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House of Commons

Tuesday 6 September 2011

The House met at half-past Two o’clock


[Mr Speaker in the Chair]

Business Before Questions

London Local Authorities and Transport for London (No.2) Bill [Lords] (By Order)

Second Reading opposed and deferred until Tuesday 13 September (Standing Order No. 20).

Oral Answers to Questions


The Chancellor of the Exchequer was asked—

Banking Industry (Taxation)

1. Clive Efford (Eltham) (Lab): What recent assessment he has made of the level of taxation levied on the banking industry. [69994]

The Chancellor of the Exchequer (Mr George Osborne): Her Majesty’s Revenue and Customs published details of total pay-as-you-earn and corporation tax receipts from the banking sector for the first time on 31 August. The official statistics show that tax receipts from the sector increased from £17.3 billion in 2009-10 to £21 billion in 2010-11. A number of other taxes are incurred by the banking sector that the Office for National Statistics did not include in the figures, including the new bank levy introduced by this Government, which we expect will raise an additional £2.5 billion net each year, which is more in each and every year than the previous Government raised in their one-off payroll tax.

Clive Efford: I am grateful to the Chancellor for that answer, but the truth is that the High Pay Commission has just published a report demonstrating that high executive pay bears no relation to the performance of companies and that nowhere is this more starkly illustrated than in the banking sector. Meanwhile, youth unemployment is going up. Is it not time we made the banking sector pay its fair share in order to do something for the young unemployed in this country, as advocated by the Opposition?

Mr Osborne: That is why we introduced the bank levy, which Labour had 13 years to introduce but did not. It raises £2.5 billion. We are also taking action to clamp down on tax avoidance. We recently proposed a measure to tackle something called disguised remuneration,

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whereby high earners, often in the financial services sector, disguise their income to avoid tax, but the Labour party voted against the measure.

Sir Peter Tapsell (Louth and Horncastle) (Con): As we are discussing banking, may I again put it to the Chancellor that further delay in ring-fencing retail banking from investment banking can only perpetuate the appalling shibboleth that big banks cannot fail? Until we debunk that shibboleth, the capitalist system will remain at risk.

Mr Osborne: My right hon. Friend makes a powerful point. We must learn the lessons of what went wrong in the regulation of our banking system and ask deep questions about how, as an economy, we underwrite that system. That is why the Government asked John Vickers and his fellow commissioners to look at the structure of the banking system and at how we can ensure that Britain can be home to global banks but, at the same time, the British taxpayer can be protected should those banks fail. Of course, John Vickers will publish his final report next week and I am sure that there will be plenty of discussion about it.

Ed Balls (Morley and Outwood) (Lab/Co-op): With the future jobs fund and education maintenance allowance abolished, Labour Members have been urging the Chancellor to repeat the bank bonus tax on top of the bank levy in order to get young people into work. The Chancellor claims that the economy is recovering, unemployment is falling and that such action is unnecessary, so will he tell the House how many more young people, compared with a year ago, are now not in education, employment or training?

Mr Osborne: The number of 16 and 17-year-old NEETs has actually come down, and more than 500,000 new jobs have been created in the private sector over the past year. The right hon. Gentleman talks about the bonus tax, and I will use not the advice I have been given by Treasury officials to respond, but the advice I have been given by the previous Chancellor of the Exchequer, someone we know he is very close to. The previous Chancellor said this of the bonus tax, and he after all is the man who introduced it:

“It will be a one-off thing because, frankly, the very people you are after here are very good at getting out of these things and... will find all sorts of imaginative ways of avoiding it”.

That is why he did not want it to be anything more than a one-off tax, and that is why we introduced a much more permanent and sustainable tax on the banks, which the right hon. Gentleman never introduced when he was City Minister. It is a permanent bank levy that raises more net every year than the one-off bonus tax did.

Ed Balls: Unemployment is rising and the stock market is plummeting—it is no surprise that the Chancellor does not want to answer the question about youth unemployment. Let me tell the House that the number of young people between 18 and 25 out of work and not in education, employment or training has gone up in the past year by 18%: 119,000 more young people are unemployed. Let me tell the Chancellor what my right hon. Friend the Member for Edinburgh South West (Mr Darling) said on “Newsnight” last night:

“The government, by going so fast, is really strangling the economy…if you go too fast you stall”—

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Mr Speaker: Order. I think the shadow Chancellor will want to refer to taxation levels on the banking industry.

Ed Balls: The argument that I am making is that the Chancellor is ignoring the case for repeating the bank bonus tax for a second year, even though youth unemployment has gone up by 18%—119,000 more. Let me ask him a second—

Mr Speaker: Order. I say to the shadow Chancellor that what we need now is a very brief question. We need to move on; there are a lot of questions to cover.

Ed Balls: The question that people will be asking is if the Chancellor will not change his mind on the bank bonus tax, on VAT and on the pace of deficit reduction, why is he now changing his mind on stalling bank reform? He said that we were all in it together. Why is there one rule for the banks and another rule for everyone else?

Mr Osborne: Now we can see why the former Chancellor has said that the Labour party had no credible economic policy. The shadow Chancellor had all summer to think of that question, and the best he came up with was that we were not regulating the banks. He was the City Minister when the City exploded. We have taken action better to regulate the banks. We set up the commission that will report next week. As for downgraded numbers, the fastest falling numbers around here are his economic credibility numbers.

Mr John Redwood (Wokingham) (Con): It would be good to get more tax out of RBS, a state-owned bank, but unfortunately it is still loss making. Will the Chancellor or a relevant Minister have an urgent meeting with its executives so that they can have a better plan for cutting risks, selling assets and making some money for the taxpayer?

Mr Osborne: My right hon. Friend is, of course, right that the British banking system has had its challenges—not least over the summer, with its share prices. We are in regular discussion with the banks about that, of course, and we will of course have many discussions about the future structure of banking. We need a profitable banking sector that lends to the real economy. We have in place targets to see an increase in lending to small businesses. But my right hon. Friend is absolutely right that a key part of the recovery is a return to health for the financial services industry and the financial system.

Domestic Energy Prices

2. Vernon Coaker (Gedling) (Lab): What assessment he has made of the effects on the economy of recent trends in domestic energy prices. [69995]

The Economic Secretary to the Treasury (Justine Greening): The Office for Budget Responsibility is now responsible for independent economic and fiscal forecasts for the Government, and that includes taking account of trends in energy prices and their impact on the economy, including on inflation. The OBR will publish a fully updated forecast in the autumn.

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Vernon Coaker: Thousands of people in my constituency of Gedling and millions across the country will be disappointed by that response from the Minister. Consumer Focus has said that, on average, energy bills will go up by £200 a year, which means that this winter many people —pensioners and families—will be worried about switching on gas and electricity. Has the Minister met the energy companies to discuss that, and will she specifically outline some measures that she and her Government intend to take so that people are not afraid to switch on the heating this winter?

Justine Greening: The hon. Gentleman is right to raise the issue because it is important. The challenge that we all face is to make sure that energy bills are affordable not just this winter—the point that he makes—but in winters in 10 and 20 years’ time. The problem that we have as a country is our dependency on fossil fuels. In the long term, we need to get ourselves off that dependency so that we are not so blown about by the international winds that see commodity prices go up and down. In the short term, we are taking steps to support the most vulnerable through the Warm Homes discount. Next year, we will introduce the green deal to help energy efficiency. The hon. Gentleman asks whether we have meetings with energy companies, and of course we do every day. I am sure that he will also—

Mr Speaker: Order. Progress is very slow, and it needs to get faster.

Mr Mark Spencer (Sherwood) (Con): The Minister will be aware of how rapidly fuel and energy prices have increased. Am I right in thinking, however, that if the Chancellor had not taken action in the Budget, fuel prices would be 6p a litre higher today?

Justine Greening: My hon. Friend is absolutely right. The action that we took, which was part of a £1.9 billion package to support motorists, means that fuel duty was 6p lower than it otherwise would have been under the previous Government’s proposals.

Mr David Hanson (Delyn) (Lab): The Minister will know that the rise of several hundred pounds in energy costs will hit businesses hard, and that on top of VAT and price and pay freezes it will particularly hit consumers and pensioners. What is her assessment of the level of that price rise? How many meetings has she had with energy companies about the price of energy? What does she intend to do about the price of energy other than freezing the level of winter fuel payments for pensioners?

Justine Greening: I think I have answered those questions already; and perhaps the right hon. Gentleman should speak to his Back Benchers about their asking his question before he does. I know that it is his wedding anniversary today, and I hope that I do not upset him too much before he has dinner with his wife tonight. I can again assure him that we are absolutely committed to making sure that the Warm Homes discount scheme will support the most vulnerable people in our country so that they can afford to heat their homes.

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3. Helen Jones (Warrington North) (Lab): What recent assessment he has made of the effect on inflation of the increase in the basic rate of VAT. [69996]

The Exchequer Secretary to the Treasury (Mr David Gauke): The Office for Budget Responsibility is responsible for producing independent economic and fiscal forecasts. The OBR published a full analysis of developments and the prospects for inflation in its forecast at Budget, and that can be found at its website. The Office for National Statistics estimates that the impact of the VAT rise on consumer prices index inflation was 0.76 percentage points.

Helen Jones: The Minister has failed signally to answer the question. Will he tell the House why only three European Union countries—Estonia, Lithuania and Romania—have inflation higher than the rate in this country? Is it not true that the failed economic polices pursued by the Treasury and the decision to raise VAT have more than doubled the rate of inflation compared with the Government’s target? When is he going to accept responsibility for that and do something about it?

Mr Gauke: I am afraid that the hon. Lady might not have listened to my earlier answer. The fact is that the primary cause of the increase in inflation has been global commodity and energy prices. It is also worth pointing out that our currency depreciated in value quite significantly a couple of years or so ago. The VAT increase was necessary in order to reduce the deficit—a policy that was recognised by the previous Chancellor of the Exchequer.

Gavin Williamson (South Staffordshire) (Con): Did my hon. Friend inherit any work by the previous Government on plans to increase VAT if they had won the general election?

Mr Gauke: My hon. Friend will be aware that we are not privy to the advice that was given to previous Governments. However, I look forward to reading tomorrow confirmation that the previous Chancellor believed that it was a wise course of action to increase VAT.

Public Sector Borrowing Requirement

4. Mike Freer (Finchley and Golders Green) (Con): What recent estimate he has made of the public sector borrowing requirement. [69997]

The Chief Secretary to the Treasury (Danny Alexander): The July public sector finances release issued by the Office for National Statistics estimates that the out-turn for public sector net borrowing in 2010-11 is £142.7 billion, or 9.7% of gross domestic product—£14 billion lower than in 2009-10.

Mike Freer: Citibank economist Michael Saunders recently said that

“the major risk to the UK’s fiscal outlook and credit rating would be if the coalition fails to stay the course on fiscal consolidation.”

Does my right hon. Friend agree?

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Danny Alexander: Yes, I very much agree with that. As my hon. Friend will know, the need to tackle the enormous economic problems that we inherited from the previous Government, including the enormous budget deficit, was the founding purpose of this Government. It is a purpose that we intend to see through, and he can be reassured that we will stick to our plans.

Chris Leslie (Nottingham East) (Lab/Co-op): Given the Government’s poor performance on growth, lower tax receipts and higher welfare spending, will the Chief Secretary repeat—a simple yes or no answer will do—whether the Government are still committed to their target of falling public debt as a percentage of GDP by 2015? Yes or no?

Danny Alexander: Yes.


5. Mr David Nuttall (Bury North) (Con): What recent assessment he has made of the financial crisis in the eurozone. [69998]

12. Glyn Davies (Montgomeryshire) (Con): What recent assessment he has made of the financial crisis in the eurozone. [70006]

The Chancellor of the Exchequer (Mr George Osborne): The financial crisis in the eurozone is extremely serious. Fortunately, Britain is not in the euro; unfortunately, however, we are not immune to the instability on our doorstep. The euro area must implement its policy commitments to address the crisis, made most recently at the July summit. As I have said, the euro area should follow the remorseless logic of monetary union with greater fiscal integration. We must ensure that we are not part of that integration and that our national interests are protected and promoted at all points.

