The Secretary of State for Culture, Olympics, Media and Sport (Mr Jeremy Hunt): We have announced radical plans to secure the future of the local newspaper industry, and have ambitious hopes to turn this country from one of the least well served by local television to one of the best served.
Charlie Elphicke: Many local newspapers have struggled with the recession, but the East Kent Mercury and the Dover Express in my constituency have done really well. Do Ministers think it right to praise successful local newspaper groups?
Mr Hunt: Yes, especially when they are in one's own constituency. My hon. Friend is absolutely right. The best way in which we can help local newspaper groups is by making it commercially viable for them to turn into multi-media operations which offer their news product over radio, television, iPods, iPads and mobiles. I do not know what the broadcast footprint of Dover television might be, but I have no doubt that it would extend my hon. Friend's reputation as a campaigning Member of Parliament across the channel to the north coast of France.
John Glen: In the light of the uncertainty facing local radio operators such as Spire FM in my constituency over the path for migration to DAB, can the Minister tell us when the owners and operators of such stations will know whether they can secure a future beyond Ofcom's seven-year licensing strategy?
I thank my hon. Friend for his important question. We greatly value the role of local radio, and we are also very committed to the transition to a digital
future. We want to ensure that the timing is such that it does not force people to jettison their analogue radios in huge quantities. Our discussions are progressing rapidly. Last week I had a discussion with the managing director of one of the largest commercial radio groups, and we hope that our discussions will progress further in the next month.
Chris Bryant (Rhondda) (Lab): There is a great deal of anger in Wales about the way in which the Minister and his Department have treated our local media. ITV Wales will probably not be able to sustain its public service requirements, and S4C has been treated appallingly. There has been no consultation with the people of Wales. There will be a single monopolistic presence in broadcasting in Wales, and the Minister is doing a great disservice to the people of Wales by the way in which he is advancing his cause.
Mr Hunt: The mess in local broadcasting in Wales was not created by this Government. It was the hon. Gentleman's party under which audiences for S4C halved over the last decade, and which did absolutely nothing about it. We have sought to find a secure future for S4C that will maintain its independent identity but will also give it the support of our largest broadcaster. We have actually done something about the problem; the hon. Gentleman's party did nothing about it whatsoever.
Ian Lucas (Wrexham) (Lab): When the Minister does consult on the future of local media, will he speak to elected representatives? I note that he has completely ignored the views of all party leaders in Wales on S4C, including the leader of the Conservatives in Wales. Is not the way in which he is ignoring elected representatives from Wales an absolute disgrace? Will he start talking to people about something which is very keenly felt in Wales, and which he does not understand?
Mr Hunt: With respect to the hon. Gentleman, I have talked to many elected representatives, but in particular elected representatives from this House, about the best way forward for S4C. We have put a solution on the table which secures S4C's finances for the whole comprehensive spending review. If the hon. Gentleman has a better solution, perhaps he should put something forward, because we have heard nothing from the Labour party.
2. Mark Pawsey (Rugby) (Con): If he will discuss with the Secretary of State for Business, Innovation and Skills steps to ensure that the roll-out of fibre-optic broadband is available on an equal basis to all customers in a single community. 
The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey): I am lucky enough to be a Minister in both the Department for Culture, Media and Sport and the Department for Business, Innovation and Skills, but I intend to discuss the issue with my right hon. Friend the Secretary of State for Culture, Olympics, Media and Sport, who leads on it.
Mark Pawsey: Constituents of mine tell me that on a new housing estate consisting of 900 homes, about 800 are about to receive the new BT Infinity fibre-optic service, but 100 will be left with a poor 0.5 to 1.5 megabit supply. Working professionals rely on an efficient service. Will the Minister make representations to ensure that all users in a community receive the same excellent service?
Mr Vaizey: My hon. Friend speaks up very well for his constituents in regard to this problem, which is connected with the placing of exchanges. One community is often served by two different exchanges. However, I intend to speak to the relevant operator about the issue and report back to him.
The Minister for Sport and the Olympics (Hugh Robertson): I have asked Sport England to develop its £135 million places people play strategy, which along with the investment in the Olympic park will mean a new generation of iconic facilities, protection for our local playing fields and the gold challenge, which will both raise money for charity and get more people playing Olympic sports. The school Olympic-style competition will get competitive sport back in our schools, and all of this is, of course, supported by protecting both the whole sport plans and elite athlete funding in the spending review.
Dr Poulter: I am sure the Minister is aware that Ipswich has some fantastic sporting facilities, and we are greatly looking forward to hosting the Azerbaijan team during the 2012 Olympics, but may I invite him to visit Ipswich to help us in our aspirations to develop a sports village and a lasting sporting legacy for young people, and to improve healthy lifestyles in Ipswich?
Hugh Robertson: I thank my hon. Friend for that invitation, and I have indeed visited Ipswich on a number of occasions-and watched his football team win a couple of years ago. [Interruption.] I do not sound surprised at all. The scheme my hon. Friend mentions is precisely the sort of project that will benefit from the type of funding Sport England is now looking at, and I wish him every success with it.
Mr Ben Bradshaw (Exeter) (Lab): But will not the decision to scrap school sport partnerships do great damage to the most important part of the Olympics legacy, which is the health and fitness of our young people? What has the Minister said to the Education Secretary to try to persuade him to reverse this disastrous decision?
I think it is fair to say that nobody who is involved in sports issues-as the right hon. Gentleman was in his previous job, of course-would want sports funding to be cut in any way, but we have to realise that this is a decision- [Interruption.] It is all very well moaning about it, but it is a decision taken
against the backdrop of the fact that this country pays out £120 million in debt interest every day. Schools funding has been ring-fenced and handed over to head teachers, and I would challenge them to continue this funding where it is proving important and showing benefits, and I hope the right hon. Gentleman would support them in that.
Mr Don Foster (Bath) (LD): Further to that answer, I greatly welcome the proposal for the new school Olympics to improve competition between schools, but does the Minister recognise that for that to be successful it is important that schools receive a wide range of support, which was previously provided by the school sports partnership? Will he confirm that although the ring-fencing for the funding has gone, the money is still available in schools, and therefore will he confirm that he will continue to work with the Secretary of State for Education to ensure there continues to be a partnership into which schools-
Hugh Robertson: The short answer to that is yes of course I will. The key thing to remember is that the funding has, of course, been handed over to the schools-[Hon. Members: "No, it hasn't."] The schools budgets have been handed over to head teachers and it is entirely up to them to make decisions on it as they please. The head teachers of every single secondary school that I have visited during my time as a Member of Parliament have always asked me for greater control of their budgets; they have now got it.
Tessa Jowell (Dulwich and West Norwood) (Lab): The Olympics are a national project beyond party politics, and I join the hon. Gentleman in his support for that principle, which I have always maintained, so will he now stand with the coaches, the teachers, the young people and the volunteers who are bewildered and outraged by the decision to dismantle the partnerships that have seen nine out of 10 children play sport regularly? I ask him to do so in the spirit not of party politics, but of respecting that this second Olympic promise is a once-in-a-lifetime opportunity for those young people?
Hugh Robertson: I will absolutely stand behind those people. That is precisely why we changed the amount of money that sport gets from the national lottery, which enabled us to preserve both the whole sport plans and elite athlete funding. No money whatsoever has been cut from the coaching system that comes through the Department for Culture, Media and Sport-indeed, it has been increased. Those are precisely the measures that were opposed by the Labour party. I just say to the right hon. Lady, cross-party co-operation being what it is, that she has to recognise the scale of the financial problem we face: the amount of debt interest that we pay out every day is larger than the entire Exchequer contribution to Sport England in a year. That is the scale of the challenge we face.
Nicky Morgan (Loughborough) (Con):
The Minister will be aware of the enormous value that sport plays in the economy of Loughborough. Not only will it host Team GB and Team Japan before the Olympics, but a
number of elite athletes are based at its university and college. What plans does he have to continue elite athletics funding after 2012 as part of the Olympics legacy?
Hugh Robertson: I thank my hon. Friend for that question. Of course Loughborough is right at the forefront of our plans for London 2012 and the development of sport beyond then. All the elite athlete funding has been not only confirmed for London 2012, but set at precisely the same level for the start of the Rio cycle, framed by our decision on the lottery and the money that UK Sport is getting this year. That is very good news for elite athletes in this country and it means that we will avoid the trap that the Australians fell into after the Sydney games-they front-loaded the funding for their home games and it fell off dramatically afterwards.
4. Diana Johnson (Kingston upon Hull North) (Lab): What assessment he has made of the effects on financial support for theatres in regions outside the south-east of the outcomes of the comprehensive spending review; and if he will make a statement. 
The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey): Funding decisions from central Government are the responsibility of the Arts Council. I am delighted to say, however, that as part of the spending review the Arts Council has limited cuts to the budget for arts organisations to just 15%. We have also reformed the lottery money and that will boost the arts by £50 million each year from 2012.
Diana Johnson: For nearly 40 years, the Hull Truck theatre has been a huge success for the city of Hull. The theatre now employs 93 staff and is located in its new £15 million building at Ferensway. Following the £100,000 cut made by Hull city council last week and the £40,000 reduction made by the Arts Council, will the Minister look at this again, taking into account the fact that it is much easier to find private sector investment and jobs on the south bank of the Thames than on the north bank of the Humber? Will he particularly examine the regional funding for theatre in the most disadvantaged communities, such as my own?
Mr Vaizey: I absolutely hear what the hon. Lady has to say, and I pay tribute to that theatre and its reliance on a mix of different elements of arts funding. I would remind her that theatres in Yorkshire received almost £7 million in grant in aid via the Arts Council this year and will continue to be funded by the Arts Council in future.
The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (John Penrose):
The Government aim to attract new tourist visitors from around the world through the activities of VisitBritain and to promote local destinations within the UK through
the activities of VisitEngland. I noted that Eastbourne featured as destination of the month according to VisitEngland's June newsletter; the heading was "Visit England's sunniest resort".
Stephen Lloyd: The Minister mentioned that Eastbourne is famed for its record amount of sunshine. Is he aware that it was also ranked No. 1 in a survey of the friendliest holiday towns in the UK? Will he join me in praising those who work in Eastbourne's hospitality industry, and will he and his ministerial colleagues accept my invitation to take their next summer holiday in the sunniest town in Britain?
John Penrose: I would be delighted to spend my holiday in Eastbourne were it not for the fact that I represent Weston-super-Mare, which I hope the hon. Gentleman will accept is an equally wonderful seaside resort. I do, however, join him in congratulating the welcomers in Eastbourne and other parts of the visitor economy, because the welcome accorded to visitors is a tremendously important part of the value that any tourist perceives when they visit any part of the UK.
Mr John Whittingdale (Maldon) (Con): Does the Minister accept that there is now a lot of evidence to suggest that tourism in Eastbourne and in other parts of the country would receive a substantial boost if we moved to daylight saving? Will he therefore consider giving whatever fair wind he can to the Daylight Saving Bill promoted by my hon. Friend the Member for Castle Point (Rebecca Harris), which is to be debated in this House on Friday?
