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House of Commons

Monday 24 October 2011

The House met at half-past Two o’clock


[Mr Speaker in the Chair]

Oral Answers to Questions

Work and Pensions

The Secretary of State was asked—

Youth Unemployment

1. Robert Halfon (Harlow) (Con): What steps he is taking to reduce youth unemployment. [75984]

2. Mel Stride (Central Devon) (Con): What steps he is taking to reduce youth unemployment. [75985]

5. Nick Smith (Blaenau Gwent) (Lab): What his approach is to tackling youth unemployment. [75988]

13. Karl McCartney (Lincoln) (Con): What steps he is taking to reduce youth unemployment. [75996]

The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): It is good to see so many people in the Chamber who have discovered an interest in work and pensions.

Work experience and apprenticeships are central to improving the prospects of young unemployed people. We are making up to 100,000 work experience placements available and strengthening the links between the work experience programme and apprenticeships. We are also providing additional Jobcentre Plus help for 16 and 17-year-old jobseeker’s allowance claimants and offering earlier entry into the Work programme. It is worth reminding ourselves that of the 991,000 16 to 24-year-olds who are unemployed under the International Labour Organisation measure, 270,000 are full-time students. Finally, my hon. Friend the Member for Harlow (Robert Halfon) will be aware that Harlow is one of the Government’s new enterprise zones.

Robert Halfon: I am, of course, delighted that Harlow is an enterprise zone. Does my right hon. Friend agree that one way of cutting youth unemployment is to encourage Government contractors to hire apprentices? Figures from the House of Commons Library show that if just one apprentice was hired for every £1 million of public procurement, it would instantly create 238,000 apprenticeships and cut youth unemployment by a quarter.

Mr Duncan Smith: My hon. Friend is right. Under the new arrangements, suppliers must provide an apprenticeships and skills report within six months of the contract start date. The idea is that they will periodically show their progress towards meeting a commitment to employ 5% of apprentices in delivering the Department for Work and Pensions contract to which they are entitled. Work programme providers will be paid primarily for the results that they achieve, which means that they will be under pressure to do a similar thing.

Mel Stride: My right hon. Friend will be aware that under the previous Government, youth unemployment rose by 40%. Will he reassure the House that the measures he has just outlined will ensure that under this Government we do not have a repeat of that shameful record?

Mr Duncan Smith: My hon. Friend is right that youth unemployment rose from about 2004, regardless of a growing economy. One problem was that when the previous Government came to power, there was a guaranteed training place for all 16 to 18-year-olds,

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which they scrapped. That was one of the worst, most short-sighted decisions that any Government have ever made.

Nick Smith: Youth unemployment in Blaenau Gwent grew by a massive 12.8% last year. The Centre for Economic and Social Inclusion has highlighted the benefits of the future jobs fund, which helped 500 young people in my constituency. Will the Secretary of State look at bringing back the future jobs fund, given the current crisis of youth unemployment?

Mr Duncan Smith: As the hon. Gentleman should know, we made a commitment to complete the placements that had been committed to until March. That meant that there were nearly 64,000 additional places under the future jobs fund, bringing the total to 105,000 places. We believe that the future jobs fund was an expensive way to try to get people into employment. Almost half of those who went in have ended up back on benefits.

Karl McCartney: Is my right hon. Friend aware of research by the Chartered Institute of Personnel and Development which suggests that only 12% of employers planned to recruit school leavers aged 16 in the three months to September 2011, and that just 15% intended to recruit school leavers aged 17 to 18? That issue was raised during my visit to Lincoln college on Friday. I suspect that he is as concerned as I am by those statistics. Will he tell the House what the Government will do to encourage employers to invest further in our youth?

Mr Duncan Smith: We are talking a lot to employers about that problem. My hon. Friend is right about it. I return to the answer that I gave my hon. Friend the Member for Central Devon (Mel Stride) about ending the training scheme. That really affected 16 to 17-year-olds. I have brought in the £30 million innovation fund to look at ways in which we can give people approaching the age of 16 better skills for the work force. Employers have told us that many people who leave school at that age are simply not ready for work. We have allowed jobcentres to work with many of those people to get them ready for work. My hon. Friend the Member for Lincoln (Karl McCartney) is absolutely right that this matter is a priority for us.

Mr Liam Byrne (Birmingham, Hodge Hill) (Lab): Youth unemployment is now the highest it has ever been. Does the Secretary of State agree with the Chancellor that Britain is now “a safe haven”?

Mr Duncan Smith: I am not quite sure what the right hon. Gentleman’s linkage is in that question. Youth unemployment is high now, which is deeply regrettable, but he needs to take some responsibility for that. We have to remember that when we came into power, after a period of growth before the recession, the level of youth unemployment was higher under the last Government than the level that they inherited back in 1997. Frankly, his lectures on youth unemployment are like crocodile tears in the desert.

Mr Byrne: Since this Government have taken office, they have closed the future jobs fund and shut down the flexible new deal, and replaced them with a youth work scheme that costs less than the Department spends on

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stationery and guarantees interviews, not jobs, and with a Work programme that turns out on closer inspection to be all programme and no work. Meanwhile, youth unemployment is going through the roof.

I looked for the Department’s flagship youth unemployment policy on its website this morning, and what does it say?

“Page not found. The page you are looking for may have been removed or moved to the National Archives.”

So much for the priority that the Government gave to youth employment.

The last time unemployment was this high, it was not the hon. Member for Altrincham and Sale West (Mr Brady) who was trying to bring down the Government over Europe but the Secretary of State himself, the commander-in-chief of the Maastricht rebels. Instead of today’s debate, on which the Prime Minister has wasted so much time, should we not be having a debate about how we put a proper tax on bankers’ bonuses to get 100,000 young people back to work?

Mr Duncan Smith: I must say, the right hon. Gentleman coming up with the wrong page suggests more about his ability to negotiate the website than about the Department.

I repeat to the right hon. Gentleman what I said before: it is time the Opposition took responsibility for the mess that they got us in before we took over. Since we walked through the door we have had in place work clubs, work experience, apprenticeship offers, sector-based work academies, the innovation fund, European social fund support, the skills offer, the access to apprenticeships programme, Work Together, the Work programme, Work Choice, mandatory work activity and Jobcentre Plus. He has to recognise that under Labour’s watch, youth unemployment rose to a level higher than that at which they found it in 1997. It was a disgrace.

Multiple Sclerosis Sufferers

3. David Morris (Morecambe and Lunesdale) (Con): What steps he is taking to encourage people with multiple sclerosis to return to work. [75986]

The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller): The Government are committed to ensuring that individuals with conditions such as multiple sclerosis have the support that they need to find, and remain in, work. A comprehensive range of work support for individuals with serious fluctuating conditions is provided through the Work programme, Work Choice and Access to Work.

David Morris: I thank my hon. Friend for that answer. May I convey the wishes of my constituents in the local MS society for there to be better ways forward than those provided under the previous Government?

Maria Miller: I agree that the work of the Multiple Sclerosis Society is to be applauded, and I am sure that the Lancaster, Morecambe and district branch will join many other organisations in welcoming the measures in the Welfare Reform Bill, which is currently in the other place, including universal credit. Those measures will address the unacceptable imbalances inherent in the

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current welfare system, to ensure that people suffering from fluctuating conditions such as MS cannot be written off to a lifetime of dependency in future.

Mrs Anne McGuire (Stirling) (Lab): Department for Work and Pensions research on disability living allowance in work has indicated that those receiving DLA are, on average, more severely impaired than others and have a greater likelihood of multiple disabilities, including mental health conditions. Additionally, they are disadvantaged in the labour market because of the types of their impairment, and carry the greatest employment disadvantage.

The new personal independence payment assessment has been criticised by 23 leading disability organisations as being too medicalised and not taking into account the social and environmental barriers that disadvantage disabled people in the jobs market. Will the Minister share with us just how many disabled people she expects to get back into work as a result of her DLA proposals, given that the only figure that we have on the record is that the Government want to make a 20% cut to the DLA budget?

Maria Miller: I am somewhat surprised that the right hon. Lady tries to link disability living allowance to returning to work, given that in the past she has held the position that I hold now. It is absolutely clear that DLA, and indeed the PIP, which will take over from it, are not linked to work. I should think we would want to make that clear to people who are listening to these questions.

Stephen Lloyd (Eastbourne) (LD): A recent report by the Work Foundation found that up to 44% of people in the UK with MS retire early due to their condition, a higher percentage than the European average of just 35%. What plans does the Minister have to support individuals with MS to stay in the work force once they are in employment?

Maria Miller: I thank my hon. Friend for that question. I know that he does a lot of work in this area, and I welcome his contribution. He will be aware that through the Sayce recommendations, we are specifically considering how we can increase the role of Access to Work. That could have a particularly positive impact on people with MS. We already have a budget of some £105 million supporting about 35,000 people through Access to Work, and the Sayce recommendations indicate that the number could be doubled if there is a reprioritisation of how Government money is used.

Work Programme

4. Dame Anne Begg (Aberdeen South) (Lab): If he will publish monthly information on the number of people successfully placed in jobs by Work programme contractors and the cost per job outcome. [75987]

The Minister of State, Department for Work and Pensions (Chris Grayling): We are working to guidelines set by the UK Statistics Authority to ensure we publish statistics that meet high-quality standards at the earliest opportunity. Statistics on referrals and attachments to the Work programme will be published from spring 2012 and job outcome data from autumn 2012. We will also publish

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the average cost per job outcome for claimants who have been on the programme for 24 months as part of our transparency indicators.