Mr Nuttall: I thank the Chancellor for that reply. Given that the crisis in the eurozone was caused by some member states having too much debt, would it not be a good idea—rather than increasing those debts with further bail-outs—for this country to press for the European treaties to be amended to allow a country to leave the euro while remaining in the European Union if it still wished to do so? As things stand, that is not possible.

Mr Osborne: As my hon. Friend knows, the treaty does not provide for a member state to leave at the moment, and there is no immediate prospect of major treaty renegotiation—something that the German Government have made very clear again this week. In other words, we need to focus on the task at hand, which is implementing all the agreements, communiqués and commitments made in recent months by the eurozone. That is absolutely crucial to the stability not just of the eurozone but of the wider global economy.

Glyn Davies (Montgomeryshire) (Con): Is the Chancellor aware that under the previous Labour Government, of whom the current shadow Chancellor was a prominent member, a euro preparations unit with a staff of 17 worked for 13 years on 11,500 documents to prepare Britain for joining the euro?

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Mr Osborne rose—

Mr Speaker: Order. I am grateful to the hon. Member for Montgomeryshire (Glyn Davies), but his question bears no relation to the responsibilities of the current Government and we will therefore leave it there.

Mr Julian Brazier (Canterbury) (Con): Would my right hon. Friend accept that the fact that the euro has strengthened as a currency indicates that the markets believe that the weaker countries will not be able to push water up hill for much longer and are bound to drop out of the euro before very long?

Mr Osborne: I do not think that it would be appropriate for me to comment directly on the value of the euro, but I would observe that we have a weak US dollar and that that may have had an impact on the value of the euro. As I said just now, it is important for us to focus on the task in hand, which is implementing the agreement most recently signed on 21 July by the eurozone. Of course we can and should have a discussion about the future of the euro and its governance arrangements—and that is important—but the euro is here to stay and we have to ensure that it works for Europe. I do not want Britain to be part of the euro, and there is no prospect of that happening—[ Interruption. ] Labour Members seem to forget that they are still committed in principle to joining the euro. This Government will not join the euro, but it is in our interests that the euro works.

Sir Stuart Bell (Middlesbrough) (Lab): Is the Chancellor aware that, with the exception of Portugal, growth among member states of the eurozone is higher than ours? If fiscal union is to take place, and there is to be a common euro bond, in which order does he think they should come?

Mr Osborne: As I have been saying in recent weeks, we need to follow the remorseless logic of monetary union. That was one of the reasons I was against Britain joining the euro—I thought it would lead to greater fiscal integration and common budget policies. There is obviously an active debate about what that might mean, and I would suggest that the first thing that the eurozone countries need to do is to implement the package agreed on 21 July.

May I correct the hon. Gentleman? It is not the case—sadly—that Britain has the slowest growth in Europe. Actually, the problem is that German growth in the last quarter was 0.1% and French growth for Q2 was zero. That is the challenge—a eurozone where growth is faltering, and the situation in the United States. We have to deal with these international problems as well as addressing the very serious problems that we inherited.

Mr Speaker: I am grateful to the Chancellor. We do not want the slowest growth, but neither do we want the slowest questions and answers.

Mr Andrew Tyrie (Chichester) (Con): The Chancellor has made it clear that he thinks that a monetary union requires a fiscal union. Can a credible fiscal union be put in place without a treaty change?

Mr Osborne: I think that we can take important steps towards greater co-ordination of fiscal policy by implementing, as I say, the agreements that the eurozone came up with before the summer. That is the task at

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hand now. Speculating now about major treaty change is unrealistic. It is not going to happen in the next few years. It would take several years to bring about such a major treaty change and get it ratified by all the national Parliaments, even if those Parliaments agreed to it. The challenge this autumn is to bring greater stability to the euro’s governance arrangement, which is what our colleagues in the EU want to do.

Ms Angela Eagle (Wallasey) (Lab): The Chancellor recently boasted that Britain is a safe haven from the problems in the eurozone, so will he tell us which EU countries have grown more slowly than the UK in the past 12 months, not in the last quarter?

Mr Osborne: As I said, this year, unfortunately, the German economy, the French economy and other major eurozone economies—[Hon. Members: “Ah!”] If Opposition Members do not want to look at the most recent numbers, it is no wonder they have not got a credible economic policy. Until they get one, and take a view on the eurozone and what is happening in Germany, France and the United States, they are not going to be taken seriously, as the former Chancellor of the Exchequer, the right hon. Member for Edinburgh South West (Mr Darling), has reminded them.

Ms Eagle: I do not think that the Chancellor knew the answer to that question, but today’s euro figures have revealed that only two countries—Romania and Portugal—have done worse on growth than the UK in the past year. Only yesterday, the Minister of State, Department for Communities and Local Government, the right hon. Member for Tunbridge Wells (Greg Clark), said from the Dispatch Box that there is a crisis of growth in this country. Was not the Chancellor’s friend, the new head of the IMF, Christine Lagarde, right at the weekend when she said that

“growth is necessary for fiscal credibility… We know that slamming on the brakes too quickly will hurt the”

economy “and worsen job prospects”?

We know that he will not listen to us, but why does the Chancellor not listen to sound advice from his friends, including, we hear, on this weekend’s draft G7 statement, which aims to slow the pace of deficit reduction—

Mr Speaker: Order. I am extremely grateful to the hon. Lady. I think that we have got the gist of it.

Mr Osborne: I can tell the House that Christine Lagarde will be in London on Friday. We will hear what she has to say then.

Government Budget Deficits

6. Paul Maynard (Blackpool North and Cleveleys) (Con): What recent discussions he has had with his international counterparts on steps to reduce Government budget deficits. [69999]

The Chancellor of the Exchequer (Mr George Osborne): At the last G20 summit, advanced countries committed to implementing clear, credible, ambitious and growth-friendly medium-term fiscal consolidation plans, differentiated according to national circumstances. I will further discuss fiscal consolidation plans in the G7, G20 and IMF meetings later this month.

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Paul Maynard: Does the Chancellor agree with the IMF’s most recent assessment that strong fiscal consolidation remains essential?

Mr Osborne: That is, of course, absolutely what the IMF said in its recent article IV assessment—and we remember the article IV assessments at the end of the previous Labour Government. It asks explicitly whether the UK Government should change their policy, and it says no. That is the advice of the IMF. Last July, the Labour party voted against Britain paying its subscriptions to the IMF. Frankly, I do not think that Labour Members should talk about the IMF in Treasury questions until they agree with paying the subs.

Rachel Reeves (Leeds West) (Lab): If the Office for Budget Responsibility downgrades its forecast for growth for the fourth time when it reports later in the autumn, and revises up its forecast for Government borrowing, would the Chancellor regard that as a success or failure of this Government’s economic policy?

Mr Osborne: Of course, the Government want economic growth and prosperity. We want a stable international situation in which we can trade. We have to take account of the fact that major trading partners, such as Germany, France and the United States, have seen either no growth or very limited growth as well. That is the challenge we face. As the right hon. Member for Edinburgh South West (Mr Darling) reminded us at the weekend, we can either have a credible economic policy that takes note of what is going on in the world or, as he put it, we cannot even be at the races.


7. Mrs Anne McGuire (Stirling) (Lab): What recent assessment he has made of the potential effects on consumer confidence of the change in the basic rate of VAT. [70000]

The Exchequer Secretary to the Treasury (Mr David Gauke): Sustainable public finances will support confidence in the medium term. Decisive action taken by the Government in the spending review and the June Budget, including the increase in VAT, will put the public finances and spending on a sustainable footing.

Mrs McGuire: The Stirling constituency has a large number of jobs tied up in tourism and hospitality. On 1 July, the Irish Government introduced a temporary reduction in the rate of VAT on goods and services related to the hospitality sector, realising that such a reduction has the potential to kick-start economic growth; indeed, the rate is now 11% less than the VAT rate in the UK. Given stalling UK economic growth figures, does the Minister not accept that he, too, should consider a temporary change in the rate for the sector, and if not, why not?

Mr Gauke: I have had meetings with representatives from the tourism industry at which they have made their case. We will of course keep all taxes under review, but we have to bear in mind the state of the public finances, our limited room for manoeuvre and concerns about adding complexity to our VAT system. None the less, we will look at those arguments.

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Business Costs

8. Mr Andrew Turner (Isle of Wight) (Con): What fiscal measures he is taking to reduce the costs of businesses which employ less than 25 staff. [70001]

The Financial Secretary to the Treasury (Mr Mark Hoban): Small businesses play a vital role in the economy and the Government have taken a number of steps to support them. The Government have provided support for small businesses and employers by reversing the previous Government’s planned £3 billion tax on jobs, reducing corporate taxes and introducing a moratorium on new domestic regulation for micro-businesses.

Mr Turner: Does the Minister agree that we should make it as simple as possible to set up small businesses in the UK and get rid of unnecessary regulations and red tape?

Mr Hoban: My hon. Friend is absolutely right. We need to reduce the burden of red tape to encourage small businesses to set up and to create more jobs. That is one reason why, for example, we introduced a moratorium exempting micro and start-up businesses from new domestic regulation for three years from 1 April 2011.

Mr Adrian Bailey (West Bromwich West) (Lab/Co-op): A year ago the Chancellor claimed that 400,000 small business start-ups would be assisted by the national insurance holiday in the regions. To date the figure is, I believe, 5,000. Will the Chancellor undertake to bring a report before the House saying how many new jobs have been created by those 5,000 new start-ups and what the cost to the Exchequer has so far been per job?

Mr Hoban: The hon. Gentleman should be aware that HMRC is writing to all new businesses set up in the last 12 months to ensure that they are aware of the scheme and to encourage them to apply for it. It is important that they do so, but this is just one of a series of measures that we have taken to ensure that more new jobs are created in the private sector. I would have thought that the hon. Gentleman welcomed the fact that over the last year there have been 500,000 net new jobs created in the private sector.

UK Economy (Supply-Side Reform)

9. Elizabeth Truss (South West Norfolk) (Con): What steps he is taking in respect of further supply-side reform of the UK economy. [70002]

The Financial Secretary to the Treasury (Mr Mark Hoban): “The Plan for Growth”, published alongside the Budget this year, sets out the Government’s plan to put the UK on a path to sustainable long-term economic growth. The second phase of the Government’s growth review will report later this year.

Elizabeth Truss: I thank the Minister for his answer. In the last decade the UK has fallen from 14th to 89th in terms of burden of regulation and from 14th to 95th in terms of extent of taxation. Does the Minister agree that we should be freeing up companies, rather than spending money that we do not have, to drive economic growth?

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Mr Hoban: My hon. Friend is absolutely right. Of course, it is part of the previous Government’s legacy that our competitiveness fell so far behind that of our international competitors. That is why we have taken action to reform corporation tax, for example, so that we have one of the best and most competitive regimes in the G20 and more businesses are encouraged to come to the UK. It is also why we are tackling regulation and red tape in the economy, which is why, as I said earlier, we have seen 500,000 net new jobs created in the private sector. That is three and a half jobs in the private sector for every job lost in the public sector, which shows the progress that we have made over the last year.

Stewart Hosie (Dundee East) (SNP): Both this Government and the previous one have taken an axe to tax allowances for investment on the supply side of the economy—for example, the abolition of the industrial buildings allowance under Labour and the reduction of the annual investment allowance of £100,000 to only £25,000. Have the Government turned their face away entirely from the reintroduction of tax allowances, or will they listen to representations that demonstrate the positive growth in investment on the supply side from such tax allowances?

Mr Hoban: The reforms to allowances were used to help to fund measures such as the reduction in corporation tax rates for large companies and the reduction in the small companies’ tax rate from the 22p proposed by Labour when it was in government to 20p. We are therefore seeing changes in the rate of tax paid by businesses of all sizes, which is helpful in encouraging economic growth and job creation.

Public Sector Workers

10. John Robertson (Glasgow North West) (Lab): What his policy is on the pay of public sector workers earning less than £20,000. [70003]

The Chief Secretary to the Treasury (Danny Alexander): At the June Budget in 2010, we announced that public sector workers earning £21,000 or less would be protected from the two-year pay freeze and receive at least £250 in each year.

