1. Mrs Siân C. James (Swansea East) (Lab): What recent discussions she has had with the Welsh Assembly Government on the implementation in Wales of the Sunbeds (Regulation) Act 2010. 
The Parliamentary Under-Secretary of State for Wales (Mr David Jones): The Secretary of State and I have a wide range of discussions with Welsh Assembly Government Ministers on a range of issues relevant to Wales. The Sunbeds (Regulation) Act 2010 will come into force in England and Wales on 8 April 2011. It will prevent people under the age of 18 from using sunbeds on commercial premises by making it an offence for sunbed operators to provide access.
Mrs James: I thank the Under-Secretary for that answer. As he is aware, my former colleague, Julie Morgan, the previous Member for Cardiff North, and I fought long and hard for the Act. It is vital that we stop under-age use of sunbeds. The Minister for Health and Social Services in Wales is determined to introduce the principle as a matter of urgency. The introduction of the Act on an England and Wales basis is vital. I urge the Under-Secretary to press UK Ministers for action and to keep the issue at the forefront of the public health debate.
Mr Jones: I commend the efforts of the hon. Lady and Ms Julie Morgan in drawing this important public health issue to our attention. As the hon. Lady is aware, the Welsh Assembly Government intend to introduce regulations in 2011 further to regulate sunbed businesses in Wales only, on which they are consulting. This significant measure is aimed at protecting young people, but it also concerns a public health issue for older people. Sunbeds pose a cancer risk and, to be frank, frequently do not produce a very good look.
2. John Howell (Henley) (Con): What recent discussions she has had with ministerial colleagues on the level of employment in Wales. 
7. Stuart Andrew (Pudsey) (Con): What recent discussions she has had with ministerial colleagues on the level of employment in Wales. 
The Secretary of State for Wales (Mrs Cheryl Gillan): I have regular discussions with ministerial colleagues on the level of employment in Wales. I am pleased that for the past three months in Wales, unemployment figures have fallen while employment has risen-positive signs that our approach is working.
John Howell: Nobody would wish to be complacent, but does my right hon. Friend agree that the good news on employment in Wales is an indication that the hard choices we have made about the economy are working for Wales?
Mrs Gillan: My hon. Friend is absolutely right that we have had to make hard choices. We are rebalancing and strengthening the economy by cutting the mountain of debt that the previous Government left us, in order that we can improve our economic prospects and ensure that more jobs can be created in Wales and across the United Kingdom.
Stuart Andrew: My birthplace of Anglesey is no stranger to the difficult economic times we have had, particularly given the loss of hundreds of jobs at Anglesey Aluminium Metals. What steps is my right hon. Friend taking to encourage employment on Anglesey and across north Wales?
Mrs Gillan: I am sure that hon. Members from all parts of the House agree that the job losses at Anglesey Aluminium Metals were a great blow to the Anglesey economy. I am delighted-and, as an Anglesey boy, my hon. Friend will know-that the life of Wylfa power station has been extended by two years. The site is one of eight across the UK that have been shortlisted for future nuclear generation. That would ensure good employment for the people of Anglesey and north Wales, and I am sure that all hon. Members hope it will come to fruition.
Mr Peter Hain (Neath) (Lab): Of course, those decisions about Anglesey were taken by the Labour Government and supported by the excellent MP, my hon. Friend the Member for Ynys Môn (Albert Owen). I wish the Secretary of State and all at the Wales Office festive greetings. The Office for Budget Responsibility estimates show that the actions of her Government will result in tens of thousands of public sector job losses in Wales. How many of those will involve women?
Mrs Gillan: I wish the shadow Secretary of State a very happy Christmas and a prosperous new year, and I thank him for his kind greetings. We are certainly not complacent and any job losses are to be regretted. We were pleased, however, that the OBR's original 490,000 forecast for the reduction in public sector staff came down to 330,000 in last week's forecast. I am sure that he will want to welcome that reduction of 160,000.
I find it astonishing that the Secretary of State has no idea of the number of women in Wales who will lose their jobs as a result of the public sector cuts implemented by her Government. Women make up fully three quarters of public sector workers in Wales, including at Newport passport office, which is being so
shamefully closed. The highly respected Fawcett Society is so incensed at the punitive impact on women of Government cuts that it even tried to challenge them in the High Court. As the first woman Secretary of State for Wales, is she proud of her Government's attitude to Welsh women?
Mrs Gillan: The Government have considered all the possible impacts on women, and many of the changes that we have made to support small companies, for example, will help women, because women are much more likely to work part time. The shadow Secretary of State has misled the House, and-
Mr Speaker: Order. The Secretary of State must not accuse any right hon. or hon. Member of misleading the House. She has a lot of experience, and I know that she will correct what she has just said.
Mrs Gillan: Of course I will correct it, Mr Speaker. The shadow Secretary of State is possibly in danger of misleading the House, because he knows quite well that Newport passport office has not yet been closed and that we have already secured the front-of-house services for it, which will save up to 45 jobs. In 2008, his Government did exactly the same thing to the passport office in Glasgow, so I will take no lessons from him.
3. Simon Hart (Carmarthen West and South Pembrokeshire) (Con): What recent discussions she has had with the Secretary of State for the Home Department on policing in Wales. 
4. Steve Baker (Wycombe) (Con): What recent discussions she has had with the Secretary of State for the Home Department on policing in Wales. 
The Parliamentary Under-Secretary of State for Wales (Mr David Jones): Effective policing in Wales is of the utmost importance to the coalition Government. Both the Secretary of State and I have had regular discussions with Cabinet and ministerial colleagues on matters affecting policing and law and order in Wales.
Simon Hart: The Minister will be aware of the crucial strategic importance of the Milford Haven waterway as an energy hub serving every constituency in the land. Will he assure the House that Dyfed-Powys police will have the long-term resources necessary to protect that vital asset?
Mr Jones: The Government recognise the strategic importance of Milford Haven and indeed of all other Welsh ports, and we will work closely with ministerial colleagues in the Home Office to ensure that appropriate support is provided in future. Future funding for counter-terrorism policing has been protected as far as possible in the spending review because of the nature of the threat.
Steve Baker: I am sure that Welsh police will welcome the Government's refreshing approach. What else will the Minister do to liberate Welsh police from bureaucracy and get them back on the beat?
Mr Jones: The Government are indeed keen to throw off the legacy of bureaucracy. As a result of the bureaucratic element of Labour policing policy, police officers were left impotent behind desks. Last year under Labour, just 14% of all police officers' time was spent on patrol, compared with 22% on paperwork.
Mr David Hanson (Delyn) (Lab): Does the Minister recall the Prime Minister saying during the election campaign that he thought PCSOs did a good job and that we should have more of them? Does he agree, and if so, what representations is he making to ensure that Wales does not lose out on PCSOs?
Mr Jones: The Government do indeed recognise the importance of PCSOs, but the employment of them must be a matter for individual police forces. The right hon. Gentleman will be aware that the policing settlement is due shortly.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC): The chief constable of Dyfed-Powys police recently wrote to me outlining the fact that the consequence of the comprehensive spending review for the force would be at least a 20% cut in real terms-a £10 million loss to the budget. With 83% of costs relating to staffing, will that inevitably lead to cuts in front-line policing and a reduction in the quality of service provided in the communities I represent?
Mr Jones: Again, I have to say that the issue of staffing must be one for individual police forces. The Government are trying to be sensitive about the cuts that are necessary as a consequence of the appalling economic legacy that has been left the country by the Labour party.
Mr Mark Williams (Ceredigion) (LD): Further to the previous question, what representations has the Minister made on the future of the rural policing grant as it affects Dyfed-Powys? The grant is currently £2.64 million and there are real concerns about the implications of any change for the delivery of front-line protection.
Mr Jones: I am sure that that will be a matter of particular concern to my hon. Friend. The Home Office is considering the matter, which will be the subject of an announcement shortly.
Owen Smith (Pontypridd) (Lab): The Minister and the Secretary of State say that individual police forces will be responsible for the cuts that they have to make. However, they will know that North Wales police-overall crime in the area reduced by 40% under the Labour Government-now faces cuts of perhaps 230 officers from 1,600, and 160 police community support officers. If crime increases from the current record lows in north Wales, will the Minister and Secretary of State blame the chief constable?
Mr Jones: Before I answer that question, may I congratulate the hon. Gentleman on being awarded the accolade of "one to watch" in the ITV Wales political awards? I can assure him that I am indeed watching him.
The hon. Gentleman's point has been well rehearsed, but I would rather rely on the chief constable of North Wales, who has given an assurance that the force will continue to protect the public and provide a service in which the public can be confident.
5. Andrew Rosindell (Romford) (Con): What discussions she has had with the Secretary of State for Culture, Olympics, Media and Sport on arrangements in Wales to mark the diamond jubilee of HM the Queen. 
The Secretary of State for Wales (Mrs Cheryl Gillan): The Government are closely involved in the plans to celebrate Her Majesty's diamond jubilee in 2012. A special four-day jubilee weekend will be held over the first week of June 2012, and other events will be announced in due course.
Andrew Rosindell: Does the Secretary of State agree that all parts of the UK should play their part in ensuring that the celebration of the Queen's 60th anniversary as head of state is a momentous occasion? Will she outline what her Department is doing to work with the Welsh authorities and others to ensure that the jubilee is truly a momentous occasion?
Mrs Gillan: The jubilee will be a truly historic occasion, and certainly a great testament to the hard work and dedication of Her Majesty the Queen to this country and her people. The people of Wales will be able to play their full part in it. My hon. Friend will be pleased to know that we are working closely with Buckingham palace and the Welsh Assembly Government to ensure that the Welsh public are given every opportunity to celebrate the jubilee.
Chris Bryant (Rhondda) (Lab): I am absolutely certain that large numbers of people in my constituency will want to celebrate the 60th anniversary, just as they did the 50th anniversary. However, I urge the Secretary of State to speak to the police and health service in Wales, because on the last long weekend when we had two bank holidays together several young people in the Rhondda died from drug overdoses, many of them because they were given their methadone for the Monday and Tuesday on the Friday beforehand. Will she ensure that we do not repeat those problems?
Mrs Gillan: I am grateful to the hon. Gentleman for raising that problem, because I was not aware of it. Certainly, that would be sad at a time of celebration. He will be aware that the Government are publishing our new drug strategy, and I will ensure that that problem is brought to the attention of my right hon. Friend the Home Secretary, who is responsible for the strategy. We will take action on that front, but perhaps he could help me by writing to me so that I can take the matter up properly.
6. Mr Andrew Turner (Isle of Wight) (Con): What recent discussions she has had with the Secretary of State for Work and Pensions on welfare reform in Wales. 
The Parliamentary Under-Secretary of State for Wales (Mr David Jones):
My right hon. Friend the Secretary of State for Wales and I have regular discussions with ministerial colleagues about a range of issues relevant to Wales. The Government have set out our plans to introduce legislation radically to reform the welfare
system by creating a new universal credit, which will simplify the system, make work pay and combat worklessness and poverty in Wales and throughout Britain.
Mr Turner: Does my hon. Friend accept that it would be far better to have a small number of benefits that make sense rather than a huge number of benefits that are complex and confusing, and that no one could possibly understand?
Mr Jones: Yes-that is why my right hon. Friend the Secretary of State for Work and Pensions proposes to replace six benefits with one universal credit. That will not only simplify the procedure, but encourage people to get back into work.
Hywel Williams (Arfon) (PC): With simplification, there is always the danger of people falling outside categories, and therefore of gross injustices. Will the Minister have a word with the Work and Pensions Secretary about boosting the face-to-face advice that is available from the Department for Work and Pensions, especially in rural areas. That would be a great step forward.
