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On the deficit and Ireland's decisions, I have to say that in all the discussions I have been involved in during recent weeks, not a single person around the international
tables has suggested that Ireland should be doing less to address its fiscal situation. I would have thought that the current economic environment in the world would surely remind everyone of the risks run by countries with very high budget deficits and no credible plan to deal with them. Unfortunately, we inherited a higher budget deficit than Ireland's, so I hope that the right hon. Gentleman and the Leader of the Opposition, in this big rethink they are having, will re-evaluate their opposition to a fiscal plan that has taken Britain out of the financial danger zone, which means that we are not one of the countries speculated about at the moment. I hear today that the Leader of the Opposition says that their economic policy is a blank sheet of paper. Quite frankly, I do not think that it would be much use taking that into an international negotiation.
Mr Speaker: Order. There is enormous interest but some pressure on time, so brevity from Back Benchers and Front Benchers alike is vital.
Mr Andrew Tyrie (Chichester) (Con): I think that the public were shocked to discover that the UK was going to be bailing out a eurozone member, not just through the IMF or bilateral loans, but through the European stabilisation mechanism-that is, through the EU budget. Will the Chancellor reassure the House that he will seek to block British participation in any replenishment of the €60 billion mechanism?
Mr Osborne: Let me first say that it is our intention not to be part of the permanent eurozone bail-out mechanism, which of course is the subject of discussion, not least at the December Council. It would be our intention that that mechanism should return to what it was designed for in article 122, which is dealing with natural disasters. There has been a balance of payments support mechanism in the European Union for many years to deal with the accession of the central and eastern European countries. Both that mechanism and that balance of payments support drew from the same €60 billion, and we would certainly not be in favour of somehow replenishing it to make good the amount of money that, potentially, will be committed to Ireland.
Mr Speaker: Order. I should also mention that Members who were not here at the start of the Chancellor's statement should not expect to be called. That is what I said in respect of the previous statement and that is our usual practice, to which I think we should adhere.
Mr Alistair Darling (Edinburgh South West) (Lab):
I agree with the Chancellor that it is in our country's interests to do everything we can to help Ireland through its present difficulties. Although he and I agree that I was right to keep us out of the eurozone support fund, some money coming from Europe is partly subscribed by us and also the IMF-but does that not demonstrate that it is in our interests? The fact that he is also willing to make bilateral loans available to Ireland demonstrates that it is our interests to sort out the problems in
Ireland. Although he does not have the details, can he tell us how much of that money from us and from other sources will be used to restructure and recapitalise the Irish banks, which is absolutely necessary in Ireland and also, I suspect, in a number of other countries in Europe?
Mr Osborne: I very much welcome what the right hon. Gentleman has said, and of course I agree that it is in our national interests, and indeed the interests of other European Union member states, that we bring some stability to Ireland. He is right, as his question implies, to focus on the banking system. The situation in Ireland is different from the situation that Greece found itself in earlier this year, with which he had to deal when he was Chancellor.
On the question of the breakdown between the amount of money going to the banking system and the amount going to fund the sovereign, I am afraid that I cannot give the right hon. Gentleman the exact figures, because they are still being negotiated, but I would say that most of the money will be used to take the sovereign out of the market for a period, and a substantial minority of the amount will be required for a fund to help the Irish banking system.
Mr John Redwood (Wokingham) (Con): Given that the very large loan to Greece on 2 May did not stop the rolling euro crisis despite the promises from many of the participants at the time, will the Chancellor assure the House that Britain does not stand ready to lend more money to other eurozone members in the event that the Irish loan package does not mark the end of the crisis either?
Mr Osborne: I was very clear that the bilateral loan was given because of the very specific economic relationship between the UK and Ireland, the interconnectedness of our banking systems, the fact that we share a land border, and the importance of the Irish banks in Northern Ireland. Those specific reasons led me to believe that it was right to provide a bilateral loan in these circumstances.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab): I wonder whether the Chancellor would help me with a conundrum that the people of Sheffield will no doubt be mulling over tonight. Why, in raising the money for the bilateral loan for the Irish Republic, would it not be possible to help another friend in need by adding a simple £100 million to the loan and helping Sheffield Forgemasters, which after all will repay the loan, just as the Irish will?
Mr Osborne: What I am proposing is a bilateral loan to another sovereign nation as part of an international package. Of course, I am doing it to provide stability for the entire UK economy, including the economy of Sheffield. I believe the steps that we have taken in the past six months to move this country, with the highest budget deficit in the G20, out of the financial danger zone provides the platform for economic growth, as it does for the rest of the UK.
Sir Alan Beith (Berwick-upon-Tweed) (LD):
Does the Chancellor realise that our constituents were very angry indeed at having to bail out mismanaged British banks, and will be even angrier at having to bail out
even more irresponsibly managed Irish banks? Will he not have to give a clearer picture of some of the consequences for the British economy if such action is not taken?
Mr Osborne: I make two observations. The first is that this is a loan to a sovereign nation state and, barring a really extraordinary turn of events, we would expect Ireland to pay us back. So we are making a loan to another sovereign nation that we fully expect to be paid back. The long history of international packages shows that the IMF and others get their money back in almost all circumstances. This is a loan that we can afford to make and which we will get back. Secondly, there is a broader observation about banking systems in Ireland, the UK and elsewhere. They became vastly over-leveraged and vastly over-borrowed and they were very badly regulated. The assurance that I can give my constituents and those of the right hon. Gentleman is that we are sorting out the regulation of the UK banks. We hope that the Irish Government are now dealing with the situation of the Irish banks. They were interconnected with the UK and made a lot of loans in the UK, and it is in the interests of us all that we sort out the Irish banks as well.
Mr Jeffrey M. Donaldson (Lagan Valley) (DUP): I recognise the reasons why the Chancellor has had to provide the loan to the Irish Republic, and he has recognised the potential impact of that on the Northern Ireland economy and on business in Northern Ireland. Will he support the Northern Ireland Executive in reducing the level of corporation tax there to the same level as exists at present in the Irish Republic?
Mr Osborne: I thank the right hon. Gentleman for the support that he has given to the action that we have decided to take today. He will know that my right hon. Friend the Northern Ireland Secretary is pursuing with vigour the subject of Northern Ireland's economic environment and business environment, the corporation tax rate and so on, and we are coming forward with plans to stimulate the Northern Ireland economy. Specifically, the Northern Ireland Secretary and my hon. Friend the Financial Secretary to the Treasury will be in Northern Ireland later this week to talk principally about what is going on this week, but I am sure they can have discussions about broader issues as well.
Chris Heaton-Harris (Daventry) (Con): As much as I am uncomfortable with the fact that we are bailing out a eurozone country, I have to concur that it is overwhelmingly in our national interest to do so. After 13 years on the sidelines, it is nice to see us playing a central part in negotiations that affect eurozone countries and the IMF. Can my right hon. Friend reassure the House that the UK will commit resources to Ireland only if we are confident that Ireland is able to grow its way out of trouble and pay our money back?
Mr Osborne: I thank my hon. Friend for his support, and the answer to his question is yes.
Mr Ian Davidson (Glasgow South West) (Lab/Co-op): Will the Chancellor be a little more clear about whether he is ruling out providing financial support in future to Greece, Portugal, Spain, Italy or any other country in the eurozone? Yes or no?
Mr Osborne: It would not be particularly responsible of me to speculate on any other country at this time. Let me put it as clearly as I can: there are very specific connections between the UK and Ireland, which we do not have with other countries, and I think that is why it is completely appropriate that we make a bilateral loan in this case.
Michael Fallon (Sevenoaks) (Con): Does the Chancellor agree that, when we end up having to lend very large sums of money to other countries, the Government should always be able to do so at their discretion, in a way that is accountable to this House and not at the mercy of being outvoted by other European countries?
Mr Osborne: My hon. Friend makes a very good point. As I say, a bilateral loan will be debated in this House and require the Government to take primary powers, so it is within the control of all Members, and we are accountable to the taxpayers of Britain for that. I have explained the situation, so I will not go over it again, but we are part of the European mechanism, which involves a qualified majority vote, and even if we had exercised a no vote we would have been completely outvoted. That is why I want to see that the UK is not part of the permanent bail-out mechanism, which will be discussed at the December Council.
Mr George Mudie (Leeds East) (Lab): We are contributing to the IMF deal and to the stability mechanism deal. Is the £7 billion additional to that, or is it broken up between those two with a topping-up sum?
Mr Osborne: I am not going to give a specific figure today, because it simply has not been agreed as part of the overall package with the Irish. In these situations, it is perfectly normal for the sovereign Government, in this case the Irish, to invite the IMF and the EU in and to ask for their help, and for that to be negotiated over the following week or two. Of course, we will be part of that, but as I say, I expect the UK's support to be in the billions, not the tens of billions.
Mr David Ruffley (Bury St Edmunds) (Con): If it requires a treaty change to create a new permanent bail-out mechanism, will the UK Government be prepared to use their veto?
Mr Osborne: We have made it clear that we would accept a treaty change-of the kind that, for example, Germany is talking about-only if it created a eurozone bail-out mechanism that we were not part of, and of course a treaty change requires unanimity.
Mr Andrew Love (Edmonton) (Lab/Co-op): Will the Chancellor confirm that the UK is Ireland's largest creditor, being owed about £100 billion or 7% of our GDP? It is understandable that we would want to be in there and protecting our investment. During his speech, he mentioned that we were at the centre of discussions to shape the conditions of the agreement, but does he intend those conditions to include a further retrenchment of the Irish economy, or, like Opposition Members, will he go for growth in order to help the Irish economy get back on its feet?
Mr Osborne: The plans to deal with Ireland's budget deficit are a very important part of the Irish Government's approach, but they are also part of the international package. The further fiscal tightening was specifically referred to in the statement issued by Finance Ministers yesterday. That will mean that Ireland has a budget deficit of less than 3% by 2014. If we had not taken the action that this Government have taken to accelerate the proposals we inherited, we would have been the only European country in that year with a budget deficit of more than 3%.
Mr Douglas Carswell (Clacton) (Con): We might be outside the euro as a currency union, but does the small print of the Lisbon treaty not in effect make us, as we are discovering, members of the euro as a debt union? Notwithstanding protocol 15, article 122 of the Lisbon treaty means that we pay. Will not that mean enormous non-discretionary liabilities as and when other eurozone countries seek similar bail-outs?
Mr Osborne: As I said in reply to earlier questions, we entered into certain commitments about the mechanism that I did not support at the time; I have made that clear. I was an opponent of the Lisbon treaty, as were many hon. Members. However, I have to deal with the world as I find it today, and that is a world in which Ireland's economic situation is unsustainable. One of the reasons for choosing to offer a bilateral loan is precisely so that this Parliament, including my hon. Friend, can have a view and a vote on it, and we can account for that to our constituents.
Ms Margaret Ritchie (South Down) (SDLP): I thank the Chancellor for his statement and the proposed assistance. Will the Treasury carry out an in-depth study of the economic impact of Ireland's assistance settlement on the regions of the UK, particularly the devolved regions? Will the Treasury be prepared to intervene where any region may be affected negatively, such as Northern Ireland, where there is a connection in the banking sector and where two of the banks are Irish-owned?
Mr Osborne: We are taking this action precisely because, in part, we recognise the specific economic connections between Northern Ireland and southern Ireland. I would be very happy for the Treasury to work with the Northern Ireland Executive on looking at the potential economic impact of what is happening in Ireland. Obviously, the intention is to bring some stability to the Irish economy, and then some growth, which would be in the interests of not only the people of the Republic but the citizens of the United Kingdom.
Claire Perry (Devizes) (Con): I understand that the Chancellor cannot yet set out the amounts that will be delivered under various mechanisms, but can he at least reassure the House that any bilateral financing will rank at least pari passu with money delivered through the IMF and through the EU mechanisms?
Mr Osborne: We would certainly expect it to be treated with the same seniority as any other European assistance.
Kate Hoey (Vauxhall) (Lab): What kind of conditions is the Chancellor likely to impose on the bilateral loan to Ireland? Will he take into account the feelings of people in Northern Ireland who, if they live on the border, see corporation tax at 12% just down the street, but at 28% in Northern Ireland, and will be asking why they are paying more to help a country when there is such a disparity in corporation tax?
Mr Osborne: As I said earlier, the conditions attached to our loan will be similar to those attached to the overall international assistance package; of course, we are part of the discussions when it comes to shaping that package. I would make two specific points. First, we have set very high store by sorting out the banking problem. In other words, using this financial assistance to sort out the banking problem has been the primary thing that I have been calling for in the private discussions we have had leading up to this point.
Secondly, on the rate of corporation tax, I would make this observation to the hon. Lady, and I hope that she has some sympathy with me. Ireland should be in charge of its own tax rates. How the terms of the financial assistance are met has to be a decision ultimately for the Irish Government and the Irish Parliament. It is the thin end of the wedge if we allow other countries and other international organisations to start determining what corporate tax rates should or should not be. It is in everyone's interests that Ireland grows, and it would not be particularly in our interests if the Irish undertook measures that might, for example, lead to an immediate flight of international business.