Dame Anne Begg: I have to say that I am very, very disappointed with that reply. I cannot understand why it will be more than 12 months before the Government produce statistics on job outcomes and the cost per job. After eight months of the future jobs fund, we had the statistics on job outcomes for the first four months of the scheme. I cannot see why the Government should take any longer than that. What do they have to hide?

Chris Grayling: I have the utmost respect for the hon. Lady, but she needs to look again at how the Work programme works. We are not making an outcome payment to providers for six months. That is a really good deal for the taxpayer, because before providers can receive payment, they must ensure not simply that that have got somebody into work for a week to boost statistics, but that they keep them in work for a sustained period. The Government cannot produce robust statistics under the guidance produced by the UK Statistics Authority if we try to do so earlier.

Charlie Elphicke (Dover) (Con): Is not the key point about the Work programme that payment by results and packages tailored to individual needs are likely to make the cost per successful job outcome lower, and the number of jobs achieved higher?

Chris Grayling: My hon. Friend is absolutely right. The whole point of the Work programme is real investment in the long-term unemployed. Providers will take the requisite time to get them into work, but the Government will pay the bill only when people are successfully in long-term employment. That is a much better deal than under previous schemes from the previous Government. He is right that the Work programme is a much better deal for the taxpayer.

Stephen Timms (East Ham) (Lab): The Minister for the Cabinet Office and Paymaster General says that openness and transparency on public services data will be a

“core part of every bit of government business”,

so why not this bit of Government business? Why is the Minister not only refusing to publish performance data but banning Work programme providers from publishing their own data, as many did under the new deal and would like to do now? He is threatening to withdraw their contracts if they publish that data. What is he trying to hide, and will he at least lift that ban?

Chris Grayling: The right hon. Gentleman clearly was not listening to the answer I gave a moment ago, but he would also do well to remember that his Government set up the current rules on national statistics. He would surely want statistics to be published properly and in an appropriate time frame, under the guidance of the UK Statistics Authority. I do not believe in giving information out haphazardly. Let us do it properly, according to the guidance and process he set up when he was in government.

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Credit Unions

6. Jesse Norman (Hereford and South Herefordshire) (Con): What steps his Department is taking to support access to lending from credit unions. [75989]

10. Jeremy Lefroy (Stafford) (Con): What steps his Department is taking to support access to lending from credit unions. [75993]

The Minister of State, Department for Work and Pensions (Steve Webb): Since 2006, the Department has spent more than £100 million through its growth fund to encourage credit unions. In addition, since March this year, a further £11.8 million has been invested. The Department is now conducting a study into how best we can support credit unions and will report shortly.

Jesse Norman: Only 2% of people in this country are members of credit unions such as the excellent Money Box in my constituency, compared with 44% of people in the United States. What role can Jobcentre Plus play in helping credit unions to reach more people?

Steve Webb: I pay tribute to my hon. Friend for his involvement with the all-party group on credit unions and his commitment to the cause. Jobcentre Plus is keen to work closely with credit unions, and we are currently piloting a scheme in Manchester and Newcastle in which jobcentres share office space to see whether they can assist credit unions at a local level.

Jeremy Lefroy: I declare an interest as a member of the Staffordshire credit union. For more lending, we need more saving. What steps are the Government taking to encourage payroll saving in credit unions?

Steve Webb: The process of long-term saving through auto-enrolment in workplace pensions is imminent, but there has been a big growth in workplace coverage of occupational workplace individual savings accounts, which is an encouraging development. We are looking to see what more we can do to encourage that trend.

Chris Leslie (Nottingham East) (Lab/Co-op): Many who use credit unions also need help to access credit advice. What is the Minister doing to help those who will lose out when he scraps the £27 million financial inclusion fund from next March?

Steve Webb: One of the things we are looking at as part of our feasibility study on the future of credit unions is their crucial role in supporting people who need financial advice and assistance. That work will report back to the Department next month.

Mrs Madeleine Moon (Bridgend) (Lab): I declare an interest as one of the almost 3,000 members of the Bridgend Lifesavers credit union, which has loans of more than £500,000 but savings of £1 million and is keeping people out of the hands of doorstep loan sharks and the sadly growing numbers of pawnbrokers on our high streets. What can we do to ensure that people see credit unions, rather than doorstep loan sharks, as the way to save and borrow?

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Steve Webb: I welcome the hon. Lady’s endorsement of credit unions, and I am pleased to say that, last week, the House of Lords approved the legislative reform order that will pave the way for credit unions to expand. My hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) asked about the difference between the USA and the UK. One of those differences is that many of our credit unions are small and have not been able to stand on their own two feet and become viable. We are determined to enable them to become viable so that they can perform the functions that she set out.

Work Capability Assessment

7. Mrs Mary Glindon (North Tyneside) (Lab): When he plans to bring forward new work capability assessment descriptors for mental health and fluctuating conditions. [75990]

The Minister of State, Department for Work and Pensions (Chris Grayling): We have received suggested descriptors for mental, cognitive and intellectual function from Professor Harrington’s working group. Given that they represent a substantial departure from how the current assessment works, we are considering what impact they will have and will come forward with proposals soon. We have not yet received any recommendations from Professor Harrington’s separate working group on fluctuating conditions.

Mrs Glindon: In July the Minister received recommendations for changes to the mental health descriptors from Mind, the National Autistic Society and Mencap, and although he says that the Government will be bringing forward proposals shortly, will he specify when those changes will be implemented?

Chris Grayling: The challenge facing us is that the recommendations will involve a complete change of the work capability assessment, not simply for mental health issues, but for physical issues, and is therefore a multi-year project. We are considering whether we can incorporate elements of the recommendations into the current approach much more quickly. I am concerned to ensure that we do the right thing by people with mental health conditions, and I want to ensure that we take any sensible steps as quickly as possible.

Tony Baldry (Banbury) (Con): Will my right hon. Friend confirm that our approach should focus on what can be done to help people back into the world of work and on helping them with what they can do, rather than on any scintilla of a suggestion of people being punished for what they cannot do?

Chris Grayling: My hon. Friend is absolutely right. This is a crucial point. We are not trying to do people down, but looking to help those with the potential to make more of their lives to do so. The assessment is all about working out who has the potential to get back into the workplace, and through the Work programme, we can deliver the specialist support that they need to do so.

Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op): This morning I met members of Headway East London concerned about the impact of this situation on people who are looking for work but feel that they

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are being penalised when they find it and then cannot cope with it. They talked about the chaos of the benefits system. When will the Minister be coming forward with these proposals and reassuring my constituents that they will be in a better position?

Chris Grayling: We are taking significant steps to sort out the problems to which the hon. Lady refers. The introduction of the universal credit in 2013 will completely transform how our benefits system works. It will be much easier for people with disabilities to move back into work step by step—initially, perhaps, by doing a few hours’ work and then by entering part-time and then full-time employment. It will transform their prospects.

Jenny Willott (Cardiff Central) (LD): Given Atos Healthcare’s past performance, no one has faith in the ability of the current work capability assessment or Atos fairly to assess fluctuating conditions in particular. Will the Minister work with Atos to ensure that the new descriptors are implemented as soon as possible and that Atos staff receive additional training to improve their performance and restore the faith of claimants and the general public in the assessment process?

Chris Grayling: I will have to wait and see what the recommendations are, but as a result of Professor Harrington’s first report, it is now decision makers in Jobcentre Plus who take the decision about an individual. I have told charitable groups representing people with a variety of conditions that the door is open to them to brief, train and discuss with those decision makers the issues facing such people so that they are as well informed as possible.

Dr Eilidh Whiteford (Banff and Buchan) (SNP): Last week I met representatives of the Royal National Institute of Blind People, who expressed concerns about the descriptors attached to vision. Will the Minister meet the RNIB and other representatives of blind and partially sighted people to address those concerns so that we have vision descriptors that are fit for purpose?

Chris Grayling: I have regular meetings with groups representing not just blind people, but those with various disabilities, and I will continue to do so. The object of the exercise is to help those who are blind or visually impaired back into work. Surely it is much better to find them a place in the workplace than leave them on benefits for the rest of their lives.


8. Bill Esterson (Sefton Central) (Lab): What assessment he has made of the factors underlying recent trends in the level of unemployment. [75991]

The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): Although unemployment is up by about 79,000 since the election, employment is slightly higher, at 29.1 million, and International Labour Organisation unemployment slightly lower, at 2.56 million, than the Office for Budget Responsibility thought it would be at this point. The total number claiming one of the main out-of-work benefits fell by about 25,000 over the last

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year to August. The number claiming incapacity benefit or lone parent benefits fell by nearly 140,000, while the number claiming jobseeker’s allowance rose by 115,000 over the same period. Jobcentre Plus has taken 1 million new vacancies in the last three months and there are 460,000 unfilled vacancies at the moment, up 1,000 this quarter and 5,000 on the year.

Bill Esterson: The question was about unemployment, which is at its highest since the last Tory Government lost power. We have no growth, and we need it to cut unemployment and the deficit. Will the Secretary of State support measures such as a temporary VAT cut on home improvements, which is supported by 49 business organisations, including the Federation of Master Builders and the Federation of Small Businesses, and would create jobs in small businesses in the construction industry?

Mr Duncan Smith: I felt that I answered the question. The hon. Gentleman might not have liked the answer, but I none the less answered it.

We do not agree with the Opposition’s suggestion of a VAT cut. It is also worth gently reminding the hon. Gentleman that he is part of a party that in government saw a huge rise in unemployment and stagnation of the economy, so before we get lessons and lectures from the Opposition, it would be nice for them to say, “We’re sorry for the mess we left things in.”

