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Mrs. Cheryl Gillan (Chesham and Amersham) (Con):
On Monday, the Prime Minister borrowed more money than any Government in history, in a gamble that puts a time bomb in the pocket of every family in Wales. Let
us understand what that means: schoolchildren in Wales today will spend most of their lives paying off this Labour Government’s debt. With the revelation of the secret plans to raise £5 billion through a VAT hike on top of the other tax increases, what impact will that have on the people and businesses in Wales?
Mr. Murphy: The hon. Lady knows that my right hon. Friend the Chancellor of the Exchequer has already said that that will not be the case, but on the hon. Lady’s general comments, the important point that Welsh people understand is that the Government are acting on their behalf—acting on behalf of businesses; acting on behalf of pensioners; acting on behalf of households. What would the Opposition do? Absolutely nothing. We have had lots of criticism about borrowing, as if we were the only Government in the whole world who were borrowing a great deal of money, but she knows that the United States, for example, is likely to borrow 25 times as much as we are, because they are doing exactly the right thing—as we are, in order to save our businesses and to help the people of Wales. The Opposition have absolutely nothing to offer them.
Mrs. Gillan: I hope that the Secretary of State is right, but he knows that he is not right when he says that we would do absolutely nothing. That is not the truth. With a further £5 billion of Government efficiency savings, the Secretary of State told The Western Mail that the public sector should tighten its belt, and that the savings are about such things as procurement and the right contracts for IT. The Archbishop of Wales said today that people are just as important as the bottom line, so, in fairness to the people whose jobs will be affected, will the Secretary of State tell the House which procurement contracts and IT projects he was referring to, and which areas of the public sector in Wales will have to tighten their belts?
Mr. Murphy: The hon. Lady knows as well as I do that the Government should at all times be conscious of value for money, but particularly at this time. She will also be aware that a large number of savings have already been made throughout Government on procurement contracts, computer contracts, and bought-in services such as human resources—not just by ourselves, but by the Welsh Assembly. However, she still has not told us what the Conservatives will do for Welsh people in these difficult times. It is no good just hoping that the recession will go away while doing absolutely nothing. We still do not know their plans.
Renewable Energy
3. John Robertson (Glasgow, North-West) (Lab): What recent discussions he has had with the Welsh Assembly Government on renewable energy projects in Wales. [237999]
The Parliamentary Under-Secretary of State for Wales (Mr. Wayne David): My right hon. Friend and I have regular discussions with Welsh Assembly colleagues on energy projects. Renewable energy has a vital role to play in the future energy economy of Wales and of the United Kingdom as a whole.
John Robertson: As an existing low-output energy source, nuclear should be a part of that mix. My hon. Friend will know that the Nuclear Decommissioning Authority will auction off the nuclear sites in Wales in the next few weeks, so will he assure me that we will not get into the battle that we have had in Scotland, where the argument has been thrown out with the bathwater, and that we will have a proper discussion about energy sources in Wales?
Mr. David: Yes, it is vital to have a comprehensive energy discussion and a strategy. Global energy challenges require a diverse and increasingly low-carbon mix that includes the consideration of all reasonable options. Increased energy efficiency, renewables, carbon capture and storage and nuclear power all have vital roles to play. I am sure that my hon. Friend will be aware that the Wales Office has publicly supported building at the existing Wylfa nuclear power station on Anglesey, and that is very important not only in itself but for the island’s economy.
Lembit Öpik (Montgomeryshire) (LD): Is the Minister aware that Powys citizens would much prefer to have their street lights powered by renewable energy than to have them switched off wholesale by the local authority, plunging the county into a new dark age, the like of which has not been seen in the area since the blackouts of world war two? Will he consider diverting the extra £235,000 that has been given to the Wales Office for administration purposes to keep the lights of Powys on, using renewable sources?