Mr Bernard Jenkin (Harwich and North Essex) (Con): I recognise that my right hon. Friend is dealing with some very serious and potentially disastrous economic circumstances, but when I say, "I told you so," it is not just about staying out of the euro; I am saying, "I told you we shouldn't have ratified the Maastricht treaty." [Laughter.] They are guilty over on the Opposition Benches, too. Will my right hon. Friend be a little clearer? Is he saying that unless we are fully extricated from any potential liability for other eurozone members through the European Union, there will be no treaty change?
Mr Osborne: I am not proposing to take Britain out of the Maastricht treaty, despite my hon. Friend's request. I know that will come as a bit of a disappointment. I would like the balance of payments mechanism to remain-it has existed for many years-but of course the situation in the eurozone is not a balance of payments issue. That mechanism is for countries, particularly accession countries, to draw upon. I would like the mechanism set up under article 122 to be used for what it was designed to be used for, which was natural disasters and the like, and I would like the permanent bail-out mechanism for the eurozone not to include the United Kingdom.
Rachel Reeves (Leeds West) (Lab): Although it is imperative that we support Ireland through the crisis, does the Chancellor accept that events in Ireland demonstrate that the global economic recovery is extremely fragile, and that to premise our own recovery on £80 billion of cuts and export-led growth looks increasingly optimistic at best and dangerously naive at worst?
Mr Osborne: If the hon. Lady looks around the western economies, she will see that countries with large budget deficits-we have the largest-are moving to take further steps to show how they are reducing them. I cannot see around the international scene a single group of people other than the Opposition who actually believe that the UK should be loosening the fiscal position from what we have set out. That really is completely incredible and carries absolutely no conviction in any other part of the world. As part of the Labour party's re-evaluation of its entire economic policy, I suggest that it start with that.
Glyn Davies (Montgomeryshire) (Con): I would like to ask a question from a Welsh perspective. We all understand the impact of a strong economy in Ireland on Northern Ireland, but does the Chancellor recognise that a strong Irish economy is also particularly important to Wales?
Mr Osborne: Yes, I do. Ireland's links are not just with Northern Ireland, they are also with Wales, Scotland and England. The Irish banks were of course engaged in lending into the UK economy, UK banks have engaged in lending into the Irish economy, and many companies export to each other's countries. We are deeply interconnected, which is why I have proposed this set of measures.
Mr Ben Bradshaw (Exeter) (Lab): Does the right hon. Gentleman not have the tiniest smidgen of regret about what he used to say about the Irish economic model?
Mr Osborne: I seem to remember plenty of Labour Ministers standing at the Dispatch Box praising what Ireland was doing to make itself competitive, to reduce its corporate tax rates and to create a flexible labour market. That is the tragedy-it did so much in that direction to make itself competitive, but it did not properly regulate its banking system. We in the UK know the price of that.
Mr Edward Leigh (Gainsborough) (Con): On reflection, does the Chancellor believe that our Irish friends might have been better off remaining faithful to sterling rather than eloping with the more flighty euro, and does a warm welcome await our friends if and when they return?
Mr Osborne: I am a believer in national sovereignty, so I do not propose to tell other countries what they should do with their currencies. I would just make this observation, since this has been a debate I have heard in recent years: Ireland has all its sovereign debt denominated in euros.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): Ultimately, the bail-out will work only if Ireland can retain its competitiveness. Traditional International Monetary Fund packages always include reducing public spending, increasing tax rates and devaluing the currency. The third element, which is essential for Ireland's recovery, is missing. What makes the Chancellor believe the bail-out will work under those conditions?
Mr Osborne:
If it is not possible to devalue the currency, there is a more difficult route, which is to try to enforce competitiveness through, for example, wage cuts, and that, of course, is part of the Irish package. It
does make things more difficult, but, as I say, those of us who argued against Britain joining the euro made all these arguments at the time. That makes for a very good discussion, but at a very theoretical level given the very practical immediate challenges we face in Ireland.
Mr Peter Bone (Wellingborough) (Con): The euro could collapse-nobody can doubt that point. During the Chancellor's wide-ranging private talks with the Irish Government, was there any discussion of a contingency plan under which Ireland would come out of the euro and become part of the sterling area?
Mr Osborne: No, there was not.
Mr Ronnie Campbell (Blyth Valley) (Lab): Are there not lessons for us in the United Kingdom to learn, given that the Irish cut very deeply not so long ago? Does the Chancellor not think that we should have a credible growth programme along with what the Government have already done? How will the Chancellor solve the problem when he does not know the causes?
Mr Osborne: An absolute precondition of growth, as we can see in Ireland, is stability, and there is no stability if people put a question mark over a country's ability to fund itself. One reason why the international assistance package is being put in place is to take the sovereign out of the debt markets for the next couple of years. Quite frankly, the decisions we took in May, in June and last month were absolutely necessary to restore international confidence in Britain's ability to deal with its deficit and to restore some sanity to its public finances. I find it slightly bizarre, having now had this argument for about a year with Labour Members, that they continue to pursue the belief that we could stick with a set of fiscal plans that no one regarded as credible.
Joseph Johnson (Orpington) (Con): Could the Chancellor say whether he thinks Ireland's move to tap international financial assistance will reduce or increase the risk of contagion for other euro area sovereigns and their banking systems? What assessment has he made of the risk posed by countries such as Portugal, Italy and Spain to the UK?
Mr Osborne: I hope my hon. Friend will allow me not to engage in speculation about any other country at the moment. The package today shows the willingness of the international community, the IMF and so on to help countries that get themselves into trouble, whether they are in Europe or anywhere else in the world.
Alex Cunningham (Stockton North) (Lab): Earlier today, I met politics students from Bede sixth form college in my constituency, who asked how it can be right to bail out the Irish economy, but wrong for our previous Government to have done likewise when our banks posed the same threat to our economy. Has the Chancellor an answer to the students and the House?
Mr Osborne:
I would say to those students, and, indeed, to the hon. Gentleman, who represents them, that their prospects of getting a job later in their lives depend on a stable UK economy that is growing and a stable Irish economy that is not having contagion effects
on the UK or anywhere else. That is why we are taking action domestically to put our own house in order. Even his students, I am sure, would recognise that, in the end, we cannot live beyond our means and we cannot sustain an economy on debt alone. I am also sure that if his students asked themselves what connections they had to Ireland, they would find quite a lot of connections in their family, in the businesses that they know about and the like. Our two economies are interconnected.
Nadhim Zahawi (Stratford-on-Avon) (Con): People at home will be listening to this statement, or they will read it tomorrow, and wonder whether we can borrow a few more billion and spend a few more billion. Does the Chancellor agree that market concerns over sovereign debt remain, and that the priority for the coalition Government must be to keep the UK out of the financial danger zone?
Mr Osborne: The sovereign debt concerns are very heightened at the moment-that is a statement of the obvious-and a Chancellor of the Exchequer who represents the country with the largest budget deficit in the G20, and the largest budget deficit in the EU until Ireland started to overtake us, must make moving Britain out of the financial danger zone their immediate priority, which is what this Government have done.
Toby Perkins (Chesterfield) (Lab): Does the Chancellor agree that the real lesson that comes out of Ireland-he rightly identified similarities with our economy-is that the impact of the global banking crisis added to a drastic programme of public sector cuts does not mean growth? That is dangerous to the economy.
Mr Osborne: Quite frankly, that assessment is not shared by the International Monetary Fund or other EU member states. It is not the assessment of anyone who looks at the Irish situation except for the hon. Gentleman.
Mr David Nuttall (Bury North) (Con): Bearing in mind that the Treasury will itself have to borrow the billions of pounds that it proposes to lend to the Irish Government, will the Chancellor reassure the House that the interest rate it charges the Irish Government will be substantially higher than the rate we must pay?
Mr Osborne: The terms and conditions of the loan are still to be decided, and as I said, they will be brought to the House of Commons. However, to make a general observation, we are seeking not to make a buck, but to help our friend.
Albert Owen (Ynys Môn) (Lab): The Chancellor is right to say that it is in the British national interest to help Ireland. Irish economists say that one problem on top of the instability of the banks is that the economy is suffering because too much money has been taken out of it. Will the Chancellor act in the British interest and reconsider the speed at which austerity measures are introduced in the UK, because that could hamper our economy?
Mr Osborne: At the moment, there is heightened concern around the world about European countries with high budget deficits. One such country is the UK, but there is no heightened concern about us because of the measures that we have taken. If we followed what the hon. Gentleman and Labour Front Benchers propose, and if I were to say at the Dispatch Box tomorrow, "You know what. We are abandoning our fiscal plans set out in the Budget and the spending review, and instead engaging in a loosening of those plans," I can only imagine what the international reaction would be.
Charlie Elphicke (Dover) (Con): Being there for a friend in need overseas and unbankrupting ourselves at home are right and proper. However, how could it ever be right or proper for a Government voted out of office to engage in major financial commitments for the UK while squatting in Downing street?
Mr Osborne: I think my hon. Friend is referring to the period between the general election and the creation of this Government. I have given the House my account of that. I thanked the former Chancellor for keeping us out of the eurozone facility, but I did not agree with his decision to commit us to the mechanism, and I communicated that to him. However, I also made it clear at the time there can only be one Chancellor of the Exchequer operating for the UK, even in the unusual situation between the general election and the formation of this Government. He will account for his decisions and I will account for mine.
Chris Williamson (Derby North) (Lab): I know that a week is a long time in politics, but can I take the Chancellor back to when he was the shadow Chancellor? He wrote an article for The Times in which he said:
"Ireland stands as a shining example of the art of the possible in long-term economic policymaking...They have much to teach us, if only we are willing to learn."
Does the Chancellor stand by or repudiate that article?
Mr Osborne: Yes. The shadow Chancellor read out the same quotation.
Mark Reckless (Rochester and Strood) (Con): Is not the fundamental problem that Ireland has the wrong interest rate and the wrong exchange rate, and that Irish politicians made a fundamental mistake by joining the euro? Does the Chancellor agree that we must stand and support Ireland, and that should Ireland seek a return to sterling, it must have a seat on the Monetary Policy Committee?
Mr Osborne: The first time I met my hon. Friend was when we were both at university together, and he gave a speech about exchange rates and the European exchange rate mechanism. He was absolutely right in his prediction of what would happen shortly thereafter, so it is good to hear him talk about exchange rates here in the House of Commons. I would make this observation: decisions on people's currencies must, as I am sure he would agree, be decisions for the nation state involved. I have made the observation-just because there has been some interesting speculation about this-that much of Ireland's sovereign debt is denominated in euros, which would remain whatever its currency was.
Mr William Bain (Glasgow North East) (Lab): What assessment have the Chancellor and his counterparts in the eurozone made of the capacity of the European financial stability fund to withstand further calls on finance from Italy, Spain or Portugal? If the assessment is that the fund is not big enough, would he be prepared to see it increased?
Mr Osborne: As I say, I do not think that it is sensible for me to speculate about any other country in Europe or anywhere else in the world in the current environment. I would make two observations. One is that the IMF is well resourced and is now on the road to reform, so that it properly reflects the balance of economic power in the world. It is therefore well placed to deal with whatever situation emerges, in whatever part of the world. As for the eurozone stability facility, that has to be a decision for members of the eurozone. They contribute to the facility, and they have set aside a considerable sum of money-€440 billion.
Matthew Hancock (West Suffolk) (Con): Is not the lesson from what is happening in Ireland clear: that countries need to get their own houses in order? Would it not be utter folly for us to take as the lesson that we should divert from the path of getting our house in order here in the UK?
Mr Osborne: I agree with my hon. Friend. I make the point again that if we followed the prescription advanced by the Opposition-they suggest that tomorrow I should get up and announce a brand-new Budget, and engage in fiscal loosening at a time when we have the largest budget deficit in the G20 and at a time of heightened concern about sovereign debt-that would be a completely irresponsible path to take.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab): For the last six months the Government have wasted no opportunity to tell us that Britain's situation is very similar to Ireland's. Now they cannot tell us fast enough that we are in a very different situation from Ireland, because we have our own currency and control of our monetary policy. Has the Chancellor not spent the last six months talking down the British economy for naked political advantage?
Mr Osborne: The reason we are in a different situation is not just because we have a different currency; it is because we have a Government who have put our public finances in order.
Christopher Pincher (Tamworth) (Con): We are in a very different situation from Ireland. In the past several months, our long-term interest rates have fallen materially, whereas those of Ireland and other parts of the eurozone have not. Will my right hon. Friend remind those on the Opposition Benches-and particularly on the Opposition Front Bench-why that is so?