Mr Jones: The hon. Gentleman makes a fair point. As he knows, the matter is the subject of a White Paper and no doubt he will feed into the process. Overall, it is considered that the new benefit will be simpler and easier for people to understand.
Roger Williams (Brecon and Radnorshire) (LD): I am sure that the Minister will be pleased to know that the number of claimants for jobseeker's allowance in Brecon and Radnorshire has dropped by 25%. Does he agree that that is to do with the resilience of small manufacturing companies such as Beacon Foods-which I visited on Monday-coming through the recession in the way they have?
Mr Jones: Indeed, and one must never forget that small and medium enterprises are the backbone of the Welsh economy. The measures that my right hon. Friend the Chancellor has put in place should do much to ensure that they have a successful future.
Mrs Madeleine Moon (Bridgend) (Lab): Is the Minister aware of the impact on constituents of mine in Bridgend of the lowering of mortgage interest relief for those on benefits from the previous rate of 6.8% to 3.67%? A constituent of mine who has a mortgage at a rate of 5.85% has a shortfall of £236 a month, which is getting him increasingly into debt and he faces losing his property. What help can be offered to people such as my constituent?
Mr Jones: I am sorry to hear of the predicament of the hon. Lady's constituent. If she writes to me, I will pursue the matter further.
8. Mr David Amess (Southend West) (Con): What recent discussions she has had with the First Minister on the proposed referendum on law-making powers for the National Assembly for Wales. 
The Secretary of State for Wales (Mrs Cheryl Gillan): I have had regular discussions with the First Minister on the proposed referendum. I can confirm that this Government have delivered on their commitment to hold a referendum on further powers for the National Assembly for Wales in the first quarter of next year. The legal instruments setting out the arrangements for the referendum to take place on 3 March 2011 were approved by Parliament and will be considered at the Privy Council meeting later this month.
Mr Amess: In the light of that answer, what consideration has my right hon. Friend given to the outcome of the referendum?
Mrs Gillan: The Wales Office will remain strictly neutral throughout the referendum process, but it is right to consider and prepare now for the outcome, whether it be a yes vote or a no vote. Clearly, a yes vote will transfer primary powers to the Assembly over those areas already devolved, and that will mean a changed relationship with Westminster, including the impact of legislation made in Cardiff on this House and this legislature. If there is a no vote, we will retain the existing legislative process. In that eventuality, I will examine how we can make the system more effective and more efficient, because it is broadly agreed that the legislative competence order process, as it currently operates, is cumbersome and time consuming.
Albert Owen (Ynys Môn) (Lab): I welcome the referendum on greater law-making powers for the Assembly, and I will campaign and vote for a yes. While the Secretary of State does not have a vote and wishes the Wales Office to be neutral, can she indicate what the Under-Secretary, who is a Welsh MP, will do? Will he vote yes or no, or will he sit on the fence?
Mrs Gillan: Ministers in the Wales Office will remain neutral. Unlike the hon. Gentleman's party, the Conservative party in Wales will allow members a free vote. That is the sensible way to proceed.
9. Mr Adam Holloway (Gravesham) (Con): What recent discussions she has had with ministerial colleagues on support for the aerospace industry in Wales. 
The Parliamentary Under-Secretary of State for Wales (Mr David Jones): My right hon. Friend and I have had regular discussions with ministerial colleagues on support for the aerospace industry in Wales. I am pleased that we will take forward our order for A400M transport aircraft and the future strategic tanker programme, safeguarding hundreds of highly skilled jobs in north Wales.
Mr Adam Holloway (Gravesham) (Con): Does my hon. Friend regret the pre-election scaremongering, especially in Wales, that we would scrap the A400M, project?
Mr Jones: I do. The A400M is of crucial importance to the aircraft industry in north Wales. Although the wings are not made there, the technology that produces the wings is based there, and it is of extreme importance to the aerospace industry in Broughton.
Geraint Davies (Swansea West) (Lab/Co-op): I was talking to the managing director of GE Aviation in Nantgarw on Monday and he said that he was willing to work with the Government to encourage other inward investors-for example, Boeing-to add to the aerospace cluster in Wales. Will the Minister take up that offer and work with stakeholders in Wales to increase inward investment and the number of jobs?
Mr Jones: I am very pleased to hear what the hon. Gentleman has to say.
10. Chris Ruane (Vale of Clwyd) (Lab): What recent discussions she has had with the Secretary of State for the Home Department on the likely effects on Wales of spending reductions in respect of police forces. 
The Parliamentary Under-Secretary of State for Wales (Mr David Jones): Effective policing in Wales is of the utmost importance to the coalition Government. Both the Secretary of State and I have had regular discussions with Cabinet and ministerial colleagues on matters affecting policing and law and order in Wales.
Chris Ruane: North Wales police force is one of the best in the country. Under Labour, it had record investment, a record number of police officers and a record drop in crime. Under the Con-Dem Government, all that will be reversed when North Wales police will be forced to sack 250 officers and 484 civilian staff. Will the Minister and his team do what they should be doing, stick up for Wales and stop these dastardly cuts?
Mr Jones: I remind the hon. Gentleman that the cuts are necessary entirely as a result of the Labour party's incompetent management of the economy. I reiterate that the chief constable of North Wales has sufficient confidence in his force to say that it will continue to protect the public and provide a service in which the public can be confident.
11. Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC): Whether she has discussed with the Secretary of State for Transport the electrification of the London to south Wales railway line; and if she will make a statement. 
The Secretary of State for Wales (Mrs Cheryl Gillan): I have had, and continue to have, discussions with my right hon. Friend the Secretary of State for Transport about that matter. We have already announced £7 billion of rail infrastructure improvements that will reduce journey times to Cardiff by 15 minutes. The next step is to work with the Welsh Assembly Government on the business case for further electrification. I have recently spoken to both the First Minister and the Deputy First Minister to agree how best to take that forward.
Mr Llwyd: People in Wales will be very disappointed by such a response. Network Rail has allocated no expenditure whatsoever to Wales for the next 12 months. Does the right hon. Lady realise how vital that is to the Welsh economy?
Mrs Gillan: I think I heard that question. I congratulate the hon. Gentleman on receiving at the ITV Wales Welsh politician of the year awards the "campaigner of the year" award for his work on aftercare for military veterans. We all congratulate him heartily.
I assure him that I fully support electrifying the great western main line, but the process is not simple and a range of factors must be considered. If he thinks it is such an easy matter, he should ask the people he sits on the same side of the House with why not a single centimetre of line was electrified in Wales under the previous Labour Government. [ Interruption. ]
Mr Speaker: Order. There is far too much noise in the Chamber. It is very discourteous to Members and, indeed, to Ministers.
Mr Llwyd: The assurances that the right hon. Lady gives that she will fight her corner for Wales are becoming rather empty-a bit like the situation with tuition fees and the Lib Dems.
Mrs Gillan: It is unusual for the hon. Gentleman to be quite so sour. As he knows, the Department for Transport is considering new inter-city rolling stock to replace the existing InterCity 125s. The two options that remain under consideration are the revised bid from Agility Trains for a mixed fleet of some all-electric trains, and a proposal for a fleet of new all-electric trains that could be coupled to new diesel locomotives. He knows the decision is complex and I reassure him that I am working with the First Minister and the Deputy First Minister on the business case. My officials are constantly in touch with the Department for Transport. We need to take our time and get this decision right for Wales.
Kevin Brennan (Cardiff West) (Lab): The Secretary of State has said that she will resign if the high-speed main line goes through her constituency. Will she resign if she fails to secure the electrification of the line to south Wales?
Mrs Gillan: The hon. Gentleman knows that the Prime Minister is well aware of my constituents' objections to route 3. If the preferred route on the high-speed rail is route 3, he will expect me to argue against it, not least because we will be holding a proper consultation. He also knows that, when he was in Government, many Cabinet Ministers made representations on post offices in their constituencies after they had supported-
Mr Speaker: Order. I want to hear Karen Lumley.
12. Karen Lumley (Redditch) (Con): What recent discussions she has had with the Secretary of State for the Home Department on policing in Wales. 
The Parliamentary Under-Secretary of State for Wales (Mr David Jones): I refer my hon. Friend to my earlier response to my hon. Friends the Members for Carmarthen West and South Pembrokeshire (Simon Hart) and for Wycombe (Steve Baker).
Karen Lumley: Having lived in Wrexham for most of my adult life, I notice that North Wales police force has one of the lowest crime rates and the highest percentage of uniformed officers on the streets compared with other forces in England and Wales. Does my hon. Friend think, as I do, that we could learn something from the North Wales police force?
Mr Jones: Yes, indeed, we can. Principally, what we have in north Wales is a chief constable who has displayed a tremendous can-do attitude and is prepared to live within his financial means.
Q1.  Mark Menzies (Fylde) (Con): If he will list his official engagements for Wednesday 8 December.
The Prime Minister (Mr David Cameron): I am sure that the whole House will wish to join me in paying tribute to Private John Howard from 3rd Battalion, the Parachute Regiment, who died on Sunday 5 December. He was an incredibly gifted and popular Paratrooper. We should send our condolences to his family, his friends and his loved ones at this very sad time. While I was in Afghanistan, I also met the two brave Paratroopers who were wounded at the same time that he was tragically killed. They were in the excellent Camp Bastion hospital, and I know that their families will be relieved to know that they are doing well and are in extremely good spirits.
This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today.
Mark Menzies: I would like to associate myself with the condolences expressed by the Prime Minister. Does my right hon. Friend agree that it is vital that we invest in the future of the unmanned aerial vehicle programme that has been developed at Warton in my constituency, and will he accept my invitation to come and see first hand the outstanding work force who are driving innovation and skills at that plant?
The Prime Minister: I would be delighted if I could take up the opportunity of seeing my hon. Friend's constituency and that facility. The truth is that the UAV programme is exactly the sort of defence asset that we should be investing in. It plays an absolutely vital role in Afghanistan-we are increasing our spending on that project-and it shows the point of having a defence review, as it is vital to start spending money on the weapons of the future, rather than on legacies of the past.
Edward Miliband (Doncaster North) (Lab): May I join the Prime Minister in paying tribute to Private John Howard, from 3rd Battalion, the Parachute Regiment? He showed enormous courage. We pay tribute to his sacrifice, and our thoughts and deepest condolences are with his family. I join the Prime Minister also, as he recently came back from Afghanistan, in paying tribute to all our troops serving in Afghanistan and their families.
Can the Prime Minister confirm that after his changes are introduced, English students will pay the highest fees of any public university system in the industrialised world?
The Prime Minister: The figures are well known for what students will pay. They are much lower than what students pay in the United States, for instance, but I have to say to the right hon. Gentleman that in the end, we have to make a choice. If we want to see university education expand and universities well funded, we have to work out where that money is going to come from. Our proposal is that graduates should make a greater contribution, but only if they are successful. They will start paying back only when they are earning £21,000. That is better than the system that we inherited.
Edward Miliband: The Prime Minister did not answer the question. This country will have the highest fees for going to a public university in the whole industrialised world. He says that his plans are about properly funding universities. They are not: he is cutting public investment in universities and loading costs on to students and their parents. Will he admit that the reason fees are being trebled is to make up for an 80% cut in the university teaching budget?
The Prime Minister: The reason these contributions are going up is because we were left a completely unsustainable situation. That is why, before the last election, the Labour Government put in place the Browne commission, and why the Conservative party backed it. One party has had the courage of its convictions to see this through. [ Interruption. ] To be fair to the Liberal Democrats, they never signed up to the Browne review. The right hon. Gentleman did, and he is the one guilty of rank hypocrisy.