State Pension (Women)

9. Fiona Bruce (Congleton) (Con): What steps he is taking to help women who are most affected by the state pension age proposals contained in the Pensions Bill. [75992]

16. Andrea Leadsom (South Northamptonshire) (Con): What steps he is taking to help women who are most affected by the state pension age proposals contained in the Pensions Bill. [75999]

The Minister of State, Department for Work and Pensions (Steve Webb): We have amended the Pensions Bill so that women with the largest delay in receiving their state pension will find this delay reduced by six months.

Fiona Bruce: I thank the Minister for that reply, but what support is the Department offering to those who will have to work longer as a result of the revised state pension age timetable?

Steve Webb: Now that we will hopefully have certainty about the dates next week—subject to their lordships’ approval—we will want to ensure that people know exactly when their retirement date is. We will write to 750,000 people shortly, so that they know where they stand, and all the services of Jobcentre Plus and the Work programme will be available to those who become long-term unemployed later in life.

Andrea Leadsom: I congratulate those on the Front Bench on changing their minds on this issue. A number of female constituents have written to me expressing enormous gratitude for the fact that we have changed

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the position for the better. Does the Minister agree that this shows that we care about women in particular and, even more so, that Labour left us with such a mess that we are having to sort it out now and do things that we are not necessarily happy with?

Steve Webb: I am grateful to my hon. Friend. The change that we made—a commitment to ensuring that the changes are fair as they affect women—cost £1.1 billion. The difference between us and the Opposition is that their policy cost ten times as much and they had no idea where the money would come from.

Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab): The Minister knows how important auto-enrolment is to ensuring that future generations retire on a decent pension, but the Government’s Beecroft report on deregulation looms large on the horizon. Can the Minister reassure the House that whatever Beecroft recommends, no business large or small will be allowed to opt out from auto-enrolment?

Steve Webb: I congratulate the hon. Gentleman on his new role in the House. I much enjoyed his attempt to persuade the House last week that £11 billion was not very much if we divided it by 10 and by the national debt. In answer to his question about auto-enrolment, I can assure him that 2012 goes ahead as planned, as my right hon. Friend the Secretary of State said at the Dispatch Box last week.

Harrington Review

11. Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op): What assessment he has made of progress towards implementation of the recommendations of the Harrington review of the work capability assessment. [75994]

The Minister of State, Department for Work and Pensions (Chris Grayling): We took steps earlier this year to ensure that all the recommendations in Professor Harrington’s first report were implemented in time for the start of the national migration from incapacity benefit. I expect to receive Professor Harrington’s second report, telling us how well he thinks we are doing on that front, shortly.

Tom Greatrex: Given the Minister’s earlier comments, I am sure that he is well aware of the progressive and incurable nature of Parkinson’s disease. A constituent of mine with Parkinson’s has been called for his third work capability assessment, despite appealing the previous two incorrect decisions by Atos and the decision makers. Will the Minister undertake to meet me and Parkinson’s UK, so that he can understand better how in practice the work capability assessment, rather than helping people who can work, too often hounds those who will not get better?

Chris Grayling: The hon. Gentleman has to understand that one of the great failings of our welfare state over the past decade has been that we have left people on the sidelines year after year without checking to see what their condition is or what the potential alternatives are. I am very happy to meet Parkinson’s UK and the hon. Gentleman. I well understand the challenges that the

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disease presents for those who are unfortunate enough to suffer from it, but we cannot simply go back to a situation in which we leave people year after year without even checking what their condition is.

Right to Reside Test

12. Priti Patel (Witham) (Con): What assessment he has made of the potential effects on the payment of benefits of the reasoned opinion from the European Commission on the UK’s right to reside test. [75995]

19. Henry Smith (Crawley) (Con): What assessment he has made of the potential effects on the payment of benefits of the reasoned opinion from the European Commission on the UK’s right to reside test. [76002]

The Minister of State, Department for Work and Pensions (Chris Grayling): We accept our responsibility in supporting EU citizens who work here and pay their tax and national insurance, but it is clearly completely unacceptable that we should be asked to open our welfare system to people who have never worked in or contributed to the United Kingdom and who have no intention of doing so. We are considering all the details of the Commission’s reasoned opinion, but we are absolutely committed to ensuring that the UK retains control of its welfare policies.

Priti Patel: I thank my right hon. Friend for his robust remarks. What steps is he taking to ensure that the UK is not burdened further by benefit tourism?

Chris Grayling: The best way for us to get the message across to the Commission about the need for change is to demonstrate that this is not a matter for the UK alone. I am therefore forging partnerships with my counterparts in other member states, most of whom have the same concerns. We have to make the Commission recognise that this kind of land grab of an area that should be a national competence is unacceptable. It has all kinds of political connotations, and the Commission must change its view.

Henry Smith: I thank my right hon. Friend for his previous answer. Can he tell us what steps his Department will be taking to monitor foreign nationals who are receiving UK benefits?

Chris Grayling: I can indeed. One of the things that surprised me most on taking office was the fact that the previous Administration had made no attempt whatever to identify how many people from overseas were receiving benefits. We are now doing that work. We aim to publish the results in the next few weeks, and we will aim to learn lessons from what we find.

Personal Independence Payments

14. Simon Hughes (Bermondsey and Old Southwark) (LD): What recent discussions he has had with organisations representing disabled people about the face-to-face assessment process for personal independence payments. [75997]

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The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller): Officials and I have met a broad range of disability organisations in relation to our proposals for the personal independence payment. We have also set up a dedicated group specifically to involve disabled people and their organisations in the design and operation of the new PIP process.

Simon Hughes: Two organisations representing blind people—Action for Blind People and Blind Aid—are based in my borough. One of the concerns that has come to the fore recently is that people who are registered blind, who are clearly blind and have been so for some time, should not have to present themselves to be checked when being assessed for their disability benefits. Can the Minister confirm that, where there is a clear, settled condition, there will be no need for people to be unsettled by having to prove again what is obvious to everyone?

Maria Miller: Although face-to-face consultations will be an important part of the personal independence payment for most people, I have made it clear throughout all the debates that they might not be appropriate for everyone, especially when there is sufficient evidence on which to make an assessment. It is important, however, to treat everyone as an individual, because there is a coincidence of multiple disability for many individuals.


15. Ann Coffey (Stockport) (Lab): What recent assessment he has made of the level of unemployment. [75998]

The Minister of State, Department for Work and Pensions (Chris Grayling): The latest figures published by the Office for National Statistics show 2.6 million unemployed, on the International Labour Organisation measure—a rate of 8.1% of the labour force.

Ann Coffey: The latest unemployment figures show that 35% of all jobseeker’s allowance claimants in Stockport are from the most disadvantaged area in my constituency. Unemployed people from disadvantaged areas are likely to remain unemployed for longer, so what steps will the Minister take to ensure that disadvantage does not become further embedded in our community?

Chris Grayling: The structure of the Work programme will mean that, for the first time, we will be paying a higher rate for the help provided to those who come from more challenged backgrounds, in order to encourage providers to make an investment in helping them. That will be an important part of getting them back into the workplace. Under the previous Government’s schemes, there was one flat rate for everyone, but our pricing structure reflects the real need to focus on people who are struggling in life.

Amber Rudd (Hastings and Rye) (Con): Does my right hon. Friend agree that one of the ways to reduce unemployment is to make sure that people set up new businesses? Does he agree that the new enterprise allowance, which we in Hastings and Rye welcome, should also be directed at both disadvantaged people and young people, to make sure that the widest possible number of people are able to set up in business?

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Chris Grayling: I agree, and it is very much my hope that the new enterprise allowance will generate a significant boost to new enterprise, small businesses and self-employment in this country. In the way that it is structured, it is aimed at those who have been out of work for more than six months, so I hope it will deliver exactly what my hon. Friend hopes for, which is to support people who have potential but who face the greatest challenges in getting back into the workplace.

Lilian Greenwood (Nottingham South) (Lab): Young and disabled people are more likely to rely on public transport to get to work, yet the right hon. Gentleman’s Government’s policies are leading to cuts in bus services and unaffordable fare rises. How is that helping to get unemployment down?

Chris Grayling: When I listen to Labour Members bemoan the cutbacks, I am always astonished that they seem to fail to understand that it is down to the mismanagement of the previous Government that we are having to take these difficult decisions—and we are having to take many such decisions. They should be looking in the mirror in the morning and saying, “Whose fault is this really?”

Social Fund

17. Ann McKechin (Glasgow North) (Lab): What discussions he has had with the Scottish Government on the replacement of the social fund. [76000]

The Minister of State, Department for Work and Pensions (Steve Webb): In addition to general discussions on welfare reform between Scottish Government Ministers and the Department, both Lord Freud and I have corresponded directly with Scottish Government Ministers about the planned social fund reforms.

Ann McKechin: I am grateful for the lack of information in that response. [Laughter.] The Minister will be aware that there is every possibility that the legislative consent motion relating to the Welfare Reform Bill, which includes the reform of the social fund, will not be granted consent by the Scottish Parliament. Will the Minister tell us what is his plan B to ensure that vulnerable people in communities in Scotland receive the crisis loans that they require?

Steve Webb: Let me point out that the bulk of crisis loans will remain available under a UK-wide scheme. The devolution of the social fund relates principally to community care grants and a small amount of crisis loans. In our view, that money is better handled locally, close to the communities in question, and we hope that the Scottish Parliament will take the opportunity to have the money that is available and to spend it in Scotland, which is what it always tells us it wants.

