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21 Nov 2007 : Column 143WH—continued
Jane Kennedy:
HMRC not only has its own means of gathering intelligence, but co-operates, as I said, with other law enforcement agencies. It draws on and pools intelligence, which is an absolutely necessary prerequisite for successful team working. That is the
way forward, and the lesson that we are learning around the world is that the greater the co-ordination and co-operation, the more effective the different agencies involved. However, I take the point that HMRC needs to remain alert and responsive.
I have talked about HMRC’s investment in intelligence, and given the co-operation of shipping companies and airlines, HMRC today has a comprehensive and up-to-date picture of all freight and passenger movements through Welsh ports and airports. I hope that that provides some reassurance to those Members who have participated in the debate.
That intelligence picture enables HMRC to deploy to best effect the 59 front-line detection staff based in Wales. They are not based statically at ports—that would be a weakness—but in different, flexible ways, which is more appropriate to the risks that we face. If necessary, teams are sometimes mobile and sometimes draw on teams based in the west midlands, as well as the national strike force and the cutter fleet.
Specific intelligence-led operations periodically draw on other national resources. For example, in May and June this year, Operation Faun involved more than 50 officers from across the UK, including specialist cash detection teams from London and Gatwick, who worked with Welsh colleagues at Holyhead, Fishguard and Pembroke ports to test the risk of criminal cash being smuggled through those ports.
HMRC has changed its tactics, and its intelligence-led, risk-based and less predictable approach has proved successful. The facts speak for themselves: Treasury statistics indicate that the illicit market in cigarettes, which was 20 per cent. and rising in 2002, has been driven down to about 13 per cent. However, HMRC is not complacent. It is intelligence-led and will continually adjust its response to the changing threat. Through its professionalism, flexibility and unpredictability, it aims to continue to provide a good level of protection for the UK’s border.
Sitting suspended until half-past Two o’clock.
Barnett Formula
2.30 pm
Graham Stringer (Manchester, Blackley) (Lab): I am pleased to see so many Members present. I realise that some would prefer the debate not to take place, but I do not think that any area of public policy, particularly those relating to expenditure, should not be open for the debate in the House.
I first became acutely aware of how sensitive the subject was when I tabled early-day motion 402 in the last Session. Essentially, it said that the House was worried that support for the Union between England and Scotland was falling, as was seen in an opinion poll of the time, and, potentially, one of the causes of that was the Barnett formula, which should therefore be reviewed. That remains my position: I am in favour of the Union between England, Scotland, Wales and Northern Ireland, but I believe that the United Kingdom would be stronger if the distribution of public money was seen to be carried out in a fair and equitable manner.
Chris Ruane (Vale of Clwyd) (Lab) rose—
Graham Stringer: I shall give way on that point. I am aware that many people would like to speak, and I like to give way, but I do not want to do so too often.
Chris Ruane: If the Barnett formula was reviewed and if Scotland and Wales ended up with less money, does my hon. Friend believe that that would weaken or strengthen the Union?
Graham Stringer: I am not attacking Northern Ireland, Wales or Scotland. I wish to see public expenditure, which is directed on a per capita basis towards a person in Glasgow, Cardiff or Belfast when it comes to health or education, determined on the same basis in all four home countries.
Having tabled early-day motion 402, I found out that an official from No. 10 Downing street was going round to signatories and, without telling me, was asking them to withdraw their names from the motion because of the sensitivity of the issue. That was a profoundly wrong way for No. 10 officials to behave; such issues are better aired in public debate.
The Prime Minister has said on a number of occasions that he does not believe in a review, but I hope that we can change his mind. I listened carefully to his answer to the question on the Barnett formula today, and I am not sure in what sense he meant that the formula applied to England. It was based either on an obtuse understanding of the Barnett formula or he missed the point. Effectively, the formula applies at the margin and is based on an increase in expenditure in England, not previous expenditure, which is multiplied by a comparability factor of the population. I do not see what the Prime Minister meant when he said that the formula applies to England, apart from the fact that the calculation starts with England. My hon. Friend the Member for Blyth Valley (Mr. Campbell), who asked the question, pointed out, as I shall, that the English regions end up disadvantaged because of how the money is allocated.