Mr. David: Obviously, street lighting is tremendously important for all our communities. However, I am sure that the hon. Gentleman will acknowledge that the work of the Wales Office is extremely important, particularly with regard to the effective implementation of the Government of Wales Act 2006. The hon. Gentleman would not want those resources to be diverted, even if it were possible. He should really make representations to the Welsh Assembly Government. Then, I am sure, his comments will have some effect.
Joan Walley (Stoke-on-Trent, North) (Lab): Will the Minister consider visiting the National Centre for Alternative Technology in Machynlleth to see for himself the work being done on renewables? Will he talk with his Cabinet colleagues about ways in which the UK can help with the additional funding needed for the Wales Institute for Sustainable Education research project under construction there?
Mr. David: The Centre for Alternative Technology at Machynlleth is indeed extremely important; it demonstrates various ways of living a more sustainable lifestyle and its work is relevant not just to Wales but to the whole of the United Kingdom. I understand that the centre offers a consultancy service for business and private clients who wish to follow a more eco-friendly approach. I have visited the centre in the past, and I give a commitment to visit it once again as soon as is humanly possible.
Robert Key (Salisbury) (Con): Will the Minister visit the website www.stopthebarrage.com? He will find a growing list of organisations and individuals opposed to causing irreversible damage to the Severn estuary, but strongly in favour of using tidal flow energy as an important renewable resource.
Mr. David: The issue of the Severn tidal barrage is extremely important. Numerous studies have been carried out in the recent past and before that. As a Government, we have to recognise that we are committed to reducing CO2. The Severn tidal barrage could have a huge effect on the economy of the country as a whole and on our efforts to reduce carbon emissions. I am absolutely convinced that the Government will keep on looking positively at the initiative and studying the possibility of establishing an economically sustainable Severn tidal barrage.
Mr. Peter Hain (Neath) (Lab): Will my hon. Friend ignore the strictures of the hon. Member for Salisbury (Robert Key) and look at the expert evidence from Dr. Rob Kirby? It shows that there has been a catastrophic decline in shore bird species—especially the dunlin—in the past 40 years because of the different impacts of the environment on bird life in the Severn estuary. If we had a Severn barrage, biodiversity would rapidly increase. It would be a win-win, representing the biggest renewable energy project in Britain and an improvement in biodiversity, including shore bird life. Will the Government please go ahead and push the project?
Mr. David: I commend my right hon. Friend for the excellent work that he did as Secretary of State for Wales in taking forward the project. It is important. The Sustainable Development Commission has given it a positive recommendation, and there is a strong case for further investigation into a sustainable Severn barrage. I give a commitment to the House that the work will continue.
Public Sector Jobs
5. Mr. Elfyn Llwyd (Meirionnydd Nant Conwy) (PC): What recent discussions he has had with the First Minister and ministerial colleagues on the economic effect of proposed public sector job reductions in (a) the European convergence area of west Wales and the valleys and (b) Wales generally; and if he will make a statement. [238001]
The Secretary of State for Wales (Mr. Paul Murphy): I am conscious of how important public sector jobs are to Wales; that is why in the past few years nearly 3,300 such jobs have come to Wales. For example, there have been 286 Pension Service jobs in my constituency.
Mr. Llwyd: I am afraid that that is a rather complacent and disappointing answer. It is disappointing because for months now I have been pressing the right hon. Gentleman to intervene on the job cuts in Wales. Only this week, my hon. Friend the Member for Caernarfon (Hywel Williams) was told that 2,200 extra jobs would now be created in the Department for Work and Pensions. I urge the right hon. Gentleman to ask for a moratorium on the damaging cuts in Wales.
Mr. Murphy:
The hon. Gentleman has raised the issue on a number of occasions, as have other Members. Last week, I discussed the matter with my right hon. Friend the Financial Secretary. The hon. Gentleman is aware that as far as Her Majesty’s Revenue and Customs is concerned, no job losses are involved, and there will be no compulsory redundancies. He is also aware that,
only yesterday, my right hon. Friend the Secretary of State for Work and Pensions announced that there would be no closures of Jobcentre Plus offices in Wales, as had previously been planned.