Jobcentre Plus

18. Katy Clark (North Ayrshire and Arran) (Lab): What recent assessment he has made of the capacity of the Jobcentre Plus network to administer the benefits system during periods of rising unemployment. [76001]

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The Minister of State, Department for Work and Pensions (Chris Grayling): The Department for Work and Pensions reviews work loads and staffing regularly to ensure that there is capacity to pay benefits and help people find work. On average, the DWP aims to clear jobseeker’s allowance claims within 10 days. It is currently clearing them in 9.6 days, nearly five days faster than five years ago.

Katy Clark: I thank the Minister for that answer. Twenty-two jobcentres and 17 benefit processing centres are due to close. While I understand that the Government are saying that they are going to try to avoid compulsory redundancies, there is no doubt that staff will be forced out of their jobs. Overall, the unemployment figures are reaching 3 million. In my constituency, the claimant count went up by 10% in the year to September. Surely we are going to see a worse service provided to claimants. Will the Minister undertake to provide regular performance statistics to this House?

Chris Grayling: What the hon. Lady does not understand is that we inherited a network of half-empty buildings. I am sure she would agree that it makes no sense to fund, for example, two or three jobcentres within a mile of each other in a city centre. Rather than cutting back—the hon. Member for Nottingham South (Lilian Greenwood) mentioned bus services—I would like to protect the services that we can possibly protect, and making our network of jobcentres and benefit delivery centres operate more efficiently and effectively seems a very good way of trying to ensure that we protect front-line services.

Housing Benefit

20. Heidi Alexander (Lewisham East) (Lab): What estimate he has made of the potential number of tenants who could accrue rent arrears as a result of implementation of his proposals to restrict housing benefit for social tenants in accordance with household size. [76003]

The Minister of State, Department for Work and Pensions (Steve Webb): We have made no estimates of the number of tenants who would get into rent arrears as a direct result of implementing our proposal, as it is not possible to predict exactly how people will respond to the change or what choices they might make in response to a potential shortfall.

Heidi Alexander: The Minister says he has made no such assessment, but the Housing Futures Network estimates that eight out of 10 tenants will struggle to make up the shortfall in lost benefits as a result of these proposed changes, with a third likely to go into rent arrears. That will increase the level of bad debt of housing providers and is likely to mean less investment in new affordable homes. Is the Minister concerned about that?

Steve Webb: I am grateful to the hon. Lady for drawing our attention to the Housing Futures Network research. What she did not quote was the fact that a quarter of respondents said that they were likely to downsize, which presumably means making better use of the housing stock, while 29% said that they would be either quite likely or very likely to move into work or

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increase their hours, which is a positive response. There are real issues about rent arrears; we are working closely with social landlords to assist, but there will be positive impacts from these policies, which also need to be borne in mind.

Andrew Bridgen (North West Leicestershire) (Con): Hard-working families in my constituency often see families on housing benefit receiving more than they themselves receive as a result of going out to work. Can my hon. Friend confirm that as a result of the new measures it will always pay to work?

Steve Webb: My hon. Friend will be aware that we have a range of policies to ensure that it pays to work, my right hon. Friend the Secretary of State's universal credit being central among them. The caps on housing benefit and the limit to the 30th percentile in the private sector are also designed to level the playing field between those in low-paid work and those on benefit.

Employment and Support Allowance

21. Gemma Doyle (West Dunbartonshire) (Lab/Co-op): What the average length of time was for an appeal in respect of a decision on a claim for employment and support allowance in the latest period for which figures are available. [76004]

The Minister of State, Department for Work and Pensions (Chris Grayling): In the current year, the average actual clearance time between the Department’s receiving an appeal and its being lodged with Her Majesty’s Courts and Tribunals Service was 35.2 days. That, of course, includes the time allowed for individuals to produce new evidence about their circumstances. The average time taken from receipt of an appeal at HMCTS to the date of the first appeal hearing was 23.2 weeks. That information covers 1 April to 31 August 2011, the latest period for which figures are available.

Gemma Doyle: I thank the Minister for his detailed answer. Will he take this opportunity to refute press reports that he will cut the ESA of people who appeal against assessment decisions, especially in the light of the information that 40% of cases are being won on appeal?

Chris Grayling: What I expect to see as a result of the changes following Professor Harrington’s review in the summer is a significant reduction in the number of cases that go to appeal when the Department’s initial review and the reconsideration are upheld. In order to ease pressure on individuals, we have tried to ensure that there is a proper reconsideration service in Jobcentre Plus, so that they can produce new evidence at that stage and need not use the Courts Service at all.

Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op): Will the Minister look into the delays and difficulties experienced by visually impaired claimants who are being transferred from incapacity benefit to the ESA? I have no time to go into the details of this case today, but after more than four months a constituent of mine is still unable to submit a claim because of a lack of support and assistance, and she is not the only

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person in those circumstances. Will the Minister look into the difficulties experienced by this very vulnerable group?

Chris Grayling: It is difficult for me to comment on an individual case, but we certainly do not want to see people in difficulties. If the hon. Gentleman will write to me with details of the case, we will look into it for him.

Child Care Costs

22. Tony Lloyd (Manchester Central) (Lab): What estimate he has made of the potential effect on the number of women leaving work of his planned reduction in refundable child care costs. [76005]

The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): We are not planning any reductions in support for child care. In fact, as the hon. Gentleman will have noted, we recently committed ourselves to investing £300 million more in child care support under universal credit, on top of the £2 billion already spent on child care support. As a result of that support, some 80,000 more households will be eligible for child care, which must be welcome.

Tony Lloyd: I am not sure that the Secretary of State’s message has been conveyed to the public. Many working families are very concerned both about the high price of child care and about the fact that it is rising, and believe that they will be worse off as a consequence of the changes that are being made. How does the Secretary of State propose to ensure that his message gets across, to Labour Members as well as those on the Government Benches?

Mr Duncan Smith: I know that the hon. Gentleman holds genuine views on these matters. Obviously we must ensure that we listen more to people, and explain to them the changes that universal credit will bring. The end of the 16-hour rule and the provision of child care for those working fewer than 16 hours a week will be of major benefit, particularly to lone parents. Under the present system, some 100,000 people do not take up the child care support element of working tax credit to which they are entitled because they are not aware of it, so this will be a big breakthrough.

Crisis Loans

23. Philip Davies (Shipley) (Con): What proportion of crisis loans are repaid; and if he will make a statement. [76006]

The Minister of State, Department for Work and Pensions (Steve Webb): All crisis loans are repayable, and the vast majority are repaid, albeit sometimes over several years. Of the loans issued in 2003-04, more than 95% have so far been recovered.

Philip Davies: It seems from answers given by the Department that each year only half of what is paid out in crisis loans is repaid. The police have reported to me that they have evidence of fictional crimes that people invent in order to obtain crime numbers enabling them to gain crisis loans. Can the Minister explain

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what is being done to ensure that the amount of money being repaid increases, and to stop the abuse of the system?

Steve Webb: In order to give my hon. Friend a sense of scale, let me tell him that we lent a little over £200 million in crisis loans last year, and less than £500,000 was written off as unrecoverable. As I have said, the vast majority of loans are recovered, but I share my hon. Friend’s concern that the money should be lent correctly. Localising parts of the crisis loan system will lead to much closer local scrutiny of the purposes for which the money is being lent.

Child Poverty

24. Kerry McCarthy (Bristol East) (Lab): What assessment he has made of the effect on child poverty of benefit changes in (a) 2011-12 and (b) 2012-13. [76007]

The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): Treasury projections show that modelled tax and benefit reforms announced since Budget 2010 may result in a small reduction in child poverty in 2011-12 and 2012-13. These include above-indexation increases to the child element of child tax credit by £180 in 2011-12 and £110 in 2012-13.

Kerry McCarthy: I am slightly puzzled by the Secretary of State’s response. I am sure he is aware of the research published last week by the Institute for Fiscal Studies and the Joseph Rowntree Foundation predicting a huge rise in the number of children living in relative poverty—of perhaps 500,000 more—despite the Government’s introduction of the universal credit. Does he accept that child poverty is predicted to rise under his rule?

Mr Duncan Smith: The hon. Lady should not be so surprised given that I responded to the question she asked. The IFS projection deals with the tax and the benefits systems, but there are wider issues; we are addressing the pupil premium and other areas, which we think will also have an effect. The IFS projections are based on the premise that absolutely nothing changes, and I remind the hon. Lady that the last report showed that the previous Government were going to miss their 2010 targets before they left office.

Topical Questions

T1. [76009] Sheila Gilmore (Edinburgh East) (Lab): If he will make a statement on his departmental responsibilities.

The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): From today, and following the written ministerial statement laid in the House on Friday, employment and support allowance claimants who are eligible to volunteer for the Work programme will be referred to Work programme information sessions. Claimants in the support group will be able to opt in to the sessions. That will form part of the work-related activity component for those in the work-related activity group—WRAG. This is an important step in giving claimants a taste of the support available through the Work programme.

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Sheila Gilmore: Does the Secretary of State agree with last week’s comments by the Minister for Housing and Local Government that under-occupiers should not be bullied out of their homes, and will he now withdraw his proposals for social tenants which would result in exactly that?

Mr Duncan Smith: The position of the Housing Minister is correct, and I make it a principle to support him.

T4. [76012] Bob Russell (Colchester) (LD): Further to the Atos question asked earlier by my hon. Friend the Member for Cardiff Central (Jenny Willott), does the Secretary of State agree that the company is not fit for purpose, that it treats many claimants in an unacceptable way, and that, frankly, it is time that its contract was terminated?