Edward Miliband: The right hon. Gentleman has given it away: one party. There are 57 Liberal Democrats, and they are split four ways. That is something, even for the Liberal Democrats. Things are so bad that the hon. Member for Birmingham, Yardley (John Hemming) is offering his own unique solution to the votes tomorrow. He says that if you run quickly, you can vote both ways. I have to say that if the Kremlin were spying on the Liberal Democrats, we would know why: they want a bit of light relief.
Let us have the Prime Minister answer another question, because he did not answer the first two. He says that he does not want the next generation to be in debt, so does he not understand the anxiety that students and parents have about starting their adult lives with a debt of £40,000?
The Prime Minister: You cannot attack a plan if you do not have a plan. The fact is that Labour went into the last election with a 25% cut planned for the Business Department. The right hon. Gentleman has absolutely no way of making the numbers add up. Everybody knows that they said that they would not introduce tuition fees; they introduced them. They said that they would not introduce top-up fees; they introduced them. They said that they supported the Browne review; he wrote it into their manifesto. Why are they breaking their pledge about the Browne review? Why? The fact is- [ Interruption. ]
Mr Speaker: Order. All this finger-pointing is very unseemly. I want to hear the response of the Prime Minister.
The Prime Minister: The leader of the Labour party saw a big crowd assembling in the Mall, and he just decided, "I am their leader, I must follow them." That is his idea of leadership.
Edward Miliband: A week really is a long time in politics-not so much waving but drowning. Let us talk about social mobility, because that is at the heart of these proposals. Let me quote someone whom the Prime Minister used to trust on social mobility-the person he appointed to head his social mobility taskforce: the right hon. Member for Haltemprice and Howden (Mr Davis). He said:
"I'm concerned about the effect this would have on social mobility and the huge level of debt we are encouraging young people to take on."
I know that the Prime Minister does not have much time for the right hon. Gentleman these days, but why does he not listen to him on this issue?
The Prime Minister: Let me tell the right hon. Gentleman what has happened in terms of social mobility. Last year, there were 80,000 students on free school meals; only 40 of them went to Oxford and Cambridge. That is the situation with social mobility. What we are introducing- [ Interruption. ] I know that the Opposition do not want to hear the details. We are introducing a situation where nobody pays fees up front, including part-time students-which is 40% of students-and nobody pays anything back until they are earning £21,000. Under the new system, everyone will pay back less than they pay under the current system- [ Interruption. ] They will pay back less every month; that is the case. The poorest will pay less, the richest will pay more. It is a progressive system, but the right hon. Gentleman has not got the courage of his convictions to back it.
Edward Miliband: Only the Prime Minister could treble tuition fees and then claim that it is a better deal for students. No one is convinced, frankly. Is it not absolutely clear that this policy is in chaos? The Education Minister refuses to answer questions on it, and the Government rush out proposals on it daily. Is it not the most sensible thing for the Prime Minister to go away, think again and come up with a better proposal?
The Prime Minister: The right hon. Gentleman has absolutely no idea what he would put in its place. He supported a graduate tax, which his shadow Chancellor does not back. He was the person who wrote the manifesto suggesting the Browne review. He is just demonstrating complete political opportunism- [ Interruption. ] Yes, total opportunism. He is behaving like a student politician and, frankly, that is all he will ever be.
Mr Speaker, I was a student politician, but I was not hanging around with people who were throwing bread rolls and wrecking restaurants. Is it not the truth that all the Prime Minister can offer us is "you've never had it so good" on planet Cameron? What does he have against young people? He has taken away the child trust fund; he is abolishing the education maintenance allowance; he is scrapping the future jobs
fund; and now he is trebling tuition fees. Is not the truth that he is pulling away the ladder because he does not understand the lives of ordinary people up and down this country?
The Prime Minister: The fact is that if you introduce a graduate tax, you are going to be taxing people on £6,000, £7,000 and £9,000. Where is the fairness in that? The truth of the matter is that we examined a graduate tax and we know it does not work; the right hon. Gentleman's party examined a graduate tax and knows it does not work; the Liberal Democrats had a look at a graduate tax and they know it does not work. The only reason he is backing it is because it gives him a political opportunity. I know what it is like: you can sit there for year after year; you see a political opportunity, but you will never be a party of Government. [Interruption.]
Mr Speaker: Order. There is far too much noise in this Chamber; the public absolutely detest and despise it. The House must come to order.
Chris Kelly (Dudley South) (Con): The Prime Minister may be aware that a young constituent of mine, Connor Rankine-Christ, was stabbed in an unprovoked attack at the weekend and has been battling to overcome life-threatening injuries this week. The suspect was released on bail just 24 hours after the attack, which has understandably upset and worried the victim's family. Does my right hon. Friend agree that the courts should still be able to remand individuals in custody in the most serious cases where there is a risk that the defendant will cause injury by reoffending?
The Prime Minister: I completely agree with my hon. Friend. He is absolutely right: the courts must have this power. If they believe that someone is dangerous and could offend again, it is absolutely right that that person is not given bail. That happens under our system and it should go on happening under our system.
Q2.  Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP): What assessment he has made of the likely effects of proposed reductions in expenditure on the programme partnership agreement on the effectiveness of organisations assisted by the Government in the overseas voluntary sector.
The Prime Minister: Expenditure through the programme partnership agreement is not being reduced. We expect to allocate £120 million every year to this programme from 2011 to 2014. At the same time, we are increasing overall levels of support for the most effective organisations working overseas, and we are keeping the promise to reach 0.7% of gross national income for aid by 2013.
Mr MacNeil: Many colleagues on both sides of the House, including myself, have seen at first hand the great work that Voluntary Service Overseas volunteers do worldwide. Can the Prime Minister assure the House that he will continue to provide the necessary and expected support for VSO to continue to improve the lives of 26 million people around the world?
The Prime Minister: I can do that. Voluntary Service Overseas is an excellent organisation and I know it has widespread support across the House. My right hon. Friend the Secretary of State for International Development is in discussions about how to ensure that its programme goes on succeeding and expanding. Fundamentally, with a growth in the Department for International Development's budget, there is every chance that that could happen; that is what I expect to see.
Mr Speaker: Would a Government Back-Bench Member like to contribute on this closed question?
Malcolm Bruce (Gordon) (LD): Voluntary Service Overseas provides valuable experience opportunities as well as giving people a connection with development. I welcome what the Prime Minister has said, but can he give an assurance that VSO's current concern that its budget might be cut will be overcome by giving it access to other budgets within the Department for International Development?
The Prime Minister: I believe that the discussions are going extremely well and that it will be possible to guarantee that. One reason why people are asking this question about programme partnership arrangements is because the Government want to ensure that organisations are not wholly dependent on Government money, but seek sources of funding elsewhere. As my right hon. Friend says, there are opportunities through other budgets within DFID, and VSO could also make applications to the global fund to combat poverty.
Q3.  Mr David Crausby (Bolton North East) (Lab): While temperatures drop across the UK, profit margins for the energy companies have risen by an unacceptable 38%, compelling people on limited incomes to turn their heating down. What will the Prime Minister do to force these privatised companies to pay back some of their excessive profits to customers before more pensioners freeze to death?
The Prime Minister: The hon. Gentleman is right to ask this question. Two things need to be done. The first is that the regulatory authorities need to be tough with the energy companies-and that is exactly what I expect Ofgem to do. The second thing that needs to happen is that the cold weather payments need to kick in. We have already spent £173 million since the start of the particularly cold weather. One reason why this is working so well is that we have made permanent what was only a temporary increase from Labour before the last election.
Anna Soubry (Broxtowe) (Con): This morning, I spoke to one of my constituents-[Hon. Members: "Hooray!"] It might come as news to Labour Members, if they were quiet, and they should try it. Mrs Lowther, who is 76 years of age, is disabled and has been housebound for 11 days now, because of the snow and ice in Stapleford. Does the Prime Minister agree that in such inclement weather it is imperative that we are good neighbours, especially to the elderly and the frail?
The Prime Minister:
My hon. Friend makes an extremely good point. Of course the Government should be there with cold weather payments, and we are. We should be there with winter fuel payments, and we are. It is also
important that local government plays its role, ensuring that grit supplies are there. By being good neighbours, we can all help those who could suffer in the cold weather, and she is quite right to raise the point.
Q4.  Kerry McCarthy (Bristol East) (Lab): As someone who claims to be an avid fan of The Smiths, the Prime Minister will no doubt be rather upset this week to hear that both Morrissey and Johnny Marr have banned him from liking them. The Smiths, of course, are the archetypal student band. If he wins tomorrow night's vote, what songs does he think students will be listening to: "Miserable Lie", "I Don't Owe You Anything" or "Heaven Knows I'm Miserable Now"?
The Prime Minister: If I turned up, I probably would not get "This Charming Man". If I went with the Foreign Secretary, it would probably be, "William, It Was Really Nothing".
Mr Stewart Jackson (Peterborough) (Con): Does my right hon. Friend agree- [Interruption.]
Mr Speaker: Order. There is simply too much noise. It is very unfair. I want to hear Mr Stewart Jackson.
Mr Jackson: Does my right hon. Friend agree that it is a badge of shame, for which the Labour party should apologise to taxpayers, parents and pupils, that having doubled education spending during their term in office, they managed to drive down educational attainment standards to the bottom of the international league, according to the OECD?
The Prime Minister: My hon. Friend makes a good point. The tables published today make depressing reading. We are falling behind countries such as Poland and Estonia, which we should be well ahead of. Frankly, this comes down to the choice we have to make. We made the choice of putting an extra £3 billion into the schools budget during this Parliament, because we want more done in early years and primary education so that we get the social mobility about which the Leader of the Opposition was posing earlier.
Q5.  Emma Reynolds (Wolverhampton North East) (Lab): Over half the students at the university of Wolverhampton come from disadvantaged backgrounds. This morning, the University and College Union said that Wolverhampton was one of the universities at high risk, owing to the Government's massive 85% cuts to its teaching grant. Will the Prime Minister explain to students and local businesses exactly why he is putting Wolverhampton university at risk in that way?
The Prime Minister:
The hon. Lady stood for election on a manifesto that supported the Browne commission- [Interruption.] She did; she can deny it now, but that is what the manifesto written by the Leader of the Opposition said. The fact is that we have to make a decision. Is it right for taxpayers to continue providing the predominant support for university education? [Hon. Members: "Yes."] They say yes now, but that is not what they stood on at the last election. Many taxpayers do not go to university or benefit from a university education, so it is fairer and
better to ask students to contribute, but only when they are successful. No one will contribute until they earn £21,000, which is £6,000 more than under the system that the hon. Lady's party introduced.
Michael Ellis (Northampton North) (Con): Is my right hon. Friend the Prime Minister as concerned as I am about absurd health and safety legislation, which has reached such dizzy heights in this country that the chief executive of Sainsbury's told me last week that Christmas crackers are now category 1 fireworks, and cannot be sold to anyone under the age of 16 without the risk of a six-month sentence of imprisonment? Will he put a firework up the health and safety legislation?
The Prime Minister: That would give me enormous pleasure, and I look forward to doing so.
Q6.  Ian Mearns (Gateshead) (Lab): The Prime Minister told the House in June that he had been treated not too badly on his last visit to Gateshead-we are, by nature, a very friendly bunch. Will he return to discuss with regional political leaders of all parties their real concerns and fears that the Government's current strategy is undermining the potential for economic recovery in our region, particularly through the slashing of support for the tourism industry? Before he mentions it, we are already trying to squeeze a few gallons out of a pint-sized regional growth fund pot.
The Prime Minister: There is big Government support for the north-east. There is big support for Nissan and its electric car, and we are supporting the National Renewable Energy Centre, which is building the world's biggest testing facility for wave and tidal technology. We have also awarded a £7 million contract for the construction of the first advanced bioethanol plant in the Tees valley. So we are investing in the north-east.