John Robertson: I hear what the right hon. Gentleman is saying, but not giving those workers a pay rise of £250 as the Government said they would is tantamount to their not getting it. Freezing pay is not an increase. What is he going to do about this? Is he going to honour the undertaking in the Budget last year to give those hundreds of thousands of workers £250 or not?

Danny Alexander: The £250 increase applies to all work forces under ministerial control, and it was introduced this year. It will be carried through again next year to ensure that people on low incomes in the public sector continue to receive a pay rise.

Sajid Javid (Bromsgrove) (Con): Will the Chief Secretary to the Treasury assure us that, in drawing up plans on public sector pay, the Treasury has not been impeded by a brutal regime in No. 10 Downing street?

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Danny Alexander: I can certainly assure my hon. Friend of that. Unlike under the previous Government, No. 10 Downing street and the Treasury work very well together on these issues.

Economic Growth

11. Mr Gareth Thomas (Harrow West) (Lab/Co-op): What recent assessment he has made of the level of economic growth. [70005]

The Financial Secretary to the Treasury (Mr Mark Hoban): Our economic policy objective is to achieve strong, sustainable and balanced growth, more evenly shared across the country and between industries. The independent Office for Budget Responsibility’s forecast, published at the Budget, takes full account of the policy measures announced in the spending review and in Budget 2011. The OBR forecast that the economy would grow throughout 2011, and in every year of the forecast. It will publish its updated forecast in the autumn.

Mr Thomas: As the level of economic growth over the past 12 months was lower in Britain than in the rest of the G7, is it not about time that the Minister had the courage to persuade his right hon. Friend the Chancellor to start work on a plan B?

Mr Hoban: It has been very clear, listening to all the international commentators talking about what is happening in the UK economy, that their advice has been to stick to the course and stick to plan A. That is the action that this Government are committed to—[ Interruption. ] This is interesting. We have one plan; the previous Government seemed to have more plans than they knew what to do with, and that is why they lost their credibility.

Claire Perry (Devizes) (Con): What does the Minister think is more likely to encourage growth: cuts in corporation tax or the increases in national insurance that Labour was proposing?

Mr Hoban: In our first Budget we were able to reduce corporation tax and set out a clear path to reduce it over the lifetime of this Parliament. We were also able to reverse Labour’s damaging jobs tax.

Mr Geoffrey Robinson (Coventry North West) (Lab): Will the Minister draw to the attention of the Chancellor the fact that economic credibility affects all Treasury Ministers in due course, and that in his case it is affecting him rather earlier than he might have thought? Can he not see that, with a lack of growth, he will not hit his deficit reduction target? Without hitting that target, he will not realise his plan, and without his plan—which is already in shreds—he will lack credibility, too.

Mr Hoban: I wonder whether the hon. Gentleman’s remarks about the loss of credibility for Treasury Ministers reflect his own experience.

Jake Berry (Rossendale and Darwen) (Con): Given how badly prepared the UK economy was for the financial crisis, does the Minister think that it was delusional to believe that its effects would be over in six months?

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Mr Hoban: The previous Prime Minister thought that what we now know to have been the longest and deepest recession since the war would be over in six months. That demonstrates the degree of delusion that existed under the previous regime. We are taking the tough and necessary decisions to tackle the legacy that we have been left by our predecessors.

Public Sector Borrowing Requirement

13. Andrew Selous (South West Bedfordshire) (Con): What recent assessment he has made of the effects on the economy of the public sector borrowing requirement. [70007]

The Chief Secretary to the Treasury (Danny Alexander): Sound public finances are essential for sustainable economic growth. The action that the Government have taken to reduce public sector borrowing will help to mitigate the risks to the recovery, underpin private sector confidence and help to keep interest rates low, which will help families and businesses.

Andrew Selous: Was it because of a high public sector net cash requirement that forces up interest rates, makes it more difficult for businesses to borrow, increases taxes and means that money spent on debt interest cannot be spent on public services that the outgoing director general of the British Chambers of Commerce said when he left on Friday that, in order to keep the economy going, it is essential that we stick to the Chancellor’s economic plan?

Danny Alexander: I am sure that that was part of his reasoning and I very much welcome his endorsement, alongside that of all the other business organisations in the UK that continue to back the deficit reduction plan we have set out. It is worth observing that the proposals put forward by the outgoing director of the British Chambers of Commerce and other proposals are also being taken forward by this Government. There is very strong alignment between small businesses and this Government.

Tony Lloyd (Manchester Central) (Lab): At what point, though, will Treasury Ministers realise that this austerity programme is damaging growth and that what the Government should be doing is beating a track round the world to make sure that there is an international commitment to putting growth back into the economy? That is the way we will get rid of the deficit in our economy.

Danny Alexander: This deficit reduction plan is essential to restoring credibility to British public finances, which is critical to keeping interest rates low, as low interest rates help to keep people in their jobs and in their homes. That is the argument for the plan.

Michael Fallon (Sevenoaks) (Con): Will my right hon. Friend confirm that the borrowing and revenue figures are now completely independently audited by the independent Office for Budget Responsibility and are no longer the completely unreliable and overtly political forecasts that, as we now know, were forced on the previous Chancellor by the previous Prime Minister?

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Danny Alexander: I can certainly confirm that the Office for Budget Responsibility is responsible for these matters and is independent. We certainly do not go in for the political fiddling of the figures that my hon. Friend described.


14. Rushanara Ali (Bethnal Green and Bow) (Lab): What recent assessment he has made of the potential effects on the rate of inflation of recent trends in domestic energy prices. [70008]

The Economic Secretary to the Treasury (Justine Greening): The Office for Budget Responsibility assesses the prospects for inflation, which of course factors in any changes in prices from Budget 2011. It will update its forecast this autumn.

Rushanara Ali: I thank the Minister for her answer, but with rising energy prices, stagnating real-terms income and rising unemployment, I ask her again what specific actions will be taken to help the more than 4 million households in England and one in seven households in my constituency that will face fuel poverty this year?

Justine Greening: We have already taken action in previous Budgets, not least by taking people out of paying income tax altogether by raising the personal allowance. As we have heard, we reduced fuel duty, in contrast to the previous Government’s plans to increase it. More than that, we are making sure that we target help at vulnerable people through the Warm Homes discount and next year, of course, we will introduce the green deal to help everybody to make their homes more energy-efficient.

Richard Graham (Gloucester) (Con): Does the Minister agree that although policies to help people out of income tax at the bottom level will show positive results, it is important to maintain the pressure to provide new apprenticeships so that high-value exporting manufacturers, such as Severn Glocon in my constituency, can continue to generate significant foreign exchange benefits.

Justine Greening rose—

Mr Speaker: Order. The Minister will want to relate her answer to domestic energy prices. I feel sure that that is what she will do.

Justine Greening: I shall try. I am sure that many of those apprenticeships will be in green industry, which is part of how we hope to get this economy back on its feet.

Mr Speaker: We are grateful.

Business Costs

15. Robert Halfon (Harlow) (Con): What fiscal measures he is taking to reduce the costs faced by businesses. [70009]

The Exchequer Secretary to the Treasury (Mr David Gauke): In addition to taking action to reduce the fiscal deficit, the Government are putting in place a number

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of measures to create the right conditions for businesses to grow. This includes reducing corporate taxes to encourage businesses to invest, establishing enterprise zones, and increasing the support that research and development tax credits provide to small and medium-sized companies.

Robert Halfon: Does my hon. Friend agree that the new enterprise zones will transform the fiscal situation for local businesses? As there is a new enterprise zone in Harlow, will he set out the tax advantages that we will gain and when they will start?

Mr Gauke: I am delighted that one of the two enterprise zones in the south-east local enterprise partnership will be in my hon. Friend’s constituency of Harlow; 100% of business rates collected on the Harlow site will be retained for 25 years and are to be spent on local economic priorities. This will be possible from April 2013, once the necessary legislation is passed. Businesses will also benefit from simplified planning and Government support to ensure that superfast broadband is rolled out throughout the zone.

Sammy Wilson (East Antrim) (DUP): One proposal subject to consultation, which has now finished, for reducing costs in Northern Ireland is the devolution of corporation tax so that the rate can be reduced for that part of the United Kingdom. Will the Minister assure us that the devolution of corporation tax will not be set at a price that makes it impossible for the impact on the economy to be positive?

Mr Gauke: As the hon. Gentleman said, the consultation process is now completed. I know we will be in contact with the Northern Ireland Executive to discuss the results. No decisions have been taken, but we have clearly made progress in this area. I look forward to having future conversations with the hon. Gentleman, including about the particular issue of cost that he mentions, but it is right for the cost as well as the powers to be properly devolved.

Economic Growth

16. Margaret Curran (Glasgow East) (Lab): What assessment he has made of the potential implications for the economy of the most recent figures for economic growth. [70010]

The Chief Secretary to the Treasury (Danny Alexander): Our economic policy is designed to achieve strong, sustainable and balanced growth that is shared more evenly across the country and between industries. The independent Office for Budget Responsibility has predicted that the economy will grow throughout 2011 and in every year of the forecast, and it will publish a fully updated forecast in the autumn.

Margaret Curran: Is the Chief Secretary aware of a survey produced this week by the Chartered Institute of Purchasing and Supply? It shows the sharpest slow-down in growth in the services sector for well over a decade. If Britain is such a safe haven, why is that happening?

Danny Alexander: I am aware of the survey, and of course many businesses are experiencing difficulties, not least owing to the headwinds in the global economy

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that we—along with other countries—are encountering. That is why we are taking measures to help businesses such as those to which the hon. Lady has referred, through our plan for growth and in relation to regulation, the planning system and investment in the transport infrastructure. I am sure she agrees that constitutional uncertainty about independence in Scotland is causing serious damage to businesses and business investment there.

Charlie Elphicke (Dover) (Con): Is not the most important contribution that the Government can make to economic growth to be “united at the top” and to have “a credible economic policy”?

Danny Alexander: I agree very much with that. I believe that it is a quotation from the former Chancellor of the Exchequer, the right hon. Member for Edinburgh South West (Mr Darling). We are united at the top and we have a credible economic policy, while the Opposition—if I may use the former Chancellor’s phrase—are “not at the races”.

Mr Denis MacShane (Rotherham) (Lab): Does the Chief Secretary—whom I fondly recall from the days when he was known as “Danny the euro”—agree that a big problem that we all face is the fact that the purchasing power of the pound internationally has sunk to an all-time low? Do we not have a real problem with the Osborne pound, which is now importing inflation, and do we not need to separate the two? We cannot get rid of the pound, because they will not let us, so do we not have to get rid of the Chancellor?

Danny Alexander: The right hon. Gentleman—I shall not tell the House what he was known as—should be aware that the reduction in the value of the pound took place under the previous Government, so he might direct his comments to them. He might also recognise, if he were being balanced, that that is having a beneficial effect on British exporters who are trying to sell into the eurozone, where the difficulties are, of course, affecting us as well.

Topical Questions

T1. [70019] Tracey Crouch (Chatham and Aylesford) (Con): If he will make a statement on his departmental responsibilities.

The Chancellor of the Exchequer (Mr George Osborne): The core purpose of the Treasury is to ensure the stability of the economy, promote growth and employment, reform banking, and manage the public finances so that Britain lives within her means. I can also announce today that the Office for Budget Responsibility will publish its economic and fiscal outlook on Tuesday 29 November, and that I will make a statement to the House on that day.

Tracey Crouch: Many hauliers in my constituency, like ordinary motorists, are concerned about the high price of fuel. Sadly, one Kent haulier went into administration during the recess, blaming diesel prices as a contributing factor. Can the Chancellor assure my constituents that he is listening to concerns expressed by fair fuel campaigners, and that he will do all he can to reduce the burden of high fuel costs on the motorist?

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Mr Osborne: Of course I am well aware of the pain and burden that the big rise in the international oil price has caused to British businesses and, indeed, British families. That is why we took action in the Budget with a £2 billion reduction in fuel duty.