Mr Osborne: That is absolutely the case. Back in May, the largest bond investor in the world said that sterling was sitting on a "bed of nitroglycerine". That was the kind of sentiment out there in the markets. We have taken- [ Interruption. ] The speculators? The Labour party literally believes that it can defy the bond market. That is what Labour Members are reduced to-that is where their policy review is leading them. I have to say that it is not a credible economic policy for this country.
Chris Evans (Islwyn) (Lab/Co-op): The Chancellor seems confident that the bail-out package will work. What will happen if it does not? Will there be more loans, and can we expect public sector cuts to pay for them?
Mr Osborne: Of course, an absolute precondition of the package being negotiated is that not just the UK but the IMF and others believe that it will work. An enormous amount of effort is going into putting together a package that will deal not just with the sovereign debt situation, but-the former Chancellor alluded to this-with the Irish banking situation. That is a key part of the package.
Richard Harrington (Watford) (Con): Does my right hon. Friend agree that a main cause of the problems in Ireland is the pursuit of those very policies that Labour Members would have us carry out here-borrow, borrow, borrow and spend, spend, spend?
Mr Osborne: Ireland had over-leveraged banks, and they were poorly regulated. We are all picking up the pieces of something similar in the UK.
John Woodcock (Barrow and Furness) (Lab/Co-op): Given the stark consequences of Ireland's failure to grow, will the Chancellor assure the House that he has not downgraded his commitment to a White Paper on growth in Britain?
Mr Osborne: I am absolutely committed to setting out our growth policies- [ Interruption. ] Perhaps I could make the observation that I did not think that today, given the other things that are going on, would be a particularly good day for the House to discuss an economic paper from the Government. I thought it better to take the time to explain what is happening in Ireland and what we are doing to assist it.
Mr Dominic Raab (Esher and Walton) (Con): The Chancellor has set out the national interest in supporting a close trading partner and avoiding the systemic risks posed by an Irish default. How can we mitigate a third risk-the moral hazard of the taxpayer picking up the tab for yet another banking bail-out?
Mr Osborne: Of course, the support that we are providing with the bilateral loan is to the Irish Government-to the sovereign-and we have every expectation that that will be repaid.
John Cryer (Leyton and Wanstead) (Lab): Will the Chancellor now answer the question that the hon. Member for Harwich and North Essex (Mr Jenkin) asked? Does he believe, as I do, that when British Ministers signed up to Maastricht and the growth and stability pact, they made a mistake?
Mr Osborne: To be honest, the real mistake was that countries did not pursue the policies recommended in the growth and stability pact, which was to keep control of their public finances. Year after year during the past decade, the UK was regularly warned that its deficit was growing and that it was not doing enough to deal with it. If we had listened-not necessarily to the European Commission, but to all the other people in the world who were pointing that out-we would have been in a bit better shape than we were when this Government came to office.
Dr Andrew Murrison (South West Wiltshire) (Con): Does my right hon. Friend agree that one of the few redeeming features of the Labour party when in government was that it failed to take us into the eurozone? Does he understand, as I do, that the Labour party's policy remains that we should work towards the eurozone? As the Leader of the Opposition is changing his policies, what advice can he offer?
Mr Osborne: Let me speak for Government policy. We will not join the euro. I believe that the Opposition's official policy is to join the euro, but perhaps that will be discussed by their policy groups over the next two years.
David Rutley (Macclesfield) (Con): The Chancellor is right to support Ireland, one of our important trading partners, at this critical time. Will he tell the House what steps he is taking to widen and deepen our trading relationships with fast-growing major markets such as China, India and Brazil? The Labour party missed a huge opportunity when it was in government.
Mr Osborne: The fact that we export more to Ireland than to Brazil, Russia, India or China is a statement of the interconnectedness of the Irish and UK economies, but also an indictment of our exports to the fast-emerging BRIC countries, which is precisely why, since taking office, the Prime Minister has led major trade delegations to India and China, and why we want to ensure that companies in Macclesfield and throughout the country can export more to those fast-emerging new markets.
Alec Shelbrooke (Elmet and Rothwell) (Con): The Chancellor has been asked whether he has a smidgen of regret about his comments on the Irish economy, but does he not find it more incredible that the Opposition still believe that we should join the euro after the devastation that it brought to a thriving Irish economy?
Mr Osborne: As I have said, it is for the Opposition to speak to their own policy. As I understand it, they are still committed in principle to joining the euro-
Mr Osborne: Maybe not on the Benches where the hon. Gentleman sits, but it is those on the Opposition Front Bench that I am talking about.
Ben Gummer (Ipswich) (Con):
The Chancellor will be aware of the significant property assets owned by Ireland's National Asset Management Agency and the Irish Allied Bank across the United Kingdom. Uncertainty in Ireland
has prevented development on those sites and is stopping development in some of the most deprived areas in our country, which need regeneration. In providing funds to the Irish Government, what pressure can my right hon. Friend bring to bear on the Irish to divest themselves of those assets so that others can provide investment where they cannot?
Mr Osborne: My hon. Friend makes a very good observation about a particular aspect of the Irish banking situation and its impact on those property investments in the UK. We have discussed this with the Irish, and I will get back to him on whether there have been specific developments in the last few days, but I have not raised the matter as part of the discussion on the international assistance that we are providing. We are trying to put the whole Irish banking system and the Irish state, which stands behind those banks and, indeed, behind NAMA, on to a much more stable footing.
Jeremy Lefroy (Stafford) (Con): I thank the Chancellor for his welcome statement. Given that we have sovereignty over these matters, in what currency is the bilateral loan likely to be denominated?
Mr Osborne: We will set out the terms and conditions and the exchange rate of the bilateral loan when we agree them over the next couple of weeks, and I will bring that information to the House of Commons.
David Morris (Morecambe and Lunesdale) (Con): I congratulate the Chancellor on doing the right thing in this instance- [ Interruption. ] He did the right thing. Also, as a result of the fact that we have managed the economy better over the past six months, we are in a position to lend to Ireland. The Conservatives' insistence on not joining the euro in the first place has saved us from an even bigger bail-out package than we are having to contemplate now.
Mr Osborne: As my hon. Friend says, we are now part of the solution rather than being part of the problem.
Mr Rob Wilson (Reading East) (Con): May I offer the Chancellor my support in the difficult task that he has ahead? Will he spell out for the House what he believes the consequences of leaving the euro would be for Ireland?
Mr Osborne: As I have said, that has to be a matter for Ireland. It has not been raised by them in any discussion, publicly or privately, and I do not think that I should speculate about it.
Points of Order
5.22 pm
Caroline Flint (Don Valley) (Lab): On a point of order, Mr Deputy Speaker. The Minister for Housing and Local Government, the right hon. Member for Welwyn Hatfield (Grant Shapps), has been out and about in the TV and radio studios describing the biggest change to social housing for a generation, and one of those reforms could mean that people who get a pay rise could be evicted from their social homes. On the "Today" programme he said:
"I don't want to overstep the mark and announce something to you which is actually properly being announced to Parliament later".
A consultation document has been published, and the period of time in question is only eight weeks, not 12. We are told that this consultation will inform the localism Bill which we have heard on the grapevine will be published this week. This is not the right way to treat the House. Mr Deputy Speaker, will you ask the Housing Minister to come here and apologise and to allow us to question those proposals?
Mr Deputy Speaker (Mr Lindsay Hoyle): First, may I thank the right hon. Lady for giving me notice of her point of order? As the House knows, Mr Speaker attaches great importance to key policy announcements being made to the House before they are given to the media. There has been a written ministerial statement today, and the Department for Communities and Local Government will be answering questions on Thursday. This seems to be a classic example that should be drawn to the attention of the Procedure Committee as part of its inquiry into ministerial statements.
Andy Burnham (Leigh) (Lab): On a point of order, Mr Deputy Speaker. At the last two Education Question Times, hon. Members raised concerns about the award of a contract to an organisation called the New Schools Network by the Department for Education, and about the lack of process that was followed. I wrote to the permanent secretary more than three weeks ago, asking him to investigate those concerns. I was promised a reply a week ago today, in advance of Education questions last week and of the Opposition day debate, but no such reply was forthcoming. Mr Deputy Speaker, through your good offices, may I ask that Members be given prompt answers when they are promised them, so that important questions can be raised and the Department in question can be held to account on these important matters?
Mr Deputy Speaker: That is not a point of order, but the message has been put before us and I am sure that the Chief Whip will have taken note of it. I am sure that this will be taken into account and that we can look forward to earlier replies in future.
Savings Accounts and Health in Pregnancy Grant Bill
Consideration of Bill, not amended in the Public Bill Committee
5.25 pm
Mr David Hanson (Delyn) (Lab): I beg to move amendment 1, page 1, line 1, leave out Clause 1.
Mr Deputy Speaker (Mr Lindsay Hoyle): With this it will be convenient to discuss the following:
Amendment 17, page 1, line 6 , leave out '3rd January 2011' and insert
'a date to be set by regulations made by the Secretary of State by statutory instrument'.
Amendment 4, page 1, line 6, leave out '2011' and insert '2016'.
Amendment 18, page 1, line 8, leave out '3rd January 2011' and insert
'a date to be set by regulations made by the Secretary of State by statutory instrument'.
Amendment 5, page 1, line 8, leave out '2011' and insert '2016'.
Amendment 19, page 1, line 14, leave out '3rd January 2011' and insert
'a date to be set by regulations made by the Secretary of State by statutory instrument'.
Amendment 6, page 1, line 15, leave out '2011' and insert '2016'.
Amendment 20, page 1, line 17, leave out '3rd January 2011' and insert
'a date to be set by regulations made by the Secretary of State by statutory instrument'.
Amendment 7, page 1, line 17, leave out '2011' and insert '2016'.
Amendment 21, page 1, line 18, leave out '3rd April 2011' and insert
'a date to be set by regulations made by the Secretary of State by statutory instrument'.
Amendment 8, page 1, line 18, leave out '2011' and insert '2016'.
Amendment 22, page 1, line 21, leave out '3rd January 2011' and insert
'a date to be set by regulations made by the Secretary of State by statutory instrument'.
Amendment 9, page 1, line 22, leave out '2011' and insert '2016'.
Amendment 23, page 2, line 2, leave out '3rd April 2011' and insert
'a date to be set by regulations made by the Secretary of State by statutory instrument'.
Amendment 10, page 2, line 2, leave out '2011' and insert '2016'.
Amendment 24, page 2, line 4, leave out '3rd January 2011' and insert
'a date to be set by regulations made by the Secretary of State by statutory instrument'.
Amendment 11, page 2, line 4, leave out '2011' and insert '2016'.
Amendment 25, page 2, line 5, leave out '3rd April 2011' and insert
'a date to be set by regulations made by the Secretary of State by statutory instrument'.
Amendment 12, page 2, line 5, leave out '2011' and insert '2016'.
Amendment 26, page 2, line 8, at end insert-
'(5) Regulations made under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.'.
Amendment 51, page 2, line 8, at end insert-
'( ) The Chancellor of the Exchequer must lay a report before Parliament no later than 31 December 2011 on the impact of section 1 on looked-after children in England, Wales, Scotland and Northern Ireland.'.
Amendment 52, page 2, line 8, at end insert-
'( ) The Chancellor of the Exchequer must lay a report before Parliament no later than 31 December 2011 on the uptake of tax free savings accounts by looked-after children in England, Wales, Scotland and Northern Ireland following the implementation of section 1.'.
Amendment 36, in title, line 1, leave out
'To make provision about eligibility for a child trust fund;'.
Mr Hanson: The Bill was considered in Committee but it was not amended, despite the fact that we had some 19 Divisions, which showed the strength of feeling among Labour Members. I am pleased to see so many of my hon. Friends who served in Committee in their places today.
The Labour Opposition's objection to clause 1 was well rehearsed on Second Reading and in Committee, but I regret to tell the House that it will be rehearsed again as we continue to explain our objection to the clause. As ever, I wish to help the Minister and be pragmatic by giving him the opportunity to reflect on the mistake he is making in proposing clause 1 and on the issues we raised in Committee, which my right hon. and hon. Friends want to debate again.
My main concern is to delete clause 1, which amendment 1 is designed to achieve, unless we can get the Minister to reconsider some of the amendments we tabled in Committee, which are before us today. I refer particularly to amendment 17, which would delay the abolition of the child trust fund until such time as the proposed child ISA-individual savings account-came into play. We had that debate in Committee and I will refer to it again later.
Amendment 4 would allow the abolition of the child trust fund to be delayed until 2016. Again, I want to help the Minister and give him an opportunity to fulfil his manifesto commitment to help the poorest third of children in society. At the general election in May, he said that he would not wish to see them disadvantaged by the abolition of the child trust fund.
I also support amendments 51 and 52, tabled by my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins), which raise issues that my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson) aired in Westminster Hall relating to looked-after children. It is important to return to those issues again today.
Amendment 1 would delete clause 1. I want the Minister and the House to know that, however pragmatic our approach to the abolition of the child trust fund, our fundamental objective is to ensure that the fund remains for all children, as proposed by the previous Labour Government.
