6.39 pm
Mr Gareth Thomas (Harrow West) (Lab/Co-op): As ever, we have had an interesting and fascinating debate, with many excellent contributions, although I fear that I will not be able to do justice to them all.
As my right hon. Friend the Member for Southampton, Itchen (Mr Denham) said at the outset, the Prime Minister promised us that tuition fees of £9,000 would be the exception, not the rule. Not only Oxford and
27 Apr 2011 : Column 278
Cambridge, but Oxford Brookes, Lincoln, Leicester, the university of East London, Aston, Hull, Essex, Newcastle, Bradford and many, many more are set to charge the full £9,000 in tuition fees. Then there are all those that will charge close to—albeit not quite—the maximum. Kingston university, which the Secretary of State will know well, is charging £8,500. Northumbria, Teesside and Portsmouth are all set to charge £8,500 as well. As my hon. Friends the Members for Nottingham South (Lilian Greenwood), for Sheffield Central (Paul Blomfield) and for City of Durham (Roberta Blackman-Woods) underlined in their excellent contributions, the Prime Minister got it wrong. Fees of £9,000 are not the exception; they are the reality that a huge number of the brightest and best of the next generation will face.
Even before the tuition fees vote, however, independent experts such as the Higher Education Policy Institute were arguing that fees of £9,000 would soon become the norm, not the exception. So the right hon. Member for Bermondsey and Old Southwark (Simon Hughes) is wrong to say that Ministers were not warned what would happen. Surprisingly we had no explanation from the Government Front-Bench team of why £9,000 fees will not after all be the exception. Is not the truth that Ministers have lost control of higher education policy, and that instead of a clarity of vision and purpose for the future of our universities, there is confusion?
The Secretary of State has put off and put off and put off again the White Paper on the future of higher education, as my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt) made clear. That lack of clarity has left the Department responsible for business and universities being pushed around in Whitehall. We have had the overseas students debacle, as Ministers publicly argued across Whitehall, in the media and in the House about the level of new restrictions on overseas students. University vice-chancellor after vice-chancellor has pointed out the damage done already to Britain’s reputation as a result; and many are still worried about how having 80,000 fewer overseas students—a cut of 20%—will hit their institutions in the long run, given all the benefits that the extra income brings.
Then we have the Department for Education launching a major review of the future of teacher training—never mind the high Ofsted ratings for the quality of that teacher training! Is it not the truth that Ministers have been warned that up to 25% of income for some of Britain’s universities is now at risk as a result of this review? Is there any sign of Ministers from the Departments for Business, Innovation and Skills and for Education getting together to resolve the uncertainties that universities face in this area? No, none at all!
The Department of Health is all set to axe strategic health authorities. They are the very bodies that negotiate with universities over the number of nurses, midwives and radiographers—and all the other vital health professionals who need university training—who are to be trained. Some universities receive approximately 25% of their total income from NHS-funded health professional courses, and others are already expecting cuts in the number of funded student places in this area of about 10% to 15%. Is it any wonder, then, that there is considerable financial uncertainty facing universities in the short and long term in this area as well?
27 Apr 2011 : Column 279
Stella Creasy: Does my hon. Friend also think that there is considerable uncertainty for students such as Nancy Quilliam, from Walthamstow, who has deferred entry? She is being asked to pick a university by next Thursday, but she cannot find out how much she will be charged—she has no certainty about the rate of fees—so risks incurring a further £9,000 of debt. Is that not another level of uncertainty that the system has created for students across the country?
Mr Thomas: My hon. Friend is absolutely right that our students or would-be students face huge uncertainty about the fees that they will incur. Perhaps if the Government had published the White Paper that they promised to publish even early this year, her constituents might have had just a little bit of certainty. Is not the truth that Ministers in the Department for Business, Innovation and Skills have failed to stop other parts of Government creating huge uncertainty for Britain’s universities, thereby creating incentives for fees to be higher rather than lower?
Paul Farrelly: When the Government say that universities will be allowed to charge fees of £9,000 only in exceptional circumstances, is it not incumbent on them not only to say what control they will exert to turn down the 40% to 50% that will want to charge £9,000 anyway, but to tell the House how they will square the circle and make up the funding that universities will otherwise lose?
Mr Thomas: You would think that it was indeed incumbent on Ministers to do that, Mr Speaker, but so far they have not done so. Ministers need to publish the White Paper to give us some certainty. Thus far, it does not look as though they intend to do that any time soon.
There is also continuing uncertainty about how the remaining teaching grant will be allocated, if indeed some universities get any at all. As Opposition Members have made clear, it is the huge cut to university teaching funds and to capital that continues to drive fees higher. Surrey university’s vice-chancellor, Professor Christopher Snowden, has said that his university’s plans to charge £9,000 reflected the financial uncertainties for English universities and the substantial cuts that the Government have made to grants for teaching and building refurbishment. The university of Sheffield Hallam, which the Deputy Prime Minister may know something about, has said:
“The new fee will compensate for the government’s 80% cut in our teaching grant and the significant cuts in capital funding.”
The Government based their financial plans on average fees of £7,500. In the face of such uncertainty, it should come as no surprise that many expect average fees to be somewhat higher. Indeed, as I made clear in my interventions, the Secretary of State has confirmed that the Government are considering either a cut in student numbers or an even greater cut in the teaching grant as tools to plug the funding gap. Either he was scaremongering or the threat was real. Because the Government have lost control of higher education policy, if we take the Secretary of State at his word, then on top of an almost 80% cut in university teaching funds and a 20,000 cut in student places already, we face the prospect of our universities being starved of even more income, or more
27 Apr 2011 : Column 280
of the brightest and best of the next generation being denied the chance to better themselves through a place at university.
Frankly, watching Ministers on tuition fees has become increasingly like watching a bad episode of “Only Fools and Horses”, with Front Benchers desperately trying to sell any old line on tuition fees to people whom they clearly think are gullible punters. The right hon. Member for Havant (Mr Willetts)? The Department’s very own Rodney Trotter. Grumpy old Uncle Albert, with his best years behind him? Who else but the Secretary of State? And Derek “Del Boy” Trotter? It has to be the Deputy Prime Minister: never selling the real McCoy, never telling the whole truth—inadvertently, of course—a dodgy promise here, there and everywhere, and all his best deals done down the Nag’s Head with Boycie the spiv. Talking of whom, where is the Prime Minister for this debate?
“I’m sorry, we rushed into this and we got it wrong”—I paraphrase the Secretary of State for forests. “We’re going to have a pause, listen to people’s concerns and make changes”—the Secretary of State for Health, never mind the fact that his mea culpa is just an advertising gimmick. Either his lines or those of the right hon. Member for Meriden (Mrs Spelman) would have been a more appropriate starting point for the Minister this afternoon. He should have said, “I’m sorry, better access to university looks unlikely, despite our great promises.” He should have said, “I’m sorry, we thought OFFA could control fee levels. We were wrong.” And he certainly should have said, “I’m sorry that we were so spectacularly wrong when we claimed that only a few universities would charge the full £9,000.”
This is a policy in need of a radical overhaul. Trebling tuition fees was never fair. It was not necessary and neither is it sustainable. I commend our motion to the House.
6.49 pm
The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes): The Labour Government’s unhappy, unwelcome bequest was an immense financial black hole. Then, as now, Labour was characterised by chaos. Better-informed Members will know that, according to some advocates of chaos theory, black holes are a portal to a parallel universe—an alternative reality, as my hon. Friend the Member for Solihull (Lorely Burt) described it. Perhaps there is a parallel universe in which Labour won the election. Does anyone here truly believe that if it had done so, it would be prosecuting the case it has been making today? After all, Labour was the party that introduced variable tuition fees, established the Browne review and laid down the criteria by which Browne considered these matters.
This is not science fiction; it is hard fact. When Labour was in office, it defended the very principles it has attacked today. As the Minister for Universities and Science, my right hon. Friend the Member for Havant (Mr Willetts) pointed out, Lord Mandelson hinted at a tuition fee rise five months before the Browne review was launched, telling vice-chancellors that excellence in higher education was “not cheap” and that the country had to
“face up to the challenge of paying for excellence”.
27 Apr 2011 : Column 281
Andrew Bridgen: What are the Minister’s views on the viability or otherwise of a graduate tax as a solution to higher education funding, as proposed by the Opposition?
Mr Hayes: My hon. Friend the Member for Havant referred to an interesting document that Labour has produced, “Why not a Pure Graduate Tax?”, which concludes:
“We have been unable to identify any other country with a graduate tax system along the lines described that could serve as an exemplar for how a pure graduate tax might work.”
I have good news! Experts in Labour central office have now found one. Ethiopia has a graduate tax, but it is thinking of ditching it, just as Labour has decided to take the idea on board.
As for the charge that variable fees will deter working-class students, we heard the hon. Member for Stoke-on-Trent Central (Tristram Hunt) speak with authority on the subject. I know that he is a close student of working-class culture—[ Laughter. ] I said merely that he was a student; he does study it. He and the hon. Member for Nottingham South (Lilian Greenwood) told us that fees would deter working-class students. When the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson) was a Minister, he introduced variable fees, saying:
“I reject the notion that working-class kids are more debt averse than youngsters from other backgrounds. I just reject it completely, absolutely completely.”
That was his view of the effect that variable fees would have on the participation of working-class students.
Luciana Berger: Has the Minister seen the research published today by High Fliers, which shows that 51% of existing final-year undergraduates said that they would not have gone to university if their tuition fees had been three times as high as they are now?
Mr Hayes: I would be the first to acknowledge that I have not seen that research, but I would be more than happy to look at it. I am a straightforward politician, as the hon. Lady knows, and I have to say to her that when fees were first introduced, I was one of the doubters. I wondered whether they would have the effect that has been articulated again today. However, the evidence is that they have not done so. They have not affected applications in the way that was predicted by some people, and she is on dangerous ground if she thinks that they will have that effect this time round.
It does not seem credible for the Opposition to prosecute the argument that students will be deterred from applying to university and that there will therefore not be enough of them, and simultaneously to argue that there will be too many applications and that the universities will be unable to fund sufficient places to meet the demand. The Opposition seem to be running two horses, neither of which is likely to reach the winning post.
Nic Dakin (Scunthorpe) (Lab) rose —
Mr Hayes: I shall give way to the hon. Gentleman, who is a great expert on these matters.
Nic Dakin: The Minister says he was a doubter in the past. Is he surprised that so many universities are now setting fees of £8,500 and £9,000? If such fees create a gap, how will the problem be solved? Will it be solved by cutting student numbers or by cutting university income?
27 Apr 2011 : Column 282
Mr Hayes: I am sure that the hon. Gentleman understands that the headline fees that are being published are not the same as the amount that students will pay in all cases; neither are they the same as the amount that the Government will fund. We know that fee waivers and bursaries, for example, have a real impact on the figures. The figures that are being published are maximum figures, not average figures. That point has been made by Members on this side of the House, although it does not seem to have been grasped, for the most part, by Opposition Members.
Mr Hayes: I will not give way again, as time is short.
The previous Government defended both the extra independence variable fees gives institutions and the principle that universities should justify the fees they charge. That is why this debate on the future of higher education is, above all, about three things. First, it is about securing a settlement to fund higher education that is sustainable. The right hon. Member for Tottenham (Mr Lammy) is right: the deficit was not the context when Browne began, but it certainly was the context when Browne reported. The previous Government recognised that we had strategically to rethink university funding to give them sufficient funds to compete with the best. That was acknowledged by the right hon. Gentleman when was the Minister and it is acknowledged by Conservative Members.
I think it would serve the Labour party if that was acknowledged once again. It was hesitatingly and falteringly acknowledged by the shadow Secretary of State, but he has to answer this question: if the reduction in BIS spending on higher education had been of the order he suggested—around 8% to 10%—where would the cuts have fallen? Would basic skills have taken the hit; would it have been adult and community learning; would it have been apprenticeships; or would it have been further education? Let us face it, we cannot have it all ways—yet too often the shadow Secretary of State tries to do just that.
Mr Denham: The answer is, of course, that the BIS team, including the hon. Gentleman, conceded this huge cut in higher education and offered it up to the Treasury. It is not a matter of choosing one cut or another. A BIS team of any credibility or influence would simply have said that an 80% cut in higher education teaching is unsustainable, unnecessary and unfair. It is the failure of the ministerial team to deliver that is at the centre of this debate.
Mr Hayes: The hon. Gentleman’s predecessor, the noble Lord Mandelson, was first to the table when it came to volunteering to cut in his Departments. He took more hits when he was in BIS than any other Secretary of State. It is not credible for the right hon. Gentleman to claim that, had Labour been elected, it would not have faced exactly the same challenges or, indeed, not have employed exactly the same approach to deal with them.