The hon. Gentleman talks about a fragile economic recovery. If we had listened to his party, there would not be a recovery; we would be queuing up with Ireland to go to the International Monetary Fund.
Mrs Anne Main (St Albans) (Con): Drunks and binge drinking have fuelled an economy that has sadly seen people the victims of knife crime. May I ask my right hon. Friend to stiffen the Justice Secretary's resolve in dealing with those who carry knives and those who commit knife crimes?
The Prime Minister: My hon. Friend has made an important point. If she reads the Green Paper, she will see that adults committing a crime with a knife should expect to go to prison. That is absolutely right, because there are far too many people committing knife crimes today who do not go to prison, and they should.
Q7.  Mr Gregory Campbell (East Londonderry) (DUP): The dissident terrorist threat is a continuing problem in Northern Ireland, and we have seen some evidence of the terrorists' capabilities in recent months. Will the Prime Minister ensure that if additional resources that were not previously envisaged are deemed necessary by the Chief Constable to deal with such a threat, he will ensure that they are provided without delay?
The Prime Minister: Of course we keep a very careful eye on the situation in Northern Ireland, and on whether additional resources are required. We stuck to the pledges made by the previous Government about properly funding the devolution of policing and justice. I think that decisions are better made locally, which is why that was the right step to take. I know how difficult the security situation is in Northern Ireland, and I pay tribute to police on both sides of the border for the brilliant work that they do. Of course we always stand ready to help, but we did make quite a generous settlement in terms of devolving law and justice, and that should be the first call for resources.
Richard Ottaway (Croydon South) (Con): In Afghanistan on Monday, the Prime Minister said that British troops could start coming home from Afghanistan as early as next year, which is a major policy shift. With which of our allies did he discuss that decision, and does he envisage the gap being filled by the Afghan army or the US army?
The Prime Minister: What I said in Afghanistan was what I said before I went to Afghanistan and what I will happily say again today, which is that the whole of NATO and all the nations of the international security assistance force that are involved in Afghanistan are committed to transition to Afghan control between the start of 2011 and the end of 2014. As that happens, there will clearly be opportunities either to reinvest troops in training missions or, indeed, to bring them home. What the Chief of the Defence Staff and I both said at a press conference in Afghanistan was that it might be possible to bring some of our troops home next year.
Q10.  Mr David Hanson (Delyn) (Lab): Tomorrow the Deputy Prime Minister will vote to break his election promise on tuition fees. This Prime Minister has also broken his election promise to maintain the child trust fund for the poorest in our society. What message does that send to young people about trusting Government?
The Prime Minister: I seem to remember that the right hon. Gentleman was a Minister in the last Government, who commissioned the Browne review. [Interruption.] Yes: the Government who went into the election committed to cuts of 25% in the budget of the Department for Business, Innovation and Skills. If they were committed to that, what were Opposition Members going to do? Were they going to cut the number of people in universities, or were they going to cut the money going to universities? We have had absolutely no answer. The people who are actually behaving in a way that I think drags politics through the mud are people who introduced tuition fees, introduced top-up fees and commissioned the Browne review, and who then, as soon as they are in opposition, behave irresponsibly and run away from it.
Q11.  George Eustice (Camborne and Redruth) (Con):
There are currently plans to regenerate Camborne and Redruth, which would create 6,000 new jobs and allow the building of a modern, state-of-the art mine in Redruth. However, the work depends on transport infrastructure improvements which are currently being reviewed by the Department for
Transport. Does my right hon. Friend agree that in difficult times when capital is scarce we should prioritise projects that create jobs and deliver growth, and that the Department for Transport should review its assessment criteria?
The Prime Minister: My hon. Friend speaks very well for his constituency and fights very hard for the economy in Redruth and Camborne, and he is absolutely right that of course we should give priority to transport projects that have the greatest economic return. That is what the Department for Transport does; it also has to look at environmental and other factors, but decisions should be based on where we can show economic benefits from transport-and remember that we are putting more money into transport capital infrastructure than the previous Government planned to do.
Mr Nigel Dodds (Belfast North) (DUP): In light of his experience of the World cup bid in Zurich last week, can the Prime Minister tell us what his view now is of an organisation that engages in the most convoluted and bizarre voting arrangements, that says one thing and then votes exactly the opposite way, and that has a leader who seems more interested in power and prestige than accountability-and after he has finished with the Lib Dems, can he tell us what he thinks of FIFA?
The Prime Minister: I certainly learned one thing: when it comes to breaking promises, politicians have got nothing on football management-there is no doubt about that. [Interruption.] Before Labour Members all start pointing, we should just remember who it was who said, "We will never introduce tuition fees." Who said, "We will never introduce top-up fees?" Who said "We will back the Browne review"? Who is now an organised hypocrisy?
Q12.  Karen Lumley (Redditch) (Con): Following the Prime Minister's visit to Afghanistan and the review of the military covenant published today, will he reassure me that his Government will go that extra mile to support our troops, who have given so much to our country?
The Prime Minister: I am sure the whole House is grateful for what my hon. Friend said about our troops. On my visit to Afghanistan, I was again struck by just how hard these people are working, and how courageous, professional and brave they are. They are genuinely the best of British, and we owe it to them that we support not just them, but also their families. One thing I am pleased we have been able to do is introduce a pupil premium for the children of forces families. I know from my own constituency that many children at schools dominated by forces families leave and go to a different school within each year. I think giving extra support to forces families in this way is absolutely right, and I am sure it will be supported by all.
Mr George Howarth (Knowsley) (Lab): In a tragic incident yesterday at the Sonae factory in my constituency, two people working at the plant were killed. I am sure the Prime Minister will join me in expressing deepest condolences to the families of those who were killed, and does he agree that when the Health and Safety Executive and police investigations into what happened have been completed, whatever action that is necessary will be taken?
The Prime Minister: I certainly join the right hon. Gentleman in what he says about his constituents and the dreadful accident that took place. It is important that we have procedures in place for the HSE and others to investigate these issues and, as he says, they should follow the evidence wherever it leads.
Q13.  Ian Swales (Redcar) (LD): Does the Prime Minister agree that foundation schools are already free from local authority control, and will he meet me to discuss the cancelled innovative project to join foundation school Redcar community college with Kirkleatham Hall special school, to replace their dilapidated classrooms and provide facilities for the community?
The Prime Minister: I know that my right hon. Friend the Education Secretary will be delighted to meet the hon. Gentleman to discuss that. The point is that all schools now being given this greater level of independence-whether as foundation schools or the new academy schools-should have greater ability to get together and collaborate to invest in their future, rather than always having to rely on a drip-feed from Government Ministers.
Jack Dromey (Birmingham, Erdington) (Lab): Is the Prime Minister aware that Parliament may have been infiltrated by an imposter? The Deputy Prime Minister- [Interruption.] The Deputy Prime Minister has said he will vote to treble tuition fees and abolish the education maintenance allowance. Before the general election the leader of the Liberal Democrats said he would vote to abolish tuition fees and keep the EMA. [Interruption.] Can the Prime Minister- [Interruption.]
Mr Speaker: Order. The hon. Gentleman will have a chance to finish his question without chuntering and shouting from a sedentary position. The last sentence please.
Jack Dromey: Can the Prime Minister tell the House this: are there two Nick Cleggs?
The Prime Minister: I have to say that the hon. Gentleman has the unique qualification of being one of the brothers who was selected on an all-women shortlist-next time he comes in he should dress properly.
Q14.  Mr Don Foster (Bath) (LD): Within the next couple of years the Ministry of Defence will relocate a further 1,300 jobs away from Bath, allowing two major sites in the city to be redeveloped. Given the urgent need for 3,000 additional affordable homes within the city, will the Prime Minister give me the assurance that the MOD will work with the Homes and Communities Agency and the local council to ensure that the sites can be used for those houses, rather than merely to get the best price in the sale?
The Prime Minister: I discussed this with my hon. Friend this morning, and I certainly agree that the Ministry of Defence should work with the HCA to try to bring this about. Sometimes the wheels can turn quite slowly when it comes to Defence Estates. I know that he will work hard, and I will ask the MOD to work hard, to get this fixed.
Stella Creasy (Walthamstow) (Lab/Co-op): The Prime Minister will be aware that a week is a long time in politics. Having had all that time, could he now update the House on his rethink on the future of school sport partnerships?
The Prime Minister: I think that there is quite a common position between both sides; I read the debate where the shadow sports Minister said that clearly we could not afford the current level of commitment. He also said that the current way of doing things was not particularly efficient. So we are reviewing it and making sure that we do provide money for school sport from the centre, but that we do so in a better way because, frankly, too many children in too many schools do not have access to sport after 13 years of a Government who talked an awful lot about it.
Q15.  Jeremy Lefroy (Stafford) (Con): The Browne report states that only just over 1% of UK graduates gave gifts to their former universities, compared with at least 10% in the United States. Does the Prime Minister agree that those of us who received free university education and are in a position to do this should be encouraged to do some serious giving to universities to support current students?
The Prime Minister: My hon. Friend makes an important point, which is that other countries do better at endowing their universities and making sure that they have a wider source of income. But the fundamental issue is this: if we are going to look at how we are going to fund universities in the future, it cannot be right, and we will not get a proper expansion of higher education, if we just ask taxpayers, many of whom do not go to university, to fund that expansion. It is right that students-only when they are successful, only when they have left university and only when they are earning £21,000-should make a contribution. They should do so in the progressive and fair way that Browne and we have set out.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab): The Prime Minister will be aware of the Arctic conditions sweeping across central Scotland. Constituents of mine have been trapped in cars and buses overnight, they have been trapped in their own homes, and schoolchildren have been forced to spend the night in temporary accommodation. Can he assure me that the UK Government are offering all possible assistance to the Scottish authorities, up to and including the use of military personnel and equipment?
The Prime Minister: I can certainly give the hon. Gentleman the assurance that we stand ready to give any assistance in terms of how we are doing these things. Ministerial meetings at, in effect, the Cobra level, are going through what actions need to be taken. There is a bigger strategic supply of grit than there has been in previous years, the military stand ready to help and I can guarantee him that whatever needs to be done will be done.
Mr Speaker: We now come to the statement by the Minister for pensions, Steve Webb. May I appeal to Members who are leaving the Chamber to do so quickly and quietly, so that we can hear from Minister Webb?
The Minister of State, Department for Work and Pensions (Steve Webb): With permission, Mr. Speaker, I should like to make a statement about the uprating of pensions and benefits for 2011-12. I shall place in the Vote Office full details of the new rates that are due to come into force from the week of 11 April 2011 for each pension and benefit, and arrange for the figures to be published in the Official Report.
As the Chancellor said in his autumn statement, we have taken
"decisive action to take Britain out of the financial danger zone."-[ Official Report, 29 November 2010; Vol. 519, c. 530.]
Our decisions today about uprating are part of the plan to ensure we both get on track and stay on track, now and in future.
The Department for Work and Pensions is continuing its comprehensive review of social security policy, including pensions and benefits uprating. As many hon. Members will know, an important component of the future plans for uprating pensions and benefits is the move to the consumer prices index-the CPI. For 2010, additional pensions and benefits were held at their 2009 levels because the retail prices index-the RPI-was negative, at minus 1.4%. In those circumstances, many people saw no increase in their pensions or benefit. Why did the RPI fall? It was mainly because of falling mortgage interest payments, but only 7% of pensioners have a mortgage. People with earnings-related pensions lost out because of a fall in costs that did not benefit them. Had the CPI been used to measure the change in prices last year, benefits such as additional state pension would have been increased.
