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House of Commons

Wednesday 16 March 2011

The House met at half-past Eleven o’clock


[Mr Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked—

Big Society Initiatives

1. Stuart Andrew (Pudsey) (Con): What recent discussions she has had with (a) ministerial colleagues and (b) the Welsh Assembly Government on big society initiatives in Wales. [45731]

The Parliamentary Under-Secretary of State for Wales (Mr David Jones): My right hon. Friend the Secretary of State for Wales and I have discussed a wide range of issues concerning the big society in relation to Wales with the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Ruislip, Northwood and Pinner (Mr Hurd), who has responsibility for civil society, and Carl Sargeant, the Minister for Social Justice and Local Government in the Welsh Assembly Government.

Stuart Andrew: I am grateful to the Minister for that reply. Will he comment on the important role that local authorities in Wales can play in encouraging the big society?

Mr Jones: Local authorities can do much to help roll out the big society. Smart and intelligent councils are already doing so by recognising that big society initiatives can complement services that they provide and vice versa. I recently visited Pembrokeshire, where many good neighbour schemes have been set up to provide help and support for individuals who would otherwise be isolated. Pembrokeshire county council has appointed a scheme co-ordinator who offers advice to groups that want to establish such schemes.

Albert Owen (Ynys Môn) (Lab): On Saturday, I saw the big society in all its glory in Anglesey with the opening of the scouts and guides hall. That project brought together the public and private sectors and volunteers, but public funding was key. Will the Minister ensure that funding is given to the Welsh Assembly so that such schemes can carry on? Next Tuesday, he will be able to see the big society in all its glory on Anglesey day here in the House of Commons.

Mr Jones: As I said, I have held discussions with Carl Sargeant, who is the Minister responsible for such matters in the Welsh Assembly Government. We are taking that work forward. I am sure that the hon. Gentleman will

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be pleased to hear that the big society bank will be available for the whole of the United Kingdom. There is no reason why Welsh groups should not apply to it for funding.

Jonathan Evans (Cardiff North) (Con): My hon. Friend will be aware that many people in Wales want to take advantage of the opportunities that the Government are offering, but that they may need mentoring. Will he appoint somebody in his Department, perhaps by seconding a civil servant, to assist people who have ideas to take forward the big society?

Mr Jones: All ideas are gratefully received. The Government will ensure that there is a network of big society facilitators throughout the country. As many as 5,000 will be appointed in due course.

Hywel Williams (Arfon) (PC): The WCVA has reported that half the 750 charities in Wales state that they will see a drop in their income next year. Is not investment from the big society bank just a matter of jam tomorrow?

Mr Jones: There is no doubt that we are going through difficult economic times, as the hon. Gentleman knows. Unfortunately, third sector organisations are affected by that. I believe that the £200 million that will be available through the big society bank will be of immense benefit to third sector organisations in Wales.

Owen Smith (Pontypridd) (Lab): The Welsh people are a shrewd lot, and they have quickly seen through the big society scam. Since £1.8 billion was cut from the Welsh Assembly budget, leaving councils with a shortfall of many millions of pounds, charities such as People First, which works with people with learning disabilities in the Rhondda Cynon Taff area, have been on the verge of closure. That is throwing more people on to the record unemployment numbers in Wales. As Dawn Price of People First put it to me:

“How can we take part in a Big Society when our funding is being so cruelly cut?”

Mr Jones: I realise that some Opposition Members have huge difficulty with the proposition that people should be allowed to organise their own lives in the way that best suits them, rather than such matters being delivered top-down by big Government. However, there are signs that it is slowly dawning on the Leader of the Opposition at least that the big society may be rather a good idea. When he launched Labour’s policy review recently, in which I think the right hon. Member for Neath (Mr Hain) played a part, he said:

“We have got to take that term ‘big society’ back off David Cameron”.

Devolution of Powers (Referendum)

2. Jonathan Lord (Woking) (Con): What assessment she has made of the outcome of the referendum on devolving primary law-making powers to the National Assembly for Wales. [45732]

4. Simon Hart (Carmarthen West and South Pembrokeshire) (Con): What assessment she has made of the outcome of the referendum on devolving primary law-making powers to the National Assembly for Wales. [45734]

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The Secretary of State for Wales (Mrs Cheryl Gillan): I welcome the clear yes result announced on 4 March. The vote in favour of primary law-making powers for the Assembly will enable the Welsh Assembly Government to get on with the job of delivering better public services in Wales.

Jonathan Lord: I thank the Secretary of State. I note that there are now 20 devolved areas of policy for the Welsh Assembly and that Scotland has had similar powers for many years. Has she had conversations with other Ministers about the commission that we have been promised, or preferably legislation, so that only English MPs can vote on English laws that affect English residents, and thereby maintain the parity—

Mr Speaker: Order. We are grateful to the hon. Gentleman, but we must move on.

Mrs Gillan: I think my hon. Friend is referring to what is known as the West Lothian question, or as we sometimes call it in Wales, the West Clwydian question. I have had words with the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Forest of Dean (Mr Harper), and as he informed the House on 15 December, the Government will make an announcement this year on plans to establish a commission to consider the West Lothian question.

Simon Hart: Can the Secretary of State provide a timetable for the introduction of a Calman-style inquiry, as per the coalition agreement, and will she undertake a full consultation on the matter?

Mrs Gillan: I am grateful to my hon. Friend. When we established the coalition Government, we committed in the coalition agreement to establishing a Calman-like process for the Assembly. I will announce further details on that in the coming months.

Paul Murphy (Torfaen) (Lab): The Secretary of State has just said that there will be a commission on the so-called West Lothian question. Does she personally believe that Welsh Members of Parliament should have fewer voting rights in this place, particularly bearing in mind that her Government have cut the number of Welsh MPs by 25%?

Mrs Gillan: As the right hon. Gentleman knows, it is important that every vote is of an equal weight in this country. I am sure he would not want me to revisit arguments that have been well made and exhausted in the House.

When the commission is established, it will need to take into account the Government’s proposals for House of Lords reform, the changes to the way in which this House does business and the changes to the devolution settlement in considering potential solutions to the West Lothian question.

Mr Peter Hain (Neath) (Lab): Will the Secretary of State join me in welcoming the resounding yes vote in the referendum on 3 March? As she knows, I legislated on behalf of a Labour Government for primary powers for the Assembly in 2006, and we are delighted at this historic day for Wales. I hope she is too.

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Mrs Gillan: The shadow Secretary of State must have been asleep when I answered the question in the first place and said that I welcomed the yes vote. I said that specifically during the passage of the Government of Wales Act 2006, when I sat in his position. I am also delighted that, despite prevarication, it was a Conservative-led coalition Government who delivered that referendum for the people of Wales.

David T. C. Davies (Monmouth) (Con): Does the Secretary of State accept that given the nature of the yes campaign, it is clear that the vast majority of people in Wales wish to remain part of the Union? As a proud Welshman and a proud Unionist, I believe as strongly as other Members that something must be done about the West Lothian question, to stop Welsh MPs voting on matters for which they have no responsibility.

Mrs Gillan: I, too, am a devoted Unionist, but I recognise that the yes vote does not mean that the Welsh devolution settlement will stand still. It is a living object, which is why we are establishing a Calman-like process to examine the future of the Welsh Assembly and how we are governed across the UK, specifically in Wales.

Broadband Projects

3. Andrew Stephenson (Pendle) (Con): What recent discussions she has had with ministerial colleagues on expenditure on broadband projects in Wales. [45733]

The Parliamentary Under-Secretary of State for Wales (Mr David Jones): My right hon. Friend the Secretary of State and I have regular meetings with ministerial colleagues on issues that affect Wales, including broadband projects. I am sure my hon. Friend will welcome, as I do, the announcement by my right hon. Friend the Chancellor of the Exchequer on 10 February that we are providing £10 million of funding to support the extension of superfast broadband to Pwllheli and the surrounding areas.

Andrew Stephenson: I thank my right hon. Friend. Does she agree that due to the remote and rural nature of many parts of Wales—like many parts of my constituency—it is vital for businesses in rural communities to have effective broadband?

Mr Jones: Yes, I agree that broadband is extremely important for rural communities. Indeed, it is arguably more important in the countryside than in our towns and cities. It enables people to run businesses from rural locations with no competitive disadvantage, and farmers in particular urgently need broadband to file their returns.

Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC): Although I appreciate and welcome the announcement of the broadband pilot, bizarrely made at Wrexham and not in the House, I represent the Pwllheli area among other parts of west Wales and I have no doubt that it was to due to pressure from the Deputy First Minister. Can the Minister tell me precisely which areas of my constituency will be included in the pilot and which will not?

Mr Jones: The right hon. Gentleman gives the pilot a rather strange welcome—a rather curmudgeonly one, I would suggest. As he knows, the rural area around

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Pwllheli is intended to be included in the pilot, from which we hope to gain important knowledge on the further roll-out of broadband across Wales.

Mr Llwyd: The economic renewal plan in Wales set out to provide high-speed links to all businesses by 2015 and all houses by 2020, and as the Minister knows, under the “Wi-fi Wales” initiative, there are plans to enable free wireless connection to all publicly owned buildings in Wales. What support will the Minister and the Secretary of State give to those plans? There is currently huge criticism of the Wales Office, but if they get stuck in on that, they might silence some of their critics.

Mr Jones: It is fairly clear that the right hon. Gentleman does not keep in touch with his colleagues in the Assembly, because very recently, my right hon. Friend the Secretary of State and I hosted a trilateral meeting between the Deputy First Minister and the Minister with responsibility for broadband via video link from the Wales Office in Gwydyr house. We are fully engaged in this process, and it is quite wrong for the right hon. Gentleman to suggest that we are not.

Roger Williams (Brecon and Radnorshire) (LD): The Welsh Assembly Government have offered a grant to people in not-spots throughout Wales. Can communities get together to use such facilities to provide a community solution, rather than individuals finding their own solutions?

Mr Jones: Yes, indeed. The proposal is that hubs should be provided in communities, but the technology that may be used thereafter will not be specified, so wi-fi or other appropriate solutions can be used depending on the nature of the area.

Inward Investment

5. Karen Lumley (Redditch) (Con): What recent discussions she has had with ministerial colleagues on measures to attract inward investment to Wales. [45735]

7. John Howell (Henley) (Con): What recent discussions she has had with ministerial colleagues on measures to attract inward investment to Wales. [45737]

The Secretary of State for Wales (Mrs Cheryl Gillan): Clearly, with so many of our companies in Wales having strong links with Japan, and given that some of our inward investment comes from there, I am sure the whole House would like to join me on behalf of Wales in sending our deepest condolences for the appalling tragedy.

I have regular discussions with ministerial colleagues on measures to attract inward investment to Wales. Last month I hosted a trilateral meeting between the First Minister, the Deputy First Minister and the UK Minister responsible for trade and investment to discuss how we can work together to bring much-needed investment to Wales. We will be meeting again shortly.