The second big issue is whether this system is progressive. The right hon. Member for Bermondsey and Old Southwark (Simon Hughes) made the point very clearly: there are no up-front fees; no repayments until someone
27 Apr 2011 : Column 283
is earning £21,000; and debts are written off after 30 years. This is a more progressive, fairer system than the one we inherited. Frankly, no one can honestly deny that. Indeed, it has not been denied, even by Labour Members. A graduate on a starting salary of £25,000 will repay around £30 a month under the new system and we know that graduates typically earn about £100,000 more than non-graduates over an earning lifetime.
The third key point is access. No one is a greater champion of widening access to higher education than I am—with the possible exceptions of my right hon. Friends the Minister for Universities and Science and the Secretary of State for Business, Innovation and Skills. Widening access, however, is not just about fees. It is about the patterns and rhythms of higher education study matching the patterns and rhythms of more kinds of lives. That is why the changes to part-time provision are so important and why the White Paper—for the record, it was published in June—explains how we will look to provide more higher education in further education colleges, look at more modular courses, more distance learning and more part-time provision. That is exactly the way to get more under-represented groups into higher education.
Today, we have heard from the Opposition a critique of a policy that is very close to what they might well have had to adopt in similar circumstances had they been in government. What we have not heard, however, is their alternative. I believe it ill befits an Opposition to table a motion when they have no real alternatives—
Mr Alan Campbell claimed to move the closure (Standing Order No. 36).
Question put forthwith, That the Question be now put.
Main Question accordingly put .
The House divided:
Ayes 197, Noes 304.
[6.59 pm
AYES
Abbott, Ms Diane
Ainsworth, rh Mr Bob
Alexander, Heidi
Ali, Rushanara
Allen, Mr Graham
Anderson, Mr David
Bailey, Mr Adrian
Bain, Mr William
Balls, rh Ed
Barron, rh Mr Kevin
Bayley, Hugh
Beckett, rh Margaret
Begg, Dame Anne
Bell, Sir Stuart
Benn, rh Hilary
Benton, Mr Joe
Berger, Luciana
Betts, Mr Clive
Blackman-Woods, Roberta
Blenkinsop, Tom
Blomfield, Paul
Blunkett, rh Mr David
Bradshaw, rh Mr Ben
Brennan, Kevin
Brown, rh Mr Gordon
Brown, Lyn
Brown, rh Mr Nicholas
Bryant, Chris
Buck, Ms Karen
Burden, Richard
Burnham, rh Andy
Byrne, rh Mr Liam
Campbell, Mr Alan
Campbell, Mr Ronnie
Caton, Martin
Chapman, Mrs Jenny
Clarke, rh Mr Tom
Clwyd, rh Ann
Coaker, Vernon
Coffey, Ann
Connarty, Michael
Cooper, Rosie
Cooper, rh Yvette
Corbyn, Jeremy
Crausby, Mr David
Creagh, Mary
Creasy, Stella
Cruddas, Jon
Cryer, John
Cunningham, Mr Jim
Cunningham, Tony
Curran, Margaret
Dakin, Nic
Danczuk, Simon
Darling, rh Mr Alistair
David, Mr Wayne
Davidson, Mr Ian
De Piero, Gloria
Denham, rh Mr John
Dobbin, Jim
Dobson, rh Frank
Docherty, Thomas
Doran, Mr Frank
Dowd, Jim
Dromey, Jack
Eagle, Ms Angela
Eagle, Maria
Edwards, Jonathan
Efford, Clive
Elliott, Julie
Ellman, Mrs Louise
Engel, Natascha
Esterson, Bill
Farrelly, Paul
Field, rh Mr Frank
Fitzpatrick, Jim
Flynn, Paul
Fovargue, Yvonne
Gapes, Mike
Gardiner, Barry
Gilmore, Sheila
Glindon, Mrs Mary
Godsiff, Mr Roger
Goggins, rh Paul
Goodman, Helen
Green, Kate
Greenwood, Lilian
Griffith, Nia
Gwynne, Andrew
Hamilton, Mr David
Hamilton, Fabian
Hanson, rh Mr David
Harris, Mr Tom
Healey, rh John
Hendrick, Mark
Heyes, David
Hillier, Meg
Hilling, Julie
Hodgson, Mrs Sharon
Hoey, Kate
Hood, Mr Jim
Hopkins, Kelvin
Howarth, rh Mr George
Hunt, Tristram
Irranca-Davies, Huw
Jarvis, Dan
Johnson, rh Alan
Johnson, Diana
Jones, Graham
Jones, Helen
Jones, Mr Kevan
Kaufman, rh Sir Gerald
Keeley, Barbara
Kendall, Liz
Khan, rh Sadiq
Lammy, rh Mr David
Lavery, Ian
Lazarowicz, Mark
Leslie, Chris
Lloyd, Tony
Love, Mr Andrew
Lucas, Ian
MacShane, rh Mr Denis
Mactaggart, Fiona
Mahmood, Mr Khalid
Mahmood, Shabana
Mann, John
Marsden, Mr Gordon
McCann, Mr Michael
McCarthy, Kerry
McClymont, Gregg
McDonnell, John
McFadden, rh Mr Pat
McGovern, Alison
McGovern, Jim
McKinnell, Catherine
Meale, Mr Alan
Mearns, Ian
Michael, rh Alun
Miliband, rh Edward
Miller, Andrew
Morris, Grahame M.
(Easington)
Mudie, Mr George
Murphy, rh Mr Jim
Murphy, rh Paul
Murray, Ian
Onwurah, Chi
Pearce, Teresa
Phillipson, Bridget
Pound, Stephen
Qureshi, Yasmin
Raynsford, rh Mr Nick
Reed, Mr Jamie
Reeves, Rachel
Reynolds, Emma
Reynolds, Jonathan
Riordan, Mrs Linda
Robertson, John
Robinson, Mr Geoffrey
Rotheram, Steve
Roy, Lindsay
Ruddock, rh Joan
Sarwar, Anas
Sharma, Mr Virendra
Sheerman, Mr Barry
Shuker, Gavin
Skinner, Mr Dennis
Slaughter, Mr Andy
Smith, rh Mr Andrew
Spellar, rh Mr John
Straw, rh Mr Jack
Stringer, Graham
Stuart, Ms Gisela
Sutcliffe, Mr Gerry
Tami, Mark
Thomas, Mr Gareth
Trickett, Jon
Turner, Karl
Twigg, Derek
Twigg, Stephen
Umunna, Mr Chuka
Vaz, Valerie
Walley, Joan
Watson, Mr Tom
Watts, Mr Dave
Whiteford, Dr Eilidh
Whitehead, Dr Alan
Wicks, rh Malcolm
Williams, Hywel
Williamson, Chris
Winnick, Mr David
Winterton, rh Ms Rosie
Wood, Mike
Woodcock, John
Woodward, rh Mr Shaun
Wright, David
Wright, Mr Iain
Tellers for the Ayes:
Phil Wilson and
Angela Smith
NOES
Adams, Nigel
Afriyie, Adam
Aldous, Peter
Alexander, rh Danny
Amess, Mr David
Andrew, Stuart
Arbuthnot, rh Mr James
Bacon, Mr Richard
Bagshawe, Ms Louise
Baker, Norman
Baker, Steve
Baldry, Tony
Baldwin, Harriett
Barclay, Stephen
Barker, Gregory
Baron, Mr John
Bebb, Guto
Beith, rh Sir Alan
Beresford, Sir Paul
Berry, Jake
Bingham, Andrew
Binley, Mr Brian
Blackman, Bob
Blackwood, Nicola
Blunt, Mr Crispin
Boles, Nick
Bone, Mr Peter
Bradley, Karen
Brady, Mr Graham
Brake, Tom
Bray, Angie
Brazier, Mr Julian
Bridgen, Andrew
Brine, Mr Steve
Brokenshire, James
Browne, Mr Jeremy
Bruce, Fiona
Bruce, rh Malcolm
Buckland, Mr Robert
Burley, Mr Aidan
Burns, Conor
Burns, rh Mr Simon
Burrowes, Mr David
Burstow, Paul
Burt, Lorely
Byles, Dan
Cable, rh Vince
Campbell, rh Sir Menzies
Carmichael, rh Mr Alistair
Carmichael, Neil
Carswell, Mr Douglas
Cash, Mr William
Chope, Mr Christopher
Clappison, Mr James
Clark, rh Greg
Clifton-Brown, Geoffrey
Coffey, Dr Thérèse
Collins, Damian
Colvile, Oliver
Cox, Mr Geoffrey
Crabb, Stephen
Davey, Mr Edward
Davies, David T. C.
(Monmouth)
Davis, rh Mr David
de Bois, Nick
Dinenage, Caroline
Djanogly, Mr Jonathan
Dorrell, rh Mr Stephen
Dorries, Nadine
Doyle-Price, Jackie
Drax, Richard
Duncan, rh Mr Alan
Duncan Smith, rh Mr Iain
Dunne, Mr Philip
Ellis, Michael
Ellison, Jane
Ellwood, Mr Tobias
Elphicke, Charlie
Eustice, George
Evans, Graham
Evans, Jonathan
Evennett, Mr David
Fabricant, Michael
Fallon, Michael
Farron, Tim
Featherstone, Lynne
Field, Mr Mark
Foster, rh Mr Don
Fox, rh Dr Liam
Francois, rh Mr Mark
Freeman, George
Freer, Mike
Fuller, Richard
Gale, Mr Roger
Garnier, Mr Edward
Garnier, Mark
Gauke, Mr David
Gibb, Mr Nick
Gilbert, Stephen
Gillan, rh Mrs Cheryl
Glen, John
Goldsmith, Zac
Goodwill, Mr Robert
Graham, Richard
Grant, Mrs Helen
Gray, Mr James
Grayling, rh Chris
Green, Damian
Greening, Justine
Grieve, rh Mr Dominic
Griffiths, Andrew
Gummer, Ben
Gyimah, Mr Sam
Hague, rh Mr William
Halfon, Robert
Hames, Duncan
Hammond, rh Mr Philip
Hammond, Stephen
Hands, Greg
Harper, Mr Mark
Harrington, Richard
Harris, Rebecca
Hart, Simon
Harvey, Nick
Haselhurst, rh Sir Alan
Hayes, Mr John
Heald, Mr Oliver
Heath, Mr David
Heaton-Harris, Chris
Hemming, John
Henderson, Gordon
Hendry, Charles
Herbert, rh Nick
Hinds, Damian
Hoban, Mr Mark
Hollingbery, George
Hollobone, Mr Philip
Hopkins, Kris
Horwood, Martin
Howell, John
Hughes, rh Simon
Hunt, rh Mr Jeremy
Hunter, Mark
Hurd, Mr Nick
Jackson, Mr Stewart
James, Margot
Javid, Sajid
Jenkin, Mr Bernard
Johnson, Gareth
Johnson, Joseph
Jones, Andrew
Jones, Mr David
Jones, Mr Marcus
Kawczynski, Daniel
Kelly, Chris
Kirby, Simon
Knight, rh Mr Greg
Kwarteng, Kwasi
Laing, Mrs Eleanor
Lancaster, Mark
Lansley, rh Mr Andrew
Latham, Pauline
Laws, rh Mr David
Leadsom, Andrea
Lee, Jessica
Lee, Dr Phillip
Leech, Mr John
Lefroy, Jeremy
Leigh, Mr Edward
Leslie, Charlotte
Letwin, rh Mr Oliver
Lewis, Brandon
Liddell-Grainger, Mr Ian
Lidington, rh Mr David
Lilley, rh Mr Peter
Lloyd, Stephen
Lopresti, Jack
Loughton, Tim
Lumley, Karen
Macleod, Mary
Main, Mrs Anne
Maude, rh Mr Francis
May, rh Mrs Theresa
Maynard, Paul
McIntosh, Miss Anne
McLoughlin, rh Mr Patrick
McPartland, Stephen
McVey, Esther
Menzies, Mark
Mercer, Patrick
Metcalfe, Stephen
Miller, Maria
Mills, Nigel
Mitchell, rh Mr Andrew
Mordaunt, Penny
Morgan, Nicky
Morris, Anne Marie
Morris, David
Morris, James
Mosley, Stephen
Mowat, David
Munt, Tessa
Murray, Sheryll
Murrison, Dr Andrew
Neill, Robert
Newmark, Mr Brooks
Newton, Sarah
Nokes, Caroline
Norman, Jesse
Nuttall, Mr David
O'Brien, Mr Stephen
Offord, Mr Matthew
Ollerenshaw, Eric
Osborne, rh Mr George
Paice, rh Mr James
Parish, Neil
Patel, Priti
Pawsey, Mark
Penning, Mike
Penrose, John
Perry, Claire
Phillips, Stephen
Pickles, rh Mr Eric
Pincher, Christopher
Poulter, Dr Daniel
Prisk, Mr Mark
Raab, Mr Dominic
Randall, rh Mr John
Redwood, rh Mr John
Rees-Mogg, Jacob
Reevell, Simon
Robathan, rh Mr Andrew
Robertson, Hugh
Robertson, Mr Laurence
Rogerson, Dan
Rosindell, Andrew
Rudd, Amber
Ruffley, Mr David
Russell, Bob
Rutley, David
Sandys, Laura
Scott, Mr Lee
Selous, Andrew
Sharma, Alok
Shelbrooke, Alec
Shepherd, Mr Richard
Simmonds, Mark
Simpson, Mr Keith
Smith, Miss Chloe
Smith, Henry
Smith, Julian
Smith, Sir Robert
Soames, Nicholas
Soubry, Anna
Spencer, Mr Mark
Stanley, rh Sir John
Stephenson, Andrew
Stevenson, John
Stewart, Bob
Stewart, Iain
Stewart, Rory
Streeter, Mr Gary
Stride, Mel
Stuart, Mr Graham
Stunell, Andrew
Sturdy, Julian
Swales, Ian
Swayne, Mr Desmond
Swinson, Jo
Swire, rh Mr Hugo
Syms, Mr Robert
Tapsell, Sir Peter
Thurso, John
Timpson, Mr Edward
Tomlinson, Justin
Tredinnick, David
Turner, Mr Andrew
Tyrie, Mr Andrew
Uppal, Paul
Vaizey, Mr Edward
Vickers, Martin
Villiers, rh Mrs Theresa
Walker, Mr Charles
Ward, Mr David
Watkinson, Angela
Weatherley, Mike
Webb, Steve
Wharton, James
Wheeler, Heather
White, Chris
Whittaker, Craig
Whittingdale, Mr John
Wiggin, Bill
Willetts, rh Mr David
Williams, Stephen
Williamson, Gavin
Willott, Jenny
Wilson, Mr Rob
Wollaston, Dr Sarah
Wright, Jeremy
Wright, Simon
Yeo, Mr Tim
Young, rh Sir George
Zahawi, Nadhim
Tellers for the Noes:
Norman Lamb and
Mr Shailesh Vara
Question accordingly negatived
.