I say that for three reasons. First, we believe that the child trust fund promotes saving, encourages financial education and ensures that all young people have a financial asset at the age of 18, which is particularly important for those who come from poorer families. The child trust fund scheme, introduced by the Labour Government, was having a positive effect between April 2008 and April 2009: a massive 823,504 vouchers were issued-about 70,000 a month; more than 74% of the accounts were opened by parents; and about £2 billion is held in funds. By the end of this year, it is likely that more than 6 million child trust funds would have been opened. That is a success by any stretch of the imagination-a success now being torn up by the coalition Government. Those child trust funds would have helped to support our children when they reached the age of 18. That would have been a progressive measure, which is why Labour Members oppose clause 1.
5.30 pm
The principal aim of child trust funds was to ensure that families who had never saved for their children undertook such saving as a matter of course. Previously, regular long-term savings had been made for only 18% of children. The child trust fund industry average is now 31%. Money is being saved every month in 30% of the child trust funds of families whose incomes are just above welfare dependency level. Families in the lowest income bracket are saving a higher proportion of their household incomes than those in more affluent groups.
In Committee, we heard evidence from Katherine Rake of the Family and Parenting Institution, and from the Children's Mutual. They recognised-I quote from a letter written to The Sunday Times in July-that
"the decision to abolish the Child Trust Fund along with the Savings Gateway"
-to which we shall return later-
" is short-term and misguided."
According to the figures we have, there have been regular contributions to child trust funds, made in a highly tax-efficient way, of more than £22 million a month up to July this year. The Government are abolishing a successful scheme, which is why we will oppose clause 1 unless it is amended.
Let me again help the Minister. As he can see, amendment 4 alters the date of 3 January 2011 to 3 January 2016, which is later than the date of the next general election. That date was chosen so that the Minister could secure a proper mandate for the abolition of child trust funds. I accept that in Committee the amendment was rejected by 10 votes to seven, but it has been tabled again so that Conservative Members can stick to their manifesto commitment to the electorate. The Minister will know-but it is worth reminding the House-that this was in the manifesto on which he, indeed, all 306 Conservative Members-stood:
"We will... cut government contributions to Child Trust Funds for all but the poorest third of families and families with disabled children".
I am being pragmatic about amendment 4, which is not perfect, but, if the Minister accepts it, I will ask my hon. Friends to support clause 1. The amendment gives the Minister an opportunity to fulfil his manifesto commitments to help the poorest third of families, to help children who are disabled, and to help children who are looked after and in care, who, indeed, form most of the poorest third of children. In February this year, the Government supported an increase in the amount payable to disabled and severely disabled children. Given that, and their commitment to retain child trust funds for the poorest children, I hope that the Minister will support our amendment, but I ask him to defend his decision to renege on that commitment.
As ever. I exempt the Liberal Democrat hon. Member for Birmingham, Yardley (John Hemming) from the charge, for he and his party stood on a proposal to abolish child trust funds across the board. As I recall, 57 Liberal Democrats and 307 Conservatives were elected in the general election, as well as a substantial number of Labour Members, Scottish National party Members, Plaid Cymru Members, Ulster Unionists, Independents, Democratic Unionists and Sinn Féin Members, none of whom supported the abolition of child trust funds. The policy of abolishing them across the board was officially supported at the general election by only 57 Members of the House of Commons, yet the Minister has come here today prepared-as part of a wider coalition agreement-to give up his principle of supporting the poorest third of families in the community so that the Liberal Democrats can put their seats on the line and their backsides in ministerial cars.
Clause 1 will hit the poorest children in our society, and it should be resisted. We should do what the Conservatives felt they should do in May this year, and support poorer families as a whole. Amendment 4 would allow child trust funds to be retained. It would also allow the Minister to go into the next election with his promise to the electorate maintained, although he would be able to argue to the electorate that, if returned in 2015, he will abolish child trust funds completely. The amendment does nothing but allow the Minister to keep to his manifesto pledges.
Amendments 51 and 52 stand in the name of my right hon. Friend the Member for Wythenshawe and Sale East but have broad cross-party support. As I said, my hon. Friend the Member for Kilmarnock and Loudoun raised the issue they address in Westminster Hall. Sadly, the new clause that I wished to be selected was not selected today, but these amendments give the Minister an opportunity to reflect on the impact of the abolition of the child trust fund on children in care.
I seek to assist the Minister. I want to give him a chance to reflect on his actions. I will put aside the fact that in Committee he voted down amendments we had tabled to maintain the child trust fund for looked-after children, because I hope he has reflected on what the Prime Minister said to my right hon. Friend the Member for Wythenshawe and Sale East at a recent Prime Minister's questions, and because I believe he has had some very constructive meetings with my right hon. Friend.
I want the Minister to look at the impact of the abolition of the child trust fund on looked-after children. Some 6,000 children go into care each year, and there are 86,000 children in care across the UK-as of March this year, there were 64,000 in England, 5,000 in my
home area of Wales, 15,000 in Scotland and just over 1,600 in Northern Ireland. Over previous years, the state has opened 33,158 child trust funds for children who are looked after by the state or by individuals who have been given that power by the state-children in residential care or foster care. When in Committee the Minister refused to allow the child trust fund to continue for those children, he was saying to them that the state no longer has a role to play in helping to support them financially at the age of 18. I believe he will want to reflect on that. Amendments 51 and 52 provide him with an opportunity to realise that we can, after all, offer help and support to such individuals at that time in their lives.
The amendments give the Minister an opportunity to look again at the impact of the abolition of the child trust fund and of the implementation of clause 1. They give him an opportunity to look at how we might provide some help and support. We must not allow individuals who do not have parents to contribute to their future to fall through the net. Indeed, for them, parental contributions to the child individual savings accounts that will be introduced in October next year will not be possible, because they do not have parents who play an active role-or their parents might not even be alive. The amendments would avoid a postcode lottery in respect of local authorities. As the Minister said in Committee, they can contribute to the fund, but they might do so individually with no recognition of the specific needs of each individual in their communities.
My right hon. Friend the Member for Wythenshawe and Sale East will outline his amendments in more detail, so I will not dwell on them much longer, but I want the Minister to say what we will do for looked-after children if clause 1 is agreed in the House this evening and enacted.
Amendment 17 also addresses the child trust fund issue. It is a pragmatic amendment that I hope the Minister will consider. Again, it would give him some flexibility. It would amend the Bill so that eligibility for a child trust fund was not cut off in January 2011, and Ministers could, by regulation at some point in the future, introduce a date to end eligibility. We discussed this matter in great depth in Committee, but I am still interested in the Minister's thinking on it.
Amendment 17 does not say that the Minister will not be able to abolish the child trust fund, much as we wish he would change his mind on the issue. We have no final details on the new child ISA and no implementation date for it, although October next year has been suggested. The amendment simply says that in the time between the possible abolition on 3 January, as set out in the Bill, and the introduction of the new child ISA in October or November next year, the Minister is allowed to keep the flexibility of the child trust fund for all children, and in particular for the benefit of looked-after children and those in the poorest third. The amendment seeks to ensure that between 3 January and a date provided by regulation the Minister could continue to have lower payments in place, to which the House has already agreed, for children born after 3 January 2011. Alternatively, he could end Government contributions but keep eligibility in place for parental contributions until such time as he introduces the child ISA.
There are many good reasons for taking such an approach. Carl Emmerson, of the Institute for Fiscal Studies, has said:
"I do not think that it is possible to make decisions on how the policy should look and also ensure that the financial sector is geared up to operate a market of that size." --[ Official Report, Savings Accounts and Health in Pregnancy Grant Public Bill Committee, 2 November 2010; c. 16, Q37.]
He was making the point that we do not yet know what the child ISA is, how it will operate and when it will come into play, and we need to know those details before we abolish the child trust fund. Graeme McAusland, chief executive of the Children's Mutual, told us:
"If what happens next is that you launch this new junior ISA, it would seem sensible to leave the child trust fund mechanism in place until it is clear what that new product is and until the industry is ready to participate in it." --[ Official Report, Savings Accounts and Health in Pregnancy Grant Public Bill Committee, 2 November 2010; c. 46, Q133.]
Amendment 17 gives the Minister a final opportunity to maintain the child trust fund, not for ever, for three years or for five years, but for a further eight months, until we are clear on the implementation of the ISA he is introducing.
These amendments are clear, and let me make it clear to the Minister that the Labour party opposes the abolition of the child trust fund and will continue to do so, not just here tonight and as we have done in Committee, but in another place. I hope that he will look favourably on the amendments tabled by my right hon. Friend the Member for Wythenshawe and Sale East relating to looked-after children, so that we can find a detailed solution before this Bill abolishes things. I hope that the Minister will consider maintaining his manifesto commitment, because I want him to go back to the electorate with some integrity in 2015.
Finally, I hope that he will look pragmatically at ensuring that an alternative product is in place and at maintaining the child trust fund until such time as the child ISA is introduced next October. Serious issues are at stake. I know that my right hon. and hon. Friends feel very strongly about these matters-we all do-and it is important for the Minister to respond on them. I hope that having reflected on the 19 Divisions in Committee and the seriousness with which we take these matters, he will at least come back to the House and reflect strongly on the views that we have put to him today.
John Hemming (Birmingham, Yardley) (LD): We are back where we were in the Public Bill Committee: the Opposition are going to fight on the barricades to protect the child trust fund because it is so important. We are in a world where we are borrowing large sums-we have seen in Ireland what happens if we do not bring the finances under control-and the Labour party wants to borrow money to put it into child trust funds. That sounds interesting, and in 18 years, children will be able to access that child trust fund. We then have to ask, however, what happens to the money in that child trust fund, and it is relatively difficult to find out. Today, I looked at the annual reports of the Children's Mutual. In 2008, the funds were generally worth less than the money put in. In 2009, some were worth more than the money put in and some were worth less.
5.45 pm
The idea is that the Government borrow a large sum of money-it was running at a very high rate of about £500 million a year-and invest it to benefit other people. That means that we get a lower return than it costs to borrow it in the first instance. In 18 years' time, those children will get a benefit. By working at an earlier stage, some will already have started paying tax, and that tax will be paying for the cost of the whole process. Given that we have a deficit that we need to bring under control, would it not be better at least to say that we will not borrow money to invest it and lock it away for 18 years, because, frankly, we have not got the money to do that? The Opposition argue that there is evidence that justifies the process because it encourages people to save, but the evidence is not there. The Government are proposing a junior ISA scheme that will be available to everybody from the point at which the child trust funds scheme ends. There is no question that anyone will fail to have a savings vehicle.
It is also important to remember the evidence we heard in Committee from the Royal College of Midwives, which said very simply that if a family is on a very low income and has a young baby the best thing they can do is spend the money on good quality food and health. We will soon hear Opposition Members argue that that is important.
There are those who say that people do not have to chose whether to spend £10 on better-quality food or to invest it in a savings vehicle that is not making them any money and that they can do both, but, I am sorry, that does not add up either. People do not have such options. If they are on a low income, they must decide what to do with the money. They do not have the resources to put money in a child trust fund and lock it away until the child is 18. Although the scheme has the advantage that the money can be locked away until then-it is quite useful for grandparents to know that the money will not be used until then-a family that faces difficulties when a child hits 10 or 13 finds that it is an inflexible vehicle that is not very good for their purposes.
On the amendments on children in care, I have a lot of concerns about the care system. There is confusion about the difference between a looked-after child and a child in care and the wrong figures are often quoted. In 2010, 9,500 children in England were taken compulsorily into care and more children were put voluntarily into care by their parents under section 20 of the Children Act 1989.
We identified in Committee that the administrative costs to the Government of running the machinery for the child trust funds were about £5 million a year-I think that the Financial Secretary can confirm that figure- [ Interruption. ] I thought that it was £50 million to start out with, but I had it confirmed that it was £5 million a year and I accept that it is. I have heard various figures from the Opposition for how much it costs to put in the additional cash to maintain the system for children in care, and those figures ranged from £1 million to £2 million a year. If we add the £5 million a year to the larger figure of £2 million a year, we will be putting in £7 million a year, which we are borrowing, to cover putting £2 million a year into an investment vehicle that probably does not produce a return over time to match the long-term benefit that we would have gained by not borrowing the money. We
would be far better off simply saying that we will provide some funds when those children reach the age of 18. To spend £7 million in such a way is not a rational means of managing public finances.
Fiona Bruce (Congleton) (Con): Would we not be far better off doing what we are doing now and supporting growth in the economy so that we can provide the jobs that those young people will need when they finish education and start work?
John Hemming: The hon. Lady is entirely right. If we do not deal with the deficit, we face many other problems. We will end up paying a higher interest rate on sovereign debt. At the moment we are doing quite well, with an interest rate of about 3.5%. Before the bail-out, the Irish were being charged about 8% and the Greeks are being charged about 11%. When a country has a large deficit, if that country does not take action, not only does the amount of debt go up but so does the rate of interest.
