Julia Goldsworthy (Falmouth and Camborne) (LD):
Can the Chancellor clarify the exact level of security that the Government have on their £24 billion loan to
Northern Rock? Is it not the case that while half of it has good security, the other half is optimistically secured against the banks free assets, the value of which is now under question in the falling housing market?
Mr. Darling: As I said when we last discussed these matters in the House, the Bank of Englands lending is secured against assets currently held by Northern Rock, as we would expect. I am not sure whether the Liberal position is that we should or should not have intervened; that is not terribly clear to me. However, having decided to take the action to support Northern Rock, it is important to see it through. At the moment, discussions are taking place with Virgin with a view to a possible acquisition, and clearly I will keep the House informed. Having decided on a course of action, the important thing is to see it through to ensure that we can maintain stability in the wider system as well as ensuring that we do everything that we can to help the position in relation to Northern Rock.
Mr. Michael Fallon (Sevenoaks) (Con): Given the huge amount of taxpayers money now pledged, rumoured to be about £25 billion, why should the actual amount of the loan, the terms of the loan and the repayment schedule continue to be kept secret from Parliament?
Mr. Darling: For the very good reason that if central banks provided what would in effect be a running commentary on such support, they would find it difficult to be able to intervene. The hon. Gentleman is a member of the Treasury Committee, and one of the questions that it is considering for the future is how the Bank of England and other central banks provide effective support. There has been a lot of discussion about that. Providing a running commentary on what central banks happen to be doing at times such as this would not be a very good idea, but, as I said when I appeared before the Committee, I know that it is considering the matter, and I will be happy to consider any recommendations that it has.
Sir Peter Tapsell (Louth and Horncastle) (Con): The protection of the position of the depositors and shareholders of Northern Rock is of pre-eminent importance, but does the Chancellor agree that while the liquidity crisis of the worlds largest banks continues, consideration should be given to an easing of the regulatory capital requirement under the Basle agreement?
Mr. Darling: I agree with the hon. Gentleman that protecting depositors is important; that is why I provided the guarantees that I did when Northern Rock got into difficulty. In relation to the wider issues, I also agree that it is not just capital adequacy that is important but the availability of liquidity. The House may be aware that the Bank of England announced this morning that it is injecting additional sums into the system through its market operations, especially as we approach the year-end, when banks will be reporting. I think that the Governor made a statement to that effect when he appeared before the Treasury Committee earlier today.
I am sure that many people will welcome the fact that the Bank has said that it will make that facility available and that it stands ready to take whatever action is appropriate to ensure that overnight bank lending rates remain as close as possible to the Banks current rate.
Mr. Philip Hammond (Runnymede and Weybridge) (Con): The Chancellor previously told the House that he could not publish the letters from the Governor of the Bank of England and the chairman of the Financial Services Authority because although the Governor agreed to his letter being published, the chairman of the FSA did not agree to his letter being published. Question 4 asks the Chancellor to publish the Governors letter. Will he ask the chairman of the FSA if he has any objection to the Governors letter being published, and if he does not, will the right hon. Gentleman give the House a commitment that he will publish it?
Mr. Darling: As I said in my initial reply, I will keep the matter under review, but I have also said that the Governors letter, the letter from the chairman of the FSA and my reply to them have to be seen as a whole. I do not think that it is in the public interest to publish them at the present time.
The Exchequer Secretary to the Treasury (Angela Eagle): As Lord Leitch set out in his independent report on the UKs long-term skills needs, the improving skills profile in the UK work force over time has contributed to economic growth. He also concluded that a skilled work force are increasingly critical if the UK is to continue to grow to meet global challenges. [Interruption.] Therefore, the Government will increase expenditure on higher education and adult skills by £2.2 billion over the next three years to support further improvements in the UK skills base at all levels.
Mr. Speaker: Order. The hon. Member for Bolsover (Mr. Skinner) has had his question and now he must listen to others. It is something he will have to learn, and it is not too late for him to learn after all his years in this House.
Mr. Jones: Would my hon. Friend agree that for regions such as the north-east, a highly skilled work force are essential? Would she congratulate the North East Process Industry Cluster, based in Teesside, which is doing a lot, not only to identify skills shortages and to ensure that they are filled, but to encourage youngsters in schools and to target women with regard to the good career structure in the process industries?