27 Apr 2011 : Column 284
27 Apr 2011 : Column 285
27 Apr 2011 : Column 286
27 Apr 2011 : Column 287
27 Apr 2011 : Column 288
Section 5 of the European Communities (Amendment) Act 1993
7.13 pm
The Financial Secretary to the Treasury (Mr Mark Hoban): I beg to move,
That this House takes note with approval of the Government’s assessment as set out in the Budget Report, combined with the Office for Budget Responsibility’s Economic and Fiscal Outlook, which forms the basis of the UK’s Convergence Programme, for the purposes of section 5 of the European Communities (Amendment) Act 1993.
As we look at the economic history of the past decade, we see clearly that economic imbalances create the conditions for recession, and even growth fuelled by imbalances can prove illusory. This Government’s economic programme tackles the imbalances built up under the previous Government, which triggered the deepest recession since the 1930s. As the Chancellor set out in his Budget and as is set out in the convergence programme document before us, growth in the United Kingdom under the previous Government was fuelled by debt. Imbalances arose from the UK’s overreliance on the south-east and the financial services sector, from high levels of Government debt and an over-inflated housing market. The OECD said of the UK that these imbalances
“exacerbated the downturn during the global recession and contributed to a more pronounced fall in GDP, a larger fiscal deficit and higher inflation than in most of the OECD”.
That is the legacy we inherited from the Labour party, which we need to tackle.
As we look across Europe and beyond, we see that we have had to learn the hard way that in an open, global marketplace, no economy exists in isolation: imbalances in individual countries can cause instability on a regional and global basis; the failures of economic policy in one country can be quickly exported to other nations; and unsustainable levels of debt, asset bubbles and uncontrolled deficits can destabilise whole regions through contagion, as we have seen in recent years. In the light of the global and economic crisis, there is increased emphasis on economic surveillance to identify imbalances and take action to deal with them.
Existing surveillance by the International Monetary Fund and the OECD has taken on renewed importance. The IMF has recognised the need to focus on multilateral surveillance and monitoring spill-over effects and systemic risks, and the OECD has recognised the importance of labour markets, housing markets and current account imbalances for strong and sustainable growth. Furthermore, the G20 is looking at countries with large and persistent imbalances to ensure that growth is strong, sustainable and balanced across the world.
In Europe, work to address this has been done through the stability and growth pact. The pact has been around for many years, but in more than a decade of monetary union the sanctions it contains have never been used. The recent proposals to strengthen the stability and growth pact aim to make it more effective. The changes recognise that maintaining economic stability is not just about deficits. Just as the OECD and the IMF are refreshing their approach to macro-economic surveillance, so too is the European Union as it considers a scoreboard of indicators such as labour market flexibility, current account balances and unemployment to ensure that we are alert to risks across Europe.
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Kelvin Hopkins (Luton North) (Lab): The Minister talks about imbalances. We always talk about financial imbalances, but the real imbalances in the European Union are the massive imbalances in trade. Germany has looked after its manufacturing and we have neglected ours under several Governments over the past 30 years. We at least are able to depreciate our currency and to address that to an extent, but there has still been a complete failure by successive Governments to do anything to counter the collapse of manufacturing that began in 1979 when we lost a fifth of it following the election of a Conservative Government.
Mr Hoban: The hon. Gentleman makes an important point. Under the previous Government, we saw a further deterioration in manufacturing and an overreliance on the financial services sector, creating some of the imbalances that led to the deepest recession since the 1930s. Part of the challenge faced by the Government is how to tackle those imbalances and move to a more broadly based economy, and I shall touch on that later in my speech.
We must remember that sustainable economic growth across Europe is vital to the success of the British economy. Having the right warning mechanisms in place, underpinned by sound data, will help to identify future economic crises that could harm the UK economy. Even though we are not part of the single currency and will not be joining it in the lifetime of this Parliament, we cannot consign ourselves to be bystanders in the debate.
Mr William Cash (Stone) (Con): I noticed the Minister use the expression “we will not be joining the single currency in the lifetime of this Parliament”. I thought there was a clear commitment that we were never going to join the single currency.
Mr Hoban: As I am sure my hon. Friend is aware, I am following what is set out in the coalition agreement. Like him, I do not anticipate that we would seek to join the euro.
Tonight’s debate is a consequence of the stability and growth pact. Since 1999, as a result of the pact, the Government have reported to the Commission on the UK’s economic and budgetary position and our main economic policy measures. I want to reassure the House, however, that the UK is not subject to sanctions under the stability and growth pact—the Treaty is clear that they apply only to euro area countries. The EU can make recommendations as regards our budget, as can other international organisations such as the OECD and the IMF, but, crucially, we are under no obligation to take action and we are not subject to any sanctions by virtue of our opt-out. Any recommendations made will remain just that—recommendations.
Mr James Clappison (Hertsmere) (Con): My hon. Friend is making a very persuasive case, but on the question of sanctions, may I take it from what he has just said that he is ruling out Britain’s being subject to the economic imbalances procedure set out in the Van Rompuy report?
Mr Hoban: We are not subject to sanctions as a consequence of our opt-out from the single currency. I made that point when we had a debate last year on economic governance, and it continues to be the case now.
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The information we are supplying to the Commission in the convergence programme document that we are debating tonight is the first to be provided under the new European semester arrangements. People were concerned that the Commission would receive information before Parliament, but the information provided to the Commission in the document is already public and much of it was provided when the Chancellor made his Budget statement in March.
Mr David Nuttall (Bury North) (Con): Will the Minister confirm that all the information in the convergence programme document is in the public domain and available to anyone outside the House who wants to gain access to it without the document’s publication?
Mr Hoban: Indeed. If my hon. Friend has studied this carefully, as I am sure he has, he will recognise that large chunks of it are familiar from the Red Book. Of course, chapters 6 onwards are taken from the Office for Budget Responsibility’s economic and fiscal outlook. This information is in the public domain and Parliament has had sight of it before its presentation to the European Commission.
Mr Ian Davidson (Glasgow South West) (Lab/Co-op): Will the Minister remind me exactly why we have to produce all this information for the European Union? I have not read it in enormous detail but it seems that Parliament is telling teacher or the boss why we have done what has been done. That places the House of Commons very much in the position of being subordinate to the European Union.
Mr Hoban: I do not agree that Parliament has been placed in a subordinate position. We are passing this information to the European Union having already made it available to the House, particularly during my right hon. Friend the Chancellor’s Budget speech, and there is no requirement on us to accept any recommendations that the Commission might make as a consequence of having read the information. We are in a very different situation to those member states that will provide their convergence programmes at the same time as the UK, but before their Budgets rather than after them.
Martin Horwood (Cheltenham) (LD): Does the Minister agree that all European economies have a shared interest in there being proper economic governance in all other European economies? Britain therefore clearly has an interest in proper economic management within the eurozone. Indeed, will he go further and welcome the recommendations of the European Parliament’s Economic and Monetary Affairs Committee, which pressed for even stronger sanctions against those countries that do not manage their public finances as well as this Government are doing?
Mr Hoban: Of course, sanctions are a matter for the eurozone countries. They do not apply to us, as we are outside the eurozone thanks to the opt-out secured under the Maastricht treaty and reiterated in the Lisbon treaty, so that point is not relevant to tonight’s debate. We have ensured, through our opt-outs and our commitment not to join the euro—this addresses the point raised by the hon. Member for Glasgow South West (Mr Davidson)—that Parliament remains sovereign.
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The Commission has endorsed the UK’s domestic consolidation plan, which is laid out in the convergence programme. As a result of the measures the Government have taken, the path set for fiscal policy means that the UK is on course to meet the Commission’s recommendations and deadline for dealing with our excessive deficit. We are not doing this to get a gold star—to use the language of the hon. Member for Glasgow South West’s analogy—from Brussels; we are doing it for the UK’s economic health. The plan will tackle our record deficit, with expenditure falling as a share of income in every year of this Parliament and national debt falling as a proportion of gross domestic product by 2014-15.
For those in opposition who question this approach and who would condemn Britain to years of unaffordable and wasteful expenditure, let us look at the facts. In Britain we have a higher budget deficit than both Portugal and Greece. Last year, we also had a similar level of national debt to Ireland, but our market interest rates are a fraction of those countries’ rates. Greece’s currently stand at more than 14% and Portugal’s at more than 9%, while Ireland’s is approaching 10%. Britain’s market interest rates have fallen to 3.6%, our triple A credit rating has been secured and we have avoided the sovereign debt storm that has engulfed our continent. That is a direct result of the decisive action that we have taken.
Claire Perry (Devizes) (Con): Does the Minister agree that it is not only the absolute value of interest rates that is important but the spread over countries such as Germany? Indeed, the spread over German bunds for UK sovereigns has dropped by almost two thirds since the election, confirming the validation of this fiscal convergence programme.
Mr Hoban: My hon. Friend makes an important point. Interest rates are low and the spread is narrowing. That is a huge benefit to the British economy. It ensures that mortgage rates for families are kept low and it helps to encourage the economy by reducing the costs faced by businesses that borrow. There is a significant benefit to this country as a consequence of the firm action that we have taken. These actions have shown the world that Britain’s future is now in safe hands, and that this is a Government who know how to manage their finances and who have a credible plan that is delivering stability, certainty and growth.
The independent Office for Budgetary Responsibility has forecast growth in each and every year of this Parliament, with growth of 1.7% forecast for 2011. This is in spite of the rise in world commodity prices and higher than expected inflation. The OBR points out that this effect
“creates scope for slightly stronger growth in later years”
than previously forecast. So although it expects real GDP growth of 2.5% next year, it forecasts that it will then rise to 2.9% in 2013, 2.9% again in 2014 and 2.8% in 2015.
The European Commission last month published its own economic forecasts. These show that the UK will grow more strongly in the coming year than Spain, Italy, France, the average for the eurozone, and the average for the EU.
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Chris Leslie (Nottingham East) (Lab/Co-op): Can the Minister remind the House what the OBR predicted the growth rate would be for the first quarter of 2011? I think it is on page 54 of the convergence programme.
Mr Hoban: I am rather surprised that the hon. Gentleman has not congratulated the Government on taking the tough action that put the recovery on track and made sure that we have lower interest rates than Greece, Ireland and Portugal. That is a consequence of the actions that we have taken—actions that the Opposition would not take. We are tackling the legacy that they left. The problem is that the scale of the legacy is huge. That makes the recovery challenging. Today’s figures demonstrate that we are making good progress on that.
