House of Commons
Tuesday 21 December 2010
The House met at half-past Eleven o'clock
Prayers
[Mr Speaker in the Chair]
Oral Answers to Questions
Treasury
The Chancellor of the Exchequer was asked-
Manufacturing Sector (CSR)
1. Mr William Bain (Glasgow North East) (Lab): What estimate he has made of the potential effects on the level of demand and output in the manufacturing sector of the outcomes of the comprehensive spending review. [31813]
The Chancellor of the Exchequer (Mr George Osborne): I am happy to report today that annual growth in manufacturing output is the fastest in 16 years, and the Chartered Institute of Purchasing and Supply reported the strongest manufacturing employment balance on record last month. This is a crucial contribution to rebalancing the British economy away from its dependence on debt. The Budget and the spending review will help to sustain that by cutting tax rates for manufacturers, investing in transport infrastructure and skilled apprenticeships, and providing the economic stability that our deficit reduction plan has delivered in an unstable world.
Mr Bain: I thank the Chancellor for that reply, and I wish him and his fellow Ministers on the Treasury Bench, and all hon. and right hon. Members, including you, Mr Speaker, a happy and peaceful Christmas. Does the Chancellor agree that the best Christmas present he could give manufacturers in my constituency and throughout the country is a proper White Paper on growth? He has often promised to publish one. Can he tell the House when exactly he will be bringing it before this Chamber for debate?
Mr Osborne: We have a specific review of advanced manufacturing to see what more we can do to help it, and I intend the Budget on 23 March to focus very much on supporting economic growth and removing the barriers to the expansion of manufacturing businesses and others. We are looking both at specific sectors, such as advanced manufacturing and pharmaceuticals, and at cross-government issues, such as planning and employment law, so that we provide not only the economic stability that we have delivered in recent months, but the platform for economic growth.
Mr Andrew Tyrie (Chichester) (Con):
Further to that question and that reply, the Government's efforts so far in that regard consist of "The path to strong, sustainable and balanced growth". Frankly, it is an insubstantial
document-well short of a strategy. The Chancellor has given us a firm lead on fiscal policy. Will he now commit to cutting through what appear to have been a large number of interdepartmental arguments about this, and give us a clear strategy for growth in his next Budget?
Mr Osborne: The first thing that I would say is that, of course, deficit reduction is an essential platform for economic growth. The fact that this Parliament, almost alone in Europe, is not having to discuss the sovereign debt crisis is in itself testament to the success that we have had. But we need now to turn around many Departments that have not really thought for years about this question: how do we stimulate private enterprise and private sector growth? We have inherited government machinery that is not equipped to deal with that. We are turning that around, and as I said, the Budget in March is the focus point that I expect all Departments to work towards.
Alan Johnson (Kingston upon Hull West and Hessle) (Lab): Responsibility for our manufacturing sector rests, of course, with the Secretary of State for Business, Innovation and Skills, who had some interesting things to say this morning about the "Maoist" nature of this Government. [Interruption.] Does the Great Leader-or rather, the Chancellor-recognise himself in the Business Secretary's description of "cack-handed" Tories? Strictly speaking, does the Chancellor believe that the reason why we have waited so long for any sign of a strategy on jobs and growth is because he is out of step with his Cabinet colleague?
Mr Osborne: The Business Secretary is a powerful ally in the Government in promoting growth-and, frankly, he has forgotten more about economics than the shadow Chancellor ever knew. I refer the shadow Chancellor to the statement that he gave recently about his own party:
"On economic credibility, we are in a really worrying position."
Alan Johnson: We see this morning record borrowing for November, unemployment higher than expected and inflation well above where it should be. According to the Office for Budget Responsibility, we are about to destroy £5 billion-worth of economy activity through the increase in VAT on 4 January. The Institute for Fiscal Studies says that absolute poverty-not relative poverty-will rise for children and working age adults, with 900,000 more slipping below the breadline over the next three years. If the Chancellor has not got a plan B yet, is he hoping to get one for Christmas?
Mr Osborne: I am glad that the shadow Chancellor reminds the House of the terrible economic inheritance that we are struggling with-and overcoming. He talks about the public borrowing figures today, and I am glad that he has brought them up, because they are a reminder of the fact that we have a record budget deficit. He is-if he wants to do Christmas analogies-the incredible no-man: every time we have put forward any proposal for deficit reduction, he has said no. He is running out of time to come forward with sensible credible contributions to the economic debate about how we get Britain growing again, because at the moment the Christmas lights are on but there's no one at home.
Michael Fallon (Sevenoaks) (Con): Does my right hon. Friend not agree that the record borrowing figures announced today simply serve to underline the seriousness of the situation to which the spending review was addressed, as well as the importance of sticking to the fiscal plan that has been agreed and not deviating from it in the slightest?
Mr Osborne: My hon. Friend is absolutely right. This country has a record budget deficit; that is the situation we have inherited. We have made some in-year reductions, which have made it slightly less worse this year than it otherwise would have been, and then we have measures next year to try to bring the budget deficit down. Every one of those measures has been opposed by Opposition Front Benchers. They have put forward not a single plan, not a single proposal, to reduce the budget deficit, but our proposals have provided this country with economic stability, in a very unstable European continent.
Mr David Winnick (Walsall North) (Lab): Following on from the remarks of my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson), what does the Chancellor have to say about the Institute for Fiscal Studies report, which says that almost 1 million people will be below the breadline by 2014? That is an extra million people. Does the Chancellor not feel any shame about what will happen to so many of our constituents-certainly mine-as a result of the policies that he is pursuing? I would have thought that it was a matter over which the Business Secretary might wish to consider resigning.
Mr Osborne: As usual, the hon. Gentleman's question is totally over the top. I would make this observation: we have inherited this economic situation-a record budget deficit-and we are taking the action to deal with it. We are also promoting social mobility by funding a pupil premium and giving new nursery entitlements to disadvantaged two-year-olds. Child poverty rose in the last years of the Labour Government. They set a child poverty target and entrenched it in law, knowing full well that they did not have the policies to meet that target in any way. We are putting in place the policies that will deliver greater social mobility and deal with entrenched poverty in our country.
Graduate Tax
3. Mike Weatherley (Hove) (Con): What estimate he made of the effect on public finances of the introduction of a graduate tax. [31815]
6. Mike Freer (Finchley and Golders Green) (Con): What estimate he made of the effect on public finances of the introduction of a graduate tax. [31818]
14. Mr Tobias Ellwood (Bournemouth East) (Con): What estimate he made of the effect on public finances of the introduction of a graduate tax. [31827]
The Chancellor of the Exchequer (Mr George Osborne): A graduate tax would add billions of pounds to the budget deficit. That is just one reason why anyone in government, Labour, Conservative or Liberal Democrat, who has ever looked at the facts has concluded that a graduate tax is unworkable, unfair and unaffordable.
Mr Speaker: Before I call the hon. Member for Hove (Mike Weatherley), I remind him and the rest of the House that the supplementary question must be about the policy of the Government.
Mike Weatherley: A graduate tax would be less progressive and less fair than the proposals that the Government have brought forward. Does my right hon. Friend agree that if we scrapped our proposals and introduced a graduate tax, it would be a costly disaster for those entering higher education in the future?
Mr Osborne: I absolutely do agree with that. Interestingly, as I said in my opening reply, anyone who has ever looked at the issue in government, as we did over the summer and as the shadow Chancellor did when he was the Minister responsible for higher education, has concluded that it is unworkable. It destroys the independence of universities, and it is unfair, because some students would pay much more than the cost of their education, others would avoid it all together by moving abroad, and millions of students on lower incomes than those specified by our proposals would be hit by a tax rise. It is also unaffordable, and as Lord Browne pointed out in the report that the previous Government commissioned, it would take until 2041 for the system to start paying for itself.
Mike Freer: Has the Chancellor, in developing our policy on a graduate tax, been able to bear in mind the policies of the Opposition?
Mr Speaker: Order. The Chancellor does not need to bear that in mind. He has explained his position very clearly, and we are grateful to him. I now call Tobias Ellwood, as his question is also in this group. He is not here. Oh, dear. I call Mr David Hanson.
Mr David Hanson (Delyn) (Lab): Will the Chancellor confirm that in adopting his policy on tuition fees he has raised the Government borrowing requirement to £10.7 billion by 2015-a rise of £5.6 billion-in addition to cutting at least £800 million from the university budget and tripling fees, which will deter poorer students? Will he now for once confirm to the House that his choice on tuition fees is about ideology, not deficit reduction?
Mr Osborne: What we are doing is taking the report commissioned by the Labour Government and improving on it so that it is more progressive. [Interruption.] Yes, we are increasing borrowing to help students; that is part of what we are doing to fund our higher education institutions.
The truth is this, and the shadow Chancellor said it this month: it would
"be very difficult to make a graduate tax a workable proposition."
That was the shadow Chancellor, who is now advocating as an official policy of the Labour party something that he says would be difficult to make a workable proposition. We have come forward with workable propositions on higher education, which the Opposition used to agree with when they were in government. They have now mistaken opportunism for opportunity.
Private Finance Initiative
4. Rehman Chishti (Gillingham and Rainham) (Con): What recent assessment he has made of the effectiveness of the private finance initiative. [31816]
5. Dr Thérèse Coffey (Suffolk Coastal) (Con): What recent assessment he has made of the effectiveness of the private finance initiative. [31817]
13. Tony Baldry (Banbury) (Con): What recent assessment he has made of the effectiveness of the private finance initiative. [31826]
15. Joseph Johnson (Orpington) (Con): What recent assessment he has made of the effectiveness of the private finance initiative. [31829]
The Chief Secretary to the Treasury (Danny Alexander): In the spending review the Government abolished the private finance initiative credit system, which provided Departments with a ring-fenced budget that could be used only to support local authority PFI projects. The change levelled the playing field between PFI and other forms of procurement.
Rehman Chishti: What does the Chief Secretary think of the comments made by the former Paymaster General, who said that PFI contracts were far too generous and too expensive?
Danny Alexander: That is a striking comment, coming from a Minister who was in the Department responsible for those things, and it reflects the general attitude towards public money that was prevalent under the previous Administration. There is a great deal of work that we can do as a Government to ensure that in future PFI is used only where it is absolutely necessary, and that we get best value for public money. That is how we should approach these things.
Dr Coffey: One of my constituents thinks that the PFI contracts that have been negotiated are one of the greatest scandals ever, if only because one of his relatives has made millions out of one. Apart from the potential £875 cost of a Christmas tree, which PFIs have caused the Minister the most angst?
Danny Alexander: I am not sure that it would be appropriate for me at this stage to pick out individual examples. The important thing to say is that, in common with the work that we are doing to ensure that we get better value from our suppliers across Government and that those suppliers are making a contribution to reducing the deficit, we are working on examining the future costs of PFI, so that where we can, we reduce those costs. That is very important for ensuring that we reduce the deficit effectively and have the maximum amount of money left for front-line services.
Tony Baldry: A reduction of just 0.05% in contractors' fees could save some £500 million a year. What can we do to help the Chief Secretary and the Chancellor bring pressure to bear on equity holders and key industry PFI players to persuade them to cut voluntarily their annual charges for rentals and services?