Karen Lumley: Does the Secretary of State agree that Wales has much to offer business, as the Welsh Affairs Committee heard yesterday from Sir Terry Matthews? Can she also tell us what she is doing to work with the Welsh Assembly to bring inward investment to Wales?

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Mrs Gillan: Although it is too early to prejudge the outcome of the Committee’s inquiry on inward investment, a clear message on skills emerged in oral evidence last week. That message was consistent with the conclusions of the earlier cities report. Certainly, I will see how the UK Government can work with the Welsh Assembly Government to encourage more inward investment, because Wales is a great place to do business.

John Howell: In the last couple of weeks, a number of strong foreign trade and investment visits have been made to Wales, particularly from India and the US. Does the Secretary of State agree that those are vital for Wales, and that we should maximise the opportunities that they present?

Mrs Gillan: It is very easy to agree with my hon. Friend on that, because we need to maximise the opportunities that such visits present. Wales’s share of UK inward investment projects halved in the past decade from 6% to 3% and we need to act quickly to reverse that. It is therefore important to work across Government Departments in Whitehall, together with the Welsh Assembly Government, so that we have a cohesive programme for attracting inward investment.

Kevin Brennan (Cardiff West) (Lab): With unemployment reaching a 17-year high this morning—up to 8.7% in Wales—where is the Secretary of State’s plan for growth?

Mrs Gillan: I am tired of Members talking Wales down. The message that has just gone out from the hon. Gentleman is not a positive one. The unemployment figures were announced this morning. Although I have given them a cautious welcome because the economic inactivity rate continues to fall, I want people to know that we have a willing and able work force and that Wales is open for business. It is about time the hon. Gentleman joined me in talking Wales up.

Geraint Davies (Swansea West) (Lab/Co-op): It emerged in the Welsh Affairs Committee’s visit to Germany that vital inward investment opportunities were not being taken up by UK Trade & Investment because of the abolition of regional development agencies in England. Does the Secretary of State accept that this may represent a major opportunity for Wales and if so, what is she doing about it?

Mrs Gillan: I had a particularly good meeting with the First Minister, the Deputy First Minister and the Minister responsible for trade. I am keen that we should have some joined-up government, because we have not been taking advantage of all the opportunities that exist. After the Assembly elections we shall have to take that forward with the new Welsh Assembly Government, and I know the current Welsh Assembly Government have been looking at rationalising their offices abroad and having a more comprehensive programme—one that is engaged with UKTI, the Department for Business, Innovation and Skills, the Foreign Office, and the Wales Office. Together, we will have a stronger presence.

Block Grant Settlement

6. David Mowat (Warrington South) (Con): What recent representations she has received on the mechanism for calculating the block grant settlement for the Welsh Assembly. [45736]

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The Parliamentary Under-Secretary of State for Wales (Mr David Jones): My right hon. Friend and I receive regular representations in relation to the block grant settlement for the Welsh Assembly.

David Mowat: I thank the Minister for that reply. In 2009, the Holtham commission concluded that the Barnett formula was no longer fit for purpose and was in need of urgent reform. Does the Minister agree that the Barnett formula should be replaced with a mechanism based on need?

Mr Jones: It is fair to say that everyone recognises that the Barnett formula is nearing the end of its life. However, it is necessary to stabilise the public finances before we consider the formula. In the wake of the vote in the Welsh referendum, the coalition will establish a Calman-like process for the funding of the Welsh Assembly.

Ian Lucas (Wrexham) (Lab): Earlier the Secretary of State said that the devolution settlement was a moving object. Will the commission to which the hon. Gentleman has just referred consider whether the Welsh Assembly should be given tax-varying powers?

Mr Jones: It is important that the Welsh Assembly should be accountable for its activities, and I can tell the hon. Gentleman that nothing is ruled out.

Several hon. Members rose

Mr Speaker: Order. There are far too many private conversations taking place in the Chamber and they are very noisy. It is most discourteous. Let us have a bit of order.

Fuel Prices

8. Mr Mark Williams (Ceredigion) (LD): What assessment she has made of the effect on the Welsh economy of recent trends in the cost of fuel. [45738]

The Parliamentary Under-Secretary of State for Wales (Mr David Jones): Over the last few months I have made an assessment of the impact of the recession on rural areas, including the effects of rising fuel prices on businesses and families in Wales. We recognise that businesses, individuals and families are struggling with the rising cost of fuel, and we are looking at how we can help.

Mr Williams: Following on from the Minister’s assessment, what representations has he made on extending the Government’s fuel duty rebate for the islands of Scotland and Cornwall to large tracts of rural Wales, where sparsity, economic dependence and inadequate public transport make this a pressing issue?

Mr Jones: I agree that it is a pressing issue in large parts of rural Wales, such as my hon. Friend’s constituency. I can tell the House that I have written to the Chief Secretary to the Treasury to press for the extension of the pilot to rural areas in Wales.

Mr David Hanson (Delyn) (Lab): In April last year the price of a litre of petrol in Flintshire was 116p. Can the Minister tell me what it is today and how much of the increase is due to the VAT that he imposed?

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Mr Jones: I can tell the right hon. Gentleman that the last time I filled up in Colwyn bay the price was approximately 133p. He will be aware that my right hon. Friend the Chancellor has indicated that these are matters that will be considered in the Budget next week.

Mr Peter Hain (Neath) (Lab): But is the Minister aware that the dramatic rise in petrol and diesel prices is crippling motorists in Wales, especially those on low or middle incomes? In many Welsh communities people have absolutely no choice but to drive, and with wages frozen or falling, inflation high and today unemployment in Wales surging up, they are getting desperate. Will the Government reverse the VAT rise on fuel? It is what business wants, what motorists are crying out for, and what Wales and the whole of Britain needs.

Mr Jones: Given that I come from a rural constituency, I am acutely aware of the points that the right hon. Gentleman makes. I would remind him that the escalator that is due to kick in next month is Labour’s escalator, and this is a matter that my right hon. Friend the Chancellor will be looking at.

Upland Farming

9. Neil Carmichael (Stroud) (Con): What recent discussions she has had with the Welsh Assembly Government on upland farming in Wales. [45739]

The Parliamentary Under-Secretary of State for Wales (Mr David Jones): I have regular discussions with the Welsh Assembly Government on a range of issues affecting Wales, including the farming industry. My right hon. Friend the Secretary of State and I recognise how important the rural economy is to Wales and take a close interest in matters affecting it, including farming on the Welsh uplands.

Neil Carmichael: Does the Minister agree that the Welsh Assembly should work well with the Government to ensure that we have a clear strategy for upland and dairy farming, and that that objective would be more easily met through the introduction of an adjudicator to examine abuses of power in the retail sector?

Mr Jones: Yes, indeed; I agree that the Welsh Assembly Government should work closely with the Government here in Westminster. My hon. Friend will be aware that it is the Government’s intention to establish a groceries code adjudicator to oversee disputes between retailers and suppliers.

Nick Smith (Blaenau Gwent) (Lab): Getting animals to market is important for upland farmers in Blaenau Gwent. Does the Minister agree that east-west road improvements are vital for boosting the heads of the valleys economy? Will he update us on the road improvements between Brynmawr and Abergavenny, and tell us when they will start?

Mr Jones: It would appear to me that those are matters for the Welsh Assembly Government, but if the hon. Gentleman would care to write to me, I will consider the matter further.

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Energy Policy

10. Graham Evans (Weaver Vale) (Con): What recent discussions she has had with ministerial colleagues and Ministers in the Welsh Assembly Government on energy policy in Wales. [45740]

The Secretary of State for Wales (Mrs Cheryl Gillan): The Under-Secretary of State for Wales and I have regular discussions with ministerial colleagues and Welsh Assembly Government Ministers on a range of issues, including energy policy. Last week, I was pleased to call the first Welsh Grand Committee debate on energy since 2008, which gave right hon. and hon. Members a chance to debate in detail that issue, which is of vital importance to Wales.

Graham Evans: As a result of the last Government’s policy of burying their head in the sand when it came to energy, we are facing the real prospect of power cuts. Does the Secretary of State agree that building new power plants in Wales is essential for energy security, industry and job creation?

Mrs Gillan: Energy is certainly a key priority of this Government and we are working hard to ensure that the UK, including Wales, has an energy infrastructure that is fit for the 21st century.

Paul Flynn (Newport West) (Lab): Does the Secretary of State agree that the exciting plans of the Welsh Assembly Government to generate enough electricity for every home in Wales from non-barrage marine sources offers Wales an energy future, like that of Ireland and Scotland, that will be nuclear free and renewables rich?

Mrs Gillan: I am not sure that I caught the drift of the hon. Gentleman’s question, but I have always welcomed the work that is being done to enable Wylfa A to continue to generate low-carbon electricity for a further two years until 2012. I was also delighted that Wylfa was chosen as the site for a potential new station in the future.

Jenny Willott (Cardiff Central) (LD): This Government have put the environment at the heart of their energy policy. Last week, I attended the launch of Norman Electrical Ltd, a small business in my constituency that is working with households and businesses to invest in renewable technologies. Will the Secretary of State join me in welcoming such start-ups and do what she can, with colleagues, to help Wales to become central to the renewable technology sector in the UK?

Mrs Gillan: Yes, I join my hon. Friend in congratulating the company in her constituency. If all 26 million households in the United Kingdom take up our green deal over the next 20 years, employment in that sector could rise from its present level of 27,000 to something approaching 250,000, working all around the UK to make our housing stock fit for a low-carbon world.

Public Sector Job Losses

11. Jessica Morden (Newport East) (Lab): What recent estimate she has made of the number of jobs to be lost in the public sector in Wales as a result of the reductions in public expenditure in 2011-12. [45741]

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The Parliamentary Under-Secretary of State for Wales (Mr David Jones): A forecast of public sector job losses was published last year by the Office for Budgetary Responsibility. This was based on UK-wide macro-economic data, and no regional breakdown is available. My right hon. Friend the Secretary of State and I remain committed to working with ministerial colleagues to minimise the impact of the reductions in public expenditure that we are having to make on Welsh workers and their families.

Jessica Morden: The Government’s impact assessment relating to the closure of Newport passport office includes the statement that

“we will also pay £3m redundancy…which may create a short term boost in trade for the local economy.”

Is this the Government’s new alternative growth strategy?

Mr Jones: The line to which the hon. Lady refers is in every economic impact assessment that has been prepared in connection with the current process. That consultation will not be finished until Friday, and all options remain open.

Rail Network (South Wales)

12. Mr Philip Hollobone (Kettering) (Con): What recent discussions she has had with the Secretary of State for Transport on electrification of the rail network in south Wales. [45742]

The Secretary of State for Wales (Mrs Cheryl Gillan): The statement made on St David’s Day by my right hon. Friend the Secretary of State for Transport was excellent news for all parts of south and west Wales. This £1 billion investment will deliver all the benefits and improvements of an electrified railway to Wales, with faster acceleration, greater comfort and cleaner and greener travel. The decision to extend electrification to south Wales recognises that improved rail infrastructure and lower journey times are vital components for delivering a successful economic recovery in Wales.

