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Consultants
4. Richard Harrington (Watford) (Con): If he will estimate Government expenditure on external consultants in (a) 1997 and (b) the last year for which figures are available. [921]
The Chief Secretary to the Treasury (Danny Alexander): Information on 1997 central Government expenditure on external consultancy is not held centrally, but records for 2007-08-the first year for which figures are available-show that spending on external consultants was £773 million in central Departments. In 2008-09 that rose to £1.1 billion for central Departments, or £1.57 billion when the whole of central Government is taken into account. Future expenditure will fall significantly as a result of the freeze on consultancy spending recently announced by the Government.
Richard Harrington: I thank my right hon. Friend the Chief Secretary for that answer, and welcome him into the job. He should note that the figures show gross profligacy and a waste of taxpayers' money that affects everybody in the House, all my constituents in Watford, and everybody in this country. I should very much like the Chief Secretary to assure us that that disgraceful waste of money will not happen again.
Danny Alexander: My hon. Friend is right about waste and inefficiency, and consultancy is not the only example. I can give him two or three more. The Department for Business, Innovation and Skills spent £12,000 on branded golf balls over three years. The Ministry of Defence spent £232,000 on eight paintings in a single year. The Department for Communities and Local Government has spent £6,000 on deluxe espresso coffee machines for nine new, but empty, regional fire control rooms. He can rest assured that the actions that we take will ensure that that kind of waste and inefficiency will never happen again.
Mr Speaker: Order. I know that the Chief Secretary will want to stick to the narrow subject of external consultants.
Mr Tom Watson (West Bromwich East) (Lab): Is Andy Coulson a consultant? How much are you paying him?
Danny Alexander: He works at No. 10 Downing street- [Interruption]-and I will give the hon. Gentleman a full response if he wants one.
Economic Growth
5. Peter Bottomley (Worthing West) (Con): What steps his Department is taking to increase economic growth. [922]
The Exchequer Secretary to the Treasury (Mr David Gauke): The Government are taking action to support enterprise and create a fair, competitive and efficient tax system to deliver the private sector-led recovery that will be the foundation of future growth. Fundamental to this strategy will be tackling the budget deficit and providing a stable macro-economic environment that will underpin private sector investment and growth. Further details of the action that the Government will take to secure future growth will be included in the emergency Budget on 22 June.
Peter Bottomley: We agree that investment, enterprise and modest tax rates will help the economy grow out of the inherited mess. In addition to the academic work of Arthur Laffer and Sir James Mirrlees, will my hon. Friend hold in mind the situation of an elderly lone mother who may have put money aside to buy a house, and after decades may wish to sell it, without too high a capital gains tax bill?
Mr Gauke: Obviously, this Government will want to encourage hard work and enterprise, just as the Government in which my hon. Friend served with much distinction in the 1980s did. As for specific tax measures, I am sure that my hon. Friend will understand that with only a fortnight until the Budget, I do not intend to make any specific comments. None the less, I am grateful for his remarks.
Mr Gareth Thomas (Harrow West) (Lab/Co-op): I congratulate the hon. Gentleman on his elevation to his post. I also take the opportunity to thank the Chancellor of the Exchequer for taking time out during the general election to come and support my re-election in Harrow West. The Opposition recognise that the new politics is not designed to help Labour Members, but I am grateful for the little bit of Tory love that came my way.
Can the hon. Gentleman tell the House who in the Government will have the final say on whether and which regional development agencies will survive? Will it be the Business Secretary-once a supporter of RDAs-or will it be the Chancellor? No one expects it to be the Chief Secretary. Is not the real truth that RDAs such as One NorthEast are playing, and could continue to play, a key role in helping to deliver new jobs in new industries crucial to Britain's economic future, such as renewable energy and advanced engineering?
Mr Speaker: One answer will do.
Mr Gauke: I thank the hon. Gentleman for his kind words. I should congratulate him on being re-elected on this occasion, but I also note that my hon. Friend the Member for Harrow East (Bob Blackman) is here, which is a bit of a triumph for us. On the hon. Gentleman's specific points, the decision will be made collectively. The Government will work in a cohesive manner in making those decisions.
Margot James (Stourbridge) (Con):
When I was in business, it was the oldest trick in the book for managers to come in with hopelessly optimistic growth estimates. Does the Minister think that that was endemic in the last Administration, and has he greater confidence, now that we have the impending Office for Budget Responsibility,
that it will not be the case with our Administration so that, for the first time in many years, we will have realistic growth estimates?
Mr Gauke: It is clearly very important that we have credible growth projections. We look forward to hearing the projections from the Office for Budget Responsibility. As for the previous Government's record, time will tell.
