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My right hon. Friend the Member for Witney (Mr. Cameron) has put forward a sensible proposal on credit insurance, and that and other measures are certainly needed now. We need to re-examine the rules on capital adequacy and consider whether the Financial Services Authority is applying the rules evenly across the banking sector. We also need to consider other ways of improving liquidity throughout the system. This may not be a popular suggestion, but I suspect that sooner or later the Government must address some of the toxicity within the system—the non-performing loans that are undermining confidence between the banks and that are, in the end, making it more difficult for banks to trust each other and return to the levels of lending that we all want to see.

I want to make three points about the Queen’s Speech. My first point directly relates to the earlier comments by the hon. Member for Middlesbrough (Sir Stuart Bell) on how to address the banking decisions that will be taken. We are in a new era of state banking—we own or part-own five of our 10 major banks—and we need some rules. A body called UK Financial Investments has been set up, and the Queen’s Speech should have included a legislative framework for it. If we leave such decisions entirely to ministerial discretion, credit will be rationed by lobbying. There is nothing wrong with lobbying, and hon. Members fight for their constituency interests, but it concerns me that those who shout loudest and who get closest to Lord Mandelson will get the finance that they need, whereas small businesses, such as shops and tiny family firms, that do not have the clout and regional power of, for example, the car industry or the aviation industry will lose out. It is always tempting in this House to focus on a factory or firm that employs 500 people, which is a huge number of people suddenly to be thrown on to the scrapheap, while perhaps neglecting 50 businesses that all employ 10 people, that do not get such attention and that may shut their doors in silence.

UKFI will be with us for years. It is very powerful—it owns or part-owns at least five of our 10 banks—and it is already preparing to intervene in a range of matters, such as remuneration, the appointment of directors and
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levels of lending. We need to be sure that UKFI is put on to a proper basis at arm’s length from Ministers and that it is accountable to this House. The chorus of disapproval about bank bonuses and the frustration that we all share about the shrinkage of credit should not bind us to the dangers inherent in state-directed lending. I am looking for reassurance—we want lending to flow again, but we also want it to be as commercial as possible—and therefore think that the opportunity should have been taken in the Queen’s Speech to put UKFI on to a properly accountable basis.

Secondly, the Queen’s Speech pays no attention to the growing disparity between pensions in the public sector and those available in the private sector. The collapse of stock market values is widening the gap between the quarter of the work force who work in the public sector, who will retire with an average pension of around 21 per cent. of final salary, compared with the remaining three quarters of the work force out there in the private sector, who will retire with an average pension of only 7 per cent. of final salary and who, through their taxes, must meet the cost of funding public sector pensions.

Martin Horwood (Cheltenham) (LD): Does the hon. Gentleman include MPs’ pension arrangements in that consideration?

Mr. Fallon: Yes—I was about to come to that point.

The problem is not only the lack of equity, but that the gap between the two kinds of scheme is growing, which is a moral issue that must be addressed. Of course, some measures need to be introduced on private pensions. I have no difficulty with introducing an element of compulsion as far as the second state pension is concerned, but we need to tackle the public sector schemes, too. If we accept, as my right hon. Friend the Leader of the Opposition accepts, that our own scheme, for example, should be closed to new entrants, we are recognising that something is wrong with our current system.

We need to tackle the various inequalities. The issue concerns not only the disparity between final salary retirements, but other differences. Those in the public sector can largely still retire and take their pensions at 60, whereas others must soldier on for much longer. In a previous incarnation, the Health Secretary said this on 16 October 2005:

It seems to be impossible, because the Government have not addressed that particular disparity.

To refer directly to the intervention by the hon. Member for Cheltenham (Martin Horwood), it is not possible for us to persuade nurses, firemen, teachers or police officers of the need for change unless we are prepared to address our own particular scheme. Under our scheme, if hon. Members put in a decent number of years in this House, they retire not on 21 per cent. of their final salaries but on half their final salaries. It is even possible for Members to retire on two thirds of their final salaries on a contribution of either 6 or 10 per cent. That must be addressed sooner or later, and I suggest that that contribution will probably have to be raised. We certainly need more debate and more transparency about the cost in the public sector. The
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private sector must comply with FRS 17, whereas the public sector still hides behind cash accounting, so the real annual cost and future liabilities are hidden off the public balance sheet.

Finally, the Queen’s Speech included no measures to address the growing imbalance between Government and central institutions and what is happening locally. The Queen’s Speech includes a curious pledge

I have no idea what that means. Surely we should be creating greater opportunities for local decision making by our elected local councillors.

Time and time again in dealing with constituency issues, I have been told that something cannot be done because of national criteria, national guidance, national rules and regulations or national standards that cut across decision making by elected councillors, and I shall provide three brief examples to illustrate that point. First, a recent parking review in Sevenoaks and Swanley resulted in our being told that every parking bay must have its own separate notice on its own separate post, irrespective of the characteristics of that road or avenue.

Secondly, on licensing, the secretary of the Underriver village association has written to me complaining about not only the cost—£21 a time—of obtaining a temporary events notice for the village hall, but the mechanics of going through the process, which do not allow for local common sense. She can fill in the application online, but she cannot apply online, which means that she has to print 24 separate pages of A4. One can avoid that process by obtaining an annual licence, but that involves 33 pages of forms and notes. Why is that matter not simply left to the common sense of local officials?

Thirdly, like any housing association, the major housing association in my area, West Kent housing association, sets out its various points policies—the priority that it accords in housing people on its waiting list. However, it must also follow national priorities so far as homelessness is concerned and various other criteria laid down centrally by the Government. That discriminates against, for example, the need to give higher priority to those who are actually born and bred in the particular town or village rather than those who have come into it.

In all three cases, there is a strong argument for allowing councils more discretion—indeed, for encouraging different practices to ensure more competition by emulation, which in some more federal systems is a huge source of renewal in public policy. I would like there to be a Bill for presumption in favour of the local, so that local councils could decide such things for themselves whenever possible.

David Taylor: The hon. Gentleman’s points are reasoned and reasonable. However, surely he acknowledges that the United Kingdom is more than an archipelago of 300 or 400 district, borough or city councils; he was talking about housing associations, but the same point applies to the 300 or 400 local authorities with housing responsibilities. There has to be some mechanism for addressing county, regional and national priorities, whether
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for the homeless or some other section of the population. The bottom-up approach that he suggests would never address such issues.

Mr. Fallon: The hon. Gentleman’s point of view is perfectly reasonable, but I do not agree. We are nowhere near being, so to speak, an archipelago of 300—or whatever the number is—different islands. We have a highly centralised system that frustrates our elected councillors; the decisions that they make are simply contravened by national legislation, and they cannot exercise the power entrusted to them. I think that the balance has gone too far the other way.

Others wish to speak, so I will conclude. Some of the measures in the Queen’s Speech are welcome. Some will improve the security of our country. However, an awful lot of them do not tackle the economic crisis that we face. They give us no confidence that our homeowners and small businesses will get through this recession unscathed. They will not help people through the recession or provide the reformed, locally accountable services that they deserve. That task will fall to the next Conservative Government.

8.2 pm

Mr. David Amess (Southend, West) (Con): The background to this year’s Gracious Speech is different from that of last year’s; it is as if we live in a different country and a different world. Earlier today, I spent time with a former great parliamentarian, Sir Albert McQuarrie, who is now 90, and his wife Lady McQuarrie. We were discussing the state of the British economy. He felt that the British people had not realised how serious the situation is at the moment.

I wish that the hon. Member for Barnsley, West and Penistone (Mr. Clapham) were still in his place. During his interesting speech, he told us of the danger of a nauseating smell that could be consuming the country. He is right—it is the smell of this rotten Government. They are falling apart in front of us. They have not got a clue how to deal with the current situation, and the Gracious Speech does not address its seriousness.

I want to draw the House’s attention to a few points in the Gracious Speech. It opened by telling us that the

It went on to say that the

What we have seen from the Government so far will simply not do the trick. My right hon. Friend the Leader of the Opposition was in splendid form today. As was mentioned earlier, when a Labour Member intervened on him and asked for five points, he was immediately able to list them. The Prime Minister was Chancellor for 10 years and got us into this mess. The British people are not going to wear any of the nonsense about this being a world situation that is really all the fault of the United States of America. As my right hon. Friend said, if Labour thinks that the British people are silly, it is in for a rude awakening at the next election.

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In 1997, when he was Chancellor of the Exchequer, the Prime Minister was responsible for the system of regulation that has failed at its first hurdle. It was he who removed the power of the Bank of England to regulate the amount of debt in the economy and its responsibility for regulating banks. In place of that power, the Prime Minister set up a new, tripartite system under which no one was in charge. As a rather famous person was reported to have asked not so long ago, did no one notice what was happening? No member of this Government is responsible for anything, so clearly none of them did.

The result has been the first run on a British bank since Victorian times. The British taxpayer has already spent more than £3 billion as a result of exposure to the nationalised bank Northern Rock. The Prime Minister knew that nationalisation would lead to taxpayer loss, and that nationalised bank has made a loss of nearly £600 million so far this year. My party was right to say that nationalisation would be a bad deal for the taxpayer, because that is how it has turned out. The quality of the Northern Rock mortgage book has deteriorated 16 times as fast as the industry average.

John Hemming (Birmingham, Yardley) (LD): The hon. Gentleman says that the Conservative Opposition said that Northern Rock should not have been nationalised. What should have been done, then?

Mr. Amess: I am not going to revisit the argument about what we should have done. The Leader of the Opposition made clear what we would have done, but the reality is that if there had been a Conservative Government, we would not be in this mess now. We would not have taken the power away from the Bank of England.

David Taylor: I am grateful to the hon. Gentleman for giving way. As he knows, I admire his many admirable qualities, although his political judgment is not one of them. He said that if the Conservatives had been in power, none of this would have happened. We shall never know that. However, in an interesting speech, the right hon. Member for Wokingham (Mr. Redwood), one of the soothsayers and thinkers on the right of the Conservative party, was advancing the ideal of a derestricted mortgage market and lessening the controls. Is the hon. Gentleman attracted by that idea from his fellow thinker of the right?

Mr. Amess: My right hon. Friend is not here to defend himself. I have the greatest admiration for the hon. Member for North-West Leicestershire (David Taylor), and I am sorry that he is not standing at the next election. However, he will not tempt me to fall out with a colleague for whom I have the highest regard.

The Gracious Speech also stated that the Government would

As I should have said at the start, there has never been a state opening of Parliament as late as this year’s. The Gracious Speech was full of jokes—every comic should get their hands on it. The Government talk about local decision making, but ever since 1997 they have undermined
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local government. There are now cabinet members and people with other fancy titles in local government, but all their power has been taken away. The country is run by quangos. When this was the mother of Parliaments and we had great powers, on the first day of the debate on the Gracious Speech the Chamber would be packed, particularly with Government supporters. Nowadays we have been dumbed down and no one bothers to listen to what we say. We have no power. This Government have taken power away from local government. They say that they are going to introduce a Bill to give power back to local authorities, but I shall believe it when it happens—that will be up to an incoming Conservative Government.

David Taylor: The incoming Conservative Government may still be seven, eight or nine years away. The hon. Gentleman is a keen defender of the system of county government, and I think he has represented part of Essex for quite a long period. As a keen student of political affairs over the past 35 years or so, does he recall the local government reorganisation that led up to the major restructuring in 1973-74, which was of Conservative inspiration, and the major reorganisation in 1996-97, which took place in the later years of the Major Government? That reorganisation restricted the powers of and weakened local government, and was, in most cases, done in the face of resistance and hostility from the bodies being reorganised. I am sure that, as a fair man, he would acknowledge that.

Mr. Amess: I am afraid that I do not accept what the hon. Gentleman says. For what it is worth, I was a Parliamentary Private Secretary in the Department concerned when all those negotiations were going on, and my recollection of those decisions is completely different from his. However, I will not be tempted to go further down that road.

Next, the Gracious Speech tells us:

I get the impression that there is shock in all parts of the House about what has recently happened with a colleague’s office being raided. Well, I am not shocked, because I have privately been in despair about what has been happening to our police force since 1997. We used to have the finest police force in the world. Now, thanks to Labour, we have a police force that is similar to many others throughout the world, and I greatly regret that. I have had a number of dealings with the police over all sorts of highly sensitive and serious matters, and I have found their behaviour, without question, to be absolutely unacceptable. I am in despair about what has happened. I will not go into detail about those matters, but merely point to one occasion when I happened to need the assistance of police officers. Two turned up, and their behaviour and response were an absolute disgrace.

Because of the way this Government run things, we now have a Home Secretary who does not seem to be responsible for things and it is supposedly acceptable that she has not been told about them. Earlier today, I was chatting to two former Home Secretaries. The idea that they would not have been in the loop is absolutely crazy. Sir Ian Blair would not have lasted two minutes. Who is wagging the tail? This is the mother of Parliaments.
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This is where we make the law—it is not the other way round. The police are no longer accountable to anyone. I fully back the Independent Police Complaints Commission and its chief executive. It does a splendid job, but this Government have not given it the necessary power or teeth. My constituents have to go through so-called local resolution, which we have for the health service and for the police, and when they have done that and eventually get to the IPCC, it is like a war of attrition. The police never apologise for anything, and it is one law for them and another for us. In the light of what has happened to a colleague, this is a tragedy, and we cannot leave it like that. For once, Members from all political parties must unite to restore the sovereignty of this place. I listened carefully to what Mr. Speaker said earlier, and I think that we were all heartened by that measured statement. He said that he will look very carefully at the wording of the motion that the House debates on Monday.

We have these organisations called police authorities, but I find over and again that if I take a problem to Essex police authority it seems to have no power to do anything, so what is point of them? It is interesting that the Government say that we are going to have yet another Bill, but it will be up to the incoming Conservative Government to restore the police service to what used to be the envy of the world.

The next part of the Queen’s Speech that I want to refer to says that the Government

We all agree with that. However, under Labour this has become a very unjust country in which to live.

Then we are told that because

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