Mr Hollobone: What estimate has the Secretary of State made of the number of new jobs that will be created in Wales as a result of the electrification programme?

Mrs Gillan: I hope that the electrification of the rail line, which was launched and announced with full funding by this Government, will bring the much-needed inward investment into Wales, resulting in the many jobs that we need.

Prime Minister

The Prime Minister was asked—


Q1. [46687] Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab): If he will list his official engagements for Wednesday 16 March.

The Prime Minister (Mr David Cameron): I am sure the whole House will wish to join me in paying tribute to Lance Corporal Stephen McKee, 1st Battalion the Royal Irish Regiment, who died last Wednesday. He was a highly respected, selfless and committed soldier who will be sorely missed by all those who served with him. Our deepest sympathy is with his family and friends.

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From September, military repatriations will no longer pass through the town of Wootton Bassett. I know the whole House will wish to join me in paying tribute to the people of Wootton Bassett. Their deeply moving and dignified demonstrations of respect and mourning have shown the deep bond between the public and our armed forces. It is more than 100 years since the title “royal” was conferred on a town. I can today confirm that Her Majesty the Queen has agreed to confer the title “royal” on the town of Wootton Bassett as an enduring symbol of the nation’s admiration and gratitude to the people of that town. The town will become Royal Wootton Bassett later this year, in a move that I believe will be welcomed right across our country.

This morning, I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.

Gregg McClymont: May I associate Labour Members, and those of all parties, with the Prime Minister’s condolences to the family and all who knew that brave serviceman?

The previous Government put in place the overseas victims terrorism compensation scheme. When will British victims of overseas terrorism receive compensation?

The Prime Minister: The hon. Gentleman makes an important point. This is something that we are looking at, reviewing and want to get right. I remember the debates that took place at the time of the Bali bomb and recall that hon. Members on all sides of the House spoke about it. We will bring forward our proposals shortly.

Sir Malcolm Rifkind (Kensington) (Con): The Prime Minister is to be commended for his leadership in trying to achieve a no-fly zone but, sadly, it is unlikely that it can be implemented in time to prevent a final onslaught in Libya. Does the Prime Minister agree that the best response to this urgent crisis would be for the international community, with the support of the Arab League, to urge the Egyptian Government to send a brigade of its army as a peacekeeping force into eastern Libya—to protect their own citizens, to stop Gaddafi in his tracks and to prevent a humanitarian disaster in Benghazi?

The Prime Minister: I have great respect for my right hon. and learned Friend, who speaks with great expertise on these issues. The points he made on Monday about the arms embargo were extremely important. We will, of course, look at any suggestion, but the problem at the moment is that there is no peace to keep. What I can report is that yesterday evening, after extensive discussion with Lebanon, France, the US and others, the UK tabled a new draft Security Council resolution in the UN. It includes a no-fly zone, banning all flights except humanitarian ones, an extension of the travel ban and the asset freeze and tougher enforcement of the arms embargo, particularly on the Libyan Government. Of course there are a wide range of views in the UN; I urge all to take the right steps so that we show some leadership on this issue and make sure that we can get rid of this regime.

Edward Miliband (Doncaster North) (Lab): Let me begin by echoing the Prime Minister’s tribute to Lance Corporal Stephen McKee of 1st Battalion The Royal

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Irish Regiment. He showed exceptional courage and bravery, and our thoughts are with his family and friends. Let me also echo the Prime Minister’s remarks about the community of Wootton Bassett, and the very fitting award of the “royal” designation. It is a tribute, and a sign of the way in which that community has responded to our armed forces.

Following the Liberal Democrat conference at the weekend, is the Prime Minister planning any new amendments to his Health and Social Care Bill?

The Prime Minister: First of all, let us be clear about the fact that the reforms are about cutting bureaucracy and improving patient care. They were drawn up by us as a coalition to improve the NHS. Let me answer the right hon. Gentleman’s question very directly. We have already made some real strengthenings to the Bill. First, we have ruled out price competition in the NHS. Secondly, there is the issue raised by the Liberal Democrats, with which I completely agree: we must avoid cherry-picking by the private sector in the NHS. The right hon. Gentleman might care to reflect that under the Labour Government, the private sector was given £250 million for operations that were never carried out. Perhaps he would like to apologise for that cherry-picking, and support our anti-cherry-picking amendment.

Edward Miliband: Let us give the Prime Minister another go at answering the question that I asked. The question that I asked was this. Following the Liberal Democrat conference at the weekend, are any further amendments to be tabled to the Health and Social Care Bill—yes or no?

The Prime Minister: The problem with pre-scripted questions is that they do not give you the opportunity to respond to the first answer. I gave a very clear answer about price competition and about cherry-picking.

What I would say to the right hon. Gentleman is that he should not set his face against reform in the NHS. The fact is that we support extra money going into the NHS—money that the right hon. Gentleman does not support—but we recognise that with an ageing population, more expensive treatment and new drugs coming on stream, we need to reform the NHS, and that reform must accompany the extra money that is being provided. Why is the right hon. Gentleman setting his face against that?

Edward Miliband: The Prime Minister really must get away from these pre-scripted answers. [Laughter.] I will tell him why no one trusts what he says about the NHS. What used he to say about NHS reorganisations?

“There will be no more of those pointless re-organisations that aim for change but instead bring chaos…it’s profoundly disruptive and demoralising.”

I agree with what the Prime Minister used to say. Why doesn’t he?

The Prime Minister: We are not reorganising the bureaucracy of the NHS. [Interruption.] We are abolishing the bureaucracy of the NHS. Perhaps the right hon. Gentleman would like to listen to what the adviser to the Labour Government said about our NHS reforms. He said:

“most of these reforms are very much where”

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the last Government

“and indeed I, would like to have gone if we had not encountered some of the road blocks that one did.”

We know that the roadblock was the last leader of the Labour party. What a pity it is that the current leader of the Labour party is “son of roadblock”.

Edward Miliband: I am proud of our record on the NHS. We have 100 new hospitals, more doctors and nurses than ever before, the shortest waiting times in history, and the highest level of patient satisfaction ever. But the Prime Minister is wrecking our record on the NHS, and what is his answer? The Bill creates a free-market free-for-all and threatens existing NHS services. Let me ask the Prime Minister a very specific question. Will he confirm that this Bill makes health care subject to European Union competition law, for the first time in history?

The Prime Minister: I have to say that the right hon. Gentleman is beginning to sound like the last leader of the Labour party. If he will not listen to the adviser to the Labour Government, perhaps he will listen to his own health spokesman, who said this:

“"No-one in the House of Commons knows more about”—[Interruption.]

Mr Speaker: Order. I apologise for interrupting the Prime Minister, but the answers from the Prime Minister must be heard, and that is all there is to it.

The Prime Minister: Thank you, Mr Speaker. If I can take the trouble to read out the Opposition health spokesman’s speeches, the Opposition should at least have the decency to listen to them.

The Opposition health spokesman said this:

“No-one in the House of Commons knows more about the NHS than Andrew Lansley—except perhaps Stephen Dorrell. But Andrew Lansley spent six years in Opposition as shadow health secretary. No-one has visited more of the NHS. No-one has talked to more people…in the NHS.”

He went on to say:

“these plans are consistent, coherent and comprehensive. I would expect nothing less from Andrew Lansley.”

Edward Miliband: Talk about pre-scripted answers again! Why does the Prime Minister not answer the question? Does he even know whether the health service will now be subject to EU competition law? It will be. Let us look at the Health and Social Care Bill: chapter 2, “Competition”; clause 60, “Functions under the Competition Act 1998”; clause 66, “Reviews by the Competition Commission”; clause 68, “Co-operation with the Office of Fair Trading”. Can the Prime Minister explain to the British people what that has got to do with health care?

The Prime Minister: The Opposition are the party that rigged the system so there was cherry-picking by the NHS. The point I would make is this: at the last election Opposition Members all stood on a manifesto that said—[Interruption.] I am answering the question. This is what the Opposition said in their manifesto:

“Patients requiring elective care will have the right, in law, to choose from any provider who meets NHS standards of quality”.

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They were in favour of competition in their manifesto. All that has changed is that they are just jumping on every bandwagon, supporting every union, blocking every reform and opposing the extra money being put into the NHS.

Edward Miliband: He just does not get it: he is threatening the fabric of the NHS. This Bill shows everything that people do not like about this Government: broken promises, arrogance, incompetence, and ignoring people who know something about the health service. Does this not show once again that, as the British Medical Association said yesterday and as the Liberal Democrats said on Saturday, you can’t trust the Tories on the NHS?

The Prime Minister: The right hon. Gentleman should remember that the BMA opposed foundation hospitals, GP fundholding and longer opening hours for GPs’ surgeries. Is it not typical that, just as he has to back every other trade union, and just as he has no ideas of his own, he just comes here and reads a BMA press release? How utterly feeble.

Mr Speaker: I call Gavin Williamson. [Interruption.] Order. Be quiet, Mr Simpson; such behaviour is bad for your health.

Q2. [46688] Gavin Williamson (South Staffordshire) (Con): Thank you, Mr Speaker. Has the Prime Minister seen the recent comments of the Labour Chairman of the Public Accounts Committee? She said that over the last 10 years productivity in NHS hospitals had been in continuous decline, and that the taxpayer was getting less for each pound spent. Will the Prime Minister assure the House that that trend will be reversed?

The Prime Minister: My hon. Friend makes an excellent point. I would have thought Opposition Members would listen to the Labour-dominated Public Accounts Committee and its Labour leader, who said this:

“Over the last ten years, the productivity of NHS hospitals has been in almost continuous decline”


“the health service has improved as a result of this increase in spending. But the taxpayer has been getting less for each pound spent.”

That is what we have to look at, and the fact that we are not getting even the European average on cancer outcomes, and that people here are twice as likely to die from a heart attack as people in France. We have an ageing population and more expensive treatments, and the Opposition’s answer is to do absolutely nothing. How utterly, utterly feeble.

Angus Robertson (Moray) (SNP): Today’s statistics show that unemployment has gone down in Scotland but has gone up in the rest of the UK. Will the Prime Minister ensure that the trend of lower unemployment in Scotland is not endangered by ridiculously high fuel prices and fuel duty, in what is still the largest oil-producing nation in the European Union?

The Prime Minister: I thank the hon. Gentleman for what he says. Clearly, today’s figures are a very mixed picture. The youth unemployment figures are disappointing,

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once again, but overall what is interesting is that employment is up and the number of claimants nationwide is actually down: the number of claimants has fallen by 32,000 since last year.

On fuel duty, the hon. Gentleman knows that we have a Budget coming up. I do not want to speculate as to what will be in it, but I know the pain that families and small businesses are feeling from the huge number of fuel duty increases put through by the previous Government. In their last Budget they put through seven fuel duty increases—one for before the election and six for afterwards. What a surprise that Labour did not even have the brass neck to raise that one today.