The Minister of State, Department for Work and Pensions (Chris Grayling): My hon. Friend needs to understand that Atos is simply a subcontractor to the Department for Work and Pensions. It does not take decisions about individuals. It simply operates to a template, which was mostly established under the previous Government. Of course we must be sensitive, but Atos and our other subcontractors are as careful as possible about the job that they do. Ultimately however, it is the Department itself that sets the policy and implements the processes, and that must take responsibility for the outcomes.

Ian Austin (Dudley North) (Lab): Given the Secretary of State’s complaints about the free movement of European labour and his leadership of the Maastricht rebels in the ’90s, may I ask why he will not be demonstrating some conviction and consistency this evening? Why is he putting his position and his party before his principles, and his career before his country, in the debate on Europe this evening?

Mr Speaker: Order. It is always a pleasure to listen to the hon. Gentleman, and that is, indeed, a topical question, but it suffers from the notable disadvantage of bearing absolutely no relation whatsoever to the responsibilities of the Secretary of State for Work and Pensions. I will give a seminar to the hon. Gentleman later, further and better to explain the point, but there is no requirement on the Secretary of State to respond to that question.

Naomi Long (Belfast East) (Alliance): Given the relatively small employment market in Northern Ireland, does the Secretary of State believe, based on his discussions with Northern Ireland Ministers, that enough jobs can be created for those leaving employment for the Work programme financial model to be effective in Northern Ireland?

Chris Grayling: As the hon. Lady rightly says, all these issues are devolved to Northern Ireland. We have regular contact with the Northern Ireland Administration, and my colleague, Lord Freud, has regular meetings with them on behalf of the Department. We all, of course, want to see growth and employment in every part of the United Kingdom, including Northern Ireland, and to see all our welfare-to-work policies, both devolved and otherwise, bear fruit.

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T7. [76015] Duncan Hames (Chippenham) (LD): In the Welfare Reform Bill Committee on 10 May the Minister with responsibility for disabilities, the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Basingstoke (Maria Miller), assured us that she would not remove mobility benefits from disabled people without additional support being in place. Would she care to update the House on progress in determining the level of support that will be available to disabled people, including care home residents, through personal independence payments?

The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller): I thank my hon. Friend for giving me the opportunity to do that. As he is aware, we have been examining this issue more broadly and our research is well advanced. The independent review chaired by Lord Low has been examining some of the same issues, and it is sensible to reflect on the outcome of his important work in advance of our final decision. Lord Low is due to report on 3 November and I will announce our final decisions shortly after.

Mr Stephen Hepburn (Jarrow) (Lab): If Harrington does bring forward improvements to the work capability test, will the Minister give a commitment to review all those past cases seen and commissioned under Atos, where bad mistakes may have been made?

Chris Grayling: Of course, every claimant who goes through the work capability assessment has the right of appeal. I simply say to the hon. Gentleman that when Professor Harrington carried out his first assessment last year he said to me clearly that although he had recommended improvements, we could and should go ahead with the national incapacity benefit migration. I have accepted his recommendations.

T10. [76018] Priti Patel (Witham) (Con): Ministers will be aware of the difficulties that young people face in finding employment, and the challenges are naturally greater for those with disabilities. Will the Minister provide an update on Government plans to help young disabled people to get back into work, following the recent Sayce review?

Maria Miller: I thank my hon. Friend for her question. As she will doubtless be aware from her own constituency, the aspirations of young disabled people are no different from those of any other people. That is why, through the Work programme, the Work Choice programme and the access to work scheme, we will give young disabled people all the opportunities they need to progress into work.

T3. [76011] Fiona O'Donnell (East Lothian) (Lab): The Secretary of State seemed surprised that we do not share his love of statistics. I wonder whether it was he who briefed the Prime Minister last week, leading to the Prime Minister claiming at Prime Minister’s questions

“that 500,000 people have jobs who did not have one at the time of the election.”—[Official Report, 19 October 2011; Vol. 533, c. 893.]

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The Prime Minister was not at his most eloquent last week. However, according to official figures, between April to June 2010 and the most recent figures—June to August 2011—employment is up by just 87,000. We do not like the Secretary of State’s statistics when they are wrong. Does this not prove that the Government do not have a plan for tackling unemployment?

Chris Grayling: The hon. Lady is missing something out. One of the most regular refrains from the Opposition over the past few months has been that, as we have had to make necessary changes in the public sector as a result of the financial mess they left behind, the private sector would not be able to take up the slack. The truth is that although we have had a bad quarter for unemployment, we have seen more than 500,000 extra jobs in the private sector since the election and more jobs created in the private sector over the past year than have been lost in the public sector.

Mr Edward Timpson (Crewe and Nantwich) (Con): Under new housing benefit rules, foster carers who claim housing benefit will be penalised for having bedrooms occupied by foster children because they will be deemed as “under-occupied”. At a time when we need more foster carers, not fewer, what are the Government doing to address that anomaly?

The Minister of State, Department for Work and Pensions (Steve Webb): My hon. Friend has a good deal of personal knowledge of this issue. I refer him to the comments made by Lord Freud when it was raised during consideration of the Welfare Reform Bill in the Lords. He observed that this is a serious issue and that he is keen to ensure that we respond appropriately to that important point.

T5. [76013] Natascha Engel (North East Derbyshire) (Lab): A record number of employment and support allowance claimants are wrongly assessed as fit for work. They cannot claim ESA while they await their appeal hearings, yet appeals are taking anything up to 15 months to be heard. What is the Minister doing to make the system better and, more importantly, quicker?

Chris Grayling: The hon. Lady needs to remember that the system we inherited from the previous Government caused the problems to which she is referring. We made changes after the Harrington review last year that were all in place earlier this summer for the start of the national incapacity benefit migration. We have yet to see the statistical outcome of that, but I am confident that we will see a fall in the number of successful appeals as a result of our decision to implement the Harrington recommendations in full.

Brandon Lewis (Great Yarmouth) (Con): For auto-enrolment to have the maximum impact, it is important that seasonal short-term employees have an equal opportunity to be part of it. Will the Minister outline what incentives the Government are putting in place to encourage take-up by short-term and seasonal employees?

Steve Webb: We must strike the right balance in respect of those who work for an employer for a very short period, in order to avoid unnecessary bureaucracy.

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Those who are with a firm for more than three months will be within the scope of auto-enrolment, and those who work for a shorter period will still be free to opt in and trigger a contribution from their firm.

T6. [76014] Jessica Morden (Newport East) (Lab): Will the Minister reassure my constituents that the assessment for the personal independence payment will be fit for purpose and will not repeat the experiences of the work capability assessment?

Maria Miller: I thank the hon. Lady for her question. She will be aware that last May we published the assessment criteria, that we have been testing those through the summer with 900 disabled people, and that we are working with more than 50 disability organisations. I hope that that assures her that we will ensure that it is very much fit for purpose.

Sarah Newton (Truro and Falmouth) (Con): I very much welcome the Government’s plans to streamline advice and information and advocacy services, with the big possibility of a much enhanced citizens advice service. Will the Minister assure me that benefits advice and advocacy will be very much at the heart of the new service?

Mr Duncan Smith: Yes, I can.

Mr Frank Roy (Motherwell and Wishaw) (Lab): Is the Secretary of State aware that it is proving impossible for MPs to make telephone inquiries to Work programme providers, outsource providers and work capability assessment providers?

Chris Grayling: We are extremely keen to see close relationships between local Members of Parliament and Work programme providers. If there is any issue in making that happen, we will happily act as middlemen to make sure the doors are opened.

T8. [76016] Ann McKechin (Glasgow North) (Lab): As the Minister will be aware, there are approximately 2,000 local government employees in Scotland who administer housing benefit. He said in a recent parliamentary answer to me that those people are in his thinking in relation to the introduction of universal credit. Can he give any reassurance to the House that those people’s jobs will be protected and will be considered as part of the new system?

Mr Duncan Smith: We have said all along that, when it comes to administering universal credit, all those who are responsible for administering various parts of it now will have an equal opportunity to show that they are the most efficient and most effective.

Miss Anne McIntosh (Thirsk and Malton) (Con): I thank the Government for amending the state pension age for one category of women. May I press the Government and the Minister on the transitional arrangements for those women who will not have a reprieve, because presumably the unemployment benefit will not be as high as the state pension to which they would have been entitled?

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Steve Webb: My hon. Friend is right that there will still be people who face a significant increase in their state pension age. Working-age benefits will be available, including jobseeker’s allowance and employment and support allowance. Some such women will also have access to occupational pensions and other forms of income and we will support those who seek to carry on working up to their new state pension age.

T9. [76017] Catherine McKinnell (Newcastle upon Tyne North) (Lab): On Saturday, I joined more than 1,000 people in Newcastle for one of the many Hardest Hit campaign rallies across the country, in which people expressed anxiety about cuts to local care and support services, jobs and essential benefits for some of the most vulnerable in society. Given that disabled people are already twice as likely to live in poverty, what does the Minister have to say in response to their concerns?

Maria Miller: I regularly meet all the major organisations that are involved in the march. I can reassure the hon. Lady that we are doing work in the Department for Work and Pensions and through the Department of Health, with an extra £7.2 billion going on social care, an extra £3 million being put into user-led organisations and £180 million going on disabled facilities grants. Those are all additional areas of expenditure that disabled people should welcome.