Derek Twigg (Halton) (Lab): Transport infrastructure is of course important for economic growth, and as the hon. Gentleman's right hon. Friend the Chancellor will know, as a Cheshire MP, there is a very important project, the Mersey Gateway project, which is crucial to the economic regeneration of Cheshire and Merseyside. Will that be excluded from the proposed cuts that his Government are making?
Mr Gauke: The Government will make a decision on all matters considering the value for money and considering the very difficult financial circumstances that we find ourselves in, bequeathed by the previous Government.
Equitable Life
7. Dr Julian Lewis (New Forest East) (Con): What steps his Department is taking in respect of payment of compensation to Equitable Life policyholders. [924]
9. John Howell (Henley) (Con): What steps his Department is taking in respect of payment of compensation to Equitable Life policyholders. [926]
15. Neil Parish (Tiverton and Honiton) (Con): What steps his Department is taking in respect of payment of compensation to Equitable Life policyholders. [932]
The Exchequer Secretary to the Treasury (Mr David Gauke): The coalition Government have pledged to make fair and transparent payment to Equitable Life policyholders, through an independently designed payment scheme, for their relative loss as a result of regulatory failure. The Queen's Speech announced the Government's intention to introduce a Bill in the first Session of Parliament to enable payments to be made to Equitable Life policyholders. On the same day, the Government also announced that an independent commission would be established to design the payment scheme. These steps are a strong sign of the Government's commitment to deliver on their pledge.
Dr Lewis: More than 60 of my constituents in New Forest East, and indeed even one of my own relatives, will be delighted to know that the Government intend to implement the recommendations of the ombudsman. Can he tell me when this is going to happen-and can he guarantee that the Independent Parliamentary Standards Authority will not be put in charge of making the payments?
Mr Gauke: I thank my hon. Friend for his question. The intention is that Sir John Chadwick's report will reach its conclusion in mid-July; at the same time the independent commission will be established. We are making progress in this area-in contrast, I am afraid, to the dither and delay of our predecessors.
John Howell: I am grateful to my hon. Friend for his previous answer, but he will be aware that many of us have had to put in place our own means of keeping constituents who have got caught up in Equitable informed of what is happening, so poor has been the Government communication programme. So will he say a little more about his plans to keep that group of people informed as the payment scheme goes through?
Mr Gauke: I suspect that one of the reasons why the previous Government were so poor in communicating progress was that there was very little progress to communicate. As I mentioned earlier, we are keen to ensure that there will be progress, that we have the independent commission in July, and that we will have the conclusions of Sir John Chadwick's report; we intend to make progress there. I hope that we will have more information to give my hon. Friend in mid-July. This is a matter that has caused enormous anxiety for many people, and it is right that we keep people up to date with exactly what progress we are making.
Neil Parish: I would like to follow up those questions on Equitable Life. Over 1 million policyholders were affected by the fact that the previous Government did not accept the ombudsman's proposal that they be compensated. I am particularly worried that many people have died during the whole process; the previous Government was rather cynical in that respect. May I be assured that, through this process, we will ensure that people are compensated quickly? That needs to be done.
Mr Gauke: We are keen for the independent commission to design the scheme, but one of the points that we have made clear is that the dependants of deceased policyholders should be included in the scheme to address that point. Clearly, however, my hon. Friend highlights the need to move quickly, after 10 years of inadequate progress.
Michael Connarty (Linlithgow and East Falkirk) (Lab): On the question of Equitable Life, there can be few constituencies that do not contain people who are waiting for payment or people who have died while waiting for payment. Is it not shocking that one of the main perpetrators of the Equitable Life fraud-for that is what it was-will, after last weekend, be able to take up a senior position in a financial institution? Can the Government re-examine what happened in that process, so that these people are not allowed to have senior financial positions in future?
Mr Gauke: I hope that the hon. Gentleman will understand that I am not going to be drawn on an individual case without all the information in front of me. He has made his point very clear.
Mr Lindsay Hoyle (Chorley) (Lab): First, would the Minister care to share with the House the date that the cheques will arrive through the doors of those who are still waiting for payment? That is the key. My second question is, as people have, tragically, died while the process has gone on and on, will there be compensation for the families that have missed out as well?
Mr Speaker: Order. To ask a second question was very cheeky on the part of an experienced Member, but I know that the Minister will not be tempted to follow suit.
Mr Gauke: I fully understand the hon. Gentleman's concern about delays. He knows as well as I do where a lot of the blame for that lies. I made the point earlier that dependants of deceased policyholders should be included in the scheme. As for a specific date, the only thing I can say is that we are clearly making much more progress than the previous Government did.
Dr William McCrea (South Antrim) (DUP): Bearing in mind the fact that many of the policyholders are getting older- [Interruption]-surely it is vital that we get money into their hands as quickly as possible.