Q3. [46689] Nigel Adams (Selby and Ainsty) (Con): Hundreds of residents across the Selby district are up in arms at the prospect of having a Traveller site imposed on their villages. Can the Prime Minister tell me what can be done—and when—to remove the top-down Traveller site targets currently imposed on local authorities?

The Prime Minister: I can tell my hon. Friend that we are abolishing the top-down Traveller pitch targets that were imposed on local authorities, and instead local councils will determine the right level of site provision in consultation with their local communities. It is also important that we recognise that one law should apply to everyone in terms of planning policy in this country, Travellers included.

Q4. [46690] Mr Gordon Marsden (Blackpool South) (Lab): Blackpool has an above average number of residential homes for disabled people, including for hundreds of my constituents. May I therefore ask the Prime Minister why he still plans to scrap the disability living allowance mobility component in his Welfare Reform Bill, thus potentially marooning people in those homes? In his reply, will he not compare these people to patients in hospitals? They are in their homes, and they are not ill.

The Prime Minister: I would urge the hon. Gentleman to look very carefully at the Bill and at our plans, because what he will see is that we are putting the question of mobility into the reform of DLA, as we change that benefit and improve it. What we will do is avoid the double counting that has happened in the past, and sort out this issue, as I have said.

Stephen Phillips (Sleaford and North Hykeham) (Con): Earlier in the week, my right hon. Friend the Prime Minister received representations on the Government’s deficit reduction plans from, on the one hand, the credit rating agencies, and on the other hand, the Leader of the Opposition and others from the previous Administration who got us into this mess. Whose advice is the Prime Minister going to follow?

The Prime Minister: We should listen to the advice of Fitch, the credit rating agency, which this week reconfirmed our triple A credit rating status. I also think we should listen to the OECD, which is here today giving a presentation on the British economy and which strongly supports our deficit reduction plans. The point I would make is this: those people who think that there is some difference between deficit reduction and getting growth

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at the same time should look at the current interest rates in Ireland, in Greece and in Portugal. In Portugal, market interest rates are 7.5%. What is the genius plan of the Opposition? It is to halve the deficit in four years, which would get us in four years to where Portugal is today. What a brilliant plan!

Q5. [46691] Mr Jim Cunningham (Coventry South) (Lab): Is the Prime Minister aware that Southern Cross, which runs 750 old people’s homes up and down the country, nine of which are in Coventry and Warwickshire, is in great difficulties? Some 31,000 old people could be affected by this, so will he talk to the Qatari parent company to see whether a solution can be found? This is a very serious situation.

The Prime Minister: I thank the hon. Gentleman for raising this point, and I will ask the Health Secretary or one of his Ministers to contact him urgently to discuss this. It is vital that we have good residential care provision in our country and that there is competition and choice in that residential care provision; many private providers provide an excellent service. I shall make sure that one of my Ministers gets in touch with the hon. Gentleman straight away.

Jo Swinson (East Dunbartonshire) (LD): I welcome the UK’s strong leadership at the UN on Libya. Can the Prime Minister tell me what message he thinks it will send to every tyrannical dictator if, against the urgent desire of the Libyan people, against the wishes of the Arab League and against the UN principle of the responsibility to protect, the international community fails to stop Gaddafi crushing the spirit, the hopes and the lives of the Libyan people?

The Prime Minister: The hon. Lady makes a very important point. Every world leader has said that Gaddafi should go and that his regime is illegitimate. If at the end of this he is left in place, that will send a terrible message—not only to people in Libya, but, as she says, to others across the region who want to see greater democracy and greater openness in their societies. That is why it is right for Britain to play this leading role at the UN and elsewhere. I am not arguing that a no-fly zone is a simple solution to this problem—of course it is not—but I do think that it is one of the steps we need to take to isolate and pressurise that regime, and to say that we stand with people in Libya, who want to have greater democracy and greater freedom, such as we take for granted in this country.

Q6. [46692] Steve McCabe (Birmingham, Selly Oak) (Lab): Does the Prime Minister have any sense of the current mood of bewilderment and betrayal felt by rank and file police officers?

The Prime Minister: I strongly support the British police. They are the finest force in the world. What the police and other public servants know is that we were left a deep Budget deficit that we have to deal with. If we want to keep police officers on the streets, it is necessary to have the pay freeze that we are talking about. It is necessary to look, as Tom Winsor has done, at the allowances that they receive and to work out how we can make sure that we have well-paid, well-motivated police officers doing a great job in our country. Again, if

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the Labour party is just going to stand against every reform, every change and every improvement and say there is nothing we can do about any one of these problems, not only will it be irrelevant, but the British public will work out that it is irrelevant.

Matthew Hancock (West Suffolk) (Con): Last night there was a violent double murder in Beck Row in Suffolk, which was the most serious in a series of incidents in the area. Will the Prime Minister assure me, and the residents of west Suffolk, that these crimes will be fully investigated, that their perpetrators will face justice and that everywhere in this country must be subject to the rule of law?

The Prime Minister: I can certainly give my hon. Friend that assurance. This is a very disturbing case, and I am sure that hon. Members will all have heard about it this morning on the news. I think the police will want to do everything they can to get to the bottom of this dreadful crime and to bring the perpetrators to justice.

Q7. [46693] Lindsay Roy (Glenrothes) (Lab): People in all parts of the House appreciate that there is a mammoth crisis in Japan. Our hearts go out to the people there and we all want to do everything we can to help, including the UK. I appreciated the Prime Minister’s comments on Monday, but will he investigate reports that a British rescue team has recently been turned away from Japan?

The Prime Minister: I am grateful for the hon. Gentleman’s question, and I have asked for a briefing about this, so I can tell the House what happened. The official rescue team that was sent from the UK, in good time, arrived in good time and has already started work. There was also an extra, independent rescue team that did not have the correct documentation and encountered some problems, but we are doing everything we can to make sure it can get access.

Q8. [46694] Stuart Andrew (Pudsey) (Con): This week tickets for the London Olympics went on sale. Does my right hon. Friend agree that if the people buying tickets saw an athlete cross the finishing line in first place only to end up on the bronze medal podium, they would demand a refund? Does he agree that that example highlights the absurdity of the alternative vote, and the reason why we need a no vote?

The Prime Minister: That was an ingenious way of weaving the alternative vote into a question in this House. Clearly there is support for the no campaign on both sides of the House, and I am sure that there are also those who support the yes campaign, so we should have this argument out in the country and make arguments like that. My hon. Friend mentioned the Olympics, and I hope that as many people as possible will be able to get to see the Olympics, which will be a fantastic festival of sport in our country.

Q9. [46695] Nick Smith (Blaenau Gwent) (Lab): The Prime Minister stood on Ark Royal last year and said that he wanted a new military covenant written into the law of the land. The Royal British Legion has said that the proposals made by Defence Ministers in the Armed

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Forces Bill do not honour that pledge. Will the Prime Minister follow the legion’s advice, define the covenant in law and keep the promise he made to our brave armed forces?

The Prime Minister: I am having discussions with the Royal British Legion about this. It seems to me that the right thing to do is to reference the covenant clearly in law, but to have a debate in the House every year about the covenant and make sure we can update and improve it, because it is not a static document. It needs to take into account changing health and education needs, and to make sure that it is the very best it can be for our armed service personnel.

Q15. [46701] Mr Bernard Jenkin (Harwich and North Essex) (Con): Does my right hon. Friend support the following statement:

“The reason I've never supported AV is that it would have given”—


“an even bigger majority in 1997, and it would have given the Tories an even bigger majority in 1983, and…1987 as well…If…we want reform…to rebuild public trust and confidence in politics…AV doesn’t deliver that.”

Is he as surprised as I was to learn that those are the words of the right hon. Member for Exeter (Mr Bradshaw), who is the director of Labour’s Yes to AV campaign?

The Prime Minister: What can I add to that brilliant piece of judgment?

Q10. [46696] Mr Gareth Thomas (Harrow West) (Lab/Co-op): I draw the attention of the House to the interest that I have previously declared. There are very few people outside the House—or, I suspect, inside it—who think that Northern Rock would have got into as much trouble if it had still been a mutual building society. Given the considerable scepticism about whether the coalition really wants to change the culture in the banking industry, will the Prime Minister now insist that his City Minister requests a serious and detailed assessment of the case for remutualisation of Northern Rock?

The Prime Minister: We are prepared to consider all options, and the City Minister will do that. I would make two points. First, we think that mutualisation should go much further than just the banking industry, and are considering options for mutualisation within the public sector to give members of staff in public sector organisations far more control over the organisations that they are in. On banking, it is about looking at not just mutualisation but the whole issue of responsibility and trying to link in again the idea of taking deposits and making loans, as building societies used to.

Q11. [46697] Robert Halfon (Harlow) (Con): Given the Lockerbie bomb and Gaddafi’s continuing murder of his own people, does the Prime Minister think it was wrong for British universities to sign deals with Libya, and wrong for the previous Government to help facilitate some of those contracts? Will he take steps to learn the lessons and ensure that that never happens again?

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The Prime Minister: I think that there are lessons to be learned. As I have said, I think that it was right to respond to what Libya did in terms of weapons of mass destruction, but I do not think that the way in which that response was handled was right. Too much credulity was shown, particularly over issues such as that of Abdelbaset al-Megrahi, the man who was convicted of the biggest mass murder in British history. Universities will also want to ask themselves, as they are doing, some pretty searching questions about what they did.

Q12. [46698] Kelvin Hopkins (Luton North) (Lab): The Nobel prize-winning economist Paul Krugman has said that the Government’s economic policy is going in precisely the wrong direction. Does the Prime Minister really wish to be remembered as a reincarnation of President Herbert Hoover, whose policies led directly to the great depression of the 1930s, and to leave the future open to our leader to be a new Roosevelt and lead us away from that?

The Prime Minister: As a job application, that was at the greasy end of the spectrum, I think. I prefer to listen to the head of the OECD, who is in London today, and who has said:

“I think dealing with the deficit is the best way to prepare the ground for growth in the future.”

When it comes to the question of who supports this Government’s policy, we have the OECD, the International Monetary Fund, the Federation of Small Businesses, the CBI and the Bank of England. When the shadow Chancellor was asked recently, “Who supports your economic policy?”, there was a long pause and he finally replied, “The Guardian.” I will keep my supporters, and you can keep yours.

Mr James Gray (North Wiltshire) (Con): The people of Wootton Bassett have sought neither thanks nor praise for what they have done on so many hundreds of occasions over the years, but they will be deeply honoured and very pleased by the great honour that Her Majesty has shown them. Will the Prime Minister now lead the people of Carterton, in his constituency, in filling their place?