Danny Alexander: I am grateful to the hon. Gentleman for his festive offer of assistance with these matters. I urge him and other colleagues on both sides of the House to draw the Government's attention to areas where they see PFI schemes being wasteful, or to examples that they would like to bring to our attention. I would be only too delighted to pick those up if he drew them to my attention.
Joseph Johnson: Has my right hon. Friend had a chance to read the Public Accounts Committee's recent report on PFI in the credit crunch? It suggested that many projects are locked into very high financing costs for periods of up to 30 years. I wonder what scope there is to claw back some of the gains in the event of any refinancing.
Danny Alexander: The Treasury will respond in the normal way to that report, and it would not be proper for me to comment on it until we have published the relevant Treasury minute. The Treasury and the Cabinet Office are working closely together to ensure that the PFI industry contributes its fair share of savings from operational projects.
Kelvin Hopkins (Luton North) (Lab): PFI was, of course, invented by the Tories; I may be in a small minority in having consistently opposed PFI and urged that we should have public investment instead. In making an assessment of PFI, will the Government make comparisons with superb public investment projects such as Luton sixth-form college, which has been rebuilt at far less cost than it would have been under PFI?
Danny Alexander: I am grateful for that comment. I hope that the hon. Gentleman will welcome the decision that we took in the spending review to end the PFI credit system. That means that Departments now have to look at the best way for funding projects within their own budgets; effectively, the PFI credit system meant that they could top-slice local government funding for local authority projects. The change that we have made means that Departments will have to make a proper comparison between PFI costs and the sorts of costs that the hon. Gentleman has described. I am sure that the House will have heard what he has said.
Mr Jim Cunningham (Coventry South) (Lab): As my hon. Friend the Member for Luton North (Kelvin Hopkins) said, PFI was an invention of the previous Tory Government, who were having difficulties building new hospitals. Is it beyond the wit of the Chief Secretary, who knows that most of those PFIs were local negotiations and have break clauses in them, to use his imagination and look into the break clauses?
Danny Alexander: The hon. Gentleman makes an important point. As for the politics of the matter, it was, of course, the previous Government who oversaw a massive expansion of PFI. It does not come well from the hon. Gentleman and other Opposition Members to be criticising an approach that ballooned under the previous Government.
Bill Esterson (Sefton Central) (Lab):
My constituent Jeanette May wrote to me recently about the cancellation of the PFI at Maghull prison in my constituency to say
that cutting the prison will affect the local economy, especially the immediate population. Does the Chief Secretary understand the impact that cuts such as the cancellation of Maghull prison will have, and how they will hit jobs and growth in communities across the country?
Danny Alexander: I am bound to say that that is yet another example of a saving that is necessary to tackle the terrible inheritance left by the previous Government, which Opposition Members now seem to be opposing. They also oppose every single cut, yet do not recognise that the consequence of such an approach would be to put this country back in the economic mess that they caused.
Bank Bonuses
7. Phil Wilson (Sedgefield) (Lab): What recent steps he has taken to reduce bonuses paid by banks to their staff. [31819]
The Financial Secretary to the Treasury (Mr Mark Hoban): The Government have taken decisive action to tackle unacceptable bank bonuses. The Financial Services Authority has revised its remuneration code and new rules will be in place by 1 January 2011. In addition, the Government have introduced a levy that incentivises less risky banking activities, and we will continue to investigate the cost and benefits of a financial activities tax. In combination, those and other measures will ensure that remuneration is consistent with effective risk management.
Phil Wilson: The Minister will be aware that the Business Secretary has said that a big argument is going on in Government about the banks. He says that he wants a very tough approach but
"our Conservative friends don't want to do that".
Is the Business Secretary right?
Mr Hoban: The Government are totally united about the fact that we want banks to play their full role in the economic recovery by lending to businesses and recognising their wider social responsibilities.
Jesse Norman (Hereford and South Herefordshire) (Con): May I remind the House that no hospital PFI contract was signed under the- [ Interruption. ]
Mr Speaker: Order. The hon. Gentleman is to resume his seat. He has come in on the wrong question I am afraid; we are talking about bank bonuses.
Richard Fuller (Bedford) (Con): While the Minister reviews the undoubtedly well-stuffed stockings of certain bankers to determine whether they have been naughty or nice, will he acknowledge the significant amount of tax that they pay, and the institutions that choose London as their domain? Will he recognise that, as far as their choice of domain is concerned, the airports of this country will not always be closed?
Mr Hoban:
My hon. Friend makes an important point. At the time of the spending review the Chancellor made it very clear that we want banks to pay the maximum sustainable tax. That is why on 1 January we
will introduce a bank levy, which the Opposition rejected when they were in Government. That levy will raise £2.5 billion more than the net amount raised by their bonus tax.
Ms Angela Eagle (Wallasey) (Lab): Will the Minister now admit that the more noise the Government make about this issue, the less action they appear willing to take? Will he confirm today that amidst all the PR and bluster, the Chancellor has decided not to go ahead with Labour's requirement that all bankers' bonuses over £1 million be published? He may be willing to ignore the Business Secretary's nuclear option, but the millions of Britons who are paying the real price of his austerity measures will never forgive him if he lets his friends in the banks off scot-free.
Mr Hoban: I am not going to be lectured by the hon. Lady about attitudes towards banks. Labour is are the party that gave Fred Goodwin his knighthood, so I will not take any lessons from Labour politicians. They talk tough, but they did nothing when they were in government. This Government are taking real concrete measures to tackle bankers' pay and to introduce the bank levy, which they refused to introduce. In Europe there will be a most stringent application of the Financial Stability Board principles on bankers' remuneration.
Sovereign Sukuk
8. Roger Williams (Brecon and Radnorshire) (LD): What recent discussions he has had on the introduction of a Government-backed sovereign sukuk. [31821]
The Financial Secretary to the Treasury (Mr Mark Hoban): As chairman of the all-party group on Islamic finance and diversity in financial markets, my hon. Friend is well known for his close interest in Islamic finance. The Government believe that sovereign sukuk issuance would not offer value for money at the present time, but the situation remains under review.
Roger Williams: I thank the Minister for that reply. A sovereign sukuk issued by the Government might lead to two benefits: first, providing funding for the Government's borrowing requirement, and secondly, giving readier access to liquidity for the growing number of Islamic banks that operate in this country. Will he agree to meet a small group from the all-party group on Islamic finance and diversity in financial markets to discuss this matter in more detail?
Mr Hoban: My hon. Friend makes an important point. We recognise the benefits that a sovereign sukuk could bring to improving liquidity in the sector, but significant costs would arise from sovereign sukuk issuance. However, I am sure that my noble Friend Lord Sassoon, who leads on this matter, will happily meet him and his colleagues.
Local Services (CSR)
9. Barbara Keeley (Worsley and Eccles South) (Lab): What assessment his Department has made of the effects of the outcome of the comprehensive spending review on the provision of local services in deprived areas. [31822]
The Exchequer Secretary to the Treasury (Mr David Gauke): It is for Departments to decide how best to prioritise resources within their departmental expenditure limits. The consequences in particular locations will become apparent only once these decisions have been made. However, the Secretary of State for Communities and Local Government announced the provisional local government finance settlement on Monday, and the balance of the settlement is more heavily weighted towards councils that are more dependent on central Government grants and have greater relative needs.
Barbara Keeley: Salford is ranked 15th in average scores for the 50 most deprived districts in England. The front-loaded grant cuts announced in the spending review mean that next year Salford council is faced with making budget cuts of 15%, or £40 million, which will have an impact on services such as social care for frail older or disabled people. How does the Minister square that reality with the Government's pledge in the spending review to limit the impact of spending reductions on the most vulnerable in our society?
Mr Gauke: Had we proceeded with the spending formula that existed under the previous Government, some of the deprived areas that are most dependent on central Government grant would have faced a greater cut than the one in the proposals announced by my right hon. Friend the Secretary of State for Communities and Local Government.
Charlie Elphicke (Dover) (Con): Does the Minister agree with me, and my constituents in Dover and Deal, that the council tax freeze is very welcome, and stands in sharp contrast to the massive rises that have hit the poor, elderly and vulnerable in recent years?
Mr Speaker: Order. The question is about the comprehensive spending review.
Mr Gauke: With reference to the comprehensive spending review, the council tax freeze and the other measures that we have announced demonstrate that we are making every effort to ensure that the difficult decisions that we have to make because of the deficit are reached in a way that is fair.
Chris Leslie (Nottingham East) (Lab/Co-op): But will the Minister now acknowledge that the spending review was in fact brutally regressive and hit the poorest hardest, especially when we see how the figures announced last week will affect individual councils and communities? For example, how can he justify the percentage changes announced last week to the local authority specific grants for learning disabilities, Sure Start and One to One tuition? The most deprived 10th of local authorities will see a drop-minus 12%-whereas the wealthiest decile will see an increase of more than 24%. How is that fair or progressive?
Mr Gauke:
When we look at 2011 and onwards, we see that this is a Government who are bringing in the pupil premium and funding social care. Labour Members, when they were in government, were planning to make cuts in 2011-12. Where would they have made their
cuts? We have done everything we can to protect the poorest in the very difficult circumstances left us by the Opposition.
Mary Macleod (Brentford and Isleworth) (Con): Does my hon. Friend agree that the pupil premium in the comprehensive spending review will have a transformative effect on helping the poorest in Brentford and Isleworth, and elsewhere?
Mr Gauke: Within the comprehensive spending review we have given priority to school funding. The pupil premium will help the poorest, which is indicative of the Government's values in looking to the long term, looking at fairness, and ensuring that young people have an opportunity that they did not necessarily get under the previous Government.
Budget Deficits (Ireland)
10. Stephen Timms (East Ham) (Lab): What recent discussions he has had with his Irish counterpart on measures to reduce budget deficits. [31823]
The Financial Secretary to the Treasury (Mr Mark Hoban): The Government welcome Ireland's effort to bring its fiscal deficit under control, and support the international assistance package currently being agreed to deliver stability.
Stephen Timms: The Chancellor used to speak of the Irish miracle as a shining example of economic policy making. Are there not, though, important lessons to learn from the misery that we are seeing in Ireland today? Is it not clear that simply increasing VAT, making large-scale public sector redundancies and cutting welfare does not add up to a successful path out of the global crisis?
Mr Hoban: Let me remind the right hon. Gentleman what he said about Ireland on 8 May 2007:
"The Irish economy has enjoyed a good deal of success over the past few years. The corporation tax regime has contributed to that, but there have been a number of other factors". --[ Official Report, Finance Public Bill Committee, 8 May 2007; c. 19.]
The truth is that the Irish economy, like our economy under the previous Government, had a banking sector that was poorly regulated and out of control. It is because we have tackled the legacy of the Labour Government that we are in a position to help Ireland.
Mr Edward Leigh (Gainsborough) (Con): Given the misery that economies on the periphery of Europe, such as Ireland, are suffering from the imposition of a single currency throughout Europe, will my hon. Friend advise his European partners that any future plan should be motivated by what the markets demand, and not what grandiose politicians want?