To support the economy and to continue the growth in the private sector, my right hon. Friend the Chancellor set out a new economic strategy as part of this year’s Budget. The strategy has four ambitions at its heart—that Britain will have the most competitive tax system in the G20; that it will be the best place in Europe to start, finance and grow a business; that it will be a more balanced economy, by encouraging exports and investment; and that it will have a more educated work force that is the most flexible in Europe. In pursuit of these objectives, we have announced further cuts to corporation tax, taking it down to 26% this year and 23% by the end of this Parliament.
This is alongside our decision to introduce a highly competitive tax rate on profits derived from patents and our fundamental reform of the complex rules for controlled foreign companies, making them much more territorial and making the UK a much more attractive place for businesses to locate, ensuring that we have a far more attractive tax system than either Germany or France.
This year’s Budget also deals directly with the challenge of education and youth unemployment, which has been rising steadily for the past seven years. Instead of 20,000 young people benefiting from our new work experience scheme, as we originally planned, we will increase that number fivefold to 100,000 places over the next two years. Although in Austria and Germany one in four employers offers apprenticeships, in England fewer than one in 10 does so. That must change.
That is why last year my hon. Friend the Minister for Further Education, Skills and Lifelong Learning published a skills strategy and confirmed the largest ever expansion in adult apprenticeships. At the Budget we committed to funding another 40,000 apprenticeships for young unemployed people. That brings a total of 250,000 more apprenticeships over the next four years, as a result of this Government’s policies. This will help to ensure that all parts of the country have access to a better educated work force.
This year’s Budget will help to create a more balanced economy, tackling the imbalances of the past that undermined the economy and led to the longest and deepest recession since the war. This year’s Budget gives support to the private sector and hope to those looking for work, and will stimulate job creation across Britain.
Mr Cash:
One word that the Minister has not mentioned is “deregulation”. In view of the fact that 4% of GDP is lost as a result of European regulation, does he agree that we need to override European regulation, such as
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the working time directive, when it has the effect of increasing unemployment and preventing businesses from growing?
Mr Hoban: My hon. Friend makes an important point about the burden of regulation on business, and that is why in the Budget my right hon. Friend the Chancellor set out our plans for a moratorium on new regulations for micro-businesses and for start-ups, why the Prime Minister, along with several other European leaders, called for plans to cut the burden of European red tape, and why the Prime Minister has also required José Barroso, the President of the European Commission, to deliver on his commitment to reduce the cost of red tape for business by 25%.
We need to work on those issues to tackle regulation that hampers growth not just here in the UK but throughout Europe, because regulation is a Europe-wide issue. We need to tackle and reduce that burden if the eurozone is to grow at the levels that we expect to see in Asia and in the far east.
As I said to my hon. Friend, this Budget tackles regulation and introduces a moratorium, and that is why it stands firm on our plan for recovery. It is good for business, it is good for growth, and with the approval of the House it will form the basis of the information that we provide to the European Commission. I commend this motion to the House.
7.30 pm
Chris Leslie (Nottingham East) (Lab/Co-op): Many hon. Members might wonder why we are having this debate tonight. It is an incredibly important debate, but they might be forgiven for not having spotted the small print on, I think, page minus 2 under the ISBN number of the Red Book in probably seven or eight-point font, where it points out that the UK is required to submit to Brussels an annual convergence programme so that it can monitor our economic policy.
I am, however, grateful to the Financial Secretary for having written to me to draw attention to the debate this evening, the papers for which were published only at lunchtime yesterday. In fact, the motion appeared on the Order Paper only yesterday, too, and I am surprised about that, because in the parallel debate a year ago following the 2010 pre-Budget report, the hon. Member for South West Hertfordshire (Mr Gauke), now the Exchequer Secretary, then speaking from the Opposition Benches said:
“It was also very difficult to locate the report. I obtained a copy last week, but it was not available in the Vote Office yesterday. This is a point that has been made many times before”. —[Official Report, 10 February 2010; Vol. 505, c. 947.]
I am surprised that the Government have not really listened to their own Members when it comes to flagging up the importance of this particular debate, but, given that we have a motion asking the House to note “with approval” the Government’s assessment of the economy, and to conform with the requirements laid down in the various European Union treaties, I am sure that it is pure coincidence that Ministers did not flag it up or put bells and whistles around it to draw its attention to many hon. Members.
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Chris Leslie: But I am quite pleased that the hon. Gentleman keeps his eye on these developments.
Mr Cash: We certainly do our best on the European Scrutiny Committee, which included our making sure, by the way, that this debate took place on the Floor of the House by objecting to the motion to refer it to a Committee. I thought that we might just as well get it on the Order Paper.
Chris Leslie: I am very grateful for the hon. Gentleman’s work on the European Scrutiny Committee. This is, as I say, an incredibly important debate, and more hon. Members ought to be aware of it.
Martin Horwood: I am not sure what greater publicity the hon. Gentleman wants other than a debate on the Floor of the House in the middle of a parliamentary week, but, if the implication behind his references to the obligation to report to the European Union is that we should not do so, is he suggesting that that shared obligation among all European economies should not apply to places such as Greece, Italy, Spain or Ireland? Would he be happy for those countries not to report the state of their economies?
Chris Leslie: I simply note at the outset that we are now engaging in a particular debate. Yes, I am glad that it is taking place on the Floor of the House, but we did not really know that it was going to be on the Floor of the House, in this particular form, with this set of papers and this particular motion, until 24 hours ago. It is curious that the Government, in their relationship with many hon. Members throughout the Chamber, have not made it clear that this is quite an important component of our obligations under European Union treaties. I know that Ministers are keen to abide by their obligations under such treaties, but I just point out that some Members might be less keen.
Mr Davidson: Given that this debate is so important, will my hon. Friend clarify whether the programme has already been sent to the European Union or if we will have to wait for the result of this debate before it is posted off second class?
Chris Leslie: I presume that the House has to agree the contents of the convergence programme before it can be posted to the European Commission. The hon. Member for Bury North (Mr Nuttall) implied that the Commission could probably glean all the information online, and there is a perfectly reasonable argument that the Commission should follow events in member state countries rather than expect these matters to be handed to it on a platter. I do not think that presenting the information is necessarily genuflecting in front of Brussels, but the obligation to do so is certainly a core component of the treaties. I simply point out that fact.
The point of the motion about which we need to be most wary is the noting “with approval” the Government’s assessment of the economy, particularly given the Chancellor’s and Treasury Ministers’ lamentable failure to understand the need for economic growth. Page 13 of the convergence programme, which was published just 24 hours ago, says that the recovery is in line with previous recoveries. That, of course, is not the case.
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In the recessions of the early ’80s and ’90s the economy had clawed back economic strength by this stage in the economic cycle. However, since this Government took office, the trajectory of recovery has stalled. We are already seeing that the information in the document, published just 24 hours ago, is becoming out of date.
Kelvin Hopkins: Is it not rather regrettable that we should have chosen to acquiesce in the Government’s decision rather than call for a Division? I would be happy to vote against the document if we had the chance.
Chris Leslie: We have the opportunity to divide the House on this matter, although I think that it would be a deferred Division; obviously, that is a matter for Mr Speaker.
As we go through the details of the document, we see that there are problems in it. Page 17 says that the economy is forecast to grow by 1.7% in 2011—lower than the forecast in the June Budget. Is that forecast sustainable? The Government and the Office for Budget Responsibility revised down their forecasts for growth in June and revised down expectations in November. The OBR then revised down expectations for a third time after the March Budget.
The answer to the question that I asked the Minister earlier—what was the OBR’s prediction for the first quarter of this calendar year—is 0.8%. Yet today the Office for National Statistics gave a rather comatose and limp growth rate of 0.5%. That comes on the heels of a growth rate in the fourth quarter of 2010 of minus 0.5%. Essentially, there has been a zero rate of growth—flat-lining—over the past six months.
As Stephanie Flanders, the BBC’s economics editor, said, it is
“depressing to think that the economy is treading water…in a normal recovery we would expect to see a lot of momentum at this point”.
Chris Giles, economics editor at the Financial Times,said that for there to have been any credible claim to a return of underlying growth, this quarter’s figure should have been 0.7%. He went on:
“Add in one quarter of the growth expected in 2011—about another 0.5 per cent—and the figure necessary to show the economy growing at an average pace in the first quarter is at least 1.2 per cent.
Arguably, it should be even higher, at somewhere about 1.7 per cent, if the underlying stagnation in the fourth quarter of 2010 has been recovered in the first quarter of this year.”
We are a long way from that, and that is a serious problem. Yet the Chancellor seems to think that we are on the right track; as somebody said today, if he thinks that, he needs to chuck away his satnav and get a new one.
The GDP growth figure of 0.5% for the first three months of this year merely replaces the loss of output in the snowbound fourth quarter of 2010 and suggests that the economy has no underlying momentum at all. The chief statistician at the ONS said today that we had been “on a plateau” for the past six months. Tony Dolphin, the chief economist at the Institute for Public Policy Research, says that a 0.5% fall followed by a 0.5% bounce-back is equivalent to two successive quarters of zero growth—
“as close as it is possible to come to a recession without actually being in one”.
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Yet the Prime Minister says that this is “good news”—those were his words as he trumpeted this resounding success at Prime Minister’s Questions today. Even the Minister said, a matter of minutes ago, that it is good progress. I am afraid to say, however, that the document we are being asked to approve is already out of date, even though it was published only 24 hours ago. It is a bit of dead parrot. It is no more, it has ceased to be, it has expired; it is an ex-convergence programme.
It is not good enough if the Minister cannot even produce a document when he gets advance notice of ONS growth statistics that matches the realities of the economy rather than the forecasting ideas that are dreamed up in the Treasury. That is a sign that the Government do not understand the importance of growth in our economy, especially when today’s statistics showed that construction has fallen back by 7% over the past six months, with total production already falling back even from the last quarter before Christmas. Government cuts have not yet started in earnest, and the VAT increase is already biting hard.
What are the prospects for business growth? On page 14 of the document, the Treasury says:
“Credit conditions have shown signs of stabilisation”.
That is certainly not the experience of small and medium-sized enterprises: lending to businesses is in an atrocious state. It goes on to say in paragraph 2.43:
“however, credit conditions for smaller firms remain tight”.
That is an exceptional understatement. The Bank of England’s lending report shows that lending to SMEs fell by a further 3% in February. That is echoed by the British Bankers Association’s growth rate statistics on lending to small businesses, which cited a figure of minus 6% in December. So much for the much-vaunted Project Merlin. Yet the mark-ups that small businesses have to pay for loans are widening, and the banks are charging small businesses even more even though less and less lending is available. We have a serious systemic problem with our economy. Underpinning the difficulties with growth are the factors that businesses need in order to fire up the economy, and they are going wrong.
We also have to look at the Government’s failure on employment. Page 84 of the convergence programme document says:
“In line with a weaker outlook for output growth, we expect employment to be lower than forecast in November.”
The OBR predicts that unemployment will go up by 200,000 as a result of the Government’s policies. If each unemployed person costs the Exchequer about £7,800 in welfare costs and lost taxes, that could represent a loss to the Exchequer of more than £1 billion—money that the Exchequer should have coming in that is going the wrong way. In addition, inflation is undermining Government spending plans, as the document admits in terms of VAT fuelling inflation, and it is forecast that borrowing and debt will be higher than predicted in June. As a consequence, the interest that we will need to pay on our borrowing will be higher because of the inflationary costs of social security expenditure.
Mr Cash:
I have no doubt that the hon. Gentleman has looked at the comparison of unit labour costs throughout the whole of Europe. It shows that in the past 10 years Germany’s costs have increased by only 2% whereas almost every other country’s have increased
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by massive multiples of up to 35%. Does he accept that one of the real reasons Germany is predominating in the European economy includes, in particular, the fact that its labour costs are so low, which means that it can compete in the BRIC countries, including India, China and the rest?
Chris Leslie: There are several factors underpinning the German economy. The Germans do not pursue the same degree of hard and fast austerity that we are pursuing, they have a different approach to productivity, and they are achieving higher levels of growth. Our economy needs a pro-growth strategy. I do not say that as a whim—it is a hard-headed credible necessity for reducing the deficit and getting the economy moving again. Without growth, the Treasury will be losing revenue.
Jacob Rees-Mogg (North East Somerset) (Con): When the hon. Gentleman talks about a pro-growth strategy, does he mean spending? If so, where on earth is the money coming from?
Chris Leslie: As the hon. Gentleman knows, the paradox of austerity and of an anti-growth strategy is that it costs more in the long run. I quite understand that many Government Members do not understand the causes of the deficit. It is therefore improbable that they are the right people to solve the deficit. If they understood its causes, perhaps I would accept their rationale on how to solve it, but they do not.