My hon. Friend mentioned hauliers in her constituency. The average haulier will benefit by approximately £1,700 this year as a result of the measures announced in the Budget, in comparison with the last Government’s fuel duty plans. Those measures were funded by an increase in tax on North sea oil companies, which was controversial and was opposed by the Labour party.

T2. [70020] Mr Kevin Barron (Rother Valley) (Lab): The carbon price floor taxation policy within the electricity market reform is designed to push up the cost of electricity produced from high-carbon fuels such as coal. That could close what remains of indigenous coal production in this country, and also vastly increase the costs of energy-intensive industrial users such as steelmakers. Is the Chancellor prepared to look again at that policy, or consider compensating the industries that will fall foul of it?

Mr Osborne: We are looking specifically at the impact not just of the carbon floor price but of all the other environmental policies of recent years on energy-intensive industries. I hope, in the autumn forecast at the end of November, to give the House an update of what we propose to do to help.

T3. [70021] Mark Lancaster (Milton Keynes North) (Con): As we approach its first anniversary, is the Chancellor happy with the performance of the Office for Budget Responsibility?

Mr Osborne: Yes, I am happy with the performance of the OBR, because we have created a new institution in Britain that produces independent fiscal and economic forecasts. The absolutely astonishing revelation of the former Chancellor’s memoirs was how—[Interruption.] Let me tell Labour Members this: that book has not even been published yet, but they will be hearing a lot more about it in the months ahead, because it reveals the truth, not just about the last Government but about how the current shadow Chancellor operated in the last Government—the poisoned politics, the paralysed Government and the lack of a credible economic policy.

T5. [70023] Vernon Coaker (Gedling) (Lab): Thousands of working-age households in my constituency and millions across the country are set to lose up to 20% of their council tax benefit from April 2013. What assessment has the Chancellor made of the impact of that policy on incentives to work?

Mr Osborne: We published our impact assessments at the time of the spending review, and, like other savings in the welfare budget, the policy the hon. Gentleman mentions is designed to deal with a welfare budget that was completely out of control. Just a few weeks ago, the Opposition said they were going to come forward with a credible medium-term deficit reduction plan. Well, where is it? Every single measure we have put forward, they have opposed.

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T4. [70022] Miss Anne McIntosh (Thirsk and Malton) (Con): The Chancellor has stated his clear commitment to planning reforms, and local authorities are coming under increasing pressure to raise more locally than they receive centrally. Obviously, future developments are very attractive to them. Where in the planning reforms does the Chancellor assure the House there will be local democracy and a local voice?

Mr Osborne: We are giving a much greater role to local communities in determining their own local plan. We are also protecting the green belt and areas of outstanding natural beauty—of which I am sure there are a number in my hon. Friend’s constituency. I would make this point: these are sensible protections for the countryside, but we must also allow economically productive development in this country. We have to simplify a planning system that is completely unintelligible to most citizens. That is precisely what we are doing and I hope we will be backed on both sides of the House.

T6. [70024] Mr Nigel Dodds (Belfast North) (DUP): Will the Chancellor give a categorical assurance to the House that the Government will swiftly and robustly reject any proposal from the European Commission, the European Parliament or any other European institution for a trans-European revenue-raising measure?

Mr Osborne: I can assure the right hon. Gentleman that I am certainly opposed to any new European tax.

T8. [70026] Peter Aldous (Waveney) (Con): The Lowestoft and Great Yarmouth enterprise zone can play a vital role in promoting growth. Will the Chancellor accept an invitation from me and my hon. Friend the Member for Great Yarmouth (Brandon Lewis) to visit our constituencies to see for himself the area’s great potential and to hear from business and council representatives about the work being done to create new private sector jobs?

Mr Osborne: I certainly will visit Great Yarmouth and Lowestoft—and on a couple of occasions during this Parliament, I hope. I am delighted that the bid for an enterprise zone from Great Yarmouth and Lowestoft was successful. It was a very impressive bid, involving intelligent use of East Anglia’s offshore energy resources, and I look forward to seeing how work on that is progressing when I visit.

T7. [70025] Rushanara Ali (Bethnal Green and Bow) (Lab): Given stagnating economic growth in the UK, US and much of Europe, and with forecasts predicting slow to no growth, will the Chancellor acknowledge that his economic plans are hurting but not working, and can he now tell us what his plan B is for driving growth in the UK?

Mr Osborne: I think that question involved a contradiction in that the hon. Lady pointed out that there was either slow or no growth in the United States and Europe and then somehow blamed my economic policies for that situation. That points to a broader observation: until the Labour party has some cognisance of what is happening in the world and how our policies are protecting the country with the largest budget deficit

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in the G20 from being caught in the firestorm that some other European countries have found themselves in, frankly it is not going to be at the races.

Stephen Williams (Bristol West) (LD): Coming back to the crisis in some of the economies of the European Union, out of a crisis can sometimes come an opportunity. Will the Chancellor, next time he is meeting his fellow Finance Ministers, impress upon them the need further to deepen and reform the single market in order to promote trade and growth within the European Union?

Mr Osborne: I certainly will. I agree 100% with the point the hon. Gentleman is making, and on Friday we will be meeting as the G7, and then we have the ECOFIN meeting next week. He is absolutely right: as well as needing to tackle the fiscal policies and budget deficits, we need to make Europe more competitive. We need to make the whole of the European continent more competitive, and that involves supply-side reforms, deepening the single market and promoting free trade around the world, and I will be making that point today and in future.

T9. [70027] Diana Johnson (Kingston upon Hull North) (Lab): Given the latest data on manufacturing, construction, exports and retail, can the Chancellor explain to me exactly where we will see growth and jobs coming from, especially in an area such as Hull?

Mr Osborne: I hope the hon. Lady welcomes the decision we made to make sure that Humberside had an enterprise zone. The way that this and other countries are going to get growth is not by taking yet another fix of the debt-fuelled spending bubble that got us into the mess we are in at the moment; it is by becoming competitive and having successful private sector businesses and a tax and regulatory environment that allows them to compete with not just the rest of Europe but the rest of the world.

Laura Sandys (South Thanet) (Con): Like many of my colleagues, I want to thank the Chancellor for launching the enterprise zone and visiting—[Hon. Members: “Ah!”] Yes, in Sandwich. However, it is not just enterprise but trade and investment that need to come into the country. Does he believe that UK Trade & Investment is going to step up to the mark and ensure that we get the message across that Britain is open for business?

Mr Osborne: The short answer is yes. I was delighted to visit the new enterprise site in Sandwich with my hon. Friend, but we do need to promote exports. It is absolutely staggering that we export more to Ireland than we do to Brazil, Russia, India and China. That is the situation we inherited, and we have got to increase exports. The Chinese vice-premier will be in London on Thursday, and I hope we can fulfil our countries’ joint ambition to increase trade between the two countries.

T10. [70028] Tristram Hunt (Stoke-on-Trent Central) (Lab): Given that increasing urban density increases economic productivity, and that countries with lax planning law such as Ireland, Greece and Spain are among the least competitive in Europe, why on earth is the Chancellor so intent on ripping up our planning system and destroying what makes England England?

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Mr Osborne: I completely reject the premise of the hon. Gentleman’s question. As I say, green belt and areas of outstanding natural beauty will be protected, but we need to allow economically productive development. I have to say that his question is particularly puzzling as he represents the city of Stoke. Stoke applied for an enterprise zone, and one of the features of such a zone was that we were going to relax the planning rules.

Bob Russell (Colchester) (LD): When the Eurostar is in France it is in a eurozone country, but when it comes through the channel tunnel into England’s green and pleasant land, the euro is not the sovereign currency. Last week, Eurostar refused to accept British money, even on the train in this country. Will the Chancellor make a robust complaint to Eurostar? [ Interruption. ]

Mr Osborne: The Opposition remind me of the very good election slogan that we had—although it was not particularly successful—which was “Save the Pound”. We have managed to save the pound on the Eurostar—or rather, the company itself has anticipated questions such as the one from my hon. Friend. I am glad to hear that, as he travels to and from Brussels and Paris, he will continue to be able to buy his meals in pounds sterling.

Stephen Timms (East Ham) (Lab): Before the Chancellor meets the head of the IMF on Friday, will he recognise that in warning that slamming on the brakes too quickly will harm the recovery, she has a point? Does not Britain’s experience illustrate that?

Mr Osborne: The point that the IMF has made consistently over the last two years is that countries with fiscal space can of course use it, but that Britain does not have that fiscal space. It made that point in its article IV assessment of the UK just a few weeks ago, and that is also the view of Christine Lagarde. As I say, she is coming to this country on Friday and we will hear what she has to say.

Margot James (Stourbridge) (Con): As the Chancellor has reassured the House that protecting the green belt is not incompatible with reforming the planning system, can he tell the House any more about how the Government can help to reduce the costs of the planning system for business?

Mr Osborne: Planning costs in Britain are among the highest in the world and planning delays are among the longest in the world. That is what we are seeking to deal with, so that we get economic development that is sustainable and protects our most cherished environments. That is what we are doing. What people are beginning to see, as this debate unfolds, is that we have to take some difficult decisions in this House if we are to have sustainable economic growth in a very competitive global economy. The planning reforms are part of that plan.

Albert Owen (Ynys Môn) (Lab): The massive increases in energy prices are hitting every family and business in this country. Before the general election, the Conservative party, and indeed the Prime Minister, promised to take direct action and curb excessive rises. What action does the Chancellor intend to take to cure this problem now?

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Mr Osborne: I took action in the Budget to cut fuel duty.

Mr Philip Hollobone (Kettering) (Con): What would happen to domestic interest and mortgage rates were Britain to lose its triple A status by relaxing its financial deficit reduction targets?

Mr Osborne: Of course the benefit of having a credible economic policy and a credible fiscal policy is having low market interest rates. Greece today has one-year bond rates of 82% and Italy’s bond spreads have gone out in recent days. We are borrowing money at 2.3%, and that is, in part, because we have a credible economic policy. If we did not have plans to deal with the largest budget deficit in the G20, we would find ourselves in a similar position to Italy or Spain.

Naomi Long (Belfast East) (Alliance): The Chancellor will be aware that air passenger duty has a particular impact in Northern Ireland, particularly as it places pressure on business and discourages tourism. What action does he intend to take, and when, to ensure that we can maintain our links, particularly our transatlantic ones?

Mr Osborne: I am very aware of the issue relating to the continental flight from Belfast to the eastern seaboard of the United States, and I have spoken to Northern Ireland’s First Minister and Deputy First Minister about it. I can see that there is a particular challenge because of the proximity of the airport in Dublin, and the British embassy in Washington has also been very active in dealing with the company in the United States. I can assure the hon. Lady that we are on the case.

Jo Swinson (East Dunbartonshire) (LD): There is still huge public anger that taxpayers have had to bail out the very banks whose cavalier and risky behaviour led to the global economic meltdown. Further to the eloquent question from the Father of the House, the right hon. Member for Louth and Horncastle (Sir Peter Tapsell), when Vickers reports next week will the Chancellor

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ensure that he acts promptly to introduce any necessary legislation to implement the recommendations, in order to avoid a repeat of the financial crisis, and that he does not listen to the vested interests arguing for delay?

Mr Osborne: It was this coalition Government who established the Vickers report. Those questions were simply not asked by the previous Government—we are asking those questions. However, I am afraid that the hon. Lady will have to wait until Monday to hear the Government response to the Vickers report.

Mr Iain Wright (Hartlepool) (Lab): Harold Macmillan, the most successful Chancellor and Prime Minister that Eton has ever produced, once said that effective Governments need to adapt to “Events, dear boy, events.” Could the Chancellor, dear boy that he is, outline to the House the events that would warrant a change in his economic policy, or is he woefully negligent, blinkered and complacent?

Mr Osborne: I think the hon. Gentleman is being rather harsh on Hugh Dalton, who I think also went to Eton.

Matthew Hancock (West Suffolk) (Con): Do not recent revelations show that the previous Government were masters of nothing?