The CPI is the headline measure of inflation in the UK as well as the target measure used by the Bank of England, and it is internationally recognised. The CPI uses a methodology that takes better account of consumer behaviour in response to price increases. The Government believe that it is right to use one appropriate index for uprating additional state pensions, public and private pensions and social security benefits, and that CPI is a more appropriate measure of changes in the cost of living of pensioners and benefit recipients than RPI. In addition, the House may be surprised to learn that the RPI excludes the spending patterns of the poorest pensioners.
For all those reasons, the Government have decided to move to the CPI. I acknowledge that over the long term the CPI tends to rise more slowly than the RPI. However, the question is not which is the higher or lower number but which is the most appropriate way to track and measure the changes in average prices. The coalition will ensure that the value of many important pensions and benefits is maintained through a rise of 3.1% even in these tough economic times. In addition, steps have been taken to protect low-income families with children through above-indexation increases to child tax credits. Such measures are better targeted on low-income families and will ensure that the measures in the Budget and spending review, of which the move to CPI was a part, will have no measurable impact on child poverty in the next two years.
For consistency, we also announced on 8 July that we would move to CPI as the basis for calculating the statutory minimum increases for revaluation and indexation of occupational pension schemes. Hon. Members will wish to note that the annual revaluation order, which implements the decision, is being laid before Parliament today, together with our consultation document which sets out proposals and seeks views on the impact of using CPI for private sector occupational pension schemes.
The consultation document includes three main proposals. First, we propose legislation to ensure that schemes that choose to stay with RPI do not have to pay CPI in those years when CPI is greater than RPI. We do not intend to put an additional burden on schemes. Secondly, we plan to include indexation and revaluation on the list of changes where employers are required to consult with their employees. I was surprised to learn that schemes had been able to change indexation and revaluation without any duty to consult employees. We will change that. Thirdly, we need to consider what to do when schemes specifically state that RPI should be used and when they do not have the power to amend scheme rules.
I know that many people will have been alarmed by press speculation that we were planning to override scheme rules. We were tempted to respond to the inaccurate reports in this morning's press, but we were keen that this announcement should come out in a formal, structured way and to the House first of all. However, I am pleased to announce to the House that, contrary to press speculation, we do not plan to grant schemes a modification power to make it easier to use CPI when they do not already have the power to amend scheme rules. We believe that members' trust in schemes and the scheme rules could be severely damaged if we intervened to give schemes the power to change their rules when the scheme does not already have such a power. Trust in pensions is important and I believe that intervention demands strong justification.
Finally, I should like to turn to one of the early actions of this coalition Government: the restoration of the earnings link for the basic state pension. Unlike the Opposition, who had 13 years to make that important change but failed to do so, the Government made good on the pre-election promises to restore the link with earnings and delivered that promise within months of coming into power. In fact, we have gone further. We have protected the future value of the basic state pension with a triple guarantee that it will rise by the highest of the growth in earnings, prices or 2.5%. The triple guarantee means that even in times of slow earnings growth, we will never again see a repeat of small rises such as the 75p rise in 2000.
The new rate for the basic state pension will be £102.15 a week for a single person-an increase of £4.50 a week. From April next year, single people on pension credit will receive an above-earnings increase to their minimum guarantee of £4.75, taking their weekly income to £137.35. For couples, the increase will be £7.30, taking their new total to £209.70 a week. Separately, to help manage expenditure, the Chancellor used his spending review statement to announce that we will freeze the savings credit maximum. Over time, the savings credit has resulted in more and more pensioners being caught up in the means-tested system. Freezing the savings credit maximum helps us to focus resources on the poorest pensioners.
At a time when the nation's finances are under severe pressure, the Government will be spending an extra £4.3 billion in 2011-12 to ensure that people are protected against cost-of-living increases. We have protected the basic state pension with our triple guarantee and we have confirmed that most people on pension credit will benefit in full from the cash increase enjoyed by those on the basic state pension. Our move to CPI for the uprating of the majority of other pensions and benefits will result in an uplift of 3.1 per cent from next April and will set the future of uprating on a more appropriate, consistent and stable basis that is fair to individuals and the taxpayer. Throughout this statement, I have outlined our firm commitment to ensure that no one is left behind, and I commend the statement to the House.
Rachel Reeves (Leeds West) (Lab): I thank the Minister for giving me advance sight of the statement today. Both sides of the House agree that we need to cut the Budget deficit, even if we differ in our approaches, but let us be clear from the outset that what is set out today is not about deficit reduction. Making this permanent change from the use of the retail prices index to the consumer prices index, the impact of which will be felt long after the deficit is long gone, is an ideologically driven move that Labour opposes. If it were a time-limited change, we would consider whether it was a fairer alternative to deep cuts in departmental expenditure and would be willing to work with the Government on it. We would have supported a time-limited change to uprating, but why would the Government change the uprating of benefits in a way that will have an impact after the deficit has been reduced if not for ideological reasons? I agree that we need to get the economy back on track, but why will we be punishing the poorest in society and our pensioners even when the economy is growing again? Can the Minister confirm just how much worse off people will be over the next 10 years as a result of the switch and, correspondingly, how much money it will save the Government?
The Minister has conceded today that CPI will rise more slowly than RPI, but he says that the question is not about which index is higher or lower. That might not be the question that he wants to focus on, but for millions of pensioners and low-income families up and down the country, that is exactly the question to focus on. They will be asking how they will make ends meet following these changes. What advice would the Minister give to people who will be worse off year in and year out as a result of his decisions today?
Let us look at the detail. The Minister has outlined the Government's commitment to continue Labour's policy of restoring the earnings link for the basic state pension with a triple-lock guarantee. [ Interruption. ] The Government Front-Bench team may laugh, but they know that we committed to doing that and they are doing nothing more than continuing with our policy. Given that the Government are usually so intent on regressive cuts, the announcement in the Budget sounded too good to be true. The Minister's statement has confirmed that when something seems too good to be true, it usually is. His statement means that millions of pensioners will see the value of their pension fall every year, and that will be compounded by the increase in VAT, which will leave couple pensioners worse off by
£275 a year and single pensioners worse off by £125 a year. To what extent will the Government's combined measures on the change in uprating of the state second pension, the state earnings-related pension scheme, public sector pensions and the VAT increase wipe out any benefit to pensioners from the triple-lock guarantee?
What of the Government's previous promises? Before the election, the Minister said:
"We are very clear that all accrued rights should be honoured: a pension promise made should be a pension promise kept...we would not make any changes to pension rights that have already been built up. I have confirmed that I regard accrued index-linked rights as protected."
That is quite clear, I think, but today the Minister has confirmed that people who have paid into the state second pension, the state earnings-related pension scheme or a public sector pension throughout their working life will see their pension in retirement uprated by CPI, not RPI, as they had thought, which changes the rules of the game for pensioners and those coming up to retirement.
In just one week, we have seen the Lib Dems break their promises to students and to pensioners. The Minister will know, but for the benefit of others I shall remind him, that I have written to him to ask him to set out why he believes that CPI is a better measure of inflation for pensioners. I have copied that letter to the UK Statistics Authority, which on 6 October said:
"We believe that the CPI should become the primary measure of consumer price inflation but only when the inclusion in the index of owner occupiers' housing costs has been achieved."
I have not had a response to that letter, and given his attempt at explaining today, it is clear why.
The Minister has not produced any evidence to justify the change in indexation. Indeed, for pensioners and low-income families, average inflation is more than RPI and CPI, because of fuel and food costs. It is entirely disingenuous for him to claim that CPI is a better measure of inflation for pensioners when, in reality, pensioner incomes will be lower as a result. It is disingenuous as well to argue that CPI is a better measure of inflation than RPI for those on benefits. Those in that group spend more on food and fuel, so the average inflation is higher, not lower, than either RPI or CPI. Age UK says that CPI is not better, and that evidence is backed up by the Institute for Fiscal Studies. It adds that older people tend to spend more on essentials such as food and fuel, and still spend on housing costs such as council tax. I ask the Minister now, what evidence-not assertion, but evidence-is there that CPI better reflects inflation for pensioners and low-income families?
It is not just pensioners for whom this uprating makes no sense. The Government have said that, from 2013-14, they will uprate local housing allowance by CPI, rather than local rents, meaning a total disconnection between local housing markets and the housing allowance. The long-term consequences are likely to be dire, so will the Minister confirm whether that will be a permanent shift and whether he is comfortable that pensioners and low-income families risk losing their homes because of changes in rents over which they have no control?
The Government enthusiastically talk about making work pay-we would all support that-but we also hear today that they have said that they will freeze working tax credit but uprate jobseeker's allowance. Does that not mean that the gains from moving into work will shrink every year? Will the Minister explain how that is compatible with the drive to get people back to work?
Finally, does the Minister agree with the Child Poverty Action Group, which says that the
"effective inflation rate for the poorest households was higher than RPI in recent years when the cost of basic essentials like food and domestic fuel rose much faster than other prices"?
It adds that CPI uprating will make inequality and poverty worse.
Steve Webb: I am grateful to the hon. Lady for her questions. The CPI
"is more reliable because, taking account of spending by all consumers, this consumer prices index gives a better measure than the old RPIX measure of spending patterns. It is more precise because... it takes better account of consumers substituting cheaper for more expensive goods."-[ Official Report, 10 December 2003; Vol. 415, c. 1063.]
How right the previous Prime Minister was when he said those words.
There is a sensible debate to be had about the most appropriate price index. The hon. Lady said that pensioner inflation is always higher. I did not notice the previous Government using a higher inflation measure for pensioners in the 13 years during which they decided these things. In fact, over the past 20 years-not the past five, which Age UK used-the average pensioner inflation and the average non-pensioner inflation were the same. In other words, there are times when it is higher and times when it is lower, as we would expect, but in the long run they are the same. Previous Governments never used pensioner-specific inflation rates; nor do we propose to.
It was good of the hon. Lady to say that she would consider the CPI for this Parliament. Obviously, we are announcing today the benefit rates for next April, so I am assuming that, in the event that the House comes to vote on these matters, she will support the benefit rates that we are proposing. It was not entirely clear to me whether she was for them or against, but I hope that, in due course, it will be clear.
The hon. Lady asked about the use of the RPI and felt, I presume, that it is a better measure of inflation. Does she believe that in the year to September 2009 pensioner inflation was negative? I have never met a pensioner who thought that their inflation was negative. The goal is to use an index that matches inflation experiences, and that is what we have done.
The hon. Lady mentions the IFS and its views on the issue. The main difference between the CPI and the RPI is not the basket of goods but how the two indexes respond to price increases. The IFS found that the substitution effect used in the CPI is a better measure for lower-income households, so its judgment is that, on that key difference, the measure that we are using better fits the inflation experience of lower-income households. I am glad she cited the IFS, because it was right on that point.
The hon. Lady raises the issue of people meeting their fuel bills, and, as my right hon. Friend the Prime Minister said, the cold weather payment is one of Labour's ticking time bombs. This winter, it was due to fall to £8.50 a week. That was in the spending plans, but my right hon. Friend the Chief Secretary to the Treasury and my right hon. Friend the Secretary of State for Work and Pensions agreed that it was not fair-that paying people £8.50 a week this year would not be
acceptable. So, we found the money to set it at £25 a week not just this winter, but for the whole Parliament, and pensioners on low incomes are better off as a result.
The hon. Lady asks about the net effect of the changes, glossing over the earnings link, which, mysteriously, was Labour policy but never implemented in 13 years. It is funny how things become implementable in opposition but not when one controls the levers of power. The earnings link on average gives about 2% a year above prices; the CPI change on average gives about 1% a year less than the RPI. So for those with low and modest occupational pensions, the net effect on pensioners of the two taken together will be positive.
