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There is an alternative approach. The Chancellor finished by suggesting that their cuts were the same as ours-[Hon. Members: "Less."] Less than ours? That is even more utter and complete nonsense, for two reasons.
First, the Conservatives calculated the 20% figure by some very dodgy formulae that stretched the limit of credibility for the protected Departments. Secondly, the Chancellor has not caught up with the fact that we have listed a series of measures with which we agree-for instance, the increase in capital gains tax and the changes to welfare. The Chancellor has not caught up with the statements that we have made about the welfare bill. We will look at the further measures that the Chancellor has announced today, but if we take the statements that we have made into account, we came into this debate with departmental cuts half the level of those that the Government are proposing.
This spending review is not about economic necessity; it is about political choices. The Chancellor argues that Labour would have done nothing about the deficit; he goes on to say that his cuts are no worse than ours. He cannot have it both ways. He cannot be right in both arguments, although he does manage to be wrong on both counts. The difference between us is that the Government are removing almost twice as much from Department budgets, while we were looking for a much more gradual, much slower reduction, which would not stifle the very low levels of growth in our economy. It is our firm belief that the rush to cut the deficit endangers the recovery and reduces the prospects for employment in the short term and for prosperity in the longer term. We believe that we can and should sustain a more gradual reduction, securing growth. I do not believe that the Chancellor or the Prime Minister sufficiently understands the worries and concerns of families up and down this country. Those worries will have multiplied considerably as a result of the Chancellor's statement today.
Mr Osborne: He's a nice guy, but he's in the wrong job. The truth is this: frankly, either member of the Balls family would have done a lot better than that, and they might even have asked me a question or two, but let me try to respond to what he said.
The right hon. Gentleman keeps talking about a plan B, but he has not even got a plan A. There was a complete denial of the fact that this country has the largest budget deficit in the G20. He made no acknowledgement of the fact that the credit rating agencies were looking at this country when he was in the Cabinet and no acknowledgement of the fact that our market interest rates were the same as Spain rather than others. Frankly, he spent half his statement defending the economic policy of the last Labour Prime Minister-who perhaps could have turned up to hear it-but that is totally irrelevant to the questions put before the House today and the proposals that we have set out.
The right hon. Gentleman kept saying, "We want to reduce the deficit." As far as I could tell, he did not agree with a single measure that I set out. He did not propose a single saving. He is a deficit denier, and the truth is this. We have been told for a whole year that we would get Labour's deficit reduction plan. Before the election, let us remember, we were told in the debates, "Don't worry, it'll come after the election." During the leadership contest, we were told that it would come after the leadership contest. After the leadership contest, we were told that it would come before the spending review, and then this morning, a member of the shadow Cabinet said on the radio, "We are not going to do an
alternative to the spending review." I then got this message in the Chamber that said that at eight minutes past 1 this afternoon, when the shadow Chancellor was actually in the Chamber, he sent an e-mail to members of the public saying:
"I'm going to be honest with you, being in opposition does mean"
we have to set out "a clear alternative", and he then said, "Please share your thoughts with us." Labour Members were in government until six months ago. They sat round the Cabinet table as the deficit increased. Six months later, they have not put forward a single idea for reducing the budget deficit. It is absolutely pathetic.
Despite the fact that the right hon. Gentleman says that he is relatively new to the subject, he dismisses, with a sweep of the hand, the verdict of the IMF, the OECD, the CBI, the chambers of commerce, the European Commission and everyone else who has looked at the British economy. I do not know whether he saw the letter from 35 leading employers in this country, but they included people such as the leaders of Asda and Microsoft-I know that the business community of this country is totally irrelevant to Labour now-and the person who founded the Carphone Warehouse, who I think used to be a supporter of the Labour party. All those people wrote to the national newspapers saying:
"Addressing the debt problem in a decisive way will improve business and consumer confidence."
If the right hon. Gentleman wants to ignore all those people, what about Tony Blair? There is total silence on the Labour Benches for the man who won Labour three general elections. I think that the right hon. Gentleman was in the Cabinet when Tony Blair was Prime Minister, and he has said:
"The danger now is this: if governments don't tackle deficits, the bill is footed by taxpayers, who fear that big deficits now mean big taxes in the future, the prospect of which reduces confidence, investment and purchasing power. This then increases the risk of prolonged slump".
The right hon. Gentleman used to be a Blairite- [ Interruption. ] Well, at least the right hon. Member for Morley and Outwood (Ed Balls) has been fighting Tony Blair all his career and says he is wrong, but the shadow Chancellor used to be a supporter.
The right hon. Gentleman has dismissed all the leading businesses of Britain, all the international organisations and Tony Blair, but let me answer a couple of his specific questions- [ Interruption. ] Well, to be fair, in the space of about 10 minutes he asked three, so I will answer them. First, he asked about police numbers. Of course this is a challenge for the Home Office, but we believe that with the advice from the inspectorate of constabulary and Tom Winsor's report, there will be no reduction in the availability and visibility of policing. However, the right hon. Gentleman was asked during the election- [ Interruption. ] He was the Home Secretary. [ Interruption. ] The new Leader of the Opposition asks- [ Interruption. ] This is what the man who was Home Secretary before the election said in the election, when he was asked a question on the "Daily Politics" show:
"Can you guarantee if you form...the next government that police numbers won't fall?
The right hon. Gentleman talks about the national health service, and he said that he agreed with our decision to ring-fence it. Presumably this is the same shadow Chancellor who said recently, "There is no logic, sense or rationality to this policy." He has done a complete U-turn.
The right hon. Gentleman says that he rejects the minus 20% definition of the Labour cuts. At the same time, he began his statement by praising the Institute for Fiscal Studies, but that number comes from the IFS. He suggests that I have not paid attention to the announcements that he has been making this week. Well, it is true that I have been quite busy, but I have paid attention to what he has said. I understand that not many people got a chance to question him about his policies, but he said that taxes needed to be increased. However, when he was asked which taxes, he said that he was open-minded about it. That is a polite way of saying he hasn't got a clue.
The right hon. Gentleman was once the great force of modernisation in the Labour party, and he has now ended up reading out the policies dreamed up by the new Leader of the Opposition. He said in that press conference earlier this week that being in opposition was not about "pretending to be in government." Now we know how right he was.
Mr Andrew Tyrie (Chichester) (Con): This is undoubtedly one of the most radical and-I think most people in all parts of the House would agree-necessary shake-ups of the public sector, whatever the scale of shake-up people wanted. Personally, I particularly welcome the cull of quangos, the re-examination of the private finance initiative, the efficiency drive in Whitehall, and the announcements on Equitable Life and the BBC. The Select Committee on Treasury will be looking in far greater detail than in the past at the Treasury's decisions, and particularly at the way that it has prioritised between Departments and at the ring-fencing. We will also examine them for fairness. The Chancellor's analysis in the June Budget presented that Budget as progressive. I would be grateful if he could confirm that this CSR is also progressive. I would also be grateful if he could say something about his plans to denationalise the banks.
Mr Osborne: First, let me thank my hon. Friend for the welcome that he gave-to repeat what I said -to what I implied about PFI, the contribution that the BBC will make and the very difficult choice that we all have to make in this Parliament about what is a fair settlement on Equitable Life. In particular, helping the trapped annuitants is an absolute priority and it is a good thing and, as I said, we found three times as much money as John Chadwick recommended.
My hon. Friend raised two particular points. First, he mentioned ring fences, and although we call them ring fences, in the end they are about priorities. We have made a choice. As a coalition Government, we have chosen certain things that we are going to cut-obviously we have made some difficult decisions on welfare-but we have also chosen to spend more money on health care and the resources going into schools. Those are choices, and in the end that is what politics in a democratic country is about. We have made those choices, so I would not regard them particularly as ring fences, more as democratic choices.
Finally, on the distributional impact, we have published distributional analyses in the book that I have published today-my hon. Friend will know that we are the first Government to attempt to do this-and I will very much welcome the Treasury Committee's inquiry on the spending review, which I know he will conduct. We have used the methodology that is used in many other countries to try to allocate the benefit in kind of public expenditure, as well as the direct income effect of some of the benefit changes. We believe that that shows this is broadly progressive, in that the top quintile pays the most and it is broadly flat across the other quintiles. The same is true of some of the annually managed expenditure decisions as well, on which we have also published tables.
I very much welcome the Treasury Select Committee's inquiry and its work on this matter. As I have said, this is the first time the British Treasury has attempted to do this, and we very much welcome the Committee's input.
Mr Speaker: Order. A very large number of right hon. and hon. Members are seeking to catch my eye, and I would like to accommodate as many of them as possible. I therefore issue my usual exhortation to brevity with particular force. Single supplementary questions, please, and economical replies from the Chancellor of the Exchequer.
Mr Michael Meacher (Oldham West and Royton) (Lab): In cutting the deficit, why did the Chancellor ignore the economic growth dividend, which could yield at least £60 billion in extra Government tax revenues over the next five years? Why did he not tax at all the 1% super-rich, whose wealth has quadrupled over the past decade? And why did he not introduce a major public sector, as well as private sector, jobs and growth programme, which could most effectively cut benefit payments and increase tax revenues?
Mr Osborne: The first thing I would say to the right hon. Gentleman is that we believe strongly, as do the major employers in this country and the people internationally who look at this economy, that dealing with the deficit is essential for sustainable growth. That is what this is all about: putting the British economy and our public finances on a sustainable footing so that we can create jobs in the future and so that the economy can grow.
The right hon. Gentleman talked about taxes on the top 1%. We introduced an increase in capital gains tax, and the truth is that not everyone in my party was particularly happy about it, but Labour had 13 years and all those Budgets in which to do that. The shadow Chancellor now rather lamely says that Labour supports the capital gains tax increase, but I would love to know, when the Cabinet minutes are published in 20 or 30 years' time, whether he ever raised this matter in Cabinet. We took a decision to increase capital gains tax to the higher rate, and last week I published proposals for increasing tax on the very highest pension contributions. That is a £4 billion tax; it was not an easy thing to do, but we have done it. We have also accepted and lived with the previous Government's decision to increase tax to 50%-of course, they introduced that in the last
month they were in office. Again, that was not an easy decision. I am not instinctively in favour of higher marginal tax rates, but it is necessary at a time like this. I am determined that all parts of the income distribution should make a contribution, but that the people at the top of the income distribution should make the most.