Mr Osborne: That is a brilliant plug for my hon. Friend’s new book. I am sure that the whole House will want to read it, because it will remind us of everything that went wrong under the previous Government.

Several hon. Members rose

Mr Speaker: Order. Time is up. I would love to call more hon. Members, as I enjoy nothing more than hearing my colleagues ask and answer questions, but I am afraid that we must move on to the ten-minute rule motion.

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Currency and Banknotes (Amendment)

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

3.34 pm

Mr Douglas Carswell (Clacton) (Con): I beg to move,

That leave be given to bring in a Bill to amend the Currency and Banknotes Act 1954 to allow banknotes in addition to those issued by the Bank of England to be legal tender; and for connected purposes.

[ Interruption. ]

Mr Speaker: Order. I am trying to be helpful to the hon. Gentleman and I apologise for interrupting him, but I appeal to Members who are leaving the Chamber please to do so quickly and quietly, extending the same courtesy to the hon. Gentleman as they would want to be extended to them in comparable circumstances.

Mr Carswell: Thank you, Mr Speaker.

My Bill would amend the Currency and Banknotes Act 1954 to enable a range of different currencies to be used as legal tender in Britain. The idea comes from a 1989 Treasury paper when John Major was Chancellor. What the Treasury proposed as theoretically possible 22 years ago, the internet now makes practically achievable.

The internet has given people unprecedented choice. We have access to a greater range of music, financial services, groceries and books than ever before, so why do we have legal tender laws that create a monopoly currency? Thanks to eBay and Amazon, it is possible to buy and sell hundreds of thousands of items at the click of a mouse. It is even possible to do so using whichever currency we please. By making a range of different currencies legal tender in the UK, my Bill would enable people to go a step further. People could buy things, store wealth and pay taxes in a range of different currencies too. Families would be able to plan their financial future without having to do so using a currency that is set to halve in value in the next 14 years. Businesses concerned about rising prices could protect themselves.

We would not need to carry multiple currencies about us in a multi-currency country. Non-cash payments, which since 2004 have exceeded cash payments, mean it would be as easy as using a debit or Oyster card. The 40 years since the collapse of Bretton Woods have been a grand currency experiment. People in Britain might have been using pounds as the unit of currency for centuries, but for the past 40 years the pound has been a fiat—or paper only—currency. Until 1971, the British state could not simply print as much money as it liked, but since then, a mere 40 years ago, the year that I was born, the number of pounds in circulation—the money supply—has been directed by Government and by the state. With a fiat pound, there has been no external constraint limiting the amount of money in circulation besides the self-restraint of the British state.

Government turns out not to be very good at restraining Government. UK money supply has grown from £31 billion in 1971 to more than £1,700 billion today—many times faster than the economy. For 40 years, monetarists have argued with those who claim that they follow Keynes about the rate at which the money supply should be increased. There has been much debate about which branch of the state should take the decision. Should it be Ministers, who are accountable to this House, or

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experts sitting in the Bank of England? Monetarists or Keynesians, the Monetary Policy Committee or Ministers: so long as it has been left to Government to manage our currency, our currency has been debauched. State officials proved to be no better at managing a nationalised currency than they are at running nationalised airlines or telephone lines.

Just as a broken clock manages to tell the correct time twice a day, our monetary managers have got the settings right on occasion. More often, however, we end up hearing how the state planners lacked the benefit of hindsight. Perhaps we should stop expecting planners to get anything right.

Our paper-only currency system emerged out of the 1960s and 1970s. Like many ideas that grew out of that technocratic age—such as urban tower blocks, child-centred education or DDT pesticide—what seemed terribly modern, forward-looking, progressive and scientific turned out to be a disaster. A small but growing number of academics now see the west’s unfolding financial crisis not simply as a banking problem. It was not simply caused by inadequate capital ratios or too much short selling. Instead, they see it as a fundamental failure of this fiat currency experiment.

A credit balloon was created by reckless management of the money supply. Using inflation, Governments were able to whittle away their debts. Monetary management favoured the debtor over the saver and the consumer over the producer. Monetary policy has encouraged us to over-consume and under-produce, to over-borrow and to save too little. In the space of a generation, fiat money has seen Government grow and the productive sectors of the economy shrink.

Under my proposal, we would no longer be forced to live under such a destructive regime. If the Bank of England keeps printing off more money—more quantitative easing, more loose monetary policy—there may be a fall in the value of its currency, but not necessarily in the value of the currency that the rest of us choose to use. At the click of a mouse, people and businesses would have an alternative. Incidentally, our ability to opt out as individuals and businesses from the MPC’s monetary monopoly might encourage it to stop taking liberties with our currency.

On both sides of the House Members recognise that choice and competition safeguard the interests of the consumer and the citizen. We do not think twice about people being able to tune into different radio and television stations or choose between different hospitals for medical treatment. One day, I hope that Britain will become a multi-currency country.

My proposal for competing currencies is not a new idea. It was the policy of the Conservative Administration in 1989. An excellent Treasury paper presented to this very House suggested competing currencies as an alternative to the European single currency. Perhaps the euro, which we mercifully kept out of, is the ultimate paper-only currency. It is not even backed by the fiat of a single state authority. It is, perhaps, the fiat currency to end all fiat currencies, although perhaps not in quite the way that the architects of economic and monetary union expected. If, as seems possible, the euro breaks up, we should revert to and revisit the ideas in that Treasury paper. By adopting competing currencies, Britain could save herself by her exertions, and save European economies by her example.

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Replacing the monopoly of one failed fiat currency with multiple competing currencies would allow euro members the least painful means of extricating themselves from the monetary monster that holds them captive. With choice and competition, all Europeans might be free from the monetary mismanagement that always comes from on high.

3.41 pm

John Mann (Bassetlaw) (Lab): I rise to speak because I think it is appropriate that someone from the Labour Benches should oppose this true bastion of Conservatism. History demonstrates to us that, given the opportunity and power, the Conservative party will always attempt to undermine, whittle away and eventually destroy the great institutions of this country. We are seeing it with the police service and the NHS. But Conservative Back Benchers want to go much further. Here we have them proposing a motion, which they wish to become legislation backed by their Front Bench, to take on, challenge and destroy sterling. I think that we on the Labour Benches want to defend the great currency of sterling against such an imposition of Euro-fanaticism—for that is what we have grown to expect from the Conservative party, although it is never up front, never to the public.

One recalls of course that, after Harold Wilson, Denis Healey and others blocked European adventurism, it was the Conservative party, inspired by Sir Keith Joseph, that resolutely took us into the European Union. Who was it who introduced all these new employment laws—maternity leave, paternity leave, a range of rights at work? Indeed, we backed them on that, rightly. It was none other than Margaret Thatcher and the Conservative party, who signed Maastricht. That was the fundamental—

Mr Speaker: Order. I have been listening to the hon. Member for Bassetlaw (John Mann) in a variety of forums for 25 years, and I see no reason to cease doing so now. However, I gently remind him that the matter under discussion is the proposed amendment to the Currency and Banknotes Act 1954.

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John Mann: I thank you, Mr Speaker. I was just drawing the parallels with this pernicious motion, which would destroy sterling at the moment of its introduction. We saw the coalition partner, the hon. Member for Colchester (Bob Russell) give an example this very week of how on Eurostar the euro is the currency of use, not sterling. The hon. Member for Clacton (Mr Carswell) wishes to impose the euro on every shop across the country, for every transaction. He would go further: he would allow the Iranian rial and other currencies to be used. When I go to buy my midget gems from the corner shop, I wish to use sterling; I do not wish to use the euro or the Iranian rial.

The idea was inspired by a paper from 1975 by Hayek, which dictated the monetary policy to which the Government are adhering. Hayek first made the proposal, to try to break down boundaries. The concepts of “ever onwards”, free trade, the breakdown of the nation state and the destruction of national currencies are really what Back-Bench Conservative Members are about; they would open the floodgates to euros at every corner shop in Britain.

We should not oppose the motion today; we should give it time, so that the arguments can be developed further, and so that we can hear the supporters’ true perspective—then we should vote it down. I resolutely stand up for sterling and the corner shop, and oppose the euro and the attempt to impose it on us, but I do not seek to divide the House. Let us give the hon. Member for Clacton more time to put his case, and let us then destroy him in the vote.

Question put and agreed to.


That Mr Douglas Carswell and Steve Baker present the Bill.

Mr Douglas Carswell accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 20 January, and to be printed (Bill 226).

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Health and Social Care Bill (Programme) (No. 3)

3.47 pm

The Minister of State, Department of Health (Mr Simon Burns): I beg to move,

That the Order of 31 January 2011 (Health and Social Care Bill (Programme)) as supplemented by the Order of 21 June 2011 (Health and Social Care Bill (Programme) (No. 2)) be varied as follows:

1. Paragraphs 5 and 6 of the Order shall be omitted.

2. Proceedings on Consideration shall be taken on the days shown in the first column of the following Table and in the order so shown.

3. Each part of the proceedings shall (so far as not previously concluded) be brought to a conclusion at the time specified in relation to it in the second column of the Table.


Proceedings Time for conclusion of proceedings

First day

New Clauses and New Schedules relating to, and amendments to, Parts 3 and 4 other than:

(a) New Clauses, New Schedules and amendments relating to transitional arrangements for NHS foundation trusts,

(b) New Clauses, New Schedules and amendments relating to private health care, and

(c) amendments providing for commissioning consortia to be known as clinical commissioning groups.

8.30 pm on the first day.

New Clauses and New Schedules relating to, and amendments to, Parts 3 and 4, which relate to transitional arrangements for NHS foundation trusts or to private health care;

amendments providing for commissioning consortia to be known as clinical commissioning groups.

10.00 pm on the first day.

Second day

New Clauses, New Schedules and amendments relating to the provision of information, advice or counselling about termination of pregnancy.

One and a half hours after the commencement of proceedings on consideration on the second day.

Remaining New Clauses and New Schedules relating to, and remaining amendments to, Parts 1, 2 and 5 to 12; remaining proceedings on consideration.

6.00 pm on the second day.

4. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at 7.00 pm on the second day on which proceedings on consideration are taken.

I will speak briefly to the programme motion, as I am sure that all hon. Members who wish to take part in debate on the Bill would like to make progress and get on to the main core of the amendments before us. As they will see, we have set in train our plan to hold Report and Third Reading over two days, commencing now and continuing until 10 pm tonight, and resuming on Wednesday, after Prime Minister’s questions and

6 Sep 2011 : Column 178

any other business that takes place on that day. As is normal, Third Reading will take place an hour before the end of that day.

As we are all aware, we arrive at Report with the Bill having received extensive scrutiny in two House of Commons Committee stages. Our first Committee stage, in February and March this year, lasted 28 sittings. It was the longest Committee stage of any Bill since the Criminal Justice Bill of 2002-03. At the conclusion of proceedings, even the hon. Member for Halton (Derek Twigg), who led for the Opposition in that Committee, acknowledged that

“every inch of the Bill”––[Official Report, Health and Social Care Public Bill Committee, 31 March 2011; c. 1310.]

had been


Following a listening exercise and the work of the Future Forum, the Bill was re-committed to a further Committee stage of 12 sittings. If that had been a stand-alone Committee stage, it would have been the longest for any Bill sponsored by the Department of Health since 2003. All that means that the Bill has been scrutinised for a total of over 100 hours, and has been the subject of 40 Committee sittings—more sittings than there has been for any public Bill between 1997 to 2010. I will dwell on that point for a moment, and remind hon. Members of recent Health Bills that predate this Government.

The Health Act 2009 was scrutinised over eight sittings, as was the Human Fertilisation and Embryology Act 2008. The Bill Committee for the Health and Social Care Act 2008, which among other provisions set up the Care Quality Commission, sat for 12 sittings, a number matched by the Health Act 2006. As the keener mathematicians among us might have realised, the total number of Commons Committee sittings for these four Bills was 40—the same number as for this single Bill. In these 40 sittings we had a great number of debates where the issues were fully debated, sometime more than once.

Having had such substantial debate in Committee, we feel strongly that two days on Report is a thoroughly appropriate length of time. I have heard the calls from certain Opposition Members that more time is needed. I find that intriguing, given the rarity with which two-day Report stages were granted under the previous Government.

