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House of Commons

Wednesday 22 June 2011

The House met at half-past Eleven o’clock


[Mr Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked—


1. Graeme Morrice (Livingston) (Lab): What recent discussions he has had with the Chancellor of the Exchequer on the effects on Scotland of the rate of inflation. [60308]

The Parliamentary Under-Secretary of State for Scotland (David Mundell): I have regular discussions with my right hon. Friend the Chancellor of the Exchequer on a wide range of issues, including the state of the economy. Inflation is being pushed higher by rising global commodity prices. This is a global problem that requires global solutions.

Graeme Morrice: I thank the Minister for his answer. It is now clear that the Government’s VAT hike in January helped to drive up inflation, which is squeezing family incomes, hitting consumer spending and holding back strong growth. Will the Minister now speak up for families and businesses in Scotland and urge the Chancellor to reverse the VAT rise to help to boost consumer confidence and bring down inflation?

David Mundell: As the hon. Gentleman knows, the former Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), said that he would have done exactly the same in relation to VAT, and a cut in VAT would do nothing to reverse global commodity price rises. It would, however, do a lot to reverse the Government’s hard-won credibility for getting the deficit down. Of course, credibility on economic matters does not seem to be important to the Opposition.

Mr Mike Weir (Angus) (SNP): In answer to my written parliamentary question, the Office for National Statistics confirms that, in four of the past five years, the rise in domestic gas prices far outstripped the rate of inflation—this is before the latest rise—while family incomes are at best static. What steps can the Government take to protect already hard-pressed families from these escalating costs in the coming winter?

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David Mundell: The Government are concerned about the rise in fuel prices, especially gas prices. One of the measures we have taken is to ensure that the poorest families have protection in relation to their fuel costs.

Ann McKechin (Glasgow North) (Lab): I am sure that the Minister will welcome the inquiry Ofgem announced today into Scottish Power’s price rise and the way in which it announced the change to consumers. Does he agree that it is completely inappropriate for energy companies to add to the increased cost of living in Scotland by deciding to hike domestic bills? What personally is he doing about this?

David Mundell: There is widespread concern in Scotland about these actions, especially about the recent fuel cost rises announced by Scottish Power. As the hon. Lady knows from previous questions, the Secretary of State and I have raised these issues with the energy companies.

Ann McKechin: Although it is very nice to meet up, I think that Scottish consumers are looking for action as they face a rise of an average of £198 a year in their bills while wages are being frozen, prices are rising at well above the target inflation rate and borrowing is now £46 billion higher than expected because of the decrease in economic activity. Does the Minister agree that it is now time for a plan B, and for the temporary cut in VAT that Labour has called for?

David Mundell: It will not surprise the hon. Lady when I say most certainly not. In setting out those woes, she has not acknowledged her part as a Minister, and that of her party, in bringing this country to the verge of bankruptcy, or the need to take the tough action that this Government have taken. She also knows that the shadow Chancellor is in a majority of one in setting out his proposals—

Mr Speaker: I thank the Minister, but we must move on.

The Union

2. John Stevenson (Carlisle) (Con): What recent assessment he has made of the benefits to Scotland of the Union; and if he will make a statement. [60309]

11. Graham Evans (Weaver Vale) (Con): What recent assessment he has made of the benefits to Scotland of the Union; and if he will make a statement. [60318]

13. Mr Philip Hollobone (Kettering) (Con): What recent assessment he has made of the benefits to Scotland of the Union; and if he will make a statement. [60320]

The Secretary of State for Scotland (Michael Moore): The Government firmly believe that Scotland benefits from being part of the United Kingdom, and that the United Kingdom benefits from having Scotland within it.

John Stevenson: I agree wholeheartedly that Scotland benefits from being part of the Union. I represent a seat that is just over the border in England. Does the Minister agree that England benefits from being part of the Union, and that it is in the interests of all of us that Scotland and England remain part of the United Kingdom?

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Michael Moore: I wholeheartedly endorse what my hon. Friend has just said.

Graham Evans: The Union is of great benefit to all the United Kingdom, but my constituents still want fairness between Scotland and England. Bearing that in mind, what plans does the Secretary of State have to review the Barnett formula?

Michael Moore: My hon. Friend will recall from last night’s debate on the Scotland Bill that we recognise that this is an issue across the United Kingdom. However, we are committed to reviewing it when we have resolved the current financial problems that we inherited from the Labour party.

Mr Hollobone: Would not a separate Scotland simply not have been able to survive the global banking crisis on its own, and if it had been separate would it not now be heading the way of Ireland and Greece?

Michael Moore: The hon. Gentleman makes an important point because the scale of the financial disaster that befell the Royal Bank of Scotland and Halifax Bank of Scotland would have placed a crippling burden on Scotland. By being part of the United Kingdom we shared the risks; we are now sharing the recovery, which is the right way forward.

Angus Robertson (Moray) (SNP): Does the Secretary of State agree with me that while the future of the constitution is hotly debated, there is no place for leading Unionists to describe the supporters of Scottish independence as neo-fascists?

Michael Moore: I think it is incumbent on us all to ensure that we use moderate and appropriate language in this debate.

Angus Robertson: In view of what the Secretary of State has just said, is it of benefit to the Union and Scotland that the Scottish Affairs Committee is chaired by someone who last night described Scotland’s majority party of government as neo-fascist?

Michael Moore: The hon. Gentleman should take up the issue with the hon. Gentleman himself. In this House, we do not challenge one another’s honour or otherwise. It is a matter for the hon. Gentleman to raise as he will. [Interruption.] I have made my position clear—it is important to be careful about our language and to debate the substance of the issues.

West Lothian Question

3. Harriett Baldwin (West Worcestershire) (Con): What recent discussions he has had with the Deputy Prime Minister on establishing a commission on the West Lothian question. [60310]

5. Mr Andrew Turner (Isle of Wight) (Con): What recent discussions he has had with the Deputy Prime Minister on establishing a commission on the West Lothian question. [60312]

The Parliamentary Under-Secretary of State for Scotland (David Mundell):

My right hon. Friend the Secretary of

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State and I have regular discussions with my right hon. Friend the Deputy Prime Minister on a range of issues. The Government remain committed to establishing a commission later this year to consider the West Lothian question.

Harriett Baldwin:

Does the Minister agree that timing is of the essence here? This is a difficult question and the commission will need to consider its recommendations, after which this House will need time to consider the outcome. It would be much better if this were done at a time of constitutional peace rather than at a time of constitutional crisis.

David Mundell:

I respect my hon. Friend’s passion on this subject. She, of course, has a Bill before the House that touches on these issues. I understand that it will be heard on the first Friday of the September sitting, which will give the whole House an opportunity to debate the issues. I will convey my hon. Friend’s call for urgency to the Deputy Prime Minister.

Mr Turner: Does my hon. Friend agree that the last thing we want, having passed the Scotland Bill and with new powers devolved to Wales, is another expensive parliamentary assembly or talking shop in England, as the British Parliament here can cope with English matters, but decided by English MPs?

David Mundell: I agree with my hon. Friend. I have always expressed the view that there is no desire for an English Parliament—and the same two people have always written to me afterwards to say that I am wrong.

Sheila Gilmore (Edinburgh East) (Lab): Does the Minister agree that this issue is much more complex than Conservative Members sometimes allow? A good example arose in the debates on university tuition fees before Christmas. That might have been regarded as a purely English issue, but it had tremendous consequences for Scotland.

David Mundell: I acknowledge the hon. Lady’s point. This is a complex issue, which is why the coalition Government are committed to establishing a commission to look at it. I hope that it will be able to take evidence from people such as the hon. Lady.

Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op): I am sure the Minister is right when he says that there is no great demand for an English Parliament. Does he not accept that the proposal to have two classes of MPs in this House, which is coming from many supporters of the proposals of the hon. Member for West Worcestershire (Harriett Baldwin), effectively amounts to setting up an English Parliament in this building? Is that not inevitably the road that his Government will go down if they accept having two classes of MPs in this House?

David Mundell: I do not acknowledge the hon. Gentleman’s point because the devolution settlement means that different MPs in this House already have different responsibilities, depending on whether they are from Scotland, England, Northern Ireland or Wales. The Government are committed to look at the West

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Lothian question, which is a substantive issue that the previous Government ignored, and will set up a commission later this year.

Economic Environment

4. Alun Cairns (Vale of Glamorgan) (Con): What steps the Government plan to take to ensure a stable economic environment for businesses in Scotland. [60311]

12. David Rutley (Macclesfield) (Con): What steps the Government plan to take to ensure a stable economic environment for businesses in Scotland. [60319]

The Secretary of State for Scotland (Michael Moore): “The Plan for Growth” published in the March Budget set out a programme of reforms to create the right conditions for private sector-led growth. This month the Government launched the next stage of the growth review with the central purpose of creating the right conditions for businesses to be established, to invest, to grow and to create jobs.

Alun Cairns: At a time when the Treasury is bringing about stability to the banking sector and banking regulation, does my right hon. Friend agree that the SNP’s drive for further independence in Scotland could destabilise Scotland’s financial markets?

Michael Moore: There is no question but that uncertainty over the nature, number and timing of the questions that will be asked about independence will be no good for the Scottish economy.

David Rutley: In Scotland and across the United Kingdom, small and medium-sized companies are vital engines of growth and job creation, for which improving access to funding is a vital priority. Will my right hon. Friend tell the House what steps he is taking to address the challenge and whether those steps include working with organisations such as the Federation of Small Businesses in Scotland?

Michael Moore: My right hon. Friend is absolutely right to highlight the critical issue of access to finance. Unless we get enough lending to small and medium-sized businesses, among others, we will not get the economy growing again. That is why creating the conditions in which businesses start, grow and invest appropriately is central to “The Plan for Growth”, and it is why Project Merlin sets out very tough targets for lending to businesses across the UK.

Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op): Does the Secretary of State agree that businesses’ access to fast broadband is also essential for business growth? Does he share my concern that many constituencies in Scotland, such as mine, do not have such access? What discussions has he had with the Scottish Government regarding that?

Michael Moore: That was one of the key issues that the hon. Lady wanted to raise when I met her a week or so ago to discuss the economy in Ayrshire. As a Government, we are committed to the implementation of superfast broadband across the United Kingdom,

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and we are in discussions with the Scottish Government on how they should go about that in Scotland. Such provision is vital in Ayrshire, the borders and all parts of the country. I am happy to work with her and others, including the Scottish Government, to ensure that we achieve it.

Dr Eilidh Whiteford (Banff and Buchan) (SNP): Has the Secretary of State had an opportunity to read the Government expenditure and revenue study published this morning, which shows that the Scottish economy is outperforming that of the UK and carrying a lower deficit? Will he take the opportunity to congratulate the Scottish Government on their efforts to promote stability through economic growth and recovery?

Michael Moore: That is a typically interesting interpretation of the figures in this morning’s report, which show that, on pretty well every measure, Scotland is running at a deficit. That highlights the volatility and difficulties associated with the different measures. It is vital that we get Scotland’s economy back on the right footing. That is why, as a Government, we are cutting corporation tax, keeping interest rates low and reducing the burden on national insurance. I am happy to work with the Scottish Government, who have fantastic powers at their disposal to ensure that the economy grows. We need to work in partnership.