We have a package of measures to protect the interests of pensioners. The earnings link over the long run will give a newly retired pensioner an extra £15,000 in state pension over their retirement, compared with the prices indexing that Labour, when it had the levers of power, applied for 13 years. That is what it applied in office for 13 years: the prices link. Within months, we have gone to the earnings link, and pensioners will appreciate what we have done for them.
Jonathan Evans (Cardiff North) (Con): Does my hon. Friend have constituents like mine, who are looking forward to increases in SERPs, and who have looked at what they received last year when the RPI was negative and the CPI was positive? Labour Members back then proposed no increase whatever in those pensions. At the same time, looking over 10 years, is it not a little disingenuous to fail to take into account what has happened to house prices over the past decade? It is unlikely to be replicated in the next decade.
Steve Webb: I am grateful to my hon. Friend for that point. Many of the letters that I signed as a new Minister were to people complaining about the April 2010 non-increase in pension rates because they were linked to the RPI, which was negative. One of the worst things about using something that is so heavily affected by mortgage interest rates is that a pensioner with savings not only fails to benefit from falling mortgage rates, but is penalised by falling savings rates, so they get a double whammy. Neither factor will affect the CPI.
Ann Coffey (Stockport) (Lab): The Minister in his statement said that he will continue to freeze the savings credit maximum, and the reason he appears to give is that over time the savings credit has resulted in more and more pensioners becoming caught up in a means-tested system. Is not another way of looking at the situation the fact that, in future, fewer pensioners on low income will be eligible for pension credit?
Steve Webb: I am grateful to the hon. Lady for her question. She is right: last year the savings credit maximum was increased-by 12p, and by 6p for a couple, so it is important to keep what we are doing in context. If, however, she is accusing us of shifting the balance between means-tested benefits and universal benefits such as the state pension, I plead guilty. We have chosen to focus scarce resources on the basic pension through the earnings link and to constrain the rise in savings credit, which is a relatively ineffective way of reaching poorer pensioners. It has a take-up rate of barely 50%. Half the people who are entitled do not even have it; everyone claims their pension.
Jenny Willott (Cardiff Central) (LD): As the Minister said, the move from RPI to CPI will lead to much more stable increases in the uprating of benefits and pensions, and the triple lock will ensure that pensioners do not fall behind the rest of society. Some concerns have been raised, however, because the CPI does not include any costs associated with housing. The Government have announced plans to consider including some housing costs in the CPI calculation, but when does the Minister expect that to be done, and what impact is it likely to have?
Steve Webb: I am grateful to my hon. Friend, who is right that CPI rises tend to be more stable compared with the surges and freezes that we had with the RPI. On the point about the inclusion of housing in the CPI, costs in the form of rents are in the CPI already, so that is covered for lower-income renters. The CPI advisory committee is undertaking a two-year programme to see how housing costs might be included, but it has already ruled out directly including mortgage interest payments specifically, which will help with the issue that we have raised. As and when the Office for National Statistics comes up with alternative measures, we will certainly look at them, but that is without prejudice at this stage, because the work is ongoing.
Hywel Williams (Arfon) (PC): The Minister draws attention to the restoration of the earnings link and to Labour's failure over 13 years to make that important change, but does he not feel a little uncomfortable about being in cahoots with the party that broke that link in the first place?
Steve Webb: What is a great source of pride to me is being part of a coalition Government who are restoring the earnings link. I assure the hon. Gentleman that, although the measure was certainly in the Liberal Democrat manifesto, if the Chancellor of the Exchequer had not been happy with the plan, it would not have happened.
Brandon Lewis (Great Yarmouth) (Con): Does my hon. Friend agree that one real benefit to pensioners that will result from today's statement is that it gives them certainty and stability, something that, to their frustration, has been lacking over the past couple of years because of the measly and in some ways insulting changes that were made to their scheme?
Steve Webb: My hon. Friend is right. The nature of the triple guarantee is that, whatever happens to earnings and prices, pensioners will be guaranteed a 2.5% rise. Picking up on one of the points that the Opposition spokesperson, the hon. Member for Leeds West (Rachel Reeves), made, I should say that the previous Government, in their spending plans, pencilled in a 2.4% rise in 2012. I have no idea what prices or earnings will be next year, but I do know that 2.5% is bigger than 2.4%.
Paul Flynn (Newport West) (Lab): If a private company alters its contractual obligations to pay its customers, it is likely to end up in court on a charge of fraud. The Secretary of State admits that CPI increases at a slower rate than RPI. Is not the measure just a simple theft of money from pensioners?
No, it is not. Each year the Secretary of State has a duty to assess the general increase in prices; that is what the law requires him to do. If the law
required him to link state pensions, for example, to RPI, that would be a different matter, but that is not the duty. The duty is to assess inflation fairly, which is what we are doing. I also announced today that, when companies have RPI written into their rules and no provision for changing those rules, the Government will not allow schemes to change them, precisely for the sorts of reasons that the hon. Gentleman mentions.
Damian Hinds (East Hampshire) (Con): My hon. Friend rightly identified in his statement that the upratings policy forms part of a much wider review of social security policy, which will include major investment in the radical universal credit. Which elements of the Government's programme does he think will have the most impact on people of working age?
Steve Webb: I am grateful to my hon. Friend for stressing that, as well as setting benefit rates, the Department, led by my right hon. Friend the Secretary of State, is looking at major structural reform to ensure that work pays. The hon. Member for Leeds West asked about making sure work pays, and we need to ensure that the move into work is seamless, people know what they will get and there are not the complexities of multiple withdrawal rates. I think that history will judge this Department and my right hon. Friend's record very favourably for putting in place the structural reform that has been overdue for far too long.
Helen Goodman (Bishop Auckland) (Lab): The Minister is very good at giving long, process answers to our questions, but I should like to ask him one simple, factual question. How much does he forecast the average pensioner losing over the next five years due to the switch from RPI to CPI?
Steve Webb: My forecast is that the average pensioner will gain from our announcements today. I understand why the hon. Lady wants to pick out one little bit, but she knows that the average pensioner draws a basic state pension, which we have restored to earnings, which more than offsets any change to CPI.
David Rutley (Macclesfield) (Con): The Minister rightly reminds the House about the importance of the triple guarantee, which will protect the value of state pensions. What feedback has he had on that important announcement?
Steve Webb: I am grateful to my hon. Friend. I regularly meet pensioners groups throughout the country, and he will be reassured to know that the restoration of the earnings link has been universally well received.
Mark Durkan (Foyle) (SDLP): The Minister will be aware that some of us who now sit on the Opposition Benches never believed that CPI was a better measure because of the fact that it tended to give a lesser increase. However, we do not deny the worth of the triple guarantee. If his concern is to protect the basic state pension, will he address the needs of those people who do not receive its full value because of the high rate of contracted-out deductions? Many people suspect that the rate of deductions is excessive and punitive, and some say that it represents a marginal tax rate of 80% or 90% on their basic state pension.
Steve Webb: Obviously, contracted-out deductions apply not to the basic state pension, but to the additional state pension. The idea of contracting out is that a scheme that offers to provide earnings-related pensions must promise to match the benefits that the state would otherwise have provided. That may not be well understood, but such schemes and the employees who use them pay less national insurance, in return for which, the scheme promises to match what the state would have provided. I do not recognise the hon. Gentleman's description, but if he writes to me with specific examples, I am happy to look at them.
Sheila Gilmore (Edinburgh East) (Lab): I have been contacted by a large number of constituents who are public sector pensioners, because they are extremely concerned that the pensions to which they have been contributing and which they thought were guaranteed to increase in a certain way should be changed by the Government without any justification. Why is it felt necessary to do that? If it is so good to triple-lock the basic state pension, why is it not equally good for public sector pensioners?
Steve Webb: To take the hon. Lady's second point first, if we were to earnings-link all public sector pensions in payment, it would cause a massive increase in unfunded pension liabilities. She has just spent billions upon billions of pounds, apparently casually, but I am afraid we are not in a position to do that. We have done what Governments have always done, which is to assess the general increase in prices, make a figure for inflation and apply it consistently-in this case, to all social security benefits, tax credits and earnings-related pensions. By statute, public sector pensions are linked to what we do to additional pensions. What we are doing for contracted-out public sector pensions is therefore exactly what we are doing for contracted-in additional pensions.
Jim Shannon (Strangford) (DUP): The hon. Member for Edinburgh East (Sheila Gilmore) asked about pensioners. What pensioners and this House need to know is the difference that is made in monetary terms when pensions are calculated using CPI rather than RPI.
Steve Webb: Under the triple lock, the increase will be determined by whichever is highest between earnings, prices and 2.5%. In the long run, the earnings figure is almost invariably higher than the prices figure, so regardless of which measure of prices is used, we will use the earnings figure. As I have said, CPI for additional pensions is about 1% a year lower. The average occupational pension in payment is about £70 a week, 1% of which is 70p a week. Under the triple lock, as I have just announced, the pension is going up by £4.50. That shows the great advantage of the triple lock.
Presentation and First Reading (Standing Order No. 57)
Secretary Liam Fox, supported by the Prime Minister, the Deputy Prime Minister, Secretary William Hague, Secretary Kenneth Clarke, Secretary Theresa May, Secretary Vince Cable, Mr Secretary Mitchell, the Attorney-General and Mr Andrew Robathan, presented a Bill to continue the Armed Forces Act 2006; to amend that Act and other enactments relating to the armed forces and the Ministry of Defence Police; to amend the Visiting Forces Act 1952; to enable judge advocates to sit in civilian courts; to repeal the Naval Medical Compassionate Fund Act 1915; and for connected purposes.
Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 122) with explanatory notes (Bill 122-EN).
Paul Flynn (Newport West) (Lab): On a point of order, Mr Speaker. There are widespread reports that the Government will adopt the policy, which seems completely anti-intellectual and irrational, of removing the obligation to have scientists advising the Government on drugs policy. The suggestion is that it will be scientists out, and bigots in. Is it not extraordinary that there has not been a statement in the House so that we might question the Government on that policy? Will you use your good offices to ensure that a statement is made tomorrow, when there is nothing of great significance on our agenda?
Mr Speaker: I fear that the hon. Gentleman overestimates my influence, although I am grateful to him for doing so. He has registered his concern forcefully and it will have been heard by senior Whips on the Treasury Bench. I have a feeling, knowing the ingenuity of the hon. Gentleman, that he will return to this matter, and more than once.
Andy Burnham (Leigh) (Lab): On a point of order, Mr Speaker. At Prime Minister's questions, the Prime Minister, I am sure unintentionally, misrepresented the position of those on the Opposition Front Bench with regard to a constructive offer that we made to discuss the future of school sport with the Government. He said that we had said that the current system was unaffordable and not working. That is not the case. You will remember, Mr Speaker, that last week the Secretary of State for Education agreed to meet us to talk about school sport. That has not happened. I raised this point of order to put those facts on the record and to say that I am seeking an apology for the misrepresentation of the Opposition's position on school sport that occurred at Prime Minister's questions.
Mr Speaker: I am grateful to the right hon. Gentleman for giving me advance notice of his point of order. He has put his point very clearly on the record and I dare say that he will want to share it more widely. As an experienced Member and a former Cabinet Minister, he will be aware that a variety of ways are open to him further to pursue this matter and, as appropriate, to seek a correction. I hope that that is helpful.
Motion for leave to introduce a Bill (Standing Order No. 23)
Sarah Newton (Truro and Falmouth) (Con): I beg to move,
That leave be given to bring in a Bill to require the Secretary of State to begin negotiations with certain local authorities with a view to those local authorities leaving the current national housing subsidy system and becoming Council Housing (Local Financing Pathfinders) by April 2011; and for connected purposes.