Mr Iain Wright (Hartlepool) (Lab): One in five young people in Hartlepool is without employment, education or training. That is the highest proportion anywhere in the country and is the direct result of Government decisions such as the scrapping of the education maintenance allowance and the cancellation of the future jobs fund. Given the astonishing complacency of the Secretary of State’s earlier answers and given that he has not given a fig about young people throughout this Administration, what practical, tangible steps will he put in place so that young people in Hartlepool are not a neglected, forgotten or lost generation?

Mr Duncan Smith: I must say to the hon. Gentleman, as I have said to many others, that these problems with youth unemployment are deeply regrettable but, most importantly, while we in government look after the economy and want to see greater levels of growth, he, like all his colleagues, needs to take account of the fact

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that we are here because of the mess that his party left the economy in and the debts and the deficit—which we have to get rid of.

Gloria De Piero (Ashfield) (Lab): A constituent of mine has been taken off disability living allowance and was told in May that his appeal was ready to be heard at a tribunal but that the backlog meant that it could not be heard until April next year. That is an 11-month wait; does the Minister think that is an acceptable length of time?

Maria Miller: I am very happy to discuss an individual case such as that with the hon. Lady if she would like to talk to me at another point.

Mr Pat McFadden (Wolverhampton South East) (Lab): Has the Minister with responsibility for disabled people received any reports of Remploy factories having to turn away work? If so, does she agree that, at a time when there is criticism of the financial performance of some of those factories, that would be perverse given that we want those factories to be taking on as much work as possible?

Maria Miller: The Government are absolutely committed to Remploy and are continuing to fund the modernisation plan. As the right hon. Gentleman knows, we are looking at the future of Remploy—not just the factories, but employment services. If he has particular examples of current practice that he is concerned about, I would be delighted to talk to him about that. I am not aware of any such business being turned away.

Mrs Mary Glindon (North Tyneside) (Lab): Does the Minister consider £22.60 enough to live on as a personal allowance to provide clothing, toiletries, travel and socialising? If not, why does the Minister expect my disabled constituents from the Percy Hedley Foundation who took part in the Hardest Hit campaign to—

Mr Speaker: Order. Thank you for the question, but we must move on.

Maria Miller: The hon. Lady may be referring to disability living allowance. That is available for part of the costs that disabled people incur. There are many other ways that the Government support disabled people.

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European Council

3.30 pm

The Prime Minister (Mr David Cameron): With permission, Mr Speaker, I would like to make a statement on recent developments in Libya and yesterday’s European Council.

Yesterday in Libya, after 42 years of tyranny and seven months of fighting, the national transitional council declared the formal liberation of their country. Everyone will have been moved by the pictures of joy and relief that we saw on our television screens last night. From Tripoli to Benghazi, from Misrata to Zawiyah, Libyans now dare to look forward, safe in the knowledge that the Gaddafi era is truly behind them.

This was Libya’s revolution, but Britain can be proud of the role that we played. Our aim throughout has been to fulfil the terms of the UN Security Council resolution, to protect civilians, and to give the Libyan people the chance to determine their own political future. With the death of Gaddafi, they now really do have that chance. The whole House will join me in paying tribute to our armed forces for the role that they have played—over 3,000 missions flown and some 2,000 strike sorties, one fifth of the total strike sorties flown by NATO. As the Chief of the Defence Staff has written this morning, it has been

“one of the most successful operations NATO has conducted in its 62-year history”.

I believe it is something the whole country can take pride in.

The decision to intervene militarily, to place our brave servicemen and women in the line of fire, is never an easy one. We were determined from the outset to conduct this campaign in the right way, and to learn the lessons of recent interventions, so we made sure the House was provided immediately with a summary of the legal advice authorising the action. We held a debate and a vote in Parliament at the earliest opportunity. We made sure that decisions were taken properly throughout the campaign, with the right people present, and in an orderly way. The National Security Council on Libya met 68 times, formulated our policy, and drove forward the military and the diplomatic campaign. We took great care to ensure that targeting decisions minimised the number of civilian casualties. I want to pay tribute to my right hon. Friend the Member for North Somerset (Dr Fox) for his hard work on this issue.

It is a mark of the skill of RAF, British Army and other coalition pilots that the number of civilian casualties of the air attacks has been so low. The military mission is now coming to an end, and in the next few days, NATO’s Operation Unified Protector will formally be concluded. It will now be for Libyans to chart their own destiny and this country will stand ready to support them as they do so.

Many learned commentators have written about the lessons that can be learned from the past seven months. For our part, the Government are conducting a rapid exercise, while memories are still fresh, and we will publish its key findings. For my part, I am wary of drawing some grand, over-arching lesson—still less to claim that Libya offers some new template that we can apply the world over. I believe it has shown the importance of weighing each situation on its merits and thinking

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through carefully any decision to intervene in advance. But I hope it has also shown that this country has learned not only the lessons of Iraq, but the lessons of Bosnia too. When it is necessary, legal and right to act, we should be ready to do so.

Let me turn to yesterday’s European Council. This Council was about three things: sorting out the problems of the eurozone, promoting growth in the European Union, and ensuring that as the eurozone develops new arrangements for governance, the interests of those outside the eurozone are protected. This latter point touches directly on the debate in the House later today, and I will say a word on this later in my statement. Resolving the problems in the eurozone is the urgent and overriding priority facing not only the eurozone members, but the EU as a whole and indeed the rest of the world economy.

Britain is playing a positive role proposing the three vital steps needed to deal with the crisis: the establishment of a financial firewall big enough to contain any contagion; the credible recapitalisation of European banks; and a decisive solution to the problems in Greece. We pushed this in the letter we co-ordinated to the G20 and in the video conference between me, Angela Merkel, Nicolas Sarkozy and President Obama last week. We did so again at the European Council this weekend and will continue to do so on Wednesday at an extra European Council meeting.

Ultimately, however, the way to make the whole of the EU, including the eurozone, work better is to promote open markets, flexible economies and enterprise. That is an agenda that Britain has promoted, under successive Governments and successive Prime Ministers, but it is now an agenda that the European Commission is promoting, too. We have many differences with the European Commission, but the presentation made by the Commission at yesterday’s Council about economic growth was exactly what we have been pushing for, driving home the importance of creating a single market in services, opening up our energy markets and scrapping the rules and bureaucracy that make it take so long to start a new business. Both coalition parties are pushing hard for these objectives.

This may sound dry, but if we want to get Europe’s economies moving and to succeed in a competitive world, these are the steps that are absolutely necessary. These are arguments that Margaret Thatcher made to drive through the single market in the first place, and which every Prime Minister since has tried to push. If the countries of the EU were as productive as the United States, if we had the same proportion of women participating in our economy, and if we were as fast and flexible at setting up new businesses, we would have the same GDP per capita as the United States. That is an aim we should adopt.

The remainder of the Council was spent on the safeguards needed to protect the interests of all 27 members of the European Union. The Council agreed that all matters relating to the single market must remain decisions for all 27 member states and that the European Commission must

“safeguard a level playing field among all Member States including those not participating in the Euro.”

That leads me directly to the debate we will have in the House later today. Members of my party fought the last election committed to three things: stopping the

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passage of further powers to the EU; instituting a referendum lock to require a referendum, by law, for any such transfer of powers from this House; and bringing back powers from Brussels to Westminster. All three remain party policy. All three, in my view, are in the national interest. In 17 months in government, we have already achieved two of the three. No more powers have gone to Brussels. Indeed, the bail-out power has actually been returned and, of course, the referendum lock is in place. I remain firmly committed to achieving the third: bringing back more powers from Brussels.

The question tonight is whether to add to that by passing legislation in the next Session of this Parliament to provide for a referendum that would include a question on whether Britain should leave the EU altogether. Let me say why I continue to believe that this approach would not be right, why the timing is wrong and how Britain can now best advance our national interests in Europe.

First, it is not right because our national interest is to be in the EU, helping to determine the rules governing the single market, our biggest export market, which consumes more than 50% of our exports and drives so much investment in the UK. That is not an abstract, theoretical argument; it matters for millions of jobs and millions of families and businesses in our country. That is why successive Prime Ministers have advocated our membership of the EU.

Secondly, it is not the right time, at this moment of economic crisis, to launch legislation that includes an in/out referendum. When your neighbour’s house is on fire, your first impulse should be to help put out the flames, not least to stop them reaching your own house. This is not the time to argue about walking away, not just for their sakes, but for ours.

Thirdly, and crucially, there is a danger that by raising the prospect of a referendum, including an in/out option, we will miss the real opportunity to further our national interest. Fundamental questions are being asked about the future of the eurozone and, therefore, the shape of the EU itself. Opportunities to advance our national interest are clearly becoming apparent. We should focus on how to make the most of this, rather than pursuing a parliamentary process for a multiple-choice referendum. As yesterday’s Council conclusions made clear, changes to the EU treaties need the agreement of all 27 member states. Every country can wield a veto until its needs are met. I share the yearning for fundamental reform and am determined to deliver it.

To those who support today’s motion but do not actually want to leave the EU, I say this: I respect your views. We disagree not about ends, but about means. I support your aims. Like you, I want to see fundamental reform. Like you, I want to re-fashion our membership of the EU so that it better serves our nation’s interests. The time for reform is coming. That is the prize. Let us not be distracted from seizing it. I commend this statement to the House.

Edward Miliband (Doncaster North) (Lab): I thank the Prime Minister for his statement. On Libya, I join him in expressing deep and abiding gratitude to members of the British armed forces. Over the past seven months, once again, our servicemen and women have been a

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credit to our nation, exercising our responsibility to the Libyan people and to uphold the will of the United Nations. That is why I have supported the Government in their actions, and I commend the Prime Minister on the role that he has played in taking the right and principled decisions on the issue.