John Penrose: I am on the record from previous oral questions as saying that the potential benefits to the tourism industry are extremely well documented and are widely held to be substantial. I am sure that my hon. Friend will also accept that there are other factors to consider, notably the concerns of many people in northern Scotland and Northern Ireland about the effect on other parts of the economy. Therefore, we want to try to ensure that we are not leaving any part of the UK behind or imposing a decision without consent. I suspect that, with any luck, that will be part of the debate on Friday.
The Secretary of State for Culture, Olympics, Media and Sport (Mr Jeremy Hunt): Boosting philanthropy is central to our strategy to help the arts weather an extremely difficult economic storm. We will announce a package of measures to do that before Christmas.
Mel Stride: Smaller organisations often lack the skills and experience to raise money from private sources. What can my right hon. Friend do to help smaller arts organisations, such as the Devon Guild of Craftsmen in my constituency, to raise even more money through philanthropy?
Mr Hunt: I commend my hon. Friend on his work for small arts organisations in his constituency. They are the lifeblood of the arts world. Organisations such as The Factory, an amateur arts group that puts on productions of "Hamlet" all over the country in church halls, are the kinds of organisations that nurture the acting talent of the future. They do not always have the fundraising capacity, however, to raise money from private donors. That is why, with the Arts Council, we will announce a series of measures to help rectify that. I hope that that will please my hon. Friend.
Steve Rotheram (Liverpool, Walton) (Lab): In his Department's structural reform plan, the Secretary of State made clear his support for philanthropic giving to supplement funding to arts and cultural organisations. Will he therefore join me in raising money for institutions in Liverpool? If I promise to get my mates to have a whip-round and to donate a few bob each, will he ask his 22 millionaire friends in the Cabinet to match our donations in proportion with their wealth?
Mr Hunt: I will happily give the hon. Gentleman any support I can in his attempts to boost philanthropy in Liverpool, as I will to attempts in the rest of the country. He is absolutely right-one of the best ways to boost philanthropy is to find a rich person and ask them to chair the fundraising committee.
Sarah Newton (Truro and Falmouth) (Con): What progress has the Minister made in ensuring that national museums financially support their offspring in the regions, such as the National Maritime museum in Falmouth in my constituency?
Mr Hunt: My hon. Friend makes an important point. In the settlement letter that we gave to all the national museums, which protected their funding to a much greater extent than was possible for many other parts of the public sector, we asked them to come forward with proposals through which they would mentor and help smaller arts organisations in the regions with their fundraising. We hope to announce progress on that front in the next few weeks.
Mr Ivan Lewis (Bury South) (Lab): The Department's business plan states, intriguingly, that the Secretary of State's philanthropy strategy will incorporate "insights from behavioural science". Does he accept that if such a strategy is built solely on a nudge and a wink, or advice from a psychologist, it will be a damp squib in exactly the same way as a nudge and a wink, rather than the coalition's promised tax break, is doing nothing to support the growth of the UK video games industry?
Mr Hunt: It is all very well for the hon. Gentleman to carp from the sidelines, but where are his proposals to boost philanthropy? Where are his proposals to help increase the money going to the front line? We are doing things to try to boost the amount of private giving to deal with the economic crisis that we inherited from his Government. He should help us, support us and contribute constructively. I am happy to nudge him to do so.
The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey): Local authorities have a statutory duty to provide a comprehensive and efficient library service. I shall be writing to all local authorities this week to remind them of that. We have put in place a plan through the future libraries programme to help local authorities take forward their library service.
Mr Vaizey: As I said, the library service is a local authority service so it is up to local authority services to deliver it. I can also tell the hon. Gentleman with my BIS hat on that the excellent Minister for Further Education, Skills and Lifelong Learning has preserved a substantial amount of funding for adult literacy programmes.
Andrew Bridgen (North West Leicestershire) (Con): In my county of Leicestershire we are seeing increased use of our libraries. Will the Minister reaffirm his commitment to support the important services they provide?
Mr Vaizey: I would certainly support the important services that Leicestershire libraries provide. I have visited Leicestershire libraries. May I also take this opportunity to praise Leicestershire's excellent music service, which I hope the county will preserve?
Mr Eric Illsley (Barnsley Central) (Lab): How does the Minister square what he has just said about preserving libraries with the effects of the comprehensive spending review and the cuts in financing to local government, given that one of the first areas to face closure will be local library provision?
Mr Vaizey: As I have said, libraries are a statutory service, so local authorities must provide them, and providing that they have a far-seeing and imaginative plan, they can do so. There are many excellent local library services up and down the country, and the future libraries programme is making sure that that knowledge is widely disseminated.
8. Bob Russell (Colchester) (LD): What discussions he has had with the Secretary of State for Transport on the use of the surface rail route between Liverpool Street and Stratford as part of the transport network for the London 2012 Olympics. 
The Minister for Sport and the Olympics (Hugh Robertson):
Although I have regular discussions with the Transport Secretary on a variety of Olympic transport
issues, I have had no detailed discussions with him about the particular use of this route.
Bob Russell: I encourage the Minister to do just that. The eyes of the world will be on east London in 2012 and I pray that very few people cast their eyes on the trackside wasteland and derelict buildings between London Liverpool Street and Bethnal Green. Will he, in the spirit of joined-up government and of involving the Mayor of London, bring people together to ensure that that stretch of the line matches what is attractive in Stratford?
Hugh Robertson: The simple answer to that question is yes, of course I can. About 200,000 people use Liverpool Street station every morning and we anticipate that there will be about 45,000 to 50,000 extra during the games, many of whom will not be going in and out at peak time and will be going in the opposite direction to the normal commuter flow, but I take the hon. Gentleman's point and will see what I can do about it.
9. Stephen Timms (East Ham) (Lab): What discussions he has had with the Secretary of State for Business, Innovation and Skills on the likely effects on competitiveness of the change in the time scale for the delivery of a universal broadband service. 
The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey): I have not discussed this with the Secretary of State for Business, Innovation and Skills, but I have discussed it with the Secretary of State for Culture, Olympics, Media and Sport and we both agree that the new target of having the best superfast broadband in Europe by 2015 is the best way to proceed on broadband. I have also praised my right hon. Friend for having secured substantial funding for broadband roll-out.
Stephen Timms: This matter is very important for competitiveness, especially at a time when we need many new jobs to be created by companies in rural areas as well as in urban areas. Before the election, the Minister's right hon. Friend the Secretary of State for Culture, Olympics, Media and Sport described the plan to secure 2 megabits per second broadband access universally by 2012 as woefully unambitious, but since the election he has simply deferred the deadline by three years to 2015. What became of his ambition?
Mr Vaizey: Our ambition doubled, tripled and became superfast. We learned from broadband providers that they were already in a position to implement superfast broadband, so why should we push them down the slow channel when we could push them down the fast channel? That is why the pilots announced by the Secretary of State will implement superfast broadband for rural areas. I know that the right hon. Gentleman will welcome that given his experience in the previous Government.
Duncan Hames (Chippenham) (LD):
Even with impressive progress, some communities such as Atworth in my constituency still face being left out, but nearly all the schools in my constituency have access to broadband speeds of at least 9 megabits per second. Will the
Minister consider opening the various grids for learning so that people can pay to piggyback on broadband access from their schools out of hours?
Mr Vaizey: The hon. Gentleman makes an excellent point. We will be publishing a broadband strategy document at the beginning of the month which will address this specific issue. There are technical difficulties with achieving that, but if they can be overcome, it should certainly be done.
The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (John Penrose): As I said earlier to my hon. Friend the Member for Eastbourne (Stephen Lloyd), the Government are investing through VisitBritain both by trying to attract more foreign visitors to the UK and by attempting to refocus VisitEngland to make sure that it is promoting English destinations of all kinds, such as those in the constituency of the hon. Member for Wells (Tessa Munt), to we Brits.
Tessa Munt: In common with many of the tourism and leisure businesses along the Somerset coastline, including the thousands of small bed-and-breakfast businesses, many of which have diversified from farming, I support the suggested trial of double summertime, about which the House will hear more in Friday's debate on the Daylight Saving Bill. Given the importance of this matter to hon. Members on both sides of the House and to leisure and tourism businesses in Somerset, including north Somerset, will the Minister give assurances that he will work with his colleagues in BIS, that the Bill will not be talked out and that the matter will proceed to a vote?
John Penrose: I am afraid that the hon. Lady will have to wait for Friday to see who wants to speak for how long during the debate, but I can assure her that I have already engaged in substantial discussions with my colleagues in BIS on this. My earlier answer to my hon. Friend the Member for Maldon (Mr Whittingdale), from the Culture, Media and Sport Committee, stands: this proposal could be tremendously valuable to the tourism industry as a whole, but that is not the only factor to be considered. There are issues for people who live north of border that need to be taken into account as well.
As I am sure everybody here knows, taxation matters are for the Treasury not for the Department for Culture, Media and Sport. However, I am sure that the hon. Lady realises that any attempt to try to reduce VAT in any one sector will need to come with a fully costed proposal about the impact on this country's large deficit, which we are trying to bring down. Given the impact of deficits in other countries in Europe, it will be
very difficult for anybody, in the short to medium term at least, to advance plans of that kind-without a fully costed proposal-without seeming to be extremely fiscally dangerous to this country's economy.
The Secretary of State for Culture, Olympics, Media and Sport (Mr Jeremy Hunt): Our plans to boost philanthropy include boosting corporate philanthropy, incentivising individual giving and boosting giving in the regions as well as in London.
Amber Rudd: Has the Secretary of State considered more specifically how organisations outside London might attract support for their businesses or their charitable organisations, such as Gizmo in my constituency, which provides creative workshops for young people? How can they attract financial support outside London?
Mr Hunt: My hon. Friend raises a very important point. We want to do everything possible to help organisations such as Gizmo, and indeed to help people raise money to support the reconstruction of Hastings pier. The truth is that there is a lot of regional philanthropy; we can look at what Roger de Haan has done in Folkestone, what Sir John Zochonis has done at the Lowry and what Sir Harry Djanogly has done to support the Nottingham Playhouse. But it is not enough. It is much tougher than raising money in London, which is why the package of measures we shall be announcing will aim to make it much easier.
Alison McGovern (Wirral South) (Lab): The Secretary of State knows, as I do, that fundraising and finding philanthropists for the arts and culture is a difficult, although rewarding, job. It is being made much harder by the turbulence caused by Government arts cuts; for example, English Heritage looks set to close its outreach department. Does the Secretary of State think it is realistic to ask even more from a demoralised and decreasing body of staff who are working to save the arts?
Mr Hunt: The hon. Lady is right: this is a very tough period for arts and heritage organisations, and we are doing everything we can to help them weather the storm. In this country, philanthropic giving to culture is £6 per head of population; in America, it is £37 per head of population. We are not America, but we would be neglecting our duty if we did not ask if there were things we could do to boost private giving, and that is what we are doing.