Frank Dobson (Holborn and St Pancras) (Lab): Is it not treating the people who work in the national health service with contempt to expect the House to consider more than 1,000 amendments and new clauses in two days? Is that not a disgrace?

Mr Burns: The right hon. Gentleman’s hyperbole does not match the facts. He mentioned 715 amendments —[Interruption.] Yes, but the right hon. Gentleman mentioned 715 amendments dealing with one issue within the more than 1,000 amendments. May I point out to him that 715 amendments are all technical amendments? They change the name of GP consortia to clinical commissioning groups, following the recommendations made by the Future Forum and others working in the health service, which I would have thought would be welcomed by the Opposition Front Bench team at least. That number bloats and distorts the total number. The other significant number of amendments—121—deal with the continuity of services, which is an

6 Sep 2011 : Column 179

issue that the Opposition Front-Bench team implored us to bring before the House, rather than allowing it to be dealt with another place. That is why we have done so.

If we are going to be somewhat churlish, let me point out that 100 amendments were tabled by the official Opposition, of which 41 have been selected, and the vast majority of those amendments have been dealt with in Committee in great detail. So in that respect we will be going over well covered ground.

I do not intend to speak for long as I do not wish to detain the House. There is work to be done. This Government have allowed four two-day Report stages in this Session alone. Let me remind the House of one of those rare Government Bills that was granted a two-day Report stage under the previous Government—the Planning Bill in June 2008, with which I know the right hon. Member for Wentworth and Dearne (John Healey) is extremely familiar and probably very fond of. For that Bill the Government of the day thought that two days were appropriate—an interesting judgment, given that they were tabling 29 new clauses and seven new schedules on Report. Indeed, by the end of Report, the Planning Bill had grown by 25%. That compares with the nine new clauses that the Government have tabled on Report for the Health and Social Care (Re-committed) Bill. So that those on the Opposition Benches get the message, that is nine new clauses under this Government, as opposed to 29 new clauses in the right hon. Gentleman’s Bill.

Let us give the Opposition the benefit of the doubt. They might have forgotten what the right hon. Gentleman said when the Planning Bill was, unusually, allowed two days on Report, so let me remind them:

“My reasons for moving this motion were straightforward… It is true that the Bill is wide-ranging and important, which is why we have, unusually, provided two full days for the Report stage… we have departed from the usual by giving two days to this consideration.”—[Official Report, 2 June 2008; Vol. 476, c. 507.]

He established the fact that it is highly unusual. The Health and Social Care Bill has had far more time in Committee than previous Bills, and we are giving an extra day to allow hon. Members the opportunity to contribute to debates, although I must warn my hon. Friends that some of the debates will be a repetition, particularly for those who served on the Committee. It is for those reasons that I urge the House to support the motion.

3.56 pm

Liz Kendall (Leicester West) (Lab): We oppose this programme motion because it fails to give hon. Members enough time to scrutinise one of the most important Bills of this Parliament and, indeed, of the 63 years of the NHS. It is one of the largest Bills of recent times and the largest ever in the history of the NHS, with 420 pages and more than 300 clauses. It is also one of the most controversial. It will force the NHS through a massive reorganisation, which is already happening even though the Bill has not been passed, when it should be focused on meeting the biggest financial challenge of its life and improving patient care. It also seeks to make fundamental changes to the way our NHS is run, driving competition into every part of the system whether or not it is in patients’ best interests.

6 Sep 2011 : Column 180

Labour has led the arguments against the Bill since the autumn, helping to create the widespread opposition that has already forced the Government to pause and amend their plans. However, the Government, far from what the Minister said, refused to give the second Bill Committee enough time to scrutinise properly the changes after their so-called listening exercise. [ Interruption. ] The Minister tuts from a sedentary position, as is his wont, but 42 Government amendments and two new clauses were not debated in the second Committee due to a lack of time. They have not even bothered to publish the explanatory notes and impact assessment for the post-pause Bill, so the two days on Report that the programme motion proposes would have been insufficient in any case.

Then, on Thursday, three days before this debate, more than 1,000 new Government amendments were tabled, 363 of which are significant. They include a completely new set of proposals on whether local NHS services and, indeed, entire hospitals will be allowed to fail—proposals that could affect every constituency in England. It is a gross discourtesy to this House, not to mention to patients and NHS staff, to produce such important proposals and give such little time for scrutiny. I am sure that Members of the other place will take that into consideration in their deliberations on the Bill.

We are now faced with hundreds of significant new amendments and a series of fundamental questions about the post-pause Bill, and yet we have only two days for debate. Who will have the final say, and who is accountable for vital decisions about the future of local services? What will the Government’s health care market mean for expensive local services that do not make money, such as accident and emergency services and geriatric care, if hospitals lose services that do make money, such as hip and knee operations? How will NHS patients be protected if the private patient cap is abolished and hospitals are forced to take on more patients who pay in order to balance their books? What will be the true cost to taxpayers of the extra red tape and bureaucracy created by the Bill?

The Government’s failure to give the House sufficient time for scrutiny and provide proper answers about their Bill means that many NHS staff and patients remain deeply concerned. Unfortunately, that seems to have passed the Prime Minister by. Two weeks ago, he claimed:

“the whole…profession is on board for what is now being done.”

I wonder whether “the whole profession” includes the British Medical Association, which says—

Mr Burns indicated dissent.

Liz Kendall: The Minister groans. If he thinks that the body representing doctors in this country is worthy of that response, that is a disgrace. The BMA says that the Bill is still

“an unacceptably high risk to the NHS, threatening its ability to operate effectively and equitably now and in the future”.

It calls for the Bill’s withdrawal

“or at the very least further, significant amendment”.

Chris Skidmore (Kingswood) (Con) Is the BMA not the same organisation that opposed the creation of the NHS in 1948?

6 Sep 2011 : Column 181

Liz Kendall: The Prime Minister claims that the whole profession is now on board for the Bill, and that simply is not the case. Government Members, particularly those on the Liberal Democrat Benches, should remember that the Government have no mandate from either the election or the coalition agreement for fundamental aspects of the Bill. In fact, the coalition agreement promises to do precisely the opposite—to stop top-down reorganisations of the NHS.

The Government want to railroad the Health and Social Care Bill through the House in the face of widespread opposition and huge controversy, and with no mandate for their plans.

Andrew Percy (Brigg and Goole) (Con): Will the hon. Lady give way?

Liz Kendall: I will not, because we need to get on to the substance of the debate. The less time that the Government give MPs to scrutinise the Bill, the more people will think that they have something to hide; the more they hide, the longer it will take to get the Bill through the other place.

Unless hon. Members vote against the programme motion, it will be left to Members in the other place to provide the parliamentary scrutiny that the Bill needs and to get answers to the serious questions that remain. I believe that Members of this House should scrutinise legislation and get the answers to questions that our constituents need and deserve. The Government are refusing to give us the time to do our job. I urge Members to vote against the programme motion.

4.2 pm

Mr Peter Bone (Wellingborough) (Con): I start from the default position of opposing programme motions. The Government have consistently said that they also oppose programme motions and that they will overcome that problem by introducing a House Committee which will, of necessity, do away with programme motions, because the House will decide.

We have to look at programme motions now on the merits of each and every case. In this case, I have to say to the hon. Member for Leicester West (Liz Kendall) that I cannot agree with her. The Government have been very willing to listen to people—politicians—and to redo completely the parliamentary scrutiny of the Bill. They sent it back to Committee, from where it has come here. On this occasion, the Government have bent over backwards for scrutiny, and I will be voting with them in the Aye Lobby.

Question put.

The House divided:

Ayes 299, Noes 232.

Division No. 335]