The Prime Minister: First, may I say to my hon. Friend what an honour it is for me to be able to make the announcement about Royal Wootton Bassett, and how I enjoyed meeting him, the mayor of Wootton Bassett and others connected with the town? Let me make it absolutely clear: they did not ask for any recognition or any form of preferment. They believed that they were honourably and honestly doing a job that the whole country wanted to see done. Now that the route will be different, we need to consider the issues raised by my hon. Friend. Already, quite a demonstration of solidarity and support takes place outside the John Radcliffe hospital, but I will certainly bear in mind what he says.

Q13. [46699] Jonathan Edwards (Carmarthen East and Dinefwr) (PC): Following the emphatic yes vote in the referendum on law-making powers, a series of UK Government Ministers have proposed a Calman-like process for Wales. Will the Prime Minister confirm that reform of the Barnett formula, as advocated by the

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independent Holtham commission, will be a cornerstone of any wider changes to how the Welsh Government are funded?

The Prime Minister: We are looking at a Calman-like process for Wales; we think that is right, and we will make some announcements and proposals. Let me just say that because the spending reductions in Wales are less than the spending reductions in England, we will find at the end of this Parliament that the difference in spending per head in Wales will be even greater than it is today, so I do not accept the contention that somehow people in Wales are being unfairly targeted with cuts; they are not. They are getting a better deal than some other parts of the United Kingdom.

Q14. [46700] Simon Wright (Norwich South) (LD): A report published today by the End Child Poverty campaign shows that when Labour left office, it left 30% of Norwich’s children living in poverty—the worst figure in the east of England. Does the Prime Minister agree that such a complex problem demands a cross-Government response to tackle the causes of poverty and deliver greater social mobility?

The Prime Minister: The hon. Gentleman is entirely right, and if we think of combating child poverty simply in terms of moving people a little bit above or below the line we will never deal with the underlying causes of child poverty, which are worklessness, family breakdown, and other problems linked to it. I am determined that we will try our hardest, with expertise from across the House of Commons—the hon. Member for Nottingham North (Mr Allen) is involved in this work, as is the right hon. Member for Birkenhead (Mr Field)—making sure that we really look at life chances, as well as poverty itself.

Rushanara Ali (Bethnal Green and Bow) (Lab): Earlier this month I joined my constituents and many others from across the east end in commemorating the 68th anniversary of the 1943 Bethnal Green tube disaster. It was one of the worst civilian disasters of the second world war: 173 people were killed and 90 injured, while seeking shelter. Does the Prime Minister agree that there should be a fitting permanent memorial to those who perished, and will he lend his support to the Stairway to Heaven memorial campaign?

The Prime Minister: I will certainly look very carefully at what the hon. Lady says. She speaks very powerfully on behalf of her constituents about something that, yes, happened many years ago, but people will still have strong family memories of what happened at that time. I will look carefully at what she says and see what support my office and I can give.

Damian Collins (Folkestone and Hythe) (Con): Does the Prime Minister agree that nuclear power stations in the UK, such as Dungeness in my constituency, have an excellent safety record, and that new nuclear power will be an important part of our energy needs in future?

The Prime Minister: I do think that nuclear power should be part of the mix in future, as it is part of the mix right now. Obviously, I am sure that everyone watching the dreadful events in Japan will want to make

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sure that we learn any lessons. Of course there are big differences: we do not have those reactor designs in the UK, nor do we plan to, and we are not in a similar seismically important and significant area. Nevertheless, I am sure that there will be lessons to learn, and that is why my right hon. Friend the Secretary of State for Energy and Climate Change has asked the head of nuclear inspections and safety to learn the lessons, and to make sure that we do so in our country.

Gemma Doyle (West Dunbartonshire) (Lab/Co-op): This week marks the 70th anniversary of the Clydebank blitz, in which 528 people lost their lives. Hundreds more were seriously injured, and 35,000 people were made homeless. Clydebank suffered the worst devastation

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and loss of life in Scotland during the second world war. Will the Prime Minister join me in paying tribute to all those who lost their lives, all those who still carry their injuries with them today and, crucially, the people who rebuilt Clydebank after those terrible events 70 years ago?

The Prime Minister: I will certainly join the hon. Lady in paying tribute to those people. It is important, as we reach the 60th and 70th anniversaries of these events, that we recognise that many people who lived through them are coming to the end of their lives. It may well be our last opportunity to commemorate what happened and to remember those who died. It is particularly important, as we come up to these anniversaries, that we get that right.

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bill presented

London Olympic Games and Paralympic Games (Amendment) Bill

Presentation and First Reading (Standing Order No. 57)

Mr Secretary Hunt, supported by the Prime Minister, the Deputy Prime Minister, Mrs Secretary May, Mr Secretary Pickles, Mr Secretary Hammond, Mrs Theresa Villiers, Hugh Robertson and Norman Baker, presented a Bill to amend the London Olympic Games and Paralympic Games Act 2006.

Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 165) with explanatory notes (Bill 165-EN).

Mr Speaker: I ask Members who are leaving the Chamber to do so quickly and quietly, so that I can hear and respond to points of order.

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Points of Order

12.33 pm

Ian Mearns (Gateshead) (Lab): Following the point of order made by my hon. Friend the Member for Hartlepool (Mr Wright) yesterday, and the response from the Deputy Leader of the House later in the day, I received a letter from the Minister of State, Department for Education, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb) outlining the reasons for the delay in answering questions. However, I find it a little incredible that a whole Department and its IT tracking device should find it more difficult to track the 563 unanswered questions than I do as an individual Member of Parliament. That seems to contradict somewhat the evidence given to the Education Committee a number of weeks ago by Lord Hill, who said that the Department was aware of delays in answering questions.

Mr Speaker: I am grateful to the hon. Gentleman for his point of order. I would say two things. First, it would be unwise for me to speculate on the technology of the matter and what has or has not happened, for the simple reason that I am in no position at this stage to know. Secondly, notwithstanding the hon. Gentleman’s understandable frustration, which he has put on the record and which he might wish to share with his constituents, I think it fair to record that the Deputy Leader of the House looked into the matter extremely expeditiously yesterday and offered a gracious apology to right hon. and hon. Members. I will leave it there for today.

Mr John Leech (Manchester, Withington) (LD): On a point of order, Mr Speaker. During questions last week to the Secretary of State for Health, the hon. Member for Manchester Central (Tony Lloyd) attacked the Government’s health policy and the role of private provision by claiming

“that at the Christie hospital in Manchester 150 jobs have been transferred from the NHS to the private contractor on that site.—[Official Report, 8 March 2011; Vol. 524, c. 757.]

That is simply not true. I have had written confirmation from the Christie that it is untrue. There has been no transfer of staff from the NHS to the new private partnership. I made the hon. Gentleman aware that I intended to raise the matter as a point of order. May I seek your guidance on whether it would be appropriate for him to apologise to the House for misleading Parliament, and to the Christie for making a false statement about its commitment and outstanding contribution to the NHS?

Mr Speaker: I am grateful to the hon. Gentleman for his attempted point of order. If an hon. Member makes a mistake, it is for the hon. Member concerned to decide whether it is necessary to correct what he or she has said and, if so, to decide how and when to do so. Meanwhile, the hon. Gentleman, who is quite an experienced hand, has offered his verdict clearly. It is on the record and I suspect that he may choose to share it with others. It is open to him to do so, but I cannot get involved beyond that.

Tony Lloyd (Manchester Central) (Lab) Further to that point of order, Mr Speaker.

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Mr Speaker: It is very proper that the hon. Gentleman accused should have a chance to respond.

Tony Lloyd: Let me say to the House and far wider that if, inadvertently, I misled the House or anybody else on the issue, of course I unreservedly withdraw that claim. Let me make it clear that I would never claim something dishonest about the Christie hospital—not that it was going to close when it was not, and not that staff were being transferred when they were not. If I was wrong, I withdraw those remarks.

Mr Speaker: I am grateful to the hon. Gentleman. As far as I am concerned, certainly for today, that concludes that matter.

Paul Flynn (Newport West) (Lab): On a point of order, Mr Speaker. As confidence in the safety of nuclear power has been shaken worldwide, and as no nuclear power station has ever been built on time or on budget, should not the House have an opportunity of considering the nature of the review, so that we can include costs and timetable in the likelihood of building new nuclear power stations in this country?

Mr Speaker: First, the hon. Gentleman may well choose to approach the Backbench Business Committee in pursuit of time to debate the issue. Secondly, I am reminded again by the efforts of the hon. Gentleman why he is the author of that well-thumbed tome, “How to be a Backbencher”. We will leave it there for today.

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Special Urban Development Zones

Motion for leave to introduce a Bill (Standing Order No. 23 )

12.38 pm

Steve Rotheram (Liverpool, Walton) (Lab): I beg to move,

That leave be given to bring in a Bill to require the Secretary of State to create Special Urban Development Zones; to set out the criteria on which such Zones must be designated, including criteria relating to Housing Market Renewal Initiative status and areas of multiple deprivation; and for connected purposes.

My aim in introducing the Bill is simple—to see areas blighted by entrenched multiple deprivation given the targeted attention they so desperately and urgently need, and to try to give Members on the Government Benches—the few who are here—some comfort or reassurance. I am not talking about yet another bureaucratic layer for its own sake, or about a new network of talking shops. The public do not set much store by what we in Liverpool would call Mickey Mouse gimmicks. I am talking about intensive intervention capable of delivering meaningful, measurable and tangible results that link in with and complement the soon to be introduced enterprise zones, local enterprise partnerships and other such Government initiatives. For some of our more blighted areas, this is long overdue. For those who live their daily lives in such conditions, the proposals are a matter of the utmost urgency. I propose the introduction of specified development zones and their roll-out out across the whole country. I will use the example of north Liverpool, for purely illustrative purposes, to explain my motivation and serve as justification for the Bill.

I should first explain that my interest in the north of the city is not purely political, although my constituency covers a large portion of it—or at least, it will until it is realigned by the Deputy Prime Minister’s spurious measure of an arbitrary, arithmetical norm. For me, the Bill’s proposals are personal, as they will be to other representatives of disadvantaged constituencies. I have lived in Walton all my married life and witnessed with anguish and frustration the social and economic stagnation in certain wards. I am determined to see something done about it.

Let me start by reminding right hon. and hon. Members of the bigger picture. In recent months, I have had cause on several occasions to recite some of the grim statistics that place Liverpool in the top five or so places nationally of every possible index of deprivation, and the city is at the very top of that unenviable league table when the indices are combined. On those occasions, I have been disappointed by the indifferent, even mocking, responses from some Members on the Government Benches. Some of that I attribute simply to ignorant or baseless prejudice, but some of it has to do with people becoming immune and insensitive when repeatedly exposed to hard-grained, albeit abstract, facts. To borrow from an infamous aphorism, the poverty of one is a tragedy; the poverty of many a mere statistic.

Whatever the case, Liverpool’s socio-economic problems are common knowledge, but what many outsiders will not know is that in north Liverpool they are disproportionately concentrated and the consequences correspondingly magnified. A complex and historical mix of issues, such as low educational attainment, a low

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skills base, high welfare dependency, poor housing, low or unskilled employment, which is often casual, and poverty of aspiration have made for a potent, self-perpetuating, cyclical cocktail of disadvantage and marginalisation.