Clyde Coastguard Station

6. Mr Alan Reid (Argyll and Bute) (LD): What recent discussions he has had with the Secretary of State for Transport on the Clyde coastguard station in Greenock. [60313]

The Parliamentary Under-Secretary of State for Scotland (David Mundell): I have regular discussions with my right hon. Friend the Secretary of State for Transport on a range of issues of mutual interest, including the future of Scottish coastguard stations.

Mr Reid: May I pay tribute to David Cairns, who had been campaigning to save the Clyde coastguard station before his tragic early death? The waters around Argyll and Bute, with all its islands, peninsulas and sea lochs, present a unique challenge to seafarers. If the Clyde coastguard station is closed, however, all the valuable local knowledge of the area held by the people who work there will be lost. Will the Minister draw that to the attention of the Secretary of State for Transport and urge him to keep Clyde coastguard station open?

David Mundell: It is appropriate that there is mention of David Cairns, who gave distinguished service as a Scotland Office Minister, at this first Scottish questions since his tragic death. I assure my hon. Friend that his points will have been heard, as they were in the recent Westminster Hall debate in which he took part. The Department for Transport will make no announcement on the future of coastguard stations until the Transport Committee has reported.

Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op): I associate myself with the comments that have been made about David Cairns.

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As the Minister will know, concern is sometimes expressed in Scotland about what he actually does. In a spirit of co-operation, may I offer him an opportunity to allay that concern by expressing, in clear and unambiguous terms, his opposition to the disastrous plans of the Department for Transport to close the coastguard centre in Greenock? Will he stand up for Scotland in that regard?

David Mundell: As the hon. Gentleman knows, the Scotland Office always makes the case for Scotland, and for facilities and resources in Scotland. I welcome the approach of my colleagues in the Department for Transport, who say that they will listen to all representations following their consultation and await the report of the Select Committee on Transport.

Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP): Clyde coastguard is important to the west coast of Scotland. As one who represents a west coast constituency, I believe that we have already suffered from the loss of Oban coastguard a decade or so ago. Does the Minister agree that—as the doughty fighter Anne McLaughlin is always reminding me—we need Stornoway, Shetland and Clyde coastguards on the west coast as a maritime insurance policy?

David Mundell: I would characterise the hon. Gentleman himself as a doughty fighter for the station in Stornoway. He has made significant representations, and they have been heard. My colleagues in the Department for Transport will announce their conclusion after the Select Committee has delivered its report.

Corporation Tax

7. Ian Lucas (Wrexham) (Lab): What recent discussions he has had with the Secretary of State for Business, Innovation and Skills about the transfer to the Scottish Parliament of the power to set rates of corporation tax. [60314]

The Secretary of State for Scotland (Michael Moore): I have regular discussions with Cabinet colleagues on a wide range of issues. The Scottish Government included the devolution of corporation tax among its requests for amendments to the Scotland Bill. To date, the Government have not received any detailed proposals from the Scottish Government.

Ian Lucas: On the same day the Business Secretary said that the logic of devolving corporation tax was irresistible, he subsequently said that he fully supported the Government’s position in opposing it. Is not the Business Secretary a bit of an embarrassment both to Scottish business and to the Government, and is it not about time he started speaking to the Secretary of State for Scotland about important matters such as corporation tax?

Michael Moore: I assure the hon. Gentleman that the Business Secretary and I are at one on the issue.

Agriculture Industry

8. Anne Marie Morris (Newton Abbot) (Con): What recent discussions his Department has had with representatives of the Scottish agriculture industry. [60315]

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The Parliamentary Under-Secretary of State for Scotland (David Mundell): My right hon. Friend the Secretary of State and I regularly discuss a range of devolution issues with the Advocate-General. We regularly discuss devolution issues in relation to the Scotland Bill, which is delivering the Government’s commitment to strengthening the devolution settlement.

Anne Marie Morris: No doubt the Minister is acutely aware of the importance of reform of the common agricultural policy to farmers both in Scotland and elsewhere in the United Kingdom. Given the importance of agriculture to the economy, does he agree that it is essential that we secure a deal for our farmers that is fairer and more transparent?

David Mundell rose—

Mr Speaker: Order. The Minister’s mellifluous tones diverted me from the fact that the content of his answer did not relate to the question that had been asked. I am sure that he will now talk about agriculture and not about devolution.

David Mundell: Thank you, Mr Speaker. I can inform the hon. Member for Newton Abbot (Anne Marie Morris) that my right hon. Friend the Secretary of State for Scotland was in Brussels last week, where he made the very points that she has just made.


9. Miss Anne McIntosh (Thirsk and Malton) (Con): What recent discussions he has had with the Advocate-General on devolution issues. [60316]

David Mundell: I refer my hon. Friend to my previous answer.

Miss McIntosh: As ever, I am grateful to my hon. Friend. Has the Advocate-General yet received an update on the progress made by the expert group set up by the Scottish Government, which is examining the role of the United Kingdom Supreme Court?

David Mundell: The Advocate-General wrote to the chair of the Scottish Government expert group, Lord McCluskey, offering a meeting, but has now received a response from the group’s secretariat saying that, owing to their timetable, members of the group have not had time in the first instance to receive submissions or hear evidence. What appears to have happened is that an expert group is set up by the First Minister one week, meets the following week—with no evidence taken in any week—and reports the week after.

Pete Wishart (Perth and North Perthshire) (SNP): That was a most disappointing response. Will the Government start supporting the integrity and independence of Scots law, work constructively with the Scots group chaired by the eminent Lord McCluskey and promise to do nothing to reform the Supreme Court until the group has reported?

David Mundell: I should have hoped that the hon. Gentleman, like his colleague, Jim Sillars, the former deputy leader of the Scottish National party, would

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have sought to disassociate himself from the appalling comments that the First Minister has made about Lord Hope, which Jim Sillars described as “foolish” and “juvenile”.




Mr Speaker: Order. There are far too many private conversations taking place in the Chamber. It is very discourteous to the Member asking the question and to the Minister answering it. I want to hear Sir Menzies Campbell.

Sir Menzies Campbell (North East Fife) (LD): What possible confidence can we have in the findings of a group that is unwilling to meet the Advocate-General, who last year established an inquiry for precisely the same purpose as this group has been established?

David Mundell: The right hon. and learned Gentleman makes an extremely good point. As I said in my initial response, it seems incredible that a group set up to consider this very complicated issue is not going to take evidence or receive submissions. I am pleased that the Advocate-General has in any event made his information available to the group, so that might give us some confidence in the report it produces.

International Inward Investment

10. Mark Menzies (Fylde) (Con): What steps he is taking to promote Scotland as a destination for international inward investment. [60317]

The Secretary of State for Scotland (Michael Moore): The trade White Paper sets out a strategy for creating opportunities and providing the conditions for private sector growth through trade and international inward investment. My hon. Friend the Minister for Trade and Investment will visit Scotland in July.

Mark Menzies: Does the Secretary of State share my fear that the Scottish Government’s plans for a referendum on separation will undermine this Government’s efforts to create jobs in Scotland?

Michael Moore: My hon. Friend is right to highlight what we are focusing on as a Government. “The Plan for Growth” seeks to give us the most competitive tax system in the G20, to ensure we are the best place in Europe to start, grow and finance a business and to bring about further investment and a flexible work force. None of that can be done if we have the uncertainty that the independence referendum casts over the Scottish economy.

John Thurso (Caithness, Sutherland and Easter Ross) (LD): Does my right hon. Friend agree that the Olympics offer a splendid opportunity for promoting inward investment to Scotland? In that regard, is it not tragic that the torch, having visited Land’s End, will fly over John O’Groats?

Michael Moore: My hon. Friend makes his point as eloquently as I would expect him to and I am sure that those who are organising the trip will have heard his points.

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Central Ayrshire

14. Mr Brian H. Donohoe (Central Ayrshire) (Lab): What assessment he has made of the outcomes of his recent visit to Central Ayrshire. [60321]

The Secretary of State for Scotland (Michael Moore): The seminar I hosted in Irvine last month discussed how to tackle the high level of youth unemployment in Ayrshire. The Scotland Office is working with key partners such as Jobcentre Plus to focus resources on the most challenging areas identified at the seminar. We look forward to working with the Scottish Government on this complex issue.

Mr Donohoe: I thank the Secretary of State for that answer. One of the areas of major concern identified at the seminar was the high unemployment among those aged between 16 and 18, which seemed to have slipped off the radar. It was the Secretary of State for Work and Pensions, who was present at the meeting, who made that very important point. What is the situation, what assessment has been made by the Secretary of State for Scotland and what is going to be done about that issue?

Michael Moore: First, may I thank the hon. Gentleman for his full participation in the seminar? It was the first in a series that we will hold across Scotland to tackle a deep-rooted problem, not just in Ayrshire but elsewhere, that has defied Governments through the ages. He rightly points out that my right hon. Friend was at that seminar; we continue to discuss the serious challenges in relation to youth employment and I will be happy to discuss those further with the hon. Gentleman in due course.

Katy Clark (North Ayrshire and Arran) (Lab): As the Secretary of State knows, Ayrshire has some of the worst rates of unemployment and youth unemployment in Scotland. In 2007, Scotland had the highest levels of employment in Britain, but it now has the lowest levels of employment and the highest levels of unemployment. What more can the Westminster Government do to work with the Scottish Government to take concrete steps to address the problem?

Michael Moore: I make two observations to the hon. Lady. First, we need to get the economy into a place from which we can see sustained, strong and balanced growth, which would be a complete contrast to the situation we inherited from her Government. On her second point about working with the Scottish Government, she is right to highlight the serious economic powers that they already have and it is vital, as I said to the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) earlier, that we work together to ensure that we do the best for people across Scotland.

Forth Road Bridge Replacement

15. David Mowat (Warrington South) (Con): What discussions he has had with members of the Scottish Executive on the funding of the Forth road bridge replacement. [60322]

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The Parliamentary Under-Secretary of State for Scotland (David Mundell): This issue was raised in discussions between my right hon. Friends the Deputy Prime Minister and the Secretary of State for Scotland and the First Minister on 9 June. As announced by my right hon. Friends the Chancellor and the Secretary of State on 13 June, the Government are bringing forward to 2011 the power for Scottish Ministers to make prepayments, which will allow work on the Forth replacement crossing to begin.

David Mowat: I thank the Minister for that reply. He will be aware that two major bridge schemes are about to take place in the UK: the Forth road bridge, to be funded by the Treasury and by the means that he has just given us, and the Mersey gateway in Cheshire, to be funded substantially by tolls. How can the Government justify that difference in the same country?

David Mundell: The justification is devolution; it is a decision of the Scottish Government to proceed with the Forth replacement crossing on the basis that there will be no tolls on it.

Prime Minister

The Prime Minister was asked—


Q1. [61068] Kerry McCarthy (Bristol East) (Lab): If he will list his official engagements for Wednesday 22 June.

Happy anniversary, Mr Speaker.

The Prime Minister (Mr David Cameron): I was unaware of that event, Mr Speaker, but I join the hon. Lady in wishing you a very happy anniversary.

I am sure that the whole House will wish to join me in paying tribute to Craftsman Andrew Found from the Royal Electrical and Mechanical Engineers, Corporal Lloyd Newell from the Parachute Regiment and Private Gareth Bellingham from 3rd Battalion the Mercian Regiment. They were talented, brave and dedicated soldiers who have made the ultimate sacrifice overseas for the safety of British people at home. We send out our deepest condolences to their families, their friends and their colleagues.