[4.3 pm


Adams, Nigel

Afriyie, Adam

Aldous, Peter

Alexander, rh Danny

Amess, Mr David

Bacon, Mr Richard

Baker, Norman

Baker, Steve

Baldry, Tony

Baldwin, Harriett

Barclay, Stephen

Barker, Gregory

Baron, Mr John

Barwell, Gavin

Beith, rh Sir Alan

Bellingham, Mr Henry

Benyon, Richard

Beresford, Sir Paul

Berry, Jake

Bingham, Andrew

Binley, Mr Brian

Birtwistle, Gordon

Blackman, Bob

Blackwood, Nicola

Blunt, Mr Crispin

Boles, Nick

Bone, Mr Peter

Bottomley, Sir Peter

Bradley, Karen

Brady, Mr Graham

Brake, rh Tom

Bray, Angie

Brazier, Mr Julian

Brine, Mr Steve

Brooke, Annette

Bruce, Fiona

Buckland, Mr Robert

Burley, Mr Aidan

Burns, Conor

Burns, rh Mr Simon

Burrowes, Mr David

Burstow, Paul

Burt, Lorely

Byles, Dan

Cairns, Alun

Cameron, rh Mr David

Campbell, rh Sir Menzies

Carmichael, rh Mr Alistair

Carmichael, Neil

Carswell, Mr Douglas

Chishti, Rehman

Chope, Mr Christopher

Clappison, Mr James

Clark, rh Greg

Clarke, rh Mr Kenneth

Clifton-Brown, Geoffrey

Coffey, Dr Thérèse

Collins, Damian

Colvile, Oliver

Crockart, Mike

Crouch, Tracey

Davey, Mr Edward

Davies, Glyn

Davies, Philip

Davis, rh Mr David

de Bois, Nick

Dinenage, Caroline

Djanogly, Mr Jonathan

Dorrell, rh Mr Stephen

Dorries, Nadine

Doyle-Price, Jackie

Drax, Richard

Duddridge, James

Duncan, rh Mr Alan

Duncan Smith, rh Mr Iain

Dunne, Mr Philip

Ellis, Michael

Ellison, Jane

Ellwood, Mr Tobias

Elphicke, Charlie

Eustice, George

Evans, Graham

Evans, Jonathan

Evennett, Mr David

Fabricant, Michael

Fallon, Michael

Farron, Tim

Field, Mr Mark

Foster, rh Mr Don

Francois, rh Mr Mark

Freeman, George

Freer, Mike

Fullbrook, Lorraine

Fuller, Richard

Garnier, Mr Edward

Garnier, Mark

Gauke, Mr David

Gibb, Mr Nick

Gillan, rh Mrs Cheryl

Glen, John

Goldsmith, Zac

Goodwill, Mr Robert

Gove, rh Michael

Grant, Mrs Helen

Grayling, rh Chris

Greening, Justine

Grieve, rh Mr Dominic

Griffiths, Andrew

Gummer, Ben

Gyimah, Mr Sam

Halfon, Robert

Hames, Duncan

Hammond, rh Mr Philip

Hammond, Stephen

Hancock, Matthew

Hands, Greg

Harper, Mr Mark

Harrington, Richard

Hart, Simon

Harvey, Nick

Haselhurst, rh Sir Alan

Hayes, Mr John

Heath, Mr David

Heaton-Harris, Chris

Hemming, John

Henderson, Gordon

Herbert, rh Nick

Hinds, Damian

Hoban, Mr Mark

Hollingbery, George

Hollobone, Mr Philip

Hopkins, Kris

Horwood, Martin

Howarth, Mr Gerald

Howell, John

Hughes, rh Simon

Huhne, rh Chris

Hunter, Mark

Huppert, Dr Julian

Hurd, Mr Nick

Jackson, Mr Stewart

James, Margot

Javid, Sajid

Jenkin, Mr Bernard

Johnson, Gareth

Johnson, Joseph

Jones, Andrew

Jones, Mr David

Kawczynski, Daniel

Kelly, Chris

Kennedy, rh Mr Charles

Kirby, Simon

Knight, rh Mr Greg

Kwarteng, Kwasi

Lancaster, Mark

Lansley, rh Mr Andrew

Latham, Pauline

Laws, rh Mr David

Lee, Jessica

Lee, Dr Phillip

Leech, Mr John

Lefroy, Jeremy

Leslie, Charlotte

Lewis, Brandon

Lewis, Dr Julian

Liddell-Grainger, Mr Ian

Lidington, rh Mr David

Lilley, rh Mr Peter

Lopresti, Jack

Lord, Jonathan

Luff, Peter

Macleod, Mary

Main, Mrs Anne

Maynard, Paul

McCartney, Jason

McCartney, Karl

McIntosh, Miss Anne

McLoughlin, rh Mr Patrick

McPartland, Stephen

McVey, Esther

Mensch, Louise

Menzies, Mark

Mercer, Patrick

Metcalfe, Stephen

Mills, Nigel

Milton, Anne

Moore, rh Michael

Mordaunt, Penny

Morgan, Nicky

Morris, Anne Marie

Morris, David

Morris, James

Mosley, Stephen

Mowat, David

Mulholland, Greg

Murray, Sheryll

Murrison, Dr Andrew

Neill, Robert

Newmark, Mr Brooks

Newton, Sarah

Nokes, Caroline

Norman, Jesse

Nuttall, Mr David

O'Brien, Mr Stephen

Offord, Mr Matthew

Ollerenshaw, Eric

Opperman, Guy

Ottaway, Richard

Parish, Neil

Patel, Priti

Penrose, John

Percy, Andrew

Perry, Claire

Phillips, Stephen

Pickles, rh Mr Eric

Pincher, Christopher

Poulter, Dr Daniel

Prisk, Mr Mark

Pritchard, Mark

Raab, Mr Dominic

Randall, rh Mr John

Reckless, Mark

Redwood, rh Mr John

Rees-Mogg, Jacob

Reid, Mr Alan

Rifkind, rh Sir Malcolm

Robertson, Mr Laurence

Rogerson, Dan

Rosindell, Andrew

Rudd, Amber

Ruffley, Mr David

Russell, Bob

Rutley, David

Sanders, Mr Adrian

Sandys, Laura

Scott, Mr Lee

Selous, Andrew

Shapps, rh Grant

Sharma, Alok

Shelbrooke, Alec

Simmonds, Mark

Simpson, Mr Keith

Skidmore, Chris

Smith, Miss Chloe

Smith, Julian

Soames, rh Nicholas

Soubry, Anna

Spelman, rh Mrs Caroline

Spencer, Mr Mark

Stephenson, Andrew

Stevenson, John

Stewart, Iain

Stewart, Rory

Streeter, Mr Gary

Stride, Mel

Stuart, Mr Graham

Stunell, Andrew

Sturdy, Julian

Swales, Ian

Swayne, rh Mr Desmond

Swinson, Jo

Tapsell, rh Sir Peter

Teather, Sarah

Thurso, John

Timpson, Mr Edward

Tomlinson, Justin

Tredinnick, David

Truss, Elizabeth

Turner, Mr Andrew

Tyrie, Mr Andrew

Uppal, Paul

Vaizey, Mr Edward

Vara, Mr Shailesh

Vickers, Martin

Villiers, rh Mrs Theresa

Walker, Mr Charles

Wallace, Mr Ben

Walter, Mr Robert

Ward, Mr David

Watkinson, Angela

Weatherley, Mike

Webb, Steve

Wharton, James

Wheeler, Heather

White, Chris

Whittaker, Craig

Whittingdale, Mr John

Wiggin, Bill

Willetts, rh Mr David

Williams, Mr Mark

Williams, Roger

Williams, Stephen

Williamson, Gavin

Willott, Jenny

Wilson, Mr Rob

Wright, Jeremy

Wright, Simon

Young, rh Sir George

Zahawi, Nadhim

Tellers for the Ayes:

Stephen Crabb and

Norman Lamb


Abbott, Ms Diane

Abrahams, Debbie

Ainsworth, rh Mr Bob

Alexander, rh Mr Douglas

Alexander, Heidi

Ali, Rushanara

Allen, Mr Graham

Anderson, Mr David

Ashworth, Jonathan

Austin, Ian

Bailey, Mr Adrian

Bain, Mr William

Balls, rh Ed

Banks, Gordon

Barron, rh Mr Kevin

Bayley, Hugh

Beckett, rh Margaret

Begg, Dame Anne

Benn, rh Hilary

Benton, Mr Joe

Berger, Luciana

Betts, Mr Clive

Blackman-Woods, Roberta

Blears, rh Hazel

Blenkinsop, Tom

Blunkett, rh Mr David

Brennan, Kevin

Brown, rh Mr Nicholas

Brown, Mr Russell

Bryant, Chris

Buck, Ms Karen

Burden, Richard

Campbell, Mr Alan

Campbell, Mr Ronnie

Caton, Martin

Chapman, Mrs Jenny

Clark, Katy

Clwyd, rh Ann

Coaker, Vernon

Coffey, Ann

Connarty, Michael

Cooper, Rosie

Corbyn, Jeremy

Crausby, Mr David

Creagh, Mary

Creasy, Stella

Cruddas, Jon

Cryer, John

Cunningham, Alex

Cunningham, Mr Jim

Cunningham, Tony

Curran, Margaret

Dakin, Nic

Danczuk, Simon

Darling, rh Mr Alistair

David, Mr Wayne

De Piero, Gloria

Denham, rh Mr John

Dobbin, Jim

Dobson, rh Frank

Docherty, Thomas

Donohoe, Mr Brian H.

Doran, Mr Frank

Dowd, Jim

Doyle, Gemma

Dromey, Jack

Dugher, Michael

Durkan, Mark

Eagle, Ms Angela

Eagle, Maria

Edwards, Jonathan

Efford, Clive

Elliott, Julie

Ellman, Mrs Louise

Engel, Natascha

Esterson, Bill

Evans, Chris

Field, rh Mr Frank

Flello, Robert

Flint, rh Caroline

Flynn, Paul

Fovargue, Yvonne

Francis, Dr Hywel

Gardiner, Barry

Gilmore, Sheila

Glass, Pat

Glindon, Mrs Mary

Goggins, rh Paul

Goodman, Helen

Greatrex, Tom

Green, Kate

Greenwood, Lilian

Griffith, Nia

Gwynne, Andrew

Hain, rh Mr Peter

Hamilton, Mr David

Hamilton, Fabian

Hanson, rh Mr David

Harman, rh Ms Harriet

Harris, Mr Tom

Havard, Mr Dai

Healey, rh John

Hendrick, Mark

Hepburn, Mr Stephen

Heyes, David

Hodge, rh Margaret

Hodgson, Mrs Sharon

Hopkins, Kelvin

Hunt, Tristram

Irranca-Davies, Huw

Jackson, Glenda

James, Mrs Siân C.

Johnson, rh Alan

Johnson, Diana

Jones, Graham

Jones, Helen

Jones, Mr Kevan

Jones, Susan Elan

Jowell, rh Tessa

Joyce, Eric

Kaufman, rh Sir Gerald

Keeley, Barbara

Kendall, Liz

Khan, rh Sadiq

Lammy, rh Mr David

Lavery, Ian

Lazarowicz, Mark

Leslie, Chris

Lewis, Mr Ivan

Lloyd, Tony

Llwyd, rh Mr Elfyn

Long, Naomi

Love, Mr Andrew

Lucas, Caroline

Lucas, Ian

MacShane, rh Mr Denis

Mactaggart, Fiona

Mahmood, Mr Khalid

Mahmood, Shabana

Mann, John

Marsden, Mr Gordon

McCabe, Steve

McCann, Mr Michael

McCarthy, Kerry

McClymont, Gregg

McCrea, Dr William

McDonagh, Siobhain

McDonnell, John

McFadden, rh Mr Pat

McGovern, Alison

McGovern, Jim

McGuire, rh Mrs Anne

McKechin, Ann

McKenzie, Mr Iain

Mearns, Ian

Michael, rh Alun

Miliband, rh David

Miller, Andrew

Mitchell, Austin

Moon, Mrs Madeleine

Morrice, Graeme


Morris, Grahame M.


Mudie, Mr George

Munn, Meg

Murphy, rh Mr Jim

Murphy, rh Paul

Murray, Ian

Nandy, Lisa

Nash, Pamela

O'Donnell, Fiona

Onwurah, Chi

Osborne, Sandra

Owen, Albert

Pearce, Teresa

Perkins, Toby

Phillipson, Bridget

Pound, Stephen

Qureshi, Yasmin

Raynsford, rh Mr Nick

Reed, Mr Jamie

Reeves, Rachel

Reynolds, Emma

Reynolds, Jonathan

Riordan, Mrs Linda

Robertson, John

Robinson, Mr Geoffrey

Rotheram, Steve

Roy, Mr Frank

Roy, Lindsay

Ruane, Chris

Ruddock, rh Joan

Sarwar, Anas

Seabeck, Alison

Shannon, Jim

Sheridan, Jim

Shuker, Gavin

Simpson, David

Slaughter, Mr Andy

Smith, rh Mr Andrew

Smith, Angela

Smith, Nick

Smith, Owen

Spellar, rh Mr John

Straw, rh Mr Jack

Stringer, Graham

Stuart, Ms Gisela

Sutcliffe, Mr Gerry

Tami, Mark

Thomas, Mr Gareth

Thornberry, Emily

Timms, rh Stephen

Trickett, Jon

Turner, Karl

Twigg, Derek

Twigg, Stephen

Umunna, Mr Chuka

Vaz, rh Keith

Walley, Joan

Watson, Mr Tom

Watts, Mr Dave

Whitehead, Dr Alan

Wicks, rh Malcolm

Williams, Hywel

Williamson, Chris

Wilson, Phil

Wilson, Sammy

Winnick, Mr David

Winterton, rh Ms Rosie

Wood, Mike

Woodcock, John

Woodward, rh Mr Shaun

Wright, Mr Iain

Tellers for the Noes:

David Wright and

Lyn Brown

Question accordingly agreed to.

6 Sep 2011 : Column 182

6 Sep 2011 : Column 183

6 Sep 2011 : Column 184

6 Sep 2011 : Column 185

6 Sep 2011 : Column 186

Health and Social Care (Re-committed) Bill

[1st Allocated Day]

Consideration of Bill, as amended in the Public Bill Committee

Mr Speaker: Before the House embarks on the Bill, it may help if I deal with a matter that has been raised with me concerning the 715 virtually identical Government amendments changing the phrase “commissioning consortia” to “clinical commissioning groups”. These are the fourth group on today’s selection list. It has never been the practice of the House or its Committees to allow a single global amendment to make a series of identical or very similar amendments. The rule that any substantive change to the text of the Bill must be done by an amendment is designed for the protection of the rights of all Members and the integrity of the legislative process. I do understand that in this case it leads to a particularly bulky amendment paper. The fact that a practice is long-standing does not, in my view, mean that it is sacrosanct. Any hon. Member who wishes is of course free to ask the Procedure Committee to inquire into this matter. I hope that that is helpful.

I should also inform the House that amendment 781, which is printed on page 2985, should appear on page 3051, and amendments 945 and 946, which are printed on page 3138, should appear on page 3068. That has no material effect on today’s proceedings, but I know that the House will have wanted me to share those crucial nuggets of information with it.

Sir Peter Bottomley (Worthing West) (Con): On a point of order, Mr Speaker. The House will have noted your comments about the repetitive amendments. Are we to take it that we have to go through quite a lengthy procedure in order just to be able to list the places where the words would be substituted? Is it not possible—is it not in your power or that of the Leader of the House—to make the change without having to go through weeks and weeks of Committees and other consideration? I do not necessarily need an answer now, but that is a consideration to which I would have thought a reforming Speaker might have found a solution.

Mr Speaker: I thought that I had found a very satisfactory way forward—one that should appease the hon. Gentleman and perhaps mollify him, putting him in a better frame of mind. There will be a grouping. If he is inquiring of me whether a separate Division will be required to give effect—

Sir Peter Bottomley indicated dissent.

Mr Speaker: The hon. Gentleman is shaking his head from a sedentary position to indicate that that is not the burden of his proposition, in which case I am not sure what is. I can nevertheless assure him that no separate Division will be required. I think that at the end of our proceedings he will be in the good humour to which we know he is accustomed.