Albert Owen (Ynys Môn) (Lab): Will the Secretary of State for Wales join me in welcoming yesterday’s announcement by the Secretary of State for Work and Pensions not to go ahead with the proposed closure of jobcentres in Wales at this crucial time? We need more support for front-line services that help those faced with unemployment. Investing in the unemployed is the price worth paying, not what the Opposition offered in the 1980s.
Mr. Murphy: Yes, of course. I very much welcome what my right hon. Friend the Secretary of State for Work and Pensions announced yesterday. The whole point of his announcement was that this Government act on behalf of Welsh people and businesses, as opposed to the Opposition, who have absolutely nothing to do or say on the issue of the recession.
Prime Minister
The Prime Minister was asked—
Engagements
Q1. [239195] Sir Peter Tapsell (Louth and Horncastle) (Con): If he will list his official engagements for Wednesday 26 November.
The Prime Minister (Mr. Gordon Brown): Before I list my engagements, I am sure that the whole House will join me in sending our profound condolences to the family and friends of Marine Alexander Lucas, who was tragically killed in Afghanistan on Monday. We owe him and all those who have lost their lives in conflict our grateful thanks for this service and for their sacrifice.
This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today.
Sir Peter Tapsell: I join the Prime Minister in his lament at the death in action in Afghanistan of yet another of our heroic young men.
Since the chairman of the Royal Bank of Scotland has publicly apologised for wrecking his bank, will the Prime Minister apologise to the nation for wrecking the British economy?
The Prime Minister: I am very pleased to hear— [ Interruption. ]
Mr. Speaker: Order. Let the Prime Minister speak. [ Interruption. ] Order. Mr. Gray, be quiet. I keep on telling you to be quiet and you do not do it, so perhaps I will have to make a move against you. Behave yourself.
The Prime Minister: Let me remind the House of what the hon. Gentleman said last week. He said that we should “boost consumer demand”, cut VAT and
“increase investment in public works”.—[ Official Report, 17 November 2008; Vol. 483, c. 33.]
He said that he was a Keynesian who believed in “further borrowing”. He persuaded me, but he did not persuade those on the Conservative Front Bench.
Colin Burgon (Elmet) (Lab): Does the Prime Minister agree that we should crack down on unscrupulous moneylenders such as Mobile Money Ltd, which recently sent a letter to a student constituent of mine, offering to lend her £5,000 in cash, with no credit checks, at an interest rate of 378 per cent.? Her father was outraged; does the Prime Minister share that outrage?
The Prime Minister: The Business Secretary is holding a summit today on the credit card industry. He is looking at excessive interest rates that have been charged. We have to have proper measures to regulate the industry when people are charging exorbitant rates. We will take whatever action is necessary, and I hope that it will have all-party support.
Mr. David Cameron (Witney) (Con): May I join the Prime Minister in paying tribute to Marine Alexander Lucas, who was killed in Helmand province on Monday? Our thoughts should be with his family and his fiancée at this time. We should also pay tribute to the incredibly brave marine, reported in today’s papers, who rugby-tackled a suicide bomber and saved literally dozens of his colleagues from death. The bravery of our armed forces is something that we can all be incredibly proud of.
If the Government do not have a secret plan to increase VAT, can the Prime Minister tell me why the Financial Secretary to the Treasury put his signature to it?
The Prime Minister: We looked at every option over the last few weeks, including options that were taken up by the last Conservative Government, and we rejected the proposal to raise VAT, in favour of a proposal to lower VAT. Let me tell the House why. We looked at the 1980-83 recession, and we found that when the Conservatives raised VAT from 8 to 15 per cent., hard-working families were hurt. We looked at the 1990s and found that when the Conservatives raised VAT from 15 to 17.5 per cent., hard-pressed families were hurt. When the Leader of the Opposition was an adviser to the Treasury, it tried to raise VAT on fuel to 17.5 per cent. We looked at all options, as the Chancellor said. We rejected the option of raising VAT; we decided we would lower it, and I hope that the Conservative party will support us.