The Secretary of State for Culture, Olympics, Media and Sport (Mr Jeremy Hunt): I briefed the Cabinet this morning on our chances for the 2018 World cup bid, and I know the whole House will want to wish the bid team the very best of luck in Zurich this week. I shall be going with my hon. Friend the Minister for Sport and the Olympics. The Prime Minister, the Deputy Prime Minister and the whole Government are wholeheartedly behind the bid.
Jessica Lee: A successful World cup bid would boost support for football right through to local divisions and local clubs. The coalition agreement sets out a commitment to co-operative-run football clubs. Supporters of Ilkeston Town football club in my constituency recently submitted a bid to run the club. Although the bid itself was unsuccessful, the club is now secured under new ownership, but what plans do the Government have to promote community-run football clubs?
Mr Hunt: My hon. Friend raises an important point. We want to see whether it is possible to create an easier pathway for supporters to build up the capital to enable them to take ownership of clubs in a way that does not threaten the investment by other people which has also been so important for the world of football. Obviously, the week before the World cup bid is not the time to bring forward football governance proposals, but we will be looking at the situation very carefully and bringing other measures to the House shortly afterwards.
Ian Austin (Dudley North) (Lab): We are right behind the Government's campaign to bring the World cup to this country, because it would do a huge amount to boost children's interest in sport. It is important that youngsters have good facilities and the right coaching, too. The Government claim that the money for specialist sports colleges is going into un-ring-fenced schools budgets, but is it not the case that the £162 million for the Youth Sport Trust, which funds school sport partnerships, is not being passed over to schools? That money is just being cut.
Mr Hunt: It is not the case. We are committed to a sporting legacy for 2012 for every single child, no matter what their background or what school they go to. The legacy that we had from the hon. Gentleman's Government was four out of five older children not doing any sport at all, and an Olympic-sized hole in the Budget.
The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey): I receive regular representations from across the creative industries- [Interruption] I think debate on the previous question is still going on, but I shall try and talk across it-on all aspects of my Department's support. I also work closely with other Government Departments, because I am lucky enough to be a Minister in the Department for Business, Innovation and Skills as well.
The Secretary of State for Culture, Olympics, Media and Sport (Mr Jeremy Hunt): As well as wishing every success to the England 2018 bid team this week, we wish every success to Andrew Strauss and the English cricket team in Australia and congratulate him, Jonathan Trott and particularly Alastair Cook on their outstanding performances over the weekend.
Mr Gray: The Government's commitment to rural broadband is laudable, but does the Secretary of State agree that providers make a large profit out of urban provision of broadband, but that in rural areas such as my own they make a large loss? What will he do, therefore, to make sure that the £500-odd million that he is committing to broadband will be spread not equally between urban and rural areas, but especially towards rural areas to help businesses and homes which so badly need it?
Mr Hunt: The money that we have secured from the licence fee settlement is for the part of the country that we believe the market will not satisfy-that is to say, approximately a third of homes including, I believe, homes in his constituency, where we think that left to its own, the market would not provide broadband. We have every confidence that we will have a solution that is not just 2 meg per home, as was the limit of the ambitions of the previous Government, but the best superfast broadband network in Europe.
Mr Ivan Lewis (Bury South) (Lab): I start by wishing the Secretary of State and Team England all the best with their mission this week to secure the 2018 World cup. On that, he and the Government will have our full support.
In relation to youth sport, the Secretary of State must come clean. He has overall responsibility for the future of sport in this country. He briefs the press that he is against the decision to dismantle support for school sport, yet on the record he is silent. Does he support the ending of all funding for the Youth Sport Trust and the dismantling of school sport partnerships-yes or no? Was he personally involved in the decision to transfer two questions on youth sport to the Department for Education so as to limit debate on the issue today? Does he accept that 95% of young people are participating in sport for two hours a week in schools, rather than the figure that he inaccurately quoted just a few moments ago and misled the House?
Order. The hon. Member for Bury South (Mr Lewis) must not accuse a Minister of misleading
the House. I assume that he meant to include the word "inadvertently" and I will insert it for him. I think we are clear about that.
Mr Hunt: I thank the shadow Culture Secretary for his fourth question. Let me answer plainly. School sport partnerships are not being dismantled. We are committed to competitive sport, and the legacy of the previous Government was only one in five children regularly playing inter-school sport. To answer the hon. Gentleman's question about older children, yes, in year 7, four in five children are not playing sport at all. We want to do something about it. That is what we want our legacy to be, and that means that we have to do things differently.
T3.  Robert Halfon (Harlow) (Con): Following the disappointing decision by the BBC to screen "The Accused", denigrating our British Army, and the subsequent criticism by the head of the armed forces, does the Secretary of State agree that it is time to democratise the licence fee and give licence fee payers a real say over our programming?
Mr Hunt: I understand my hon. Friend's concerns about the issue in question. He will agree with me that in a free country, it is important that the Government should not dictate to our national broadcaster what it says or broadcasts. However, he is right to say that we need to look at governance of the BBC. There is cross-party agreement that the BBC Trust set up by the previous Government has not worked in the way that was intended, and as we come up to the renewal of the BBC charter, we will be looking closely at ways to improve the democratic accountability of the BBC.
T4.  Bill Esterson (Sefton Central) (Lab): Can I draw the Secretary of State's attention to Chesterfield high school in my constituency, a specialist sports college which has been told that it has lost its £180,000 grant, and that the money will not go into its main grant? It was something that the Secretary of State for Education did not deny last week when I put a similar point to him about the situation throughout the country. Does the Culture Secretary agree that a cut in specialist sports grants will lead to a reduction in the number of young people taking part in sport?
Mr Hunt: First, although I do not know exactly what happens in Chesterfield, I have no reason to believe that the work done by school sport partnerships is not excellent there as well. School sport partnerships can continue; however, the philosophy of this Government is to devolve responsibility for budgets to heads, because we think that they are best placed to know how their money should be spent. In Chesterfield, as, I am sure, in large parts of the country, I have every confidence that heads will decide to continue to support their school sports partnerships.
T5.  Mr David Amess (Southend West) (Con): With a number of countries already considering basing their camps in Southend for the Olympic games, and with our new diving facility opening tomorrow, does my right hon. Friend agree that Southend pier, the longest in the world, should, via a fireworks display, be included in the opening and closing ceremonies for the Olympics?
The Minister for Sport and the Olympics (Hugh Robertson): I congratulate my hon. Friend on everything being achieved in his constituency to promote sport and, indeed, the London Olympics, and I am absolutely delighted that the local authority is going to lay on a fireworks display. I have no doubt that it will be the equal of anything we saw in Beijing a couple of years ago, and I wish him every good fortune with that.
T6.  Michael Dugher (Barnsley East) (Lab): Is the Minister aware that cuts in central Government support disproportionately hurt areas such as Barnsley, where council tax receipts are low and needs are higher? That is why the local authority is being forced by this Government to look at library closures. Meanwhile, in Surrey, council tax receipts are very high, so local authorities are less reliant on central Government and are not looking at library closures. Is that fair, and why are the Government creating a postcode lottery in library provision?
The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey): The Government are not creating a postcode lottery. Many excellent local authorities throughout the country-regardless of their relative wealth-provide absolutely fantastic libraries, and with a little imagination and, perhaps, by participating in our future libraries programme Barnsley, too, can provide a 21st-century library service for the hon. Gentleman's constituents.
Alun Cairns (Vale of Glamorgan) (Con): Can the Secretary of State confirm that there will be no change to the chairmanship of S4C? Does he recognise the insecurity that some S4C authority members are causing staff, and can he confirm the Government's commitment to an S4C that is operationally and editorially independent?
Mr Hunt: I can absolutely confirm this Government's wholehearted commitment to an S4C with its own distinct identity, operational independence and the support and expertise of our most important and largest national broadcaster. I urge the authority to clear up the confusion over the leadership at S4C as soon as possible, because it owes nothing less to the people of Wales.
T7.  Karl Turner (Kingston upon Hull East) (Lab): Given the Secretary of State for Education's disgraceful announcement that £160 million will be cut from school sports funding, what plan does the Sports Minister have to compensate children in my constituency whose health and well-being will suffer as a result of his Government's policy?
Mr Hunt: Our plan for the children in the hon. Gentleman's constituency, as for the children in every constituency, is that more of them will do sport, more of them will do competitive sport, and we will have stronger, more effective, bottom-up school sports partnerships.
Jo Swinson (East Dunbartonshire) (LD):
Top Commonwealth games officials are meeting in Glasgow today to discuss the preparations for the 2014 games, including how to avoid the dreadful problems that we saw in the run-up to Delhi. Can the Secretary of State confirm that the 2012 Olympics team is similarly learning the lessons from Delhi, and that his Department will
give the teams for 2012, 2014 and, if things go well, 2018 every possible support?
Hugh Robertson: The simple answer is yes. It is fair to say, and I will always say, that the Commonwealth games in Delhi were always going to be pretty tricky, because they were up against a very tight construction timetable, the security situation was extremely oppressive and the monsoon was unusually heavy and ran late. I am glad to say that none of those problems affects the delivery of the London 2012 Olympics, nor I am sure-even though it rains quite a lot in Glasgow-will they affect the Glasgow 2014 Commonwealth games.
T8.  Mr Jim Cunningham (Coventry South) (Lab): Is the Secretary of State aware that people, certainly those in Coventry and the rest of the west midlands, will be dismayed that the Youth Sport Trust and school youth services are going to be wound up? Have the Government not got form on that? I do not want to get the answer that it is all the fault of the previous Government; in the '80s and '90s, the right hon. Gentleman's Government sold off school fields and the youth service as well.
Mr Hunt: With respect to the selling of school playing fields, both the last Conservative Government and the last Labour Government were at fault. We are doing something to put the situation right, which is why my hon. Friend the Minister for Sport and the Olympics announced a £10 million fund to put playing fields into trust. We have done something; the other side talked about it.
Mr Vaizey: Absolutely. I commend Swindon borough council, which has moved one of its libraries into an arts centre and seen attendances rise. Perhaps the hon. Member for Barnsley East (Michael Dugher) can take that experience back to his council.
Barbara Keeley (Worsley and Eccles South) (Lab): It is known that a proportion of girls and young women dislike competitive sport, and that reduces their participation levels compared with boys and young men. If we are to ensure that the Olympic legacy meets the needs of all young people, what is the Government's policy to increase participation among young people who just do not like competitive sport?
Hugh Robertson: I am glad to tell the hon. Lady that precisely those plans are contained in the Sport England plan "People, Places, Play". It is also worth mentioning that at schools benefiting from the pupil premium, precisely those groups will be able to benefit. Indeed, the early evidence is that schools that have had extra money from the academies programme have spent it on sports equipment.
1. Mr Philip Hollobone (Kettering) (Con): If he will assess the effectiveness of (a) oral questions to the Leader of the House and (b) the weekly Business Question as an opportunity for scrutiny. 
The Leader of the House of Commons (Sir George Young): I believe that both procedures provide an effective opportunity for hon. Members to hold the Government to account for their management of the business of the House.