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

Kerry McCarthy: I thank the Prime Minister for that response, and may I associate myself and my constituents with the moving tributes that he has just paid.

A year ago today, the Chancellor stood up in the House to deliver his first Budget. Given that on the Government’s own assessment, their efforts will have a statistically insignificant impact on child poverty, may I recommend that the Prime Minister watch the BBC documentary, “Poor Kids” to find out how the other half lives? Does he regret allowing his Chancellor to take money away from families with children, rather than from the bankers who caused the financial crisis in the first place?

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The Prime Minister: I will certainly look at the programme that the hon. Lady mentions; but even in a difficult time, this Government put more money into child tax credits for the poorest families. We have frozen the council tax, and we have actually taken steps to help working families. Neither that Budget nor the subsequent Budget actually raised child poverty, because of the steps that we took. We inherited a complete mess from the Labour party, but we are dealing with it in a way that protects families.

Angie Bray (Ealing Central and Acton) (Con): Can the Prime Minister confirm that this country will not contribute a penny towards the Greek bail-out, other than what we contribute to the International Monetary Fund?

The Prime Minister: My hon. Friend is right. We are senior members of the IMF. We sit on the IMF board. We obviously have responsibilities as members of the IMF, but what I am clear about is that we were not involved in the first Greek bail-out; we are not members of the eurozone; and we are not going to become members of the eurozone as long as I am standing here. I do not believe that the European financial mechanism should be used for Greece. We have made it very clear within Europe that we do not think that that is appropriate, and I do not think that that should happen.

Edward Miliband (Doncaster North) (Lab): May I join the Prime Minister in paying tribute to Craftsman Andrew Found from the Royal Electrical and Mechanical Engineers, Corporal Lloyd Newell from the Parachute Regiment and Private Gareth Bellingham from 3rd Battalion the Mercian Regiment? They all served their country with dedication and bravery, and our hearts go out to their families and friends.

Armed Forces day is coming up this Saturday, and that is an opportunity to remind us all of the service that is provided by our armed forces in Afghanistan, Libya and all around the world. It is a moment to recognise the service that they provide with honour and courage for our country.

We support the mission in Libya, but in the past week, both the First Sea Lord and the Commander-in-Chief, Air Command have raised concerns over the prospect of an extended campaign. Will the Prime Minister take this opportunity to assure the House that sufficient resources are in place to maintain Britain’s part in the mission at the current rate of engagement?

The Prime Minister: I join the right hon. Gentleman in paying tribute to our armed forces and particularly in looking forward to Armed Forces day on Saturday, when we will be celebrating the contribution they make to our national life and the enormous amount they do to keep us safe.

The mission in Libya, similar to the mission in Afghanistan, is funded out of the reserve, so it does not put additional pressures on the defence budget. I have sought and received assurances from the Chief of the Defence Staff, General Sir David Richards, that we are capable of keeping up this operation for as long as it takes. That is vital. I would argue that the pressure is building on Gaddafi. Time is on our side, not on Gaddafi’s side. When we look at what is happening in

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Libya, where we see a strengthening of the revolt in the west of Libya, more people deserting Gaddafi’s regime, the growing unpopularity of his regime and our coalition holding strong, I think time is on our side, the pressure is growing, and I believe we will take it to a satisfactory conclusion.

Edward Miliband: I am absolutely with the Prime Minister that we should keep up the pressure on the Libyan regime. As he knows, we provide our full support for the mission, but do not the concerns that have been expressed by members of our armed forces point to something very important—the need to look again at the strategic defence and security review, precisely to make sure that we have the right capability and the right focus? The Foreign Secretary described the Arab spring as a more important event than 9/11, but the national security strategy published last year does not mention Libya, Egypt or Tunisia. Is it not right, in the light of the changes we have seen, to look again at the strategic defence and security review to make sure that we can sustain the conflict in Libya?

The Prime Minister: I am grateful for the question, because that is an important point. One of the reasons for having a National Security Council that sits weekly is all the time to ask whether we have the right resources and the right strategy. We have had a review of the national security and defence review over the past year, but that strategic defence review put in place mechanisms to take account of the fact that we may well be fighting two conflicts at the same time. It also established the necessity of having very flexible armed forces for exactly the sort of operations that we are fighting and dealing with in Libya. Having not had one for 10 years, it seems strange to want to have two strategic defence reviews within one year. We have the right flexibilities in our armed forces and they are performing magnificently in Libya. If anything, I would like to speed up the implementation of the strategic defence review because so much of the new equipment that we are looking to have—drones and so on—would be more helpful if we had it right now. So, far from being the wrong strategic posture, it is right and it is good that we are putting it in place.

Edward Miliband: I think it will come as news to the wider defence and security community that there has been a review of the original strategic defence and security review. If indeed there has been a review since the Arab spring took place, why does not the Prime Minister publish the results of that review? Let us have a consultation with the experts who know about these issues. As he will see, there is clear concern across our military about some of the issues. Finally, let me say to the Prime Minister in all sincerity that when our military chiefs raise legitimate concerns about the conduct of our operations, surely, “You do the fighting, I’ll do the talking” is not the right thing to say. In retrospect, was that not very crass and high-handed?

The Prime Minister: I have huge respect for the people who run our armed services. They do an incredibly good job. They are highly professional people and they are involved in the National Security Council. They were involved in drawing up the strategic defence review. The only point that I have tried to make in recent days is that when we are at war, as we are in both Afghanistan

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and Libya, it is extremely important, whether one is a political leader or a military leader, to think very carefully about what one is about to say.

John Thurso (Caithness, Sutherland and Easter Ross) (LD): Is the Prime Minister aware of the decision, abruptly made, to close the passport office in Wick, which has obliged a six-year-old boy to make a 300 mile round trip for an interview and another constituent to travel to Newcastle? Is that acceptable?

The Prime Minister: Obviously, I will look closely at the point my hon. Friend raises, but in the modern age we have all sorts of ways of carrying out interviews that do not necessarily involve people having to travel to a passport office. What matters is having an efficient service so that people can get the documentation they need so they can go on the holiday they want.

Q2. [61069] Mrs Mary Glindon (North Tyneside) (Lab): Given the number of U-turns the Prime Minister has made, including on sentencing, NHS reform, the forestry sell-off and school sports, it is a wonder that he knows which way he is facing, but will he now have the front to ensure that relief measures are put in place for those women who are hardest hit—[Interruption.]

The Prime Minister: I am afraid I did not hear the entire question, but that is the trouble with—[Interruption.]

Mr Speaker: Order. It is a reminder of the importance of Government Back Benchers keeping calm and quiet, not least so that the Prime Minister can hear what is being said. How helpful that would be!

The Prime Minister: It would probably also help if Members did not read out the Whips’ bit at the beginning of their question, so that we could hear the second part of the question, which in this case was, I think, about the important issue of women and pensions. I do think it is right to equalise the pension ages of men and women at 65, and that is going ahead, and I also think it is important to raise the pension age to 66, because the fact is that people in our country are living longer. That is a good thing, but we have to make sure we can pay for good and decent pensions for the future. The alternative is that we stick our head in the sand and end up either cutting pensions or building up debts for our children, which, frankly, would be irresponsible. This Government are taking difficult decisions, but they are the right ones.

Iain Stewart (Milton Keynes South) (Con): Does the Prime Minister agree that there is still too much homophobia in sport, especially football, and that the event he is hosting today in Downing street will go some way towards tackling that prejudice?

The Prime Minister: I completely agree, and I am delighted to be hosting a party for Britain’s lesbian, gay and transgender community at No. 10 Downing street today. That there are so few out players in all sports is an issue. I applaud those who have come out and will be attending my party tonight, and I hope that that will encourage schoolchildren to recognise that homophobic bullying is completely unacceptable in our society today.

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Q3. [61070] Jessica Morden (Newport East) (Lab): If the Prime Minister is serious about tackling the issue of runaway fathers, as he said last week, why is he making it harder for single mothers to get maintenance payments, by charging them to use the Child Support Agency?

The Prime Minister: We are going to carry on funding a child support agency mechanism—it is right that we do—but it is not wrong to ask people to make a contribution to that. Taxpayers are currently putting in a huge amount of money, and they will carry on doing so, but to ask the people concerned to pay towards the costs does not reduce the impact of what I said last week at all. People walking away from their responsibilities and not funding their children should not be allowed to happen in Britain today.

Q4. [61071] Oliver Colvile (Plymouth, Sutton and Devonport) (Con): Next year will be the centenary of the death of Captain Robert Falcon Scott of the Antarctic. Does my right hon. Friend recognise that this brave historic son of Plymouth left a significant scientific legacy that is still helping to shape the world’s environmental agenda today?

The Prime Minister: I thank my hon. Friend for raising that issue. That centenary is important, and I am very pleased that so much is going on across the country to celebrate it, especially in his home city of Plymouth. It is not just the scientific discoveries that are important; so too is the inspirational figure—the adventurer, the explorer—and Captain Scott’s incredible sense of duty and adventure. That is what inspires young people today.

Edward Miliband: The Prime Minister has been forced to abandon his original sentencing plans. Will he now change his mind on the proposal to prevent police from holding the DNA of those arrested for, but not charged with, rape?

The Prime Minister: We inherited an unacceptable situation, with a DNA database that had grown out of control, and without proper rights for people. We put in place a better system. There is always room to see whether it can be further improved, but we have taken a big step forward from the mess we were left by the last Government.

Edward Miliband: It is a bit late to be looking at the proposal; it is in the House of Commons and about to have its Report stage. Let me explain to the Prime Minister his own policy. Around 5,000 people each year are arrested on suspicion of rape but not charged—[ Interruption. ] I know he wants some help from the Home Secretary. In certain cases those individuals have gone on to commit further offences and been convicted as a result of their DNA being held on the national database, but his proposal is that the DNA of those arrested but not charged will be disposed of straight away. I ask him again, why is it right to discard the DNA of those arrested but not charged with rape?

The Prime Minister: I know that there is some concern—[ Interruption . ]

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Mr Speaker: Order. The answer of the Prime Minister will be heard. I remind the House that the more noise there is, the greater the difficulty in getting down the Order Paper.

The Prime Minister: I understand that there is some worry that in this Government we actually talk to each other. That is clearly not the case—[ Interruption. ] The shadow Chancellor has raised this issue, but it is perfectly clear that he and the leader of the Labour party do not speak to each other at all. I have the proof, because this week the shadow Chancellor made a huge announcement on a massive VAT cut, and yet it was only—[ Interruption. ]

Mr Speaker: Let us focus on an answer to the question, or we will move on to the next question. I call Mr Ed Miliband.

Edward Miliband: Let me give this lesson to the Prime Minister: it would be better to talk to his colleagues before they put forward a policy, not after. Instead of listening to the Home Secretary, why does he not listen to Angie Conroy from Rape Crisis? She says:

“with the reporting of rapes on the increase and conviction rates still shockingly low, the evidence this database provides is vital. The more of this data we hold, the more chance we have of catching rapists.”

She goes on to say:

“This really is a no brainer.”

Is this not another policy on crime that is careless, not thought through and out of touch? Why does he not think again?

The Prime Minister: First, if the right hon. Gentleman actually understood the policy, he would know that the police are allowed to apply to keep DNA on the computer, which is not something he mentioned. What we tend to find with his questions is that he comes up with some idea, gets it completely wrong in the House of Commons and we all find out afterwards that he has given us a partial picture. That is what his questions are all about. It is not surprising that he does not want to talk—[ Interruption. ]

Mr Speaker: Order. The answer of the Prime Minister must be heard.