The Chief Secretary to the Treasury said, as the Prime Minister had, that there would be no review. However, Wendy Alexander MSP and leader of the Labour party in Scotland—
Stewart Hosie (Dundee, East) (SNP): No she is not.
Mr. Ian Davidson (Glasgow, South-West) (Lab/Co-op) rose—
Graham Stringer: I shall give way to my hon. Friend.
Mr. Davidson: May I advise hon. Members that Wendy Alexander is the leader of the Labour party in the Scottish Parliament? The Labour leader in Scotland, as in the United Kingdom, is my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr. Brown).
Graham Stringer: I am grateful to my hon. Friend for clarifying that, but we were talking about the same person. In The Daily Telegraph on 12 September, Wendy Alexander said that the time might now be right for a review of the formula.
It is excellent to be able to talk to the person who is potentially the greatest living source on the Barnett formula—my noble Friend Lord Barnett. I shared a taxi with him on Monday, and he is clear that the Barnett formula has lasted for much longer than he intended. He is looking to set up an ad hoc Lords Select Committee to examine how money should be distributed between the four home countries, so the debate will continue. That is unfortunate for those who do not like the debate, but it is healthy to have it.
Lembit Öpik (Montgomeryshire) (LD): There is actually a large constituency of support for review of the formula, but does the hon. Gentleman recognise that those of us from Wales assume that any kind of needs-based formula would increase rather than reduce the amount given to Wales?
Graham Stringer: The hon. Gentleman makes an interesting point—I was going to come to it.
Any distribution of public money should be based on equity and fairness, and it should be transparent. Preferably, given the relationship between the four countries, it should have a legislative basis, so everybody knows where they stand. The Barnett formula does not have such a basis.
It is known and recognised, even at street level, that the formula is unfair to the English regions. It is less well known, as the hon. Member for Montgomeryshire (Lembit Öpik) said, that if we were to apply the normal fiscal needs basis to Wales—it might include distribution of population, road length, crime, unemployment, substandard housing and health issues, and the things that are considered in most needs-based formulas—Wales would require more money than Scotland. In actual fact, Wales gets nearly £500 a head less. It is often thought that reviewing the Barnett formula is a matter for the English regions only. It is a matter for the regions, but not exclusively; a review would look for a fairer basis on which to spend money within the United Kingdom.
The debate is about the Barnett formula and I do not wish to get dragged into constitutional conundrums—at least not much—but there are constitutional issues that relate to the formula. People in the English regions feel that they suffer a double whammy: first, they do not get the same level of funding and, secondly, they have less immediate local control over many of the services that the Welsh Assembly and Scottish Parliament control away from Westminster.
Mr. George Howarth (Knowsley, North and Sefton, East) (Lab): My hon. Friend knows that I share much of his analysis of the situation. However, is it not really a triple whammy, because there are huge disparities between English regions, which strengthens the force of his argument?
Graham Stringer: Hon. Members on both sides of the House appear to have had sight of my speech even though I was still writing it half an hour ago. I am coming to my right hon. Friend’s point, but I shall first go through some of the issues that illustrate the unfairness. I could spend the rest of the debate going through the figures, some of which are in the Library debate pack and the Library guide to the formula, but I shall not go through them all.
Last year, disposable household income in Scotland was £11,753, which is £1,000 greater than in the north-east of England. However, when it comes to public expenditure, the north-east of England receives £600 less per capita than Scotland, and the north-west of England receives £800 less per capita. Overall in England, the per capita level of expenditure is £1,000 less.
Angus Robertson (Moray) (SNP): Just for the record and the sake of correctness, will the hon. Gentleman confirm that he is talking about identifiable public expenditure? He is talking not about total public expenditure, but about identifiable public expenditure.