Mr Hollobone: My right hon. Friend is open to more parliamentary scrutiny on the Floor of the House than any other Minister of the Crown. Will he support my proposals for this present Question Time slot to be merged with his business questions? Together with other consequential changes in the oral questions timetable, that would lead to more time being available for questions to the Department for Transport.
Sir George Young: I am grateful to my hon. Friend for that suggestion. If this slot was moved from where it is at the moment, it would not advantage the Department for Transport but the Department for Culture, Media and Sport, from which we have just heard. The answer to my hon. Friend is this. Within three years, we will be moving towards a House business Committee. At that point, it will make sense to look at how we deal with the whole issue of business questions in the light of new arrangements for that responsibility.
The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath):
The Procedure Committee has recently announced that it will conduct an inquiry into the parliamentary calendar that could consider the issue of private Members' Bills taking place on a day other than Friday. As my right hon.
Friend the Member for East Yorkshire (Mr Knight) has indicated, right hon. and hon. Members will have an opportunity to make representations on the issue.
Duncan Hames: I have written to the Chair of that Committee accordingly. Without a sufficient number of Members on Fridays, private Members' Bills are at the mercy of obfuscation, filibusters and even poetry-tactics that only damage the reputation of the House. Will the Leader of the House explore ways to protect private Members' Bills from such antisocial behaviour?
Mr Heath: I am quite sure, Mr Speaker, that in your capable hands and those of your deputies there is no question of filibustering on Fridays. Poetry, however, there may be. Whether that is antisocial or otherwise is for Members to judge. Clearly, procedural devices are sometimes used on Fridays. Any move to remove some of those devices would be a matter for the House rather than for the Government.
Helen Jones (Warrington North) (Lab): Does the Deputy Leader of the House agree that whatever day is chosen for private Members' Bills, it is important that opinion on those Bills is tested in the Lobby, not talked out by dubious practices such as speaking for an hour and 39 minutes on a two-clause Bill or quoting what was very bad poetry? What can he do to protect the rights of Back-Bench Members with regard to their private Members' Bills? Will he give the House an assurance that the Government will not use these tactics to block debate on the Gangmasters Licensing (Extension to Construction Industry) Bill, which is of vital importance for safety in the construction industry?
Mr Heath: I remember a very frustrating period of my life in the last Session of Parliament when I had a private Member's Bill-a very important one about fuel poverty-and it seemed to me that some Members on the Government side, including the Minister, spoke at rather greater length than I had expected to avoid its making further progress. I therefore understand the point that the hon. Lady is making. I repeat, however, that this is a matter for the Procedure Committee to look at, and I am sure that she will make her observations known to that Committee.
John Cryer (Leyton and Wanstead) (Lab): Does the Deputy Leader of the House accept that a precedent for this arose during the passage of the City of London (Ward Elections) Bill, when the then Government used regularly to split business during a Monday or Tuesday evening to leave three hours for discussion of that Bill? It was a private Bill rather than a private Member's Bill. Personally, I think it was a rotten Bill, and I would rather have hacked my head off than vote for it. Nevertheless, it established a precedent, and surely private Members' Bills could be treated in the same way.
Mr Heath: I really cannot support the process of head hacking as a way of expressing dissent with what was, I think, a Bill supported by the Government of the party of which the hon. Gentleman is a member. There is a slightly different procedure for private Bills as opposed to private Members' Bills. Again, the points that he makes should be made to the Procedure Committee, which can then take them into account when coming back to the House with recommendations.
4. Greg Hands (Chelsea and Fulham) (Con): What discussions he has had with the House of Commons Commission on the effectiveness of orientation programmes for hon. Members after the May 2010 general election. 
The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath): My right hon. Friend the Leader of the House has had no specific discussion with the Commission on this subject, but I am sure that the whole House, particularly hon. Members elected for the first time in May this year, will wish to join me in thanking the staff of the House for the considerable effort that went into delivering the induction programme.
Greg Hands: My hon. Friend has spoken about the great successes of the programme earlier this year for new Members, but surely he must agree that existing Members should not be overlooked. I note that there is one Member who has spoken here only once since the election, has tabled no questions, and has made only five of the 131 votes that he might have made. Will my hon. Friend agree to have a word with the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), assuming that he can be found, and perhaps suggest that some orientation might be needed?
Mr Heath: I am sure, Mr Speaker, that it would be invidious to discuss the attendance record of any individual Member. It does worry me, I have to say, if some Members have problems reconciling the competing pressures of writing books and making well-paid speeches with their duties in this House. However, I hope that in the context of the present economic situation, those with particular experience of, say, ending boom and bust will feel able to contribute to our debates.
5. Paul Blomfield (Sheffield Central) (Lab): What recent discussions he has had on the adequacy of the provisions in Standing Orders for debates on the Floor of the House on instruments subject to affirmative resolution. 
Mr Heath: Standing Order No. 118 provides that an instrument subject to affirmative resolution shall not be referred to a Delegated Legislation Committee if a Minister has given notice of a motion to that effect. I believe that this is adequate to ensure that an instrument can be debated on the Floor of the House when there is agreement to do so.
Paul Blomfield: I thank the Deputy Leader of the House for his answer. Does he agree, however, that we will putting the cart before the horse if we debate the statutory instrument on university funding before the publication of the Government's White Paper on higher education, simply to alleviate the discomfort of Liberal Democrat MPs?
That puts me in some difficulty, because I understood that the Opposition had tabled a motion on this very subject for next week, before the White Paper
is published, so Opposition Front Benchers obviously do not agree with the hon. Gentleman.
6. Jo Swinson (East Dunbartonshire) (LD): What progress the House of Commons Commission has made in implementing the recommendations made to it by the Speaker's Conference on Parliamentary Representation. 
Mr Frank Doran (Aberdeen North) (Lab): I will answer for the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso). The House authorities have continued to work on those recommendations that fall within the remit of the House administration. For instance, new educational resources for schools have been produced to reflect changes in the new Parliament and are available free to Members and schools in hard copy and online.
Jo Swinson: I welcome the hon. Gentleman to his new role on the House of Commons Commission. It is excellent news that since the Speaker's Conference, the parliamentary nursery has opened. The Speaker's Conference recommended action on another barrier to MPs who are parents of young children, which was to consider allowing young babies to accompany their MP parent into the voting Lobby. Surely that small, sensible change is preferable to the current situation, whereby babies are left in Whips' offices during votes.
7. Alun Michael (Cardiff South and Penarth) (Lab/Co-op): What recent representations he has received on the Welsh Grand Committee's effectiveness as a forum for discussing Government policy as it relates to Wales. 
The Leader of the House of Commons (Sir George Young): Hon. and right hon. Members, including the right hon. Gentleman, have made recent representations to me on this issue. I believe that the Welsh Grand Committee provides an effective forum for Members representing constituencies in Wales to debate matters that relate exclusively to Wales.
Alun Michael: I agree with the Leader of the House, but the Committee cannot be effective if it does not meet. He has always shown enormous respect for the conventions of the House. As a former Secretary of State for Wales, I think that previous Conservative and Labour Secretaries of State for Wales have shown respect to the convention of working consensually with all parties to arrange meetings and topics for debate. Will the Leader of the House have a gentle word with the current Secretary of State for Wales to persuade her of the benefits of such a consensual approach?
Sir George Young: No one is more in favour of consensus than myself. The Welsh Grand Committee will have its second meeting of the Session this week. That makes two meetings in six months. In 2005, it met once in the Session, in 2006, it met twice and in 2007, it met once. Our record is better than that of our predecessors.
8. Diana Johnson (Kingston upon Hull North) (Lab):
What progress has been made on upgrading network
services to enable access by hon. Members to regional televisions news programmes on the Parliamentary Estate. 
Mr Frank Doran (Aberdeen North) (Lab): It is already possible to view the regional television news content and services that broadcasters make available on their websites, via the internet. In addition, the annunciator screens carry national and international television news.
Diana Johnson: I thank my hon. Friend for that answer. It seems strange that Members can watch subscription sports channels on the network, but cannot access our regional news programmes. Can this matter be considered again, because most of my constituents expect me to be up to date with regional as well as national news.
Mr Doran: As a Scot, I understand the hon. Lady's problem. We have two systems. One is the television system, the main function of which is to provide annunciator services and the feed from the two Chambers. The second is the internet. The television system has only 23 channels. I am not sure how many regional news programmes there are, but it would not be possible to have them all on the system. However, they are all on the internet, which is part of the House service.
The Chancellor of the Exchequer (Mr George Osborne): I would like to make a statement regarding the Office for Budget Responsibility's first autumn forecast. I will also, with your permission, Mr Speaker, inform the House about further measures that the Government are taking to support economic growth, including the new growth review launched today and a far-reaching programme of reforms to our corporate tax system. Following yesterday's announcement by European Finance Ministers, I would like to take the first opportunity to update the House about the Irish situation and the UK's involvement.
Copies of the OBR's autumn forecast were made available in the Vote Office earlier today. We should take a moment to recognise the significance of this occasion and the practical demonstration of this Government's commitment to transparency and independent forecasting. Today is the first time that Members of this House will engage in debate about an autumn forecast produced by the independent Office for Budget Responsibility, rather than conjured up by the Chancellor of the Exchequer, and available to read two hours before the statement. This is also the first forecast by the new independent chair of the OBR, Robert Chote, with the other members of the budget responsibility committee, Stephen Nickell and Graham Parker, whose appointments were approved by all Treasury Committee members from both sides of the House. As a result, I am sure the country can have full confidence in the independence of these forecasts.
The OBR report published today includes some 150 pages of information-an unprecedented level of detail and transparency, much of it of the kind available to previous Governments but never before published. I should like to thank the budget responsibility committee and the staff of the OBR for their hard work in putting together this autumn forecast. I hope that we now entrench this major improvement in the making of fiscal policy by passing the legislation currently before Parliament.
Although today's figures are of course independent, they are still just forecasts, and we must treat them with a degree of caution, as one should treat any economic forecast. Indeed, the OBR is explicit about that, illustrating the uncertainty surrounding any economic forecasts with the use of fan charts rather than claiming the infallible certainty that my predecessors asserted when they provided their forecasts. The only thing that was infallible and certain was that those political forecasts were usually wrong.
With that caution in mind, let me turn to the forecast. After the deepest recession since the war, the greatest budget deficit in our peacetime history and the biggest banking crisis of our lifetime, recovery was always going to be more challenging than after previous recessions, but the message from the Office for Budget Responsibility is that Britain's economic recovery is on track. The economy is growing, more jobs are being created and the deficit is falling. Its central forecast is for sustainable growth of over 2% in each of the next five years, and employment rising in each and every year. Indeed, employment and gross domestic product are higher in every quarter and every year than in the June forecast.
At a time when markets are gripped by fears about Government finances across Europe, today we see that the Government were absolutely right to take decisive action to take Britain out of the financial danger zone. Britain is on course both to grow the economy and balance the books, something that some people repeatedly said could not happen.