There are difficult days ahead, and it is for the Libyan people to determine their future, but I agree with the Prime Minister that, alongside the responsibility to protect, which we exercised, is the responsibility to help rebuild—in particular, to help provide the expertise that the new Libya will require.

Let me now turn to Europe, and here my opening remarks reflect some of the things that the Prime Minister said. We are clear, and have been consistently, that getting out of the European Union is not in our national interest. Cutting ourselves off from our biggest export market makes no sense for Britain, and the overwhelming majority of British businesses, however unhappy they are with aspects of the EU, know that, too.

What is more, at this moment of all moments, the uncertainty that would ensue from Britain turning inwards over the next two years to debate an in/out referendum is something our country cannot afford. The best answer to the concerns of the British people about the European Union is to reform the way it works, not to leave it. We should make the completion of the single market, common agricultural policy reform, budget reform and reform of state aids the issue. That is why we will vote against the motion tonight.

This is the context for the European Council that the Prime Minister went to this weekend: growth stalled in Britain since the autumn; growth now stalling in Europe; unemployment rising; and the threat of a new banking crisis. That is why yesterday’s summit was so important.

I listened carefully to the Prime Minister’s statement, and it sounds like he now believes that Britain should play an active role in solving this crisis, but the truth is that month after month the Prime Minister and the Chancellor have chosen to grandstand on the sidelines, not to help sort out the issue. The Chancellor even refused to go to the initial meetings that he was invited to on the issue. They have shown no will to try to find the solutions.

Let me ask where the Prime Minister now stands. On banking, does he believe that the amount of recapitalisation being discussed is sufficient to ensure financial stability throughout the European banking system, particularly in the light of the International Monetary Fund’s larger estimates of capital required? On Greece, does he believe that the lessons of previously announced Greek bail-outs are being learned and will provide a genuinely sustainable solution? On growth, does he now understand that Europe will not get to grips with its debt problems until it gets to grips with a crisis of growth and the immediate lack of demand in the European economy?

I suppose we should be pleased that the Government have moved from the Chancellor being empty-chaired at the meetings to the Prime Minister at least wanting to get into them, but he will have to do better than yesterday, because he was surprisingly coy about his one real achievement at the summit. In a few short hours, he managed to write the euro version of “How to Lose Friends & Alienate People”. He went into the summit lecturing the Germans; he came out of it being shouted

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at by the French. Apparently, President Sarkozy, until recently his new best friend, had had enough of the posturing, the hectoring, the know-it-all ways. Mr President, yesterday you spoke not just for France but for Britain as well.

The Prime Minister was in Brussels, but his mind was elsewhere. The Tory party on Europe is suffering another nervous breakdown, with a Prime Minister making frantic phone calls home, Parliamentary Private Secretaries threatening to resign, and it is not just the Stone Roses on a comeback tour, because the right hon. Member for Wokingham (Mr Redwood) is back among us, touring the television studios.

All the Prime Minister’s present difficulties are of his own making. What did he say in 2006? He said that instead of talking about the things that most people care about, we were banging on about Europe. However, he spent the last five years telling his Back Benchers that he may not be banging on about Europe but that, deep down, he is really one of them. He was warned that he might start by dabbling with Euroscepticism, but that it was a slippery slope. That is exactly what happened.

Does the Prime Minister regret getting out of the European People’s Party in favour of the right-wing fringe—[ Interruption. ] He says no, but I do not know whether he was aware that there was a dinner for EPP leaders on Saturday night. The German Chancellor was there, the French President was there, and the President of the Commission was there—mainstream centre right Europe—but the Prime Minister was not invited. He is the person who kept telling us that he was a Eurosceptic, who at the election promised renegotiation of the terms of Britain’s membership of the EU. His party is paying the price because it believed what he told them. The country is paying the price because we are losing influence.

Yesterday, the Prime Minister was at it again, and we heard it again today. He is locked in a row with his Back Benchers, and what do we see? We see the resurrection of the old classic to get out of the social chapter, and withdraw employment rights. The coalition agreement is clear. That option is off the table. The Deputy Prime Minister is nodding from a sedentary position. That option—the third option in the Prime Minister’s statement—is off the table, and the Foreign Secretary confirmed that again this morning. Let the Prime Minister answer this question. At the December summit, what position will he take? Will he be for renegotiation or against? The coalition agreement says that that option is off the table. He said in his statement that it is on the table. The position is totally unclear.

This goes to the heart of the Prime Minister’s ability to fight in Europe on behalf of this country. Like his predecessors, he is caught between the party interest and the national interest. We see a rerun of the old movie—an out-of-touch Tory party tearing itself apart over Europe—and all the time the British people are left to worry about their jobs and livelihoods. The Prime Minister should stop negotiating with his Back Benchers, and start fighting for the national interest.

The Prime Minister: First, I thank the right hon. Gentleman for his kind words on Libya. I agree that, as well as the responsibility to protect, we have a responsibility to help rebuild, and we will certainly do that.

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What he said about Europe started well with praise for the importance of completing the single market, something he is in favour of and I am in favour of. He did not tell us about all his views on Europe. Yesterday, he was asked repeatedly whether Labour would join the euro, and the answer was instructive. He said:

“It depends how long I’m prime minister for.”

I am not sure which prospect is more terrifying.

The right hon. Gentleman accused the Government of not going to meetings in Europe. We have been going to meetings in Europe to get us out of the bail-out mechanism that Labour put us into. He asked what we are doing to make sure that bank recapitalisation is credible. My right hon. Friend the Chancellor spent 10 hours in an ECOFIN meeting on Saturday ensuring that that happened. It would not have done without his intervention.

On Greece, we certainly want decisive action. Let me be clear about that. The right hon. Gentleman then said an extraordinary thing about the French President—that he thought the French President spoke for Britain—[ Interruption. ] That is what he said. It is difficult from opposition to sell out your country, but he has just done it.

I struggled to look for a question to answer—there were not very many. The right hon. Gentleman talked about the importance of global leadership. Let me just remind him that one of the absolute keys is going to be the role of the IMF. Let us remember that he led his Back Benchers and all his Front Benchers through the Division Lobby to vote against the IMF deal that his own former Prime Minister had negotiated in London. That was a complete absence of leadership, like so much we see from the right hon. Gentleman.

Several hon. Members rose

Mr Speaker: Order. A very large number of right hon. and hon. Members are seeking to catch my eye. I am keen to accommodate them, but I remind the House that we have a very heavily subscribed debate to take place afterwards. Therefore, brevity from Back Benchers and Front Benchers alike is of the essence.

Sir Malcolm Rifkind (Kensington) (Con): I agree with the Prime Minister’s view on the debate this afternoon. However, has he had drawn to his attention the terms of the third option in the motion, which is to

“re-negotiate…membership in order to create a new relationship based on trade and co-operation”?

Is that not purely the situation of Norway and Switzerland, is that not incompatible with membership of the European Union, and should not anyone who is interested in renegotiation that will enable us to stay within the Union oppose this motion?

The Prime Minister: I think the vital interest for the UK is belonging to the single market—not just being able to trade in that single market but having a seat at the table where you can negotiate the rules of that single market, which of course countries like Norway are not able to do. One of the other problems with the motion—I completely understand the frustrations that many of my colleagues have about Europe—is that if you have a three-way choice, you could find that 34% of the country

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voting to get out of the European Union would be enough to deliver that or, indeed, that 34% voting for the status quo, which many of think is unacceptable, would be enough.


I think we have tried the alternative vote, and a pretty clear decision was made.

Mike Gapes (Ilford South) (Lab/Co-op): How would the Prime Minister characterise his relations with President Sarkozy?

The Prime Minister: If you have a good relationship with someone, you can have frank discussions with them. I can tell the hon. Gentleman exactly what happened at the European Council yesterday. On the issue of Libya, Britain and France have worked together probably more closely than we have worked together at any time in the last 40 years, and on defence co-operation, we will continue to do that. I do not for one minute resile from the need sometimes to speak clearly and frankly on behalf of Britain and to stand up for the British national interest. It is in our national interest that the eurozone deals with its problems, and it is right that we make that clear.

Sir Menzies Campbell (North East Fife) (LD): My right hon. Friend deserves great credit for the determination and leadership that he showed in relation to Libya. He will understand that his views and mine on Europe are hardly identical, but, at the very least, can we not agree that in opposing President Sarkozy abroad, and in opposing the motion to be discussed here at home, he is clearly acting in the national interest?

The Prime Minister: I am very grateful for that compliment. The fact is that my right hon. and learned Friend is right to make the point. This is a coalition. There is not complete agreement on European policy between the parties of the coalition, but the coalition came together in the national interest and is acting in the national interest, and I think it is right to oppose this motion tonight, partly on the grounds that he puts forward.

Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): It is a shame that the Prime Minister spent only 10 minutes on Libya, the European Council and the motion. On reflection, I hope that he will think that he should have paid more attention to the European Council.

US Secretary Geithner said that even if all Greece’s debts were repaid, we would still have the same problem. Could the Prime Minister tell the House how he thinks that Greece will regain competitiveness?

The Prime Minister: I have probably made more statements on European Councils over the last 16 months than many Prime Ministers, and I have always committed to come back and report to the House.

The point that the hon. Lady makes is absolutely right. Greece is just the most glaring problem that the eurozone has to deal with. As I have said, that has to be dealt with decisively. It needs to be backed by a firewall, and it needs to be backed by the recapitalisation of banks. But the fundamental problem of the eurozone is

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the issue of competitiveness and the very large current imbalances that are building up in some of the member states, particularly those in the south. As a result, what needs to happen above all, as I said in my statement, is an advance in competitiveness, in trade, and in completing the single market, which will help all those economies in the longer term.