Finally, on the disposal of the banks, at the moment we are not in a position to do that, but of course we monitor the situation the whole time and, as and when we can dispose of them, we will. I am very keen to create a more competitive banking sector at the end of this process, which is one of the reasons why we set up the independent commission.
Karen Bradley (Staffordshire Moorlands) (Con): Areas such as Staffordshire Moorlands were neglected by the previous Government. Will the Chancellor tell the House how areas that have been let down by policies such as regionalisation will be helped by the measures announced by this Government?
Mr Osborne: We have much more focused local area partnerships that are going to help areas such as Staffordshire Moorlands, which I suspect were rather neglected by the regional development agency. I assume that such areas were not where the action was in the west midlands, and that the emphasis would have been on the big metropolitan centres. Her town of Leek and the surrounding countryside would, I suspect, have been ignored by the RDA. One of the advantages of local enterprise partnerships-and, indeed, the regional growth fund-is that we can focus on particular areas where we want to get more private sector involvement and create jobs.
Mr David Winnick (Walsall North) (Lab): I witnessed the misery and devastation that occurred in my black country constituency and elsewhere during the Tory years, and all the indications that the Chancellor has given today are that there will be a repeat of that, and that, despite what he has said, the people who will suffer the most will be those on the lowest incomes. This will be a day of tragedy for the British people.
Mr Osborne: The hon. Gentleman is not known for overstatement, but I would say to him that we inherited a situation of rising unemployment, the biggest fall in output in a generation, the biggest banking crisis-thanks to the way in which the previous Government had regulated the banks-and a huge budget deficit. In the next hour-or however long you allow for questions, Mr Speaker-every single Labour Member who gets up should propose an alternative plan. It is very difficult to make choices, but they can attack this plan only if they have an alternative.
Bob Russell (Colchester) (LD): I welcome the Government's commitment to end child poverty-during this Parliament, we hope-which Labour failed miserably to do, but may I draw the Chancellor's attention to what the coalition programme says about rented housing? Hundreds of thousands of families will be adversely affected by the removal or cutting of housing benefit. Will he confirm that local authorities have a statutory duty to house homeless families, and that the cost of bed-and-breakfast accommodation is considerably greater than that of housing benefit?
Mr Osborne: The housing benefit budget has been rising at a very rapid pace and, frankly, anyone doing my job would have to address that bill. We have sought to do that in a way that is fair and that balances the needs of the taxpayer with the needs of those in receipt of housing benefit. There has been a lot of speculation about social tenants, but we are not changing the social tenancy agreements of people in existing social tenancies-[Hon. Members: "Yes you are!"] That is what we are not doing. We are saying that for new tenants we will have to have something more like the market rent. I have to say that that was the policy of the previous Government-
Mr Osborne: But it was the stated policy of the previous Government to increase social rents over time to approach the level of market rents- [ Interruption. ] That was the policy of the previous Government. As I have said, we have tried to do this in a way that protects existing social tenants. It will help to build more social housing, and in the end the Opposition have to ask themselves why they failed so miserably on building social housing.
Stewart Hosie (Dundee East) (SNP): The Chancellor has announced 500,000 job losses and cuts of £81 billion-that is just the cuts, not the tax increases-while giving no detail of how that will be achieved. This will cause huge anxiety among those in the public sector and those who depend on their services, and in the private sector firms that are dependent on public sector contracts. I believe that this is reckless: it cuts too fast and too deep. I have one question today: how can the Chancellor possibly imagine that, after his statement, a real-terms, direct cut to the Scottish block of around £4 billion can do anything other than weaken the ability of Scotland to recover in these difficult economic times?
Mr Osborne: First, we have preserved the Barnett funding arrangements. Secondly, the decisions that we have taken on the national health service and schools budgets in England will help the funding settlement for Scotland. What we are seeking to do, north and south of the border, is to put the United Kingdom's economy on a strong and sustainable footing so that there can be growth in Scotland and in the rest of the country. My final observation is that people are pretty clear, in the House and in Scotland, that if Scotland had been independent over the past three years, given the scale of the banking crisis, it would now look like Iceland.
Robert Halfon (Harlow) (Con): My constituents will welcome this Robin Hood public spending statement, particularly the resources that are going into cold weather payments, apprenticeships and help for young children. Does the Chancellor agree that people would rather have lower taxes and more spending on public services than spend £120 million a day paying off the debt?
My hon. Friend is right. This country is spending £120 million a day on debt interest. So all the pet projects that Labour has suddenly discovered- [ Interruption. ] Well, the truth is that the previous Labour Government inherited a golden economic legacy from the Conservatives, but we have been left the worst
economic inheritance that any peacetime Government in this country have ever faced. Unfortunately, we have to deal with it, but we are doing that as two parties working together to clean up the mess that one party created. The goal that I have in sight is a more prosperous, sustainable economy and a public finance situation that is deliverable and affordable for the people of Harlow.
Teresa Pearce (Erith and Thamesmead) (Lab): The Chancellor has told us that we can expect 490,000 public sector jobs to go in the next five years, while PricewaterhouseCoopers has made an expert estimate that another 500,000 private sector jobs will go. How does putting out of work 1 million people, who will no longer pay tax and will add to the jobseeker's allowance and housing benefit budgets, cut the deficit and add to growth?
Mr Osborne: I shall make a couple of observations. First, the independent Office for Budget Responsibility-the hon. Lady is, after all, quoting its forecast, so I presume that she would accept its whole forecast-has predicted that unemployment will fall and that more private sector jobs will be created. Secondly, she must accept-even the deficit deniers in the Labour party must accept it, and they admitted it during the general election-that there would have been a reduction in the public sector head count if there had been a Labour Government. I do not know whether the hon. Lady agrees with that-she can shake her head, nod or whatever-but that is the truth. We have had to make some decisions, but there is a high turnover in the public sector anyway, so we hope that much of this can be accommodated by posts not being filled. There will be redundancies-I think the Labour party has accepted that there would have been redundancies under its plan-but we are going to do everything we can to deal with that situation and help those people to find work. In the end, however, the current size of the budget deficit means that we have to deal with this situation, or many, many more jobs would be at risk. Let us remember that this Government came into office with unemployment rising, and that is what we have had to deal with.
Nadhim Zahawi (Stratford-on-Avon) (Con): The shadow Chancellor, although very good at the jokes, demonstrated in his response his confusion about the difference between fiscal and structural deficit. I wondered whether the Chancellor could help by explaining that difference to him.
Mr Speaker: Order. I do not think that we will go with that. With respect, Members must get into the habit of asking questions about the policy of the Government, not about advice to shadow Ministers. Let us get that straight.
Mr Jack Straw (Blackburn) (Lab):
The Chancellor of the Exchequer failed to answer the question put by my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson) about the extraordinary 11,000 reduction in the number of front-line probation and prison staff in the Ministry of Justice. Will the Chancellor confirm that this runs completely counter to what the Prime Minister said on 2 May about protecting front-line services, and that, even worse, it can only be a
grave gamble with the security and safety of the British public and will eat away at the very successful fight against crime?
Mr Osborne: Obviously, I do not agree with right hon. Gentleman. All Government Departments have had to make savings. Is he really telling me that if his party had been re-elected and he had been in the Cabinet, the Ministry of Justice would somehow have been protected from any reductions?
Mr Osborne: Let me explain a couple of things to the right hon. Gentleman. First, as a member of the Cabinet, he fought the general election on protecting part of the health service, not the whole of it, if I remember correctly. He talked about two years of real increases in school funding, but we are going with four. I think he also made a promise on police numbers, but the then Home Secretary ditched the promise in the middle of the general election. The Ministry of Justice has to make a contribution. The right hon. Gentleman says, "Not on this scale", but over the next four years, the actual reduction in non-protected Departments would have been greater under his Government than under ours because of the decisions we have taken on welfare. The Institute for Fiscal Studies calculated a figure of minus 20%; it is minus 19% in our figures. The Ministry of Justice is, of course, part of one of those non-protected areas.
James Morris (Halesowen and Rowley Regis) (Con): I welcome the Chancellor's statement, and I know that many hard-working people in my constituency will support the welfare reforms he has announced. Does my right hon. Friend agree that the welfare reform proposals made today are vital because the decisions were ducked by the previous Government?
Mr Osborne: My hon. Friend is absolutely right. These decisions are absolutely vital to provide economic stability and to make sure that Britain does not go back to the brink of bankruptcy. What I would say to my hon. Friend and his constituents, many of whom work extremely hard and for long hours to pay their taxes, is that it is not acceptable for those taxes to go into the debt interest that we pay to foreign creditors when we really want the money spent here at home. That is what this is all about-trying to reduce our debt bills and bring some economic stability by reforming a welfare state that, frankly, grew out of control. We have taken the decisions today. If people have alternatives, they can put them on the table.
Mr Clive Betts (Sheffield South East) (Lab): With regard to the new rents at 80% of market rent levels for social housing tenants, when a tenant is out of work, will the rent be covered totally by housing benefit? In that case, is there no new money to pay for social housing? When a tenant is in work or seeking it, will not these new higher rents provide a disincentive to going out to work? Will the rents apply to existing tenants who seek to move home, which would be a disincentive to mobility?
We have had to take some difficult decisions on housing benefit, but I think they are fair and we have sought to protect the most vulnerable. Of
course, the universal credit we are introducing means that it will always pay to work-that is the basic principle and housing benefit is part of it. The Secretary of State for Communities and Local Government will set out the reforms in detail. The principles are set out in the document, which the hon. Gentleman can look at. As I said, existing social tenants will be protected through their rent agreements.
Simon Hughes (Bermondsey and Old Southwark) (LD): The Government have rightly taken decisions to deal with the deficit left by the international recession, the banks and the outgoing Labour Government. Can the Chancellor confirm that the policy behind the statement is not just that those with the broadest shoulders should carry the biggest burden, but that as well as children, pensioners and households on the lowest incomes will be protected most, which will be supported by the assessment of the impact of the Budget and the statement he has made and presented today?