Graham Stringer: I accept the hon. Gentleman’s point. The reason why I do not want to go through a lot of similar statistics is that they do not illustrate as well as real examples why in many English regions and certainly in Manchester, people do not talk about the Barnett formula, but they do now talk about its impact. I shall give the best illustration that I can. It has not been a happy week for my right hon. Friend the Chancellor of the Exchequer, but unfortunately I will have to use him as an example.
When the Crossrail project was agreed, the Chancellor issued a press release that said that Scotland would benefit indirectly from the £16 billion Crossrail project in London. That is not happening on any basis of need and it is particularly annoying for people in Leeds, Manchester and Liverpool, because when the Chancellor was Secretary of State for Transport, he cancelled either tram extensions or trams in those cities. If we work out the so-called Barnett consequentials of that £16 billion—I do not think that they have been made publicly available yet; I have just tabled a parliamentary question to quantify them as exactly as possible—we see that that would have bought at least one tram set for Leeds or Liverpool and possibly two.
We are talking about a Scottish Secretary of State for Transport who cancelled tram systems in England even though he could not affect the debate on whether trams were on the streets of his own city of Edinburgh. Now, when he is Chancellor and there is huge public expenditure on a London project, he boasts that it will benefit Scotland. As my children say, is that really fair?
Mr. Mark Field (Cities of London and Westminster) (Con): Does the hon. Gentleman take the view that others might think that that situation should disbar any Scottish MP in this place from being Secretary of State for Transport, the Home Secretary, the Secretary of State for Health or the Secretary of State for Education? I should be interested to know the hon. Gentleman’s views and those of his colleagues.
Graham Stringer: No, I absolutely do not take that view. Not for the first time is a Conservative party proposal unworkable. It does not deal with the real issue, which is that the situation of people living in Leeds or Birmingham, in terms of their influence on local policies on health and transport, is very similar to that of people in Scotland. Rather than creating a completely unworkable situation in the House of Commons in which there are different classes of Members, it would be better to devolve issues down to local democracy. I do not accept the point that the hon. Gentleman makes.
The example that I have given illustrates the fact that the English regions are not just competing with London, Scotland, Wales or Northern Ireland for resources, but are left out of the complete calculation. That is why, when I walk down the streets in Manchester, although people do not say that the Barnett formula is wrong, they do come up to me and say, “Why does my daughter have to pay tuition fees in England, whereas if we lived in Scotland, she wouldn’t?” They go through a series of issues—hon. Members will be aware of them—from being able to get cancer drugs in Scotland that are not available elsewhere, to the care of the elderly—[Interruption.] I hear hon. Members saying from a sedentary position that that is to do with the Scottish Parliament, but the fact is that the Scottish Parliament, without raising a penny in taxes, can spend money at a higher rate than is the case in England. The whole basis of this debate is to ask for a review so that there is an equitable basis for funding.
I am part of a campaign, with a number of hon. Members from all parties, to try to secure a referendum on the Lisbon treaty or reform treaty or whatever the European constitution is called at the moment. The basis of that is trust: what people say to the electorate should be carried through. What is often not talked about is that in national elections, there is a corrosive effect, certainly within the three major parties, in terms of how they campaign at national level and in the different countries.
I have searched through the manifestos of the Conservative party, the Lib Dems and the Labour party, and there is no mention in the last three manifestos of all those parties for the United Kingdom—in the Great Britain manifestos, to be precise—of the Barnett formula, with one exception. In
2001, the Lib Dems came out against the Barnett formula and were in favour of a review and a fairer basis for funding.
Lembit Öpik: I have two points. The variations in policy cannot all be ascribed to the Barnett formula; there are political distinctions to be made there. However, the most important point is that the hon. Gentleman should accept that the Liberal Democrats have been campaigning for a change in the Barnett formula—for slightly different reasons from the ones that he is giving—for many years. Indeed, we made that a key point in the 2005 general election in Wales and in the most recent Assembly elections, because we think that a needs-based formula, which I think he is calling for as well, is absolutely the right way to go. Even Joel Barnett, who invented the formula, seems to agree that the current formula is bankrupt.