Angela Eagle: My hon. Friend is absolutely right. It is important that the Government and employers work together to identify those areas where there are skills shortages and act with the money that we have been able to give to deal with them. The latest national employers skills survey has just demonstrated a fall in employers reporting skills gapsdown from 22 per cent. of employers in 2003 to only 15 per cent. this year.
Ms Angela C. Smith: Does my hon. Friend agree that employers must play a much bigger role in improving the skills levels of the UK work force? Does she also agree that more must be done to get employers to meet this challenge?
Angela Eagle: I agree with my hon. Friends comments. That is why the train to gain budget, which involved employers closely in the design and supply of training in employment, has been doubled and will stand at £1 billion by 2010-11.
Mr. Richard Spring (West Suffolk) (Con): Given the constant complaints of industry about the poor technical skills base in this country, why is it, after 10 years, that we still lag so dramatically behind competitor countries such as France and Germany?
Angela Eagle: We started from a lower base after 18 wasted Conservative years, which saw apprenticeships all but destroyed, massive youth unemployment and an entire generation condemned to the scrap heap. We have made great progress in the last 10 years, and we intend to make even more in the next three.
Mr. John Redwood (Wokingham) (Con): Given the need for great skill when undertaking banking transactions, such as making large loans or keeping money markets liquid, what plans are there for Treasury Ministers to go on courses?
Phil Wilson (Sedgefield) (Lab): Does my hon. Friend agree that this Governments commitment to skills has led to 1.8 million people finding jobs because of the new deal? Because of that and other skills initiatives, and the strong economy, unemployment in my constituency is now beneath the national average. Under the Tories it was 40 per cent. in some areas.
Angela Eagle: I agree wholeheartedly with my hon. Friend. We now have 2.8 million more people in work than we had 10 years ago, and 1 million fewer on out-of-work benefits, which cuts the bill of failure and allows us to give opportunities to many people that were never there in the 18 wasted Tory years. We intend to continue, deepen and broaden that good record.
Miss Julie Kirkbride (Bromsgrove) (Con): The Minister will have seen in the newspapers this morning that the UK has fallen down the world rankings in the league for the reading skills of 10-year-olds. Does she consider that to be a good thing for UK skills in computing or a bad thing for UK skills overall?
Chris Ruane (Vale of Clwyd) (Lab): My hon. Friend the Member for North Durham (Mr. Jones) praised apprenticeship schemes on Teesside. I want to praise apprenticeship schemes on Deeside. The Airbus factory in Broughton in north Wales has run 1,200 apprenticeships over the past 10 years, and dozens of those young apprentices are from my constituency. Those top-quality jobs have primed our local economy, which is one of the fastest growing in the country. What plans does my hon. Friend have to come and visit the Broughton factory and see the best practice in the UK?
Angela Eagle: I am more than happy to visit my hon. Friends constituency to see the great work that is being done. The Government have funded a renaissance in apprenticeships. There are now 250,000, and there were only 87,000 when we came into power. We have further plans to create 500,000 by the end of the comprehensive spending review period. Those apprenticeships offer fantastic skills and opportunities, none of which was available during the era of mass unemployment when the Conservatives were last in power.
The Chief Secretary to the Treasury (Andy Burnham): The latest published estimate of the total liability for the UKs unfunded public service pension schemes is £530 billion as at 31 March 2005. As we stated in the pre-Budget report, updated estimates will be published alongside the next long-term public finances report.
Mr. Swire: Despite being repeatedly pressed by the Opposition, why has it taken the Government so long to address the anomaly whereby the discount rate applied to the public sector pensions liability calculation has not for years reflected the Governments cost of borrowing, which is what private sector companies are required to do?
Andy Burnham: The hon. Gentleman will know that those are complex calculations. The Government makes updated assessments of the discount rate. Indeed, we are applying new figures released from the Office for National Statistics in October and will come back soon with an updated assessment of the long-term liability. We will publish that in the context of the long-term report on the health of the public finances, which will be published in the new year.