Mr Hoban: My hon. Friend makes an important point. He may have read the shadow Chancellor's remarkable statement last week, that the euro had had no impact on the problems in Ireland. It is important that the right mechanisms are in place to tackle the problems in the eurozone, and that those solutions are owned by the eurozone. That is why the permanent mechanism that will replace the financial stability facility will be a eurozone-only body.
Equalities (CSR)
11. Fiona Mactaggart (Slough) (Lab): What recent representations he has received on the overview of the impact of the spending review 2010 on equalities; and if he will make a statement. [31824]
The Chief Secretary to the Treasury (Danny Alexander): Throughout the spending review process, the Treasury looked closely at the impact that decisions might have on different groups. We published "Overview of the impact of Spending Review 2010 on equalities" on 20 October, alongside the spending review document. Departments will consider the impact on equalities of decisions that are made as a result of the spending review, in the light of their legal obligations. On the day of the spending review, the decision to publish that document was welcomed by, among others, the Equality and Human Rights Commission.
Fiona Mactaggart: The Chief Secretary will recall that the document said that it
"would not...be meaningful to assess the impact"
on gender of the reductions in employment "at this stage". Given that women's unemployment exceeds 1 million and is at its highest level since 1988, when will the Government apologise to women for making them bear the brunt of their economic policies?
Danny Alexander: I do not accept that analysis. For the sake of completeness, the hon. Lady should recognise that the Government are cleaning up a mess left by the previous Government. If she is interested in the impact on women, she should consider the pay freeze that we have imposed in the public sector, which will protect jobs, and women's jobs in particular. It is also of benefit to women that we are allowing pay rises for people earning less than £21,000, a disproportionate number of whom are female. For the sake of completeness, she should consider those facts.
Miss Anne McIntosh (Thirsk and Malton) (Con): Will the Chief Secretary join me in explaining to the hon. Member for Slough (Fiona Mactaggart) that the Government's policies will reduce inequalities between men and women, particularly given our more flexible approach for part-time workers? Will he reduce other inequalities, such as in spending in rural and urban areas, and ensure that the balance is restored in favour of rural constituencies, such as his and mine?
Danny Alexander: The hon. Lady has made some important points. Throughout this process we will have regard to the impact that spending decisions have on different groups, including people who live in rural areas, and in particular the most disadvantaged. Our investment in early years education and the pupil premium are important to ensure that the most disadvantaged have the better life chances that we all want them to have.
Kerry McCarthy (Bristol East) (Lab):
Does the Chief Secretary accept the independent analysis that the poorest 10% of people will suffer 15 times more than the richest as a result of the Government's spending decisions? With women and children being hit the hardest, support
for people with disabilities being cut, and the Business Secretary suggesting that the winter fuel allowance is being lined up for the axe, no wonder there is growing public anger about big corporations and wealthy individuals seeming to be able to get away without paying tax altogether. What will he do to restore a sense of fairness and justice to the economic system?
Danny Alexander: I think that the hon. Lady was trying to get every subject into one question before Christmas. I do not accept the analysis that she offers. She should study more carefully the analysis in the spending review, which took into account the impact of taxation, spending reductions and welfare changes. It showed that as a share of people's income, and taking account of benefits in kind from the state, people in the wealthiest quintile make a greater contribution to deficit reduction than the poorest. That is in keeping with the Government's stated ambition of carrying through the unavoidable deficit reduction plan, which is necessary because of the mess that the previous Government left, in a way that is fair and supports economic growth.
Dyson Report
12. Mr Dominic Raab (Esher and Walton) (Con): What plans he has to implement the recommendations of the Dyson report on new technology. [31825]
The Exchequer Secretary to the Treasury (Mr David Gauke): The coalition's programme for government made a commitment to consider implementation of the Dyson review. The Government's growth review will be one of the main mechanisms for taking forward the Dyson review's aim of making the UK the leading high-tech exporter in Europe. The Treasury is currently consulting on the support that research and development tax credits provide for innovation, as part of wider corporate tax reforms.
Mr Raab: I welcome that response. The Dyson report recommended tax credits for high-tech start-ups, including businesses such as Chelsea Technologies and TR Control Solutions in my constituency, which create new jobs by pioneering green technology. Can the Minister be encouraged to go one step further and introduce tax breaks to stimulate that niche area of the UK economy, which is good for jobs, revenue and the environment?
Mr Gauke: I take on board my hon. Friend's comment, and we are determined to ensure that we do everything we can to help jobs and revenue. That is why we have been able to reduce the corporation tax rate from 28 to 24% over four years, and we are putting in place a stable and predictable tax system. I note his comments, and as I said, there is a review of the matter.
Andrew Miller (Ellesmere Port and Neston) (Lab): The Dyson report followed the work done by Hermann Hauser, and one of their recommendations is the creation of technology innovation centres, for which the Government correctly set aside some money in the comprehensive spending review. However, all the commentators who have passed judgment on the matter have said that the £200 million allocated, although welcome, will not go terribly far. What assessment has the Minister made of the long-term need to keep that funding stream alive, and is there a long-term plan to increase it substantially?
Mr Gauke: We continue to look at technology and innovation centres, and we need to do so in the context of what we already have in the UK, such as our science capabilities and industries. We need to take advantage of the commercial opportunities that they provide. I note my hon. Friend's comments, and we continue to consider the matter.
Budget Deficit (CSR)
16. Chris Skidmore (Kingswood) (Con): What assessment he has made of the Office for Budget Responsibility's report on the likely effect of the outcome of the comprehensive spending review on the budget deficit. [31830]
The Chief Secretary to the Treasury (Danny Alexander): The spending review set out more than £80 billion of spending reductions by 2014-15, and in its latest forecast, published on 29 November, the independent Office for Budget Responsibility judged that the Government's overall plan had a greater than 50% chance of balancing the structural current deficit in 2014-15, a year ahead of our mandate. Of course, I welcome that judgment.
Chris Skidmore: This year, the country faces a deficit of about £148.5 billion. Action taken by this Government will, according to the OBR, reduce that to £18 billion by 2015-16, yet there are those who reject that action and would prefer to do next to nothing. Does the Chief Secretary agree that to do nothing would cripple future generations with unbearable amounts of debt for which they were not responsible?
Danny Alexander: I agree completely, and it is worth adding that if the Government did not have a plan to reduce the deficit, as the previous Government did not, and we lost control of our public finances, the poorest in society would suffer most from that failure to take decisive action.
Derek Twigg (Halton) (Lab): We read this morning that the Business Secretary has said that the Conservatives wanted to cut the winter fuel allowance in the comprehensive spending review. Will the Chief Secretary put it on the record today that there will be no cut to the winter fuel allowance and no change in the eligibility criteria during this Parliament?
Danny Alexander: We are sticking to the winter fuel allowance. We announced that in the spending review, and we have not changed our position. In addition, we have made permanent the £25 a week level of the cold weather payment. The previous Government had planned to return it to £8.50 a week. Imagine what that would be doing now to the millions of families who are suffering in the cold.
Matthew Hancock (West Suffolk) (Con): What assessment has the Chief Secretary made of the impact of the CSR on business confidence, and especially the ability to take on new people? For instance, the Dalton's peanut factory in my constituency is taking on more people because of the confidence in the stability plans set out by the Government.
Danny Alexander: I am glad to hear about the companies in my hon. Friend's constituency, which share the confidence of many businesses that we have a Government who have got to grips with the public finances. That gives companies the confidence to invest, which is an important part of ensuring the private sector-led recovery that we need.
Financial Services Sector (Remuneration)
17. Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab): What plans his Department has to ensure greater transparency in remuneration in the financial services sector. [31831]
The Financial Secretary to the Treasury (Mr Mark Hoban): The Financial Services Authority has revised its remuneration code for disclosure rules to incorporate provisions in the EU capital requirements directive, CRD3, which comes into force on 1 January 2011. The directive requires firms to make narrative and quantitative disclosures on pay policy and practices. Those requirements are at the forefront of global practice and will help ensure greater transparency in remuneration in the financial services sector.
Gregg McClymont: In reply to my hon. Friend the Member for Sedgefield (Phil Wilson), the Financial Secretary suggested that the Government were united in their approach to banking reform. Am I to conclude from that the Business Secretary speaks for the Government when he says that the Conservative party is a roadblock to banking reform?
Mr Hoban: I hardly think that a Government who have embarked on a programme of radical regulatory reform of the financial services sector, introduced the bank levy, and set up the independent banking commission to consider the structure of banking in the UK could be viewed by anybody other than the Labour party as a roadblock to reform.
Graduate Tax
18. Henry Smith (Crawley) (Con): What estimate he made of the effect on public finances of the introduction of a graduate tax. [31832]
The Chief Secretary to the Treasury (Danny Alexander): I agree with the assessment of the graduate tax that the Chancellor gave in answer to earlier questions. I add that, under a graduate tax, those on the lowest incomes after leaving university would pay more than they do under our proposals. From a progressive point of view, there is an important argument against a graduate tax.
Henry Smith: I am grateful to my right hon. Friend for that answer. Does he agree that a graduate tax is neither fair nor progressive and that it would do nothing to help the 17% of my constituents who go on to higher education?
Danny Alexander:
I agree. Our proposals, which the House has agreed, ensure that no one will make a payment up front when they go to university, or start repaying until they earn more than £21,000 after leaving university. I note that some hon. Members now advocate
a graduate tax. They have said that they will produce their detailed plans by the end of the year, and we greatly look forward to seeing them.
Economic Growth
19. Hugh Bayley (York Central) (Lab): What steps his Department is taking to stimulate economic growth. [31834]
The Chief Secretary to the Treasury (Danny Alexander): As the Chancellor said earlier, the Government have launched a growth review-a fundamental assessment of how each part of government can contribute to private sector success by addressing the barriers to growth that industry faces. That will report at the time of the Budget.
Hugh Bayley: When a private business wants to grow, it invests, yet the Government are slashing not just current expenditure but investment. What are they planning to do to increase private sector investment? In particular, what are they doing to get banks to lend to small and medium-sized businesses?
Danny Alexander: The hon. Gentleman may not be aware of the previous Government's plans for capital investment, but the plans that we set out in the spending review put slightly more into capital investment than the previous Government planned. In particular, we are expending more on capital investment in transport infrastructure-the sort of investment that is most valuable to many businesses-in the next four years than was spent in the past four years. He should give the Government some serious credit for that.
George Freeman (Mid Norfolk) (Con): As all the indicators are beginning to show that the Government's deficit programme encourages private sector investment and growth, would my right hon. Friend like to comment on the rumours in this morning's financial pages following the recent summit with the President of the United States that the Americans are beginning to view us a model of how to promote growth by tackling deficits?
Danny Alexander: I am happy to restrict my comments to this country's plans rather than remarking on those of other countries. However, our approach to reducing the deficit has been firm and clear. It has established confidence and is putting in place a firm platform-a precondition-for economic growth in future. It is therefore vital to stick to and deliver the plans that we set out in the spending review.
