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26 Nov 2009 : Column 732

Even more seriously, I believe that the reason I was written to this week, 13 months late, is that the National Audit Office was closing in. The NAO's report on the banking support measures is imminent, and earlier the Treasury Committee Chairman spoke, on a point of order, in much stronger terms than myself. He said that he believed that the NAO was closing in and the Government decided that they had to release the information now, 13 months late. That is a serious matter, and I shall not let it go.

I shall keep pursuing it, because this is why Parliament is set up-to protect the interests of the taxpayer and the people of this country. Occasionally Governments have to do things in secret and to protect the markets, but if they do, they have to observe the protocols. They did not do so, and for the Chancellor to tell me yesterday that he was absolved from doing so by the Banking Act 2009, which by the way came into force months after the indemnity was given, is not good enough. I shall leave the matter there, but we must return to it.

Like all other hon. Members who have spoken, I want to express extraordinary concern about the fact that, as of 31 October, total public sector debt stood at £829 billion. That is 59 per cent. of total national output. My hon. Friend the shadow Chancellor made the point that there is now a very real danger that the ratings agencies-Moody's, Standard and Poor's and so on-may start to question the UK's ability to pay its debt and downgrade the triple A rating that we currently enjoy. That would make it more expensive for all of us to borrow. For the UK and for corporations, lower investment in the UK and higher unemployment could result, leading to a disastrous double-dip recession.

Let us forget party politics for a moment. There is no choice: we have to address the deficit. The Government tell us that they are, indeed, going to reduce the deficit by half by the end of the next Parliament, but they have offered only broad clues about what they intend to do, with hints at tax increases and spending cuts. They are only hints, however; there are few detailed policies. There was one detailed policy, which would have saved only £300 million, and that was a pay freeze for top public sector earners. That is £300 million; it is nothing. Surely the people of this country, or Parliament, must have some idea of what the Government, if they are re-elected, will do to try to deal with public sector debt of £829 billion.

I shall not get involved in great macro-economic arguments with any ideas that I might have; I shall go right down to the micro level. I have now chaired the best part of 400 PAC sessions, in which we have looked at Government efficiency, and one way in which we can climb out of this black hole-it is only one way in which we will achieve only part of the object-is to carry out Government programmes much more efficiently.

I am worried that if a new Government are elected in May, or even if this Government are re-elected, Ministers, for instance at the Ministry of Defence, will be under Treasury instructions to cut x per cent. off their budget. So, the number of new aircraft carriers may be reduced from two to one; there may be a question mark over the joint strike fighter; or the number of Trident submarines may be reduced from four to three. In other words, the MOD will get up to its old tricks of moving programmes sideways and delaying them. But what about the efficiency of the procurement executive? New Ministers will have to get to grips with that issue on day one, and they may
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have to bring in outside help. We cannot allow the public sector, particularly the civil service, to continue with layers of management which simply do not exist in the private sector.

The PAC has, I think, made some progress in the past eight years. We can make only so much, but we have identified proven savings-I wrote to the Chancellor earlier this week on the matter-of £4 billion. However, we have now gone further and identified another £9 billion that we can save without changing a single policy. I know that this is the detail of the debate and that it is not as exciting as the party political debate, but £9 billion is a serious amount of money and it can be saved. The savings have all been audited by the National Audit Office, representatives of which come to our Committee. If the recommendations we have made in the past eight years had been carried out, we could have saved not only the £4 billion, but another £9 billion.

I shall give a few examples. Some £1.4 billion could be saved by Departments sharing back-office services such as finance and human resources; and £2.5 billion could be saved by all Departments matching the level of staff cost reductions achieved by the Department for Work and Pensions, Her Majesty's Revenue and Customs and the Ministry of Defence. Even a relatively simple twist of the hellishly complex benefits system could save a staggering £110 million, which would be a start. If the whole of Whitehall matched the example of some Departments in reducing running costs such as those for accommodation and IT, more than £1.3 billion could be saved. There is more. Improving how the public sector contracts and manages construction projects could save more than £2.6 billion, and developing the commercial skills of those who wield the Government's significant buying power could realise potential savings of more than £700 million, through cannier procurement of goods and services. Better use of consultants-the Committee has done a lot of work on them-alone could save £400 million. That is £9 billion just there.

I am not making a sales pitch for the PAC. I believe that there must be a total change of attitude in the public sector; that Ministers and civil servants should assume that when they are spending public money, it is as if they are spending from their own personal bank accounts; and that the days of rapid rises in spending are now over.