Kelvin Hopkins: I hope to help my hon. Friend a little. If one makes unemployment go up, fewer people pay taxes, more people depend on benefits and the deficit gets worse, not better. That is precisely what will happen.
Chris Leslie: That is precisely the point that we need to make this evening: an austerity approach that cuts too far and too fast will cost more in the long run. That is not just in terms of the lost generation of young people who are now on the dole—one in five young people are now unemployed—and not just in terms of the higher welfare costs, which will mean higher borrowing. The House of Commons Library told me today that if the past six months of the economy had emulated the first six months since the general election, the Exchequer would have received an additional £6 billion in revenues. However, because growth is flat-lining, the Treasury is recouping less revenue. The Chancellor will therefore have to add £6 billion to borrowing and the deficit will be higher as a consequence of low growth in the years ahead.
Martin Horwood: The hon. Gentleman has expanded at length on the fragility of the economy and the recovery, which I do not think is in dispute, but we are still a little thin on the alternative from Labour. In recent months, it has talked rather admiringly of the American economy and its expansionist approach. However, that has earned America a credit warning from the rating agencies. If that had happened to us, it would undoubtedly have led to higher interest rates, which would have hit everyone with a mortgage, everyone with an overdraft, and all the people who are vulnerable to debt—people about whom the hon. Gentleman is supposed to be concerned. That, in turn, would have hit economic growth. What is Labour’s alternative?
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Chris Leslie: I would regard the hon. Gentleman’s approach as credible, if it was not for the fact that in precisely the same debate a year ago, he would have argued precisely the opposite points. The Liberal Democrat party has made a volte-face away from supporting the economy and pursuing a pro-growth strategy, and has absolutely no credibility when talking about strategies for growth. They used to be a pro-growth party; they are now an anti-growth party that has joined and been assimilated into the Conservative party.
Alec Shelbrooke (Elmet and Rothwell) (Con): I wonder whether I can help the hon. Gentleman. Will he outline for the House whether his speech is based on Keynesian or Brownite economics?
Chris Leslie: It is actually based on common-sense economics. I regret that the Government cannot see that. Unfortunately, I think that they will rue the day that they neglected growth in the economy. As we know, there is anxiety in the Treasury at the flat-lining, almost comatose nature of the economy. We hope sincerely that it picks up through the next quarter, but many people predict choppy times in the second quarter of this calendar year. I refer the hon. Gentleman to the paradox that I spoke about: pursuing the austerity approach too hard and too fast undermines growth and pulls from under the economy some of the key drivers for future prosperity that support it. Cutting too far and too fast is bad not just for the economy, but for deficit reduction strategies.
The Government’s spending plans are already coming unstuck. I will wind up with this point because I know that a lot of hon. Members want to speak. On tuition fees, which we debated earlier, we know that the cuts to higher education budgets will mean that universities will charge the highest fees, which will result in the ballooning of student loan pressures and the creation of a funding shortfall. Where will that money come from? We know that the Government have U-turned on school sports and that, when it came to the crunch, even the Financial Secretary had to U-turn on the financial inclusion fund. We are glad that he did so, but it changed the spending trajectory. On forests and on any number of other spending plans, when the rubber has hit the road, the Government have been unable to fulfil many of the so-called spending cuts that they promised in their much-vaunted June Budget.
Mr Cash: Does the hon. Gentleman concede that, leaving aside the question of cuts for a moment, the motor for an economic revival comes from growth, which in turn can come only from private business and private enterprise generating the taxation to pay for public expenditure? Without that, there is no public sector.
Chris Leslie: I agree with the first part of the hon. Gentleman’s point. Of course we need a pro-growth policy, and of course the private sector has to be the engine of that. However, he suggests that the Government somehow have no role to play in encouraging and fostering growth, and that is where we differ. The Opposition believe in supporting firms in moving forward into prosperity. The laissez-faire attitude of the Conservative-Liberal alliance has moved us into wholly different terrain and proves that it does not have a credible fiscal stance.
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Unfortunately, the convergence programme is a hollow document that is already out of date. Its predictions are not probable or plausible, and for those reasons I urge Members to reject the motion.
7.51 pm
Alec Shelbrooke (Elmet and Rothwell) (Con): I start by drawing on the last intervention by my hon. Friend the Member for Stone (Mr Cash). He made an important point, and it was the one that I made last night. Government money is not our money, it is the public’s money generated by the private sector. We cannot simply say that we should carry on pouring in money, because it is not our money. We must think about where it comes from.
The hon. Member for Nottingham East (Chris Leslie) said that if certain actions had not been taken, an extra £6 billion would have come in to the Exchequer, but in our emergency Budget we cut the deficit by £6 billion. If we had not done that, there would not have been any extra money, would there? We would have borrowed an extra £6 billion instead. We would have been borrowing money, churning it out, collecting it back in and saying, “What great money generation”. We would just have been turning money around. We can get money coming in to the Exchequer only through growth, and that can occur only if the private sector is in a credible position so that it can move forward.
The Opposition’s comments are interesting, because there is a paradox in that they paint a gloomy picture but meet it with glee and struggle to keep a straight face. Of course, we know that if we had followed the previous Chancellor’s spending plans, we would have been cutting £7 for every £8 that is being cut now. The margins are small. Let us not get into a discussion about the idea that if the Government’s actions had not been taken, a further £6 billion would have come in. We cut the deficit by that amount in the emergency Budget, so there would not have been any extra money. The money that we borrowed would just have been churned out and collected back in, which would have done nothing to stimulate the growth of the economy. I agree with the hon. Member for Nottingham East that the growth figures are small, but they are growth figures. He says that they may be flat, but we know that things can be choppy. The point is that we are growing and moving forward.
Let us come back to tonight’s debate and the history of the Council of the European Union. Back in July 2008, the Council of Ministers decided that the UK had an excessive deficit and asked it to correct that by the financial year 2009-10 at the latest. In April 2009, the Council concluded that the UK had failed to correct its excessive deficit within the time set. In December that year, it adopted a recommendation that the UK end its continuing excessive deficit by the financial year 2014-15, by bringing it below 3% of gross domestic product. In 2009-10 it was at 11.4% of GDP, but the convergence document now predicts it to be at 2.6% of GDP.
That is in stark contrast to the Opposition argument that it is unnecessary to make cuts and that we should continue as before. I shall tell the House later how I actually feel about the EU’s interference in such matters, but people outside this country were saying, “You are spending too much; you need to make those changes,” and we are now doing so. Whether we should have to do
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that for the EU is a slightly different debate, and my hon. Friend the Member for Bury North (Mr Nuttall) was right to say that we are using parliamentary time and publishing documents containing information that the EU could quite easily find out for itself. That adds to the already bloated EU system, and perhaps indicates why it asks us for a 5% increase in its budget, which is an absolute disgrace at times of austerity.
The hon. Member for Glasgow South West (Mr Davidson) spoke of the imbalance of trade with the German economy. The German manufacturing economy is a powerhouse of Europe, and as my hon. Friend the Member for Stone outlined, we have a very low manufacturing base. The picture that that paints is that economic integration in the EU is not possible with sovereign countries generating high GDP growth and trade imbalances. For integration, countries must move to one common taxation policy. That, if anything, is proof that the euro is leading to a common taxation policy and a loss of fiscal sovereignty.
Mr Cash: As my hon. Friend may have noted, I raised that question with the Prime Minister earlier today in relation to voting against the provisions for a corporate tax base for the whole of Europe. That decision will in fact be made unanimously, and we can get rid of it with our veto. I did not get an answer from the Prime Minister, and I hope my hon. Friend continues to urge against having a tax system imposed upon us by the rest of Europe.
Alec Shelbrooke: My right hon. Friend the Prime Minister has a very pragmatic view on such things, and I am sure he took great note of my hon. Friend’s question. I am also sure that the Prime Minister will listen to the mood of the country and ensure that the EU does not move towards such a common economic base.
This is crux of the matter: we are publishing documents tonight to pass back to the EU that show that the UK is in compliance with the rules. Those rules mean that we could qualify for the euro. People have often asked, “With the pound so close to parity with the euro, why don’t we join?” but we will not join because we will not fudge the figures just to get into the euro—not that we want to join—[ Interruption. ] Please! I would not want anyone to leave the Chamber thinking that I am pro-euro, because I certainly am not—perish the thought.
To qualify for the euro, countries must have a budget deficit of 40% of GDP and they must borrow no more than 3% of GDP annually. We know that the Italians fudged that. That is one reason why the euro is in the mess that it is in, and why it is nowhere near competing with the US dollar, or indeed the Chinese currency, in the way that people thought it would. The fact is that if the EU wants to have a strong economic case, it must go for full monetary union, which is totally unacceptable for sovereign countries.
As we know from the treaty of Rome, the original European partnership of six nations was set up to try to prevent further wars in Europe, to bring peace to the European nations, and to get everybody trading together as one bloc. That was the vision. However, I do not think that the rise of far-right parties across Europe and the increasing moves down the federalist route are coincidental. People feel that they have lost their sovereignty
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and identity. If the EU moves forward to a full, integrated economic policy, that will be the end of the EU, because people around Europe will vote in extremist parties to try to reclaim their national identity. I say that as a warning, with no joy. I am probably one of the more dove-ish Government Members when it comes to violence or military matters, but I fear where those moves could lead.
The Opposition’s main argument this evening has been: “You’ve got your economic policy completely wrong. You could have had more money coming to the Exchequer.” However, they have forgotten that the money coming to the Exchequer was the money they printed, pumped out and brought back in before saying, “Oh, look at all the money we’ve generated!” I do not think so. This is about creating growth, and in the document before us, an independent body has said that the Government’s policy is correct and in line with what we want to achieve, which is what the previous Government singly failed to achieve despite the warnings in December 2009.
8 pm
Kelvin Hopkins (Luton North) (Lab): I want to speak briefly on this document and to support my hon. Friend the Member for Nottingham East (Chris Leslie), who sits on the Opposition Front Bench. The Government’s economic policy will drive us into recession. The cuts have not really started yet, and when they do, unemployment will rise, and when unemployment rises, people will lose confidence and stop spending, and we will see a downward spiral into recession. I am convinced of that. I am not the only person saying it. As I have pointed out in the Chamber more than once, Paul Krugman, the Nobel prize-winning economist, has said that the Government are going in precisely the wrong direction. They should be trying to stimulate the economy through additional spending in labour-intensive areas, such as construction and the public sector—but that is the absolute opposite of what they are doing.
If we bring down unemployment, revenues will rise, benefit payments will reduce and the economy will grow, and that will reduce the deficit. I have used this example many times: after the second world war, under Conservative and Labour Governments, we had a gross debt two and a half times GDP—about four times what it is now—but we just maintained a policy of full employment, led by the magnificent Atlee Governments in 1945 and 1951. We had full employment, we created the national health service, living standards rose and we even ran a labour shortage such that people came from abroad to work here because the economy was growing so fast. We ran a growth economy led by public spending. That is what we should be doing now, but we are doing the absolute opposite. If other countries do the same, we will see the 1930s relived, but people have so much more to lose now it will be politically quite dangerous.
There is already a reaction in Europe to what is happening. In Finland, a Government have been elected who are baulking at the idea of bailing out some of the weaker members of the eurozone. I have no idea why we should be bailing out members of the eurozone. Ireland is a special case, because it is our nearest neighbour and effectively part of the sterling-zone economy, not the
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eurozone economy. We are its major trading partner and we have an exchange of population, so Ireland is a different case from the rest of the EU. For us to be bailing out other countries in the eurozone is complete and total nonsense. The sooner they leave the eurozone, recreate their own currencies and depreciate them, the sooner they will recover.
Chris Heaton-Harris (Daventry) (Con): The hon. Gentleman puts a happy and cuddly aura around the old hard-left of the Labour party. Bearing in mind that for years we and other European countries have been reporting to the European Commission on these matters, does he think that the Commission has learned any lessons from the information it has been sent? If it has, why did it not try to help the economies of Greece, Ireland, Portugal, Italy and so on?
Kelvin Hopkins: I think that the hon. Gentleman and I agree on this point. It has learned absolutely nothing. To try to squeeze the life out of an economy that is already almost wrecked is nonsense. The Commission should allow those economies to grow, and they can grow only if they can recreate and depreciate their own currencies, and start to compete again. Ireland is in a terrible state because it chose—foolishly, I think—to join the euro. I have said to Irish politicians—in as friendly and comradely a way as possible—that they should recreate and depreciate the punt to something like the level of sterling, and rejoin the sterling zone, which is where Ireland belongs. Its economy would then start to recover. Without that, it will not recover.