The Prime Minister: I am not surprised that he does not want to talk about the issues his party has put forward this week, because I do not suppose he knew about them.

Several hon. Members rose

Mr Speaker: Order. The House needs to simmer down and take whatever tablets are necessary.

Mr Marcus Jones (Nuneaton) (Con): As a parent, I am appalled that the Labour party advocates burdening our children with ever more unsolicited debts, which it is putting forward with its reckless raft of unfunded tax cuts and spending commitments, of which the VAT cut is the latest—[ Interruption. ]

Mr Speaker: Order. The hon. Gentleman will now resume his seat. I call Valerie Vaz.

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Q5. [61072] Valerie Vaz (Walsall South) (Lab): There are 400 avoidable deaths from epilepsy and related conditions each year. My ten-minute rule Bill asks for two things: an immediate referral to a tertiary specialist and; in education, support for children, with an assessment and additional support so that they can fulfil their potential. Will the Prime Minister meet me, the Joint Epilepsy Council and Professor Helen Cross to see how we can progress those provisions, which will save not only costs, but more importantly, lives?

The Prime Minister: I would be delighted to meet the hon. Lady and Helen Cross, whom I know well. She works at Great Ormond Street hospital and is an absolutely brilliant clinician. I am keen to improve the support that we give to people with epilepsy. Obviously, one of the steps that we are taking is to put in place more personal budgets and more single assessments, which I think will help with epilepsy. My understanding is that, although there are many good things in the hon. Lady’s Bill, there is some concern that it could have too much of a medical approach to special educational needs, something that I actually have some sympathy with, but which I know many professionals have concerns about, so perhaps we could talk about that when we meet.

Stephen Phillips (Sleaford and North Hykeham) (Con): Could my right hon. Friend tell the House whether the Government have made an assessment, and if so the results, of what a proposed cut in VAT would do to the British economy at this stage of the cycle?

The Prime Minister: My hon. and learned Friend makes an important point, which is that to make an unfunded cut in VAT right now, when the concerns are about debt and deficit, would actually be the height of insanity. What is now clear is that Labour’s plan B stands for bankruptcy.

Q6. [61073] Helen Jones (Warrington North) (Lab): The Prime Minister frequently tells us that we are all in this together, so can he explain why banks have been rewarded with a £2 billion tax cut on their obscene bonus pools while parents of disabled children are being penalised with a benefit cut of £1,400 a year? How is that fair?

The Prime Minister: I will tell you what this Government have done, and that is to put in place a £2.5 billion bank levy, raising more than Labour’s bonus tax every single year, but I have to say that, if Opposition Members want to see irresponsible people who are earning a lot of money pay proper taxes, perhaps they will explain this: why did they vote against the measures on disguised earnings in the Finance Bill which will raise £800 million from people who are giving loans to themselves to dodge taxes? [ Interruption. ] Well, I think that that is probably a detail that the leader of the Labour party was not really aware of.

Andrew George (St Ives) (LD): Although of course we should not make a unilateral contribution to the Greek bail-out, does the Prime Minister not agree that we have something which would help regenerate the Greek economy and put right a 200-year wrong—the marbles, which we should give back?

The Prime Minister: I am afraid that I do not agree with the hon. Gentleman—[ Interruption. ]

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Mr Speaker: Order. I want to hear the Prime Minister’s views on marbles.

The Prime Minister: The short answer is that we are not going to lose them.

Q7. [61074] Mr William Bain (Glasgow North East) (Lab): Is the Prime Minister aware that 670,000 people, two thirds of whom, according to his Government’s equality impact assessment, have a disability, will lose up to £13 a week because of his changes in housing benefit under-occupancy rules? Is not that a complete betrayal of his Chancellor’s promise not to balance the Budget on the backs of the poor?

The Prime Minister: I have looked carefully at that issue, and I know there are concerns, but the point I would make is this: I think it is right that we reform housing benefit, because the costs had got completely out of control under the previous Government, rising to £22 billion; and I think it right that housing benefit reflects the size of a family rather than the size of a house. But, we have actually made an exception for people with carers so that allowance is made for that in housing benefit. So, I think that that is fair, but I have to say to Opposition Members, it is no good saying that you are in favour of welfare reform and cutting the costs of welfare while never being able to find a single part of the Bill to agree with.

Q8. [61075] Greg Mulholland (Leeds North West) (LD): Will the Prime Minister join me in welcoming the new report by the all-party paediatric mobility reform group, “My Wheelchair is My Shoes”, showing how, through partnership working, we can deliver the wheelchairs that transform young people’s lives? Will he meet me and Whizz-Kidz ambassadors to discuss how the Government might take that forward?

The Prime Minister: Certainly. I know Whizz-Kidz well. It is an excellent charity that does a brilliant job, and I will certainly arrange a meeting for the hon. Gentleman. The point I would make on wheelchairs is that that is exactly where the health reforms, with greater choice and with greater opportunities for GPs and patients to choose, should come in, so that people can get the wheelchair of their choice when they need it, rather than as it is at the moment where you have to take what you are given.

John Mann (Bassetlaw) (Lab): In four of the last five years, there have been no mistakes made in setting school examination papers. Since 16 May this year, there have been 10 such mistakes made. What does the Prime Minister intend to do for those among the 250,000 young people affected who will lose out either on their university of choice or on university completely because of this staggering incompetence?

The Prime Minister: The hon. Gentleman is right; this is not an acceptable situation. I have discussed it this morning with the Education Secretary, who in turn has discussed it with Ofqual, which is taking the toughest possible action to root out this failure and to make sure that it does not happen again.

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Q9. [61076] George Eustice (Camborne and Redruth) (Con): The Prime Minister will be aware that the former Labour Secretary of State, Lord Hutton, has described current proposals on pension reform as the best chance we have to deliver a sustainable system that is fair both to scheme payers and to the taxpayer. Does my right hon. Friend agree that when it comes to these major, long-term issues, we should build the broadest possible consensus; and will he seek the support of Members on both sides of the House for his proposals?

The Prime Minister: I thank my hon. Friend for his question and for the way he puts it. The Hutton report is a good report. This is not about attacking or downgrading public sector pensions; it is about a way of making really good public sector pensions affordable into the long term and respecting all the accrued rights that people have. We need to win this argument on the basis of fairness. It is right for the taxpayer to put money into public sector pensions, but we need to know that they are affordable for the long term. The steps that Lord Hutton puts forward are therefore absolutely right. I hope that the Labour party will take a responsible view and recognise that we need to make this change for the long-term good of our country.

Q15. [61082] Catherine McKinnell (Newcastle upon Tyne North) (Lab): Eighteen months ago, one of my constituents required knee surgery and was pleased to hear that he had to wait only six weeks. He now needs another operation and has been told that he has to wait 10 months. He is in agony and unable to walk. He is understandably angry and wants to know if this is what the Prime Minister meant when he said that the NHS was safe in his hands.

The Prime Minister: If the hon. Lady gives me the details of the individual case, I will certainly take it up and look at it. The fact is that we have not changed the waiting list targets that have been in place in the NHS for a long time—in particular, the 18-week target that is part of the NHS constitution. Average waiting times have actually come down in recent months. The clear lesson is this: were it not for this Government putting in an extra £11.5 billion—money that Labour does not support—we would see all waiting times going up.

Q10. [61077] Mr Douglas Carswell (Clacton) (Con): On 18 July last year, the Economic Secretary to the Treasury stated, with regard to the decision to sign Britain up to the eurozone bail-out mechanism:

“While these decisions were taken by the previous Government, this Government judges them to be an appropriate response to the crisis.”

Does this remain the Government’s position?

The Prime Minister: I know that my hon. Friend is pursuing this issue with his normal dogged tenacity. The facts of the case are very clear. The last Government—at the death, as it were, after the election but before the new Government were formed—signed us up to the European financial mechanism that we are still having to pay out under. This Government have got us out of that by tough negotiation in Brussels so that we will not have to contribute after 2013.

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Dan Jarvis (Barnsley Central) (Lab): May I associate myself with the Prime Minister’s and the Leader of the Opposition’s expressions of condolence for the soldiers who have fallen in Afghanistan? Those who serve are the lions of our country, and we must always do everything we can to repay the debt of gratitude we owe them.

The October 2010 strategic defence and security review has been overtaken by events, and the world is now a fundamentally different place. May I therefore ask the Prime Minister again: will he do the right thing for the armed forces and for the country and order a new chapter to this now outdated review?

The Prime Minister: I very much respect what the hon. Gentleman says, particularly his fitting tribute to the armed forces, but the idea of totally reopening the defence review at a time when our armed forces are engaged and are doing such a fantastic job is the wrong one. The defence review was all about making sure that we have flexible armed forces so that they can be committed to different parts of the world and have the backing they need. It was about getting rid of the main battle tanks in Germany and putting money into the enablers and the forces of the future. Libya shows that it is working, and I think we should stick with it.

Q11. [61078] Stuart Andrew (Pudsey) (Con): Will my right hon. Friend welcome those campaigning outside Parliament today for high-speed rail in order to bring thousands of much-needed jobs to the midlands and help to address the north-south divide, and will he confirm that it will come to Yorkshire?

The Prime Minister: I happily confirm all those things. I believe that if we are really serious about rebalancing our economy and ensuring that we get growth across the country, and not just in the south-east, the time for high-speed rail has come. That is why it has my strong support.

Q12. [61079] Mr Wayne David (Caerphilly) (Lab): The Secretary of State for Wales has said that she is prepared to be sacked because of her opposition to Government policy on high-speed rail. Will the Prime Minister take her up on that very kind offer?

The Prime Minister: I prefer to focus on the fact that in one year as Welsh Secretary, she has secured something that 13 years of Labour Welsh Secretaries never achieved, which is the electrification of the line between Paddington and Cardiff.

Mr Aidan Burley (Cannock Chase) (Con): An agoraphobic man from Middlesbrough received so much money from state benefits that he set up his own illegal loans company. At the trial, the judge described him as receiving a staggering amount of money on benefits. Does that not show that our welfare system is broken, and will the Prime Minister pledge to redouble his efforts to reform it?

The Prime Minister: My hon. Friend is absolutely right that the people who send us here want us to sort out the welfare system. They want it to be there for people who genuinely need help, but they want us to ensure that anyone who can work and is offered a job cannot live a life on welfare. Government Members

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have put forward the legislation and voted for it. What a pity that the Labour party talks about it, but did not have the guts to back it when the crunch came.

Q13. [61080] Simon Danczuk (Rochdale) (Lab): Most people know that Rochdale is the home of co-operation. Next year is the United Nations international year of co-operatives. Will the Prime Minister consider visiting Rochdale to show support for mutualism in the 21st century?

The Prime Minister: I note the excellent record of Prime Ministers visiting Rochdale, and what can happen to them when they get there. I will certainly put it in the diary. I am a strong supporter of co-operatives and mutuals. I think that they have a huge role to play not just in our economy, but in the provision of public services. We will make some announcements about that, perhaps in Rochdale, in the months to come.