Mr Osborne: The poorest suffer when a country loses control of its public finances. That, indeed, was the assessment of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), and it was one of the few things he said that I agreed with. Constituents on the lowest incomes benefit from a Government trying to deal with this economic problem. The structural deficit-someone asked me about it-is the bit that does not go away when the economy grows. Labour Members seem to be suggesting that in four years' time, a Chancellor of the Exchequer will stand up to announce the next four-year programme of cuts, which would not do this country much good.
Specifically on pensioners, we have of course taken the big decision to link the basic state pension to earnings, and we have protected the pension credit. Yes, there have been some difficult decisions on welfare, but I have sought to protect the most vulnerable, and I believe that our overall welfare reforms will help to provide incentives to many in our country who do not currently have them to seek employment.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op): It is very disturbing that this statement simply does not disclose the extent of the cuts being made to transport, although it is clear that there will be a massive increase in both train and bus fares. How can that help economic recovery, including people's ability to get to work?
Mr Osborne: We are spending more on transport projects over the next four years than was spent during the last four years. I have made every effort to prioritise transport spending, which has led to other questions coming down the line. Given that the hon. Lady is a Liverpool MP, I thought she might at least welcome the Mersey Gateway project. I am an MP for the north-west, as is the right hon. Member for Blackburn (Mr Straw), and we have been talking about the Mersey Gateway project for an awful long time. It is going ahead.
Richard Harrington (Watford) (Con): Will my right hon. Friend confirm to me and my constituents that the purpose of today's announcement is to take public expenditure back to 2008 levels, not 1888 levels as some Opposition Members have implied?
Naomi Long (Belfast East) (Alliance): Given that Northern Ireland has a great reliance on the public sector, which means that these cuts will hit it pretty hard, when do the Government intend to bring forward their promised proposals to look at rebalancing the economy in Northern Ireland, along with the Northern Ireland Executive?
Mr Osborne: Of course there are difficult decisions today, but because of the decisions we have taken on the English health service and the English education system, Northern Ireland gets a relatively favourable settlement in comparison with some other parts of the country. We have also made the decision today on the Presbyterian Mutual Society and we want to work with the devolved Administration to ensure that people who have had no certainty for a long time can now get it and get some money for the savings they have lost. I promise the hon. Lady that my right hon. Friend the Secretary of State for Northern Ireland regularly raises with me issues about growth and investment in Northern Ireland. As I am sure the hon. Lady knows, he has lots of ideas for stimulating economic activity, and I believe he is going to bring forward his proposals later this year. We will all be able to participate in the debate about them at that time.
Ms Louise Bagshawe (Corby) (Con): Does my right hon. Friend share my joy at the shadow Chancellor's admission that the deficit must be reduced, and my mystification that he is apparently so bereft of ideas that today he sent an e-mail asking for "Answers on a postcard, please"?
Liz Kendall (Leicester West) (Lab): Cutting funds for local councils by 28.4% over four years will decimate services in Leicester West, and allowing councils to borrow against business rates will further widen inequalities, as areas with more private businesses can borrow more to improve services. Can the Chancellor explain to me, and to my constituents, how that is fair?
Mr Osborne: I am sorry that the hon. Lady is opposed to more freedom for local government- [Interruption.] Well, that is what my increment financing proposal means. Along with our other decisions about grants, it means more freedom for local government. As I have said, this is a challenging settlement for local government. [Interruption.] Let me repeat that the Labour party created the budget deficit, and if the Labour party does not have a plan, it is in no position to criticise those who are trying to sort out this mess.
Tony Baldry (Banbury) (Con):
Do not an increase in the number of adult apprenticeships, commitment to the digital economy through the rolling out of universal super-fast broadband, investment in the green investment bank, protection for the science budget and the encouragement of green-collar jobs demonstrate the coalition Government's belief, with every fibre of our
being, that the only way forward for the country is a private sector-led recovery which will generate real wealth and real, new jobs for the 21st century?
Mr Osborne: Of course I agree with my hon. Friend. We made every effort to protect the science budget-that was one of the things that we strained to achieve-and if the efficiency proposals in the Wakeham report are implemented, that will lead to a real increase in scientific output. We have also been able to confirm the synchrotron project in Oxfordshire. Although Oxfordshire is extremely well-represented in the Cabinet, it is unfortunately not one of the counties that will benefit from a super-fast broadband pilot, but I hope that if the pilots are successful we will be able to roll them out in other rural parts of England, including the Banbury constituency.
Hazel Blears (Salford and Eccles) (Lab): According to the independent organisation New Philanthropy Capital, the massive cuts of nearly 30% in local councils' budgets over the next four years will mean cuts of between £3.2 billion and £5.1 billion in charitable and voluntary bodies which provide essential services for many of the most vulnerable people in our communities. What action will the Chancellor take to ensure that the Prime Minister's much-vaunted big society does not end up smaller and weaker, and leave thousands of the most vulnerable citizens at risk?
Mr Osborne: As I mentioned early in my speech, we have provided some additional resources for the voluntary sector through the transition fund. As for the local government settlement, I said that it was challenging. The right hon. Lady, who used to be a member of the Cabinet, is well aware that some difficult decisions were required to reduce the deficit. If there are other areas of Government spending that she would have preferred me to cut more, she can tell me what they are, but she did not volunteer any in her question.
Jesse Norman (Hereford and South Herefordshire) (Con): May I say, on behalf of not merely the people of Herefordshire but people in rural counties everywhere, how thrilled I am about the new super-fast broadband pilot? That is magnificent news. May I also ask the Chancellor whether it made a difference that the previous fundamental savings review had not been implemented when he came to see the problem face to face?
Mr Osborne: It did make a difference, and I found in the Treasury absolutely no plans to reduce the budget deficit. They were pencilled into the March Budget, which Labour Members all cheered at the time, but absolutely no plans were put in place.
Sammy Wilson (East Antrim) (DUP): We understand the economic mess that the coalition Government have inherited and the problems that it presents, but the spending review represents a huge gamble with people's jobs, with economic growth and with public welfare. I suppose we all hope that it pays off.
How does the fact that capital expenditure will fall by 40% over the next four years in an already fragile Northern Ireland economy sit with the promise from the Secretary of State for Northern Ireland only last week that the investment programme would be protected? What assessment has the Chancellor made of the impact on his desire, and that of the Northern Ireland Executive, to rebalance the Northern Ireland economy?
Mr Osborne: Let me say first that the biggest gamble that the country could have taken in the current world environment would have been not to set out a credible plan to reduce the budget deficit. If we had not set out that plan and made our decisions, we really would have been in the firing line. Secondly, the capital spending cuts that I have-unfortunately-announced today are less than those proposed in the Labour Government's plan, because of the increase in the capital envelope that I announced. That does make them particularly easy, but I have sought to prioritise infrastructure investments, and if there are good projects in Northern Ireland we can work on them with the devolved Administration. This is, of course, an area of devolved responsibility.
Finally, let me say that one of the absolute priorities of my right hon. Friend the Secretary of State for Northern Ireland, after security, is enabling the economy to grow and a private sector recovery to take place in Northern Ireland. I am sure it will be possible to arrange, some time later this year, an opportunity for us all to get together-the representatives in Northern Ireland, the Secretary of State and I-to discuss what we can do to help Northern Ireland see that private sector job growth.
Nick de Bois (Enfield North) (Con): While I greatly welcome today's announcement, my constituents-particularly my younger constituents, who live in an area where there is one of the highest levels of youth unemployment-would be keen to know what specific measures will be taken to support apprenticeships, thus enhancing their chances for the future.
Mr Osborne: We have already announced a record investment in apprenticeships, and many tens of thousands of additional apprenticeships. That is because of the difficult decisions that we made elsewhere in the Budget, and I think it shows that we are investing in the skills that our economy needs for the future.
Mr Andrew Love (Edmonton) (Lab/Co-op): The Chancellor has announced the loss of 490,000 jobs in the public sector, and has not challenged the forecast by PricewaterhouseCoopers that 500,000 jobs will be lost in the private sector as a consequence. What estimate has he made of the number of jobs that will be lost in the construction sector, in view of what was said by my hon. Friend the Member for Sheffield South East (Mr Betts) about cuts in funds for social housing? Given the accepted sluggishness of the private sector recovery in the economy, will we not see significant increases in overall unemployment in the next year?
The hon. Gentleman, who is a member of the Treasury Committee, knows that the budget deficit was threatening the economic stability of the country. He also knows that his party proposed to eliminate the structural deficit over a slightly longer
period than we propose. That, however, would not have reduced the scale of the cuts; it would merely have prolonged them. A structural deficit is a deficit that does not return when the economy grows. That is the definition of a structural deficit.
We are investing in road projects, and in housing projects: we are providing 150,000 new homes. The hon. Gentleman probably has not had time to study the document, but the capital cuts that have been set out today are less than the capital cuts in the March Budget presented by the Labour party.
Gavin Williamson (South Staffordshire) (Con): Will my right hon. Friend assure the House that, unlike the Labour party, which abandoned Prudence after two years of government and pursued the policies of economic recklessness, he will continue to hold Prudence close to his heart to ensure that we have long-term stability and growth?
Mark Durkan (Foyle) (SDLP): Can the Chancellor assure us that the green investment bank will be active and accessible to all regions, including Northern Ireland, and that relevant projects will not be disqualified by virtue of having a cross-border character? That would be entirely appropriate, given our market and environmental context.
Mr Osborne: In my statement, I set aside £1 billion of direct Government funding for the green investment bank. That will, I hope, be the minimum sum. I also want to dispose of certain Government assets and put the money from those sales into the bank, but I wanted to provide a minimum of £1 billion in case those asset sales took longer to realise than we hoped. I also want to lever in private sector investment so that the bank is a very successful vehicle for helping all parts of the United Kingdom invest in green energy. I am very happy to consider the case for cross-border projects because, obviously, the economies of Ireland and Northern Ireland are very closely linked, and I will come back to the hon. Gentleman on that specific point.