Martin Horwood: I am just curious: who does the hon. Gentleman think would lend those Governments the money to finance that public spending, given their credit ratings at present?
Kelvin Hopkins: In the end Governments can print money if they wish to, but the idea that we can squeeze those economies into growth is complete nonsense. We could debate these matters at great length—I would be happy to do so on another occasion—but that is not what this debate is about. I want to focus on the Government’s economic policy, which I think is profoundly mistaken.
Another point in the document is the emphasis on fiscal neutrality. The Government do not seem to appreciate that fiscal neutrality can be achieved in various ways. If we cut public spending and taxation at the same time, that is, in a sense, fiscally neutral. If we raise public spending and taxation, that is also fiscally neutral. We can also achieve fiscal neutrality by raising taxes on the rich and reducing them on the poor. Fiscal neutrality can have all sorts of different effects. If we cut taxes on the rich and raise them on the less well-off, we will drive the economy into recession, because poor people will spend less money. The marginal propensity of the poor to consume is higher, so if we tax the rich and give more to the poor, they will spend. If we give pensioners a rise in their pensions, for example, they will spend more, but if we give a wealthy person a tax cut, they will not spend.
Those are marginal changes, but my general point is that fiscal neutrality can be achieved in various ways. In fact, it is nonsense to have fiscal neutrality when growth
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is flatlining. We ought to have an expansionary fiscal strategy, not a neutral fiscal strategy. I might add that this is my view, not necessarily the view of my hon. Friends on the Opposition Front Bench. They are perhaps more cautious than me, but in the end I would like to think that I and others will be proved right. We have to generate growth, but it will not happen if the Government continue to operate in the way that they are at the moment.
Steve Baker (Wycombe) (Con): As the hon. Gentleman knows, I have great admiration for him on many subjects, but does he realise that when Keynes was suggesting those fiscal stimulus packages, the state accounted for only about a quarter of GDP, whereas now the figure is up to 45% and getting on for 50%? The capacity is just not there. I would suggest to the hon. Gentleman that even Keynes would be horrified at the notion of Governments spending more from present levels?
Kelvin Hopkins: The role of the state is much larger than it was even in Keynes’s day; therefore, the state has to generate more demand. The state has a bigger role in the economy—I think that is a good thing—but we cannot withdraw from the idea of managing economies in the way that we did after the second world war. Between 1945 and the 1970s, we had a world that actually worked. We had rising living standards and the highest rate of growth in our history. We had full employment, we developed a welfare state and the national health service, and we had free tuition at universities. Since then, the neo-liberals and the monetarists have got hold of economic policy again and we have gone back to something like the early 1930s, albeit with higher living standards, at the moment, but that could so easily be destroyed if the current mistakes continue to be made.
Alec Shelbrooke: I really do not understand the hon. Gentleman’s rose-tinted view of the 1960s and 1970s. In the 1960s we had to devalue, and by the 1970s inflation and wage inflation were huge, to the point where teachers were given a 25% pay rise in the mid-1970s that was worthless the following year. As for the Keynesian arguments, the new deal in 1930s America failed until the second world war came along and the country could manufacture and lend money to support the war effort. That is what created the recovery. Surely the hon. Gentleman is not suggesting that we need another war to sort out the economy.
Kelvin Hopkins: I would advise the hon. Gentleman to read an excellent book by J. K. Galbraith called “The World Economy Since the Wars”. He said that wartime investment in American manufacturing transformed the economy, which emerged as the strongest economy in the world.
We could go into those matters at great length; the point is that it is nonsense to try to deflate our way to growth, as has been said by a number of leading economists. Okay, so they happen to be Keynesians rather than monetarists, but do we want to go back to a world of high unemployment and greater inequality, or do we want to go forward to a world of full employment and greater equality? That is the choice. The Government’s proposed strategy, as set out in the document under discussion, will have a devastating effect on our economy
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and—they may not be prepared for this—will make them detested and massively unpopular. I remind them that, after the second world war, Labour took office with a massive majority as a result of the working people of Britain rejecting what had happened in the 1930s: the recession and the war. We are in danger of going in that direction again, and the end result would be the election of a Labour Government who would have to pick up the pieces of an economy that had been destroyed.
Even PricewaterhouseCoopers—not a noted left-wing organisation—has suggested that, for every job lost in the public sector, one would also be lost in the private sector, as opposed to the private sector picking up where the public sector left off. Much of the demand in the private sector comes from public sector spending and public investment. We have already seen construction levels falling, with the cancellation of many school building programmes. That will create unemployment in the private sector as well as the public sector, and it is conceivable that unemployment could rise by 1 million. If we had 1 million unemployed, in addition to the 2.5 million that we already have, we would be in very serious economic waters. It would be a terrible time, not just for young people but for the whole economy. We would see falling living standards, mass unemployment and a mass political reaction to what was happening.
I had a different view on this matter from those on my own Front Bench, particularly before the election, when I and a number of Labour comrades rejected the idea of cuts altogether. We believe that dealing with the deficit has to be done by generating growth. After the banking crisis, the Labour Government did exactly the right thing. They pushed demand into the economy by printing money, reducing interest rates almost to zero and recapitalising the banks, all of which had to be done. In fact, the Conservative Government, in their first six months, were living on the growth generated by Labour’s policies—[ Interruption. ] That is the reality. Now, Conservative policies are kicking in and we are starting to see the economy go down.
I could go on about this at greater length, but others want to speak and this is a short debate. I am happy to come back and talk about these issues time and again if hon. Members wish me to. Indeed, I am happy to discuss them in private as well as in public. I am convinced that the Government have got this wrong, and that Keynesian economists such as Krugman and Stiglitz have got it right. We need to generate growth through public spending and public investment; we do not need to cut.
8.12 pm
Mr William Cash (Stone) (Con): It will be useful to remind the House of what section 5 of the European Communities (Amendment) Act 1993 actually says. Some of us were here in 1993 during the Maastricht debates, and it was rather an interesting moment when the only piece of reality in the whole of that Session occurred. That was when an attempt was made to restrain the movement towards a European Government. Section 5 states:
“Her Majesty’s Government shall report to Parliament for its approval an assessment of the medium term economic and budgetary position in relation to public investment expenditure and to the social, economic and environmental goals set out in Article 2”—
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“which report shall form the basis of any submission to the Council and Commission in pursuit of their responsibilities under Articles 103 and 104c.”
What this really boils down to is that, in order for us to be able to continue—leaving aside the opt-out from the euro—we effectively have to comply with the convergence criteria and other criteria that are laid down by the European Union. Effectively, leaving aside the question of the European stability mechanism—my hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke) knows that I totally agree with the extremely important point that he made earlier—the bottom line is that we have been moving inexorably, regrettably and avoidably towards deeper and deeper European integration, with more and more requirements and obligations being imposed on us.
As Chairman of the European Scrutiny Committee, I and other colleagues here tonight—my hon. Friends the Members for Daventry (Chris Heaton-Harris) and for North East Somerset (Jacob Rees-Mogg), and the hon. Member for Luton North (Kelvin Hopkins), a distinguished member of the Committee from the other side of the House—know the sheer, massive extent of the invasion and the vast range of impediments that are put in our way as a result of decisions taken not by this Parliament but by other countries, by the European Commission and by the European institutions. So this is an important debate, and the Minister will understand why I objected to the idea that it should be shunted off to some innocuous Committee, well controlled by the Whips, without having any real opportunity for the whole House to participate.
I can make my points briefly. Some have already been made and others I have made myself in the past, so I do not need to elaborate on them. First, I very much agree with the suggestion that this undemocratic process affects the daily lives of the people of this country and inhibits our ability to grow our economy, particularly when at least 4% of our gross domestic product is lost through excessive European regulation of small and medium-sized businesses. I find it utterly absurd—it is incomprehensible to me—that the Government cannot simply say, “Look, we’ve tried. We’ve gone ahead. We’ve tried to negotiate, but they are not listening. We are going to have to override the European legislation.” I think it negligent not to do so.
I received a letter from the Prime Minister only a few days ago, reminding us that the European Council
“agreed on the need for robust actions to support growth”.
He went on to refer to reducing
“the overall burden of regulation including exemptions for micro-enterprises from future regulations”.
In my right hon. Friend’s absence, I have to say—he will know that I would say it anyway—that “future” regulations are not the issue. The real question is about existing regulations. I do not need to go through them all again—I have written pamphlets about them, as have many others—and we know that there is a vast array of completely negative regulations that cause a vast amount of difficulty for small and medium-sized businesses. We are not going to achieve the private enterprise that will
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be needed to pay for the public sector that is needed unless we get out of that vicious circle. That is point No. 1.
Point No. 2 is that the consequences of not having sufficient growth and of having the deeply regrettable legacy of the deficit will mean that riots and protests—not only in other countries, but in our own—will grow as the pain bites into the economy and into people’s daily lives. This will lead to an increase in the potential for parties of the far right to gain traction. I do not think that the policy pursued on the stability and growth pact can be described as anything other than a disaster area because there has been no stability, no growth and no pact. I wrote an article about that in The Timesfive or more years ago, but it is exactly the same now. Nothing changes. That is terribly depressing, which is why we must have the political will to do something about it.
The Europe 2020 strategy is another re-run of the vast amount of verbiage that accompanied the Lisbon agenda, which those involved had to admit was a complete disaster. It is words, words and words; it is nothing to do with the practical question of generating growth. I mentioned Brazil, India and China earlier. The plain fact is that we have to compete with these other countries and it is impossible to do so when looking at the question of unit labour costs in those countries and then looking at the European Union and noticing that Germany had an increase of only 2% in the last 10 years, compared with 30% in most other EU countries. We are in a completely impossible situation. I say this with the greatest respect to my hon. Friend the Financial Secretary, but I did not hear anything in his speech to respond to this situation except for the fact that he said we were getting close to achieving the parameters laid down by the EU for the excessive deficit procedure.
Let me ask a question that I asked before the general election and again during it. It is simply this: what is the true level of our debt? Suppose that the Chancellor of the Exchequer had risen to make his Budget speech in the House the other day and said, “The first thing I must tell the House is that we will have to knock £6 billion off the figures that I am about to announce because we will be bailing out Portugal—and, by the way, our budget contribution to the European Union will rise to £10 billion, so we had better start factoring that in as well.”
Some Members may not know—I do not think many people do—that a spat is going on between the Office for National Statistics and Eurostat about the formulation of our figures in relation to the deficit. I am looking into it, but it is the sort of thing that really troubles me. If we do not get the figures right, and if the Eurostat figures are imposed in a way that makes it difficult for us to accord with the parameters of the rules, that will be another matter that should concern us.
There are many other issues that I could raise, but let me end by dealing with the question of looking to the future. The plain fact is that Germany has now taken pole position in the European Union. The European Central Bank—which has not been mentioned tonight, and to an extent I understand why—has been more or less working in a German environment, if I may put it in those general terms, and has become the owner of vast quantities of bad assets. Another problem is being stoked up there. As was pointed out in a very interesting article in The Economist a few weeks ago, all that is part
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and parcel of Germany’s pole position at the heart of Europe and also the heart of the problem itself. We cannot afford to work on the basis of a system—to which the Government have foolishly agreed—in which we would not be isolated, but would be engaged in the process of a two-tier Europe because we had agreed to a treaty that will have a serious adverse effect on us. We must renegotiate these treaties and return to a European Free Trade Association-type arrangement, so that we have independence and, with it, the ability to deliver an economy that the British people deserve.
Mr Deputy Speaker (Mr Nigel Evans): Order. Three Members are standing; I remind them that the debate must end at 8.43 pm. I call Mr Nuttall.
8.22 pm
Mr David Nuttall (Bury North) (Con): I will bear that in mind, Mr Deputy Speaker.
It is always a great pleasure to follow my hon. Friend the Member for Stone (Mr Cash), who speaks with such knowledge and who gives the House the benefit of his long experience of these matters. Let me say at the outset that I am 100% supportive of the economic policies that the Treasury and its Ministers have pursued since the general election. It cannot be the case that the way out of the financial mess created by the last Government, who were borrowing, borrowing, borrowing, is to borrow even more, and to continue to borrow at those levels.
Alec Shelbrooke: Will my hon. Friend give way?
Alec Shelbrooke: I am grateful to my hon. Friend, and I will be brief. Is his view not confirmed by what the hon. Member for Nottingham East (Chris Leslie) said about inflation creeping into the system, and by the suggestion of the hon. Member for Luton North (Kelvin Hopkins) that the way out of the problem was to print more money?
Mr Nuttall: My hon. Friend is absolutely right. As everyone knows, printing money invariably leads to inflation. I am sure that that would be the case if we continued to print money today.