Paul Uppal (Wolverhampton South West) (Con): Earlier this year, the Prime Minister demonstrated his strength of character in talking about multiculturalism. In view of the fact that I have a Christian first name and a Sikh surname, I try to combine the best of my traditional Indian values with my core British values. Does he agree that we can learn a lot from our Indian partners in this respect, many of whom define themselves by their nationality first and foremost, regardless of their ethnic or religious background?

The Prime Minister: I pay tribute to my hon. Friend and his work on this issue. It is vital that, as a country, we build a stronger national identity. Of course people can have all sorts of religious and cultural identities, but it is very important that we build a strong British identity. He is living proof of that.

Q14. [61081] Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): Tomorrow, the European Parliament will

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decide whether to increase the EU’s carbon reduction target to 30% by 2020. That was a commitment in the coalition agreement. According to reports, the vote will be very close, but it will not pass because just one Conservative MEP out of 25 will vote for the 30% target. Will the Prime Minister guarantee that all his MEPs will honour the coalition agreement and vote for the 30% target tomorrow?

The Prime Minister: Let me be absolutely clear that we are committed to the 30% target and nothing is going to change that. I will do a deal with the hon. Lady. I will work on my MEPs if she promises to work on hers, who in recent months have voted for a higher EU budget and new EU taxes, and against an opt-out on the working-time directive. They even voted against scrapping first-class air travel for MEPs. Perhaps she would like to fly over and give them a talking to.

Mr Speaker: Last but not least, I call Mr Robert Buckland.

Mr Robert Buckland (South Swindon) (Con): With the National Audit Office estimating the cost to the economy of criminal reoffending at £10 billion a year, does my right hon. Friend agree that the need to reduce reoffending from the unacceptably high rates that we inherited from the previous Government must be the priority of any penal policy?

The Prime Minister: I completely agree with my hon. Friend, who has considerable experience in this matter from his career before coming to this place. We have inherited a system in which each prison place costs £45,000, half of prisoners reoffend within a year of getting out, half of prisoners are on drugs, and more than 10% of prisoners are foreigners who should not be in this country in any event. The key thing we have to do is reduce costs in the criminal justice system by making prison work and reforming prison, rather than by cutting sentences.

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Points of Order

12.34 pm

Angus Robertson (Moray) (SNP): On a point of order, Mr Speaker. May I seek your guidance? [Interruption.]

Mr Speaker: Order. May I ask Members who are leaving the Chamber to do so quickly and quietly, affording the same courtesy to the hon. Gentleman that they would want to be extended to them in such circumstances?

Angus Robertson: I seek your guidance, Mr Speaker, about Standing Order No. 122C, which governs rules for motions of no confidence in a Select Committee Chair, and states:

“A resolution by a committee expressing no confidence in its chair shall not have effect”


“the majority of the membership of the committee, including at least two members from the largest party represented on the committee, and at least one member from another party, vote in favour of the resolution.”

Will you confirm that the membership of the Scottish Affairs Committee is five Labour, four Conservative, one Liberal Democrat and one from the Scottish National party? Does that not mean, then, that it will fall to two Labour members of the Committee to decide whether it is acceptable for the Committee Chairman to remain in office after describing the Scottish National party as “neo-fascists”?

Mr Speaker: The hon. Gentleman has quoted the Standing Order and offered his analysis of the situation, and it falls to the Committee to decide what, if any, action it wishes to take. There is no matter of order on which I need rule.

Mr David Winnick (Walsall North) (Lab): On a point of order, Mr Speaker. It is not my wish to extend Prime Minister’s Question Time, and I realise the number of Members who were trying to catch your eye. However, in order that there should not be any misunderstanding, may I say that, although the point of view on Libya put forward from the Front Benches may, for all I know, remain the majority view in the House, there is a different point of view? That is the desire to bring about a genuine ceasefire as soon as possible. It should be understood that the view that has been expressed in the House today is not by any means the view of all of us.

Mr Speaker: The hon. Gentleman, in a disorderly but engaging way, has now made the position as far as he and perhaps others are concerned very clear. We are grateful to him.

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Smoking in Private Vehicles

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

12.37 pm

Alex Cunningham (Stockton North) (Lab): I beg to move,

That leave be given to bring in a Bill to require the Secretary of State to make provision for a ban on smoking in private vehicles where there are children present; and for connected purposes.

My constituency is ranked 15th in the British Lung Foundation’s ranking of constituencies for children at most risk of passive smoking. The parent smoking hot spots table shows that almost 29% of households in Stockton North contain parents who smoke. In addition, the number of adult smokers is significantly higher than the England average, as are deaths from smoking. Also, more women smoke in pregnancy than the national average.

We are all aware that passive smoking is harmful to children’s health. According to the tobacco advisory group at the Royal College of Physicians, more than 300,000 children in the UK present to their GP with passive smoking-related illnesses every year. It also estimates that passive smoking causes about 20,000 new cases of wheezing and asthma in UK children each year, and makes a conservative estimate that that costs the NHS £22 million a year in hospital admissions and treatment costs.

In north-east England we are working hard to address the issue, including through action by charities such as Fresh, and we have had some great success. Smoking rates in the region dropped from 29% in 2005 to 22% in 2009, a welcome step forward in the fight against tobacco. Fresh tells me, however, that some 84,000 children in north-east England are still exposed to second-hand smoke in the home, a figure that must come down.

A recent YouGov poll showed that 90% of smokers in the north-east of England worry about the impact of smoking around children, and that 78% support a ban on smoking in cars carrying children younger than 18. That support is even higher elsewhere. When the British Lung Foundation teamed up with Mumsnet to find out the views of parents on smoking, it found that more than 85% of them supported a proposed ban on smoking where children are present. The research also showed that 83% of smoking parents said they would support legislation to protect children.

The science is clear. Experts say that children are particularly vulnerable to passive smoke, as they have quicker breathing rates. It goes without saying that consistent exposure to second-hand smoke can lead to a lifetime of respiratory problems. The Chartered Institute of Environmental Health has shown that smoking in cars is dangerous to children even after the cigarette is extinguished. Levels of second-hand smoke in cars can be extremely high, because of the restricted area in which the smoke is circulated.

A study by Aberdeen university showed that smoking in a car exposes children to levels of smoke that compare with the levels in a smoke-filled pub, which we fortunately no longer have to endure. The fact that children can be exposed to such an environment in cars is reason enough to introduce a ban on smoking in private vehicles when they are present.

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In the Government’s tobacco control plan for England, “Healthy Lives, Healthy People”, they say that they want people to recognise the risk of second-hand smoke and to decide to make their homes and cars smoke free. Frankly, that is not good enough. We need a ban, and healthier children. I am told that the Government’s marketing strategy for tobacco control will set out further details on how they will support efforts to encourage smoke-free homes and family cars. Perhaps they will take the right action, but they need to be decisive.

We already have legislation to ban smoking in vehicles carrying passengers in the course of paid or voluntary work, including buses, trains, planes and taxis. I remember when it was considered normal for people to light up on public transport. Most would agree that attitudes have changed significantly. I cannot see how it can be a real hardship to anyone to stop smoking in private vehicles. The benefits will be tremendous. Given the significant health impact on children, who are unable to remove themselves from such cars, the Government should not dismiss calls for a ban.

Some will say that the car is a private space in which the Government should not intervene, but is the space in the back of a car not the child’s private space? Some adults invade it with dangerous smoke—[ Interruption. ] They do! They invade it with dangerous smoke. Some have asked why I am not pushing for a blanket ban on smoking in private vehicles. I believe that adults can make up their own minds about the dangers of smoking. We need to protect children.

Opinion research by the British Lung Foundation highlights the growing consensus among parents and children for legislation to protect children from passive smoke while they are travelling in cars. Its petition calling for legislation has already been signed by more than 16,000 people. The foundation’s research shows that just over half of eight to 15-year-olds surveyed were exposed to cigarette smoke when confined in a car, and that 86% of children in the UK want people to stop it. Rather worryingly, almost a quarter of the children surveyed reported that they had said nothing when someone smoked in the car, because they were too embarrassed. One in 10 said that they were too scared to say anything.

I would ask those who believe that legislation would be ineffective to look at car legislation on seat belts, mobile phones and drink-driving. Most if not all people adhere to such laws without the police becoming heavy-handed. For example, information provided to me by the House of Commons Library demonstrates that when wearing seat belts was made compulsory in 1983, the wearing of seat belts increased significantly. Before the law, 40% wore a seat belt, and 90% afterwards. A 1985 report estimated that that change saved around 7,000 fatal or serious casualties, and 13,000 slight casualties in the first year alone.

There are precedents from elsewhere for a ban such as the one I propose. Were such a ban introduced, we would be joining several countries where smoking in cars carrying children is prohibited. In the USA, legislation has been introduced in states including California and Maine; in Canada, there is legislation in British Columbia and Ontario; and in Australia, Queensland and Tasmania have introduced legislation.

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Professor John Britton from Nottingham City hospital has looked at the lessons from Canada, where a national media programme was supported by legislation in some provinces. Data provided to him demonstrate that provinces that implemented legislation on smoking in cars with children saw a dramatic drop in exposure to smoke compared with states that focused only on education. In one case, the proportion fell from 21.4% to 13%.

UK politicians want action too: 36 MPs signed my early-day motion, and 78 signed early-day motion 214, sponsored by my hon. Friend the Member for Gateshead (Ian Mearns), which is on a similar issue. In Wales, the chief medical officer, Dr Tony Jewell, announced that he wants to start a debate on smoking in cars carrying children, and the public health department in Jersey is currently considering whether to ban smoking in cars altogether.

The health costs can be illustrated no better than by someone who has spoken openly and honestly about her smoking. Sharon Gould from Leicester told the British Lung Foundation that she started smoking when she was 14. Throughout her son Ben’s childhood she tried to give up smoking but did not manage to quit until three years ago. She would occasionally smoke in the car when he was present—always with the window down—and she also smoked in the home. She always thought, “Just one won’t hurt.” However, she was not aware of the serious dangers of passive smoking on Ben’s health—a child who was found to be asthmatic. Sharon is unaware of any family history of lung disease, so believes that her son’s asthma has been caused, in part, by passive smoking. She said:

“I don’t know if passive smoke was the whole cause of Ben’s asthma, but I know that it’s part of it…. It is vital that all parents understand the dangerous effects of passive smoke on developing young lungs.”

I have had particular support for the Bill from many members of the all-party group on asthma, who I am sure have all heard similar stories to the one told by Sharon. I would also like to thank the organisations that have lent their support to this cause, including the British Lung Foundation, Action on Smoking and Health, Fresh in the north-east and the British Heart Foundation. I am especially pleased to have secured support for the Bill from Members on both sides of the House. Polling indicates that the public are strongly in favour of a ban, and I hope that all Members will seek to protect the health of children in their constituencies. That is why I have brought the Bill before the House.

12.46 pm

Philip Davies (Shipley) (Con): My opposition to the Bill is not based on self-interest: I do not smoke, I have never smoked and I am unlikely ever to start smoking. In fact, as it happens, I do not actually enjoy going into smoky places. However, many of my hon. Friends might not be surprised to see me here today, because I also voted against the smoking ban in 2006. My opposition to this Bill is similar to my opposition to the original ban, and is threefold: first, it is rooted in my strong belief in freedom; secondly, it is rooted in my belief in parental responsibility for bringing up children; and thirdly it is based on the complete lack of evidence surrounding the proposal. I am not surprised that the hon. Member for Stockton North (Alex Cunningham) is continuing to champion the extension of the nanny

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state into every aspect of the British public’s lives, because it is something that the Labour party excelled at during its time in office, and is still trying to do today. The proposal is excessive, intrusive and insulting to British parents who smoke.

