duty displayed by the air ambulance that covers the area I represent.

--- Later in debate ---

[Mr Hoban]

I appreciate the right hon. Gentleman’s knowledge—he is a former shadow Secretary of State for Health—but my point is that the Treasury is working with Department of Health officials to ensure that the matter is covered by the review. I can confirm that, if it is ultimately not covered, the Treasury will carry out its own review. However, rather than having three reviews into air ambulances, I believe that two are sufficient if the second covers the tax issue. We are working with the Department of Health to ensure that that is the case. I can confirm to hon. Members that there will be a review and that the Government will not vote against the motion. Indeed, we believe it raises valid issues.

It would be possible in principle to introduce a refund system for air ambulance charities’ non-business activities, although it is important to consider that in the context of broader public spending, as I am sure my hon. Friends appreciate.

To refer to a point made by my hon. Friend the Member for Rugby, it is important for us to consider carefully how air ambulance charities can provide a better service by improving efficiency, and not just through refunds and tax breaks. Effective co-ordination of services could bring cost reductions that far outweigh the scale of a VAT refund on fuel. I am sure the House will join me in applauding such innovation and agree that we should continue to do all we can to improve this excellent service further. As my hon. Friend said, the air ambulance based in his constituency delivers a co-ordinated approach to providing the service across Warwickshire, Northamptonshire, Leicestershire, Derbyshire and Rutland. It has made significant cost savings and earned the transformational change award at the Orange national business awards last year.

I hope I have set out clearly my reasoning on why a change to the VAT law is impractical. I believe the best review on a level playing field for providers is being done by the Department of Health, but, as I have made clear, if that does not fully cover air ambulances, the Treasury will conduct its own, separate review.

[Hugh Bayley]

I am most grateful to the Minister for giving—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The Minister has finished and is not giving way. I call Guy Opperman.

Amendment of the Law

Hugh Bayley Excerpts

Wednesday 21st March 2012 Commons Chamber

[Mr Andrew Tyrie (Chichester) (Con)]

I am also available for injury time, if anybody wants to chip in. After the generals, it always falls to me to be the first of the foot soldiers.

The first point that I want to make is about the overall Budget judgment. The issue that overshadows all the others to which the Chancellor referred is that Britain is living beyond its means. We are borrowing £1 for every £4 we spend. That is why the last Chancellor of the Exchequer was right, in his final Budget two years ago, to set out a tough deficit reduction plan, even if his neighbour argued about it all the way. It is also why the current Chancellor was absolutely right today to stick to a clear plan for deficit reduction. Although it is not popular with most Members to say this, I also deeply respect the Liberals for helping to make that plan a cornerstone of coalition policy, despite all the flak they take.

Some have argued that the economy needs a further fiscal boost on top of the deficit that we are already running. It is worth bearing it in mind that the last Chancellor injected a £20 billion boost in 2009, but that sum pales into insignificance compared with the £100 billion of quantitative easing over the past 12 months or the £300 billion of quantitative easing since the crisis began. Even though quantitative easing and fiscal policy are not directly comparable, it is clear that monetary policy has played a huge role in managing the recession.

The biggest influence on overall macro-economic policy at the moment, therefore, is probably the Bank of England. It is becoming more powerful than ever before, which is why the Treasury Committee will look closely at how much of the latest round of quantitative easing is finding its way into final demand. It is also why strong accountability of the Bank to Parliament is essential. The Treasury Committee is united in the view that the proposals currently in the Financial Services Bill are simply not enough, and we will press on behalf of Parliament for significant improvements on Report.

[Hugh Bayley (York Central) (Lab)]

At the time of the last general election, the national debt stood at £760 billion. It has now risen to more than £1 trillion for the first time in history and is on track to rise to about £1.5 trillion. What does the Chairman of the Treasury Committee think the impact on interest rates will be by the end of this Parliament?

[Mr Tyrie]

I think I will ask the Bank of England that question when it comes to see the Committee, but I agree that the issue needs to be taken into consideration.

One measure that was announced yesterday, about which I might just have time to say a few words now that I have some injury time, was credit easing. Yesterday’s announcement on the loan guarantee scheme responded to many constituents’ complaints that they simply cannot get the money they need to run or start up small businesses. We all have constituents in that position, and the scheme will offer some welcome relief. How much relief? I think it will offer only a little, and there is a risk of the banks pocketing most of the money. The Treasury Committee, the Public Accounts Committee— I do not know whether its Chair is in her place—and the National Audit Office all need to play a role in ensuring that the banks do not run off with the money, and that value for money is secured.

None the less, I still think the scheme may turn out to be valuable, for several reasons. First, by announcing it the Chancellor has raised the salience of an important issue and put pressure on the banks not to dismiss requests for loans without examining them properly. Furthermore, it seems to me that the Treasury’s own pessimistic briefing yesterday that the money will go only to existing borrowers is almost certainly mistaken. There is very likely to be some more lending, because banks will benefit from the stronger financial position of firms to which they have lent. Those loans, in turn, will be less risky for the banks, so they should have some more headroom for new lending without altering their risk profile.

Oral Answers to Questions

Hugh Bayley Excerpts

Tuesday 6th March 2012 Commons Chamber

[Mr George Osborne]

I gave these figures to the House before and will give them again because they remind us how irresponsible the Labour party’s policy is: a 1% rise in mortgage rates would add £10 billion to family mortgage bills; a 1% rise in interest rate loans would cost businesses £7 billion; and a 1% rise in interest rates would add £21 billion to debt interest payments. The policy that the Labour party claims to pursue, at least this week, would definitely put market rates up, which is what has happened to other countries without a credible fiscal policy, and taxpayers, families and businesses would pay for the mess they got us into.

[Hugh Bayley (York Central) (Lab)]

By how much will the national debt have grown by the next general election, compared with the situation the Government inherited following the last general election?

[Mr Osborne]

In two weeks’ time I will produce the latest Office for Budget Responsibility forecasts for the fiscal situation, so the hon. Gentleman will have to be patient and wait until then.