I am sure that most Members from all parts of the House share the experience that I have in my surgery each week of meeting constituents who do not have a good quality and genuinely affordable home in which to live. Across the country, tens of thousands of families need a home-homes that councils such as mine in Cornwall would like to build. I am in no doubt that we must continue to invest in upgrading existing council housing, but we must also enable councils to build new homes. The ability to deliver the housing and welfare reforms that our society so badly needs is the prize for serving in this Parliament. Together with a good education and a decent job, those reforms will enable millions of hard-working families on low incomes to improve the quality of their lives.
To enable councils to build more homes, we must reform the way in which council housing is financed. Along with Members from all parts of the House, I support the coalition Government's plans to do so. As the Minister for Housing and Local Government said in October:
"For far too long councils have been left hamstrung in their efforts to meet the housing needs of their residents by a council house finance system that is outdated and no longer fit for purpose. The Housing Revenue Account subsidy is in urgent need of reform.
That's why I can confirm that we intend to scrap the current system, and instead replace it with something more transparent that will serve the needs of local communities without interference from Whitehall."
"we will offer councils the opportunity to keep the rents...This is a key step to transfer powers to councils and communities, so they are free to improve their local services in a way that best meets the needs of local people."
It is anticipated that the decentralisation and localism Bill will provide for the new system. We also anticipate a revised debt settlement, plans for the allocation of debt between authorities and proposals for the system's day-to-day operation.
It is worth recapping the previous Government's work that brought us to this point. In summer 2006, the Housing Quality Network was appointed to undertake business plan modelling with six councils. The six authorities produced model 30-year business plans, based on a one-off settlement with central Government that would allow them to leave the national system. The modelling demonstrated that self-financing could bring improvements in efficiency, long-term planning and asset management. It could attract private investment and provide opportunities for local authorities to add new homes to the housing stock.
In December 2007, the then Minister for Housing announced a full review of the housing revenue account subsidy system to examine further the case for change. That was launched jointly by the Treasury and the Department for Communities and Local Government in March 2008. In June 2009, the then Minister for Housing announced a consultation on the dismantling of the subsidy system and on replacing it with a devolved system of responsibility and funding. The consultation, "Reform of council housing finance", concluded in October 2009. In March 2010, the findings of the consultation were published, along with a set of proposals for further consultation. Following the general election the Government have confirmed that self-financing will be introduced for all local authorities by 2012.
The Bill will create self-financing pathfinders to contribute to the coalition policy of ending the national subsidy system for council housing finance. It will give central and local government the chance to learn lessons on debt redistribution and to evaluate the impact before allowing the remaining local authorities to leave the national subsidy system. It proposes that three councils, Cornwall council, the London borough of Wandsworth and Stockport metropolitan borough council, be offered the opportunity to negotiate terms of exit with the Secretary of State for Communities and Local Government and to leave the national subsidy system in April 2011. To enable that to happen, a minor amendment needs to be made to section 80B of the Local Government and Housing Act 1989.
The proposed establishment of a pathfinder programme for housing revenue account reform, to be undertaken at the three authorities that I mentioned, could have significant benefits for Government, the council housing sector and wider social housing policy. There would be no cost to the Treasury, which in fact would gain. Although it is impossible to be exact about the final formula, receipts to the Treasury during the pathfinder year would be substantial.
HRA reform is about turning local authorities from state-dependent administrators of council housing in an outdated national system into bodies that are locally financed and develop real long-term plans for more sustainable housing with local people. By working through the complex and detailed processes that are required to transform authorities in that way, we will learn valuable lessons that will minimise the risks of unforeseen problems when the legislative deal is done with the whole sector and 160-plus authorities in 2012. An agreement will need to be signed on a voluntary basis by each of the authorities involved and the Government, and it will need to include the debt settlement for April 2011.
It is worth recalling the housing sector's responses to the July 2009 review, which show its reactions to the self-financing proposals. Although only 6% expressed disagreement with the principle of self-financing, of the
64% who agreed with the proposals, only 10% did so without expressing significant reservations or caveats. Some 49% offered support for the proposals and accepted the redistribution of debt on condition that the amount of debt to be allocated at local level was acceptable. Clearly there is still work to be done with some councils to build consensus and momentum on the proposed reforms. The Bill offers the Minister an opportunity to work with the evangelists and to help him with the doubting Thomases.
The overriding objective is to use the pathfinders to support preparation for national HRA reform, not to divert resources away from the overall project. Such a process should be seen as complementary and beneficial, because it would provide a live testing environment for the detailed proposals as they continue to emerge. For example, the pathfinder councils would be able to participate in the forthcoming Charted Institute of Public Finance and Accountancy consultation in a live situation and provide detailed technical feedback.
The process would clearly be seen as a pathfinder process so that technical, regulatory and financial lessons could be learned. It would not be to the advantage of the three local authorities concerned, save for the de facto benefit of being out of the HRA subsidy system a year early. The pathfinder councils would produce a report, with input from any of agencies that had been involved, such as CIPFA or the Public Works Loan Board, and that report would be made widely available to inform the ongoing preparations for self-financing.
The three authorities in the programme are included on the basis of their high performance, their high standing in the sector and the capacity that each has to take on the work early. There is a geographical mixture of debt take-on and debt write-down, of arm's length management organisations and retained management, and of stock sizes. That will provide an opportunity to maximise learning from the process.
I should like to end by thanking colleagues outside the Chamber from the local authorities, who have been generous with their time and very patient with my questions, particularly the housing officers at Cornwall, Wandsworth and Stockport councils and Steve Partridge at the Chartered Institute of Housing. Finally, I thank my colleagues from the official Opposition and the coalition who are supporting the Bill.
That Sarah Newton, George Eustice, Sheryll Murray, Andrew George, Dan Rogerson, Stephen Gilbert, Jane Ellison, Ann Coffey and Mr David Nuttall present the Bill.
Sarah Newton accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 21 January 2011 and to be printed (Bill 124).
[Relevant Document: Oral and written evidence taken by the Home Affairs Committee on 23 November on the Effect of the Comprehensive Spending Review on the Home Office, HC 626- i .]
Motion made, and Question proposed,
That, for the year ending with 31 March 2012, for expenditure by the Home Office-
(1) resources, not exceeding £4,490,851,000, be authorised, on account, for use for current purposes as set out in HC 593,
(2) resources, not exceeding £225,450,000, be authorised, on account, for use for capital purposes as so set out, and
(3) a sum, not exceeding £4,601,101,000, be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund, on account, and applied for expenditure on the use of resources authorised by Parliament. -(Stephen Crabb.)
Keith Vaz (Leicester East) (Lab): Thank you very much, Mr Speaker, for allowing us the opportunity to discuss this very important issue. As I did not have the chance to say this yesterday, I hope you had a very happy wedding anniversary.
On 20 October, the Chancellor announced the outcome of the 2010 spending review. The budget of the Home Office will fall by 25% in real terms from 2010-11, and within that the resource budget will fall by 23%, or £2.2 billion. Administration costs are due to fall by 33% and the capital budget by 49%. Taken as a whole, the Home Office has received a settlement with cuts more than twice the average of all Departments, which is 11%. Even ignoring the protected Departments of International Development and Health, the average cut for all other Departments is 17%, or 5% a year.
The comprehensive spending review document states that the Home Office settlement includes support for major policing reforms; a reduction in police resource funding by 14% in real terms by 2014-15; £1.8 billion of capital investment over the spending review period; spending for the delivery of a new national crime agency; and overall resource savings of about 23%. In real terms, central Government funding for the police is due to fall by 20% by 2014-15. As the House will know, part of the police's funding comes from the police precept, and if the police authorities decide to increase the precept at the rate forecast by the Office for Budget Responsibility, the overall level of police funding will decline by 14% by 2014-15. There is therefore widespread concern about the level of funding for the police and the Home Office over the next five years, and about the way in which it will be achieved.
What has been described as front-loading-the cuts happening in the first few years-has already caused concern. I understand that the Association of Police Authorities recently wrote to the Minister for
Policing and Criminal Justice, whom I see on the Government Front Bench, to express that concern. It stated that
"a sensible, realistic approach is necessary to realise the savings objectives and avoid long-term damage to policing capability"
"deeply concerned that front-loading cuts will strip out the required financial flexibility police forces need to transform their working practices in order to make savings."
The CSR document, about which I am sure we will hear more from the Minister, expresses the hope that the savings will be achieved through reducing bureaucracy, modernising pay and conditions for staff, introducing directly elected police and crime commissioners, abolishing the National Policing Improvement Agency and cutting counter-terrorism by about 10% in real terms. After the CSR was published, KPMG was reported as estimating that 18,000 police officers could be lost over a four-year period. The Police Federation was reported as estimating that the number would be 20,000. At Home Office questions on Monday, the Minister said:
"By cutting costs and scrapping bureaucracy, we will save both money and man hours, so I am confident that the spending review should not lead to any reduction in police officers visible and available on the streets."-[ Official Report, 6 December 2010; Vol. 520, c. 14.]
Richard Burden (Birmingham, Northfield) (Lab): My right hon. Friend might like to know that this morning a number of my hon. Friends and I met the Minister to discuss the impact of the cuts on the West Midlands police force, which is 80% dependent on central Government funding. My right hon. Friend talks about the impact of the cuts on police numbers, but where police authorities are wholly or mainly dependent on central Government funding rather than the precept, the impact on local communities and police visibility will be that much worse.
Keith Vaz: The Home Affairs Committee has already heard from Chief Constable Sims of West Midlands police. It organised a seminar in Cannock Chase, which is not a million miles from my hon. Friend's constituency, where those concerns were raised. The problem is that individual police forces are currently unable to tell us precisely what effect the cuts will have locally. We will have to wait for the publication of the settlement, which we anticipate in early December. When the Minister speaks, I am sure he will tell us precisely when the provisional police settlements will be announced and placed before the House. He is smiling, so perhaps he will announce the figures today and we can question him on them. I am sure that we will hear soon. Until we do, we will not know precisely what is happening.
Steve McCabe (Birmingham, Selly Oak) (Lab): Apart from the cuts, which will reduce the overall number of police, I understand that the CSR will mean a freeze on recruitment, the likely application of regulation A19, which will get rid of the more experienced officers, and a freeze on pay. Do they sound like the conditions for a highly motivated, well performing police force?
My hon. Friend asks almost a rhetorical question to which the answer must be, "No-people will not be motivated if those cuts take place," but he is right to raise those concerns. That is why this debate is
important. The Home Affairs Committee is of course aware of the deep concern in the west midlands, which is demonstrated by the number of west midlands MPs in the Chamber this afternoon.
A number of police forces have already issued statements on how the CSR will affect them. In a statement on 22 November, the chief constable of Greater Manchester police and the treasurer of the Greater Manchester Police Authority said:
"Final spending details are not expected until the end of November or early December but if the headline reductions in spending totals for the Police Service are ultimately reflected in GMP's Formula Grant and Specific Grants, the Force and Police Authority will need to find savings of £134m over the four year period...Savings of £52m will need to be found in 2011/12."
They estimate in their report that GMP will lose approximately 2,950 posts from a total of 12,000 over the four-year period, and BBC News has reported that 1,387 officers and 1,557 civilian posts could go in Greater Manchester.
Northumbria police also issued a statement, saying that the likely impact of the cuts will be the loss of 450 members of the civilian staff out of a total of 2,500. As my hon. Friends the Members for Birmingham, Northfield (Richard Burden) and for Birmingham, Selly Oak (Steve McCabe) said, it looks as though 2,000 jobs will be lost in the West Midlands police force, including 1,050 police officers over the four-year period.