Let me take the House through the detail of the forecast. The forecasts for the economy are broadly in line with those produced for the June Budget, despite the more challenging international conditions. I should also like to point out that they are very similar to the European Commission forecasts for the UK, which also happened to be published today. Indeed, the European Commission today forecast that Britain would grow faster over the next two years than Germany, France, Japan, the United States of America and the average for the eurozone and the European Union.
The OBR forecasts real GDP growth of 1.8% this year, 2.1% next year, 2.6% in 2012, 2.9% in 2013, 2.8% in 2014 and 2.7% in 2015. Growth this year is now expected to be considerably higher than was forecast in June. In the OBR's judgment, some of that improvement is likely to be permanent and some of it a temporary impact of stock-building. As a result, it forecasts that the rate of growth next year will be 0.2 percentage points below its forecast in June. It also predicts above-trend growth for the four years after that, but the level of GDP, or indeed the overall size of our economy, is forecast to be about half a percent higher next year than was forecast in June, and indeed higher throughout the whole forecast period.
"growth has been volatile, as this is a common characteristic of post recession recoveries",
its central view is that there will be no double-dip recession. Its forecast is growth next year of more than 2%, and it expects that in the slowest quarter of growth, the first quarter of next year, it will be 0.3%, rising back to 0.7% by the last quarter of next year. It also forecasts that consumer prices index inflation will fall from 3.2% in 2010 to 1.9% in 2012, once the short-term effects of the VAT rise and other temporary factors fall away.
Crucially, the OBR forecasts a gradual rebalancing of the economy as we move away from an economy built on debt to one in which we invest and export-again, something that some people said would not happen. It expects more demand to come from business investment, which is set to grow by over 8% for each of the next four years, as well as exports, which are expected to grow on average by over 6% per year. That new model of sustainable economic growth will rebalance the economy towards investment and exports and away from an unhealthy dependence on private debt and public deficit. It will bring to an end the unsustainable situation that saw families save less and less each year, so that they ended up, in the words of today's report,
"effectively borrowing money to purchase increasingly expensive houses."
The OBR also published today a full forecast for the labour market-something that, I should like to point out, previous Chancellors chose not to do. Employment is forecast to grow in every year of this Parliament. Total employment is expected to rise from 29 million to
30.1 million-that is over 1 million additional new jobs. Thanks to faster-than-expected growth in the economy, the OBR now expects the unemployment rate to be slightly lower this year at 7.9%, instead of 8.1%. Its forecast for the unemployment rate for next year is unchanged from the June Budget at 8%. For future years, the OBR predicts a gradual decrease in unemployment, with the rate falling every year. By the end of the Parliament, the OBR forecasts that it will fall to just above 6%, which is about 500,000 fewer unemployed people than at the beginning of this Parliament.
The trend in the claimant count is similar to that for the internationally recognised labour force survey measure of unemployment. However, the level is expected to be higher. The OBR explained that the revision is mainly due to a change in the way that flows from employment and support allowance on to jobseeker's allowance will take place as a result of the new work capability assessment. In other words, more people are assumed to be flowing off ESA and on to JSA. That is a key part of our reforms to create a welfare system that encourages people to seek work and reduce costs to the taxpayer. In short, we will stop hiding people who can work in the incapacity statistics. Crucially, in each year, fewer people are expected to be on both of those out-of-work benefits combined than in the June forecasts.
I can also tell the House that following the spending review the OBR has recalculated its estimate of the reduction in the headcount in the public sector. In June, the OBR forecast a reduction in headcount of 490,000 over the next four years; in its latest forecast, that estimate has come down to 330,000-a reduction of 160,000. The bulk of that revision results from the action that we have taken to cut welfare bills rather than public services. Our difficult choices on child benefit, housing benefit and other benefits, each of which the Labour party opposed, mean that fewer posts will be lost across the public sector. Those headcount reductions that still need to take place will happen over four years, not overnight, and the OBR forecast is that private sector job creation will far outweigh the reduction in public sector employment. Its forecast states:
"A period of rising total employment alongside falling general government employment is in line with employment trends during the 1990s"
The most important point is this: the lesson of what is happening all around us in Europe is that unless we deal decisively with this record budget deficit, many thousands more jobs will be put at risk in both the private and the public sectors.
Let me summarise the forecast for the public finances, which shows that Britain is decisively dealing with its debts. Borrowing this year is expected to be £1 billion less than was forecast in June. The OBR forecasts that public sector net borrowing will fall from £148.5 billion this year to just £18 billion in 2015-16. Government debt as a share of GDP is projected to peak just below 70% in 2013-14 and then to fall to 67% by 2015-16, so the debt ratio is now expected to peak at a lower point compared with the June forecast-just below 70% instead of just above it.
On the OBR's central forecast, we will meet our fiscal mandate to eliminate the structural current budget deficit
one year early, in 2014-15. The same is true for our target to get debt falling as a percentage of GDP. Indeed, to use the OBR's own words,
"the Government has a slightly wider margin for error in meeting the mandate than appeared likely in June."
It is clear that our decisive actions have proved to the world that Britain can live within her means. The Government have taken Britain out of the financial danger zone and set our economy on the path to recovery. That is the judgment not only of the OBR, but of the International Monetary Fund, the OECD, the European Commission, the Bank of England and all the major business organisations in this country. Already, our efforts are paying off. Today's forecasts show that the cost of servicing the Government's debt has come down. Compared to the June forecast, the OBR predicts that we will save £19 billion in interest payments between now and the end of the forecast period. That is £19 billion that will no longer be paid by British taxpayers to private bondholders and foreign Governments. It is £19 billion that would have been wasted, but will instead be saved.
This is an uncertain world, but the British recovery is on track. Employment is growing, 1 million more jobs are being created and the deficit is set to fall: the plan is working, so we will stick to the course. That is the only way to help confidence to flourish and growth to return, and I urge those who seriously suggest, when they see what is happening to our neighbours across Europe, that we should abandon the decisive plan we are following, and instead borrow and spend more, to think again. What they propose would be disastrous for the British economy, would put us back in the international firing line we have worked so hard to escape from and would mean higher deficits and jobs lost, and we should reject that path.
Stability is a necessary precondition for growth, but it is not enough. Our economy's competitiveness has been in decline for more than a decade, undermining its ability to create jobs and grow, which is why we have already announced four annual reductions in corporation tax, axed the jobs tax, cut the small companies rate, expanded loan guarantees, simplified health and safety laws, invested in science and apprenticeships and promoted exports through major trade missions.
Let me set out some of the other things that my right hon. Friend the Secretary of State for Business, Innovation and Skills and I are announcing today to support growth and a rebalancing of our economy. In the Budget, I set out a plan to reduce the main rate of corporation tax to 24%-its lowest ever rate-demonstrating our commitment to tax competitiveness. I can now tell the House that today we are publishing the most significant programme of corporate tax reforms for a generation, for consultation with the business community. We propose to make the UK an even more attractive location for international business and investment by reforming the outdated and complex rules for controlled foreign companies. We have seen a steady stream of companies leaving the UK in recent years, and this Government, unlike the last one, are not content to sit by and watch our competitiveness leach away and our corporate tax base be undermined.
Another tax issue of crucial importance to our corporate sector is the tax treatment of income from intellectual property. For a long time, we have argued that we should increase the incentives to innovate and develop new products in this country, so to encourage high-tech businesses to invest in the UK and to create high-value jobs here, we can confirm that we will introduce from April 2013 a lower 10% corporate tax rate on profits from newly commercialised patents. We have been consulting the business community, and I can tell the House that as a result of this measure, GlaxoSmithKline will today announce a new £500 million investment programme in the UK, including new manufacturing in Hertfordshire; a £50 million venture capital fund to invest in health care research; a new facility at the university of Nottingham to develop green chemistry technology; and the building of GlaxoSmithKline's next biopharmaceutical plant in this country, with sites in the north of England and Scotland under consideration. In total, it estimates that 1,000 new jobs will be created in the UK over the lifetime of these projects.
Today, we are also launching a cross-government growth review. This will be a determined, forensic examination of how every part of Government can do more to remove barriers to growth and support growth opportunities. Too often, the natural inclination of Government is in the opposite direction, creating new regulations, putting up new barriers, and making life more difficult for entrepreneurs and innovators. We are starting to turn the super-tanker around. Together with the Department for Business, Innovation and Skills, the Treasury will lead an intensive programme of work, involving all parts of Government, using evidence provided by the business community and reporting by next year's Budget. We will identify reform priorities that can benefit the whole economy. Specific priority will be given to improvements to the planning system and employment law, more support for exporters and inward investment, and reforms to the competition regime. At the same time, we will begin a new sector-by-sector focus on removing barriers to growth and opening up new opportunities. Some of the resulting changes will be substantive on their own; others will help particular industries in specific ways. Some changes may be controversial if they confront vested interest, but brick by brick we will remove the barriers that are holding Britain back.
Finally, I would like to update the House on the international assistance package for Ireland. I attended the various European meetings in Brussels yesterday. We agreed a three-year package for Ireland worth €85 billion, which is
"warranted to safeguard financial stability in the euro area and the EU as a whole."
Of that, €35 billion will be used to support Ireland's banking sector, with €10 billion going towards immediate bank recapitalisation and €50 billion being used for sovereign debt support. Ireland will contribute €17.5 billion towards the total package, and the remaining €67.5 billion will be split, with one third coming from the IMF, one third from the European financial stability mechanism, and one third from bilateral loans and the eurozone facility. The terms of the IMF loans will be determined over the coming weeks. In principle, our bilateral loan is for £3.25 billion, and we will expect the loan to be
denominated in sterling. The rate of interest on the loan will be similar to the rates levied by the IMF and the eurozone. The loan to Ireland is in Britain's national interest. It will help one of our closest economic partners manage its way through difficult conditions.
I should also tell the House that the eurozone Finance Ministers met without me to discuss a permanent financial stability facility. I made it clear in the subsequent ECOFIN meeting that the UK will not be part of that. The president of the euro group made it clear that the UK will not be part of the permanent bail-out mechanism, and that the European financial stability mechanism, which was agreed under the previous Government in May and of which we are part, will cease to exist when that permanent eurozone mechanism is put in place.
Mr Osborne: Our economy was unstable, our public finances were out of control and our country was on the international watch list to avoid. We took decisive action. Now, the independent Office for Budget Responsibility has confirmed that the British recovery is on track, our public finances are under control, 1 million jobs are set to be created and our economy is rebalancing. Today we are taking further measures to secure growth and create prosperity. We are doing so based on the foundation of stability that we have now secured. Britain is on the mend, and I commend this statement to the House.
"As we discussed in Chapters 3 and 4, past experience and common sense suggest that our central forecasts for both the economy and the public finances are almost certain to be wrong and that there are upside and downside risks to both."