Justine Greening (Putney) (Con): The Minister has just admitted that the last Government assessment of public sector pension liability is well over two and a half years old. I am sure that the hon. Member for Bolsover (Mr. Skinner) will be interested, because he no doubt represents a large part of that liability.
Actuaries Watson Wyatt estimate that the liability today could be as high as £960 billion. Perhaps the Minister can confirm whether the two-and-a-half to three-year cycle between forecasting public sector pension liability is a new approach to Government policy, or did Ministers not get round to doing it earlier merely because of incompetence?
The Conservative party has to be a bit careful with the figures. Let us be clear about what the estimates are. They are notional figures that relate to all future payments that will have to be made over eight decades. The hon. Ladys colleague, the shadow Chief Secretary, told the Sunday Mirror last week that that will mean that
Every family in Britain will pay £33,000 to fund the pension promises he has made to public sector workers.
Miss Anne Begg (Aberdeen, South) (Lab): Is it not worth remembering that pensions are deferred salaries? The work that we get from our public sector, on low pay and working long hours, means that the liabilities of the public sector pension are value for money.
Andy Burnham: I endorse my hon. Friends comments. We have been looking at public sector schemes, whichespecially the teachers scheme, the civil service scheme and the NHS schemehave been subject to reform in recent years. Let us remember that those reforms, which we debated, were difficult, but, as my hon. Friend rightly says, they are sustainable as they go forward now, and give a fair return to those valuable public sector workers who provide services on which we all depend. The implication of the quote of the shadow Chief Secretary that I read out is that the Opposition would not fund those schemes in the way in which we propose. They need to explain to public sector workers exactly what they would do to those pension schemes.
Mr. Philip Dunne (Ludlow) (Con): The Chief Secretary has just referred to the public sector pension liabilities, which pay the pensions of millions of public sector workers who have retired over many years, as though they were some rough estimate that the Government can choose to publish when they like. They are already nearly a year behind their original schedule for publishing the figures. Surely he should take the matter far more seriously.
Andy Burnham: I take it extremely seriously. As I explained to the hon. Member for East Devon (Mr. Swire), it is a complex calculation and we will therefore take our time to get it right. It is a complex figure which should not be grossly simplified and misrepresented. The previous long-term public finance report, which was published last Decembernearly but not quite a year agostated that public sector pension schemes were sustainable over 50 years. That is a fair judgment which we made and put into the public domain. When we have new figures, we will put them in the public domain so that a balanced judgment can made on them rather than the alarmist and misleading debate that the hon. Gentleman and his colleagues are trying to get going.
The Chief Secretary to the Treasury (Andy Burnham): Per pupil expenditure in England has risen from under £2,500 in 1997 to £5,600 in 2007-08. That has supported a sustained increase in attainment. In 2007, 60.3 per cent. of pupils achieved five or more GCSEs at grade A to Cup from 45.1 per cent. in 1997.
Mr. Simon: Schools in my constituency have improved considerably under Labour, but official unemployment is still 10 per cent. and worklessness is nearly 50 per cent. after 10 years of a Labour Government. How will we convince kids to buy into staying on at school and in education up to the age of 18 when, in my constituency, on finishing education they still cannot get a job?
Andy Burnham: I recognise the issues to which my hon. Friend draws attention because my constituency has a similar profile to his. The figures that I read out do not show that the improvement in schools has been much more marked in areas such as those that he and I represent than it has been in the rest of the country. I believe that that will bring long-term benefits to the economies of Leigh and the part of Birmingham that he represents. Long-term unemployment is significantly down in the west midlands from around 36,000 to 11,000, but he is right: as the Prime Minister made clear this week, we need to do more to integrate the benefits system and the skills services on offer to get people back into work.
Mr. James Gray (North Wiltshire) (Con): Could the disconnect between results in the constituency of the hon. Member for Birmingham, Erdington (Mr. Simon) and the hundreds of millions of pounds spent on education in the past 15 or so years be accounted for by the university of Cambridges primary review report, which was produced this month? It stated that the hundreds of millions of pounds have been spent on various educational policies, which were poorly researched, not tried out on the ground and largely a waste of money.