Sir Peter Bottomley: Further to that point of order, Mr Speaker. The point was the one that you have made, which is that the amendment has to be repeated, with

6 Sep 2011 : Column 187

different pages and lines. I suggest that an amendment might be tabled setting out a list of the pages and lines where it applied.

Mr Speaker: What I am saying is what I have already said, which is that there is no provision for a global amendment. An amendment is required to be made in each case. That does not entail a separate Division or what the hon. Gentleman in his first point of order described with some trepidation as a “lengthy procedure”. There will be no requirement for a lengthy procedure. Ministers seem sanguine; so am I—so, I think, should the House be. Perhaps we can now proceed to the business before us.

New Clause 2

Conditions relating to the continuation of the provision of services etc.

‘(1) The things which a licence holder may be required to do by a condition under section 104(1)(i)(i) include, in particular—

(a) providing information to the commissioners of services to which the condition applies and to such other persons as Monitor may direct,

(b) allowing Monitor to enter premises owned or controlled by the licence holder and to inspect the premises and anything on them, and

(c) co-operating with such persons as Monitor may appoint to assist in the management of the licence holder’s affairs, business and property.

(2) A commissioner of services to which a condition under section 104(1)(i), (j) or (k) applies must co-operate with persons appointed under subsection (1)(c) in their provision of the assistance that they have been appointed to provide.

(3) Where a licence includes a condition under section 104(1)(i), (j) or (k), Monitor must carry out an ongoing assessment of the risks to the continued provision of services to which the condition applies.

(4) Monitor must publish guidance—

(a) for commissioners of a service to which a condition under section 104(1)(i), (j) or (k) applies about the exercise of their functions in connection with the licence holders who provide the service, and

(b) for such licence holders about the conduct of their affairs, business and property at a time at which such a condition applies.

(5) A commissioner of services to which a condition under section 104(1)(i), (j), or (k) applies must have regard to guidance under subsection (4)(a).

(6) Monitor may revise guidance under subsection (4) and, if it does so, must publish the guidance as revised.

(7) Before publishing guidance under subsection (4) or (6), Monitor must obtain the approval of—

(a) the Secretary of State, and

(b) the National Health Service Commissioning Board.’. —(Mr Lansley.)

Brought up, and read the First time.

4.22 pm

The Secretary of State for Health (Mr Andrew Lansley): I beg to move, That the clause be read a Second time.

Mr Speaker: With this it will be convenient to discuss the following:

Government new clause 6—Objective of trust special administration.

6 Sep 2011 : Column 188

Amendment 10, page 83, line 5, leave out part 3.

Amendment 1225, in clause 57, page 83, line 13, leave out ‘monitor’ and insert ‘Integrated Health Service Regulator (elsewhere referred to in this Bill as “Monitor”)’.

Amendment 1226, in clause 58, page 83, line 20, at end insert ‘and

(c) is sufficiently integrated so as to reduce any risk to patient care and to provide continuity of service.’.

Amendment 1207, page 83, line 23, after ‘preventing’, insert ‘competitive or, as the case may be,’.

Amendment 1227, in clause 59, page 84, line 42, at end insert ‘bearing in mind that it should be balanced with ensuring the protection of health service integration.’.

Amendment 1228, page 85, line 2, at end insert—

‘(3A) “Integration”, in relation to health services, means the provision or commissioning of health services in a manner to ensure the viability of the full range of health and social care facilities which a community might reasonably expect from the NHS, including the provision of complex and commercially less attractive and difficult to provide emergency and other acute services which require to be provided on a site or in a manner which benefits from its collaboration with other acute health specialities or services.’.

Government amendment 87.

Amendment 1205, in clause 61, page 86, line 14, at end insert—

‘(n) the need to avoid existing NHS services, including but not restricted to, emergency care, intensive care, chronic and complex care, teaching, training and research, becoming unviable or unstable due to an unplanned reduction in income or case-load.’.

Government amendment 90.

Amendment 1208, in clause 70, page 92, line 7, after ‘in’, insert ‘competitive or, as the case may be,’.

Amendment 1209, page 92, line 8, at end insert—

‘(d) protect and promote the integration of health services and health and social care services,

(e) improve the equality of access to NHS services and healthcare outcome,

(f) do not undermine the stability of existing NHS services, including but not restricted to, emergency care, intensive care, chronic and complex care, teaching, training and research.’.

Amendment 1229, page 92, line 8, at end insert—

‘(d) do not act in a manner which risks undermining the viability of maintaining essential or designated core health services or the essential integration between health services.’.

Amendment 1219, in clause 74, page 94, line 22, leave out subsections (1) to (3) and insert—

‘(1) Part 3 of the Enterprise Act 2002 (mergers) applies (in so far as it would not otherwise) where two or more enterprises have ceased to be distinct enterprises and specifically the activities of one or more NHS foundation trusts and the activities of one or more businesses have ceased to be distinct activities.’.

Amendment 1220, page 94, line 29, leave out ‘subsections (2) and (3)’ and insert ‘subsection (1)’.

Government amendments 91 to 107.

Amendment 28, page 117, line 22, leave out clause 110.

Government amendments 113 to 115.

Amendment 44, in clause 119, page 123, line 30, at end insert—

‘(10A) A description for the purposes of subsection (9)(b) may be framed by reference to—

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(a) the level of workforce training undertaken by the provider, and

(b) the extent to which the provision of its service leads to consequential costs for other providers.’.

Government amendments 116 to 136.

Amendment 29, in clause 130, page 132, line 34, at end insert—

‘(5AA) Regulations under this section must ensure that where transfers of property or liabilities occur, they can only be transferred to another NHS body.’.

Government amendments 137 to 164.

Amendment 30, in clause 134, page 136, line 26, leave out ‘licence holder’ and insert ‘NHS body’.

Government amendments 165 to 180.

Amendment 19, page 156, line 38, leave out clause 166.

Government amendments 181 to 184.

Amendment 1166, page 159, line 2, leave out clause 167.

Government amendments 185 to 187.

Amendment 20, page 163, line 14, leave out clause 176.

Government amendments 188 to 217.

Amendment 8, page 168, line 6, leave out clause 182.

Government amendment 218.

Amendment 9, page 168, line 39, leave out clause 183.

Government amendments 219, 220 and 366 to 372.

Mr Lansley: Our plans for modernising the NHS are focused not only on improving the quality of care of patients today, but on ensuring that the NHS is fit to face the challenges of tomorrow—to ensure that the NHS is always there, always improving and always based on the needs of patients, not their ability to pay. Parts 3 and 4 of the Bill are an integral part of achieving that aim. They take forward our commitment to protecting patients’ interests, by establishing a comprehensive system of regulation in part 3, and to promoting high quality services, by supporting all NHS trusts to become foundation trusts in part 4.

The regulatory framework that we inherited from the previous Government simply did not do enough to protect patients. It lacked a way to protect patients’ interests in relation to all types of provider. The previous Government set up two regulators—Monitor for foundation trusts and the Care Quality Commission—but forgot, or neglected, to create an explicit link between the two. They also left independent providers outside much of that regulatory oversight. We have proposed the development of Monitor as a health sector-specific regulator, establishing equivalent safeguards to protect patients’ interests in relation to all types of provider.

By contrast, let us look at Labour’s proposed amendment—amendment 10, in this group—which would delete all of part 3. That would leave the NHS in a position in which inconsistent regulation as between NHS trusts and foundation trusts undermined accountability and performance, in which independent providers were not regulated effectively, in which the Labour Government’s preferential treatment of independent sector providers could carry on, and in which politicians would continue to second-guess regulatory decisions, creating a double jeopardy for providers. On the Government side of the House, however, we recognise the needs of the NHS. We recognise the fact that patients’ interests must be protected, irrespective of the

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type of organisation providing their NHS services, in a clear, consistent, transparent framework.

These parts of the Bill have been scrutinised in the Bill’s two Committee stages and by the NHS Future Forum. I should like once again to thank Professor Steve Field and the members of the NHS Future Forum for their work in making recommendations on how to improve our plans. We then took those recommendations forward in the recommittal stage. As a result of the listening exercise, we made changes to introduce stronger safeguards, to ensure that fears of a market free-for-all could not happen. Monitor’s core duty has been changed to make it clear that it is there to protect and promote patients’ interests, and that it will not be required to promote competition as if that were an end in itself.

Chris Leslie (Nottingham East) (Lab/Co-op): Do not the right hon. Gentleman’s changes to the Bill still emphasise far too much the supposed read-across with competition law, treating health provision as though it were simply another utility? With regard to mergers and changes, for example, the Office of Fair Trading will be the arbiter on competition duties. Why has he chosen the OFT as arbiter in such cases?

Mr Lansley: I am not sure that the hon. Gentleman has followed this closely enough. We do not do any of those things. We are very clear that, through the Bill, we are creating, in Monitor, a health sector-specific regulator that will be able to exercise competition powers in a way that is entirely sensitive to the duties that it has for sustaining high-quality NHS services. As I will explain later, there will be a role for the OFT. Indeed, it has a role now. Labour Members should know that the application of competition law inside the NHS at the moment is exactly the same as it will be after the Bill. However, instead of it being done through the OFT as principal competition authority, it will—with the exception of mergers, which I will talk about later—be done through the concurrent powers of Monitor. The NHS Future Forum helpfully discussed these matters at length with people throughout the country, and concluded that it would be in the interests of the NHS for the legislation to create concurrent competition jurisdiction for Monitor, thereby ensuring that the application of competition rules—which is not changed in its extent by this legislation—is achieved in a health-specific context.

Nick Smith (Blaenau Gwent) (Lab): Why will Monitor have no duty to promote collaboration, as recommended by the Future Forum?

Mr Lansley: I am sure that the hon. Gentleman will want to look at clause 20, which is very clear about Monitor’s responsibilities. I am sorry—it is not clause 20; I will find it later. Monitor’s duties are very clear, and they include support for the integration of services and for the continuous improvement of quality of services. Across the NHS there is existing legislation making it clear that there is a responsibility for collaboration. As we have made clear in response to the NHS Future Forum’s report on the listening exercise, we are taking an evolutionary approach. The competition and co-operation panel was established under the Labour Government in January 2009. At that time, the panel made it absolutely clear that there should be a health basis for the implementation of competition and

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procurement rules in the NHS. That panel is now to be incorporated as part of Monitor. As its name implies, it examines both competition and collaboration. Monitor, like other bodies, has a duty to promote the integration of services.

Now, as I said, we have introduced safeguards against privatisation. This Bill, for the first time, stops the Secretary of State—and, indeed, Monitor or the NHS commissioning board—from trying deliberately to increase the market share of a particular type of provider. If the previous Labour Government had put such a requirement in law when they were office, hundreds of millions of pounds would not have been paid to independent sector treatment centres to carry out operations that were not required and never took place. If the Opposition had their way this afternoon, the safeguards that we intend to put in place would not be available.

4.30 pm

In its response to the opportunity provided by Report stage, the Labour party is being not progressive but reactionary, while the trade unions are being misleading in the presentation of their campaign. To be specific, the trade unions and other proxy organisations such as 38 Degrees have gone to some trouble to misrepresent the Bill in order to attack it.

Toby Perkins (Chesterfield) (Lab): I am grateful to the Secretary of State for giving way. Does he think that the British Medical Association, too, is misrepresenting the position when it says that even after Report stage there will still be too much emphasis on using market forces to shape health services? Is the BMA misrepresenting the truth as well, or is it just the Labour party?

Mr Lansley: I was interested to read this morning a letter whose lead signatory was Hamish Meldrum, the chairman of the BMA council, whom I know well. It was curious because his objection to the Bill, which he wants to be amended, was about the introduction and extension of the role of “any qualified provider”. However, that extension is not in the Bill. It is not occasioned by the Bill; it is a consequence of the way in which commissioners—[Interruption.] No, it does not. If there were no Bill, it would be open to strategic health authorities and primary care trusts to extend “any qualified provider” and patient choice in the NHS to whatever extent they wished. The Bill does not make that happen.

The point is that under the legislation there is a stronger safeguarding process, because the commissioners—

Toby Perkins rose

Mr Lansley: I will finish answering the hon. Gentleman before letting him intervene again.