Mr Gauke: I do not want to be pedantic, but all of them are getting older. The hon. Gentleman rightly says that there is a need to move quickly. I think that we all feel that. I am pleased that the Government have already announced in the Queen's Speech that there will be a Bill on this subject. We have already announced a date for the establishment of the scheme. We are making progress. That is a very welcome change from what we have seen in the previous 10 years.
Child Poverty
8. Ann McKechin (Glasgow North) (Lab): What recent discussions he has had with the Secretary of State for Work and Pensions on the future of Government targets to eradicate child poverty; and if he will make a statement. [925]
The Economic Secretary to the Treasury (Justine Greening): The coalition Government have announced that they want to see an end to child poverty in the UK by 2020. We now have 1.9 million children living in workless households in the UK. The OECD says that we have the highest proportion of children living in workless households of any OECD country-nearly 18%. That is one of the reasons why my right hon. Friends the Chancellor and the Secretary of State for Work and Pensions have been discussing that matter. One of the early outcomes of those discussions, as I am sure Members will be aware, is the announcement of the review by the right hon. Member for Birkenhead (Mr Field) of child poverty and life chances. We think that that will be an informative way of engaging people in the debate, and of coming up with some policy options, which we can then feed into our consideration of child poverty.
Ann McKechin: The hon. Lady will be aware that disabled children are much more likely to live in poverty and have much reduced life chances. Given that, and given her Government's decision to abolish the child trust fund, can she tell me how many disability organisations they consulted prior to that decision, and what assessment they have made of the impact that that decision will have on thousands of disabled children throughout the country?
Justine Greening: We are providing support for disabled children and their families. In fact, regarding the child trust fund, part of the package was the funding of 8,000 extra week-long breaks for the parents of disabled children-breaks that we know are well valued.
Mr Julian Brazier (Canterbury) (Con): Does my hon. Friend agree that the main reason for the scale of child poverty in this country is that we have inherited a benefit system that punishes thrift, work and traditional families? If the right hon. Member for Birkenhead (Mr Field) does indeed think the unthinkable, will we, unlike the previous Government, support him?
Justine Greening: Unlike the previous Government, we all recognise that child poverty is about much more than just money. If we are to be successful in improving children's life chances, wherever they start their lives in this country, we need to look at a little bit more than the child tax credit; we need to look far more broadly. We need to look at issues around health and education. That is one of the matters that we will consider over the coming months. It is vital to realise that if we do not tackle the root causes of child poverty, we are very unlikely to tackle the symptoms. Of course, the ultimate way of tackling child poverty is sorting out our economy and getting people back into jobs, so that children are not in workless households in the first place.
Mr David Hanson (Delyn) (Lab): Under the previous Conservative Government, child poverty doubled; thanks to the efforts of the Labour Government, with the minimum wage, working families tax credit and child benefit rises, 500,000 children were taken out of poverty. Today, will the Minister, whom I welcome to her new position, not just commit to tackling the targets that the Labour Government set, but support the means-the minimum wage, working families tax credit, and child benefit?
Justine Greening: The previous Government managed to raise a number of children who were just below the poverty line just above it, without tackling the fundamental causes of why they were in that position in the first place. What is particularly depressing is that it is as if nothing has been learned from the experiment of the past 13 years. Clearly, we need to look more broadly, rather than just at giving households in poverty money. We need to help them to get back into work. It has to be wrong that in this country, the marginal tax rates for those in low-income families who are going back to work can be in the 90th percentile range. We would never dream of taxing people who are rich that much, but we tax people who are poor at those rates.
Economic Growth
10. Charlie Elphicke (Dover) (Con): What recent assessment he has made of the level of growth in the UK economy compared with those of other OECD countries. [927]
The Chief Secretary to the Treasury (Danny Alexander): The independent Office for Budget Responsibility will publish forecasts for growth in the UK ahead of the emergency Budget.
Charlie Elphicke: There is too much deprivation in Dover and Deal. We need more jobs and money locally. What action will the Government take to increase the trend growth rate of this nation, so that the people of Dover and Deal get more jobs and money, and Britain does better?
Danny Alexander: The best thing that we can do to increase growth and create jobs in this country is tackle the enormous budget deficit that we inherited from the previous Government. By taking firm action to reduce the deficit, we can restore confidence in the economy and help the private sector to create jobs. That is what we need to do.
Angela Smith (Penistone and Stocksbridge) (Lab): The £80 million loan to Sheffield Forgemasters was an investment designed to encourage the growth of the advanced manufacturing sector of the economy, not just across south Yorkshire but across the UK as a whole. Will the Government bear in mind that investment, and the long-term context, when they make a decision on the future of that loan?
Danny Alexander: I am grateful to the hon. Lady for making that point, and I have certainly heard what she said. Obviously, we are reassessing carefully projects approved by the previous Government between 1 January and the election, and we will make an announcement in the near future.
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