Graham Stringer: I take the hon. Gentleman’s point. Of course, the nature of devolution is that there will be policies at elections in Wales, Scotland and Northern Ireland that relate to those countries, but where there are issues of taxation and expenditure, there is no doubt that the Barnett formula applies to England and has consequences in England. It is very strange, unhealthy and corrosive that it was possible for the previous Prime Minister to go to the Lighthouse in Glasgow on 13 April and say what a great thing the Barnett formula was, whereas it was not mentioned in our 2005 manifesto. That is the real point I am making. There is a level of unintended dishonesty, in that the Conservative party, the Lib Dem party and the Labour party would not campaign hard on what a great thing the Barnett formula is in England, and that needs exposing.
Chris Ruane: I thank my hon. Friend for being so generous in giving way. He perceives that there is an injustice, an inequality, in funding between various countries of the UK.
Mr. George Howarth: And regions.
Chris Ruane: Indeed. Has my hon. Friend also considered the unequal way in which the defence budget is divided up around the UK? I tabled a parliamentary question seven or eight years ago for per capita figures, and it turned out that the north-east did well; Wales did not do too well; and the south-west did well. These issues need to be considered in the round.
Graham Stringer: The way in which parts of the Government’s expenditure are allocated around the country is clearly worthy of debate. I know that all hon. Members fight very hard for their constituencies and I accept the point that sometimes too much goes to one area rather than to another. I wanted to initiate a debate and keep it going about how one aspect of how spatial public expenditure is allocated seems to be fundamentally unfair.
Mr. Davidson: Will my hon. Friend give way?
Graham Stringer: I will, but for the last time. I want to give other hon. Members time to speak.
Mr. Davidson: My hon. Friend is a fine fellow, particularly in his views on the European constitution. However, does he agree that it is important to ensure that any review of spatial expenditure does not focus on the Barnett formula alone? Also, we need a review of expenditure not only within England—I completely accept that we need one here—but in Scotland. It is clear that my area of Glasgow is grossly underfunded in comparison with many other parts of the country, which receive far greater public expenditure although they have far less need.
Graham Stringer: I am sure that my hon. Friend will accept that there are great similarities between post-industrial cities such as Glasgow, Manchester and Leeds in terms of deprivation, health problems and having double the usual level of unemployment. One can go through the statistics. Glasgow, Leeds, Birmingham. Manchester and the other industrial cities should be dealt with similarly—I accept that—but one of those cities should not be dealt with better just because it is north of the border.
I am asking for a review for equity. I understand what some hon. Members are asking: will it mean less for Wales or Scotland? Not necessarily, because time could be taken to make things fairer—one comes to rates of increase when talking about such matters. But if we do not change things, we are accepting that the English regions—I gave what I think is the best illustration, transport policy—will be permanently disadvantaged. I know that some hon. Members in this Chamber, although I am not one of them, believe that it would be a good thing if the English regions were disadvantaged, because it would add to the arguments against the Union. I want the review because I am strongly in favour of keeping the countries in the United Kingdom together.
This debate has not been primarily about the constitution, but about how, rather than the Conservative solution to what is clearly an unfairness, decisions should be taken at a different level in Wales, Scotland and Northern Ireland. I do not think that the House of Commons should be divided into Members of different status, but I think that a serious look should be taken at how local democracy can be given back many of the powers and resources to make decisions that only 50 years ago, within living memory, were taken by county councils and major cities.
Mr. Peter Atkinson (in the Chair): Order. May I say to hon. Members present that I intend to call the wind-ups at half-past 3? Seven Members have indicated in advance that they wish to speak. If I am to get them all in, they will have to speak for approximately five or six minutes each. I ask Members to bear that in mind as it will make the debate fairer for everybody.
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