Sheila Gilmore (Edinburgh East) (Lab): In April, the leader of the Liberal Democrats said that big cuts would be extremely dangerous. Did the hon. Gentleman agree with him then? If he does not agree with that now, when did he change his mind?
John Hemming: That might be slightly out of order, but I should probably answer the question. There has been a debate about the £6 billion of cuts in this financial year. At about 4% of the overall deficit, £6 billion is not a large sum, but given what happened with the initial sovereign debt crises during the general election-things that we have to be aware of, such as what was going on in Greece-we need to give the message that we are serious about dealing with the deficit. That is a socially progressive policy.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op): Does the hon. Gentleman accept that the state has a special responsibility for children in care, irrespective of how they end up in care? Even in times of financial difficulty, any responsible parent would look first to the most vulnerable children, and that is what the state should do.
John Hemming: I agree entirely, but it is also the state's responsibility to make sure that we do not spend £7 million to give people £2 million. Putting aside whether child trust funds bring a return over time, it is absolutely absurd to propose, as the Opposition do, spending £7 million to give children in care £2 million. There has to be a better way of doing things. Also, those children would not get the money until they were 18.
Nic Dakin (Scunthorpe) (Lab): I think that the hon. Gentleman agrees that we should support looked-after children in some way, so can he suggest a better way? [ Interruption. ]
John Hemming: From a sedentary position, an hon. Member suggests that we ensure they have a job. That is true, but what we are talking about is a child trust fund that is made available at the age of 18.
Pete Wishart (Perth and North Perthshire) (SNP): Would not the people whom we are talking about need that money at 18 to pay for the Liberal Democrats' tuition fees?
John Hemming: The good news is that we are scrapping up-front tuition fees not just for full-time students but for part-time students, but I think we are straying-
Mr Deputy Speaker (Mr Lindsay Hoyle): Order. We are going off the Bill.
John Hemming: The point is that spending £7 million to give £2 million is an appalling waste of money. Anyone who votes for anything like that will have a real stain on their financial track record, because people will observe the Opposition saying, "This is so important that we have do things in this inefficient way." It is a ludicrous proposal.
Bill Esterson (Sefton Central) (Lab): The hon. Gentleman has talked about ISAs replacing the child trust fund as a way of saving for children. Does he appreciate that ISAs are often related to stocks and shares and that their value can go down as well as up? I do not see the difference in what he proposes.
John Hemming: At this point, I should declare my interest, which is on the Register of Members' Financial Interests, as the chair of a company, John Hemming and Co., which provides software to ISA providers. I understand how ISAs operate and that the value of ISAs that are exposed to the stock market can go up as well as down. The difficulty with the child trust fund is that it is relatively small and that there is a great challenge in managing small funds. As a proportion of the fund, the 1.5% charges rate is higher than that for many other funds.
Kate Green (Stretford and Urmston) (Lab): Is the hon. Gentleman confident that the junior ISA will be more cost-effective for the local authorities that are the corporate parents of children in care than the child trust fund?
John Hemming: There is no reason why a junior ISA should be any less effective for the corporate parents. The issue is that running the computer systems for the child trust fund costs £5 million a year. That cost would not affect local authorities but would mean central Government incurring an extra £5 million in administrative costs now to give children in care £2 million in 18 years' time.
Kate Green: Rather than this being about whether there will be more or less cost, is it not simply about whether the cost will be borne by central or local government? In the scheme of things, that makes very little difference when we are talking about overall cost to the public purse.
John Hemming: The Opposition's proposal to maintain the child trust fund and give £2 million to children would cost £7 million, so they would waste £5 million on the process. In the sphere of the massive deficit, £5 million might not seem like much, but it is the responsibility of Government to be effective and efficient in their use of public funds.
Cathy Jamieson: Will the hon. Gentleman confirm that £5 million will still be used for children in care under the Government's proposals? Will he also tell us how it will be used?
John Hemming: I cannot confirm precisely what is being done in the care system. I am not a Minister; I have never been in a ministerial car and I have no interest in putting my derrière inside one. I happen to be a Back-Bench Member of my party who is very supportive of the Government's strategy of being cost-effective and of using public funds in the most effective way, particularly to look after the most vulnerable members of society. The simple point, on which I shall end if there are no more interventions, is that it is insane to spend £7 million to give people £2 million.
Paul Goggins (Wythenshawe and Sale East) (Lab): Let me begin by complimenting my right hon. Friend the Member for Delyn (Mr Hanson) and, indeed, all my hon. Friends for their sterling work on the Bill and exposing clearly its impact on looked-after children and children from all backgrounds. My right hon. Friend said that he wanted to be helpful and conciliatory. I have worked with him for many years and I thought he was very helpful and conciliatory this afternoon. I want to adopt the same approach regarding amendments 51 and 52, which stand in my name. They would place a duty on the Chancellor to report, by the end of 2011, on two things: the impact of clause 1 on looked-after children, and the take-up rate of tax-free savings accounts for looked-after children. Admittedly, this is in its early stages because we do not have the details on the child ISA that have been promised.
Whatever divisions there are in the House, we should always try to reach consensus on our obligations and duties in relation to looked-after children. We should not be divided on that and should constantly seek answers that we can all agree on and that clearly show we are prepared to meet our obligations. Whatever other motives might be attributed to the Minister in bringing the Bill to the House, I do not believe that he came here intending to cause children in care any harm. I believe that the impact the Bill will have on looked-after children is a genuinely unintended consequence. Equally, however, if it is enacted without steps having been taken to ensure that looked-after children are not disadvantaged by its measures, the Government-indeed, all of us-will have failed to meet our obligations.
The Minister has said on several occasions that he wants the new junior, or child, ISA to be the replacement for the child trust fund, which might have merit-I shall not discuss this in too much detail. That policy might well make sense for the child who has a parent who can afford to set up and contribute to an ISA, but for the child who does not have a parent or who does not have a parent who is in a position to invest on his or her behalf, it is meaningless. It is therefore essential to establish in the Bill the principle that the Government should open and make suitable contributions to a child ISA when a child is in care for a reasonable length of time. For me, that is a fundamental principle. I will be listening carefully to the Minister's response, because its nature and content will be important when I decide whether to press the amendment to a Division.
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It was many years ago, but I worked with looked-after children for about 10 years, most of which were spent in a local authority assessment centre in Wigan. The centre was the point of entry for many of the children in the
area who came into care. Generally, we worked with those children for about three months. After that, about half of them, thankfully, were able to go back home, often with support from others in the community, because we had been able to iron out the problems, whatever they were. The other half went on in their care journey to other situations, such as foster care. It is the children in that group for whom we should have the greatest concern, because they face the greatest disadvantage. It is those children who end up over-represented in our custodial institutions, and in so many other aspects of our society that cause us difficulty.
My hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson) is right to say that we take on the responsibility as parents when those children come into the care of the state, and with that responsibility comes a range of actions that we need to take. We have an obligation to support looked-after children in different ways. Government Members are quite right to say that a good way to help children when they leave care is to ensure that they have a job to go to and that they have been properly educated and trained. Any actions that the Government take to make that more likely will have my full support, because it is important. If setting up a child ISA is good enough for children in reasonably well-off families, it is good enough for the children whom we are obliged to support and look after.
I believe that a savings account, a nest egg or some such asset could make a real difference for a young person who has been looked after as they move into adult life. The reports that I am calling for in amendments 51 and 52 would offer the Government an opportunity to demonstrate their support for looked-after children. If, in the context of the Bill, they were prepared to put together a package that would deliver both the opening of accounts and contributions to them, they would have something very positive to say in those reports.
I first raised the issue with the Prime Minister on 27 October and was heartened by his response. I asked him whether he would ask his Ministers to work with me and others to produce an affordable alternative to the child trust fund, and he said yes. In a way, that did not surprise me; whatever other differences I have with him, he has made it clear that we need to do more for looked-after children and get better outcomes for them. In that sense, it did not surprise me that he was so positive. I had a discussion with the Minister last week, which, again, was a cordial exchange. I left him several things to think about, and I look forward to hearing his observations this evening and any further thoughts he has had.
The scheme that I propose is outlined in some detail in new clause 3-it was not selected for debate, and I understand why. I have been working with a number of Members and senior representatives of Barnardo's and Action for Children, the two largest children's charities in the country. We propose a very simple scheme that would apply to children throughout the UK: for any child who enters care and remains in care for a minimum of three months, the Government should open a junior ISA and make an opening deposit of some £250, which is consistent with the previous scheme, and there should be a top-up of £100 for every year that the child remains in care thereafter. Of course, it would be open for others to make contributions to that ISA, such as members of the extended family who were not in a position to look
after the child but who could contribute. Nothing in our proposals would prevent local authorities, trusts and other benefactors from making contributions.
Cathy Jamieson: Does my right hon. Friend agree that that would also give young people themselves the opportunity to understand the value of saving and perhaps make some contributions themselves, which hitherto they may have been unable to do?
Paul Goggins: My hon. Friend makes an important point. If a looked-after child aged 16 or 17, perhaps studying and working part time, was in a position to make a modest contribution to their own fund, that would be a good thing. Looked-after children have to be more resilient than any other people in our society, so it would be good for them to learn about the importance of managing money and planning ahead through the medium of that child ISA or a savings account to which they and others may contribute. That could make them even more resilient, and looking back to the time when I worked with such young people, the opportunity to sit down with them and work out their money management would have been a great way to do it. I think that that suggestion has great merit, and if the young person could also contribute, that would be a very good thing too.
My proposal would require the Government to open accounts for about 20,000 looked-after children each year. With additional top-ups of £100 for those who remain in care for a year or more, as I have described, we are talking about a total annual sum of some £6.6 million. We can argue about whether child trust funds are a sensible way to spend half a billion pounds, and the Government have taken a view that is different from that taken by my right hon. Friend the Member for Delyn and those of us on the Labour Benches, but I put it to the House that a scheme that would deliver a savings account for every looked-after child in the UK who had been in care for more than three months, at a cost of less than £7 million, would be a good way to spend public money. The young person would get the money when they were 18. It could be an important part of care planning, as I said in response to my hon. Friend the Member for Kilmarnock and Loudoun, and would promote resilience. It would send a clear and strong message to the young people concerned that we owe them an obligation and are prepared to support them in a practical way.
I hope that the Minister will provide a positive response not only to the precise content of my amendments, but to the proposal in general and the need to do something, either here or in another place, that will put in the Bill something tangible for looked-after children. What I propose is modest, but it could make a real difference. If the Minister is prepared to act and make that clear, that would be good news for looked-after children. It would demonstrate that, whatever differences there are in this place over the Bill, when it comes to looked-after children we are prepared to sink those differences and do something together.
Paul Maynard (Blackpool North and Cleveleys) (Con):
I am grateful for the opportunity to pass comment on the Opposition's continued attempts to retain child trust funds. I am struck, in particular, by the nature of
their opposition: rather than concentrating on the effectiveness or otherwise of child trust funds as savings vehicles, they appear to have reduced their argument to one about generic usefulness. There seems to be a growing objection to abolishing child trust funds, because somehow the Opposition have inadequate confidence in the junior ISAs or child ISAs that are due to replace them. That is particularly concerning.
I remind those Members who sat on the Public Bill Committee with me, and inform those who did not, of a quote from the director general of the Building Societies Association, Mr Adrian Coles, who said:
"let us not pretend that we need to rely on the Government or the public sector to do all of this. The 49 building societies and other mutuals offer about 100 children's savings accounts in the free market, which have been pretty successful over the years". --[ Official Report, Savings Accounts and Health in Pregnancy Grant Bill Public Bill Committee, 2 November 2010; c. 26, Q67.]
I know that in Committee concerns were expressed that the customers who take out ISAs might be the more affluent or the more elderly. It was made clear at the time that 12 million people on incomes under £20,000 have ISAs, and that 40% of them are under the age of 44, compared with just 20% who are over the age of 64, so any concerns that younger families are not sharing in ISAs are unfounded.
I was particularly concerned when I heard continued doubts about the ability of families on lower incomes to cope with the financial complexity of an ISA. We need to trust people. A great deal of work is going into financial education-an increasing amount. It is a trend initiated by the previous Government, and I congratulate them on that. We are building on it, so we can have confidence in ISAs as a potential future savings vehicle.
Another reason for opposing the abolition of the child trust fund was the impact that that could have on the needs of families with disabled children. I was shocked by one of the statements by the shadow Minister, the right hon. Member for Delyn (Mr Hanson), when he said that
"the proposal for providing 8,000 week-long respite breaks each year for disabled children in England . . . trivialises the nature of the child trust fund". --[ Official Report, Savings Accounts and Health in Pregnancy Grant Public Bill Committee, 9 November 2010; c. 228.]
I found that a disquieting comment. I do not regard respite breaks for children as trivial in any way, shape or form.