I want to address the issue of our dealings with Europe, but first let us consider our net borrowing figures. According to forecasts from the House of Commons Library produced just a few days ago—on 21 April—even if we take into account all the measures that the Treasury are taking, we will borrow £122 billion in the current financial year and £101 billion next year. We are not paying back our debts; we are simply reducing the scale of the debt.
Kelvin Hopkins: I could raise a number of issues, but one in particular is that the Treasury is now predicting that the deficit at the end of this Parliament will be £11 billion higher than it thought a few months ago, simply because it expects the economy to grow less.
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Mr Nuttall: I think there is always scope for margins of difference in predictions for five years ahead. I agree that on page 54 of the document in question a figure of 0.8% is referred to in respect of the quarterly growth figures, but what was not mentioned is that the previous line refers to erratic factors, and the very use of the word “erratic” implies there is some deal of scope for the figure not to be precisely bang on the nail. As we all know, the figures that have been released today are provisional, and it would be very surprising indeed if they are not revised one way or the other. [Interruption.] They may well go up, but it would be very surprising indeed if they were not to be revised.
Let me move on to my concern about this motion. I have said that I am entirely supportive of the Government’s economic policy, but I am not at all supportive of the idea of our supplying 201 pages of information, which I am grateful the Minister confirmed is all in the public domain, to Europe. Why cannot we send the Europeans one simple e-mail with a link to the Treasury website, where we say the following: “Here you are chaps; if you’re interested in what we’re doing, look at our website as it’s all on there, and you’ll be able to read what you want. We are a sovereign nation, and we are not going to produce 201 pages of bumf for you to no doubt translate into dozens of other languages. If you want to see what we’re doing, look at our website or read Hansard, as it’s all in there. We’ve got nothing to hide”? Frankly, I have to ask what on earth they do with these documents when they get them, as they obviously have not been keeping an eye on Greece, Ireland or Portugal, because look at the mess they are in! They obviously get these documents, file them under “Too difficult”, and let those countries get on their merry way.
That is not good enough, and that is why I do not support this motion. I do not think we should be sending any documents to the Europeans. We should be saying, “If you want to see what we’re doing, look at our documents, which are all in the public domain, and where it is all confirmed.” I am fully supportive of our economic policies. Let us stick at it, and let us say no to Europe.
8.27 pm
Steve Baker (Wycombe) (Con): I shall try to confine my remarks to three points on the report. First, the report rightly talks about imbalances in the economy. The hon. Member for Nottingham East (Chris Leslie) talked about serious systemic problems in the economy, and I agree that there are such serious systemic problems, albeit not, perhaps, those that the hon. Gentleman thinks there are.
On the first page of section 2, the report talks about debt and unsustainable levels of private sector debt. It is estimated that the UK has become the most indebted country in the world, and one sentence stands out:
“the spending plans set out in the 2007 Comprehensive Spending Review were based on unsustainable revenue streams from the property boom and the financial sector.”
The report also talks about geographical and sectoral imbalances. Given the limited time available, I will be very brief, but let me say that I feel that far too little effort has been made to explain some of these imbalances through monetary factors. Printing money has been mentioned. The problem with printing money is that it creates patterns of economic activity that can last only
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as long as that supply of new money. When the new money comes to an end—
[Interruption.]
From a sedentary position, the hon. Member for Luton North (Kelvin Hopkins) talks about the multiplier effect, and, again, he has appealed to Keynes. I have to say to him that one thing I have learned over the past few years in setting up a think-tank and talking to economists is that it is really no good at all appealing to the authority of economists. There are always several schools of thought, and one of the things they are no good at is making accurate predictions—or, indeed, agreeing with one another. I am therefore afraid that that leads us to thinking for ourselves.
One of the most important factors to do with money is something long known, called the Cantillon effect: the fact that when money is created, it always arrives in one place in the economy first. So when banks are lending money into existence and into the housing sector, of course house prices rise, the financial sector is better off and the economy reorients itself to the south-east, where the banking sector is based. Although the report diagnoses the problem very satisfactorily, I am disappointed that the monetary policy framework consists of one short paragraph. We have learned tonight that there is an appetite in this House for a serious debate about monetary policy, and the monetary framework and how it has an impact on the real economy.
Secondly, and further to my point about new money creating unsustainable patterns of economic activity, sustainable investment requires prior production and real saving. That involves individuals, families and businesses consuming less than they produce to make real savings and invest them. Easy money will not create sustainable development and sustainable growth.
I wish to allow other hon. Members to speak, so I shall make one final point. I must ask to what end we are making this report. The lexicon has suddenly developed the term “convergence programme” and I am not sure where it came from. We have talked about Maastricht, but the term has certainly only just emerged into the public debate today. Why are we converging? With whom? To what end? I would be grateful for an answer.
8.31 pm
Jacob Rees-Mogg (North East Somerset) (Con): I do not know how long I have before we move on to the wind-ups, if indeed we are having them.
Jacob Rees-Mogg: We are not having them, so I have 11 minutes—this is very exciting. Thank you, Mr Deputy Speaker for calling me last—it does sometimes happen that the first will come last and the last first.
Chris Heaton-Harris: Like under AV.
Jacob Rees-Mogg: That is a good point.
I had not intended to speak until we heard so eloquently from the shadow Minister about the virtues of reckless spending—it is tremendously important to stop that view of the world. We have to get back to some of the debate we had yesterday, which is why it is worth
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supporting the Government’s financial outlook position and policy. The reason for that is that the situation will be increasingly difficult. The economy was left to us in a terrible mess, in terms of not only the public finances, but private sector debt. The idea that this will easily be recovered by getting people to borrow again or banks to lend again is simply wrong.
The hon. Member for Luton North (Kelvin Hopkins), who is an hon. Friend on European matters but an hon. Gentleman on other matters, talked about getting more people to spend and taking money off the rich so that it can be spent by poorer people, who have a greater propensity to spend. That might be fine when the banks have money to lend, but we need to get the loans-to-deposit ratio for the banks as a whole in the United Kingdom below 100%, so that the banks have the liquidity to lend. Until we are able to do that, the idea that we can have debt-fuelled re-growth is simply mistaken.
On Government debt, I wish to return to a point made yesterday by the shadow Chief Secretary on Ricardian equivalence. She does not believe in Ricardian equivalence and I do not think that many people do in exactly the terms that Ricardo spelt it out. None the less, his underlying point was completely sound: the debt of Governments will ultimately have to be paid back through tax income raised. Intelligent electors realise that and know that if the economy is growing on the basis of Government debt, that will eventually be a charge to them. It might not affect their behaviour over one or two months, but over one, two or five years it certainly does. Economies that run indefinitely on debt find that their growth levels are neutered, and anybody who doubts that should look at the Japanese economy.
If we look at what has been going on in Japan since 1990, we see that the Japanese have increased their public sector debt from next to nothing to 200% of their GDP and that in that period they have had absolutely no growth—their economy has been stagnant. Their tax revenues were lower in 2010 than in 1985, because the level of growth in the Japanese economy has been so low.
Alec Shelbrooke: Would my hon. Friend like to bring things up to date and comment on the US economy and the fact that the Americans decided to pour a lot of money in, found that that did not work and are now considering very strong austerity measures?
Jacob Rees-Mogg: It is relevant to look at the United States economy and at the gold price, which is up at $1,500 and not because more people are getting married and want wedding rings—although I congratulate my hon. Friend on his forthcoming nuptials and I am sure he is buying a large piece of gold for his future wife. The gold price has been so strong because the financial markets have lost confidence in the US dollar and because the American political forces—the President and Congress—have not been willing to tackle the deficit in the way that Her Majesty’s Government have done. The gold price in sterling terms has not risen by anything like so much, because people have confidence in what the Government are doing.
Normally, I take the view that there are two people in this world who should be obeyed. One is the Holy Father and the other is my hon. Friend the Member for Stone (Mr Cash). When my hon. Friend speaks on
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European matters, he does so with a degree of infallibility that belongs to only one other living person, although I hasten to add that the remit of the Holy Father does not cover European matters. My views diverge slightly from those of my hon. Friend on one point: I think we should be proud of the document that Her Majesty’s Government are sending because of what the Government have got right. The situation they faced a year ago was desperately serious, needed urgent attention and had to be brought under control by their taking measures that are not necessarily popular.
It is important to emphasise that point because all Governments, when they take tough decisions, face gentlemen such as the shadow Minister, the hon. Member for Nottingham East (Chris Leslie). Over the next year or two, as people see the cuts coming through, it will be very tempting to listen to such voices and to think that perhaps there is an easier way and a land flowing with milk and honey that we have not yet found where we can borrow more money, where the financial markets will turn a blind eye, where we can spend money we do not have and not worry about our children and our grandchildren and where the banks will suddenly miraculously lend to bankrupt people to keep inefficient systems going. That is when those on the Treasury Bench must stiffen their sinews and summon the blood and not give way to those voices. At the moment, that is still relatively easy, because there has not been much coming through in the way of cuts. We have not seen the pain that will come from those difficult decisions. Now, however, we are sending our plan abroad. We are telling people not just in this country but in foreign countries of what we are doing and we should be proud of it because it is right. If we do what is right, the economy will begin to recover.
We on the Back Benches, in particular, must support those on the Front Benches when they do such things and when the critics from the other side appear to be doing well in the opinion polls. That is the point of maximum difficulty. Let us think of the great lady in 1981, when 360-odd economists wrote to The Times—a great newspaper with very fine editors—to suggest that the economic policy was wrong. That was two years in and it was the hardest point and that Government stuck to their guns, which led to the recovery we then had.
Mr Davidson: The hon. Gentleman has spoken movingly about the need for cuts and indeed for pain—pain that I suspect will not be felt by him. Pain will be felt by poor people whereas bankers, who are rich people, will feel no pain whatsoever. It is the unfairness of what the Government are doing that is causing so much opposition and bad feeling in the country and that is why the Liberals will suffer so badly in the AV referendum and the election.
Jacob Rees-Mogg:
The fundamental flaw in the hon. Gentleman’s argument is to think that there is a painless way out of a major crisis. It is simply a question of whether we deal with it now and ensure that the problem is resolved and that the economy can grow again or whether we delay it and have a much worse crisis later. The pain I was talking about was political pain for the Government as people notice the cuts. Our approach will reduce the pain for individuals because it will ensure that the economy is rebalanced sooner rather
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than later. That is the way to minimise pain—not thinking that there is a never-never land with no pain after we have lived on debt and incompetent Government policies for the past 13 years.
Alec Shelbrooke: We hear about fairness from the Opposition, but which does my hon. Friend feel is more unfair: bringing in higher taxes to get us out of this problem or letting the economy run away and allowing interest rates to rocket, thereby leaving thousands of people’s homes to be repossessed?
Jacob Rees-Mogg: My hon. Friend is absolutely spot on. This is one of the great virtues of the Government’s policy, which is being welcomed by the gilt market.
It is also worth noting what the late John Maynard Keynes said on such matters. Everyone in opposition quotes him and says that we should follow his policies but one of his policies, to quote the Chancellor, was that Governments should mend the roof while the sun shines and should build up reserves in the good times. My godfather interviewed John Maynard Keynes late in life and asked him, “What happens if Governments do not do this? What happens if they spend money in the good times?” to which Keynes replied, “If they do that I shall make a speech in the House of Lords and that will put them off.” Sadly, he was not here between 1997 and 2010 to make a speech in the other House to tell the other side of the policy failures when the economy was booming, so there was no money when the economy went wrong.
Time is short and I have a point to make about the presentation of the document to Europe. I hope that we have a Division because it will be delayed until after the deadline for sending in the papers. I hope that Her Majesty’s Government will show their independent-mindedness and ensure that the House’s approval comes before the requirements of a foreign international body. It would be a great discourtesy to the House if the document were presented to the European Commission before the deferred Division that we are likely to have on Wednesday.
The Deputy Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 5 May (Standing Order No. 41A).
Business without Debate
Delegated Legislation
Motion made, and Question put forthwith (Standing Order No. 118(6)),
That the draft Civil Contingencies Act 2004 (Amendment of List of Responders) Order 2011, which was laid before this House on 28 February, be approved.—(Mr Vara.)
European Union Documents
Motion made, and Question put forthwith (Standing Order No. 119(11)),
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That this House takes note of the proposed draft Directive on combating the sexual abuse and sexual exploitation of children and child pornography, repealing Framework Decision 2004/68/JHA; supports the Government in welcoming the objectives of the draft Directive in raising the standards of protection from sexual exploitation for children across Europe; and supports the Government’s view that national law or practice in England and Wales fulfils the obligations in the draft Directive.—(Mr Vara.)