This Government have committed our country to a rate of fiscal consolidation that has been attempted only twice in living memory, and on both occasions by countries that benefited from strong growth in a benign global environment. In the current economic crisis, no country other than Ireland has attempted to cut so deeply, so quickly. The Chancellor is always telling us that we have the highest fiscal deficit in the G20. That is not true: the US has a proportionally higher fiscal deficit than ours, and the Americans plan to reduce it by less than half over the next five years. Japan, which has roughly the same level of deficit, has learnt from its experience over the past 10 years and plans to cut by less than a quarter. The Chancellor has chosen to take an unprecedented gamble with people's livelihoods and the country's future, and he has done so on the basis of a fundamental deceit: that when he assumed office, the public finances were worse than expected. The OBR exposed that deceit last year, and it has confirmed it today, so will the Chancellor now tell all those Back Benchers behind him-all those Tories who claim to their constituents that things are worse than they expected, and of course those who tell them that they have never
had it so good-that they will have to find a new excuse? Nothing in his statement today can hide the fact that it was the balanced approach of my right hon. Friend the Member for Edinburgh South West (Mr Darling)-[Hon. Members: " Where is he?"] Snowed in, in Scotland, probably. It was the balanced approach of my right hon. Friend that saw growth return at the beginning of the year, saw the recovery gain momentum and led to nearly 1 million fewer people claiming out-of-work benefits than predicted. That was the previous Chancellor, not this one.
As expected, the OBR has produced a higher growth forecast for this year than at the time of the emergency Budget, but this is the result of an approach that this Government have rejected. The reckless gamble that coalition Members support is still to come; the Chancellor is in the casino, but he has not yet spun the wheel. The OBR's judgment of the future matters more than its revised forecast for a year that is almost over.
Does the Chancellor accept that the OBR does not expect the fast momentum built up this year to be maintained? Indeed, it is explicit in saying that it expects a slow recovery. Next year, as spending cuts begin to take effect and the VAT hike dampens demand, the OBR is revising its growth forecast down from 2.6% before the emergency budget to 2.3% immediately afterwards and to 2.1% now-it is going south. Looking beyond next year, the forecast for growth over the first four years of the recovery is reduced to an average of 2.4%. This compares with a 3.1% average growth in the far from pain-free recoveries from the two Tory recessions in the 1980s and 1990s. That growth was largely driven by growth in the financial sector and in public services, neither of which will be in a position to help this time.
Lower growth means fewer jobs, and in this weak recovery the OBR, having changed its mind, is now forecasting something that the Chancellor could not bring himself to say-namely, that unemployment will rise next year. It no wonder that the Conservative-led Local Government Association pointed out last week that front-loading cuts in local authorities will lead to 140,000 job losses next year, which is much higher than originally expected. The Chartered Institute of Personnel and Development estimates that the increase in VAT on 4 January will cost 250,000 jobs, more than three times as many as our proposed increase in national insurance, which the Conservatives called a tax on jobs.
The Chancellor tells us that public sector jobs will be protected by his decision to cut welfare benefits, but this works both ways: can he tell the House what the additional hit to private sector jobs will be from those welfare changes? For families up and down this country, a jobless recovery will be no recovery at all. This Government have no interest in protecting jobs, no alternative measures if the gamble fails and, worst of all, no plan for jobs. Indeed, since just last week their growth plan has actually shrunk, from a White Paper that was supposed to contain proposals, to today's promise to talk: there will now be a debate, a discussion.
The Government's plans rely on a huge increase in exports and business investment. Let us hope they materialise. But it is a gamble to assume that cuts on the scale envisaged, with cyclically adjusted public borrowing reduced by 8% of gross domestic product in just five years, will automatically be compensated for by exports. Exports need markets, and there is nothing to suggest
that the global economic climate will assist us in achieving the kind of boost to growth that we have not seen for 60 years.
The Chancellor talked about his plans for corporation tax. Everyone wants a tax system that supports business, but he has abolished investment allowances for manufacturing to pay for a cut in corporation tax that will give a further £1 billion to the banks. Can he tell us what sense there is in helping companies that make large profits for little investment, at the expense of businesses that will invest heavily in the UK? We were very pleased to hear his announcement on GlaxoSmithKline and the patent box. We were pleased because that was our proposal. It was me, as Secretary of State for Health, with the former Business Minister, Lord Dyson, who argued for that in Cabinet. That is why it was in last year's pre-Budget report. It is an excellent proposal. It was a Labour proposal.
Here is an idea for the Star Chamber that the Government are going to form. Why not help UK advanced manufacturing in the civil nuclear supply chain by giving an £80 million loan to Sheffield Forgemasters? That is an idea that they can chew over for the next four months.
The Chancellor talked about developments relating to Ireland. As I said last week, we support the financial assistance offered to Ireland, but the lessons of Ireland cannot be ignored. As a Financial Times leader said last week,
"a slower pace of consolidation might have been its best bet at encouraging growth."
The Chancellor's analytical ability in respect of Ireland was demonstrated in his 2006 article, which has been widely quoted, but in 2008, just two years ago, confident that Ireland would not be affected by the financial crisis that was just emerging, he said that Ireland now had
"a 'future fund' of assets built to provide security against future shocks and liabilities. Their public finances are well placed. Their competitiveness has risen. Their institutions are stronger."
"used the fat years to prepare for the lean years."
The Chancellor was wrong about Ireland, and he is wrong about the United Kingdom. The autumn statement does nothing to alleviate the summer madness that led him to gamble so recklessly with our future.
Mr Osborne: I think the shadow Chancellor made the mistake of writing his response before he had seen the OBR's forecast. He predicated all of it on there somehow being lower growth, when in fact growth is higher in every quarter and every year than was predicted in the June forecast. I assume that he also wrote his response before the European Commission produced its forecast today. I am sure that he has now seen it. He read out a list of countries, but the European Commission predicts that over the next two years we will grow more quickly than Germany, France, the United States of America, Japan, the eurozone and the EU average. If one is going to read out a list of countries, one might as well start with the most accurate and recent forecast for their economies.
As I have said, the shadow Chancellor's response was not much of an analysis of what the OBR has said today. He skated over the fact that because of the
welfare changes that we have introduced, we have been able to reduce the public sector headcount reduction that is required by any deficit reduction plan-including, presumably, the plan that he will one day propose. He should at least acknowledge that the welfare changes achieve that. He and the leader of his party have some important choices to make in the next few months as we vote on some of these measures. They must decide whether they will support welfare reform or would rather see a higher number of public sector job losses, but that will be a decision for them.
The shadow Chancellor said that he did not believe in the rebalancing of the economy, and that the assumptions for exports and investment that I had made were fanciful. They are, of course, the estimates made by this independent body, the appointment of whose members, as I have said, was ratified by the Treasury Committee. The shadow Chancellor accused me of having no alternative measures to present. I thought that that was a bit of a cheek, because as far as I can tell the Labour party has a blank sheet of paper as its new economic policy. He talked of the importance of protecting intellectual property and supporting the growth of patents, and then praised, I believe, James Dyson. The last time I checked, it was we, rather than the shadow Chancellor, who had consulted him, but so be it.
Mr Speaker: Order. Members really must calm down. Only this morning I was talking to sixth-formers, one of whom observed that the noise in the Chamber was totally off-putting. The public loathe it, and so do I. Let us put an end to it.
Mr Osborne: I welcome the support that the Opposition have given to our decision to offer a bilateral loan to Ireland. We will have to put legislation before the House, and I will of course keep the shadow Chancellor informed of the details when they are negotiated along with the IMF, eurozone and other bilateral contributions. I should have mentioned that Sweden and Denmark have also provided bilateral loans.
I come back, however, to the point that this forecast shows 1 million new jobs being created over the next four or five years. It also shows growth of over 2% in each year; it shows the economy rebalancing; it shows Britain getting to grips with its debts. Yet all the shadow Chancellor could come up with was this: he said he had read a Financial Times editorial in the last week-and I note from his interview this morning that that is how he does his homework; he says he photocopies articles from the FT. Well, I went one better and actually got a copy of the FT, and he said this in his FT interview this morning:
"I am a great believer in the philosophy that if you've not got anything to say, keep your mouth shut".
Mr Speaker: A lot of Back Benchers want to say something and I would like to accommodate them, but there is important business to follow in the form of Backbench-led debates, so brevity is of the essence from the Back Benches and the Front Benches alike.
Mr Andrew Tyrie (Chichester) (Con): In June, the Red Book was forecasting that the savings ratio would remain broadly steady at about 6% for the next five years, which is quite near its long-run average for the previous 40 years. On page 67 of the most recent document however, the new forecast assumes a fall in the savings ratio to just over half that, and for the remainder of the Parliament, at only 3%. Is the Chancellor worried about that fall in the savings ratio, and will he consider measures to address it?
Mr Osborne: Yes, I have, of course, seen the forecast for the savings ratio and we will want to address it. It has the savings ratio returning to its average of before the recession, and I think all parties in this House, and certainly the Government, will want to find ways of encouraging saving more effectively than was the case in the past, and to address that particular problem.
Mr Osborne: I am not aware that the OBR makes that forecast, but obviously everything we are doing-whether increasing free nursery care provision for some of the poorest two-year-olds or introducing the pupil premium-is designed to encourage social mobility and to give those on lower incomes a chance to increase their incomes over this Parliament.
Mr John Redwood (Wokingham) (Con): I thank the Chancellor for the guarantee of no bail-outs for other European countries. Does he think the European Central Bank will make available all liquidity needed by major banks in euroland, as it should do because it tells us they are all solvent?
Mr Osborne: Obviously, the ECB is independent so I will not speak for it. What I have said about the European financial stability mechanism is that we now have a verbal agreement-I will, of course, want to secure it over the coming weeks-that that mechanism will not form a permanent part of the bail-out mechanism that the eurozone wants to put in place from 2013, and we will not be part of that bail-out mechanism. Indeed, if it requires a treaty change, our consent to that change would, of course, be required.
Ian Paisley (North Antrim) (DUP): I thank the Chancellor for his statement. What assurances has he received from Ireland to ensure the multibillion pound loan now given to it will not be allowed to be used to have a fire sale of assets that the Irish state now owns in Ulster and, indeed, across the whole of the United Kingdom? Can the Chancellor also tell us what progress he has made with the Northern Ireland Executive on a reduction in corporation tax so we can compete fairly with a nation that has a corporation tax rate of 12.5%?
Mr Osborne: The Irish bank restructuring package will now take several weeks-at least-to put in place, and we are, of course, very aware of the interconnectedness of the banking systems of Ireland and Northern Ireland, and, indeed, the whole UK. That is one of the reasons why we are making this bilateral contribution; it is one of the reasons why we are in the room discussing the conditions and the banking package. I am certainly conscious of the fact that some of the Irish banks have significant assets in the UK, and we have a very real interest in the future of that. That is why my hon. Friend the Financial Secretary came to Northern Ireland earlier this week, and I want to make sure that the Treasury, as well as the Secretary of State for Northern Ireland of course, remain in very close contact with the Northern Ireland Executive and Members from Northern Ireland.