Actually, in a way, the days of targets may be over, because targets work in a growing budget. Typically, in the past 12 years, the Government have come out with a worthy objective and required the civil service to carry it out. When that did not happen, the Government had to impose targets. It is going to be very difficult to impose targets on a shrinking, contracting budget. The Government are going to have to trust professionals and cap their budgets in the health and education services, and they are going to have to ensure that our civil servants and managers deliver services to the front line, and not cut them while protecting their own jobs. That is not a good enough attitude from our public servants.

2.22 pm

Mr. Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab): May I begin by saying that I welcome the economic measures in this Queen's Speech? I believe that they
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demonstrate the continued importance of the Government performing a substantial role in bringing this country out of a worldwide recession.

It never ceases to amaze me that the Government's critics seem conveniently to have forgotten the cause, scale and unknown depth of this recession. In the context of employment, this year alone 38 million jobs will be lost worldwide, in which case Britain has done exceptionally well to withstand the hurricane of job losses devastating the jobs market around the world. Without Government action, a further 500,000 jobs would have been lost. Cutting VAT and cutting income tax were designed to help people and support the economy; 150,000 businesses were given more time to pay their tax bills; and unprecedented measures have been put in place to help 300,000 people stay in their own homes.

The Queen's Speech sets out a programme of tough action on the big issues that matter to people. There is of course an alternative vision, which I would characterise as fundamentally pessimistic. The claim that Britain is broken is simply not true and I will offer my rebuttal in due course in this speech. Nor is it true to say there is no alternative to looking towards an age of austerity. Leaving people to sink or swim in a recession is an untenable, unforgivable and unworthy stance, and this Government can never be accused of taking it.

Of course, this is a difficult period for our country but we need to remain optimistic. Britain has a bright future based on its greatest strength: the talent and enterprise of our people. There will be difficult decisions as we move out of this recession, but the answer is not to drain the life blood out of our constituents nor drain them of confidence and hope for the future. It would be a grave mistake to end the economic stimulus at this time. We have learned that when Government do nothing, the market does not necessarily always provide. Choking off recovery by turning off the life support prematurely would be fatal to growth, jobs, prosperity and our capacity to grow, not just for now, but for years to come.

I particularly welcome the proposed measures in the Financial Services Bill, which demonstrate how the Government can provide the regulatory framework for a prosperous but stable financial sector. In the past year, I have received more inquiries from small businesses in my constituency than ever before. In the main, they have been about bank lending. I have made those representations known to my right hon. Friend the Chancellor, including as recently as yesterday, and I am delighted to acknowledge that the Prime Minister in his recent speech to the CBI said that RBS and Lloyds, backed by the Government, will provide £27 billion of new lending for businesses this year and next and that other banks will follow. That is exactly the leadership language and action that small businesses up and down the country want. That is why the business community will always reject the notion of austere government.

I am acutely aware that the construction industry has suffered during this recession. Re-igniting house building programmes would help not only the industry, but those who seek to find homes for themselves in future. I should like to cite just a couple of ideas that resonate with many in the construction industry, namely placing new obligations on banks proactively to lend to small and medium-sized enterprises, and making mortgage finance available to key first-time buyers who are priced out of the market by exorbitant deposit requirements.
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In my view we will never get the demand back into the housing market unless there are some special provisions for first-time buyers.

Recently in my constituency, I had a meeting with Scottish Enterprise officials. The subject under discussion was the failure by some banks to lend to small businesses. However, that should now start to change. I urged Scottish Enterprise, as I do again today, to step up its efforts, and stressed that, in a time of recession and given the considerable public investment in Gartcosh business park in my constituency, it was time that the full potential of this site was realised. In terms of vision, location, connections and opportunity, this site has it all, and more importantly it has the capacity to employ around 1,200 people. That is what I want to see happen sooner rather than later, as a quarter of a century is a long time to wait. When that does happen, unemployment in my constituency will start to fall dramatically.

I am also pleased that there is much activity in the business start-up rate. In Lanarkshire, 2,000 individuals have been provided with pre-start-up advice. Total starts are well ahead of the same period last year. There is still a healthy number of higher growth prospects in the pipeline, but difficulties raising finance are obvious. We have a vibrant local business community in my constituency. While I applaud the steps that the Government and other agencies have taken to help, there is always more that we can do. I know that the Chancellor is working hard to increase lending, and I ask him to continue to work hard for small businesses. We may see more evidence of that in his pre-Budget report.