Delegated Legislation (Committees)
That the draft Employment and Support Allowance (Limited Capability for Work and Limited Capability for Work-Related Activity) (Amendment) Regulations 2011 (S.I., 2011, No. 228) be referred to a Delegated Legislation Committee.—(Mr Vara.)
petition
Pleck Library (Walsall)
8.43 pm
Valerie Vaz (Walsall South) (Lab): The petition is from the users of Pleck library, Walsall. The petitioners wish to prevent the closure of Pleck library and therefore request that the House of Commons urges the Government to take all possible steps to protect Pleck library for the future. There are 1,108 signatories to the petition in similar terms.
The Petition of users of Pleck Library, Walsall,
Declares that the Petitioners wish to prevent the closure of Pleck Library. The Petitioners therefore request that the House of Commons urges the Government to take all possible steps to protect Pleck Library for the future.
And your Petitioners, as in duty bound, will ever pray.
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Press Self-regulation
Motion made, and Question proposed, That this House do now adjourn.—(Mr Vara.)
8.43 pm
Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab): I thank those hon. Members who have remained behind for this Adjournment debate, which is rather later than expected. There has been some speculation on the internet today that the debate would be about super-injunctions, so I must apologise to hon. Members who have turned up to be titillated by stories of the exotic adventures of premier league football players as they will be sorely disappointed. It is not about that; it is about the self-regulation of the press—hon. Members are leaving immediately!—and particularly about the Press Complaints Commission and the editors code of practice.
“I believe in equality for everyone, except reporters and photographers.”
On that point, I disagree with the great man. If anyone is attending this Adjournment debate expecting an all-out assault on the printed media in the Chamber tonight, they should leave now. That is not my intention.
The printed news media, which from now on I shall refer to simply as the press, have the right to publish anything they want, so long as they do so fairly and accurately. The press is free to be partisan, although it must distinguish clearly between comment, conjecture and fact. I will fight to ensure that it continues to enjoy those freedoms. I value the freedom of the press, the right of journalists to criticise or praise and the right of photographers to do their job, because the freedom of the press is a cornerstone of our democracy.
There has always been tension between those who argue for press freedom and those concerned with a range of other issues, including the invasion of privacy, the restriction that complaints can be made only ex post facto, and the practice of newspapers paying for stories. The case for the defence of the press is more often than not that a story is in the public interest, but who decides what is in the public interest and how do they arrive at that decision?
The stand-off between self-regulation and statutory controls has been around for decades. A 1947 royal commission recommended in 1949 that a General Council of the Press should be created as a governing body to regulate behaviour, but it was not until the threat of statutory regulation was mooted again in 1953 that the General Council was set up. The friction continued and by the time of a second royal commission in 1962 the General Council had been the subject of considerable criticism. The General Council became the Press Council. This organisation stumbled on ineffectively until the Calcutt report in 1990, which recommended the formation of the Press Complaints Commission.
The PCC was originally given 18 months to prove that self-regulation could work, with the threat that if it failed to do so, a statutory system would be introduced. It passed that first test and has continued to evolve. The code has changed 30 times since its formation, the last revision taking place in January 2011 on the question of the prominence of corrections, an issue that
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I will touch on shortly. It is right for the press to work within a voluntary code, but evidence is emerging of problems that need to be addressed.
The most disconcerting issue is that these challenges are not new. They have been around for some years but no solutions have been found, despite genuine attempts to look for them. These problems have been parked, but I believe the industry must get into gear, move on and find solutions, for it would be a major advantage to the industry if, as well as being seen as a champion of self-regulation, it were seen in the vanguard of promoting and introducing change. That, more than anything, would consign to the dustbin of history the period I spoke of earlier, when the stick had to be used more often than the carrot. If we can achieve that, those who feel compelled to complain to the PCC will have more confidence in the system.
Right now there is a serious lack of confidence in the system. My views are based on my personal experience of dealing with the PCC editors code of practice which, sadly, I have had to do in my short spell as a Member of Parliament. It will come as no surprise to Members in the Chamber this evening that my first dalliances with the PCC were in relation to the first batch of expenses published by the Independent Parliamentary Standards Authority.
“The Press, whilst free to be partisan, must distinguish clearly between comment, conjecture and fact.”
Paragraph 1(i) states that the press must also
“take care not to publish inaccurate, misleading or distorted information”.
One of my local newspapers printed a story stating that I had claimed expenses for hotels in London, while at the same time claiming rent for a London property. The story was trailed on page 1 and appeared prominently on page 9. If it had been true, it would have been a sensational story and helpful to the paper’s dwindling circulation, but it was a complete and utter falsehood that had been fabricated in an attempt to mislead readers and to destroy my reputation.
The newspaper then refused to publish the truth or to apologise, and I was forced to complain to the Press Complaints Commission. The PCC carried out a full, thorough and professional investigation and found that the code had been breached, but the adjudication that was eventually printed was placed at the bottom of page 9, much less prominently than the original article, and there was no trail on the front page. It was said to have been given due prominence by the PCC; I contend that it was given less prominence.
The PCC further took the view that, as the misleading words had appeared on page 9 and not on the front page, the page 9 adjudication, less prominently placed, was sufficient.
Steve Rotheram (Liverpool, Walton) (Lab):
My hon. Friend makes a powerful argument in favour of press freedoms as the cornerstone of our democracy, but I am sure he will agree that with press freedom there should equally be press responsibility. I cite the example of the worst sporting disaster in British history, when 96 football supporters were killed at Hillsborough on 15 April 1989. In the immediate aftermath of that human tragedy, press reporting hit an all-time low.
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Despite the huge loss of life, that most despicable of men, Kelvin MacKenzie, used the front page of
The Sun
newspaper to peddle lies about Liverpool supporters under the banner headline “The Truth”. When the scurrilous claims that it made were proven to be—
Mr Deputy Speaker (Mr Nigel Evans): Order. This is an intervention, not a speech. Please, could the hon. Gentleman make it briefly?
Steve Rotheram: When the scurrilous claims that the newspaper made were proven to be entirely fallacious and without foundation, Kelvin MacKenzie refused to print a banner headline of a similar size and font, with the same page prominence that my hon. Friend talks about, stating quite simply that they had lied, something for which he and his former newspaper will never be forgiven in Liverpool. Does my hon. Friend therefore agree that if editors were forced to give equal prominence to retractions, they would be think carefully before fabricating stories and besmirching the reputations of individuals or of great cities such as Liverpool?
Mr McCann: I agree. My trials and tribulations with the press pale into insignificance when compared with the grievous claims that that publication made against the people of Liverpool. I agree wholeheartedly, and I am going to deal in some detail with the issue of prominence, because it has to be covered.
The issue of prominence has to be addressed by the PCC. It is currently parked, but it needs to be moved on, otherwise—and I do not say this lightly—it might have to be clamped by some sort of statutory mechanism. If newspapers get it wrong, ex post facto a complaint is made and that complaint is upheld, the correction must be given equal prominence to the original story. The very least that an individual or organisation can expect, if their integrity or actions have been inaccurately called into question, is that the apology should be of the same size, weight and prominence as the article that besmirched them. That is exactly the point that my hon. Friend makes. For those who argue that the same end result can be achieved by negotiation, let negotiation be the driving force of the settlement but let the persuader of “equal prominence” be available.
Mr John Whittingdale (Maldon) (Con): When the Select Committee on Culture, Media and Sport, which I have the honour to chair, examined press standards, we certainly looked at the issue of due prominence. I share the hon. Gentleman’s view that, when an adverse ruling is reached by the PCC, it is vital that it appear with the same due prominence as the original article. The PCC in response suggested to us that the failure to do so would in itself constitute a potential breach of the code. If the hon. Gentleman felt that the adjudication did not receive the proper prominence that it should have, I should be interested to know whether he went back to the PCC and made a further complaint against the newspaper.
Mr McCann: The hon. Gentleman will not believe this, but the newspaper tried to editorialise the adjudication. It was forced to reprint it the following week because I immediately complained to the PCC that the words of its adjudication had been changed.
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On the hon. Gentleman’s other points, I should say that, yes, I did contact the PCC and spoke to Stephen Abell, the chief executive. I made the very point to him. He said that because the misleading words were not on page 1, the adjudication could not be on page 1. I said, “Hold on a second. The page 1 trail took people to the misleading article. Why could there not have been a page 1 trail taking people to the PCC adjudication?” Surely that would be a fair and reasonable way to deal with my complaint and the subsequent adjudication.
Another feature that needs to be addressed is the letters pages of newspapers. I discovered that letters pages are also covered by the editors code of practice, so the same rules that cover articles in newspapers also cover letters; those letters, like everything else in the paper, are the editor’s responsibility. He or she is the sole arbiter.
In the normal chronology of events, newspapers print stories and, post-publication, they receive comments from readers. When I was the subject of the misleading article that I referred to earlier, the same edition of the newspaper contained a letter attacking me in the same way as the so-called news story. In my opinion, that was an unlikely coincidence.
To add insult to insult, the author was protected under the guise of anonymity; all I know about my so-called critic is “name and address withheld”. Mr Deputy Speaker, I am a trusting fellow as you very well know. I have tried hard over the years to find the best in people wherever I go, but my sixth sense told me that that was a stitch-up. I made a complaint to the PCC about the veracity of the letter, only to be told that because the writer wanted to remain anonymous no investigation could take place.
If the PCC thinks that its position on this matter is justified in any way, it is seriously out of touch with reality. If I do not know who wrote the letter, how do I know that it was not a political opponent seeking to make mischief? How do I know that it was not a journalist pretending to be a member of the public? How do I know that the letter was genuine?
Ian Murray (Edinburgh South) (Lab): My hon. Friend has raised an incredibly interesting point about the letters pages of newspapers. However, there are also anonymous contributions to newspapers’ online presence; people can anonymise the comments that they make online. Very rarely do the newspapers have the resources or time to look at those in detail and deal with issues against an individual or organisation. Does my hon. Friend think that that aspect should come under a statutory code as well?
Mr McCann: Some might think that I am foolish to hold this debate, because they might think that taking on the press on any subject whatever is not a good idea. I think that it is better to take small steps rather than large ones. If we can deal with the first two issues of prominence and the letters pages, we can then move on to deal with some of the content on the internet.
For a code to work, it must operate in the unoccupied territory between the press and the consumer. The code must be able to interrogate complaints openly and fairly, yet this element of the system does not allow that to happen. The PCC administers the code; the editors code of practice committee is its keeper. That committee
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meets periodically to take account of public and—crucially—parliamentary comment, as well as reports from the PCC itself. The purpose of the committee is to allow the code to develop and respond quickly to changing practices and technology in the industry and to the concerns of readers.
The two issues that I have raised are not new; they have been around for some time, yet no solutions have been brought forward.
Nadine Dorries (Mid Bedfordshire) (Con): I congratulate the hon. Gentleman on this Adjournment debate. The greater public perhaps regard MPs talking about their experiences with the media as self-indulgent. I am one of the Members who can speak with authority as one who has been maligned time after time by page after page of pure lies, but I have never gone to the PCC, which I regard as a toothless tiger.
I congratulate the hon. Gentleman on this debate. The issue is not about MPs because we rarely feature in the local press, which is full from front to back cover with stories about individuals in our constituencies. They do not know how to go to the PCC or how to complain. They try to complain but do not have their complaints answered in any way. Does the hon. Gentleman agree that what he is proposing tonight would benefit those people far more than it would us? We are, after all, here to represent our constituents, who suffer far more than we Members do. We can decide not to bother because we know that the PCC is a toothless tiger. Our constituents, however, may have expectations that will be thwarted.
Mr McCann: Let me say to the hon. Lady, in the words of Bill Clinton, that I feel her pain, because she and I have been in the same place. The code is meant to protect everyone—not only people like us in public positions, but our families. My daughter had problems at school because people were suggesting that her dad had acted inappropriately. That is wrong. My family is not in public life; I am, and I have broad shoulders and thick skin. We have to put in place a code that ensures that everyone is protected. What is wrong with people standing up when they make a mistake and saying, “I’ve got it wrong”, and the mistake being remedied in the same way that the original story and besmirchment took place?
These problems need to be resolved, and I hope that this short debate can at least put the issues into the public domain. The press have enormous power: they have the power to make the innocent guilty and the guilty innocent. With that great power, they have massive responsibility, as my hon. Friend the Member for Liverpool, Walton (Steve Rotheram) said. For the PCC editors code of practice to be effective, it must be able properly to scrutinise the press. Fairness must run through the code like the lettering through a stick of rock. I found this quote from Franklin D. Roosevelt that I thought very appropriate:
“If in other lands the press and books and literature of all kinds are censored, we must redouble our efforts here to keep them free.”
If this debate makes a pinprick of a contribution to that cause, it has served its purpose. I hope that the Minister will take on board the points that I have made and join me in pressing the Press Complaints Commission to deal with these two big issues.