Sarah Newton (Truro and Falmouth) (Con): We have inherited a social care funding system that is just not fit for purpose and that lets down tens of thousands of the most vulnerable people in our society. I greatly welcome the extra £2 billion of funding while we establish a new and reformed system. When will details of the extra funds be made available?
Mr Osborne: There are details in the book we have published today, and we will set out more details in the coming days. Also, we are, of course, waiting for Andrew Dilnot's report into social care. We have tried to address a long-established problem that we are all aware of in our constituencies: the wall that is sometimes there between the health service and the local authority. Given the challenging nature of the settlement, I was conscious that social care might be affected, which is why I found the additional £2 billion for it.
Phil Wilson (Sedgefield) (Lab):
The Chancellor said in his statement that he would like the country to be able to afford new rolling stock. Can he say what that means for the intercity express programme, considering
both that if it does go ahead it will create hundreds of jobs in my constituency and thousands more in the north-east of England, and that no public sector money will be required until after the next election?
Stephen Williams (Bristol West) (LD): The Chancellor said that fairness was one of the objectives of his statement. I grew up in poverty-in fact, I was on free school meals-and one of my ideological objectives in politics is to deliver social mobility, so will the Chancellor confirm that the £7.5 billion of extra investment he has announced today is the biggest part of the CSR and will help unlock potential in some of the poorest families in the country?
Mr Osborne: My hon. Friend brings a life experience to bear on this debate. The two biggest settlements have been for health and education. In education, we have particularly prioritised disadvantaged children, primarily those on free school meals. At the heart of the coalition agreement was the commitment to a £2.5 billion pupil premium. We have found that money on top of the flat cash settlement per pupil, even when pupil numbers are rising. It leads to a real increase in resource in schools-over four years, rather than the two years that the Labour party was offering at the general election. We are also offering for the first time 15 hours of free education for all disadvantaged two-year-olds, which will of course include those on free school meals. That offers a real chance to ensure that other people on free school meals have as successful a career as my hon. Friend.
Joan Ruddock (Lewisham, Deptford) (Lab): The Chancellor said that he will replace the education maintenance allowance with more targeted support. Can he tell me and the thousands of families in Lewisham who will be affected what could be more targeted than £30 into the pocket of a family who are bearing the extra burden of keeping a teenager at school?
Mr Osborne: We looked very carefully at this programme, and it has a very high dead weight. We are raising the compulsory participation age to 18 and funding that-one of the policy's original stated purposes was to get people to stay on after 16-and we will introduce a more targeted scheme, so there will be help. I have to say that we conducted a public consultation over the summer, and we received 100,000 responses, many from parents and children in receipt of EMA. It was one of the most prominent issues raised, and the overwhelming view of the responses was that it was not a well-targeted support. That has certainly been my experience from those in some of the schools that I have visited. We are looking for a more targeted payment that actually helps those whom this financial incentive would really encourage to stay on in education.
Mr Rob Wilson (Reading East) (Con): I welcome the Chancellor's commitment to protecting the science budget and his comments on Lord Browne's review of university and student funding, but does he agree with me-and, apparently, the new shadow Chancellor-that the problem with a graduate tax is that the money goes straight to the Treasury and not to the universities?
Mr Osborne: My hon. Friend is absolutely right, and he has considerable experience in this area. The problem with the graduate tax, which we honestly looked at and honestly considered- [Interruption.] Actually, an enormous amount of work was done in looking at the feasibility of the graduate tax, some of it by the previous Government: the shadow Chancellor was the higher education Minister who ruled out a graduate tax, and under the previous Government the education Department published a paper about why it would not work. As I have said, we looked at this idea carefully-we approached it in a genuinely open-minded way-but there were many disadvantages to it. One of them was that it would represent a massive centralisation of the university system with, basically, the Treasury controlling, almost to the last pound, how much different universities would get. That is why, as I understand it, the Russell group of universities-for a start-are completely against it.
Sir Stuart Bell (Middlesbrough) (Lab): On the Prime Minister's statement which the Chancellor confirmed, the House will welcome the facts that the science budget is safeguarded, that the adult apprenticeship scheme will be advanced, and that £500 million will go into the Tyne and Wear metro and the Tees valley bus network.
Following on from the questions of my hon. Friends the Members for Erith and Thamesmead (Teresa Pearce) and for Leicester West (Liz Kendall), since the Chancellor places so much emphasis on fairness, how can it be fair to make 490,000 people unemployed in the public sector and a putative further 500,000 in the private sector? How can that be a sensible policy for growth?
Mr Osborne: That is, quite frankly, a deliberate misrepresentation of the number, which was produced independently. The number is for the reduction in the public sector head-count over four years. As I have said, there will be redundancies, but there will also be posts that go unfilled. The plan set forward by the Labour party also involved a reduction in the head-count of hundreds of thousands; the Leader of the Opposition admitted that on a number of occasions during both the general election and his party's leadership contest. We have all got to face up to this challenge, but I should point out that the same organisation that produced the number that the hon. Member for Middlesbrough (Sir Stuart Bell) cites-the Office for Budget Responsibility-also forecasts falling unemployment through to 2014.
Andrew Percy (Brigg and Goole) (Con): I welcome the commitment to infrastructure funding for Yorkshire and Humber, which follows the announcement on the review of the Humber bridge tolls two weeks ago. I also welcome the commitment to offshore wind energy. Just last week in North Lincolnshire, Labour and Conservative councillors voted through an offshore wind development at the South Humber gateway, which has the potential to bring 5,000 jobs to the region. However, that is now in jeopardy because Natural England is requesting that it be called in for a public inquiry, with the risk that the jobs will go to mainland Europe. Given the commitment to offshore wind, will the Chancellor have a quiet word with the Secretary of State for Communities and Local Government and encourage him to reject that application for a public inquiry?
Mr Osborne: I think that I would get myself into a lot of legal hot water if I were to do that, but let me make a couple of observations. First, all involved in planning decisions, whether at local, area or national level, should take into account the need for the economic investment that the British economy must have over the coming years and give that due consideration. Secondly, we have found additional money for offshore wind technology investment, including manufacturing at port sites, which was one of the issues the trade unions raised with me as a particular priority. Finally, both my hon. Friend and our hon. Friend the Member for Beverley and Holderness (Mr Stuart) have been very persistent in asking for a Treasury review of the Humber bridge tolls-in which no doubt the shadow Chancellor takes an interest, too-and there will be a Treasury-led review of the tolls, but I am not going to prejudge its outcome.
Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab): The Department for International Development operates within my constituency, and many people will welcome today's commitment by the Government to spend 0.7% of GDP on international development. However, can the Chancellor tell me how much of that budget will be assigned to works previously delivered and paid for by other Government Departments, agencies and non-departmental public bodies?
Mr Osborne: There is a very substantial increase, of about 37%, in DFID's budget. There are parts of international development work that the Foreign and Commonwealth Office carries out too-conflict stabilisation and the like. It is, of course, perfectly within the rules set on the UN commitment, which are internationally policed and so we cannot fudge them, and perfectly reasonable to count that expenditure towards the 0.7% target. However, the large bulk will be delivered through DFID, whose budget has a substantial increase. I suggest that it is a task for this House-all parties-to ensure that that development aid is well spent on the poorest people and on conflict prevention.
Andrew Bridgen (North West Leicestershire) (Con): Does my right hon. Friend agree that the reason why the previous Labour Government failed to hold a spending review was because they bottled their responsibilities? Does he also agree that Labour Members are still running away from those now and that the cuts that we are seeing are no more than the butcher's bill for 13 years of Labour profligacy and waste?
Mr Osborne: I completely agree with my hon. Friend. It is striking that in all the responses and everything that we have heard today from Labour Front Benchers and Back Benchers there has not been a single positive proposal as to how to reduce the deficit that they all sat there and allowed to grow.
What I would say to the hon. Gentleman is that, again, we have to take a realistic decision about investment in our railways. We are going to invest £14 billion in them and we also want to invest in new rolling stock, on which I was asked a question by the
hon. Member for Sedgefield (Phil Wilson), who has now left his place. That has required a tough decision on rail fares, but I hope that passengers will at least understand that if we want investment in rail stock we have to be able to afford it, and the people who use the rail stock should make a contribution to that.
Sajid Javid (Bromsgrove) (Con): I welcome the bold and powerful statement that my right hon. Friend has made today and, in particular, the efforts to protect the most vulnerable. Does he agree that the biggest risk to our economy would have been to have done nothing at all, as advocated by most Labour Members, and that the action that he has taken today will do the most to restore economic confidence to our economy?
Mr Osborne: I agree with my hon. Friend. Whoever won the general election-whoever formed the Government-was going to have to come to the House of Commons to set out a plan for reducing the highest budget deficit in our peacetime history; the deficit is considerably higher than it was when Denis Healey had to go to the International Monetary Fund. We have set out those proposals, and I believe that they will deliver certainty and stability going forward. The market interest rates for British businesses and British families are already lower as a result of the decisions that we have taken since coming into office. As for the decisions that we have announced today, I have noted that not a single Labour Member has asked me about the increase in the child tax credit, which will help 4 million families.
Caroline Lucas (Brighton, Pavilion) (Green): I am not sure how the Government can claim to be the greenest ever when it is estimated that Department of Energy and Climate Change and Department for Environment, Food and Rural Affairs funding combined will reduce by 47% in real terms over the next four years. However, my question is this: should the Chancellor not do more than just hope that the private sector will fill the huge gap between the £1 billion he has set aside for the green investment bank and the £4 billion to £6 billion that Ernst and Young says is the minimum required? He said that he would try to find a bit more through the sale of assets, but how much does he imagine that will fund as well?
Mr Osborne: There is commitment, even in these difficult times, to a carbon capture and storage demonstration, to the development of offshore wind technology and manufacturing at port sites, and to a renewable heat incentive. On the green investment bank, it would have been easy to say, in my position, "Let's wait to see whether we can get some Government asset sales and some private sector money; just create the body and hope it gets the funding." I wanted to provide a back-stop and I have done so today by making available £1 billion from general Government expenditure. However, I also want to see substantial Government asset sales go into the green investment bank and to lever in some private sector money, so that it is a multi-billion pound force for investment in our country.