G20 (Government Deficits)
20. Stuart Andrew (Pudsey) (Con): What discussions he has had with his international counterparts since the G20 Seoul summit on co-ordination of efforts to reduce Government deficits. [31835]
The Financial Secretary to the Treasury (Mr Mark Hoban):
At the G20 summit in Seoul in November, advanced countries committed to developing plans, which reflected their situations, to tackle their deficits and promote growth. The Chancellor has been actively involved in discussions with international and European counterparts
since the Seoul summit. As was the case with previous Administrations, it is not the Government's practice to provide details of all such discussions.
Stuart Andrew: Has my hon. Friend discussed with his counterparts the fact that the key to securing low interests rates for the long term is to take effective and decisive action on Government deficits?
Mr Hoban: My hon. Friend is absolutely right. We are very fortunate in this country. Because the Government took difficult decisions to tackle the deficit when we came into office, we are in a much stronger place now-consider the turbulence in the eurozone. The difficult decisions that we took ensured that we stepped back from the brink of bankruptcy.
Alison McGovern (Wirral South) (Lab): Global action on regulating the financial services sector through groups such as the G20 is vital. The House of Lords Economic Affairs Committee recommended a pre-funded deposit insurance scheme. It said:
"The Government should move towards pre-funding of the Financial Services Compensation Scheme as soon as"
possible. Why has the Treasury turned its back on that important measure?
Mr Hoban: If the hon. Lady speaks to building societies, which are finding it difficult to lend at the moment, she will hear their concern about the amount that they pay towards the financial services compensation scheme. Contributing to a pre-funded scheme would add to that burden and reduce the ability of banks and building societies to lend to support the recovery.
Mr Peter Bone (Wellingborough) (Con): Government Members, including me, believe that the Chancellor and his team are doing an exceptionally good job for the country. May I suggest another policy to reduce the deficit in this country? A freeze on our contributions to the EU would save us £22 billion over the next five years, which should be given back in tax cuts.
Mr Hoban: My right hon. Friend the Prime Minister is working with his international partners to freeze the EU's budget over the next financial perspective.
Child Benefit
22. Kate Green (Stretford and Urmston) (Lab): What his estimate is of the number of single-income families which will be affected by the decision to end child benefit for households with a higher-rate taxpayer. [31837]
The Exchequer Secretary to the Treasury (Mr David Gauke): The withdrawal of child benefit from families containing a higher-rate taxpayer in 2013 will affect around 200,000 single-income households.
Kate Green: The Minister will be aware that receipt of child benefit by full-time mothers with no other income triggers national insurance caring credits, which count towards those women's pensions. Will he explain how the full-time mothers who will lose child benefit under the Government's proposals can retain their link to the national insurance system and their pension contributions?
Mr Gauke: I can assure the hon. Lady that we will ensure that the link with national insurance contributions will be maintained, and that mothers in those circumstances will not lose out. We will announce details in due course.
Topical Questions
T1. [31838] Chris Williamson (Derby North) (Lab): If he will make a statement on his departmental responsibilities.
The Chancellor of the Exchequer (Mr George Osborne): The core purpose of the Treasury is to ensure the stability of the economy, promote growth and employment, reform banking and ensure that Britain lives within her means.
Chris Williamson (Derby North) (Lab): Is the Chancellor embarrassed that independent analysis by the House of Commons Library shows that the provisional local government settlement will result in the most deprived areas bearing far bigger cuts than more affluent parts of the country? The two councils in his constituency of Tatton will see their spending reduced by less than 2 and 3%, compared with more than 8% cuts in deprived constituencies. Will he therefore stop saying that his austerity measures are fair, and admit that we are not all in it together after all?
Mr Osborne: The Prime Minister explained from this Dispatch Box that the cuts in his constituency are considerably greater than the cuts in the Leader of the Opposition's constituency. Our reforms give local government greater control over budgets, but let me make another observation. Local government is responsible for a quarter of all Government spending. Labour proposed £44 billion of expenditure cuts. If Opposition Members are saying that they would not include local government in those proposals, they are less credible than I thought they were.
T2. [31839] Damian Hinds (East Hampshire) (Con): The anticipated provident societies and credit unions legislative reform order will bring great advantages to credit unions, including the ability to pay fixed interest on savings and to offer services to community groups, social enterprises and companies, but it has been rather a long time in coming. Will my hon. Friend update the House on the expected arrival date of that LRO?
The Financial Secretary to the Treasury (Mr Mark Hoban): My hon. Friend takes a close interest in that matter as chairman of the all-party group on credit unions, a position he took over from the hon. Member for Bristol East (Kerry McCarthy). He is right that that LRO will bring significant benefits to credit unions. Following comments by the relevant parliamentary Committees that scrutinised the draft laid by the previous Government, amendments need to be made, and I hope to lay the amended regulations in late January or early February.
T4. [31841] Chris Bryant (Rhondda) (Lab):
The Chancellor of the Exchequer seems to take a particular delight in playing the role of Baron Hardup. May I say to him, in the nicest, most Christmassy way possible,
that all his austerity talk provokes real anxiety in many of my constituents, who worry about their winter fuel allowance, the VAT increases in January and the major losses in construction jobs in the new year? Can I encourage him to play, just sometimes, Prince Charming instead?
Mr Osborne: At least I am not the pantomime dame. The measures we are taking are dealing with the economic inheritance that the previous Government, of whom the hon. Gentleman was a Minister, left this country. As we go into the new year, we are one of the few European economies not facing concerns about their sovereign debt issues, and we are providing a platform for economic growth next year. That is why people are looking at the UK and saying, "There is a country that is dealing with the problems."
T3. [31840] Andrew George (St Ives) (LD): Treasury Ministers rightly assert that the vulnerable should be protected and that those with broader shoulders should bear the greatest burden. With that in mind, will Ministers report on the effectiveness of the initiative announced in September to bear down on the estimated £42 billion of tax that the wealthy do not pay each year?
The Exchequer Secretary to the Treasury (Mr David Gauke): My hon. Friend is right to highlight this particular issue. We announced that £900 million would be spent over the spending review period on reducing the tax gap, and that will begin in 2011. Earlier this month, we announced plans to tackle tax avoidance with several detailed proposals on issues that had been left for many years. We have taken a firm line on those and we hope that that will raise considerable revenue from people who should be paying more in tax.
T5. [31842] John Cryer (Leyton and Wanstead) (Lab): Will the Chancellor tell the House whether the Treasury has made any plans for the possible collapse of the euro?
Mr Osborne: We monitor the European situation closely. I do not think that a collapse of the euro is remotely on the cards, but obviously stability in the eurozone is in our interests. We want to see a comprehensive solution early in the new year to some of the fundamental issues on having a currency union while not having a fiscal or political union, and we know that eurozone member states are working on those. It is also up to individual member states to do what they can to put their own economic house in order, and we would urge them to do that as well.
T8. [31845] Mr Robin Walker (Worcester) (Con): Does the Chancellor agree with the chief executive of a FTSE 250 engineering company, with whom I recently met, that the single most important decision by the coalition Government to date was to cut corporation taxes and thereby signal that Britain is open to business? What further plans does he have to reduce and simplify the burden of taxation on our businesses?
Mr Osborne:
The reduction in corporation tax from 28 to 24% keeps the UK as an incredibly competitive place to do business and, over the next few years, will
help to ensure that Britain gets its fair share of the growing global economic cake. The Office of Tax Simplification, which we have created, is specifically looking at the burden of tax on smaller businesses so that we can also bring benefits to them, although we have been able to avoid Labour's increase in the small companies tax rate.
T6. [31843] Mr Andrew Love (Edmonton) (Lab/Co-op): The recent Institute for Fiscal Studies report referred to by my hon. Friend the Member for Walsall North (Mr Winnick) shows clearly that both relative and absolute poverty will increase in every year up to 2014. Is not that the final nail in the coffin of the Government's claim to be both progressive and fair in their policies?
Mr Osborne: The hon. Gentleman seems to forget that child poverty was rising under the last Labour Government and we have put forward policies to increase social mobility and tackle the causes as well as the symptoms of poverty.
T9. [31846] Jeremy Lefroy (Stafford) (Con): As the Chancellor knows, I have written to the Treasury with details provided to me by a Staffordshire resident of an extraordinary tax avoidance scheme inherited from the last Government. I hope that it will not last long. In the spirit of Christmas, will the Chancellor invite his predecessors around for a dram so that they can explain why they found tax avoidance such a hard nut to crack?
Mr Gauke: As we have heard, Her Majesty's Revenue and Customs' assessment of the tax gap was £42 billion, but we are taking measures to address that. It is right that we do so, and we showed our determination this month when we announced a series of measures to reduce tax avoidance.
Mr Chuka Umunna (Streatham) (Lab): I would like to get some clarity on the taxation of the banking sector. The Business Secretary made it clear over the weekend that if the financial services sector did not exercise restraint in bonus payouts during the current round of bonuses, which goes on until April next year, the Government would consider imposing further taxes above and beyond existing taxation arrangements and the banking levy. Will the Chancellor, who adopted quite a different tone in New York, please confirm whether the Government are considering imposing extra taxation, over and above the existing arrangements and the banking levy, on the banks if they do not exercise restraint?
Mr Osborne: We said in the Budget that we were looking at the case for a financial activities tax, which is one of the two taxes that the International Monetary Fund- [Interruption.] The hon. Member for Wallasey (Ms Eagle) says it has nothing to do with bonuses. I suggest that she goes and considers what a financial activities tax is. The IMF has set out some of the principles behind it, but we have followed the principles behind the other IMF proposal, which is the bank levy. In the past couple of weeks, we have demonstrated that we are prepared to increase the rate of the bank levy to sustain the revenue.
Jo Swinson (East Dunbartonshire) (LD): While travelling on a gap year in New Zealand, one of my constituents had a nightmare experience when she was left with no access to money after her bank cancelled her card, despite her having informed it that she would be abroad. In an increasingly globalised world, will the Government consider whether banks can be made to offer a better service for UK customers living, working or studying abroad to avoid problems such as that faced by my constituent?
Mr Hoban: The hon. Lady makes an important point, and I am sorry to hear about the situation that her constituent experienced. It is important that banks ensure a good service for those travelling abroad, and I would encourage her to suggest to her constituent that she writes to the Financial Ombudsman Service to raise a complaint. However, I am sure that the banks will have heard what she said and take heed of her comments.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): What specific equality impact assessment did the Treasury carry out on the potential effects on women of the two-thirds reduction in Warm Front scheme funding next year announced in the comprehensive spending review?
The Chief Secretary to the Treasury (Danny Alexander): As I said in answer to questions earlier, we carried out an impact assessment, which we published, of the spending review. Individual impact assessments were also carried out. The matter to which the hon. Lady refers was decided by the Department of Energy and Climate Change, and it is the responsibility of that Department to carry out a specific impact assessment. The Treasury undertook its responsibilities fully in relation to the spending review as a whole.
Mr John Baron (Basildon and Billericay) (Con): What progress is the Chancellor making on the Government's review of the complex rules surrounding foreign earnings inherited from the Labour party, given that those rules are encouraging a number of companies to leave these shores? Those companies include WPP, Wolseley and United Business Media. That means a loss of revenue to the UK Exchequer.