Mr Hanson: There are two points about those discussions in Committee about which the hon. Gentleman is aware. First, the abolition of the child trust fund takes away a resource that is applicable in Scotland, Northern Ireland, England and Wales, and replaces it with a provision that is available only in England. Secondly, provision for respite care is entirely different from building a capital asset for individuals at the age of 18. That was the objective of the revised proposals from the Minister.
Paul Maynard: I thank the right hon. Gentleman for that effort to bring clarity. None the less, I regret the use of the word "trivialise", if only because I have spoken to many families in my constituency with disabled children. When speaking just a fortnight ago to one family who had benefited from the family fund and had their first holiday in five years, the mother broke down in tears.
I raise the matter not to have a go at the shadow Minister, but to highlight one of the wider issues that was illuminated in Committee: the difference between the accessibility of an asset that is locked away until the young person is aged 18, and the changing needs of families with disabled children-and of looked-after children, for that matter. If we are seeking to target the child trust fund at those in the community who are the most vulnerable, who have the most chaotic lives, who are subject to the most pressures, to whom unexpected things occur, is it truly sensible to tie them into something that can be delivered only when the individual reaches the age of 18?
Cathy Jamieson: Does the hon. Gentleman agree that the situation should not be an either/or? We should be able to give day-to-day help and support to the most vulnerable, at the same time as allowing people-for example, looked-after children and people who have disabled children-to build a capital asset that will be available to them when they enter adulthood.
Paul Maynard: I agree entirely, and I wish that during the evidence taking in Committee and in the debate, we had had an either/or discussion, rather than an "and, and, and, and yet another idea" discussion. We had far too many shopping lists and not enough recognition that hard choices had to be made. It is important to recognise, as Marc Bush from Scope did when he gave evidence to us, that delivering an asset at age 18 is not the solution to the problems faced by families engaging in the transition of their child from childhood to adulthood, when faced with a complex disability. That starts at age 14 and can continue to age 30. The hon. Member for Stretford and Urmston (Kate Green) recognised that when I intervened on her, and that was a useful move forward.
When we are discussing the future of child ISAs, I hope it is taken into account that families who are particularly vulnerable may need access before the age of 18. Locking the ISA away until age 18 is not always the best solution.
Paul Maynard: I will give way, for the last time.
Kate Green: I am grateful to the hon. Gentleman. He is right to say that if the junior ISA can offer that flexibility to disabled children, it would be a useful enhancement-I look forward to hearing the Minister's response on that-but does he accept that another advantage of the child trust fund, which he and I would welcome in the junior ISA, was that it delivered extra money to more vulnerable children in the double payments that were available to children from low-income households or with disabilities, for example?
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Paul Maynard:
I thank the hon. Lady for that intervention. One of the joys of the Bill is that I have learned so much from her about progressive universalism. She is right that the progressive element is being removed. However, it has struck me that it is as though I have been locked away on Moonbase Alpha for the past fortnight, because there seems to have been no recognition
on the part of the Opposition that we are operating in a much more stringent financial climate. The hon. Member for Wirral South (Alison McGovern), who is no longer in her place, dismissively said at one point in Committee, "I recognise that there has been a debate about the deficit and all that sort of thing." I found that regrettable.
We are operating in a situation in which we have to make financial savings. Rather than having a discussion about whether the child trust fund is the most appropriate use of public money, we have continually debated why we should do this, and this, and this, and then something else, and something else again. At no point did we discuss the crux of the issue: whether the child trust fund was the best use of public money to help those most in need in our society.
I welcome the fact that the Minister is having discussions with the right hon. Member for Wythenshawe and Sale East (Paul Goggins). I hope something comes of that, but I remain concerned that the Opposition's determination to try to save child trust funds is based on an outdated notion that only those savings vehicles provided by the state can provide a solution. That is not the case.
Yvonne Fovargue (Makerfield) (Lab): The child trust fund has a dual purpose-not only to give the young person a lump sum, but to nurture in them a savings habit for life. Some 74% of those eligible have taken up the responsibility of the child trust fund account. It is the most successful savings product on the market; ISAs and pensions fall well behind that figure. It is simple-much simpler than opening a deposit account-and it gives people a nudge to save.
Nearly a third of parents and grandparents have added to the fund, and the poorest 20% have added a higher proportion of their income to it. However, even for young people whose families do not contribute, the practical demonstration of saving in the account is invaluable. Organisations such as the Personal Finance Education Group, which works in schools, structure their lessons around it, certain in the knowledge that all pupils will have received a statement annually on their birthday, and that all pupils have such an account.
The very universality of the scheme provides a useful and practical foundation for learning and for influencing behaviour. In addition, it is especially useful for looked-after children and children with disabilities, who receive extra premiums. For looked-after children, it is a practical example of the state acting as parent and attempting to improve their prospects at 18-an ambition that all parents have for their children-by providing a lump sum at one of the most difficult periods of their lives, a time of transition that is difficult for any teenager, but especially for those leaving care.
For children with disabilities, the scheme provides an asset that allows them to take advantage of life opportunities or to invest in whatever they see as their priority. It is unfair to remove the scheme without a full impact assessment of groups who may be disproportionately affected, such as families with disabled children and people with disabilities, especially as the Demos report showed that the emergency Budget had a substantial financial impact on families with disabled children.
It has been suggested that a junior ISA may replace the child trust fund, but I cannot believe that it will provide an adequate replacement, even if a seamless
transition in January 2011were possible, which has been disputed by a number of experts in the savings field. An ISA primarily benefits taxpayers and higher-rate taxpayers in particular, so what advantage does an ISA offer to a non-taxpaying family? Equally, the simplicity of the child trust fund product has been praised.
I have worked with people to whom ISAs and other financial products have little relevance, with people who need support to open a basic bank account and with people who have no notion of opening a deposit account. I urge Members, therefore, to retain the scheme in some form-even if only for looked-after children, children with disabilities and the poorest third of families-and not to scrap it completely. I urge Members to support the amendments.
Kate Green: I shall speak strongly in support of amendments 51 and 52, which my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins) has tabled. As he says, Members from all parties share a deep concern about the continuing very poor outcomes that we, as corporate parents, deliver for children in the care of the state. Those children suffer difficult childhoods, often arriving in care in traumatic and traumatising circumstances. They are therefore significantly unsettled and disadvantaged in their childhoods, and that disadvantage continues, to our shame, into their adult lives.
Such children all too often achieve poorer outcomes in education and health: in adult life they are less likely to move into sustainable employment or further or higher education, and they are more at risk of poverty. I know all hon. Members feel deeply that that is wrong, so I shall speak strongly in support of my right hon. Friend's amendments, because they open-mindedly ask us to address that endemic disadvantage. If Opposition Members are offered assurances that other financial instruments can meet those concerns, we will of course consider them, but we are clear about what those alternative instruments must deliver if they are to receive our approval tonight. They must deliver some of the advantages that the child trust fund was able to deliver for looked-after children-advantages that sought to some degree to adjust and compensate for the disadvantages that such children face as they embark on adult life.
The first important thing about a payment mechanism specifically designated to meet the needs of looked-after children is that it represents a signal from us as a community that we care about such children-that they are valued, and as precious as any child living with his or her family is to his or her parents. Too often, looked-after children feel that our society does not value or recognise them and that nobody has an interest in them, so a financial contribution to a savings fund for them is one of a number of steps that we can take to show that those children and their futures are important and matter to us all.
The child trust fund, in its design, also delivered much more hard-edged benefits to looked-after children. As Members have said, it put extra money aside for children through double payments, and in responding to my right hon. Friend's questions it is important that the Minister should address how we ensure that those children do not suffer further financial disadvantage and inequality in adulthood by embarking on adult life with a significantly smaller asset than many other children.
Adjusting wealth and asset inequality was one of the intended bonuses of the child trust fund-one that was particularly important for looked-after children, and one that I hope the Minister will address.
My hon. Friend the Member for Makerfield (Yvonne Fovargue) pointed out that the fund sought to meet costs at a time of transition, and reaching 18 is a particularly difficult time for children leaving care, because we leave them at the mercy of adult life as no familial parent would with her or his child. No mum or dad would throw their child out of the family home without so much as a kettle or an offer to underwrite the gas bill if they struggle as they set up home, but that is what we do to too many children who leave the state's care. By providing those children with a financial asset, the child trust fund helped to smooth some of the extra costs that they faced at transition points, with which no other family member might have been available to help them. The fund therefore enabled those young people to embark on their adult life with the confidence, certainty and stability that other young people often draw from family support.
I hope the Minister will reassure me that any alternative financial model will replicate two other in-built advantages of the fund, one of which is the product's relative simplicity. It was fairly clear what sums were going in, and it was fairly clear when they could be drawn out. Junior ISAs might offer more flexibility and allow more contributions and different points of withdrawal, and that might bring some advantages, but we must not set up a product that is too complex for corporate parents and others who might wish to donate to the funds of looked-after children to access readily and save within. I look forward, therefore, to the Minister's assurances about how the product will prove accessible to anyone who wishes to save for a looked-after child or young person, and in particular how a corporate parent will be able, without unnecessary bureaucracy and expense, to make contributions for children in their care.
Right hon. and hon. Friends have mentioned how the child trust fund offered consistency throughout the country, between local authorities and in all four parts of the United Kingdom, ensuring that every looked-after child left care with the same opportunity of an asset with which to start adult life. Can the Minister assure us that the alternative mechanisms and products that he might bring forward will deliver such consistency? We do not need to perpetrate inequalities among children leaving care as we do between children leaving care and other young people as they start out on adult life.
My hon. Friend the Member for Makerfield rightly pointed out that the junior ISA offers little that is intrinsically attractive to savers who do not benefit from a tax break. By definition, that includes corporate savers who invest for the future of children leaving care. I very much want to hear how the Minister will at least incentivise, more than that exhort, and-preferably-insist that corporate parents save adequately and equally for every child who falls within their care. If those assurances are forthcoming this evening, like my right hon. Friend the Member for Wythenshawe and Sale East, I will be able to look again at his amendments. If we do not receive satisfactory assurances, however, every young person and every child who has been in care will expect the House to support the amendments, and I for one certainly will.
Sheila Gilmore: Let me offer these words to the House:
"Simply put the Child Trust fund started people saving for children again. Since its introduction, child saving across all schemes and products has risen. We should acknowledge that asset building for children became a widespread reality in the UK through the introduction of the Child Trust Fund in 2005, and it quickly became an internationally renowned example of a long term tax free savings and investment account for children, one which encouraged saving and promoted an understanding of personal finance."
Those are not my words but the words of Phillip Blond, in a new pamphlet called, "Asset Building for Children-Creating a new civic savings platform for young people". I did not expect to be speaking his words, let alone encouraging the Minister to listen to them.
Fiona Bruce: It is correct that families have engaged in, and benefited from, the improved financial awareness that was one of the stated aims of the child trust fund. However, the evidence given by Dr Samantha Callan, a witness to the Committee, said that of parents who opened child trust funds,
"99%...have not received the maximum funding available. Therefore, it is not those on the lowest income that are actually taking the initiative to open the accounts." --[ Official Report, Savings Accounts and Health in Pregnancy Grant Public Bill Committee, 4 November 2010; c. 102, Q253.]
That means that they are not benefiting from the financial education and engagement that the funds were aimed at providing.
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Sheila Gilmore: The hon. Lady overstresses that issue. She fails to see that the child trust fund was different from other savings funds because it was intended to provide not only financial education but a real asset to children who would not otherwise retain one. It is also important to realise that there is a real difference in kind between what the previous Government put in place and the junior ISA, which was thrown in fairly late on in the course of the thinking that occurred in response to the concerns expressed and is still fairly vague in its implications.
This is about a transfer of assets and tackling asset inequality. We are faced with not only income inequality but asset inequality. It is perfectly legitimate, and indeed desirable, that we look at asset inequality just as much as at income inequality. As my hon. Friend the Member for Stretford and Urmston (Kate Green) said, the way in which child trust funds were structured enabled additional money to be put in for looked-after children and children with disabilities. That is extremely important for them at the age of 18. Junior ISAs do not deliver that; rather, they will be of greatest benefit to those who get the tax relief that goes with an ISA.
In the past, there have been many schemes allowing parents, grandparents and other people to save on behalf of children. My children had baby bonds, which were provided under the National Savings scheme, and some of the money that went in came from their grandmother. That was wonderful, and a great idea, but it would not-I am sure that it did not-assist many children from low-income households, to whom the child trust fund was specifically designed to give additional help.
I want to return to the pamphlet produced by Phillip Blond, which has been given a lot of support from several organisations interested in this field. He strongly advocates that the infrastructure of child trust funds should be retained, even if the rest of the system is to go:
"Our first and foremost recommendation is to maintain, extend and improve the infrastructure of the...Child Trust Fund under the auspices of the new ABC account. Maintaining the old CTF platform comes at a minimal cost (£2m pa) and it preserves a unique and valuable savings infrastructure for the further augmentation and development of children's savings."