Alun Michael (Cardiff South and Penarth) (Lab/Co-op): I should declare an interest, because my son is the chief executive of a police authority. Will my right hon. Friend reflect on the large numbers of police officers that will be lost? The Government imply that the loss of police officers will not be seen on the streets because people can somehow be pulled out of back offices, but many officers who are not on the streets investigate internet-related crime and child abuse, and undertake intelligence and scientific activities to prevent crime. They investigate a range of crime, the evidence for which is not to be found on the streets of our towns and cities.
Keith Vaz: My right hon. Friend is extremely knowledgeable as a former Police Minister. He will know that, depending on the police authority or station, 85 different functions could be performed every day in a police station by people from IT experts to those on the switchboard and reception. Of course, the temptation is to remove the back office, but if we do so, those in the front office-the visible police officers-will have to go there, because there will be nobody else to do that work. My right hon. Friend is right to highlight the problems caused by the suggested front-loaded reductions.
Jack Dromey (Birmingham, Erdington) (Lab): Is my right hon. Friend aware that West Midlands police assume in their planning that they will be unable to cope with cuts on the scale being forced on them by the Government without compulsorily retiring up to 400 of the longest-serving police officers under A19, and without a significant reduction in visible policing on the streets-fewer bobbies on the beat-in the west midlands generally and Birmingham in particular?
My hon. Friend is rightly concerned about that. I will be going to Birmingham in a week's time at
the invitation of my hon. Friend the Member for Birmingham, Selly Oak to see how the CSR will affect visible policing.
Rehman Chishti (Gillingham and Rainham) (Con): In response to an earlier question about the functions of police officers, it has to be said that many were affected by the previous Government's ill-thought out, badly drafted legislation. For example, the short-term, knee-jerk reaction dispersal orders simply moved one problem to a different street in the same area, which I often saw as a cabinet member for safety in Medway. Of course we must consider the various functions of police officers, but in the past 10 years the police have been tied up with functions they should never have been dealing with.
Keith Vaz: The hon. Gentleman is absolutely right. One thing I hope we can avoid at all costs is the kind of knee-jerk reaction that he mentioned. I would hate the police service to be subject to the same kind of reorganisation that we have had in the NHS in the past 20 years under the previous Government and the one before that.
I do not intend to go on for long, because many right hon. and hon. Members wish to contribute to debate. The Committee hopes to assist the Government in this difficult process-we want to approach the proposals in a comradely and constructive way. I am glad to see so many members of the Committee in the Chamber. Our longest-serving and most distinguished member, my hon. Friend the Member for Walsall North (Mr Winnick) is here, as are my right hon. Friend the Member for Cardiff South and Penarth (Alun Michael) and my hon. Friend the Member for Birmingham, Selly Oak. The hon. Members for Cannock Chase (Mr Burley) and for Rochester and Strood (Mark Reckless) are members of the Committee, and sitting behind them on the Government Benches is a non-member, the hon. Member for Gillingham and Rainham (Rehman Chishti). The hon. Member for Brentford and Isleworth (Mary Macleod) is also in the Chamber. She was a member of the Committee but was poached within weeks of her appointment by the Minister to become his Parliamentary Private Secretary. I am sure she is doing a great job.
The Committee has decided to undertake a trilogy of reports on three different aspects of the proposals to assist the Government. It is rather like "The Lord of the Rings". We have just published our report on police and crime commissioners. As the Minister knows, members of the Committee have different views on the desirability of police and crime commissioners, but I hope he found our report helpful. It outlined a number of issues that we feel could be of value to the country.
We were very concerned that the figures for the cost of police and crime commissioners came out only after we had published our report. Indeed, the proposals came out on the very day that we published our report. Perhaps we can improve our co-ordination. I am not saying that we should be like "Strictly Come Dancing", but if the Government and the Committee communicated a little bit better, we might be able to see the proposals before we commence our reports, which would make what we say more valuable.
The second report was suggested by my hon. Friend the Member for Birmingham, Selly Oak and my right hon. Friend the Member for Cardiff South and Penarth,
and we will look at the CSR in the light of the decisions that the Minister will make imminently about how much police forces will have as part of that second report on a reduction in police bureaucracy. There is common ground on both sides of the House about the need to reduce police bureaucracy. When my hon. Friend the Member for Gedling (Vernon Coaker) was the Minister with responsibility for the police, he also said that he wanted to cut red tape. In the 23 years I have been a Member of Parliament, Ministers have always said that they want to cut red tape, but the proof of the pudding is in the eating, and we need to ensure that it actually is reduced. That is why I hope that Jan Berry will have her term as the police bureaucracy tsar renewed, so that rather than just writing a one-off report she can continue to monitor the situation.
Guy Opperman (Hexham) (Con): Does the right hon. Gentleman accept that savings would have to be made whichever party was in government? Will he give us a preliminary figure that he-personally or as the Chair of the Committee-would accept for the reduction in police budgets and numbers?
Keith Vaz: I am afraid that I cannot give him a personal figure. The Committee has not met and has not discussed this matter, nor have we conducted our report. Members of the Committee would be most concerned if I started speaking on behalf of the Committee on a matter that we had not considered. I know that the hon. Gentleman has a great interest in policing matters, and we will look at this very carefully. We will of course take evidence from the police and from others.
The final report that we intend to produce is on the new landscape of policing. The Government have not finally decided precisely where every bit of the old landscape will fit in the new landscape and we hope to help by setting out a landscape that will be accepted by the Government and the Opposition, so that whatever happens on 5 May 2015-or whenever the fixed-term election will be held-and if the Labour party is returned to power, we will not have another reorganisation, as we have had in the health service. Let us reach a consensus about how to proceed.
To that end, I was very pleased that the Minister was able to come to the summit meeting that was organised in the constituency of the hon. Member for Cannock Chase a few weeks ago. I hope the Minister took away the message that there are stakeholders in the policing process who want to be engaged in what the Government are doing. We heard an excellent speech from my right hon. Friend the shadow Home Secretary, and other Members of Parliament attended. We now have, in people such as Hugh Orde, Denis O'Connor, Paul Stephenson, Paul McKeever and others, some truly outstanding leaders in the profession, but we-Parliament and the Government-need to work together to ensure that we have a permanent landscape and to deal with the reductions in a particular way.
I am very concerned that there will be a reduction not only in the number of police officers but in the number of PCSOs. I was deeply concerned by the press statement issued by the chief constable of Lancashire police-which covers the area of Chorley, if my geography is correct,
Mr Deputy Speaker-to the effect that every PCSO has been put on notice that they may lose their posts. They have been a terrific addition to policing.
I recently went to a residents meeting in London-I normally speak at residents meetings rather than attend them, but I was attending as a constituent of the hon. Member for Hendon (Mr Offord). The hon. Member for Harrow East (Bob Blackman) was also there. We heard an excellent presentation from a local PCSO about the work that he does, which includes reducing the work load of police officers, enabling them to do their jobs effectively.
Lorraine Fullbrook (South Ribble) (Con): Is the right hon. Gentleman aware that of the 427 PCSOs who received the at-risk notice from Lancashire constabulary, only 149 are completely funded by that constabulary?
Keith Vaz: I did not know that and I am most grateful to the hon. Lady, who is another member of the Committee. However, that still does not address the reductions. If we are to proceed with a view to reaching a consensus-people have strongly held views-we must agree that there is of course a need for an overall reduction in the police budget. However, that hurts us as local MPs when it affects our local areas.
The public want to be able to pick up a phone to report a crime to a police officer and to ensure that that crime is dealt with as quickly as possible. If that is the bottom line, I hope that this debate can be conducted in a way that achieves that purpose. Let us put our party political differences to one side and concentrate on the fact that if a reduction in resources means fewer police officers-as I think it will-the Government will need to think again, and possibly ask the Treasury for additional resources so that we match the spending on the national health service and education. Law and order-the prevention and detection of crime-is a key issue for our constituents and we need to do everything that we can to ensure that it remains at the forefront of people's concerns.
Nigel Mills (Amber Valley) (Con): It is a pleasure to speak in this debate, and this is the third time in seven months as a Member of Parliament that I have spoken on this issue. It is also a pleasure to follow the right hon. Member for Leicester East (Keith Vaz), a fellow east midlands Member. I am sure he will agree that the east midlands forces have generally fared relatively badly in terms of funding in recent years. We all hope that, as the Minister finalises his funding settlement for the individual forces, he will look favourably on our local forces.
I commend the police for work they do in my constituency and across Derbyshire. I also commend their positive approach in responding to the anticipated level of cuts. They have not thrown their toys out of the pram and panicked that they will not be able to deliver effective policing across Derbyshire. Instead, they have looked at sensible steps that they can take. To be fair, they have been taking such steps in recent years in preparation for this situation, which they knew was likely to arise. Earlier this year, they reduced their control districts from four to three, moving the control district that covers my area from my constituency to
Chesterfield, a move that has been achieved without any real damage to the quality of policing in the area.
We have to be realistic about police funding and accept that there is only so much that forces can do if they do not have the right money in the first place. Making straight- line cuts from the wrong starting position will not leave us in the right finishing position. Derbyshire police estimate that the impact of the comprehensive spending review will result in their needing to make straight-line savings of £6 million in the next financial year. However, they have lost roughly £5 million a year from the damping mechanism, which has cost them some £26 million in the last five years. It is a little much to expect a force that is already £5 million behind where it should have been-which is the equivalent of some 200 police officers compared to how many they would have had with the right amount of formula funding-to be able to absorb a straight-line cut in the same way as other forces that have received much more generous funding. Such a cut is bound to have a serious impact on local policing. It is a little over-ambitious and I hope that the Minister will be able to assure us that he will look to reverse some of the negative impact of the damping mechanism, especially during the CSR period. By the end of that period, our police forces need to be in a fair funding situation; otherwise some of them will have received far less money than they should for an entire decade.
It is worth mentioning that forces can do things to save money that do not rely on cutting front-line officers. I have had meetings with people who have given me information about the waste that exists in police forces, and there is scope for tackling that. I have concerns about how a uniformed, qualified officer has to supervise specialist functions within the police force-for example, on forensics. Somebody in a managerial role ends up trying to supervise something that they are not really an expert in and to which they add little value. That is not a necessary part of the structure. I also question whether it is necessary to have quite so many different silos considering different areas of responsibility. It is a struggle to integrate them and bring together a joined-up seamless force. There must be huge scope for making savings but, fundamentally, there is only so much blood we can get out of a stone before we end up without an effective force.
We are in a bit of a strange position in terms of timing. The review of police conditions is ongoing, yet we want forces to start to make significant savings before they have had a chance to work through the impact of that. It would be unfortunate for forces to lose skilled and trained back-office staff or PCSOs because that is the only way they can make headcount reductions as forces cannot currently make uniformed police officers redundant. If we change the rule halfway through the process and decide that having uniformed officers performing back-office functions is not a great idea, we will find we will have already put ourselves in that position by having to proceed too quickly.
I hope that the timing of the spending reductions will be consistent with the pay and conditions review. It is hard for the public to understand why police officers enjoy an almost unique protection from redundancy whereas PCSOs and skilled back-office staff do not. I do not think the uniformed officers in the constabulary in my constituency will be desperately keen on changing
that or on hearing such a change being advocated, but such an approach would give a level playing field for all employees of the police authority.
I do not wish to detain the House for much longer. However, when the Minister considers funding, I urge him one last time-this is the third time I have done so in the Chamber-to acknowledge that straight-line cuts on average will not deliver a fair outcome for forces across the east midlands, especially in Derbyshire. I hope that, over the CSR period, that will be taken into account and that we can move towards having the fairer funding that the formula states Derbyshire police ought to get.
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