In England, smoking has already been banned in a vehicle unless it is used primarily for private purposes by a person who owns it or has the right to use it, or is used at work by only one person or has an open cab. The suggestion of banning smoking in private vehicles while a minor is present is yet another unwarranted intrusion on individual freedom. The Government should have no role in regulating the private lives of adults making decisions as adults. Adults should be free to smoke in a private vehicle providing they do not light up or smoke in a way that distracts from safe driving. Of course adults should show courtesy to others in a private vehicle, but that does not require the nanny-state legislation proposed by the hon. Gentleman.

I would like to know how the hon. Gentleman would implement and enforce his proposal. Perhaps he envisages a scenario where children go around informing the authorities that their parents might have broken the law. Given that the Labour party is so upset about cuts to the police budget, does he really think that the police should be taking time out from catching burglars, rapists and other serious offenders to go around stopping cars to see whether anyone might have smoked in them while a child was on board? Does he think it a serious enough matter for the police to concentrate on? I presume that he would also like cars to go around with tinted windscreens, which might be the only upshot of his proposal. The whole thing is completely ludicrous.

On top of that, there is a substantial lack of evidence surrounding the hon. Gentleman’s Bill. The scaremongers have bandied about the claim that second-hand smoke is 23 times more toxic in a vehicle than in the home. However, in a journal for the Canadian Medical Association, MacKenzie and Freeman failed to locate any scientific source for this claim, and it remains unsubstantiated.

I wonder why the Government give such credence to the opinions of people at ASH, or Action on Smoking and Health. Members of the anti-smoking lobby, including ASH and SmokeFree, have received a large amount of Government funding, despite being charities. In 2009, the Department of Health gave ASH £191,000 for a report called “Beyond Smoking Kills”, which came on top of a direct grant from the Department to the tune of £142,000. Surely public policy should be protected from the vested interests of any single-issue group, including the pharmaceutical industry on the one hand, and vociferous, substantially taxpayer-funded lobby groups such as ASH on the other. In addition, the Department published a report by Professor Linda Bauld, who was commissioned to provide an academic review of the smoke-free legislation that was implemented in 2007. However, Linda is a member of ASH, so there was surely a clear conflict of interest in the report that the Government commissioned.

This proposal is also a solution looking for a problem. Let us look at the evidence on second-hand smoke exposure. A study carried out by Sims et al concluded that second-hand smoke exposure in children declined

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by nearly 70% between 1996 and 2006—that is, before any ban on smoking was even introduced, which reinforces the point that this Bill is clearly over the top and unnecessary. A survey of smokers showed that 85.3% do not smoke in a car with children in any event, while 6.5% said that they would seek permission before doing so. Again, this proposal is a solution looking for a problem.

We are here to defend the freedoms of people in this country, not to interfere in every aspect of everybody’s lives, as the Opposition would like us to do. This proposal would be one infringement on people’s liberties too far. Whether hon. Members decide to vote against it or allow it to wither in the long grass is a matter for them, but one thing I know for sure is that the Government should have nothing to do with such a ludicrous infringement on our liberties.

Question put (Standing Order No. 23).

The House divided:

Ayes 78, Noes 66.

Division No. 303]

[12.52 pm


Alexander, Heidi

Amess, Mr David

Bailey, Mr Adrian

Barron, rh Mr Kevin

Betts, Mr Clive

Blackman, Bob

Blenkinsop, Tom

Blomfield, Paul

Brake, Tom

Brooke, Annette

Campbell, Mr Gregory

Campbell, Mr Ronnie

Carmichael, Neil

Chapman, Mrs Jenny

Clark, Katy

Clwyd, rh Ann

Cooper, Rosie

Corbyn, Jeremy

Crockart, Mike

Cunningham, Alex

Dakin, Nic

Dodds, rh Mr Nigel

Donohoe, Mr Brian H.

Durkan, Mark

Efford, Clive

Elliott, Julie

Evans, Jonathan

Fovargue, Yvonne

Gapes, Mike

Gilmore, Sheila

Glindon, Mrs Mary

Goggins, rh Paul

Green, Kate

Heyes, David

Hopkins, Kelvin

Horwood, Martin

James, Margot

Jamieson, Cathy

Jarvis, Dan

Kelly, Chris

Lavery, Ian

Leech, Mr John

Long, Naomi

Lucas, Caroline

McCartney, Jason

McCrea, Dr William

McDonnell, Dr Alasdair

McDonnell, John

Meacher, rh Mr Michael

Morrice, Graeme


Morris, David

Mudie, Mr George

Munt, Tessa

O'Donnell, Fiona

Parish, Neil

Pearce, Teresa

Phillips, Stephen

Poulter, Dr Daniel

Raynsford, rh Mr Nick

Reid, Mr Alan

Riordan, Mrs Linda

Ritchie, Ms Margaret

Ruddock, rh Joan

Russell, Bob

Shannon, Jim

Sheerman, Mr Barry

Simpson, David

Skinner, Mr Dennis

Smith, rh Mr Andrew

Smith, Henry

Tomlinson, Justin

Turner, Karl

Vaz, Valerie

Williams, Hywel

Williams, Mr Mark

Williams, Roger

Williams, Stephen

Winnick, Mr David

Tellers for the Ayes:

Ian Mearns and

Mr Andrew Love


Aldous, Peter

Bacon, Mr Richard

Baker, Steve

Bingham, Andrew

Bone, Mr Peter

Byles, Dan

Cairns, Alun

Carswell, Mr Douglas

Clarke, rh Mr Tom

Coffey, Dr Thérèse

Danczuk, Simon

Davies, David T. C.


Davies, Philip

Doyle-Price, Jackie

Ellis, Michael

Eustice, George

Evans, Graham

Freer, Mike

Fullbrook, Lorraine

Gilbert, Stephen

Godsiff, Mr Roger

Griffiths, Andrew

Halfon, Robert

Hancock, Mr Mike

Hart, Simon

Hemming, John

Henderson, Gordon

Hollobone, Mr Philip

Hughes, rh Simon

Johnson, Gareth

Johnson, Joseph

Jones, Mr Marcus

Knight, rh Mr Greg

Kwarteng, Kwasi

Main, Mrs Anne

Maynard, Paul

McIntosh, Miss Anne

Mercer, Patrick

Metcalfe, Stephen

Mills, Nigel

Morris, James

Mosley, Stephen

Nuttall, Mr David

Offord, Mr Matthew

Ottaway, Richard

Pincher, Christopher

Robertson, Mr Laurence

Rosindell, Andrew

Sanders, Mr Adrian

Smith, Sir Robert

Soames, Nicholas

Stewart, Rory

Stuart, Ms Gisela

Stuart, Mr Graham

Sturdy, Julian

Swales, Ian

Tredinnick, David

Tyrie, Mr Andrew

Walker, Mr Charles

Walker, Mr Robin

Watts, Mr Dave

Wharton, James

Whittaker, Craig

Whittingdale, Mr John

Williamson, Gavin

Zahawi, Nadhim

Tellers for the Noes:

Jacob Rees-Mogg and

Ben Gummer

Question accordingly agreed to.

22 Jun 2011 : Column 331


That Alex Cunningham, Mark Durkan, Caroline Lucas, Mrs Jenny Chapman, Ian Mearns, Julie Elliott, Stephen Lloyd, Mrs Sharon Hodgson, Bob Blackman, Stephen McPartland, Mr David Amess and Bob Russell present the Bill.

Alex Cunningham accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 25 November, and to be printed (Bill 207).

22 Jun 2011 : Column 332

Opposition Day

[18th Allotted Day]

The Economy

Mr Speaker: I should notify the House that, as a consequence of the fact that no fewer than 38 right hon. and hon. Members have applied to speak in the debate, I have imposed an eight-minute limit on Back-Bench contributions. There is no time limit on speeches from the Front Benches, but it would be appreciated by the House if Front Benchers would tailor their contributions accordingly. I inform the House that I have selected the amendment tabled in the name of the Prime Minister.

1.6 pm

Ed Balls (Morley and Outwood) (Lab/Co-op): I beg to move,

That this House notes that on 22 June 2010 the Chancellor announced his first Budget with a target to eliminate the structural deficit by 2015-16 through an additional £40 billion of spending cuts and tax rises, including a VAT rise; further notes that over the last six months the economy has not grown, in the last month retail sales fell by 1.4 per cent. and manufacturing output fell by 1.5 per cent. and despite a welcome recent fall in unemployment, the Office for Budget Responsibility predicts that future unemployment will be up to 200,000 higher than expected; believes the Government’s policies to cut the deficit too far and too fast have led to slower growth, higher inflation and higher unemployment, which are creating a vicious circle, since the Government is now set to borrow £46 billion more than previously forecast; calls on the Government to adopt a more balanced deficit plan which, alongside tough decisions on tax and spending cuts, puts jobs first and will be a better way to get the deficit down over the longer term and avoid long-term damage to the economy; and, if the Government will not change course and halve the deficit over four years, demands that it should take a step in the right direction by temporarily cutting VAT to 17.5 per cent. until the economy returns to strong growth and by using funds raised from repeating the 2010 bank bonus tax to build 25,000 affordable homes and create 100,000 jobs for young people.

A year ago today, in his first Budget statement to the House, the Chancellor of the Exchequer made a clear choice. He said that rapid deficit reduction was the overriding priority, and that it would involve fiscal tightening of such scale and severity that it would have to begin immediately. He said that the faster we cut, the better it would be for confidence. He said that there was no choice, and that the markets demanded this action. He also said that no alternative was possible and that anyone who said otherwise was a deficit denier.

The Chancellor ignored the evidence that budget deficits had risen rapidly in every country after a global financial crisis caused by the irresponsible behaviour of banks around the world, claiming instead that the root cause of Britain’s deficit was too much spending on the NHS, schools and the police. He ignored the evidence that Labour’s balanced deficit reduction plan to support jobs and halve the deficit over four years was working, that the UK economy was already recovering, that tax rises and spending cuts had been pre-announced, and that we were over-achieving on our deficit reduction plan in line with the G20 commitment.

Christopher Pincher (Tamworth) (Con) rose—

Nadhim Zahawi (Stratford-on-Avon) (Con) rose—

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Ed Balls: I will give way in a moment.

The Chancellor claimed that he would cut faster than any other major country—

Several hon. Members rose

Ed Balls: I will take as many interventions as hon. Members want me to, but I am going to establish my argument first. I think that the House knows that I enjoy interventions, and I will absolutely take them all—Members should not worry!

The Chancellor also ignored the fact that we were not in the euro, that our debt maturity was long—

Nadhim Zahawi: Will the hon. Gentleman give way?

Ed Balls: No; perhaps I need to say this to the hon. Gentleman again. I will take his intervention after I have established my argument.

The Chancellor ignored the fact that we were not in the euro, and that—[ Interruption. ]

Mr Speaker: Order. I know that I have done this many times before, but I appeal to right hon. and hon. Members to have some regard to the way in which our proceedings are viewed by the people whose support we were seeking only 13 months ago. I do not care whether this sort of behaviour was traditionally thought to be a good thing; it is not, and if people behave like this and expect to be called, they will be disappointed.

Ed Balls: Thank you, Mr Speaker.