Mr Osborne: That was another of the problems in the in-tray. We have announced reforms to the controlled foreign companies regime, on which we published a consultation paper a couple of weeks ago, and I expect to return to the matter in the Budget.
Jack Dromey (Birmingham, Erdington) (Lab): The Chancellor has said that he will be tough but fair in his cuts to Britain's public services. Is it fair that the West Midlands police service, serving an area of high need, will be hit twice as hard as Surrey, and as a consequence lose 1,200 police officers, 270 of whom will be compulsorily retired by next April?
Mr Osborne: The police settlement is fair. Here is yet another example of the Labour party's position. In the past hour, we have heard Opposition Members oppose all the welfare reforms, the local government reductions, and the reductions in the Ministry of Justice and Home Office budgets. Their position is completely non-credible.
Sajid Javid (Bromsgrove) (Con): The Prime Minister of Luxembourg recently proposed that the EU should start issuing common EU bonds, jointly and severally guaranteed by all member states. Although the eurozone countries can do what they want on bond issuance, will the Chancellor reassure the House that Britain will play no role in an EU common bond?
Mr Osborne: I can indeed give my hon. Friend that assurance. This is an issue that the eurozone is publicly considering, as well as other potential routes forward for the eurozone. My efforts are concentrated on getting our gilt auctions away, and I can reassure him that, thanks to the measures we have taken, that is going well at the moment.
Mr Tom Watson (West Bromwich East) (Lab): I see on my copy of the Liberal Democrat "Whip" for this week that all Lib Dem Ministers have been instructed to visit Oldham East and Saddleworth three times before 13 January. Will the Chief Secretary to the Treasury tell me on what days he intends to visit, and will he take the Business Secretary with him, so that they can outline their "Maoist revolution"?
Mr Speaker: Order. I assume that the hon. Gentleman is requesting a visit in which the Minister will talk about the policies of the Government.
Danny Alexander:
I am certainly not going to let the hon. Gentleman know of my intentions in advance, but it is characteristic of the attitude on his side of the House that Opposition Members do not have a single question to ask that offers a proposal for dealing with
the economic problems that they caused. It is economic common sense on the Government side of the House; just nonsense on the Opposition side.
Duncan Hames (Chippenham) (LD): Many jobs today require a university degree, yet compared with the position on funding employees' vocational training, there is no equivalent tax shield for employer contributions to higher education. Will the Chancellor explore changes to tax rules to encourage voluntary contributions from employers towards their graduate recruits' higher education?
Mr Osborne: My hon. Friend raises a good point. That is something on which we are seeking official advice, and I will keep him informed of any progress that we make on it.
Mr Dennis Skinner (Bolsover) (Lab): Now that the Chancellor has adopted a more belligerent tone in the last few minutes, will he open up and tell us what he really thinks about the WikiLeaks cable?
Mr Speaker: With relevance to Treasury matters, Chancellor-that is, if the right hon. Gentleman wishes to respond. He is not under an obligation.
Mr Osborne: I am not sure that there is anything that I can say to the hon. Gentleman, except that I wish him a happy Christmas and I hope that he approaches retirement soon.
Mr Speaker: Order. I am afraid that, as usual, demand has exceeded supply, and there are points of order sprouting up all over the place.
Points of Order
12.32 pm
Diana Johnson (Kingston upon Hull North) (Lab): On a point of order, Mr Speaker. Is it in order that the promise made by the Under-Secretary of State for Health to publish a review on contaminated blood products before the end of the year has not been fulfilled? My constituent Mr Glen Wilkinson has contacted me in the last hour. He is extremely angry that a group who have suffered so much have been let down again. May I ask you, Mr Speaker, whether you would look into this matter?
Mr Speaker: Nothing disorderly has occurred. The hon. Lady is dissatisfied, but that is a different matter. She has registered that dissatisfaction, which will have been heard.
Jim Fitzpatrick (Poplar and Limehouse) (Lab): On a point of order, Mr Speaker. In respect of David Quarmby's report "The Resilience of England's Transport Systems in Winter", during Transport topical questions on 2 December, the Secretary of State for Transport told the House:
"The findings and recommendations of the review have been implemented, and I have asked David Quarmby to come back and audit their implementation".-[ Official Report, 2 December 2010; Vol. 519, c. 955.]
Yesterday, during his statement on severe winter weather, the Transport Secretary told the House:
"Many of those recommendations have already been implemented, although some will necessarily take longer."-[ Official Report, 20 December 2010; Vol. 520, c. 1216.]
Those statements cannot both be accurate. Have you received any request from the Secretary of State to correct the record, given that Ministers have an absolute obligation to tell the truth to the House? If not, would now be a timely moment for you once again to reinforce the point to Ministers that they must correct the record when they get things wrong, even if they do so inadvertently?
Mr Speaker: I have received no such request from a Minister to make a statement. What has just been said about the importance of accurate statements to the House is true. If there is any inaccuracy, it should be corrected. I hope that the hon. Gentleman will understand that I am unsighted on the matter and not in a position to act as adjudicator. The point has been made; the point has been heard.
Dr Julian Lewis (New Forest East) (Con): On a point of order, Mr Speaker. Those of us who have been worried about the future of the nuclear deterrent in the light of some Government decisions will have been heartened by today's report in The Daily Telegraph that at least one Cabinet Minister has access to nuclear weapons. Have you received any notice, from any member of the Government, of a statement to be made in this House about this welcome augmentation of British military capability?
Mr Speaker: No, I have received no such indication. I shall take this as a pre-Christmas point of order of the New Forest East genre, and we will leave it at that for today.
With reference to a point that has already been made, let me just say-I am grateful to the Leader of the House for this-that I should perhaps have reminded the House that a written ministerial statement is being made today on the subject of contaminated blood. I simply put that on the record.
Mr Tom Watson (West Bromwich East) (Lab): On a point of order, Mr Speaker. That same Cabinet Minister has also said that the Prime Minister is seeking to abolish the winter fuel allowance. Have you had a request for an emergency debate so that the position can be clarified, in order to prevent millions of pensioners from living in fear this winter?
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): On a point of order, Mr Speaker. On 2 December, I asked the Secretary of State for Transport about winter tyres. In his response, he told me:
"We have looked at the issue, and in fact David Quarmby addressed it."-[ Official Report, 2 December 2010; Vol. 519, c. 973.]
He went on to say that the use of winter tyres here was "not appropriate". When I raised the issue with him yesterday, however, I told him that I could find no reference to winter tyres in the Quarmby report and that his response had been inaccurate, in that the Highways Agency actually recommends them. He replied:
"I am grateful to the hon. Lady for giving me the opportunity to clear something up-I clearly mangled my words in my reply to her."-[ Official Report, 20 December 2010; Vol. 520, c. 1226.]
Is it appropriate to use the phrase "mangled my words" to describe something that was clearly misleading the House, when he should have put the record right? The facts were wrong.
Mr Speaker: I am not sure that there is a misleading of the House involved, but the point has been made and the Leader of the House is on the Treasury Bench; he will have heard what has been said. If any message needs to be conveyed to the relevant right hon. Member, I feel confident that, as a result of the hon. Lady's efforts, it will be.
Chris Bryant (Rhondda) (Lab): On a point of order, Mr Speaker. On 2 November, in replying to an urgent question on the right of prisoners to vote, the Parliamentary Secretary, Cabinet Office, the hon. Member for Forest of Dean (Mr Harper) said that no decision had yet been made. He went on to say that once a decision had been made, it would be announced in the usual manner and, in his words, "at the Dispatch Box". In fact, it was announced last Friday, not even by a leak but by a press release. Before it had been announced to Parliament, a written ministerial statement was issued yesterday, but the announcement was not made at the Dispatch Box. Is there any means of making a Minister honour a commitment that he has made to the House?
Mr Speaker:
There is no means by which to compel or oblige a Minister to follow through on the precise words or commitment previously uttered or given. How a statement is made or a decision is announced by a Minister is a matter for the Minister. However, the hon. Gentleman, who is a perspicacious parliamentarian,
has drawn attention to what I would call the disparity between what was said on one occasion and what happened on another.
Diana Johnson: Further to my previous point of order, Mr Speaker. I note the comment that you went on to make about today's written ministerial statement. May I just confirm that that written ministerial statement is merely a holding response, and that it is not actually the statement that was promised by the Minister?
Mr Speaker: I am unsighted on that point, but my additional observation about the written ministerial statement was intended to be helpful. It was not intended to spark a further debate on this occasion.
Mr Speaker: "Ah!", says the hon. Member for Rhondda (Chris Bryant). I am glad that, even in the approach to Christmas, we can rely on his running commentary, which is richly enjoyed.
Television and Radio Advertising (Credit and Debt Management Services)
Motion for leave to bring in a Bill (Standing Order No. 23 )
12.38 pm
Mrs Jenny Chapman (Darlington) (Lab): I beg to move,
That leave be given to bring in a Bill to regulate the advertising on television and radio of credit and debt management services; and for connected purposes.
In other words, the Bill is designed to get legal loan sharks off our screens. Credit is something that few of us are able to live without. Whether we want to buy a car or a house, go to university or get married, most of us use loans of one form or another to enable us to do it. Debt in itself is not a bad thing. The problems start when debt becomes unmanageable-when loans are taken to repay other loans, and when the percentage of our income spent on debt creeps up and up until we are unable to service our debts.
Loans are often taken out following a change in circumstances, such as a relationship breakdown or the loss of a job, or to tide us over while times are tough. Loans are frequently taken out in response to emergencies such as a broken washing machine, the need to travel to a funeral, or unexpectedly high bills for facilities such as heating. The idea that people in unmanageable debt are always simply spendthrifts who should have known better is not correct. All but the very wealthiest have debt. Most of us either escape it or manage it reasonably successfully, but being in unmanageable debt is a problem that eclipses all others.
We know that owing money that cannot be repaid leads people to depression, suicide, domestic violence, alcohol misuse and deeper debt. Loan companies know that as well, and go to great lengths to make their products appear easy, everyday, and the perfect solution to an all-encompassing problem. Darlington citizens advice bureau tells me that the number of people applying for payday loans in Darlington has been increasing, and that television advertising is responsible. Such loans come with interest rates of about 2,500% for Wonga and 5,000% for Payday First. There is little disagreement about the expensive nature of that type of borrowing. The total cost of credit is well over 20% of the value of the loan. A consumer survey run by MoneySavingExpert. com suggests that a 20% cap on the cost of credit would be welcome.
The Bill does not seek to ban high-interest loans, although I think that that would be a very good thing. It seeks to prevent such loans from being advertised on television and radio. Television and radio advertising are the most effective forms of advertising available. Campaigns that use them consistently out-perform those that do not. Ads are now cheaper in real terms than they were in the 1980s and, on the whole, more successful. Advertising works. That is why restrictions are placed on the advertising of alcohol, and why the advertising of cigarettes on television and radio is not allowed.
We know that advertising generates demand, and that that is why companies pay large sums to advertise. We also know that other countries are getting serious about trimming the worst excesses of the credit and
debt management industry, with maximum interest rates being introduced in the United States and parts of Europe. That is leading to an increase in high-interest lending in this country, with many US firms looking to the under-regulated UK market for their next growth opportunity.