Mr. Cameron: The Prime Minister cannot claim that this is some madcap idea that he immediately rejected. I have got the document right here. It is called the Value Added Tax—
Chris Ruane (Vale of Clwyd) (Lab): Give it back!
Mr. Cameron: “Give it back!” the hon. Gentleman says—he can get the document on the internet. [ Laughter. ] There go the dinosaurs. It is called the Value Added Tax (Change of Rate) Order 2008 and it says this:
“Ministerial Sign-off...I have read the Impact Assessment and I am satisfied that...it represents a fair and reasonable view of the expected costs, benefits and impact of the policy...Signed by the responsible Minister: Stephen Timms...24 November”.
It is absolutely clear that the Government are planning a VAT bombshell to hit every family in the country. Let me ask the Prime Minister this—he should answer carefully; we may carry out some freedom of information requests. Was there a plan to raise VAT even further than 18.5 per cent.?
The Prime Minister: I have said that we had considered all options, but we rejected them. I shall tell the House why we rejected those options. We rejected them because, as the Chancellor said on Monday, we chose the options that were fairest to ordinary, hard-working families. The question is: do the Conservatives now support cutting VAT from 17.5 per cent., or are they simply the do nothing party that would not help people in times of real need?
Mr. Cameron: So there we have it from the Prime Minister: this plan for even higher VAT was considered. The Prime Minister asks what we would do. I will tell him. We would freeze the council tax by cutting wasteful spending. We would cut small businesses’ VAT bills by £10 billion by allowing them to delay payments. We would ensure that the loans got out of the banks by giving Government insurance to those loans, to get small business working again. Instead of sitting in Downing street making up nonsense about the Opposition plans, why does he not do something useful? Everybody knows that Labour is putting up taxes because there is a black hole at the heart of the public finances. Let me turn to why the black hole is so big. Will the Prime Minister confirm that his plans will double the national debt?
The Prime Minister: The national debt, even after the difficulties that we go through, will be lower as a percentage of national income than in France, Germany, Italy and Japan, and almost certainly in America. The message that the Leader of the Opposition is trying to communicate is that we can do something without spending any money. The truth is that his policy ends up doing absolutely nothing to give real help to families and businesses now. If he has a proposal, it means that he would have to spend to meet it. The fact is that the Conservatives would do nothing in the end and leave the families of Britain without real help and support. We are not going to take the do nothing road of the ’80s and the ’90s; we are going to give real help to families and businesses now.
Mr. Cameron: There is absolutely nothing stimulating about what the Prime Minister is proposing. What he is proposing is to borrow a huge amount of money, to cut prices marginally when they are already falling and to hit every family with a tax bombshell in two years’ time. What is so stimulating about that? I do not know where the Prime Minister goes shopping, but the shops are discounting by 20 or 30 per cent. already. Let me return to the national debt and read the Prime Minister the figures. Page 198 of the pre-Budget report says that last year the national debt was £527 billion. In five years’ time, it will be £1.1 trillion. It is a simple question, but let me repeat it: does he admit that his plans will double the national debt?
The Prime Minister:
We published the figures and they make it absolutely clear that national debt in Britain will rise to 58 per cent. It happens to be 58 per
cent. at the moment in France and Germany and it will rise there. It is more than 100 per cent. in Japan and 90 per cent. in Italy, and is going to rise to 70 per cent. or more in America. When we are faced with unique and unprecedented circumstances, the question is: do we take the action that is necessary? We will give real help to families and businesses now.
The Conservative answer is to let the recession take its course. I have talked to leaders in every part of the world and nobody is saying to me what the Conservative health spokesman—the hon. Member for South Cambridgeshire (Mr. Lansley), the one person who has been guaranteed a job in the Cabinet, if there ever was one headed by the Leader of Opposition—has said. He said that
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