In the Budget debate, I took 16 interventions from Members on the Government side of the House. I will take interventions, but not from people who shout and are aggressive while I am still establishing my argument. Let me establish my argument; then I will take interventions. I will start with the hon. Member for Sevenoaks (Michael Fallon) in just a moment.

The Chancellor insisted, despite the fact that we were not in the euro, that our debt maturity was long and that our long-term gilt yields were historically low and had started to fall well before the election. He made the economically illiterate and preposterous claim that, like Greece, Britain was on the brink of bankruptcy. Having already abolished the child trust fund and the future jobs fund, he announced in the Budget immediate plans to take billions more out of the economy through a combination of deep spending cuts and tax rises. That included an increase in VAT to 20% and a cut in tax credits for thousands of families. It also included cuts to housing benefit, pensions and disability benefits. The Chancellor boasted in that speech that the Budget was progressive, not regressive, and that it would be an extra £40 billion fiscal hit in this Parliament. Labour Members warned him of the dangers, but the Chancellor said it would work. Let me cite what he said a year ago:

“These forecasts demonstrate that a credible plan to cut our budget deficit goes hand in hand with a steady and sustained economic recovery, with low inflation and falling unemployment.”—[Official Report, 22 June 2010; Vol. 512, c. 168.]

Things did not turn out that way last year.

Since the Prime Minister foolishly said in October that the economy was out of the danger zone, we have had the biggest fall in consumer confidence for 20 years; our economy has flatlined and not grown at all since the autumn; inflation is now higher than in every country except for Estonia and Turkey; the Institute for Fiscal

22 Jun 2011 : Column 334

Studies has declared the Chancellor’s Budget to be regressive, not progressive; and child poverty is expected to rise this year, next year and the year after, with women hit harder than men and families with children hit hardest of all. I have to say that this anniversary—unlike your anniversary, Mr Speaker—is not one worthy of celebration. It is certainly not an anniversary worthy of a 40th birthday party bash at Dorneywood. I do not know whether you were invited to the party at the weekend, Mr Speaker. I was not, which might be because I am not a Knight of the Garter.

Michael Fallon (Sevenoaks) (Con): I am grateful to the shadow Chancellor for giving way so early in his speech. While we are on the issue of credibility, will he explain why his sudden, completely unfunded £13 billion tax cut did not appear to be either agreed or even discussed with the shadow Cabinet? When the former Labour Chancellor was asked nine times this morning whether he agreed with it, he failed to endorse it. Why is the shadow Chancellor so isolated?

Ed Balls: The former Labour Chancellor is not in the shadow Cabinet, as the hon. Gentleman will know—[Interruption.] He chose not to stand for the shadow Cabinet. We voted against the VAT rise earlier this year. The Leader of the Opposition said some months ago that it should be reversed. I repeated that claim last week and what I know, as it happened last week, is that when I go to speak to my leader, he understands the issues and backs me up, which is more than could be said for the Education Secretary, the Health Secretary, the Environment Secretary, the Lord Chancellor—and, I fear, quite possibly for the Chancellor of the Exchequer, too, if things carry on as they are.

Christopher Pincher: I am grateful to the right hon. Gentleman for giving way. He says he talks to his leader, so will he tell us when he released this information about the VAT cut to his leader—was it before he told the shadow Cabinet or did he treat his leader like just any other member of it?

Ed Balls: I have to say that that is a ridiculous question. At a time when the economy has flatlined, confidence is down and our borrowing is up, is it surprising that I am asked questions like that? Of course I discussed all aspects of my speech with the Leader of the Opposition some days before I gave it. We agreed on this strategy because we think this VAT rise is a mistake. Families in the hon. Gentleman’s constituency are being hit by having to pay £450 more in VAT, so one would have thought that he would be backing rather than opposing our plan to give them some help.

Christopher Pincher rose

Ed Balls: I am not giving way to the hon. Gentleman again now; I might do later.

The reason why the VAT cut is needed now is that things are getting worse, not better. In recent weeks, we have seen manufacturing output and job vacancies falling and the biggest fall in retail sales for more than a year. The Chancellor likes to boast that a net 370,00 jobs have been created in the last 12 months; what he does not like saying is that 70% of those extra jobs were created in the six months before the spending review and only 29% in the six months after it. That is why his Budget forecasts of a year ago have gone so badly awry.

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The Office for Budget Responsibility forecasts for growth have been downgraded three times. Unemployment is now forecast to be 200,000 higher, while inflation is forecasted to be well above target this year and next year. The result of this stalled recovery, higher unemployment and higher inflation is that the Government are now forecast to borrow a further £46 billion more than was forecast in last year’s spending review. Public borrowing in the first two months of this year is higher than it was in the first two months of last year.

Toby Perkins (Chesterfield) (Lab): The Chancellor said yesterday that he does not want to comment regularly on the OBR’s updates. Given that it is downgrading its forecasts every time he opens his mouth, it is hardly surprising.

Ed Balls: Whether or not the Chancellor comments, the fact remains that since the last OBR forecast, Britain’s growth forecasts have been downgraded by the International Monetary Fund, the OECD, the CBI, the British Chambers of Commerce and the National Institute of Economic and Social Research. Everybody else is downgrading growth forecasts; we will have to wait for the OBR finally to catch up.

Nadhim Zahawi rose

Ed Balls: I happily give way to the hon. Gentleman.

Nadhim Zahawi: I thank the shadow Chancellor for finally giving way. I must push him a little bit harder. When did he discuss his VAT cut with the shadow Cabinet? Will he tell us that?

Ed Balls: That tells you, Mr Speaker, how on the defensive Conservative Members are about the economy. The shadow Cabinet decided—[Inte rruption .] Look, just shouting does not get people to listen; the hon. Member for Stratford-on-Avon (Nadhim Zahawi) has got to learn that. The shadow Cabinet decided that the Opposition would oppose the VAT rise. In January, the Leader of the Opposition said it should be reversed. Last week, two days before I made my speech, I discussed the matter in detail with the Leader of the Opposition—[Hon. Members: “Aah!”] What do they mean, “Aah”? I discussed it 48 hours previously with the Leader of the Opposition, who backed me 100%—in marked contrast to the Prime Minister’s inability to grasp the detail, to stick with a policy or, most importantly, to support his own Cabinet members.

Several hon. Members rose

Ed Balls: Who shall we have? The hon. Gentleman.

Charlie Elphicke (Dover) (Con): I am grateful to the right hon. Gentleman for giving way. On that particular point, why is the right hon. Member for Dulwich and West Norwood (Tessa Jowell) reported as being unhappy and feeling that she had not been consulted? Why did he not consult the shadow Cabinet?

Ed Balls: I do my politics on the record. I am not going to comment on that kind of trash. [Interruption.] In view of all the Cabinet Ministers who have been briefed against in recent weeks by the Treasury—the Defence Secretary, the Health Secretary, the Lord Chancellor—perhaps the Chancellor should take a leaf out of my book on how to do things.

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It is the contention of Labour Members that the Chancellor is wreaking long-term, as well as short-term, damage on British investment, incomes and employment. We know from the downgraded OBR forecast that our economy is already £5.6 billion worse off than it would have been if the Chancellor had got it right. The danger is that these policies will have a long-term impact, leading to a return of the long-term unemployment of the 1980s, a new lost generation of jobless young people and a permanent dent in our nation’s prosperity.

Christopher Pincher rose—

Andrea Leadsom (South Northamptonshire) (Con) rose—

Ed Balls: I will give way in a few seconds.

The test for the Treasury is not whether it can eventually get back to growth, but where it will make up the lost ground in jobs and living standards.

In this debate, I challenge the Chancellor to agree with me on three propositions: first, his plan is not working; secondly, he has the opportunity to change course; and, thirdly, there is a better and fairer alternative economic policy for our country—better for jobs, better for living standards, and a better, fairer way to get the deficit down.

Several hon. Members rose

Ed Balls: I give way to my hon. Friend first.

Ian Austin (Dudley North) (Lab): Why does the shadow Chancellor think the Government are so surprised that he has announced a policy of cutting VAT when we cut VAT during the downturn and we voted against the increase in VAT that they imposed? Does he think that it is a sensible political strategy for the Government to highlight the fact that we want to cut VAT and they want to put it up?

Ed Balls: I find that baffling as well. The fact is that cutting VAT was an effective stimulus, as the IFS said, which led to strengthening growth and falling unemployment a year ago. Now that cut has been reversed, and our position on the policy has been consistent. We propose not a move all the way from the Government’s deficit reduction plan to halving the deficit in four years, but a step along the road. That would be the right thing to do, and it would deliver for the constituents of Government Members a boost of £450 a year for a family with children, and of £275 a year for a pensioner couple. Why do they oppose action that would put money in people’s pockets and help to get the deficit down in a fairer way?

Harriett Baldwin (West Worcestershire) (Con): The right hon. Gentleman says that he likes to do his politics on the record. On the “Daily Politics” show on 14 March, he said:

“We’ve made no commitments at all, it would be totally irresponsible for an opposition to behave”

in that way. What is responsible about an unfunded £51 billion tax cut?

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Ed Balls: If that was written by the Whips, they will have to do better. What I said was that it would be completely irresponsible for me as shadow Chancellor to make a commitment now to a reverse in the VAT rise for our next election manifesto. Of course I cannot make an unfunded commitment for the next manifesto. The rise in VAT this January was a mistake. It was the wrong tax to raise, it was unfair, and it has depressed confidence and stopped people spending at the wrong time for the recovery. The Chancellor does not have to agree with us that he should not have raised VAT, but he should agree that he did it at the wrong time, and he should temporarily reverse it until the recovery is secure. We now hear from Conservative Central Office that the proposal to cut VAT only temporarily until the recovery is secure would have to be in place for four years of this Parliament. That tells us that the Conservatives think that the recovery will not be secure for the whole of this Parliament, which is precisely the argument that I am making.

Mr Barry Sheerman (Huddersfield) (Lab/Co-op): Is it not the fact that the deniers here today are the Government who deny the collapse in consumer confidence? No one on the Government Benches is doing anything about it, and the economy will not kick-start again unless we tackle it.

Ed Balls: My hon. Friend is right, and that is why the Chancellor must break out of his current state of growth denial before it is too late.

Several hon. Members rose

Ed Balls: I will give way in a second.

The fact is that the scale of the fiscal hit to demand and growth in Britain this year and next is unprecedented. It is happening when interest rates are already low, so they cannot be cut, and when other countries are trying to reduce their deficits at the same time. Confidence is also hit by the public debate about when mortgage rates will have to go up because of the Chancellor’s own-goal on inflation through the rise in VAT. That is why there is a problem. Instead, all we get from the Chancellor and the Conservative party is excuse after excuse.

Ben Gummer (Ipswich) (Con): The right hon. Gentleman has already mentioned the OBR, the IMF, the EU, the OECD and the CBI, each of which supports the Government’s policy and says that any deviation would be a mistake. What is his answer to them?

Ed Balls: It is good to see the IMF supporting the Government of the day. The IMF not supporting the Government of the day would be a catastrophe, and exactly the same has always been true, historically, for the OECD. There is no doubt that business has a growing worry about what is going on. There is also a growing worry in Ipswich, not least shown by a Labour local election victory there just a few weeks ago. I am disappointed that the hon. Gentleman’s colleague the hon. Member for West Suffolk (Matthew Hancock) is not in the Chamber, but obviously this local campaign is catching on. I congratulate the hon. Member for Ipswich (Ben Gummer) on his campaign to save school crossings, to get more funding for them from schools or parent-teacher associations, and his lobbying of the

22 Jun 2011 : Column 338

Secretary of State for Education to ensure that education in Ipswich gets the extra money it needs. “Save Sure Start from Cuts”—it is obviously all catching on.