Corporation tax has genuinely been a matter of debate in the European Union. I do not think that has been any secret; it has been in the newspapers. Some member states wanted to attach conditions to Ireland's corporation tax rate, and I do not deny that that 12.5% rate is a real challenge for companies in Northern Ireland. That is why the Secretary of State for Northern Ireland is looking at that and at packages to help the competitiveness of companies in Northern Ireland. But I took a position, which was that it is not really for other member states to dictate the tax rates of sovereign nations, even when they are seeking international assistance. The rates of tax levied by the Irish Government should be a matter for the Irish Government and the Irish Parliament. If the shoe was on the other foot, we would not want to be accepting, in this country, decisions imposed on this Parliament about tax rates. This should be a matter for the elected Parliament of the country. I do not deny that that 12.5% rate is a challenge for Northern Ireland, but I did not feel it was right to use the position we found ourselves in to get Ireland to increase that corporate tax rate.
Dr John Pugh (Southport) (LD): The Chancellor says he is intent on reforming our "outdated and complex rules for controlled foreign companies." Can he assure me that this will not create new opportunities for tax avoidance?
Mr Osborne: Yes, I can assure the hon. Gentleman that that is certainly not the purpose of the measure and that tax avoidance is what we are going to seek to avoid. The measure is there to keep pace with the changes in corporate tax regimes that have been introduced in many other countries, not only Ireland, which we have just been talking about, but countries such as Belgium and the Netherlands, which have also made corporate tax changes that attract international companies to headquarter there, rather than in the UK. We have to keep pace with those changes, which is why we are taking the measures that we are.
Mr George Mudie (Leeds East) (Lab): The Chancellor and the Business Secretary have apparently postponed the long-awaited growth White Paper. Officials say that this is because of the lack of serious content. Can the Chancellor tell us when we can expect this long-awaited document? In which financial year?
Mr Osborne: What we have published today is a series of documents, which the hon. Gentleman has perhaps not had a chance to see yet. Some of them are on corporate tax reform, on intellectual property and on how in time for the Budget-after all, a White Paper proposes measures that will then be legislated for-we will have measures that will address the competitiveness of British industry. Our measures will specifically look at things such as the competition regime, the approach we take to attracting inward investment, how we improve our employment law and specific sectors. If he wants to involve himself in that process, I will make sure he can be part of it.
Michael Fallon (Sevenoaks) (Con): Given the forecasting record of the Chancellor's predecessor but one, who was frequently in error but seldom in doubt, is not the strength of these forecasts that they were prepared by independent officials, who cannot be and were not overruled by politicians?
Mr Osborne: That is, of course, a very significant feature of what is happening today. It is completely unprecedented for a Chancellor to present an autumn forecast that has been produced independently by people who have been verified by the all-party Treasury Committee and who had their own separate press conference. In addition, Members have had a couple of hours to look at this document. If one thinks back, for example, to a year ago and the pre-Budget report, when the previous Chancellor produced the autumn forecast, one recalls that he rattled off the numbers. There was absolutely no opportunity for the shadow Chancellor to have examined those numbers or to have looked at the document, or for any other Member in the House to have done so. It was the Chancellor's judgment, rather than an independent judgment. Our approach is a major improvement to fiscal policy making in this country. The legislation is before the House of Lords, and I hope that when it comes to the House of Commons it will have all-party support.
Mr Osborne: What the Irish banks are getting, in many cases, is a capital injection. As in the UK, the banks have been very poorly regulated. We are improving our regulation system. If the hon. Gentleman does not think we should be supporting the Irish banking system, the impact of his proposals on his constituents in Derbyshire would be very severe.
Dan Byles (North Warwickshire) (Con): The shadow Chancellor says that he is concerned about what he calls slow growth in coming years. Does the Chancellor agree that steady, sustainable and private sector-led growth is exactly what the UK needs after the bubble that was inflated and then burst by the previous Government?
My hon. Friend makes an extremely good point. What is happening here is a rebalancing of the economy. I hear the shadow Chancellor muttering away about what he calls slow growth, but according to the European Commission forecasts today our growth is more rapid than that of Germany, France, the United States of America or Japan, as well as than the EU
average and the eurozone average. I am not sure what his proposals are to increase that growth rate but if he has some, now is the time to produce them.
Mr Dave Watts (St Helens North) (Lab): Is it not the case that most of the public sector cuts will take place in the north and that any jobs that are created-there are not likely to be many-will be in the south? Is not the policy unbalanced?
Mr Osborne: In the last decade, under the Government of which the hon. Gentleman was a member, for every 10 jobs created in the south-east only one was created in the midlands and the north. That is the situation that we have inherited and the economic model that we have to change. It is precisely because we want to see exports and investment increase that we are aiming for a more geographically balanced model of economic growth. Announcements such as the one we have made today on the investments by Glaxo will help that, as will the first-time-ever tax cut for new employees that is specifically directed at regions outside the south-east.
Mr John Baron (Basildon and Billericay) (Con): I suggest that my right hon. Friend never tire of reminding the Opposition that this recession, unlike all previous post-war recessions, is a recession built on debt and that one cannot borrow one's way out of debt.
Mr Osborne: I assure my hon. Friend that I will not tire of reminding the Opposition of that. Of course, if they come forward with a new economic policy we can examine it, but at the moment there is not a new economic policy to examine, so there we have it.
Mr Chuka Umunna (Streatham) (Lab): The Chancellor has said that he sees private sector growth being driven by business investment and by exports. In its report today, the OBR has revised down its forecast for business investment in four of the years between 2010 and 2015. Of course, we have seen the dramatic uncertainties in the eurozone, which is our main export market. If exports and business investment do not turn out to be what he expects, where does he see private sector growth coming from?
Mr Osborne: One of the primary tasks of the OBR is to assess whether we will hit the fiscal mandate. The very fact that the fiscal forecasts are not a matter of controversy in the House today shows what we have done to get the British public finances under control. The OBR assessed specifically the scenario that the hon. Gentleman volunteers and said that the fiscal mandate will be met under those conditions. In fact, rather perversely, that helps the fiscal forecasts because of the tax base being more focused towards consumption.
Mr Charles Walker (Broxbourne) (Con): When the books are balanced, will the Chancellor seriously consider reducing the overall burden of taxation? Thanks to the efforts of the previous Government, it is far too high.
Of course, I am a believer in trying to reduce the tax burden and trying to reduce taxes. However, I have always believed that the best way to achieve that
is from stable public finances, otherwise one cuts taxes one year and has to put them up the next. So I am a fiscal conservative with a small c as well as a tax-cutting Conservative with a big C.
Mr Andrew Love (Edmonton) (Lab/Co-op): In reference to the answer to my hon. Friend the Member for Streatham (Mr Umunna), the Chancellor, through the OBR, is suggesting that there will be 8% growth in business investment yet there is scant sign of it at present Net trade, it has been suggested, will increase by 6% in each of the next four years yet, according to the Governor of the Bank of England, there are doubts about whether the euro area or the United States will deliver the sort of export growth that is being suggested. Is not the Chancellor just a little worried about the optimism in the estimates and is he concerned about whether they will be delivered over the next four years?
Mr Osborne: The hon. Gentleman says that I made the forecasts, but they are independent forecasts by Mr Robert Chote, whom I do not think anyone would claim is in anyone's pocket. He is totally independent. The hon. Gentleman is on the Treasury Committee, which interviewed Mr Chote for the job and passed him. These are Mr Chote's, Mr Nickell's and Mr Parker's estimates and they have made a central forecast. He says that there is scant evidence, but that is not what the Office for Budget Responsibility believes. It is independent and it has forecast that business investment is set to grow by more than 8% for each of the next four years and that exports are set to grow by an average of more than 6% a year.
Andrea Leadsom (South Northamptonshire) (Con): Is my right hon. Friend concerned that in the Greece bail-out and now in the Ireland bail-out taxpayers will end up supporting professional bond and equity holders in banks?
Mr Osborne: This has been one of the most difficult issues that the international community and, of course, the Irish people have had to wrestle with. For reasons of financial and economic stability, it was decided that it was not possible and would not be sensible to ask the senior debt holders in the Irish banks to take a haircut. That is exactly what did happen in late 2008, in some of the US bank rescues, with pretty disastrous effects, so that is why that decision was taken. Subordinate debt holders in the Irish banks will suffer losses and I think that is appropriate.
Sheila Gilmore (Edinburgh East) (Lab): Given that the nearest year for prediction in the OBR report suggests that growth will fall in relation to previous predictions-it was 2.6%, then 2.3% and is now 2.1%-what confidence can we have that predictions further out than now will be any more reliable? Is it not likely that growth will not rise as much as predicted?
I said right at the beginning of my remarks that these are economic forecasts and that we should treat them with the caution with which one should treat all economic forecasts. At least we explicitly acknowledge that and the forecasts are independently produced. What we have here is a central forecast; previously, Chancellors just gave a number and asserted
that that was the forecast come hell or high water. That is not what the OBR is doing today. However, one can take confidence that its growth forecast for next year is in line with those of most independent commentators and forecasters. It happens to be very close to the numbers that the European Commission produced today, which were not available to the OBR or the British Government until today. We can have confidence that it is part of a group of people who look to the UK and see it growing sustainably over coming years and jobs being created.
Mr Edward Leigh (Gainsborough) (Con): All the talk is of cuts, but with spending still rising despite these so-called cuts and with debt as a proportion of GDP rising to a staggering 70%, will my right hon. Friend remind the House that, to coin a phrase, there is no alternative to further massive efficiency savings, particularly in ring-fenced Departments such as Health where there has been a catastrophic decline in productivity in the last 10 years?
Mr Osborne: I certainly agree with my hon. Friend that an essential part of this programme for public expenditure is getting greater productivity in the public services. As the former Chair of the Public Accounts Committee, he has much to offer. The Treasury is engaging with him on this, I hope, and will engage further with him in the coming months. He is absolutely right that, in a period when there is less money available, if we do not have reform, we will have deterioration in the service. That is why we have got to have reforms and why Parliament is being asked to support those reforms in the next few months.
"reflects...the impact of the Government's fiscal consolidation."
Can the Chancellor confirm that it follows from this that if the Government's fiscal consolidation had been less severe, the medium-term outlook would be less sluggish? In other words, he has cut too far and too fast, just as Ireland has.
Mr Osborne: The short answer is no. We inherited a situation of very deep recession, a major banking crisis and a record fiscal deficit. I thought-although one is never sure-it was common ground across the parties that at least we had to do something to address the fiscal deficit, not that we have heard specific measures from the Opposition for doing that. In the summer, the OBR produced a comparison of the growth forecasts under the previous Government's plans and under the plans of the current Government, which showed that over a period of time we were putting forward a much more sustainable path for growth that would lead to higher growth in the future. It also avoids the downside risk-the tail risk-of a major fiscal event, which would be a major loss of confidence in the UK. It is pretty remarkable that here we are today debating the numbers, and that is fine, but we are not having to worry about the UK's creditworthiness, unlike some other countries in the European Union, even though we inherited the largest budget deficit in the EU. We have taken measures to take ourselves out of that firing line, and now we have sustainable growth and jobs are being created.
Matthew Hancock (West Suffolk) (Con): Will the Chancellor give us his assessment of what would happen if we ignored the advice of the IMF, the OECD and the EU, and moved from the path of putting our own house in order?