Dr Thérèse Coffey (Suffolk Coastal) (Con):
I congratulate the Chancellor and the Chief Secretary to the Treasury on this spending review. Delivering investment in 21st-century infrastructure will be welcomed by my constituents,
as will the spending to protect the post office network and, most importantly for us, to deal with coastal erosion. Does he agree that it is the coalition Government who are making the difficult and politically courageous spending decisions? That has also been reflected today in the European Parliament, where Conservative MEPs voted to reduce the European Union budget, unlike Labour MEPs, who did not take that opportunity and instead also voted for tax-raising powers for the EU.
Mr Osborne: My hon. Friend tells me something that I did not know, which is that the behaviour of Labour MEPs is completely inconsistent with the message from their party that it is serious about trying to reduce Britain's budget deficit. The money that we have found for flood and coastal defences totals about £2 billion and will help 145,000 households. Obviously, the relevant Secretary of State will make the announcements about the different tranches that will now go ahead, and I wish Suffolk Coastal every success.
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab): This is further to the question asked by my hon. Friend the Member for East Kilbride, Strathaven and Lesmahagow (Mr McCann) and refers to the Chancellor's use of the words "conflict resolution", which strangely were also used several times by the Prime Minister yesterday in the context of a statement on defence expenditure. It also recalls the episode of the Pergau dam. Can the Chancellor give us an absolute assurance that ring-fenced funding for overseas aid will not find its way into defence commitments and will be used for the purposes outlined in the millennium development goals?
Mr Osborne: Let me say to the right hon. Gentleman that, first, the 0.7% target is internationally monitored and so, having said we are going to hit it, we obviously do not want to find the international bodies saying that we have badged overseas aid in the wrong way. [Interruption.] May I say to the hon. Member for Brent North (Barry Gardiner) that we have increased the international aid budget by almost £4 billion today? I understand that lots of Labour Members, and indeed Members on this side of the House, want to ask questions about specific difficult decisions that we have taken, but to quibble about the massive 37% increase in DFID's budget is a little unfair. We have made a decision as a House of Commons to hit the 0.7% target, as internationally observed-all parties were committed to this in the general election-which we have to understand has consequences in Government budgets elsewhere. That involves a substantial increase in the international development budget. We are funding very specific projects on malaria, maternal health and the like, and as a country we should be proud and tell the world about our commitment, rather than suggest that the rules will be fudged when they cannot be because they are internationally policed.
Mr Aidan Burley (Cannock Chase) (Con): Will my right hon. Friend take this opportunity to nail, once and for all, the lie perpetuated by many Labour Members that the international banking crisis is in some way completely responsible for the budget deficit, given that, in reality, the figures show that just £40 billion of the total £667 billion spent by Government last year went to prop up the banks?
Mr Osborne: If my hon. Friend has not yet had the opportunity to do so, he should look at chart 1.1 in the book produced by the Treasury, which shows that a structural deficit was emerging throughout the past decade and that that made Britain particularly ill-prepared for what happened in our banks. Of course, the poor regulation of our banking system meant that this country was probably affected more than any other, except for Iceland and perhaps Ireland. We are trying to sort that out, by addressing not only the public finances, but the regulation of the banks. As I say, if we had fixed the roof when the sun was shining, we would have been in a better condition to deal with the storms.
Jeremy Corbyn (Islington North) (Lab): The Chancellor will be aware that housing is the biggest and most serious problem facing people in my constituency, because of overcrowding and a shortage of social housing. His proposals in July to cap housing benefit render at risk the lives of many people living in private rented accommodation, where the rent is paid by housing benefit, and his proposals now to have two tiers of council tenure do not sit very well, because one tenant will be living in secure accommodation on a fixed rent of about £100 a week whereas their next-door neighbour, because of an accident of dates, will be paying at least twice that in rent and will have no security of tenure. How does that fit with the notion that we are all in it together?
Mr Osborne: There is a problem in social housing, but frankly the party that the hon. Gentleman supported in this House-on and off-for 13 years did absolutely nothing to address it. We are trying to reform social housing provision so that more homes are built and so that there is more availability of socially rented properties, unlike the fall that we have seen recently. He talks about his constituents and he must ask himself-I certainly confronted this-whether it was fair to ask the people of his constituency who go out to work to fund housing benefit bills of £50,000, £60,000 or £70,000 a year. That is totally unaffordable to the working people of Islington. We have introduced what I think is a perfectly reasonable rule that the average family out of work should not get more in benefits than the average family earns in work. I find it difficult to see how people could object to that.
Andrea Leadsom (South Northamptonshire) (Con): Does my right hon. Friend agree that in this country the key to our economic recovery will be the development and growth of new small and medium-sized enterprises? More people are employed in SMEs in this country than in any other sector. Does he also agree that in order to get SMEs up and running, it will be key that they have better funding, and that we remove barriers to entry for new providers to get funding to new SMEs?
Mr Osborne: I did not mention in my speech that we are funding the enterprise finance guarantee scheme to help small businesses get access to credit. In the Budget I also stopped the increase in the small companies tax rate that was going to take place under the previous Government. We want to help the small businesses and medium-sized enterprises that are the engine room of our private sector economy. I hope that some of the transport infrastructure, which is something that businesses often raise with us, set out today will help.
Mr Speaker: Order. This statement can run for only a few more minutes, so some people will be disappointed, but I reiterate the appeal for short questions. Help yourself and help others in the process.
Natascha Engel (North East Derbyshire) (Lab): The Chancellor has announced a cut of 490,000 jobs in the public sector. Whichever way he slices it, that still means that even after four years and even if it is down to natural wastage there will be 490,000 jobs in the public sector that are lost to the economy. He also wants to move people off benefit and into work to save on the welfare budget. How does he make this add up? Where are the jobs coming from that the people who are now on welfare-
Mr Osborne: First, to put it in context, close to 200,000 jobs have been created in the last three months. Secondly, the Labour party's plans involved a head-count reduction of more than 400,000. It was accepted by Labour politicians during the election that there would be a head-count reduction and that there would be redundancies. This is what happens when a country loses control of its public finances. If we had been better managed over recent years-if the people doing my job before me had managed to avoid this record budget deficit, which is the largest in the G20- [ Interruption. ] Opposition Members keep saying that this is all to do with the international situation. They have not yet managed to explain to me why we were the worst affected in that international situation. We have to take some difficult decisions, but it will help if private sector recovery helps to create jobs. The number that the hon. Lady keeps using is a number from an independent body-the Office for Budget Responsibility-that she presumably regards as credible, since she is quoting it, but the OBR also forecast falling unemployment over the period. She cannot really use one forecast from the body and not the other.
Mary Macleod (Brentford and Isleworth) (Con): When my right hon. Friend met the IMF and World Bank officials in Washington recently, did they agree with his approach on reform, fairness and growth, which he has presented today, or did they suggest something else, like the Opposition have?
Mr Osborne: They said very clearly in their article IV assessment of the British economy that the measures we had taken were essential for fiscal sustainability. They do not always say that kind of thing about economies-last year, they criticised the previous Government's economic plans. To be honest with my hon. Friend, I did not share all my detailed budget plans with the IMF; I thought I would share them with the House of Commons first.
Jim Shannon (Strangford) (DUP): In the statement, the Chancellor did not mention additions to tax credits at any stage. One of the anomalies before the statement was made was, I understand, that people on an income of £45,000 would be penalised in their tax credits whereas those who had two incomes coming into their house, perhaps totalling £80,000, would not be penalised. That money is not cappuccino and cupcake money-it is for education and clothing for their children and for the mortgage. What steps will the Chancellor take to help those people?
Mr Osborne: I think the hon. Gentleman is referring to child benefit, and it has clearly been a difficult decision to remove child benefit from families where there is a higher rate taxpayer. It raises £2.5 billion. It is interesting to note that, although it was the first issue raised by the Leader of the Opposition at Prime Minister's questions last week, not a single Labour MP has mentioned it. I think they are beginning to realise that making this their priority for public spending is probably a mistake. I understand that it is a difficult decision, but I have to try to make this fair. These higher rate taxpayers represent the top 20% of earners and the decisions that I have taken have tried to make this fair across the income distribution.
Paul Uppal (Wolverhampton South West) (Con): It is often said of the last Labour Government that although talk is cheap, the consequences of their actions were very expensive. Does the Chancellor agree that the sentiment of the spending review is not about cuts but about responsibility and the financial responsibility that we bequeath to our children and our grandchildren?
Mr Osborne: My hon. Friend makes a very good point. We have talked a lot about fairness and about fairness across the income distribution, but there is also a fairness between generations. If we do not deal with these debts and do not have a credible plan, it will be our children and grandchildren who are saddled with the debts that we were not prepared to pay. I think that is very unfair.
Mr David Lammy (Tottenham) (Lab): The Chancellor describes the cuts to local government as challenging, but will he clarify whether cuts to the area cost adjustment and to specific grants mean that cuts to local authorities could be up to 35%? Both those grants are based on deprivation. How does he reconcile that with his obligations on child poverty?
Mr Osborne: The right hon. Gentleman is obviously-I do not hold this against him-a centraliser rather than a localiser. He would like all these decisions to be taken by people doing my job and directed to elected local councils through grants. We take a different approach. We are sweeping away a lot of these grants. I have to say however-I am sure that this will be of interest to people in his constituency, as I know something of the nature of it-that the increase in the child tax credit will help. We have also, at the insistence of the Secretary of State for Communities and Local Government, put a great deal of resources into the Supporting People programme, which is particularly important in areas such as that represented by the right hon. Gentleman.
David Rutley (Macclesfield) (Con): Does the Chancellor agree that the investments spelled out today in the regional growth fund will go a long way to help underpin growth and private sector jobs in the north-west, which we both represent?
As my hon. Friend is my local MP, I had better agree with him. His predecessor-people will remember the former Member for Macclesfield-was passionate about supporting manufacturing and I am glad that the torch has been passed to a new generation there. My hon. Friend is right. We need to see a private sector recovery and we need to see growth and investment
in the north-west of England. We want to get away from the economy that we have seen over the past 10 years, where all the growth was focused on one sector and where, from memory, for every 10 jobs created in the south-east of England by the private sector one job was created in the midlands and the north. That is not a sustainable economic model.