In recent times, against the odds, Liverpool has come on in leaps and bounds, which is to be commended and celebrated. Many Members, even on the Labour Benches, will be astonished at our city’s transformation and urban renaissance when the party has its conference there later in the year, just as the Lib Dems were when they visited.

It remains, however, a tale of two cities in one, a sub sub-regional north-south divide. The wealth, opportunity and aspiration so evident in the centre and elsewhere have not filtered through to north Liverpool. That has long been the case. In the 19th century, well-healed visitors to the city wrote with pity and horror about its poor, most of whom were clustered, even then, in the inner north. The Victorian street urchins and the notorious back-to-back dwellings are long gone, but the causes and effects of poverty that characterised large swathes of the city’s underclass in those northern suburbs persist today. That is unconscionable.

I blame no particular Administration or party. Over the years various well-intentioned local, regional and national initiatives have aimed at reviving the area, but they foundered, overwhelmed by the scale of the difficulties they face or bogged down by conflicting or competing priorities. The soon-to-be defunct housing market renewal initiative essentially recognised what we need to do and made some progress, but ultimately it was neither sufficiently focused nor sufficiently geographically specific to meet north Liverpool’s needs. In any case, it tackled only one of a plethora of problems.

It is time to get to grips with the situation once and for all. The difficulties in the north of the city might have become entrenched, but I refuse to accept that they are insurmountable. As my predecessor, Peter Kilfoyle, argued consistently in this place and in Liverpool, the plight of north Liverpool powerfully demonstrates why we need a fresh, full-spectrum approach to deprivation hot spots, both to tackle the root causes and to address the effects.

Through this Bill, I envisage the creation of designated special urban development zones, intelligently configured according to multiple deprivation indices and housing market renewal intervention status. Each SUDZ would comprise an operational framework consisting of three elements: first, a clear and holistic strategy with realistic and measurable objectives: a focused strategy, unashamedly biased in favour of the interests of the zone; and a strategy devised, developed and monitored with a single

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purpose in mind—the whole-scale and sustainable regeneration of the area in question.

Secondly, there would be funding—yes, funding—or at least additional resources and/or tax incentives. It is all very well banging on about austerity measures, but, as I have pointed out repeatedly in this place, any economy that grows while concentrations of deprivation throughout the country are simply left to fester and rot is an utterly false, foolish and precarious economy. It is also morally reprehensible.

Thirdly, there would be a dedicated delivery vehicle: an independent, stand-alone authority that was suitably equipped and sufficiently robust to work with partners on an equal footing, and with the ways and means—in other words, the clout—to get things done.

I have used north Liverpool as a case in point. It is what I know best; it is my priority; and in my view its regeneration ought to be high on the to-do list of any competent, right-minded Government. But there are many north Liverpools, dotted throughout the country, facing equal hardship and equally deserving of the action I suggest. I propose this Bill on their behalf, too.

Were the Bill to be enacted, it would signal a clear commitment by this allegedly progressive Government to tackling poverty and inequality. Inaction borne of apathy, indifference or something more cynical is no longer an option, and I therefore beg leave to bring in the Bill.

Mr Speaker: The question is that the hon. Member have leave to bring in his Bill.

Gordon Birtwistle (Burnley) (LD) Mr Speaker, am I allowed to comment?

Mr Speaker: If the hon. Gentleman wishes to oppose the Bill, he can.

Gordon Birtwistle: I do not wish to oppose the Bill. What I—

Hon. Members: Sit down.

Mr Speaker: Order. I am grateful to the hon. Gentleman for his courtesy, but he cannot make a comment on the Bill. He is either opposing it or not.

Question put and agreed to.


That Steve Rotheram, Mrs Louise Ellman, Stephen Twigg, Luciana Berger, Graham Jones, Bill Esterson, Catherine McKinnell, Mr Joe Benton, Mr Dave Watts, Ian Murray, Thomas Docherty and Tom Greatrex present the Bill.

Steve Rotheram accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 17 June and to be printed (Bill 163).

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Opposition Day

[13th allotted day]

Fuel Prices and the Cost of Living

Mr Speaker: The first of the two debates is on fuel prices and the cost of living. I inform the House that, in the first debate, I have selected the amendment in the name of the Prime Minister.

As colleagues will be aware, in the light of the level of interest in participating in the two debates, I have imposed a six-minute limit on Back Benchers’ speeches in each of the two debates. There is, of course, no formal time limit on Front Benchers’ speeches, but in view of the interest I appeal to Front Benchers to exercise a certain self-denying ordinance.

12.50 pm

Ms Angela Eagle (Wallasey) (Lab): I beg to move,

That this House recognises that rising world oil, food and commodity prices are increasing the cost of living and adding to the squeeze on families on low and middle incomes across Britain; believes this has been compounded by the Government’s decision to increase VAT to 20 per cent., which will cost a family with children an annual average of £450, has helped to push up the consumer prices index annual inflation to 4 per cent. and, according to the House of Commons Library, is adding £1.35 to the cost of filling up a vehicle with a 50 litre tank; notes that the AA announced last week that the cost of unleaded petrol has now reached an average of £6 a gallon and that the fuel duty stabiliser promised in the 2010 Conservative Party manifesto has not yet been announced or implemented; further notes that the previous administration regularly postponed planned fuel duty rises when world oil prices were increasing sharply, as they are now; and demands that the Government takes immediate steps to reverse January’s VAT rise on road fuels, using the extra £800 million from the bank levy and securing the appropriate EU derogation, in order to provide relief to hard-pressed motorists and, at the time of the Budget, looks again at the annual duty rise due in April.

It is a great pleasure to follow my hon. Friend the Member for Liverpool, Walton (Steve Rotheram), whose ten-minute rule Bill seeks to address an issue that is close to the hearts of all of us from Merseyside.

Times are increasingly tough for millions of ordinary hard-working people and families in our country. Since May last year, we have seen this Government embark on a reckless gamble with our future prosperity. Public expenditure is being cut too deep and too fast, and up and down the country millions of people are really beginning to feel the pinch. Families are facing the biggest squeeze in their living standards for 80 years, and some economists are warning that it could get still worse. Real wages are static, even falling. With recruitment freezes, job losses and rising unemployment, people are right to be worried about the future.

Mr Greg Knight (East Yorkshire) (Con): Will the hon. Lady help the House? Over the past 13 years, in every aspect of Government policy, the Labour Government were deliberately and decisively anti-motorist. Does the motion before the House today represent a seismic shift in policy, or is it, as we suspect, a transient spat of opportunism?

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Ms Eagle: I am rather sorry that I gave way so early in my remarks to that kind of comment. I do not recognise the right hon. Gentleman’s caricature of our policies for motorists. Perhaps he has been reading too much of the Daily Express. [ Interruption. ] Well, I am a motorist as well. He should realise that motorists are not confined to the Conservative Benches.

Robert Halfon (Harlow) (Con) rose—

Ms Eagle: I will give way to the hon. Gentleman, but after that I should like to get some more remarks in.

Robert Halfon: I find the Labour motion astonishing, because over the past few years the hon. Lady’s party crucified Harlow’s motorists by putting up fuel duty by 6% a year and increasing it more than 12 times—and it was going to introduce another tax.

Ms Eagle: I will come to the details of the motion later. Perhaps the hon. Gentleman will do us the honour of staying in the Chamber and listening to that.

Taxes such as VAT are rising, and the Chancellor’s huge cuts in benefits and services are only just starting to bite. The Government are doing all this while the world economy is still very fragile after the international banking crisis. Global commodity prices are soaring, and these price increases are hitting people and businesses in Britain hard.

Mark Tami (Alyn and Deeside) (Lab): Does my hon. Friend agree that this problem tends to have a worse effect in rural areas than in some towns? A lot of people in rural areas rely on oil as a fuel, so they are being hit by a double whammy.

Ms Eagle: I am pleased that the competition authorities have launched an investigation into what has been going on with heating oil. My hon. Friend is right to point out that transport in rural areas is a particular issue.

People who are already financially stretched by this Government’s slash-and-burn approach now find themselves trying to cope with sudden sharp increases in the price of essentials such as food, energy and fuel. Recent OECD figures put UK food inflation at 6.3%. That is higher than the consumer prices index, higher than the retail prices index, and higher than in most of the rest of Europe. In my constituency, parents are now worried about the rising cost of providing balanced meals for their children.

Caroline Lucas (Brighton, Pavilion) (Green): Does the hon. Lady agree that the fuel duty escalator is an important tool to send a clear message that oil prices are going to have to continue to rise, not only for geopolitical reasons but because of peak oil and climate change, and that a way of ensuring that the poorest are not hardest hit would be to scrap the recent VAT increase in totality and replace it with a crackdown on things such as tax evasion and tax avoidance?

Ms Eagle: The hon. Lady is right that there has to be a balance between the environmental aspects of taxes on fuel and living standards. However, I find, all too often, that on the green side of the argument the social

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justice aspects of imposing environmental tax rises are not thought about enough, and such measures tend to hit hardest people whom we are least able to help. She needs to help all of us, when we are thinking about this, by bearing in mind the effects on poverty of environmental taxes.

Mr Dennis Skinner (Bolsover) (Lab): The fuel duty escalator was introduced by the former Tory Chancellor of the Exchequer, the right hon. and learned Member for Rushcliffe (Mr Clarke). One of the first things that the Labour Government did on assuming office was to make sure that we did not pursue that policy. [ Interruption. ] Oh, yes. That is why, on several occasions in our 13 years, the Labour Chancellor of the Exchequer got rid of the fuel duty increase. That is the truth.

Ms Eagle: My hon. Friend fingered the right hon. and learned Member for Rushcliffe, but in fact the fuel duty escalator was introduced in 1993 by a person who is now in the other place, Lord Lamont—

Charlie Elphicke (Dover) (Con) rose—

Brandon Lewis (Great Yarmouth) (Con) rose—

Ms Eagle: Let me finish my sentence. It is absolutely the case that it was Conservative Chancellors of the Exchequer who first introduced the fuel duty escalator.

Chris Ruane (Vale of Clwyd) (Lab): And it escalated.

Ms Eagle: It did escalate. It is also true that it escalated for one year when we came into government, but we had six years when we did not increase fuel duty at all—not even in real terms. Fuel duty escalators need to be applied sensitively.

Charlie Elphicke rose—

Ms Eagle: I am more than happy to give way to the hon. Gentleman.

Charlie Elphicke: I thank the hon. Lady for her kindness and generosity in allowing me to intervene. To clear up the addling of some minds in the House regarding the history of this matter, will she confirm that in 1997 duty was 36.86p and today it is 57.19p?

Ms Eagle: One has to remember that the price of petrol at the election was £1.20 a litre, at a time when the Conservatives were promising to cut 10p off the price of a litre because petrol prices were too high. It is now £1.32 a litre.