By preventing the advertising on television and radio of loans that cost more than 20% of their value, we will remove the main means by which lenders target people on low incomes or on benefits, convincing them that a high-interest loan is appropriate, desirable and easy. In such ads, expensive lending is given the appearance of something that everyone is doing. That is classic nudge theory: make us believe that everyone is at it, and we are more likely to join in ourselves. That is fine when applied to recycling or exercise, but not so fine when we are talking about exploitative loans.
The Bill also proposes restrictions on debt management services. We all know the ones I am talking about. Even those of us who do not admit to watching Jeremy Kyle have seen them: "Repackage all your debt into one easy monthly payment." Again, the ads make it look so easy. What they do not mention is the high cost of the debt restructure, or the fact that the same service is available from free Government and charitable sector organisations which are not in a position to pay for expensive television advertising. The eventual result is a spiral in which hefty charges are imposed on consumers who are in a desperate position. Those charges produce profits and pay for further advertising, enticing more people into using the service.
Statutory regulation, over and above the very basic licensing and supervisory regime presided over by the Office of Fair Trading, is vital. Over-indebted vulnerable consumers are acting under stressful conditions, without the time or inclination to shop around. There should be adequate protection from rogue providers of debt advice, so that huge numbers of already indebted consumers are prevented from falling into even greater financial difficulties. Estimates suggest that in 2010, fee-charging providers of debt management will cost heavily indebted consumers between £207 million and £275 million in fees alone.
At the end of September, the OFT published the results of a review of compliance with its debt management guidance, which providers are meant to abide by. The OFT found that non-compliance was widespread and had reached an unacceptable level. Misleading advertising was the most significant area of non-compliance-in particular, failure to disclose that a fee is retained by the business, and misrepresenting debt management services as being free when they were not.
My Bill proposes that adverts for debt management services should have to make their charges properly clear in all their advertising, and further that they should make it clear that alternative sources of free advice are also available, such as Payplan and Citizens Advice.
The Government have confirmed that Jobcentre staff will soon start issuing vouchers for people to exchange for emergency food supplies. The scheme will begin next month and roll out nationally in April. It is surely wrong that those same people who are being assisted by the state in this way are allowed to be deliberately targeted, misled and exploited.
By preventing high cost lenders from advertising on television and radio and by changing the way in which debt management advisers promote their services, we can start to make this sector less ordinary. We have given high cost lenders and debt management services an easy ride in this country. By curbing the worse excesses in their marketing, we reduce their ability to mislead increasing numbers of people into thinking that what they have to offer is good value, easy and commonplace.
That Mrs Jenny Chapman, Yvonne Fovargue, Nic Dakin, Justin Tomlinson, Heidi Alexander, Valerie Vaz, Tom Blenkinsop, Dr Stella Creasy, Sheila Gilmore, Dr Thérèse Coffey, Mr Robert Buckland and Tracey Crouch present the Bill.
Mrs Jenny Chapman accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 4 March 2011, and to be printed (Bill 129).
Backbench Business
Christmas Adjournment
Mr Speaker: Before I call a member of the Backbench Business Committee to move the motion, I should inform the House that a six-minute time limit will apply to Back-Bench speeches, and Ministers will be expected to wind up the debates on each occasion in 10 minutes. The list of Members and subjects has been published, but the order in which Members are called will depend upon the discretion of the Chair. As usual, the occupant of the Chair will seek to alternate in calling Members to speak from both sides of the House and will take into account how often each Member has spoken previously in this Session.
This is an experiment and we may need to be flexible to accommodate as many Members as possible and get ministerial replies to their speeches. Members are expected to remain in the House for the whole of the debate in which they are taking part. The annunciator will give notice of the likely start time for the next debate.
12.48 pm
Mr Peter Bone (Wellingborough) (Con): I beg to move,
That this House has considered matters to be raised before the forthcoming Adjournment.
I move this motion on behalf of the Backbench Business Committee. On behalf of Back-Bench Members I should like to thank the staff of the House for the splendid work that they do in supporting us through the whole year. In particular, on behalf of the Backbench Business Committee I thank the Clerk and staff of that Committee. I extend to you, Mr Speaker, my thanks for putting Parliament first and putting the rights of Back-Benchers firmly on the map. Through your direct and indirect actions, you have helped to restore confidence in Parliament.
The Backbench Business Committee wanted to try an experiment on the last day of term. The idea of the debate is that Ministers should have an opportunity to hear what Members say, that Ministers will give a substantive response to Members, and that Members will know the timing of the debate through the various chapters that have been used. If the experiment is successful, we will consider repeating it in future.
Cabinet Office
12.50 pm
Ms Karen Buck (Westminster North) (Lab): I am very grateful for this opportunity to make a few introductory comments on the 2011 census, in which I am supported by my hon. Friend the Member for Slough (Fiona Mactaggart) and the hon. Member for Cities of London and Westminster (Mr Field). He has sent his apologies for being unable to be here today, but he and I had a conversation about this issue this morning and he supports the comments I will be making, not least because they have been informed in part by an excellent briefing from Westminster city council. That is a comfort, because the council and I spend six days a week fighting like ferrets in a sack, so it is a pleasure when we are able to find areas of common agreement.
Ten years ago there was massive under-enumeration of the population in my constituency and my borough of Westminster, as well as in Manchester, many parts of east London, Cambridge, Oxford and many other areas of the country. One million fewer younger people than anticipated were counted at the end of the census process in 2001, leading the then director of the Office for National Statistics to comment that he thought they were probably all in Ibiza. That was a very good joke but, unfortunately, it hid a serious truth, because the reality was that the under-counting of the population in 2001 was almost entirely among harder-to-reach communities-poorer communities, black and minority ethnic communities and the more mobile communities-and that mattered. It mattered both in terms of the purity of the data and in terms of the grant allocations to local authorities.
In my borough of Westminster, 63,000 fewer people than anticipated were found by the census, and the contact rate was just 71%, which was the fourth lowest in the country. It took the local authority-I know because I was working with it-at least three years to convince the Government and the ONS that the census had been wrong. It was wrong in part because the contact rate was so poor, but it was also wrong at a most staggering level in that census forms were simply not delivered to entire estates. It was an extraordinarily incompetently managed exercise.
The four sweetest words in the English language are "I told you so." Before the 2001 census, I told the local authority, the Government and the ONS what would happen. The glow of self-righteousness lasted for longer than the census period itself, but it has given me no real satisfaction because this took so much time and did so much damage, and because the imputing of statistics after the process cannot capture the complexity of the population at a small-area level. The fact that the ethnic make-up of populations has not been thoroughly identified has meant that ever since we have not had sufficiently accurate data to be able to administrate health and local government services properly.
The 2001 census was subject to scrutiny by the Public Administration Committee and the London Regional Select Committee, which I briefly chaired, and I pay tribute to the officers who organised that scrutiny process. A number of evidence sessions were held, and by the end of the process I was convinced that some lessons had been learned from the errors of 2001. A proper
address register is being compiled for the first time, although I suspect it will not be maintained, and investment has been put into the scanning and tracking of census forms to ensure that there is real-terms accuracy in their return.
Set against that, however, is the fact that we now know from Government statements that the 2011 census will be the last one. That sends out a powerful psychological message. It is likely that this census will not attract as much support as previous ones. Also, local authorities and voluntary organisations, who are important partners, are distracted by cuts. The funding for administration is under pressure, and the Government have stated that they would like to see reduced funding. Above all, despite the ONS's commitment to a partnership with local authorities, it maintains a one-size-fits-all approach to management. The Westminster council briefing states:
"the ONS has placed a great deal of emphasis on the idea that the 2011 census is to be delivered in partnership with local authorities but the lack of local flexibility means that, for example, Capita's recruitment is so complicated and restrictive that the ONS have been unable recruit even half the staff needed locally."
Is the Minister content that staff will be recruited and trained properly?
There continues to be a serious risk that the ethnic minority populations will be the most significantly under-counted. Westminster's own survey found that the response was low, particularly in the high-churn districts, where it was as low as 4%. Without additional assistance and the Government giving a higher priority to this, and without the ONS now rapidly adjusting its response to the lessons being expressed by Westminster and others in order to improve the quality of the census process, we are in danger of not only repeating the failures of 2001 but possibly producing an even worse outcome in some areas. That will be bad news for local government and bad news for the health service. It will also reflect badly on the Government, and I ask them to make sure that, in the 20 remaining weeks, these errors are corrected.
12.56 pm
Jack Lopresti (Filton and Bradley Stoke) (Con): When I was thinking about this debate and my speech, I was conscious that the term "big society" has only recently been added to the political lexicon. In my opinion, it is not a new concept however. One might almost call it an age-old human value. Here is a quotation that I believe begins to explain what the big society is:
"To be attached to the subdivision, to love the little platoon we belong to in society, is the first principle (the germ as it were) of public affections. It is the first link in the series by which we proceed towards a love to our country, and to mankind."
That was said by a man called Edmund Burke, who was the MP for Bristol in 1774.
Edmund Burke was one of the first writers to realise the importance of the spontaneous social groupings that people create for themselves. Social scientists have increasingly recognised that Burke's little platoons are the glue that holds society together and makes it tolerable. The point I am trying to make is that big society initiatives and volunteering empower people, and I think the big society could be one of the biggest social mobilisers we have had for generations.
It is not just poverty and difficult family circumstances that hold young people back; it is also the poverty of aspiration and a lack of good role models. By being part of a community group-whether in politics, sport or the arts-inclusion gives young people a sense of purpose and aspiration. It gives them a sense of community and active citizenship, and it can provide them with successful role models who can lead the way.
I know how difficult it is to escape from the constraints of our individual circumstances. I would not be a Member of Parliament if it were not for the fact that I was once a volunteer. At the age of 18 I wanted to engage in the political process locally and get involved in campaigning for a political party. It was only when I met other like-minded individuals, although from very different backgrounds to my own, and when I was inspired by role models, that I started to think that, perhaps, even I, who had left school at 15 with no qualifications, could one day be a Conservative Member of Parliament. People see others who are doing it, and they start to think, "Why not me?"
There are many examples in my own constituency of volunteer groups that inspire young people to mobilise and be part of the community. I think of the volunteers who run my youngest son's Army cadet detachment in Patchway-unpaid, passionate individuals who give up a lot of their time to keep the detachment going and to give the youngsters the chance to broaden their horizons by learning how to live and work with people from all walks of life, and who teach the cadets real life skills and provide great role models. I was also lucky enough to be invited to meet, at one of their weekly meetings, the St John Ambulance cadets in Bradley Stoke. I met some wonderful young people, some of whom are so passionate about their cause that they want to go on to become doctors and paramedics and take up other roles in the medical profession. I am in the process of arranging a trip for them to the House of Commons.
The big society is about overcoming the problems Britain faces by pulling together and working together. In this vein, real change does not come from Government alone, but, more importantly, when the people are inspired and mobilised. This is the underlying ethos behind the big society programme, and it is the approach we should take to improve social mobility.