Derek Twigg (Halton) (Lab): I was grateful to hear the announcement from the Chancellor about the Mersey Gateway, which has all-party support. However, he knows that it must have funding to ensure that it can go ahead. Will he set out today, given that he is a local MP, what funding is allocated for the Mersey Gateway project?
Mr Osborne: I do not have the exact number to hand, but I shall give it to the hon. Gentleman this afternoon. We are funding the project as it was set out. I know the chief executive of Halton borough council because he used to be the chief executive of my local borough council. I have discussed it with him and I hope to have further discussions to ensure that the bridge is built and that the private investment linked to the bridge comes in. I shall give the hon. Gentleman the exact number later today.
Alec Shelbrooke (Elmet and Rothwell) (Con): May I thank the Chancellor for taking the decision to give to Equitable Life more than three times the amount that was recommended in the Chadwick report? Will he describe to the House and to my constituents what settlement he thinks that the Equitable Life policyholders might have got if the Opposition were still in government?
Mr Osborne: We know the answer to that because they had 13 years to address the problem and gave absolutely nothing. They then set up Sir John Chadwick's report and, although I thank him for it, I do not agree with its conclusions. I strongly suspect that if Labour had won the election, they would have agreed with his conclusions, which would have meant just a third of the money that I have set out today for Equitable Life policyholders. We are helping policyholders across the piece, but our particular priority has been the trapped annuitants, whom we will fully compensate.
Lilian Greenwood (Nottingham South) (Lab): The Chancellor has confirmed that almost half a million public sector jobs will go under his plan, and PricewaterhouseCoopers estimates that another half a million will go in the private sector. Will he explain how adding a million people to the dole so that they are paying no taxes will bring down the deficit and help our economy to grow?
Mr Osborne: Let me explain it to the hon. Lady. This country has the largest Budget deficit in the G20. If we do not address that, there will be economic ruin for this country, so we are addressing it. The reduction in the public sector head-count will take place over four years. This economy created 200,000 jobs in the last three months and part of the head-count reduction will happen through turnover. The last time I checked, Labour were still committed to eliminating the structural deficit-they just would have taken longer over it-so the job losses and the head-count reduction would have been prolonged. I do not think that is right for this country.
Mr Robert Buckland (South Swindon) (Con): As a fellow one-nation Conservative, does my right hon. Friend agree that today's announcement has been driven not by some ideological crusade, as the Labour party has suggested, but by a genuine desire to spend more Government revenue on public services and less on servicing Labour's debt?
Mr Osborne: My hon. Friend is absolutely right. Of course, we have made choices today. First, we have chosen to seek to reduce debt interest by going faster than the Labour party would have done. I think it is better to spend the money here rather than to give it to our foreign creditors. Secondly, we have chosen to put particular emphasis on trying to reduce the welfare bills. That has enabled us to increase investment in the NHS, schools and early-years provision, which we were discussing earlier. That is true to the values of one-nation conservatism and to the values of this coalition.
Barry Gardiner (Brent North) (Lab): I welcome the Chancellor's decision to honour the previous Government's commitment to contribute 0.7% of gross domestic product to international development, but I would like absolute transparency on this. How much of the money that was previously allocated in the Defence and Foreign and Commonwealth Office budgets is now going to be covered by the Department for International Development's budget?
Mr Osborne: Let me make two points. First, there is an increase of almost £4 billion in the DFID budget. Secondly, having a tri-departmental fund for DFID, the Ministry of Defence and the Foreign Office will help with conflict and supporting post-conflict stabilisation. It will grow from £229 million this year to £309 million in 2014-15-a growth of just short of £100 million. That will help us to avoid having to come into emergency situations, but it is, of course, pretty small given the scale of the increase that I have just announced in DFID's budget.
Thomas Docherty (Dunfermline and West Fife) (Lab): On a point of order, Mr Speaker. You have been very generous in the amount of time that you have given today, but many Members on both sides of the House did not have copies of the Chancellor's statement after he sat down. It seems that the Vote Office did not have sufficient papers or that the Treasury did not give it enough. Could you ensure that in future the Chancellor makes sure that the Vote Office is given ample copies of such statements so that hon. Members can scrutinise them?
Mr David Anderson (Blaydon) (Lab): On a point of order, Mr Speaker. In response to my question in Prime Minister's questions, the Prime Minister said that I mentioned the British Chambers of Commerce, but I did not. I referred specifically to a report from the North East chamber of commerce, which said that 17,000 jobs in the construction industry were at risk. I am the first to admit that my accent is not always the easiest to understand, but I am also sure that the Prime Minister was not misleading the House. Can you advise me on how this matter can be corrected?
Mr Speaker: The hon. Gentleman has just corrected it very successfully. I do not want to be personal, but let me say to him that I have never found the slightest difficulty in understanding what he has had to say. I hope that he is grateful for that.
That leave be given to bring in a Bill to make provision for police officers to be offered, or be made subject to, terms of redundancy; to set out the circumstances in which such redundancies can be made; and for connected purposes.
I should first declare an interest as a member of the Kent police authority. In that role, working with Kent's chief constable, I will have to help to make the savings the Chancellor has just announced. I should also emphasise that I speak as a friend and supporter of the police. I pay tribute to their service and the fact that, almost alone among the public servants affected by today's announcement, they forswear the right to strike.
In Kent, we are fortunate to have a chief constable who sees lower spending as an opportunity to deliver a new and more efficient way of policing Kent and to keep crime coming down. As we make cuts in the central grant-these might be higher than the overall figure of 4% per year that we have just heard-it is essential to allow police forces and authorities to decide how best to police their areas with the money they have. Unfortunately, the law does not currently give them that freedom, so we are asking chief constables to make cuts with one hand tied behind their back. That is because, historically, the police enjoy a unique status under the common law as constables who exercise discretion under the Crown. A senior police officer cannot order a constable to make an arrest; the constable must decide for himself. On that basis, the courts have traditionally held that the law of master and servant does not apply to the police. That law has evolved into the modern statute-based employment law that we have today, but, extraordinarily, the police still remain outside its scope. As no one employs the police, no one can make them redundant. A police officer is appointed subject to two years' probation, but after that, unless they are found guilty of gross misconduct, their appointment as a police officer simply continues until they retire-generally after 30 years. It makes France look like a flexible labour market.
Hon. Members might ask how cuts will be made in police budgets. The answer is that they will be concentrated on cheaper civilians. On average, police forces are made up of about 60% police officers and 40% civilians, but as forces have set out projected plans for reductions, they have had no choice but to target civilian staff disproportionately. Strathclyde police say that they plan to lose 200 officers and 600 civilians, and Cambridgeshire police say that they plan to lose 470 officers and 550 civilians.
In my own force, Kent, our chief constable had suggested cuts of 500 officers and 1,000 civilians.
Those civilians are employed in a range of roles-from call handlers to crime investigators to police community support officers-which are clearly on the front line of policing. Forces often use civilians for specialist roles that do not need fully warranted officers who have had costly training across all aspects of policing. That allows police forces to concentrate those officers where the public want them most. We want the police to do that, but unless we change the law, we risk forcing police officers off the streets and into back-office roles that are now done by police staff, because we let police authorities make their civilian employees redundant but make them pay police officers until they retire, whether or not they are needed and irrespective of performance.
The only flexibility-I use that word advisedly-that police forces and authorities have in respect of police officers is to force them to retire under regulations 19 and 20. Under regulation 19, police officers can be required to retire when they have reached pensionable service, which is generally after 30 years. Meanwhile, regulation 20 states that a police authority may require a police officer to retire
"if he is permanently disabled for the performance of his duty".
But I must tell the House that, when in Kent one of our officers is injured while protecting the public and is perfectly capable of doing a good desk job, we would like to look after them, not force them to retire simply because they are the only type of officer to whom we can do that.
I am not sure whether those regulations will in any event survive what I suspect will be a wave of litigation that their use will soon engender, but I want to introduce the Bill because I believe that hon. Members should make that decision in the House. If we are to require police forces and authorities to make significant savings, we should allow them to do that in a way that makes most sense for local policing. We should certainly not force them to do it by targeting civilians, the old and the disabled.
I ask hon. Members for permission to introduce the Bill, since today we are telling our local police forces that they must make savings; we should also give them the freedom to decide how that is done.
That Mark Reckless, Mr Aidan Burley, Kwasi Kwarteng, Lorraine Fullbrook, Amber Rudd, Priti Patel, Mr Robert Buckland, Mr David Ruffley, Mr Douglas Carswell, Fiona Bruce, Mr Philip Hollobone and Mr Christopher Chope present the Bill.
[Relevant documents: The Third Report from the Political and Constitutional Reform Committee, P arliamentary Voting System and Constituencies Bill, HC 437, and the oral evidence taken before the Committee on Thursday 15 July on the Coal ition Government's programme of political and constitutional reform, HC 358-i .]
"(2AA) The boundary review due to be completed by the date set out in subsection (2)(a) above shall not begin until both Houses of Parliament have approved a report from the Electoral Commission certifying that in its opinion sufficient measures have been taken to provide for the registration of eligible voters.".'.
The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath): I welcome you back to the Chair, Ms Primarolo, and to the consideration of clause 8. I am delighted that we can continue debating amendment 127. Of course, we would not have been able to do this if the Opposition's attempt to prevent us from doing so, when we dealt with the timetable motion yesterday, had succeeded. When I was last speaking to this group of amendments, we were having a brief exchange on the matter of Wales. I do not want to continue that exchange, because we need the opportunity to discuss the much more important issues relating to Wales and the other parts of the United Kingdom under clause 9, which I hope we will reach shortly.
I was also considering the amendments proposed by the hon. Member for Rhondda (Chris Bryant). One of the great advantages of having an overnight break is that we can look back at the Official Report and read what the protagonists have said. I looked back through the report of the 50 minutes that the hon. Gentleman took in proposing his amendments and found that he did not, as I had suspected, mention them once during those 50 minutes. We know not from him what the content of the amendments is. So I propose to move on from the hon. Gentleman to the right hon. and hon. Members who contributed something positive to the debate.