I end by paying tribute to North Lanarkshire council which successfully bid for 1,080 jobs from the Government's future jobs fund. This stimulus has helped bring the country to the verge of recovery as predicted earlier this year. I am glad that the Government are manifestly helping families through this difficult period. What it proves is that business prospers when the Government invest and regulate sensibly. There is no question but that the Chancellor and the Prime Minister have won the argument here in the United Kingdom, and their leadership skills during this economic crisis are admired around the world.

2.31 pm

Peter Luff (Mid-Worcestershire) (Con): It is a privilege to follow the right hon. Member for Coatbridge, Chryston and Bellshill (Mr. Clarke), who is one of the most decent and loyal Members of the House. I share his optimism about the prospects for our nation, but we need to admit that our society, politics and economy are all broken and need a fresh approach.

If more time had been available, I would have liked to paint some of the background to the economy that underlies my concerns and to talk at length about the issues confronting the unemployed, especially the young unemployed. It was an unusual deviation from his normal high standards for my good friend the hon. Member for Wolverhampton, South-West (Rob Marris) to say that because we did not talk about unemployment much, we do not care about it. Of course we care passionately about unemployment, but I do not have the time to talk at the length that I would wish.

The Queen's Speech has four characteristics, which are some genuinely good things; some dividing lines, which we would be better off without; some missed
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opportunities; and some very good intentions, although we all know what the road to hell is paved with. The good things include the ban on cluster munitions, which is absolutely right albeit far too late, and the home-school contracts, a very good idea from this side of the House. I welcome those aspects of the Queen's Speech.

I am the Chairman of a Select Committee and I do not want to be too partisan today, but the dividing lines worry me. My hon. Friend the shadow Chancellor set them out well in his opening remarks and I say as a parliamentarian, and more in sorrow than in anger, that a Government at the end of their allotted span should be concerned about the good of the country, not trying to wrong-foot the Opposition. It is a shame that the Government do not realise where their priorities should lie. It amuses me sometimes when with some justice things blow up in their face. For example, the free personal care proposals in the Queen's Speech blew up in their face, just like the 10p tax rate. Dividing lines do not always benefit those who seek to do the dividing.

The tragedy is that the good intentions in the Bill are often also used to seek to divide. The commitment to continue to enshrine in law the abolition of child poverty by 2020 is an honourable aspiration, although one might ask why 2020 and not 2018 or 2022. As for the intention to legislate to halve the deficit, halving or reducing the deficit is clearly a good idea, but why halving? Why do we need legislation to do that in the first place? That point was ably made by the shadow Chancellor and the Liberal Democrat Treasury spokesman. To ask who would be prosecuted if we fail and what would be the legal sanction is to understand the folly of the proposal. Who is being prosecuted for the Government's failure to meet fuel poverty targets? As far as I am aware, no one is.

We do not need legislation on such issues. We share a commitment across the House to achieving those things in different ways, to different time scales or by different methods. It is not the legislation that matters: it is the action that we should be taking. What we should have heard from the Government is a clearer establishment of their priorities, not their spurious legislative intentions.

Protecting our long-term competitiveness as a nation requires action, not law, as well as some difficult decisions. To be fair to the Government, they are taking some of those difficult decisions, as well as some easy ones. I wish publicly to thank the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for Wrexham (Ian Lucas), for the announcement he made yesterday about the filling of the post of chief construction adviser. That is a valuable response by the Government to a recommendation from my Select Committee that will greatly help the construction industry to improve its relationship with Government. I am really pleased about that.

Let me say another public "thank you" to the Minister. Towards the end of the previous Session, he gave me a rather churlish reply to a parliamentary question on the national competency strategy, but he has responded magnificently today with what appears to be a good strategy and the welcome announcement of a major national composite centre of excellence centred on Bristol, which is the right place to put it. That sounds like a very boring and anoraky subject to those who do not understand it, but composite technology lies at the heart of our economic competitiveness, particularly in the aerospace
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sector and, as the document-I have not read it in detail-rightly says, in the manufacture of wind turbine blades. It is applicable in a whole stack of areas, including marine renewables technology, that require composites that do not corrode like metal. There are huge opportunities, so well done to the Government on that-although it would be good to get the same amount of enthusiasm behind getting the automotive assistance scheme up and working.