In practical terms, the big society is a vision that can partly be described as championing local people at grass-roots level so that they can empower themselves and their communities, and partly as encouraging the private sector to help us to tackle social problems and to contribute to society as a whole. As the Prime Minister states:
"all the Acts of Parliament, all the new measures, all the new policy initiatives, are just politicians' words without"
the empowerment of people at a local level.
Nat Wei, the highly successful social entrepreneur who, as executive chair, has been instrumental in setting up the Big Society Network, has said that in groups people
"learn what society fundamentally is".
"grouping at the local level is arguably a public good".
The big society is intertwined with the improvement of people's lives and circumstances. The big society initiatives and the mission to improve social mobility pave the
road on the journey back towards a healthy civil society-towards a 21st century-friendly society, in which all are invited to be active members.
I also wish to pay tribute to some of the organisations in my constituency, which are most prominent in my mind, for what they do to improve social mobility through big society programmes. I am thinking of the council for voluntary service in south Gloucestershire, which gives the voluntary and community sector in that area effective and accountable representation. By sitting on various strategic bodies and supporting other voluntary sector representatives, it ensures that volunteers are represented in local government. The guidance and assistance provided by south Gloucestershire CVS is invaluable to the voluntary sector locally. I also pay tribute to the Southern Brooks Community Partnership, which has done so much to promote the big society agenda in Filton, Bradley Stoke and elsewhere.
The Government's vision for a big society with more diverse providers of public services and greater power for communities to make local decisions brings huge opportunities to charities, voluntary groups and social enterprises. I am pleased that as well as providing these new opportunities and rights, the Government will assist new providers by improving access to the resources they need and providing funds to pilot the national citizen service. The big society bank will bring in private sector funding, in addition to receiving all the funding available to England from dormant accounts. I know that that, in particular, will help to transform the lives of many of our young people. I look forward to the Minister's response, but I am deeply encouraged by the commitments that the Government have already made to the big society agenda and to improving social mobility in our country hugely.
1.1 pm
Pete Wishart (Perth and North Perthshire) (SNP): Thank you, Mr Speaker, for giving me the opportunity to speak in the all-new, super-duper, pre-recess Christmas Adjournment debate. I wish to discuss the plans for a city status competition in Her Majesty the Queen's diamond jubilee year and the arrangements for that contest. If I get the opportunity to do so, I might just make the compelling, excellent and fantastic case for the beautiful city of Perth.
We in Perth were delighted when it was announced that there was to be a city competition in 2012 and we look forward to putting our compelling, excellent and fantastic case, alongside like-minded towns and cities throughout the United Kingdom. We naturally presumed that, once again, the Cabinet Office and the relevant Minister would attempt to ensure that a wide range of cities from throughout the United Kingdom would be rewarded with official city status, in recognition of the different civic traditions, arrangements and cultures in our diverse component parts of the United Kingdom. We therefore cannot begin to say how disappointed we were with the plans that we saw and how puny they were. Instead of encouraging a good competition, one that would match the commitment, energy, enthusiasm and ambitions of a range of candidate towns and cities across the United Kingdom, this time the Government have, for some reason, sought to award this status to only one city throughout the United Kingdom. After the efforts that we have made in our city, that has come
as a crushing disappointment to Perth, as I am sure it has to other small applicant towns and cities the length and breadth of the United Kingdom.
Perth first approached the Ministry of Justice a couple of years ago to see whether it could secure official city status in advance of its 800-year anniversary: it is 800 years since Perth was awarded a city charter and became a royal burgh. We were encouraged to drop that plan and bid in the 2012 competition, which is what we have decided to do. Perth sees itself as a different aspirant city because it was an official city; it had its lord provostship. That goes back to what I was saying about the differences in tradition and culture between Scotland and the rest of the UK. We do not have mayors; we have provosts. It is bizarre to ask us to compete with towns and cities that have mayors, given that we have provosts. I look forward to the Minister's response on that.
Perth was an official city-in fact, it was the capital of Scotland and was where the Kings of Scotland were crowned. Until the 1970s, when the town was so callously stripped of its official city status, it was considered to be the second city of Scotland. So for us this campaign is not about securing city status; it is about restoring that status and it is a matter of justice. Even in 2010, Perth is still very much considered a city: it is the "Fair City" of Sir Walter Scott's book; it is the gateway to the highlands; it is the legal, administrative, commercial and educational centre of one of the largest areas in the United Kingdom, with one of the fastest growing populations in the country; and it even has a far-reaching international footprint, as we see when watching the English cricket team struggling to preserve the Ashes out in Western Australia.
When considering this competition, we must ask how we have done it before. In 2002, we had the Rolls-Royce version of a city status competition, when each of the nations of the UK had its own internal competition. That year, the city of Stirling was lucky enough to be awarded official city status. The millennium competition was not quite the same-with different competitions throughout the UK-but the equivalent of the Ministry of Justice at the time put real effort and energy into awarding this status to a range of cities from across the United Kingdom. Brighton and Hove, Wolverhampton and Inverness all won, so there was one winner from the south of England, one from the midlands of England and one representing the rest of the nations of the UK. That was a fantastic example of how a city competition throughout the UK could be organised and it was far more generous than what is on offer the next time around.
Such is the concern that, in a rare gesture of political unity, all the political leaders in the Scottish Parliament have come together to express their concern that Scotland will be overlooked. We in Perth are confident that we can see off all comers, because we believe that our case is fantastic, excellent and compelling, and that the beautiful city of Perth will be a real contender. However, what we presume will happen, given that there is to be only one winner, is that this competition will be lazy and sloppy. We presume that it will tend to favour the largest and those with greater access to the centre of power and-dare I say this?-it may favour applicant towns with one Conservative Member of Parliament or with several Conservative MPs.
We know that 11 towns from England are bidding to be official cities this time around, the smallest of which is twice the size of Perth and the largest of which is five times as populous, so they will have greater resources to deploy. If I were representing an English applicant town, I would expect to win this one. I would not expect the winner to be from the Celtic fringe. Given that England is the largest constituent part of the UK, I would expect one of its towns to win. All I am asking the Whip to pass on to the Minister is a request to review slightly what the Government have in mind for this city status competition and to do what was done last time around. The Government should reward a series of applicant cities from across the UK and make this fair. Let like compete with like. The Minister can still do that, because the plans can still be altered. Let us have a proper, genuine city competition that can meet and match the ambitions of communities the length and breadth of the United Kingdom.
1.7 pm
Harriett Baldwin (West Worcestershire) (Con): May I, too, associate myself with the kind remarks made by my hon. Friend the Member for Wellingborough (Mr Bone) in passing on good wishes to everyone at this time of year?
I wish to discuss the West Lothian question which, as I am sure all hon. Members appreciate, is the nickname given to the situation post-devolution in which MPs here at Westminster who represent Welsh, Northern Irish or Scottish constituencies may find themselves able to vote on matters that do not affect their own constituents.
In West Worcestershire, which I think of as being the heart of the heart of England, this issue is being raised increasingly frequently with me. Recently, I took part in a television debate, where the reporter had been to the border between Shropshire and Powys. Located on the border is a village called Chirk, which is divided. On one side of the town prescriptions are free and on the other side they cost £7.20. The differences do not end there, because the village might also be divided over matters such as university tuition fees and other services where the Welsh Assembly Government might treat their residents differently. Do not get me wrong, I am a big supporter of devolution and the process of localism that we are going through. It represents enormous progress. I am also a big supporter of the Union, but it does not mean that the West Lothian question can be swept under the carpet for ever.
The manifesto on which I was elected said:
"Labour have refused to address the so-called 'West Lothian Question': the unfair situation"
of Scottish, Welsh and Northern Irish MPs voting on matters that do not necessarily affect their constituents. It continued by saying that we
"will introduce new rules so that legislation referring specifically to England, or to England and Wales, cannot be enacted without the consent of MPs representing constituencies of those countries."
I completely acknowledge that during the five days in May, when the coalition's programme for government
was put together, the pledge was somewhat changed, and a commission has been called for to look into the question.
On 26 October, I was able to ask the Deputy Prime Minister in the Chamber for an update on when the commission might be established, and he replied:
"My hon. Friend the Parliamentary Secretary, Cabinet Office, who has responsibility for constitutional affairs, will lead on that and he will announce our intention to set up a commission on the long-standing knotty problem of the West Lothian question by the end of the year."-[ Official Report, 26 October 2010; Vol. 517, c. 154.]
Last week, however, my hon. Friend the Member for Brighton, Kemptown (Simon Kirby) received a written answer from the same Parliamentary Secretary, to the effect that the Government is
"continuing to give careful consideration to the timing, composition, scope and remit of the commission. Its work will need to take account of our proposals to reform the House of Lords to create a wholly or mainly elected second chamber, the changes being made to the way this House does business and amendments to the devolution regimes, for example in the Scotland Bill presently before the House. We will make an announcement in the new year."-[ Official Report, 15 December 2010; Vol. 520, c. 822W.]
So my first question for the Department is: will the Government clarify which part of the new year that is likely to be, and confirm that the new year referred to is, indeed, 2011?
I should like to use this opportunity to preview my private Member's Bill. I was lucky enough to be placed seventh in the ballot, and the Bill has its Second Reading on Friday 11 February. It has the innocuous title of the Legislation (Territorial Extent) Bill, and from my research into the West Lothian question I have found that the challenge is to get around parliamentary privilege. We are all elected to this place equally, and we can all have an equal say and vote on all issues, and we certainly do not want to have two categories of MP.
Many much more distinguished brains than mine have wrestled with that knotty problem. In 2000, Lord Norton of Louth looked into the matter and came up with some proposals; in 2006, my hon. Friend the Member for North Dorset (Mr Walter) had a private Member's Bill on the issue; and Lord Baker of Dorking had a Bill in the Lords in 2005. The current Prime Minister then asked the now Lord Chancellor and Secretary of State for Justice, my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), to look into the issue.
It might be possible to use Standing Orders and Speaker certification to identify which Bills affect which parts of the UK. My private Member's Bill simply calls on draft legislation to identify and outline which parts of the UK it affects. It is a simple piece of preparatory, enabling legislation, and I urge all hon. Members who share an interest in the matter to come to me with their ideas. My second question is: will the Government be able to support my private Member's Bill?
1.13 pm
Fiona Mactaggart (Slough) (Lab):
The Christmas Adjournment debate is a good opportunity for the Government, 2010 years after a botched census led to a baby being born in a stable, to get the 2011 census right. Slough has for a long time been a victim of the failures of the previous census, and as a result we have been
underfunded for a significant period. I am concerned that worse problems might occur in the 2011 census, and they will arise from a combination of inadequate resourcing and flawed methodology.
The first flaw in the methodology is the emphasis, as my hon. Friend the Member for Westminster North (Ms Buck) pointed out, on using the post. That is a deterrent to people in my constituency, many of whom have poor literacy skills. Moving as a primary school teacher from Peckham to Slough, I was shocked by the poor literacy in the constituency that I now have the privilege to represent.
Slough's "hard-to-count" score is assessed as a three, which puts it in the top 20%, but that is another error. It should be assessed as a four, and in the top 10%, to account for our transient and diverse population. One indication of the rapid change in Slough between 2008-09 and 2009-10 is that schools in my small borough recorded 531 recently arrived pupils from 53 different countries.