Much of what we heard was about registration and the fact-it is a fact-that many people do not appear on the electoral register. The hon. Member for Blackley and Broughton (Graham Stringer)-I am glad to see him in his place-made clear his view on that, and said, I think, that we were moving to a system whereby 3.5 million people are not on the register. I disagree with him about that. We are not moving to a system whereby 3.5 million people are not on the register; we are already at that stage, and have been for a very long time. The disgrace is that we have been so unsuccessful in dealing with the parts of the country where registration is insufficient.
My hon. Friend the Member for St Ives (Andrew George) set out some of the reasons why we will never achieve 100% registration, given the difficulties involved. He is absolutely right, and I do not disagree with his analysis in any way. That is why the Government are introducing proposals at least to help the process and get as many people as possible on to the register.
The difficulties that we have with the amendments fall into two groups. They would change the basis on which boundary reviews are effected, moving away from the number of registered electors to some other basis, whether an estimate of eligible electors or an estimate of population. Alternatively, they suggest that we delay the process and make it longer, by a variety of mechanisms. I do not believe that that is the right way forward. The proper course of action is to ensure that the register is as accurate as possible. As I have said, the Government are taking action to improve the registration system.
Amendment 125 would require the boundary commissions to use an estimate of eligible electors, to be provided by the Office for National Statistics. The
ONS does not at present make any estimate of eligible electors. Census data are available, but a census is carried out only once a decade, does not cover eligibility to vote and may contain inaccuracies. Indeed, in evidence to the Political and Constitutional Reform Committee, the secretary of the Boundary Commission for Scotland said that there would be "significant practical problems" with using population rather than registered electorate for the purposes of the boundary review. It was mentioned that the electoral register is published annually, whereas the census, which does not record whether a person is eligible to vote, is published every 10 years.
Delaying the boundary reviews would simply make the information on which they are based more inaccurate. The general election held last May was based on electoral registration data 10 years out of date. That cannot be right, and that is my difficulty with amendments 341 and 342, tabled by my hon. Friend the Member for Leeds North West (Greg Mulholland). Those amendments would not only delay the initial review, but halve the frequency of such reviews, by requiring the boundary commissions to report before 1 October 2018, instead of 2013, and every 10th year after that, instead of every fifth year. That would simply make an unacceptable situation worse.
The Government's proposals build on the existing arrangements for boundary reviews, which have been based on the electoral register for decades. It is right that we take action in support of complete and accurate registers, and the Government are taking that action. On that basis, I urge right hon. and hon. Members not to press their amendments.
Chris Bryant (Rhondda) (Lab): We have had 51 speakers-or rather, 52, counting the Deputy Leader of the House, who has just spoken. Despite his rather petulant and "ad hominate" speech last night, we have none the less had a good debate. He did, however, correctly excoriate me for not fully adumbrating the amendments that we tabled. That was partly because I took 31 interventions, more than half of which were from Government Members, but perhaps it would be of assistance if I were now to explain precisely why our two amendments are important.
The Deputy Leader of the House was quite right last night to say that our two amendments, 127 and 135, which refer to different parts of the Bill, are not necessarily readily comprehensible at first sight-partly because one refers to clause 8 and the other to clause 16. Both appear at different points in the amendment paper. Consequently, Members will have to turn to pages 429 and 445 to find them.
"within twelve months of part 2 of the...Act...coming into force in accordance with section 16(2) thereof'."
"after the referendum on the determination of powers devolved to the National Assembly for Wales under the terms of the Government of Wales Act 2006".
The Deputy Leader of the House rightly told me off last night for not explaining precisely why we believe that that is important. As I tried to say in yesterday's debate, historically, we have constructed Parliament in this country by determination according to the four
different constituent parts of the Union. That has included the representation that each part requires in order for the Union to be solid and hold together, which is precisely what happened in the 1536 Act of Union, the 1707 Act of Union and the 1801 Act of Union. With all three, the first thing determined was how much representation there should be from Wales, Scotland and Ireland. Obviously, that was subsequently changed with the creation of the Irish Free State.
The further change to Scottish representation occurred when we introduced devolution, so, following the Scotland Act 1998, it was agreed that because a variety of powers would be given to the Scottish Parliament, it was right and proper for the number of seats that Scotland accounted for in the Westminster Parliament to be reduced.
The first referendum in Wales on devolution brought about the creation of the National Assembly for Wales, which does not have law-making powers or enjoy any powers over crime, justice or policing, so it is a somewhat different body from the Scottish Parliament. However, there is a proposition that follows on from the Wales Act 2006, and it will be tested in a referendum, which the Government have said will take place in the first quarter of next year, but for which as yet no date has been set. The Welsh Assembly Government have requested that it should be on 3 March, but the Secretary of State for Wales has not yet assented to that. We do not know whether a date has been agreed or whether the referendum will proceed. The date of 3 March may well be problematic, as-how can I put it?-it sometimes rains in Wales in March. Sometimes we have fairly excessive conditions in large parts of Wales at the beginning of March, so the date may well end up being inappropriate.
However, be that as it may, we need to be assured of what powers the Welsh Assembly will have if we are then to have a coherent Union-based understanding of how much representation there should be from Wales in the Parliament of the United Kingdom of Great Britain and Northern Ireland. That is why we have tabled the two amendments, and I shall press them to a Division, because I have not heard anything from the Deputy Leader of the House to alter my opinion that we should proceed on a Union-based understanding of how we create this House, not on a purely mathematically based assumption.
Mark Durkan (Foyle) (SDLP): Further to that point, does my hon. Friend recognise that because of the arithmetical formula, the Bill will ensure not just that boundaries will change every five years, but that the number of seats allocated to each Boundary Commission could change? The number of seats in Northern Ireland could go up in one review and down in another, and that in turn would affect the seats in the Northern Ireland Assembly, because the constituencies of the Assembly and of Parliament are absolutely coterminous. The proposal will create havoc.
The seats in the Welsh Assembly are coterminous with those for this Parliament at the moment, although there is a provision later in the Bill to change that through decoupling. That is something that we must analyse. My hon. Friend is right that there may be a change in the number of seats between each segment. If there is a boundary review every five years, there might well be a change in the number of seats, and in
the end I am not sure whether that is likely to lead to a more stable constitutional settlement between the four constituent parts of the Union.
There are those who like to think that there is just the Union, not any constituent parts, and there are those who want to think that there are just the constituent parts-which should not be constituent parts but independent. However, I believe that they are constituent parts of the whole, and I say gently to Ministers that the way in which they are proceeding in relation to some parts of the Union is not likely to aid the Unionist cause. It will be detrimental.
Chris Bryant: No, it is not Labour party policy that anywhere be under-represented. We believe, as I said yesterday evening, that it is important to achieve greater equalisation of the number of voters in each electorate, but that should not be a purely mathematical exercise. Where there are overriding concerns, those should be brought into play. Indeed, the Government agree to some degree, because they have created a degree of exception for Northern Ireland and a completely different set of exemptions for two seats in Scotland, which, according to the Government's interpretation of the situation-and, I presume therefore, the hon. Gentleman's-will effectively create two rotten boroughs in Scotland. We think that if we are going to make exemptions, we should make a broader set of exemptions, rather than just those two.
Mark Tami (Alyn and Deeside) (Lab): To correct not only my hon. Friend but myself, I should say that I am reliably informed that three seats are involved. There is another seat; there is a rule that applies only to that seat on geographical grounds. That does not apply in Wales, where, as I am sure my hon. Friend will agree, a seat could well stretch from one side to the other if the population density was low.
Chris Bryant: My hon. Friend is right to correct me. I accept the admonition that three seats are being created in this way. I do not think it inappropriate for those seats to exist. But the logic of the Government's argument-that there should be complete mathematical purity-leads one to suppose that they can only think that they are creating three rotten boroughs.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP): I detected a form of back-pedalling in the hon. Gentleman's answer to the hon. Member for Alyn and Deeside (Mark Tami). I assume that he is not saying that Labour's policy is that the islands of Scotland are rotten in some way.
No. The hon. Gentleman knows that personally I have a great affection for the islands; indeed, many of my ancestors came from Lewis. But that is not the point. I am not trying to say that Scotland is in any
shape rotten; I am merely trying to say that there is an illogicality in the argument that the Government are presenting. They are trying to say that we should have mathematical purity everywhere-except where we should not have it. I am trying to say that we should strive towards broad equality of representation in each of the seats. However, other considerations need to be brought to mind, and that should apply not only to the seats that I mentioned, but to some others as well.
Chris Bryant: Yes, I do. As the hon. Gentleman knows perfectly well, we have tabled amendments that would include his seat, but also include others. He is a sage man and I know that he would want to pursue the logic of the creation of his own seat so as to make exactly the same exemptions in some other cases where there are overriding concerns-in the Isle of Wight, for instance. That is the nature of the amendment that we have tabled elsewhere.
Naomi Long (Belfast East) (Alliance): Could we put it this way? Given that the Government have already conceded that there are exceptions to the numerical rule, would it not be better to give the judgment to the Boundary Commission, which could not be perceived to have any vested interest? It could make the judgment on where exceptions should and should not apply, rather than the Government laying that out in the Bill.
Chris Bryant: The hon. Lady speaks with almost as much sagacity as the hon. Member for Na h-Eileanan an Iar (Mr MacNeil). I agree with her that there is no logic to how the exceptions have been laid out. The Boundary Commissions should be given a certain latitude while striving towards a greater equalisation of the number of electors in each constituency.
Tristram Hunt (Stoke-on-Trent Central) (Lab): Does my hon. Friend find it surprising that the Bill comes from a party that is meant to be committed to the Union and that that party's parliamentary colleagues will be involving themselves in the destruction of the historic Duchy of Cornwall along the same lines?
Chris Bryant: My hon. and historical Friend is absolutely right. That adds to my argument, and to arguments that I shall hope to adduce later. As I said, there need to be some exemptions where there are overriding geographical, political or cultural issues that need to be resolved.
One of the overriding political issues is the bonding together of the Union, which historically has taken into consideration the existing political structures in Wales, Northern Ireland and Scotland. That is why we have tabled amendments 127 and 135, which would mean that the Boundary Commission would not be able to proceed until the referendum had happened in Wales. In that way, we would know that there was a settled view about what powers the National Assembly for Wales would have.