Mr Osborne: It is not a bad test of the policy offered to the Government from the Opposition to consider what would happen if we actually did it tomorrow. If the shadow Chancellor stood up tomorrow, or if I adopted his plan, and announced that the UK was backing off its fiscal consolidation plan and that it would take much longer, where do we actually think the UK would be within about 30 minutes of that statement?
Kate Green (Stretford and Urmston) (Lab): I am naturally pleased that the number of job losses in the public sector has been revised downwards, but I am very concerned that it seems that the £18 billion of welfare cuts, which will affect the poorest, will be picking up the price tag. Was that the Chancellor's explicit decision and policy, and if so does he think it was fair?
Mr Osborne: I do of course think the spending review was fair, but as I said at the time- [ Interruption. ] If the Opposition would actually produce a spending review, perhaps we could compare the two-but they do not want to do that.
The point I was making to the hon. Lady is that I said at the time of the Budget and the spending review that I was making a conscious decision to seek further welfare reform to try to reduce the rapidly escalating costs of the welfare state. That was a challenge that anyone doing my job would face, and I said that if we were able to find further welfare reforms, we would be able to reduce the cuts in Departments, and that is exactly what we were able to do.
Jesse Norman (Hereford and South Herefordshire) (Con): May I congratulate the Office for Budgetary Responsibility on a thoroughly transparent, comprehensive and technically excellent report? It marks a first in this country. Can the Chancellor give us an assessment of any remaining threats he sees to financial stability from the eurozone countries?
Mr Osborne: There is of course concern about the high deficits, particularly in the eurozone. Let us hope that the action taken yesterday to stabilise Ireland, and also the clarification that eurozone Ministers offered about the future permanent bail-out mechanism and the involvement of private sector creditors in that, will help to achieve stability. That is certainly what the intention was yesterday.
Ann Coffey (Stockport) (Lab): Stockport council will tonight announce proposals for cuts, with the likely loss of 400 jobs. That will have a devastating impact on my constituents who are affected, but it will also lead to loss of confidence by those with jobs that they will have jobs in the future, which might lead to reluctance on their part to spend money in the economy. Is the Chancellor concerned that such lack of confidence will affect new jobs and future growth?
Of course, I have enormous sympathy with anyone who faces a job loss, but we are creating the economic conditions where they will be able to find a
new job, I hope. There is support from the welfare system. We expect more than 1 million new jobs to be created over the coming years. I make this observation to the hon. Lady, who was Parliamentary Private Secretary to the previous Chancellor: if the Labour Government had been re-elected in May, they would be cutting billions and billions of pounds from public spending, this year, next year and in the years ahead. That was in the March Budget plans, even if they are not the plans that the shadow Chancellor is sticking to. If the hon. Lady is able to find a way of cutting many, many billions of pounds-£40-odd billion-from public spending without in any way affecting the local government settlement, she should please let me know.
Mr Marcus Jones (Nuneaton) (Con): I welcome my right hon. Friend's statement and his will to reform business regulation. In the course of that reform, will the onerous and costly reporting to Government culture to which businesses must adhere be fully scrutinised?
Mr Osborne: The short answer to my hon. Friend is yes. One of the specific aspects that we want to look at is how Government should be helping businesses grow, rather than standing in the way of that. That includes procurement for Government. The Government spend too much of their money on the largest companies in the country and not enough on some of the smaller companies. That is one of the things that we seek to improve.
Barbara Keeley (Worsley and Eccles South) (Lab): On public sector jobs, the Chancellor says that headcount reduction will happen over four years, but as he knows, some local authorities are facing budget reductions of 20 or 30% next year alone, due to front loading and loss of specific grant. Will he consider rephasing the cuts to local government so that we do not see 140,000 local government job losses next year?
Mr Osborne: I said at the time that it was a challenging settlement. I have removed some of the ring-fencing-indeed, almost all the ring-fencing-to allow local authorities the maximum flexibility to deal with that, but unfortunately I inherited a situation where the country was borrowing £1 in every £4 that it was spending. At a time when people are looking at European countries, we can see what happens to European countries that have high budget deficits and no credible plan to deal with them, so I have had to take those decisions. As I say, if the Labour party wants to put forward a plan to remove the structural deficit without affecting the local government settlement, let us hear it.
Dr Thérèse Coffey (Suffolk Coastal) (Con): I warmly welcome the announcement that you made of the investment by GSK into our British economy today on the back of the 10% tax rate for patents and innovation. Can you tell us more about the competitiveness measures that you are taking to help this country on its way out of the mess left behind by the Opposition?
Mr Osborne: We are looking at two specific things. One is the controlled foreign companies regime. This is what we believe will help encourage large multinationals to choose the UK as a place to put their headquarters, rather than in Holland or Belgium, for example, where some companies have chosen to go. In a world in which companies can increasingly choose where to locate and countries are being aggressive in trying to attract their location, these tax measures will make us one of the most competitive places in the world for a company to locate its headquarters. On the patent box and the lower corporation tax rate for intellectual property, of course the GSK announcement is just one of many, I hope, from companies that depend on intellectual property and patents to power their business. Again, that will make us very competitive versus other countries.
Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab): The OBR confirmed today that we will borrow £1 billion less. Last week, we decided to make a £7 billion loan to the Republic of Ireland, yet apparently we could not afford to make an £80 million loan to Sheffield Forgemasters. Is that not proof, if any were required, that the Chancellor has deliberately talked down the British economy and, more importantly, that these policies are damaging the British economy?
Mr Osborne: I think that is one that was prepared earlier. UK growth is forecast to be higher than that of Germany, France, many other European countries or the United States of America. It is also the case that the OBR is forecasting the creation of a million jobs. When it comes to the sovereign loan to Ireland, that is of a totally different nature from industrial support. It will be set out in the terms that I bring before the House of Commons. It is £3.25 billion, rather than the number that the hon. Gentleman gave.
Geoffrey Clifton-Brown (The Cotswolds) (Con): My right hon. Friend has today reinforced the need for exports to help our recovery. What can he personally do to help reverse the situation whereby we export more to southern Ireland than we do to all the BRIC countries-Brazil, Russia, India and China-put together?
Mr Osborne: Since the Government were created there has been an absolute focus in foreign policy and trade policy on trying to increase our exports to those BRIC countries. The Prime Minister led major trade missions to India and China, the Business Secretary was very recently in Russia and I think that a trip is being proposed for Brazil, so we are seeking to expand our exports to the BRIC countries and, indeed, to some other important emerging economies such as Indonesia, Turkey and so on. We do not want to export less to southern Ireland or to anyone else in the advanced world; we just want to increase our exports to emerging economies.
Geraint Davies (Swansea West) (Lab/Co-op):
We know that the deficit is the price that has been paid to avoid a depression-a price that the Chancellor would not have paid. To reduce the deficit, will he consider using three methods: first and foremost, a proper jobs and growth strategy; secondly, fair and progressive taxation; and, thirdly, savings over a greater period, instead of simply casting half a million public sector workers on to the
dole, triggering the unemployment of another 1 million private sector workers and ending up with the unfair, unnecessary and failed policies of the Conservative past?
Mr Osborne: That was a complete load of nonsense. The independent forecast shows that we are projected to create 1 million jobs, and that the economy will grow more quickly over the next couple of years than the economies of most of our European competitors. Frankly, we inherited from the previous Government an absolutely catastrophic situation in which people called into question Britain's ability to pay its way in the world. That was the situation we inherited, but I think we have done many things in the past six months to ensure that the British economy is now on the mend.
Claire Perry (Devizes) (Con): I am sure the whole House will welcome chart 1.1 on page 8, which shows that there is almost no probability of a double-dip recession. Does the Chancellor agree with that forecast?
Chris Williamson (Derby North) (Lab): What words of comfort can the Chancellor offer the construction industry and the thousands of unemployed building workers who are still reeling from his Government's decision to scrap the Building Schools for the Future programme and end housing targets? Does he not accept that a private sector-led recovery will be impossible without a vibrant construction industry? What will he do to support the industry?
Mr Osborne: We certainly want to support the construction industry. It is one of the specific sectors that we are looking at, as the growth review that we publish today sets out. If I can just correct the hon. Gentleman, however, I must say that the capital investment programmes of this Government are actually higher than the capital investment programmes set out in the March Budget. If he is not aware of what the Labour party fought the election on, so be it.
Mel Stride (Central Devon) (Con): I welcome my right hon. Friend's statement and, in particular, today's OBR forecast, which sees projected public sector job losses drop from 490,000 to 330,000. Based on the previous 490,000 figure, PricewaterhouseCoopers projected that half a million jobs would be lost in the private sector. Will my right hon. Friend comment on the likely reduced impact on private sector unemployment as a result of today's lower projected job losses in the public sector?
Mr Osborne: The OBR also makes a projection for private sector employment and takes into account all the potential impacts on that, and it finds that a net 1.1 million jobs will be created over the period: there will be 30 million people in employment at the end of this Parliament, compared with 29 million today.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC):
In bringing forward their national insurance proposals the Government accept that their fiscal consolidation
programme will have a disproportionate affect on those areas of the state that are more reliant on public expenditure. What other countervailing measures is the right hon. Gentleman considering?
Mr Osborne: We have created the regional growth fund to look specifically at areas that need support and investment. We have been able to announce some significant transport investment in other parts of our country. The national insurance tax reduction, which the hon. Gentleman mentions, refers explicitly and only to job creation outside the south-east and east, and I have deliberately taken that decision to try to create a more geographically balanced economy than the one I found when I took this job.
Mr Tobias Ellwood (Bournemouth East) (Con): It is clear from the response that we have heard today that the Labour party is still in denial about the huge deficit that it created. I congratulate my right hon. Friend on coming up with a workable, viable and transparent plan that can take us out of this mess.
I take my right hon. Friend back to the permanent fiscal stability facility, which will not come online until 2013. What will happen if another eurozone country requires a bail-out? Will Britain's involvement be kept to a minimum?
Mr Osborne: I thank my hon. Friend for his initial comments. I say this about any future action that we may or may not have to take. On the bilateral loan, I said last week that there were some very specific- I stress the words "very specific"-circumstances that would lead us to support Ireland because of the interconnectedness of our economies. I also said that the European financial stability mechanism, the EU fund, was something that the previous Government had signed up to, and that the UK could not block its use because it operated under qualified majority voting. I had to deal with that situation, but by finding now what I think is a way forward that means that the mechanism disappears in 2013, we have taken a bad situation and made it a lot better.
Mr Osborne: The point that I would make- [Interruption.] Ireland has had to take some incredibly difficult decisions to deal with its fiscal deficit. Its Government have announced, with the support of all the major parties in Ireland, with the exception of Sinn Fein, that they are going to have to take further austerity measures next year and over the next three or four years. If they did not take those measures, the country's situation would be even more difficult.
Frankly, we should have some respect for the incredibly difficult situation in which Ireland finds itself. We should take some comfort that, because of the measures that we have taken on our public finances, we in this House are able to help the country and that we are not in the firing line in the way that we would have been if the Labour party had won the election.
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