The score also does not take proper account of the impact of houses in multiple occupation. Slough can provide the Office for National Statistics with information about 1,500 HMOs of which the authorities are aware. For the remaining 2,000 HMOs, which are implied by census and survey data, only one questionnaire will be posted, however. If the questionnaire is posted back or completed online, no follow-up visit by a census collector will take place. Only if a questionnaire is not posted back or not completed online will there be any opportunity for accurate counting through a follow-up visit, and those houses in multiple occupation are just ordinary terraced houses.
Additionally in Slough, a number of people live in sheds and other hidden households for which we have no address, so there will be serious problems in dealing with that. I should like to suggest five remedies to which I hope the Minister will respond.
First, the Minister should ensure that the people responsible for collecting census forms have the requisite language skills. Slough borough council is concerned that none of the census posts being advertised has language as an essential requirement. The recruitment and selection process that Capita is delivering on behalf of the ONS means that there are no face-to-face interviews, and that selection decisions are based on performance in online testing and questioning. Although language skills are listed as desirable for all roles, they are not part of the recruitment and selection process, but they should be.
Secondly, will the Minister ensure that the operational elements of the 2011 census include dedicated and adequately resourced events at which people can complete census questionnaires? Currently, the planned completion centres will not have sufficient personnel who are able to re-issue household questionnaires. Only ONS staff can do that, and in my borough only seven and a quarter people will be able to do so.
As a result, in a very verbal town, the events in the centres, which could be a good way of ensuring that people are able to complete their questionnaire, will not take place frequently enough or in enough places. Are the ONS staff trained in questionnaire filling? Will they have the language skills that my constituents require? The ONS says that local authorities can set up alternative completion centres, but local authority staff cannot issue new forms; only the ONS staff can do that.
Thirdly, a national marketing campaign must take place. It has been deferred because of the Government moratorium on advertising, and that is pretty stupid, frankly. Will the Minister ensure that materials are available and clear? Slough has volunteered to translate certain materials, but the ONS has not agreed, so can I have an assurance that the publicity campaign will be agreed to?
Fourthly, we must improve the arrangements for large households. Currently, the head of household will have to request an additional form if there are more than six residents in their household. They will have to do so using a phone line, and in Slough the head of household is likely to be someone for whom English is not their first language, so such requests will be hard to make. Can we therefore have better arrangements for people who need supplementary forms?
Fifthly, Slough is under-represented. I am familiar with the London borough of Wandsworth, which is about twice as big as Slough.
Mr Bone: The hon. Lady is making a powerful speech. Has she considered whether a sampling technique would be better than an actual census?
Fiona Mactaggart: The hon. Gentleman is right to make that point, and sampling will take place after the 2011 census, because that will be the last one. Sampling techniques are theoretically great, but I spent 10 years trying to persuade the ONS that its sampling techniques and statistical methods were inadequate, so I know that they are not perfect.
To return to resources, the London borough of Wandsworth is about twice the size of Slough and has a similar ethnic mix, yet Wandsworth has two area managers, whereas Slough has one quarter of an area manager. Wandsworth has two community advisers, the same number as Slough, and 23 co-ordinators compared with Slough's five. I do not begrudge Wandsworth that; indeed I live in Wandsworth as well as in Slough, but the ONS, which has shown since 2001 that it does not get Slough and continues not to get Slough. Unless it gets Slough and puts the resources in we will-once again-be under-counted in the 2011 census.
1.20 pm
Penny Mordaunt (Portsmouth North) (Con): The third sector makes a huge contribution to the quality of life of everyone in my constituency, and given the opportunity it could do even more. In Portsmouth, we are particularly indebted to Community First, which has done so much to support charities and community organisations.
However, there are some very real threats to the sector's capacity to expand, and even maintain, its current work in the community. Local authorities are faced with reduced grants from central Government. In the economic circumstances, it would be a naive council that thought that it would be protected from the consequences of a massive deficit, but it would be a lazy council that responded to the challenge of a reduced budget by cutting funding to third sector organisations.
If local authorities use this spending round as a cover for a retreat to the comfort of central provision, they will not be thanked and nor will they be acting responsibly. I am sure that everyone in the House understands, and
can give many examples from their own constituencies, of how the third sector delivers better value for money and the most client-focused services, raises additional funds and inspires more good will than its public and private sector counterparts. It is said that the people do not know what the big society is, but people do know that and the third sector has been laying the foundations for years. It is big state local authorities that are refusing planning permission for the next stage.
I have identified four key concerns in Portsmouth. First, local authorities must harness the power of the third sector rather than stifling it and running it down. There is a lacuna in service commissioners' understanding of what the sector can offer and an unwillingness to fill it. The Government have done and are doing much to level up the playing field, but unless commitment is continued at a local level where powers are being pushed, we will not succeed in empowering charities and community groups to become providers or set up sustainable services.
Take a service such as Motiv8, for young people in Portsmouth. The enormous amount of money that it saves the public purse in the long term is well documented and there is no doubt that such services are required. Yet unless it can be sure of transition funding, some of its activities might have to stop. There is no doubt that the ill effects of its absence will be keenly felt and, in time, the council will need to re-establish similar provision-but this time, probably council-provided. That is a complete waste of money and the same could be said for other services such as Pompey Stars, Off The Record and Enable Ability, which already deliver very good returns on investment.
To shut such services in spring purely to reinvent them in the summer, following the loss of staff, premises and good will, seems a crazy thing to do, especially as these services are often able to attract considerable additional funding if they are given enough time to do so.
This small-mindedness is further represented by the lack of a commissioning framework in Portsmouth. That makes it extremely difficult for organisations such as the Alzheimer's Society to plug into the service needs of the population. Work is under way to streamline and standardise commissioning in Portsmouth, but I am very sceptical about whether that will create a level playing field for small voluntary organisations.
There is much to be done on the demand side of commissioning, too. If we are really to tackle the considerable unmet need that exists in Alzheimer's and dementia care, we must be focused on that need and find ways to meet it. Portsmouth city council must cut its backroom costs and find ways of making every pound spent on these services lever in more funding and volunteers. It should be increasing provision, not shutting services in the north of the city such as those provided at the Patey centre.
Mr Bone: My hon. Friend has made a powerful case when mentioning her local council. What she says is absolutely true and applies across the country. My council in particular could learn from it as well.
Penny Mordaunt: I thank my hon. Friend; I am sure that everyone can give examples of such things happening on their own patch.
Another example of how the sector could support the commissioning and design of services can be seen in the work of the wonderful Beneficial Foundation, which provides not only training and life skills teaching for people with learning disabilities, but a fantastic business recycling scheme that provides arts and crafts materials for so many organisations. At a time when the council is seeking to introduce a business recycling scheme, would a conversation with the Beneficial Foundation not be worth while?
Thirdly, there is a refusal to maximise our community assets. The Stamshaw and Tipner leisure centre, which has been threatened with closure and demolition on more than one occasion, is due to be made structurally sound next year, but there is no funding to bring the interior up to a standard that would guarantee a sustainable number of bookings from community groups. In response, members of the community have stepped forward to do it themselves-time, tools, materials and donations have been offered. But it has been very difficult to engage with the local authority on simple matters such as the building schedule and getting approval for the work to be done. How much good will is lost when the local authority is not responsive to such offers?
In my patch, many community assets have been neglected for years, and-one suspects-earmarked for demolition, to be replaced by housing. In Cosham, for example, there is the Moat club and the amazing Wymering manor, which is even mentioned in the Domesday Book. I am delighted that at long last the Hilsea lido has been transferred as a community asset. The Pool for the People group is legendary for its hard work and dedication to restoring this wonderful community facility to its former glory. I have every confidence that we will be able to retain these assets and that in the not-too-distant future, generations of Portsmouthians will be able to enjoy the manor and the lido again. However, we have to make it as easy as possible for communities to help themselves.
The final obstacle that I have identified in Portsmouth is the lack of financial transparency at Portsmouth city council. If you go to the council's website and look for information related to its expenditure, you will find this statement:
"We believe transparency is a key condition and driver for the delivery of our services. As a publicly funded organisation, we have a duty to our residents to be transparent in our business operations and outcomes."
Unfortunately, that is it. There is no information about what it does spend the money on, and it is one of the only councils in the country not to have published its expenditure online. The north of the city has been scandalously underfunded for decades. The council must move to publish all its expenditure online, so that people in my constituency can see what they are owed and what has been spent-exactly what has been spent on Alzheimer's and dementia care, for example, and what is going into our community assets.
I also want my local authority to set up a modest transition fund-of tens of thousands of pounds, not hundreds of thousands-to ensure that services whose external funding is not secure by the time of the Budget can continue until the end of summer, when statutory or other funding will be in place. The Cabinet Office needs to work closely with the Department of Communities and Local Government-and, I would argue, directly with Portsmouth city council.
1.27 pm
Stephen Crabb (Preseli Pembrokeshire) (Con): I start by echoing the thanks of my hon. Friend the Member for Wellingborough (Mr Bone), a member of the Backbench Business Committee, to all the members of his Committee and the staff who support its work. We have had an interesting first chapter to this debate and I shall try to provide substantive responses to each contribution.
First, I turn to the speeches made by my hon. Friends the Members for Filton and Bradley Stoke (Jack Lopresti) and for Portsmouth North (Penny Mordaunt), who both spoke passionately about social mobility and the contribution that community organisations make to delivering the big society. Unlocking social mobility is at the heart of the coalition Government's agenda. We believe that a fair society is one in which opportunities are detached from origins and everyone has the chance to do well regardless of their background. If everyone can fulfil their potential and people's talents are unlocked, our economy will also benefit.
However, we should recognise that social mobility trends in the UK are not encouraging. There is evidence that social mobility declined for people born in 1970 in comparison with those born in 1958. Data from the OECD show that, relative to other countries, the earnings of individuals in the UK are strongly related to the earnings of their parents.
We want to reduce the degree to which patterns of advantage and disadvantage are carried across from one generation to the next. The Deputy Prime Minister is championing social mobility within the Government and is chairing a social mobility ministerial group to ensure cross-Government action. A social mobility strategy will be published early next year and several reforms that aim to improve social mobility are already in process. Alan Milburn has been appointed as the independent reviewer of social mobility, to keep us on our toes.
I agree with my hon. Friend the Member for Filton and Bradley Stoke, who said that the Government cannot improve social mobility by working alone. That is true. Individuals, civil society organisations, employers, community groups and other non-governmental organisations play a critical role in helping people to do well, regardless of their backgrounds. The three pillars of the big society-social action, community empowerment and reforming and opening up public services-will empower people to take control of their lives, and the rest of society, not just the state, will help them to do that.
The Government are committed to supporting the voluntary, community and social enterprise sector to take up opportunities and play its part in the big society. We want to recast the sector's relationship with the state and give it a huge range of new opportunities to shape and provide innovative, bottom-up services and solutions where state provision has failed. We recognise that those opportunities will not emerge overnight and that, furthermore, spending reductions will also have an impact. We are making £100 million of transition grant funding available to front-line organisations over this and the next financial year to support the sector through this difficult period. That will give such organisations the breathing space that they need.
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