Brandon Lewis rose—

Claire Perry (Devizes) (Con) rose—

Matthew Hancock (West Suffolk) (Con) rose—

Ms Eagle: I give way to the hon. Member for Great Yarmouth (Brandon Lewis), because he stood first.

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Brandon Lewis: I thank the hon. Lady for being so generous in giving way. Will she confirm that, despite what has been said, my hon. Friend the Member for Dover (Charlie Elphicke) is right: there were 12 fuel duty rises under the Labour Government, and six more were set to come into force before they left office and would have done in the next few years?

Ms Eagle: As I said, we had six years when we did not even increase the price of fuel by inflation, so there were real-terms price falls. The number of increases in all sorts of duties tends to expand the more one is in government. We will see what this Government do in the Budget next week.

Michael Connarty (Linlithgow and East Falkirk) (Lab): The difference in our approach is that we are looking to help people across all parts of the economy. Surely the people at the Freight Transport Association who have been campaigning solely for a fuel duty rise not to be imposed, which would benefit them, should realise that they must build an alliance with other people by campaigning for the striking down of the increase in VAT to 20%, which is hurting everyone, including not only themselves as the people who deliver goods, but the people who have to purchase those goods.

Ms Eagle: It is clear that increases in fuel duty have knock-on effects on petrol prices, and that fuel prices in general have complex knock-on effects in an economy. The Government have to think about that as they approach the Budget.

Rehman Chishti (Gillingham and Rainham) (Con): Will the hon. Lady give way?

Ms Eagle: No. I have given way a few times, and I am going to get on with my remarks.

It is absolutely clear that increased fuel duty costs are eating further and further into already stretched household budgets, making the squeeze on living standards even worse. Businesses are suffering from problems caused by inflating commodity costs, tighter margins and restricted access to credit from the banks. Many are anxious about how they will get by in the next few years, and the continuing rise in the price of fuel is adding to that worry.

Claire Perry: Will the hon. Lady give way?

Ms Eagle: I will get on with my remarks and give way to the hon. Lady shortly.

The cost of oil has been rising on world markets as a result of underlying increases in demand from Asia and uncertainty because of the unrest in the middle east. Just a week ago, petrol prices hit a new high at the pumps. The average price for unleaded fuel is, a week later, still £1.32 a litre. That means that the cost of fuel has risen 7p a litre since the beginning of the year. The AA pointed out that the £6 gallon has arrived for the first time, and that prices for diesel have soared even higher, currently averaging £1.38 a litre.

Gordon Birtwistle (Burnley) (LD): I am grateful to the hon. Lady for giving way—[Interruption.] May I refer to an e-mail that I received—[Interruption.]

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Mr Speaker: Order. That is not an orderly way in which to conduct the debate. An hon. Member should not stand up in the Chamber with an electronic device and read from an e-mail as a means of debating. That is the current position—such matters are always subject to review, but I assure the hon. Gentleman that that is the position at the moment, and we will leave it there.

Gordon Birtwistle: I apologise.

Mr Speaker: I am grateful to the hon. Gentleman,

Ms Eagle: That is nought out of two for the hon. Gentleman. Perhaps the next time he tries to intervene, he will manage to be in order.

Gordon Birtwistle rose—

Ms Eagle: I am not willing to give way to the hon. Gentleman. [Interruption.] He can show me the e-mail afterwards.

The Conservative-led Government’s decisions to raise VAT to 20% may have been expertly disguised before the election so that the voters were kept in the dark about it, but we all know about it now. Increased VAT has added an average of £450 a year in extra cost to a family with children and has pushed the headline CPI figure to 4%, which is double the Bank of England’s target.

Gordon Birtwistle rose—

Ms Eagle: I will not give way to the hon. Gentleman.

As we all know, VAT applies to petrol. The Library calculated that the Conservative Government’s 2.5% increase in VAT has added nearly 3p to the cost of a litre of petrol when people are least able to absorb that extra cost.

The Economic Secretary to the Treasury (Justine Greening): Perhaps the hon. Lady will confirm and clarify her party’s position on—I think—fuel duty. I am not sure because on ITV’s “Daybreak” the shadow Chancellor said: “We’re saying today, as well as the duty thing, which I’ll think you’ll freeze”—I presume that he was not saying that explicitly to Christine Bleakley—“I think you should reverse the VAT rise.” Specifically on the “duty thing”, is the shadow Chancellor talking about freezing the 1p rise, the RIP rise—[Hon. Members: “RIP?”] Sorry, I mean the RPI plus one rise. Which is it? [Interruption.] I might have made a slip, but I was thinking about the Opposition and their policy.

Mr Speaker: Order. Before we continue, may I appeal to Members, including Ministers and other Front Benchers who are intervening, to do that economically? I remind the House that the Chair’s responsibility is to seek to protect the rights of Back-Bench Members who wish to speak. I put it to Front Benchers that Back Benchers will be not inconsiderably irritated if long speeches from the Front Bench stop them getting in.

Ms Eagle: I was trying to help hon. Members by giving way. Obviously, that extends the time that one’s remarks take, but I think that some exchange helps the debate.

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I hoped that the Chief Secretary would be here today, but we have the Economic Secretary instead. Why will the Chief Secretary not turn up to one of his own debates? Where is he? Why has he not come to tell us about what he has been doing on all those issues?

Mr Alan Reid (Argyll and Bute) (LD): The hon. Lady will recall that when she was a Treasury Minister, she received a delegation of highlands and islands Members of Parliament, including the Chief Secretary, and that we asked for a fuel duty derogation for remote rural areas. We had tea and sympathy, but no action. The Chief Secretary is now implementing that policy. Does the Labour party now support reduced fuel duty for the islands?

Ms Eagle: We want to do something that helps everyone in the country, not one third of 1%.

As we all know, VAT applies to petrol. As I said , the Library has calculated that the 2.5% increase in VAT has added nearly 3p to the cost of a litre of petrol when people are least able to absorb that extra cost. We all know that an extra fuel duty increase of 1p above inflation is factored into the Chancellor’s Budget arithmetic and due to be implemented next month. Taken with rising inflation, those changes could put 5p a litre on to fuel duty rates. The combination of sharp rises in world oil prices, ongoing uncertainty in the middle east and the self-inflicted rise in VAT is creating real hardship for many people. It causes higher inflation, lowers consumer spending power, which is already weak, and reduces both consumer and business confidence, thereby putting any prospect of growth at risk. The economy shrank by a shock 0.6% in the last quarter of 2010. People are getting increasingly desperate for some relief from the Conservative Government, but there is precious little sign of it.

Several hon. Members rose

Ms Eagle: I am trying to get on with my remarks, as the Speaker wishes me to do.

What help has been put in place to tackle rising fuel prices since the Government took power last May? The Business Secretary was reported as telling the Press Gallery over lunch recently:

“It’s quite likely that we are going to get a nasty period of high fuel prices”.

Top marks for observation, but most people would think that, at an average of £1.32 a litre, we already have a nasty period of high fuel prices. However, the Minister of State for International Development does not seem to think that they are high. As a former oil trader, he was unable to resist the urge to speculate. His irresponsible guesswork succeeded in generating front-page headlines in The Sunday Times on 6 March, when he announced that he thought that the record price of $147 a barrel for oil reached at the height of the oil price spike in 2008 would be smashed. He said:

“I’ve been saying in Government for two months that if this does go wrong, £1.30 at the pump could look like a luxury, $200 a barrel is on the cards”.

His words of wisdom, which were hardly calculated to bring calm to the international oil markets, were reported around the globe. His headline-grabbing antics succeeded

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only in making a bad situation worse, and, I would imagine, swift removal from No. 11 Downing street’s Christmas card list.

Meanwhile, total incoherence was breaking out in the oddly named “quad”, which, for those who do not know, consists of the Prime Minister, the Deputy Prime Minister, the Chancellor of the Exchequer and the Chief Secretary. Apparently, they are meant to be the ones who actually run the Government, and it seems that they are falling out over the Conservative manifesto promise to introduce a so-called fuel duty stabiliser, which would cut duty when prices were high but raise the tax when prices fall.

Several hon. Members rose

Ms Eagle: I will not give way. I am trying to get on. [Interruption.] I hope that the hon. Member for Devizes (Claire Perry) will stay in order. I have said that I want to get on with my remarks because the Speaker is trying to protect Back-Bench business, and I have given way a lot. She should now be patient if she wishes to contribute to the debate.

The fuel duty stabiliser relies on the view that increasing oil prices provide the Treasury with a windfall from North sea oil revenues that can be distributed to hard-hit fuel users. Where is the fuel duty stabiliser? In April last year—conveniently before the general election—the Prime Minister, after a huge song and dance on the issue, which we saw on the front pages, suggested that a Conservative Government would cut the cost of petrol by 10p a litre if oil prices remained high. At that time, petrol cost 12p a litre less than it does now. The Daily Telegraph reported that the Tory fuel duty stabiliser

“is expected to be launched within months if Mr Cameron is successful.”

As oil prices soar, voters who remember that promise are still waiting.

Since then, the Prime Minister has dropped lots of little hints about his pet policy, without actually doing anything about it. Every time he mentions it, he is quickly slapped down by the Chief Secretary. That happened in January just after a prime ministerial fuel price hint. Speaking on the BBC’s “Politics Show”, the Chief Secretary said of the stabiliser mechanism:

“It’s a complicated idea and it’s difficult to see precisely how we achieve it”.

Of course, that did not stop the Conservatives dangling the idea cynically before the electorate last April. In the same BBC interview, the Chief Secretary rejected calls to scrap the 1p rise in fuel duty that is due to be introduced this April, saying—

Several hon. Members rose

Ms Eagle: No, let me finish. The Chief Secretary rejected calls to scrap the 1p increase, saying that he was not prepared to “sacrifice income willy-nilly” to help motorists. That is the Chief Secretary who is not at this debate. Perhaps Conservative Members should be asking him their questions. He proceeded to champion the fuel derogation for remote islands, which will help just a third of 1% of Great Britain’s almost 34 million registered vehicles and 60 million people. To be fair to him, he has battled for 10 months to get that policy up and running

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and, showing the energy and drive for which he is famous, he has managed to get around to asking the EU for permission to think about doing it. That is a perfect example of a policy from this Government: it generates a satisfyingly large amount of headlines, helps virtually nobody and costs almost nothing.

Meanwhile, the Chancellor asked the Office for Budget Responsibility to undertake an assessment of the effect of oil price fluctuations on the public finances, in order to design a stabiliser mechanism. It produced that assessment last September.

Brandon Lewis rose—

Charlie Elphicke rose—

Sajid Javid (Bromsgrove) (Con) rose—

Ms Eagle: I have given way to the hon. Member for Great Yarmouth (Brandon Lewis) already.