There are other amendments in this group. In particular, the hon. Member for Leeds North West (Greg Mulholland) has tabled amendments 341 and 342, either of which I would be happy to support; I very much hope that he will press one of them to a Division.
The hon. Gentleman made an important point in his contribution to the debate when he said that we have only just had a boundary review and we are to have another by 2013, which seems rather a fruitless exercise. He is absolutely right; it would be better if we did things on a longer time scale, and towards 2018. That point relates to his amendment 341. His amendment 342 would mean that instead of having reviews every five years, we should have them every 10 years. I say to hon. Members who are hard and fast in their view that we should have a full boundary review, every five years, on the basis of purely mathematical, arithmetical equations, that that would put every single parliamentary seat in doubt every single time. It may not be that every single one is changed every time, but a large number probably would be. The danger is that that gives rise to a conflict when an hon. Member knows the seat that they will be fighting at the next general election and they want to get in touch with the voters in that seat not as an MP but as a candidate. That is likely to lead to a considerable number of unfortunate circumstances in the way that Parliament behaves. It was difficult enough in the last general election, when the Speaker and the courts had to intervene in two cases in London where boundaries had been redrawn and MPs wished to be able to correspond not as an MP but as a candidate, and the sitting MP objected to that intervention.
Phil Wilson (Sedgefield) (Lab): Does the shadow Minister agree that over, say, a 20-year period of four Parliaments one community could find itself in four different constituencies and have four different MPs, not because an MP is deposed but because the constituency boundaries are being changed to ensure that all the arithmetical figures stack up? That breaks the strong and important link between the constituency MP and the local electorate.
Chris Bryant: Absolutely. Particularly in many rural areas where the difference between reaching the mathematical perfect number and not reaching it might be 1,500 or 3,000 votes, a medium-sized village or small town might have to be divided in half, or a river might run across the constituency and new polling districts might have to be created. A whole series of different issues might mean that the individual voter ultimately ends up being less confident about knowing who their political representative is.
The hon. Member for Epping Forest (Mrs Laing), who knows that I have a great respect for her-I waited until she took her seat before referring to her-made several points, one of which related to the fact that we should not be redrawing the seats for our own convenience. She is absolutely right. We should, however, ensure that the political boundaries for constituencies are for the convenience of our electors. Our electors do not think in terms of lines on a map but in terms of political communities, cultural connections and social connections, and where the roads go and do not go. If one is to bind together little bits of geography just because they sort out a perfect map according to mathematical excellence, one might assist the convenience of the Boundary Commission, but one will not necessarily assist the convenience of voters, who want to know and understand who their Member of Parliament is-and it is better that they do. I know that there are split wards, but it would be better if there were not.
Geraint Davies (Swansea West) (Lab/Co-op): My hon. Friend suggested that there would be changes every five years but that that might not affect every constituency. Does he agree that, for example, a constituency in the south that grew because of population changes and migration would necessarily have a nudging effect on contiguous boundaries and a domino effect all the way up the country, and that because it is likely that virtually every seat will change every five years during the 20-year period that my hon. Friend the Member for Sedgefield (Phil Wilson) mentioned, one's constituency might move around the country? [ Interruption. ]
Chris Bryant: Members on both sides are laughing because my hon. Friend has of course moved around the country himself, so I will assist by saying that I know that the people of Wales welcome him back to his home town.
My hon. Friend is absolutely right to say that where there are significant changes in the population there will not only be effects for one constituency but potentially nudge-on effects for many others, which may move from one county council or one borough to another. In part, we have to accept this. Rhondda used to have two parliamentary seats, Rhondda East and Rhondda West, and then we moved down to one parliamentary seat because the population fell dramatically. I do not believe that the boundaries of parliamentary constituencies in Wales or anywhere else should be written in stone-of course we have to move with the population flows. However, if we move forward precisely like this, without any kind of exemption, one constituency in Wales will represent at least a third of the geographical area of Wales. That would be unacceptable. It would cover several counties, which are unitary authorities in Wales, and would include areas that are, and feel themselves to be, virtually in England, and a large part of Wales that is fiercely proud of its Welsh language heritage. That would be an inappropriate direction in which to move.
Susan Elan Jones (Clwyd South) (Lab): Does my hon. Friend agree with what the women's institute has written? As I am sure all hon. Members know, anyone who dares to suggest that the women's institute is party political will have their come-uppance, but it has expressed great concern about the effect that the changes will have on rural communities, because natural geographical boundaries will be cut up.
Chris Bryant: Tony Blair learned that one should not really mess with the women's institute, and I have no intention of doing so, but my hon. Friend is absolutely right. Large parts of her constituency are very rural, and chunks of mine are semi-rural-everybody in the Rhondda lives within about 200 metres of a farm. Surely the point is that overriding concerns must be able to trump mathematical perfection, not entirely but to a degree. The Government have already accepted that in relation to three constituencies, but it should apply more widely.
My hon. Friend the Member for Blackley and Broughton (Graham Stringer) has tabled amendment 38, which refers to registration. A lot of Members talked about under-registration yesterday afternoon, and the Deputy Leader of the House has just mentioned it. I am glad he accepts that some 3.5 million people are not on the register and should be. I make no pretence that we got it
right when we were in government. Indeed, some of us-particularly one of my hon. Friends, who is probably about to intervene on me-quite rightly argued aggressively in the last Parliament that many people are under-represented on the register. The danger is that they will therefore be under-represented in Parliament and their concerns will not be taken on board.
Chris Ruane: My hon. Friend says that we did not do as much as we could have done, and I agree, but we did do some things in the past 13 years. In the Electoral Administration Act 2006, we examined what electoral registration officers were doing and measured them in 26 fields. That process was long and slow, but now we are beginning to examine what they achieved so that we can fine-tune the process. However, the current proposals are being rushed through.
We also listened to the then Opposition. When they wanted individual registration, we opposed it at first but then said that because of political balance we would introduce it. We said that it would happen in 2015 and that we would put measures in place to increase registration over the five years until then. All that bipartisanship has been shattered by the governing parties for party political gain and to pursue a little English coup.
Chris Bryant: But it was very good, Mr Hood, and spot on. I hope that some coalition Members accept that when we were in government, we tried to co-operate on electoral registration. When the hon. Member for Epping Forest spoke for her party on the matter, she did so very effectively and we tried to co-operate and reach agreement when we could. We agreed that we would move towards individual registration, but I am concerned that the new Government's message about registration is, "Yes, we want everybody to register, but it doesn't really matter if you don't. We're going to get rid of the fine for somebody who does not send in their form, and registering is almost entirely optional." That is a shame, because as I tried to say in a debate that the hon. Lady secured in Westminster Hall earlier today, we sometimes take our democracy for granted all too easily.
Tristram Hunt: My hon. Friend is right to point to the Bill's partisan nature. Did he hear anything from the Chancellor about allocating extra resources to increasing electoral registration in December, or perhaps for the wonderful democracy festival that the hon. Member for Bermondsey and Old Southwark (Simon Hughes) talked about?
No-I heard exactly the opposite. I think that there was a reference to a 7% cut in local authority funding every year for the next four years. My concern is that, because all too often we take democracy for granted, when local councillors have to decide whether
to spend £100,000 on keeping a swimming pool open or on a really good door-to-door canvas to ensure that everybody is registered, they tend to keep the swimming pool open. Although I fully understand such decisions, which will be difficult for many councillors in the next four years, unless one values democracy and spends money on it, one does not get a proper representative democracy. That is why Labour Members believe that amendment 38 is important. Unless the Electoral Commission is satisfied that there is proper registration and that proper measures are being taken to ensure full registration of all eligible voters in this country-and for dealing with those who are on the register but should not be-the Boundary Commission should not be able to produce its report.
My hon. Friend the Member for Swansea West (Geraint Davies) tabled amendment 125, which refers to the census. Earlier, the Deputy Leader of the House said that he did not agree with the amendment because the census happened every 10 years, which might have led one to believe that there would not be one for 10 years, but of course, one will be held next year. The information may not be available immediately, but surely it would be bizarre if we found that the number of those eligible to vote in individual areas of the country was dramatically higher than those registered to vote, and that those areas were significantly unfairly under-represented in the House because the Government chose to proceed on only one element.
Geraint Davies: My amendment would provide for the Office for National Statistics to conduct an assessment of the number of eligible voters. It would use the register of voters alongside the census and other data sources to get the best estimate. It might not be perfect, but it would be better than the current suggestion.
One other issue was mentioned in yesterday's debate. I am sorry to refer to the hon. Member for Epping Forest for a third time, but she got rather cross with me in yesterday evening's debate, so I merely wish to respond to one of her comments. She said that the point about the number of Members of Parliament in a particular area and the casework that they took on was not a matter of substance. Various hon. Friends suggested that some of those who are not eligible to vote often provide much of the casework in a constituency. Consequently, there is an argument about the role of the Member of Parliament, which should be considered before reaching the precise matter of how the boundaries are drawn. The hon. Lady said that it would be good if we reduced the number of Members of Parliament and achieved equalisation of the electorate in each constituency, and that if a problem remained with casework, we could give Members of Parliament more staff. [Interruption.] I think that the hon. Member for Brecon and Radnorshire (Roger Williams) says, "Hear, hear" because he wants more staff to work for him.
I am concerned about the hon. Lady's view because the role of a Member of Parliament has completely changed since the days of Stafford Cripps, and casework is an essential part of the job. Simply hiving it off to a member of staff, without the Member of Parliament's being directly involved, distances Members of Parliament
from the real life that goes on around them. Simply replacing Members of Parliament with paid staff is not the right route.
I am keen to press our amendments to a Division. I hope that hon. Members will agree that mathematical excellence is not the only way in which one should proceed towards creating new boundaries for the House of Commons, and that other considerations need to be borne in mind. I hope that I can rely on the Committee's good sense.
The Temporary Chair (Mr Jim Hood): Now that the hon. Gentleman has given notice that he wishes to press his amendment to a Division, I will invite him formerly to move it when the Division on amendment 127 is over.
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