There are some difficult decisions to take in the context of the severe budget constraints that we all know we face, Conservative Members included. If I argue that we should not cut funding for university research, as I think that we should not, what conclusions do I reach on other aspects of Government spending? If I also think that the budget of UK Trade & Investment should probably be protected to help our exporters to export out of recession and bring wealth to the country, what further compromises do I have to make? I was struck by the fact that the radical proposals by the Institute of Directors to slash £50 billion from public spending also exempted UKTI from the axe.

In the dying months of this Government, we need a focus on action, not legislation. I worry that such declaratory legislation takes time away from issues on which we do need to legislate; it distracts us with unworthy debates that we do not need to have. I think particularly of what is, for me, perhaps the most important Bill in the Queen's Speech-the Digital Economy Bill. That raises some hugely important questions that we started to tease out with the Under-Secretary of State for Business, Innovation and Skills, the right hon. Member for East Ham (Mr. Timms), who is also Financial Secretary, a couple of days ago. We do not know what the 2 megabits per second universal service obligation mentioned in the Bill really means, which is worrying. Is it a minimum? Is it an average, and if so, which kind-median or mode? Is it an advertised speed? We all know what that means, coming from internet service providers.

Are we right to put public investment into a massive expansion of next generation access networks beyond that which the market would deliver? That is an important issue for the House to examine. Should we not be concentrating on the 40 per cent. of households who do not have access to broadband at all because they choose not to? It is there, they could take it, but they do not-why? Rather than worrying about imposing new taxes-the 50p tax on fixed lines seems very regressive, and, interestingly, represents one of the first occasions on which the Treasury has authorised an hypothecated tax, which could be a dangerous precedent-should we not be sorting out the mess of the business rate system, which deters investment in new fibre optic cables? Is it right for the Government to pick technologies to roll out next generation access? What will happen to satellite technology over the next few years? It might deliver faster, cheaper options for more remote communities.

However, the Government are certainly right to attack illegal file sharing. Getting the protocols right and ensuring that proper warnings are issued by ISPs before they cut off the account holder is absolutely the right thing to do. Protecting the UK's creativity lies at the heart of one aspect of our economic prosperity, and I congratulate the Government on their position on that.

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I am sorry that clauses 38 and 39 of the Bill do not address the provision of compensation for radio microphones flowing from new access arrangements for the electro-magnetic spectrum. In their "Digital Britain" White Paper, the Government made a commitment to providing compensation for radio microphone users, but they seem to be wriggling off that hook. I hope that that commitment will be honoured in full. It would breach the sector's human rights, apart from anything else, and possibly destroy large sections of our entertainment, broadcasting and sporting industries were that compensation not to be offered as promised. That is one of the missed opportunities in the Bill.

Another missed opportunity relates to a Bill that died a sad and tragic death in the last Session-the Postal Services Bill. I understand that the Government think that the linkage of part privatisation and settling the pension deficit should be brought together, but no longer feel able to propose that. We all know the reasons, but I will not go into that today in the limited time available. But what about regulation of the sector? We could move to make the reforms suggested in the Hooper review and bring Postcomm within Ofcom. Indeed, I would suggest that the Digital Economy Bill provides a vehicle to do that. Why not take the sections of the Postal Services Bill dealing with regulatory issues and implement them as part of that Bill? The sector cannot live in this regulatory hiatus, with Postcomm dying on its feet, not knowing its own future. Urgent action is required.

A lot of other things could be done, too. For example, I believe that an omission of some seriousness from the Queen's Speech is measures to deal with illegal immigration, particularly that caused by fraudulent student applications. Why can we not move to a system of accreditation of institutions? Good universities and further education colleges know who they are admitting, but at present we are not working on that basis and there has been a massive increase in what appear to be fraudulent applications from the Indian sub-continent. Why can we not say that if an accredited institution is in receipt of a student, there should be an automatic assumption that that student's application should succeed?

If we want to do good by small deeds, as I believe we should, why not legislate for a grocery market ombudsman, as called for in early-day motion 192, which I signed today? What a good step that would be to help the small business sector. That is the type of small good deed in a wicked world that the Government should be doing, rather than following grand strategies and making grand statements that are politically motivated and achieve nothing. This Government should have died with dignity. Instead, new Labour dies as it lives-partisan and divisive. It is a sad epitaph after such a confident beginning back in 1997.

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