The Office for Budget Responsibility produced the assessment last September, and it failed to make the numbers stack up for the policy. It calculated that the overall effect on the public finances of a temporary oil price rise would be close to zero, and that a permanent rise would create a loss to the public finances. In other words, there is no windfall for the Treasury to redistribute using a so-called fuel duty stabiliser mechanism.

No one appears to have told the Prime Minister about that and he clearly has not bothered to read the OBR report, because at Prime Minister’s questions a couple of weeks ago, he promised a fuel duty stabiliser in the Budget:

“we will look at the fact that extra revenue comes to the Treasury when there is a higher oil price, and see if we can share some of the benefit of that with the motorist.”—[Official Report, 2 March 2011; Vol. 524, c. 300.]

The Daily Telegraph called that statement “misleading and economically illiterate”. I could not have put it better myself.

Brandon Lewis rose—

Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP) rose—

Ms Eagle: I have given way to the hon. Member for Great Yarmouth.

That statement shows that this Government are run by a Prime Minister who does not do detail and who appears to be at odds with his own Chief Secretary. The OBR has shown that a temporary rise in oil prices generates a £100 million surplus in the first year for the Treasury, but that that turns rapidly to a net revenue loss of £700 million the year after. What the Government gain from higher oil tax revenues, they lose from the effects of higher prices on consumption and the requirement to spend more on indexing pensions and benefits. A permanent rise causes permanent losses to the public finances. The Prime Minister has to stop pretending that there is a windfall in rising oil prices that he can share out, because it simply does not exist. [ Interruption. ]

Mr Speaker: Order. I apologise for interrupting the hon. Lady. I say to the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) that loud conversations in the middle of a speech are discourteous and must not happen. That is not a proper way to conduct debate. I am not having it, and that is the end of it.

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Ms Eagle: I was saying that the Office for Budget Responsibility has given the lie to the view that a fuel duty stabiliser mechanism can be financed by the windfall that rising oil prices give the Government by revealing that that surplus does not exist.

The Secretary of State for Business, Innovation and Skills was caught recently saying that the Liberal Democrats are in a “constant battle” inside the Government, especially over tax proposals. They are obviously in a battle over the fuel duty stabiliser. In debates on the 2008 Finance Bill, he said that fuel duty stabilisers were “unbelievably complicated and unpredictable”. He also said:

“May I suggest that there might not be any net windfall at all?”—[Official Report, 16 July 2008; Vol. 479, c. 339.]

The OBR has since confirmed that there is not. The Liberal Democrat bit of the Government is saying one thing and its Tory masters another. Together, there is total inaction on fuel prices.

The Institute for Fiscal Studies has concluded that introducing a fuel duty stabiliser would inject more uncertainty into the public finances rather than less. Analysis by the Policy Studies Institute found that if a stabiliser had existed for the 12 months to last December, when the price of petrol rose by 13p a litre, it would have cost the Exchequer a staggering £6 billion. The Government’s flagship policy on fuel, which they used cynically before the election to generate so many favourable headlines and to gather votes, is not only late in arriving, but looks shambolic and incoherent.

Andrew Bridgen (North West Leicestershire) (Con) rose—

Charlie Elphicke rose—

Ms Eagle: It is clear that the policy can be introduced only at the risk of injecting huge and dangerous uncertainty into the public finances. I give way to the hon. Member for North West Leicestershire (Andrew Bridgen).

Andrew Bridgen: The Labour party’s apparent damascene conversion on fuel taxes will amaze and intrigue the bulk of the electorate. Will the hon. Lady confirm whether she supported the crafty action of the previous Chancellor of the Exchequer, who effectively excluded fuel from a VAT reduction in 2008 by raising duty, and then put the VAT on fuel back up to 17.5% in January 2010?

Ms Eagle: One minute Government Members say that we have no plan to deal with the deficit, and the next minute they complain that we had a plan that would have raised money. They really do try to have it both ways and are not remotely coherent.

The time for action is now. The Chancellor should take immediate action on fuel prices to ease the cost of living crisis in Britain. He does not even have to wait until the Budget. We are calling on him to reverse immediately the 2.5 percentage point increase in VAT on petrol that he imposed in January.

Charlie Elphicke rose—

Sajid Javid rose—

Ms Eagle: I have given way to the hon. Member for Dover (Charlie Elphicke).

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The House of Commons Library has estimated that that reduction would cost £700 million and take nearly 3p a litre off the price of petrol.

Jacob Rees-Mogg (North East Somerset) (Con): Will the hon. Lady give way?

Ms Eagle: I always give way to the hon. Gentleman.

Jacob Rees-Mogg: The hon. Lady is always enormously gracious and generous in giving way. The Labour party is now proposing tax cuts, and has not proposed any serious spending cuts. Does it just want the country to go bankrupt?

Ms Eagle: The hon. Gentleman should not believe the propaganda from Tory central office. Of course we do not want the country to go bankrupt. We had a plan that would have halved the deficit, rather than dealing with it in four years. If I were in the Conservative party, I would not be quite so proud of producing the third largest fiscal consolidation—public spending cuts in ordinary language—of the top 29 industrialised countries, beaten only by Iceland and Ireland. As the hardship and the squeeze on living standards in this country become clearer in the coming year, the Government will come to rue their decision to cut too far and too fast. People will suffer day in and day out as a result of that decision.

Several hon. Members rose

Ms Eagle: I want to get to the end of my remarks, and I have given way a lot.

Mr MacNeil: Will the hon. Lady give way?

Ms Eagle: I will give way to the hon. Gentleman before I finish.

Mr MacNeil: I am not sure what the hon. Lady thought about living standards in the Outer Hebrides when, time after time, she stood at the Dispatch Box as a Minister and said what she could not do and why she could not do it. Does she, in her quieter moments, regret not approaching the European Commission for a rural fuel derogation for the Hebrides and other islands in Scotland?

Ms Eagle: Why does the hon. Gentleman not want to help the whole of Scotland? Why does he want to help only a tiny bit of Scotland?

Andrew George (St Ives) (LD): Will the hon. Lady give way on that point?

Ms Eagle: I must continue.

The Chancellor should use the Budget to look again at the annual fuel duty rise due in April, because of the price of fuel in world markets. At this time of instability and change in the middle east and north Africa, the Chancellor has to work with other Finance Ministers to try to keep oil supplies flowing and get world oil prices down.

At the weekend, the Deputy Prime Minister claimed that the Liberal Democrats were

“in the middle, for the middle”.

I say to them this afternoon: prove it. If they really cared about the struggles facing hard-pressed families in Britain, they would join us in the Lobby and vote for our motion. I for one look forward to seeing them.

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Mr Russell Brown (Dumfries and Galloway) (Lab): My hon. Friend has laid out clearly why a fuel duty stabiliser or regulator would not work in fiscal terms. The tragedy is that the wider UK public, on the back of the Fair Fuel UK campaign, have been sold the idea of a stabiliser while at the same time talking about a reasonable price. Does she have any idea what would be a reasonable price with which people would be satisfied? It would be quite unsustainable, I think.

Ms Eagle: I thank my hon. Friend for his observations, and he is quite right. The stabiliser mechanism relies on our having some idea of the price at which petrol ought to be stabilised, which means guessing right. A wrong guess could lose the Exchequer a lot of money. The question is, when is a rise in fuel prices a blip and when is it a trend? A stabiliser would require a judgment call on that point, too, and if the Government got it wrong it could cost a lot of money.

We have had nothing but delay and dithering on the issue from the coalition parties, despite their electoral promises, which were lavish in the extreme. The Government should be taking action now. Instead, just 10 months in, what do we have? A Foreign Secretary who is looking for his mojo, a Deputy Prime Minister publicly denying being taken hostage by the Prime Minister from inside his £2 million ring of Sheffield steel, and a Business Secretary who is so full of self-importance that he claimed he could bring the Government down single-handed if he was pushed too far. Millions of Britons struggling in the middle of the largest squeeze in living standards for 80 years are hoping and praying that somebody will push him, and push him fast.

Families are crying out for help now, but the Government are cutting too far, too fast and pursuing a dangerous and extreme experiment on the UK economy. Since they came to power, growth has stalled. Today’s unemployment figures are the worst since 1994, and inflation is double the Bank of England’s target. They need to recognise that families need help now, and they need to forget the dogma and join us in the Lobby to vote for this cut.

1.23 pm

The Economic Secretary to the Treasury (Justine Greening): I beg to move an amendment, to leave out from “House” to the end of the Question and add:

“notes that the Government inherited the largest deficit in UK peacetime history and that the previous Government and current Opposition has no credible plan to deal with the deficit; further notes that this Government has already taken steps to support families and that those on low and middle incomes will benefit from April 2011 from a £1,000 increase in the income tax personal allowance, above-indexation increases in Child Tax Credit and that pensioners will receive new ‘triple-lock’ increases in the basic State Pension; further notes the significant impact on fuel prices in the UK of the dramatic increase in the world oil price to over $100 per barrel and the impact on households and business; notes that the previous Government increased fuel duty no less than four times between December 2008 and April 2010, proposed introducing a fuel escalator from 2011 and planned for a further series of six consecutive fuel duty rises up to 2014; nonetheless recognises the significant impact of high fuel prices on motorists, hauliers and businesses and that the Government is considering a fair fuel stabiliser that could support motorists and businesses when oil prices are high; and in addition notes that a reduction in VAT on fuel would be deemed illegal under EU law and that the Chancellor will update the House on this issue at the time of the Budget.”.

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There we have it, from the party that came into government with fuel duty at 36.86p a litre and left it at 57.19p a litre—a whole load of moaning and insubstantial comments about what it cannot do to help motorists. The Government, unlike the Opposition, understand the seriousness of the issues that we are debating today. We know that the increase in the world’s oil price, as it feeds though to all other goods, is leaving many people out of pocket, and that families up and down the country are finding it hard to make ends meet. The Opposition clearly have no grasp of the issues at hand, as we have just heard; to them, it is just politics. They are simply not interested in how people on the ground actually feel about things, and they have no credible policies to back up their claims.

Andrew George: The Labour motion mentions

“securing the appropriate EU derogation”.

I hoped that the shadow Minister would give way to me, so that I could ask her what European derogation that is, and how many times in the past 13 years Labour attempted to seek it. Has the Economic Secretary seen anything in the records of the Treasury suggesting an answer to those questions?

Justine Greening: Officials are not aware that the last Government sought any derogation in relation to VAT on fuel at any point in the past 13 years. In fact, if the shadow Chancellor had gone off to Europe with his influencing strategy, which was clearly so unsuccessful when he was running for the leadership, I doubt that there would have been any prospect whatever of his making any progress. The Labour party seems to have about as much understanding today of the economic situation that it has left our country in as it did of the situation two years ago, when it ran this country into the deepest and longest recession in living memory.

Rehman Chishti: Will my hon. Friend confirm that the shadow Chancellor was wrong in law when he said that there should a reversal of the VAT rise on fuel? Under EU directive 112 of 2006, that cannot legally be done.

Justine Greening: My hon. Friend is absolutely right. In fact, the EU directive on VAT states: