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Question put forthwith (Standing Order No. 31(2)), That the proposed words be there added.
M ain Question, as amended, put and agreed to .
That this House acknowledges the excellent reputation of emergency and urgent care services in the UK; commends the expertise and dedication of NHS emergency and urgent care staff who work around the clock to provide a consistent and reliable service; notes the strain placed on accident and emergency departments across the 5 country from winter viruses, and commends NHS staff for their extra efforts to maintain services in the face of such pressures; supports the improvement of acute hospital services and development of specialist centres where appropriate; acknowledges that health professionals provide excellent emergency care to 19 million patients a year in England; recognises the unique contribution made by community first responders; notes that the four hour target maximum wait in accident and emergency is hailed by many as one of the most significant steps forward in improving services for patients; welcomes the fact that patients can also access services through NHS Direct and 90 NHS walk-in centres and will soon see the benefits of 113 new GP practices in underdoctored areas and at least one new GP-led health centre in each primary care trust open seven days a week from 8 am to 8 pm; and further notes that the removal of target maximum waits for treatment will increase waiting times for patients.’.
Mr. Deputy Speaker: Order. Before we move on to the next debate, I should observe that Mr. Speaker expects Divisions to take no longer than 13 or 14 minutes. I will therefore draw his attention to the 20-minute time lapse today.
Mr. David Winnick (Walsall, North) (Lab): On a point of order, Mr. Deputy Speaker. Will you confirm that it is not intended to move the freedom of information order that is on Thursday’s Order Paper? If that is so—I believe that it is—many of us will welcome the fact that we will not be exempted from freedom of information legislation. That was passed by the House, it applies to others and obviously it should apply to us. The move is very welcome, and I hope that you will be able to confirm that what I have just stated is the position.
Bob Spink: Further to that point of order, Mr. Deputy Speaker. May we have an urgent business statement? There is considerable confusion about what motions on Members’ allowances will be taken tomorrow and under what constraints votes will be taken—in particular, whether deferred Divisions will be allowed.
Mr. Deputy Speaker: Order. The matter raised by the hon. Gentlemen is, of course, strictly for the Government and not for the Chair. However, I am aware of media reports that there has been a change in the business previously announced for tomorrow. Perhaps the Government will seek to acquaint the House formally of that change. [Interruption.] If so, I assure the House that the Chair will facilitate that.
The Leader of the House of Commons (Ms Harriet Harman):
Further to that point of order, Mr. Deputy Speaker. Perhaps I can assist the House by saying that we will seek to bring a number of the motions tabled last Thursday, in my name as Leader of the House, to the House tomorrow for debated decision—and that
there is one that we will not. Let me state which ones we will take forward. We will take forward the motion that endorses the new Green Book, which we argue has tougher rules in it. Secondly, we will bring forward the motion that provides for audit and assurance, so that we can all be sure that the rules in the new Green Book are properly applied.
Thirdly, we will come forward with a proposal that every year, irrespective of whether there has been a Freedom of Information Act request, there should be publication in 26 categories of all the money that all hon. Members have spent in that year, and on what. Fourthly, there will be a motion to establish a Committee of the House on members’ allowances, instead of the Advisory Panel on Members’ Allowances. That, incidentally, will not have a Government majority on it. We will go ahead and bring those motions to the House tomorrow for debate and decision. But we will not be proceeding with the statutory instrument under the Freedom of Information Act 2000.
Mr. Deputy Speaker: Order. I cannot cavil about the fact that the right hon. and learned Lady has responded so quickly to what I said, but she will understand, as will other hon. Members, that that places me in difficulty in that we have a time-limited debate for which many hon. Members have applied to speak. We cannot have a full debate on the contents of the statement made under a point of order. However, in the circumstances, because this is very much a House of Commons matter, I will allow the hon. Members for Rutland and Melton (Alan Duncan) and for Somerton and Frome (Mr. Heath) briefly to respond. I hope that everyone will understand that then we really must move on: we cannot treat this as a business statement pre-empting the other business of the House.
Alan Duncan (Rutland and Melton) (Con): Further to that point of order, Mr. Deputy Speaker. I am grateful for your guidance, and of course we will leave most of these matters until tomorrow. May I seek from the Leader of the House clarification on the status of the last four years of receipts now that the attempted motion to stop their being revealed has been removed? Will they be published in full, as now appears likely?
Mr. David Heath (Somerton and Frome) (LD): Further to that point of order, Mr. Deputy Speaker. Obviously, many Opposition Members will greatly welcome the withdrawal of the statutory instrument on freedom of information. However, is it in order to proceed with a publication scheme that is expressly not in accordance with the judgment of the High Court?
Ms Harman: I will have to discuss with the Clerk of the House how the House authorities—the data holders—will proceed with the existing 180 Freedom of Information Act requests. I am not trying to stonewall on this, but I have not yet had a chance to speak to the Clerk of the House. I will do so, and we will debate this further tomorrow.
The Liberal Democrat spokesperson asked whether this obviates the need for a publication scheme for the generality of all Members of the House. The publication scheme will provide information to members of the public, without its having been requested, on all Members
of the House every year. However freedom of information requests are dealt with, it is still important that as well as having tough rules and robust audit, we have a scheme to put in the public domain, without its having been asked for, information about what all Members are spending every year, and on what.
Mr. Deputy Speaker: Order. The House has now heard officially about a change of business for tomorrow, and we must move on.
Savers
4.27 pm
Mr. Philip Hammond (Runnymede and Weybridge) (Con): I beg to move,
That this House recognises that the reduction in interest rates since October 2008 has been a necessary policy response to the recession, justified by the dramatic reversal of inflationary pressures; believes that the role of Government in a recession is to support those most affected in the short term, while strengthening the economy for the recovery; notes that lower income savers have suffered significant losses as a result of interest rate reductions, and are likely to have a high marginal propensity to spend any increase in post-tax income; further notes that older savers, in particular, are a group who have acted responsibly during the so-called age of irresponsibility, and should be rewarded rather than penalised for their thrift; acknowledges the decline in the savings ratio from 9.9 per cent. to 1.8 per cent. since the second quarter of 1997; believes that more needs to be done to promote a culture of saving during the period of recovery and end Britain’s addiction to debt; and calls upon the Government, in the next Budget, to cut taxes for savers by reducing the starting rate and basic rate of tax on savings to zero, paid for by reducing the real growth rate of Government spending in 2009-10, as the Government has already committed to do in 2010-11.
In the next few days, we will learn for certain that the UK is in recession. The Chancellor has already signalled that his prediction, made as recently as the pre-Budget report in November, that the UK would resume positive growth in the second half of this year is now unlikely to be achieved. Earlier this week, the European Union published its projections showing that the UK will suffer the longest and deepest recession of any EU country except for the Baltic states and Ireland. That means that even the pre-Budget report estimate of a staggering £118 billion budget deficit for 2009-10 now looks optimistic.
Just in the course of this week, we have seen another multi-billion-pound banking rescue package as the Government desperately struggle to address the failure of the October package to deliver the credit flow that the economy so desperately needs.
The Government’s record to date consists of: a failed stamp duty holiday, which was supposed to stop house prices falling but has actually seen the fall accelerate; a failed fiscal stimulus VAT cut that has stimulated no one, been derided by retailers as pointless and succeeded only in adding another £12 billion to our £1 trillion debt mountain; and a banking rescue package that has neither saved the banks nor saved the economy by getting lending moving again.
Repossessions are rising, unemployment is rising and business failures are rising. In fact, the only things that are falling are the pound and inflation, both of which reflect the chronic weakness of the economy, which—if I may paraphrase the Prime Minister—in turn reflects the chronic weakness of the Government.
Mr. Doug Henderson (Newcastle upon Tyne, North) (Lab): I am not sure that I understand the point that the hon. Gentleman is trying to make. I get the impression that the Conservatives are saying that the things that the Government have done are wrong, and that they will therefore have an alternative policy. If so, will he tell us what that Conservative policy is?
Mr. Hammond:
I hope that the hon. Gentleman will bear with me, because, as he might have anticipated, much of the remainder of my speech will set out the
things we would have done, some of which the Government have now adopted in their package of proposals.
Members will recall that the Prime Minister thinks that he saved the world. The Employment Minister apparently sees light at the end of the tunnel, Baroness Vadera sees some green shoots and the Housing Minister sees an upturn in the housing market. However, I have to say to the Financial Secretary to the Treasury that everyone else—every commentator, every market, the European Union, the OECD—sees unrelenting gloom, and a longer and deeper recession in the United Kingdom than in any other major economy.
Mr. Rob Wilson (Reading, East) (Con): Is my hon. Friend aware that the UK is in danger of losing its triple A credit rating status, which would be a further blow to the pound?
Mr. Hammond: My hon. Friend is right. Members will be aware that some EU countries have already seen downgrades to their credit status, and there is speculation in the media about the UK’s credit rating status. Obviously, it is critical to all of us that the UK maintain the top investment grade credit rating for its Government paper.
The root cause of the problem is the failure of the banking system to deliver the routine credit that is needed to oil the wheels of commerce and to support businesses with the working capital that they need to protect jobs and to allow for investment for the long term. The Government’s response initially focused on fiscal policy, with the wasteful and ineffective £12 billion temporary VAT cut, to be paid for by pre-announced higher taxes after the next general election.
However, I am pleased to say that, over the past week and a half, Government policy has moved in a welcome direction, to refocus on the supply of credit through moves to address the flaws in bank bail-out No. 1—for which we have been calling since that bail-out was announced in October—and to adopt a version, of sorts, of the national loan guarantee scheme that we first proposed in November, underpinning bank lending to companies in a way that would allow banks to raise the funds to provide the credit that business needs to survive the downturn.
Ms Sally Keeble (Northampton, North) (Lab): Is the hon. Gentleman aware that Paul Tucker, the newly appointed deputy governor of the Bank of England, said this morning that the first bail-out, last autumn, had been successful, that it had served its purpose and that it had been essential to prevent the complete collapse of the banking system? He said that the current proposals were therefore a second phase in a necessary process.
Mr. Hammond: That is the Prime Minister’s spin: that this is the planned second phase. The hon. Lady needs to go back and look at what the Chancellor and the Prime Minister said last October. First, they said that the £37 billion of taxpayers’ money that they had invested would appreciate in value over the next period, when in fact £20 billion of it has already been lost. Secondly, they said that its purpose was to get banks lending again to businesses, home owners and families. That has not happened, and that is a failure in anyone’s book.
There is an ongoing debate about the merits of fiscal responses versus monetary responses, and about the respective abilities of fiscal and monetary actions to help economies out of a recession. That is a perfectly respectable academic debate, and, for a country that enters a recession in fiscal balance or with a surplus, it is an interesting and important debate. Each such country will reach its own conclusion as to the right balance between fiscal and monetary responses, no doubt informed by its own historical experience. I am thinking particularly of the agonising that has gone on in Germany.
In the UK, however, we do not have to spend our time carrying out that analysis, because we do not have the room for a fiscal stimulus. We did not fix our roof while the sun was shining. There is a clear— [ Interruption. ] I will say that again for the hon. Member for Islington, South and Finsbury (Emily Thornberry): we did not fix our roof while the sun was shining, which is why we are in the mess we are in today. Whether she likes it or not, there is a clear emerging consensus that a fiscal stimulus is not appropriate, given the circumstances in which this Government delivered the UK to the brink of recession in 2008.
Emily Thornberry (Islington, South and Finsbury) (Lab): Over the past few years half of the homes in Islington have had their roofs fixed as a result of the decent homes programme. Thank goodness for a Labour Government.
Mr. Hammond: The hon. Lady obviously thinks that that is a very clever intervention. [ Interruption. ] Well, it has been done before, but usually with school roofs. She makes my point precisely. During the good years, the Government borrowed yet more money that they did not have and spent it, and now we have come to the recession the cupboard is bare. The Government have no room for a responsible fiscal stimulus, while many of our neighbours in Europe find that they do have such room.
There is an emerging consensus that a fiscal stimulus is not appropriate in these circumstances, and I shall set out what those circumstances are. There is a huge current budget deficit. The Economic Secretary thinks that that is funny; his Government is going to run up a budget deficit of £118 billion. Household debt stands at £1.4 trillion. There is a pattern of persistent and huge external deficits. We have a rapidly weakening—some would say collapsing—currency. There has been a record of absolute failure during the past seven years to deliver the fiscal projections made in Budget after Budget, and we have an unbalanced and highly exposed economy.
Mr. George Mudie (Leeds, East) (Lab): If the argument is that we started in a bad position with no fiscal room, what is the hon. Gentleman suggesting in fiscal terms? Is he saying that we cannot do anything because of our starting point? If he is saying that, I would point out that the Opposition motion would cost £4.1 billion. Where would that come from?
Mr. Hammond:
If the hon. Gentleman can bear with me for just a few more minutes, he will find out exactly where it is coming from. I am not saying that we can do nothing. What we have been saying since November is that this crisis was created in the credit system and the banking system, and it requires a response that is primarily
monetary. That is fortunate because the UK fiscal position means that the Government are not able to provide an appropriate fiscal response.
Mr. Jeremy Browne (Taunton) (LD): If what the hon. Gentleman says is true, why is it that until a very recent U-turn, the Conservative party was committed to matching the overall totals of taxation and spending of the Labour Government?
Mr. Hammond: We made a commitment to match the Government’s spending totals against a background of an entirely different economic situation, and it has become apparent—
Mr. Browne: When the sun was shining.
Mr. Hammond: The Government were projecting increases in spending totals that would see public spending decreasing as a share of GDP, taking on the prudent approach that we have been advocating and that they have singularly failed to adopt in the last few years.
The Government will quote in their defence sources that are generally supportive of fiscal measures—that is to say, people who tend to be on the fiscal side of the academic debate or who recommend a balance of fiscal and monetary initiatives. [ Interruption. ] We can quote some Germans if the Economic Secretary really wants us to; I have my Germans all lined up in a stack of papers on the Bench. What the Government will not tell us is that most of those people, under questioning, readily concede that a fiscal stimulus is not only inadvisable, but positively dangerous in the UK’s current circumstances. Some have issued specific warnings against the UK adopting a fiscal loosening. For example, in the European Commission’s economic recovery plan that we debated yesterday, we find on page 7:
“It is clear that not all Member States are in the same position. Those that took advantage of the good times to achieve more sustainable public finance positions and improve their competitiveness have more room for manoeuvre now.”
It continues, and I invite my hon. Friends to try to spot the reference here:
“For those Member States, in particular outside the Euro area, which are facing significant external and internal imbalances, budgetary policy should essentially aim at correcting such imbalances.”
In other words, there is no room for fiscal loosening. Jean-Claude Trichet, the president of the European Central Bank, warns:
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