That would then enable the new proposal that comes from a raft of organisations working with children-the ABC account-to be developed using the same infrastructure. It would also enable this Government, or a future Government, to return to it and decide that they want to put in additional contributions at a later date. I am surprised at the lack of faith shown by Government Members, including members of the Committee, about the economy recovering. They do not seem to think that it is worth preserving the infrastructure for a future time when it would be possible to put in extra contributions.
I urge the Minister to listen to the words of Phillip Blond and those who have supported his proposals and even at this stage, if the Minister cannot support amendment 1, to consider keeping the infrastructure.
The Financial Secretary to the Treasury (Mr Mark Hoban): As the right hon. Member for Delyn (Mr Hanson) set out in his opening remarks, the amendments in this group, except for the two tabled by the right hon. Member for Wythenshawe and Sale East (Paul Goggins), seek to delay the ending of child trust fund eligibility, or indeed not to end eligibility at all. Amendments 4 to 12 and 17 to 26 would delay the end of child trust fund eligibility from January 2011, either to 2016 or a date set by regulations. Amendments 1 and 36 would mean that child trust fund eligibility did not end at all.
I set out clearly on Second Reading the rationale for ending child trust fund eligibility, particularly for ending it from January 2011. This Government inherited a fiscal position that the Governor of the Bank of England described as "clearly unsustainable", and dealing with it immediately was unavoidable. As hon. Members will recall, my right hon. Friend the Chancellor set out a package of £6 billion-worth of savings in 2010-11 just a couple of weeks after the coalition Government were established. Part of that package was £320 million of savings from the child trust fund this year. A large part of those savings have already been made through the regulations made in July, which reduced contributions at birth and stopped them at the age of seven. Delaying the end of eligibility would reduce the savings that we plan to make by £20 million this year and by around £50 million in each future year that the delay continued.
Those figures assume that the current value of the child trust fund would continue at £50 at birth for most children and £100 for those in lower-income families. Some providers have told us that those values would not be viable for them in the long term, and so some could withdraw from the market. However, if the value of the vouchers were increased, which could be done through regulation, the costs of the delay in ending eligibility would increase too. Either way, the money would have
to be found from somewhere, through other spending cuts, tax rises, or even more borrowing. The Labour proposals would also be confusing for families who understand that CTF eligibility is due to end in January this year, particularly if we were to take the power to set a date through regulations.
I understand the point that the right hon. Member for Delyn made about delaying the end of eligibility until the junior ISA, which I announced on Second Reading, is in place. I am not expecting that to take too long; I hope that the new account will be up and running as early as autumn next year. It will be available for children who are born after the ending of the child trust fund-that is, those born after 3 January 2011.
The hon. Member for Edinburgh East (Sheila Gilmore) said that the trouble with the junior ISA was that it is tax free, but so was the child trust fund, so I cannot see that its essential nature is very different. I do not quite understand her point.
Mr Hoban: I am happy for the hon. Lady to clarify it.
Sheila Gilmore: The point that I was trying to make is that the only incentive given in the junior ISA is that the payer-the parent or grandparent, or whoever is putting in the money-can get tax relief. The child trust fund gave money to the children of families who do not usually benefit from putting money into a savings account that brings tax relief because they may not be paying tax, or paying very little tax, so it is not of such great advantage.
Mr Hoban: The fundamental difference is that under the junior ISA there will be no contributions from the state, whereas in the case of the child trust fund there were contributions from the state. Our intention is to save money in order to cut the deficit-that is why we are ending eligibility for those sums. The junior ISA will be a simple product. The hon. Member for Stretford and Urmston (Kate Green) queried that, but she should remember-to reiterate a point that I made in Committee-that 20 million people have ISAs, 12 million of whom earn incomes of less than £20,000 a year. The ISA is a mainstream financial product that people of all income streams and all ages understand; they find it very easy to contribute to a cash ISA or to an equity ISA.
John Hemming: Perhaps the hon. Member for Edinburgh East (Sheila Gilmore) was slightly confused about whether people get tax relief on contributions to an ISA. My understanding is that they do not. They get it only on contributions to a pension.
Mr Hoban: Indeed, the tax models for ISAs and pensions are different. With an ISA, the income and gains are tax-exempt, which is one of their incentives.
I believe that child trust fund eligibility should end for children born from January 2011, as the Bill provides, and not from any other date. I continue to believe that ending eligibility is the right thing to do. I know that some find that disappointing, but in the middle of the exceptional fiscal challenge that we are facing, it simply does not make sense to continue to spend half a billion
pounds a year on giving people money that is locked up until the age of 18. There are more urgent priorities, and the child trust fund is a luxury that we cannot afford.
I wish now to refer to the amendments tabled by the right hon. Member for Wythenshawe and Sale East and the wider points raised in his new clause and amendment that were not selected. I understand his point about looked-after children, who are among the most disadvantaged young people in our society and face a number of particular challenges that mean they need additional support. As he said, we met last week to discuss the matter, and he outlined to me the proposal that he has referred to today. As I said then, I have a lot of sympathy with what he is trying to achieve, and I want to consider the matter more closely. Indeed, I have already written to the Under-Secretary of State for Education, my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton), to ask his views on the proposal. We will have to consider it carefully, but as I have said a number of times during debates on the Bill, we have limited resources at the moment and there is currently no unallocated funding in the Department for Education budget that could be used for the suggested payments. We would also have to be sure that they were the best use of our resources and gave us the best possible value for money.
As I have said, there is also the question of whether locking up money for up to 18 years provides better value than spending it to support people now, and we need to ensure that we focus resources on our priorities. We will also have to consider what the proposal would leave children with. As the right hon. Member for Wythenshawe and Sale East explained, the provision would not be triggered until a child had been in care for at least 13 weeks, to avoid junior ISA accounts being opened for children who were in care for only a week or so. We know that, thankfully, most children are not in care for long periods. Of the children who left care in 2009-10, about 37% were in care for less than six months. I will therefore wish to consider how many children would receive accounts containing just the £250 Government payment that he suggests, and whether those accounts would necessarily provide good value.
However, as I have said, I am more than happy to continue to consider the proposal with my hon. Friend at the Department for Education, and I certainly commit to maintaining contact with the right hon. Member for Wythenshawe and Sale East. I reassure him that if we do want to move forward with his proposal or something similar, the Bill will not be the right vehicle for doing so. It may be possible to legislate on the matter alongside the provisions on junior ISAs, or even to introduce them without legislation. Not including them in the Bill does not close down our options.
I understood the right hon. Gentleman's points on amendments 51 and 52, which were selected, but there are practical reasons not to accept them. First, as I have said, we are still looking closely at our options, and that may end up making the reports called for in those amendments unnecessary. Secondly, if we wanted such reports to be produced, requiring their completion by the end of 2011 would be too early. By then, child trust funds would only just have stopped being opened, as
the last vouchers are not expected to expire until well into 2012, and junior ISAs would have been in place for only a few months.
Thirdly, I suggest that even if we did want to carry out the reports that the right hon. Gentleman suggests, we could do so without having them specified in the Bill. In fact, leaving them out of the Bill would provide us with more flexibility on both content and timing.
Paul Goggins: I am very grateful to the Minister for clearly giving very serious consideration to the points that I put to him at our meeting last week. He has clearly weighed them up carefully. I am grateful that he has already written to his colleague in the Department for Education.
The Minister will understand my slight concern that, notwithstanding the fact that he is going to consider my proposals seriously, the Bill will now go to the other place and-in fairly short order, he hopes-become an Act. With the Government's majority, I am sure that will happen. I do not want the focus on the important issues that we have discussed to be lost, so will he make a commitment that as far as possible, they will be addressed as the Bill is considered in the other place?
6.45 pm
Mr Hoban: The right hon. Gentleman will be aware that we are consulting on the design of the junior ISA, and we need to ensure that his points are considered in tandem with that, rather than in the accelerated time scale that it will take for the Bill to go through the other place. I reassure him that I am considering the matter seriously with my hon. Friend at the Department for Education.
The right hon. Gentleman makes important points about looked-after children, and we need to consider them carefully. As he knows, there are other provisions in place to meet the needs of such children, such as a bursary scheme for those who go into higher education, although I regret that not as many do so as we would all like. However, he has made important points both today and in our meeting last week, and I will pursue them with him and with my hon. Friend the Under-Secretary of State for Education. I hope that the right hon. Gentleman will not press the amendments tonight, but that is a decision for him to take. I hope that he will take into account my comments this evening about the approach that I want to take.
On the other amendments in the group, as I have explained, I believe that we should go ahead as planned with ending child trust fund eligibility from January 2011. I believe that the right structure is in place to ensure that children who do not qualify for a child trust fund will be eligible for the junior ISA, even if it is not introduced until late next year. I have made the commitment that any child born after 3 January 2011 will be eligible, and I believe that the for combination of reasons that I have set out-the need to tackle the deficit, the need to save money and the need to put the public finances on to a better, firmer footing-we need to press ahead. I urge hon. Members to oppose the Opposition's attempt to squander yet more money.
Mr Hanson: I am grateful to the Minister for his response to the debate. It is self-evident that I am disappointed with the fact that he wishes to continue to seek the abolition of the child trust fund. I did not expect him to accept amendments 1 and 4, both of which gave him an opportunity to stick to his manifesto commitments and save some remnant of the child trust fund.
I have some concerns about the Minister's responses. I hope to encourage my noble Friends to return to the matter raised in amendment 17, because it is about ensuring that we do not have a hiatus between the abolition of the child trust fund and the establishment of the new child ISA. It simply gives the Minister an opportunity to reflect on the fact that he can delay the abolition for what may be only six or seven months to ensure that he does not have to backdate the child ISA and confuse parents. He can put a product in place and ensure that we know about it by the time of the abolition. I suspect that there will be further debates on the matter in another place, and I hope that amendments will be tabled there to support the aims behind amendment 17.
On the amendments tabled by my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins), I am grateful that the Minister is continuing to discuss what we should do about looked-after children, who are a vulnerable group of individuals. I wish to ensure that he- [Interruption.] I hope that the Minister will listen to this point. He has just said to the House that he is in discussion with his colleagues in the Department for Education about how we deal with looked-after children. I am pleased about that, but I remind him that the current child trust fund is a UK-wide facility funded by the Treasury, which applies in the constituencies of my hon. Friends in Scotland and Northern Ireland as well as in mine in north Wales. If he just brings forward an England-only solution with the Department for Education, that will not satisfy my hon. Friends. I hope that he will reflect on the fact that the current child trust fund is a UK-wide provision for looked-after children. My right hon. Friend is trying to ensure that that is what it remains at a relatively low cost to looked-after children and the state. I do not expect my right hon. Friend to press his amendments, but I do expect the Minister, in the context of the discussions that we will have in another place, to look at a UK-wide solution, not a solution that simply involves him having discussions about England with his hon. Friend in the Department for Education.
Paul Goggins: In addition to the points made by the Minister, my right hon. Friend has raised a very serious issue. Any replacement provision for looked-after children would have to be UK-wide to be fair, so his point is clear. I share his thinking on whether I should press amendments 51 and 52 to a vote. When somebody with whom one has a disagreement reaches across and begins to come halfway, one probably does not poke them in the eye just at that moment. I am not tempted to press amendments 51 and 52 to a vote, but my right hon. Friend knows me well enough to know that, the Minister having made the commitment, I will be closely on his tail every inch of the way to make sure that he delivers something for looked-after children right across the United Kingdom.
Mr Hanson: I know my right hon. Friend very well and I know that he will do that. In coming to a solution, will the Minister make sure that it is UK-wide? Will he make sure that it is not based on a postcode lottery, under which one local authority might contribute for looked-after children, while another local authority might not? We want to ensure, at the very least, that we salvage something from this train crash, and that is help and support for looked-after children in our society as a whole.
Based on what the Minister has said, I have no alternative but to press amendment 1, because the abolition of the child trust fund is wrong. Opposition Members believed that it was wrong on Second Reading, we believed that it was wrong in Committee and we believe that it is wrong on Report, so we will press amendment 1 to a Division.
Question put, That the amendment be made.
The House divided: Ayes 218, Noes 297.