Ben Gummer rose—

Ed Balls: I have plenty more; we will come to them in a second. Just think, “Good publicity, good publicity, it’s all good publicity.” It did not do the hon. Member for West Suffolk any harm; it did not do him any good either.

We do not hear much from the Chancellor these days about snow being the explanation for the contraction of the economy at the end of the year, because as he knew at the time, it also snowed in America, Germany and France, and they all posted stronger growth. In fact, Denmark, Ireland, Greece and Portugal were the only other countries with falling output in the last quarter of 2010. The Chancellor of all people, a regular skier on Europe’s slopes, should have known that even in winter it does not snow in Greece and Portugal. Instead we hear a new weather-related line. He blames the global headwinds, factors outside his control—rising oil prices, food prices, the eurozone, the Japanese earthquake, all reasons why prudent Chancellors should always be vigilant and choose caution over complacency. It is ironic to hear the Chancellor and the Prime Minister blame the rest of the world for Britain’s economic difficulties, as they did the opposite for their last four years in opposition.

Compared with other countries facing the same global headwinds, we are doing worse. We have gone from being in the top half of the EU economic league, to fourth from bottom in the past few months. It is no wonder that the OECD Deputy Secretary-General said a few weeks ago that

“we see merit in slowing the pace of fiscal consolidation if there is not so good news on the growth front”.

Even the IMF has said that

“there are significant risks to inflation, growth and unemployment”.

The excuses are not working, and the Chancellor is starting to be rumbled.

Andrea Leadsom: Does the right hon. Gentleman recognise that when the Government took office, our country was on credit watch for a downgrade? Does he welcome the fact that this country’s borrowing rates are similar to those of Germany and nowhere near those of Portugal and Greece? Does he further recognise the impact that his proposal effectively to reduce VAT rates right now, unfunded, would have on our current national deficit?

Ed Balls: The irony of a Conservative MP opposing tax cuts in VAT for families while allowing a tax cut, compared with last year, for the banks, is almost overwhelming. As everyone who studies the figures and not the political spin knows, we went into the crisis with lower national debt than France, Germany, America and Japan. Every country had a rise in its deficit, so of course we did. The fact is, however, that our gilt yields were very low and falling month by month before the general election, even as the opinion polls narrowed—

Nadhim Zahawi: On that point, will the right hon. Gentleman give way?

22 Jun 2011 : Column 339

Ed Balls: No, no, no.

Three months before the general election, the polls said that the Conservatives would get a majority. As the polls narrowed, our long-term interest rates fell, entirely disproving the point that the hon. Member for South Northamptonshire (Andrea Leadsom) makes.

Kwasi Kwarteng (Spelthorne) (Con): The right hon. Gentleman spoke about responsibility earlier, but does he take responsibility for the appalling fiscal position we were in when we had the largest debt in peacetime?

Ed Balls: It is fine for the hon. Gentleman to be thinking of his intervention rather than listening to the answers, but the fact is that we had a lower budget deficit and lower national debt than we inherited in 1997. The IFS, in its report, “The public finances: 1997 to 2010” said:

“By 2007–08, the public finances were in a stronger position than they had been when Labour came to power in 1997.”

That entirely disproves his point.

Andrea Leadsom: Will the right hon. Gentleman give way?

Ed Balls: Not again. I will make a little more progress. [ Interruption.]

Several hon. Members rose

Ed Balls: I give way to my hon. Friend the Member for Swansea West (Geraint Davies).

Geraint Davies (Swansea West) (Lab/Co-op): Does my right hon. Friend accept that one reason for the remarkable fact that the world economy is growing steadily while Britain is flatlining, is the report from UK Trade & Investment that says that although UK inward investors are coming forward to build factories and growth in Britain, they are not being drawn down as the RDAs have been abolished? The Government are destroying the engines of growth.

Ed Balls: I am sure that was one of the proposals in the so-called strategy in the Chancellor’s Budget.

As I have said, there is growing concern in the business community. There is even concern in the Conservative fraternity. As my friends on The Daily Telegraph said in a recent editorial:

“These figures should be giving George Osborne some sleepless nights.”

They should indeed be giving the Chancellor sleepless nights at No. 11.

Christopher Pincher: Will the right hon. Gentleman give way?

Ed Balls: Give me five minutes.

The Chancellor has clearly been paying some attention. There is no plan B yet, but there has been a change in the rhetoric. Now the Chancellor says that the economy is “choppy”, but that

“Changing course would be a disaster for our credibility”

and would lead to a Greek crisis here in Britain—a Greek crisis that the Chancellor now absurdly claims he has narrowly avoided in the past.

22 Jun 2011 : Column 340

Chris Ruane (Vale of Clwyd) (Lab): A Greek tragedy. [Laughter.]

Ed Balls: Well, at least that was not an animal noise.

Something has been puzzling me in recent months. Why does this Chancellor have such a love of the nautical metaphor? Navigating through choppy waters, steering a steady course, sailing into strong global head winds—where does he find all those boating metaphors? But this, of course, is the Chancellor who likes to spend his summers gossiping on the yachts of his friends.

I have said many times in the past year that the Chancellor must learn the lessons of history if he is to avoid repeating the mistakes of history. I am sorry to have to raise that rather unfortunate episode in his history again. I know that it is a bit irritating for Members, even a bit annoying, but the Prime Minister said that I was the most annoying person in politics, and I must live up to my reputation.

As a matter of fact, my reign at the top table did not last very long. A few days later, The Sunday Times conducted a poll asking the public who was the most annoying person in British politics. It turned out that the Prime Minister is just as annoying as me, it turned out that the Chancellor of the Exchequer is more annoying than me, and it turned out that the Deputy Prime Minister is more annoying than all of us. But who is the most annoying person in British politics today? It is still Lord Mandelson, the Chancellor’s yachting partner.

I know Lord Mandelson well. He is a good friend of mine. [Laughter.] He is, actually, and I know that he will agree with me on this. If the Chancellor and his friend the Prime Minister have found us annoying so far, they should bear in mind that this is only the beginning; and when the Chancellor boasts that he narrowly avoided a summer Greek crisis, we know what he is really remembering.

Christopher Pincher: A man is known by his friends, and I think the shadow Chancellor has just proved that.

The right hon. Gentleman has talked a fair amount about the newspapers that he reads, such as The Daily Telegraph, The Times and the Eastern Daily Press. It must be very interesting for the shadow Home Secretary in the evenings. Perhaps he has also read the Tamworth Herald, which has revealed that unemployment in Tamworth has fallen to the lowest level since 2008 and that investment has been made in Tamworth by Ocado and BMW. If the right hon. Gentleman thinks that we are doing so badly, how does he explain those developments?

Ed Balls rose—

Mr Speaker: Order. I am glad that the exchanges so far have been good-natured, but may I remind colleagues of the merits of brief interventions? A lot of Members want to make speeches, and I want to help them to do so.

Ed Balls: I think the question that people will be asking in the hon. Gentleman’s local newspaper is this: why does he oppose a tax cut that would provide £450 for every family this year, and would boost failing confidence?

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The hon. Member for West Suffolk does not seem to have turned up. It is so disappointing that he is not here, as he was last time, because I had a very good contribution for him.

Let me now set aside the Chancellor’s wild and nonsensical political attempts to draw parallels between Britain and Greece, and make a serious point about what is happening in Greece and how it affects the United Kingdom. The issue now is not whether Britain does or does not contribute to a further EU financial package for Greece. Like the Chancellor—I think—I believe that that would be the wrong thing for our country to do. It seems to me that we have reached a point at which talk of more temporary liquidity austerity packages, and further tough talking, is no longer working.

EU Finance Ministers must face the fact that Greece needs economic growth to succeed. Otherwise, it will be stuck in a debt trap. It is now very hard to see how Greece can stay in the single currency without a change of strategy on fiscal austerity and a substantial restructuring. The fact is, however, that it is precisely because the UK is outside the eurozone—and thank goodness we are; I will take an intervention on that if any Member wishes to intervene—and because our banks are less exposed to Greek debts than those in Germany and France that Britain should be an honest broker in these discussions. We are in a position to present an objective argument for immediate and co-ordinated action to restore jobs and growth and start reducing the debt, along with a sustainable, long-term plan for its reduction. However, we can do that without being accused by the people of Greece that we are merely looking after our own interests.

Mr John Redwood (Wokingham) (Con): Will the right hon. Gentleman give way?

Ed Balls: No.

What happened this week when there was the chance to show some leadership? Throughout the crisis, our Chancellor’s only concern has been to make short-term domestic political capital out of the crisis.

Mr Redwood: Will the right hon. Gentleman give way?

Ed Balls: No. I am making a serious point.

In every crisis since 1997—the Asian crisis, the dotcom crisis, the Russian crisis, and the global financial crisis of 2008—Britain was constantly at the centre of discussions attempting to establish a solution for the future.

Mr Redwood: Will the right hon. Gentleman give way?

Ed Balls: In one second.

For the first time in 14 years we have a Chancellor and a Prime Minister who are on the sidelines, silent, irrelevant and ignored. I believe that whatever the outcome of the present crisis—whatever happens in the eurozone and to Greece—people will say that we had a Chancellor of the Exchequer who was not there, who did not deliver, who was out of his depth, and who could not contribute to the long-term reforms that were needed.

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Mr Redwood rose—

Ed Balls: Now I will give way to the right hon. Gentleman.

Mr Redwood: The right hon. Gentleman is making a very important point. The United Kingdom can make an important contribution to the debate, but it obviously should not lend money directly to Greece. Is he saying that he thinks the only way out for Greece now is a rescheduling of its debt and agreement on the fact that there must be a change of pattern to secure the necessary growth and enable the economy to accelerate?

Ed Balls: In a moment I will deal with the parallel with the United Kingdom. Let me say first, however, that the lesson of history shows that it is not possible to deal with a solvency crisis by providing liquidity package after liquidity package, because that does not reach the heart of the issue. On the contrary, it makes the position worse and worse. At some point people will have to face up to that. Package after package has been agreed, but that has not worked. The debt has not gone down; it has gone up.

History teaches us that three things are necessary to the credibility of a plan, whether it involves monetary policy or fiscal policy. First, the plan must be for the medium term; secondly, there must be political support for it; and thirdly, it must work. If it does not work, that will eventually rebound on political support, as we have seen in Greece in recent weeks.

Kelvin Hopkins (Luton North) (Lab): I entirely agree with what my right hon. Friend has said about both Greece and the need for a plan, but if a plan is to be implemented the country concerned must have control of its exchange rates, interest rates and fiscal policy, and that is not possible inside the eurozone.

Ed Balls: Let me deal with precisely that point by returning to the subject of the United Kingdom. Notwithstanding what I consider to be a rather tawdry attempt to use what seems to be a political claim that a sovereign debt crisis exists here in the UK to give the Liberal Democrats an excuse to ditch everything in their manifesto and support a Conservative party policy, the fact is that the plan is not working here either.

The Chancellor likes to play this game. A few weeks ago, he told the “Politics Show” that if he “abandoned” his plan,