AYES
Abbott, Ms Diane
Alexander, rh Mr Douglas
Alexander, Heidi
Ali, Rushanara
Austin, Ian
Bailey, Mr Adrian
Bain, Mr William
Banks, Gordon
Barron, rh Mr Kevin
Bayley, Hugh
Beckett, rh Margaret
Begg, Miss Anne
Bell, Sir Stuart
Benn, rh Hilary
Berger, Luciana
Betts, Mr Clive
Blackman-Woods, Roberta
Blenkinsop, Tom
Blomfield, Paul
Blunkett, rh Mr David
Bradshaw, rh Mr Ben
Brennan, Kevin
Brown, Lyn
Brown, rh Mr Nicholas
Bryant, Chris
Buck, Ms Karen
Burden, Richard
Burnham, rh Andy
Byrne, rh Mr Liam
Cairns, David
Campbell, Mr Alan
Campbell, Mr Ronnie
Clark, Katy
Clarke, rh Mr Tom
Clwyd, rh Ann
Coaker, Vernon
Coffey, Ann
Connarty, Michael
Cooper, Rosie
Cooper, rh Yvette
Corbyn, Jeremy
Creagh, Mary
Creasy, Stella
Cruddas, Jon
Cryer, John
Cunningham, Alex
Cunningham, Mr Jim
Cunningham, Tony
Curran, Margaret
Dakin, Nic
Danczuk, Simon
Darling, rh Mr Alistair
David, Mr Wayne
Davidson, Mr Ian
De Piero, Gloria
Denham, rh Mr John
Dobson, rh Frank
Docherty, Thomas
Donaldson, rh Mr Jeffrey M.
Donohoe, Mr Brian H.
Doyle, Gemma
Dromey, Jack
Dugher, Michael
Eagle, Ms Angela
Eagle, Maria
Edwards, Jonathan
Efford, Clive
Elliott, Julie
Ellman, Mrs Louise
Engel, Natascha
Esterson, Bill
Evans, Chris
Farrelly, Paul
Field, rh Mr Frank
Fitzpatrick, Jim
Flint, rh Caroline
Fovargue, Yvonne
Francis, Dr Hywel
Gapes, Mike
Gardiner, Barry
Gilmore, Sheila
Glass, Pat
Glindon, Mrs Mary
Goggins, rh Paul
Greatrex, Tom
Green, Kate
Greenwood, Lilian
Griffith, Nia
Gwynne, Andrew
Hain, rh Mr Peter
Hamilton, Fabian
Hanson, rh Mr David
Harman, rh Ms Harriet
Havard, Mr Dai
Healey, rh John
Hepburn, Mr Stephen
Heyes, David
Hillier, Meg
Hilling, Julie
Hodge, rh Margaret
Hood, Mr Jim
Hopkins, Kelvin
Hosie, Stewart
Hunt, Tristram
Irranca-Davies, Huw
Jackson, Glenda
James, Mrs Siân C.
Jamieson, Cathy
Johnson, rh Alan
Johnson, Diana
Jones, Graham
Jones, Helen
Jones, Mr Kevan
Jowell, rh Tessa
Joyce, Eric
Kaufman, rh Sir Gerald
Keeley, Barbara
Kendall, Liz
Khan, rh Sadiq
Lammy, rh Mr David
Lavery, Ian
Lazarowicz, Mark
Leslie, Chris
Lewis, Mr Ivan
Lloyd, Tony
Llwyd, Mr Elfyn
Love, Mr Andrew
Lucas, Caroline
Lucas, Ian
Mactaggart, Fiona
Mahmood, Shabana
Mann, John
Marsden, Mr Gordon
McCabe, Steve
McCann, Mr Michael
McCarthy, Kerry
McClymont, Gregg
McDonnell, John
McFadden, rh Mr Pat
McGovern, Alison
McGovern, Jim
McGuire, rh Mrs Anne
McKechin, Ann
McKinnell, Catherine
Meacher, rh Mr Michael
Meale, Mr Alan
Mearns, Ian
Michael, rh Alun
Miliband, rh Edward
Miller, Andrew
Morrice, Graeme (Livingston)
Morris, Grahame M. (Easington)
Mudie, Mr George
Munn, Meg
Murray, Ian
Nandy, Lisa
Nash, Pamela
O'Donnell, Fiona
Osborne, Sandra
Owen, Albert
Pearce, Teresa
Perkins, Toby
Phillipson, Bridget
Pound, Stephen
Qureshi, Yasmin
Raynsford, rh Mr Nick
Reed, Mr Jamie
Reeves, Rachel
Reynolds, Emma
Reynolds, Jonathan
Riordan, Mrs Linda
Ritchie, Ms Margaret
Robinson, Mr Geoffrey
Rotheram, Steve
Roy, Mr Frank
Roy, Lindsay
Ruddock, rh Joan
Sarwar, Anas
Seabeck, Alison
Sharma, Mr Virendra
Shuker, Gavin
Singh, Mr Marsha
Skinner, Mr Dennis
Slaughter, Mr Andy
Smith, rh Mr Andrew
Smith, Angela
Smith, Nick
Smith, Owen
Soulsby, Sir Peter
Spellar, rh Mr John
Straw, rh Mr Jack
Stringer, Graham
Stuart, Ms Gisela
Sutcliffe, Mr Gerry
Tami, Mark
Thornberry, Emily
Trickett, Jon
Turner, Karl
Twigg, Derek
Umunna, Mr Chuka
Vaz, rh Keith
Vaz, Valerie
Walley, Joan
Watson, Mr Tom
Watts, Mr Dave
Weir, Mr Mike
Whiteford, Dr Eilidh
Whitehead, Dr Alan
Wicks, rh Malcolm
Williams, Hywel
Williamson, Chris
Winnick, Mr David
Winterton, rh Ms Rosie
Wishart, Pete
Wood, Mike
Woodcock, John
Woodward, rh Mr Shaun
Wright, David
Tellers for the Ayes:
Mr David Hamilton and
Phil Wilson
NOES
Adams, Nigel
Afriyie, Adam
Aldous, Peter
Amess, Mr David
Andrew, Stuart
Arbuthnot, rh Mr James
Bacon, Mr Richard
Bagshawe, Ms Louise
Baker, Norman
Baker, Steve
Baldry, Tony
Baldwin, Harriett
Barclay, Stephen
Barker, Gregory
Baron, Mr John
Barwell, Gavin
Bebb, Guto
Beith, rh Sir Alan
Bellingham, Mr Henry
Benyon, Richard
Beresford, Sir Paul
Berry, Jake
Bingham, Andrew
Binley, Mr Brian
Blackman, Bob
Blunt, Mr Crispin
Boles, Nick
Bone, Mr Peter
Bottomley, Peter
Bradley, Karen
Brady, Mr Graham
Brake, Tom
Bray, Angie
Brazier, Mr Julian
Bridgen, Andrew
Brokenshire, James
Brooke, Annette
Bruce, Fiona
Bruce, rh Malcolm
Buckland, Mr Robert
Burley, Mr Aidan
Burns, Mr Simon
Burrowes, Mr David
Burstow, Paul
Byles, Dan
Cairns, Alun
Campbell, rh Sir Menzies
Carmichael, Mr Alistair
Carmichael, Neil
Carswell, Mr Douglas
Cash, Mr William
Chishti, Rehman
Clark, rh Greg
Clarke, rh Mr Kenneth
Clifton-Brown, Geoffrey
Collins, Damian
Colvile, Oliver
Cox, Mr Geoffrey
Crabb, Stephen
Crockart, Mike
Crouch, Tracey
Davey, Mr Edward
Davies, David T. C. (Monmouth)
Davies, Glyn
Davies, Philip
Davis, rh Mr David
de Bois, Nick
Dinenage, Caroline
Djanogly, Mr Jonathan
Doyle-Price, Jackie
Drax, Richard
Duddridge, James
Duncan, rh Mr Alan
Dunne, Mr Philip
Ellis, Michael
Ellison, Jane
Elphicke, Charlie
Eustice, George
Evans, Graham
Evans, Jonathan
Evennett, Mr David
Fabricant, Michael
Fallon, Michael
Farron, Tim
Featherstone, Lynne
Foster, Mr Don
Francois, rh Mr Mark
Freeman, George
Freer, Mike
Fuller, Richard
Gale, Mr Roger
Garnier, Mr Edward
Garnier, Mark
Gauke, Mr David
Gibb, Mr Nick
Gilbert, Stephen
Gillan, rh Mrs Cheryl
Glen, John
Goldsmith, Zac
Goodwill, Mr Robert
Gove, rh Michael
Graham, Richard
Grant, Mrs Helen
Gray, Mr James
Grayling, rh Chris
Green, Damian
Greening, Justine
Grieve, rh Mr Dominic
Griffiths, Andrew
Gummer, Ben
Gyimah, Mr Sam
Halfon, Robert
Hames, Duncan
Hammond, rh Mr Philip
Hammond, Stephen
Hancock, Matthew
Hancock, Mr Mike
Hands, Greg
Harper, Mr Mark
Harrington, Richard
Harris, Rebecca
Hart, Simon
Harvey, Nick
Haselhurst, rh Sir Alan
Heald, Mr Oliver
Heath, Mr David
Heaton-Harris, Chris
Hemming, John
Henderson, Gordon
Herbert, rh Nick
Hinds, Damian
Hoban, Mr Mark
Hollingbery, George
Hollobone, Mr Philip
Holloway, Mr Adam
Horwood, Martin
Howarth, Mr Gerald
Howell, John
Hughes, Simon
Huhne, rh Chris
Huppert, Dr Julian
Hurd, Mr Nick
James, Margot
Javid, Sajid
Jenkin, Mr Bernard
Johnson, Gareth
Johnson, Joseph
Jones, Andrew
Jones, Mr David
Jones, Mr Marcus
Kawczynski, Daniel
Kelly, Chris
Kennedy, rh Mr Charles
Kirby, Simon
Knight, rh Mr Greg
Kwarteng, Kwasi
Lamb, Norman
Lancaster, Mark
Lansley, rh Mr Andrew
Latham, Pauline
Laws, rh Mr David
Lee, Jessica
Lee, Dr Phillip
Leech, Mr John
Lefroy, Jeremy
Leigh, Mr Edward
Leslie, Charlotte
Letwin, rh Mr Oliver
Lewis, Brandon
Lewis, Dr Julian
Lilley, rh Mr Peter
Lopresti, Jack
Lord, Jonathan
Loughton, Tim
Luff, Peter
Lumley, Karen
Macleod, Mary
Main, Mrs Anne
May, rh Mrs Theresa
Maynard, Paul
McCartney, Jason
McCartney, Karl
McIntosh, Miss Anne
McLoughlin, rh Mr Patrick
McPartland, Stephen
Menzies, Mark
Metcalfe, Stephen
Miller, Maria
Mills, Nigel
Milton, Anne
Morgan, Nicky
Morris, Anne Marie
Morris, James
Mosley, Stephen
Mowat, David
Mulholland, Greg
Munt, Tessa
Murray, Sheryll
Murrison, Dr Andrew
Neill, Robert
Newmark, Mr Brooks
Newton, Sarah
Nokes, Caroline
Norman, Jesse
Nuttall, Mr David
Offord, Mr Matthew
Ollerenshaw, Eric
Opperman, Guy
Ottaway, Richard
Parish, Neil
Patel, Priti
Pawsey, Mark
Penning, Mike
Penrose, John
Percy, Andrew
Perry, Claire
Phillips, Stephen
Poulter, Dr Daniel
Prisk, Mr Mark
Pugh, Dr John
Raab, Mr Dominic
Randall, rh Mr John
Reckless, Mark
Redwood, rh Mr John
Rees-Mogg, Jacob
Reid, Mr Alan
Rifkind, rh Sir Malcolm
Robathan, Mr Andrew
Robertson, Hugh
Rogerson, Dan
Rudd, Amber
Ruffley, Mr David
Russell, Bob
Rutley, David
Sanders, Mr Adrian
Sandys, Laura
Scott, Mr Lee
Selous, Andrew
Shapps, rh Grant
Sharma, Alok
Shelbrooke, Alec
Simmonds, Mark
Skidmore, Chris
Smith, Miss Chloe
Smith, Henry
Smith, Julian
Smith, Sir Robert
Soames, Nicholas
Soubry, Anna
Spelman, rh Mrs Caroline
Spencer, Mr Mark
Stephenson, Andrew
Stevenson, John
Stewart, Bob
Stewart, Iain
Stewart, Rory
Stride, Mel
Stuart, Mr Graham
Sturdy, Julian
Swales, Ian
Swayne, Mr Desmond
Swinson, Jo
Swire, Mr Hugo
Syms, Mr Robert
Teather, Sarah
Thurso, John
Timpson, Mr Edward
Tomlinson, Justin
Tredinnick, David
Truss, Elizabeth
Turner, Mr Andrew
Tyrie, Mr Andrew
Uppal, Paul
Vara, Mr Shailesh
Vickers, Martin
Villiers, rh Mrs Theresa
Walker, Mr Charles
Walker, Mr Robin
Wallace, Mr Ben
Ward, Mr David
Watkinson, Angela
Weatherley, Mike
Webb, Steve
Wheeler, Heather
White, Chris
Whittaker, Craig
Willetts, rh Mr David
Williams, Mr Mark
Williams, Roger
Williams, Stephen
Willott, Jenny
Wilson, Mr Rob
Wollaston, Dr Sarah
Wright, Jeremy
Wright, Simon
Young, rh Sir George
Zahawi, Nadhim
Tellers for the Noes:
Bill Wiggin and
Mark Hunter
Question accordingly negatived.
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