Mr William Cash (Stone) (Con): The Prime Minister has made it clear that he advocates fiscal union within the eurozone. Can he explain to the House how it is that fiscal union of that kind is not a fundamental change in our relationship with the European Union, bearing in mind that it is established that the constitutional position is clear that where there is fundamental change, there must be a referendum? How can he square that circle?

The Prime Minister: Let me be clear with my hon. Friend. I think that fundamental changes are coming in Europe; they are clearly coming in the eurozone. That may lead to pressures, as we saw over the weekend, for treaty change. That will present opportunities for Britain and we should respond to those opportunities. The question for the House tonight is whether it is right to go off down the path of having a referendum that includes an in/out option, just when there are big opportunities as the eurozone and the EU are changing.

Keith Vaz (Leicester East) (Lab): I join others in congratulating the Prime Minister on his stance on Libya, but remind him that there are other countries, such as Yemen, that need to be focused on. The Lisbon agenda set out the benchmarks for economic growth, which were replaced by the 2020 strategy. Is the Prime Minister confident that, despite the eurozone crisis, those targets will be achieved?

The Prime Minister: First, the right hon. Gentleman is right on Yemen. As he knows, the National Security Council is spending an increasing amount of time on examining how we can best help that country not only to achieve a transition to greater democracy and freedom, but to tackle the security concerns that we have about it. He is right that we have had the Lisbon process and the 2020 process. The problem is that although this agenda gets pushed forward, in too many cases the targets and measures are not met. After 16 or 17 months of going to Council meetings, I am seeing a change of heart in the European Commission, not least because everyone recognises that the priority in Europe is now growth. The Commission has to stop adding expensive regulations to business and start deregulating, which is exactly the agenda that we are putting forward.

Richard Ottaway (Croydon South) (Con): Does the Prime Minister agree that not only in Libya, but in Tunisia and Egypt there is an opportunity for reconstruction and a transition to democracy? To what extent will that be dealt with on a bilateral basis or in conjunction with our partners through the European External Action Service?

The Prime Minister: The first thing that we have done is to help to change the European neighbourhood policy to ensure that it is much more engaged with Libya, Tunisia and Egypt, and to put in much more conditionality so that there is progress towards rights and democracy

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in the countries that we are helping. In addition, we have a significant bilateral programme. It is essential to help those countries develop the building blocks of democracy, such as political parties, and understand the importance of civic society. The Department for International Development and others can help with that.

Mr Nigel Dodds (Belfast North) (DUP): I join others in paying tribute to the bravery of our servicemen and women over Libya and to the work of NATO. I particularly commend the Prime Minister for his leadership on Libya. I am afraid that on Europe, the same cannot be said. The people of Britain will today be asking why he has he decided to firmly set his face not only against his own Back Benchers, but against the settled will of the British people for a referendum on Europe.

The Prime Minister: First, I thank the right hon. Gentleman for what he said about Libya. As I have said, the country can be proud of what our armed service personnel have done. On Europe, I am clear about what Parliament should do about a referendum. We do not come to this place to give away powers that belong to the people, not to us. It is wrong that we did not have a referendum on Maastricht, Lisbon and those other treaties. My clear view is that it is when this Parliament proposes to give up powers that there should be a referendum. That is the guarantee that we have written into the law of the land.

Philip Davies (Shipley) (Con): As global traders, our future prosperity lies in improved trade with China, India, South America and emerging economies in Africa, and not in being part of the backward-facing, inward-facing protection racket that is the European Union, which is propping up inefficient businesses and French farmers. The Prime Minister’s objection to tonight’s motion seems to be about timing. Will he give us a timetable for getting powers back from the European Union?

The Prime Minister: First, where I have some disagreement with my hon. Friend is that, although we of course want to export more to China, India, Brazil, Russia and Turkey—the fast-growing countries of the future—we have to recognise that today, 50% of our trade is with European Union countries. It is therefore in our interest not only to keep those markets open and have a say about their regulation, but to further open them up. That is what we should be pushing for and are pushing for in the European Union. As I say, there is a case for a referendum if ever this Parliament proposes to give up more powers. Otherwise, it is clear what the country wants us to do: it wants us to stay in the European Union, but to retrieve some powers and ensure that we have a better relationship with Europe. That is the commitment that we have made.

Tony Lloyd (Manchester Central) (Lab): The Prime Minister must recognise that whether we are talking about Greece, Italy, Spain, Portugal or Ireland, only growth will make a real difference to the financial crisis. Why did he not advocate policies of growth at the heart of these debates and, in that way, give a lead to the British people about why Europe is so important?

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The Prime Minister: We have been doing exactly that, but one reason some of those countries have got into difficulties is not just the shortage of growth and competitiveness, though that has been key, but the fact that they have built up very large budget deficits. That is the lesson right across Europe—you have to make sure that you cut your cloth according to what you can afford. That is a lesson that we are tragically having to learn in this country, too.

Charlie Elphicke (Dover) (Con): My constituents in Dover were very pleased and heartened to see the Prime Minister standing up to the French.

When it comes to the national interest, is not a key point that we need action on budgets and action on getting us out of the bail-out fund, not action selling us down the river, joining up with the euro or selling down the £7 billion rebate that we used to have?

The Prime Minister: My hon. Friend makes an important point, which is about what the British people want us to do specifically with respect to Europe. The biggest danger, they sense, is getting drawn into further bail-outs. That is why, in the treaty change that has already come forward, that was the price that we exacted—to get out of the EU bail-out fund by 2013. We have returned that power to the UK. We should also be taking action on the European budget, and we have secured agreement with some of the large countries in Europe on a real-terms freeze this year. Those priorities, plus the referendum lock, are what this Government have already been able to deliver.

Mr Denis MacShane (Rotherham) (Lab): The Prime Minister prayed in aid Margaret Thatcher, but she put her money where her mouth was in the sense that the UK contribution to the European Community went up from £656 million in 1984 to £2.54 billion in 1990—a fourfold increase. Then, it was to help Greece, Spain, Portugal and Ireland. Does the Prime Minister plan to emulate her to help Poland, Latvia and our poorer friends in the new Europe?

The Prime Minister: The right hon. Gentleman reminds us that Margaret Thatcher did indeed put her money where her mouth was. The only trouble was the next Government came along and gave it away when they gave up the rebate for absolutely nothing in return.

Andrea Leadsom (South Northamptonshire) (Con): Will my right hon. Friend speculate on what the cost would have been to the taxpayer if he and my right hon. Friend the Chancellor had not negotiated to get Britain out of the bail-out mechanism?

The Prime Minister: The point about the bail-out mechanism is that we were left exposed by the last Government because of the existence of the European financial stabilisation mechanism. Although we are still at risk between now and 2013, what we have secured is that we have ended that from 2013. That is an achievement. We also stayed out of the second Greek bail-out, and that was an achievement. Those things have saved real money, and it is really important for people to understand that the Government have been focused on delivering something really concrete and important for the British people at this time.

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Sir Gerald Kaufman (Manchester, Gorton) (Lab): As a Member who voted for the implementation of Security Council resolution 1973, and who as shadow Foreign Secretary refused to meet Gaddafi when he invited me to go to Libya to collect financial compensation—blood money—for the family of WPC Fletcher, may I state my disgust and revulsion at the murder, and the nature of the killing, of Gaddafi? May I ask the Prime Minister to emphasise to the national transitional council that the future for democracy in Libya lies in reconciliation, not revenge?

The Prime Minister: The right hon. Gentleman makes an important point, and I can announce to the House that Chairman Jalil, leader of the national transitional council, has announced today that there will be an inquiry into the circumstances of Colonel Gaddafi’s death. Clearly, we wanted him to face justice. That is what should have happened, and it is important that that inquiry goes ahead. However, I do not stand back for one second from what I said in my statement—that because the Gaddafi era is over and he is gone, the Libyan people, who genuinely feared that as long as there was a prospect of his coming back there was a difficulty in building their future, can now get on with that future.

Jo Swinson (East Dunbartonshire) (LD): I greatly welcome the Prime Minister’s leadership on Libya. Its liberation is a success not only for the Libyan people but for proving that the international community can act together to implement the responsibility to protect. However, does he agree that we must also exercise caution? Intervention under R2P must be used sparingly and only in cases that meet all the relevant criteria, such as there being a serious threat to human rights, the response being proportional and there being clear support for action internationally, regionally and within the country.

The Prime Minister: I very much agree with how my hon. Friend puts her question, but I would add something important to that: we should intervene only if we believe we are capable of doing so and of bringing about the effect that we need. There is a very important issue there. It is about seeing not only what is legal and necessary, but what we can do.

Kate Hoey (Vauxhall) (Lab): The Prime Minister must know of the growing division between the public and politicians. Does he have no concern at all about what will happen at 10 o’clock tonight, when all three party leaders will whip their Back Benchers in a Division on a motion that is not binding, and that seeks a referendum and future legislation in—probably—2013? Does that mean that once again, the public will say, “Seventy-five per cent. of us would like a referendum at some stage. This Parliament is not listening”?

The Prime Minister: The hon. Lady asks a very important question, so let me try and answer it. I absolutely believe it is right to have public petitions in the way that we now do, and that it is right to give time to Back-Bench motions—this Government have brought that reform about. However, the issue of Europe is not a side issue, but an important one, and it is important that political parties and Governments make their views on

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it known. I do not accept the idea that somehow we can have a vote on something as important as this on a Thursday and hope that it will go unnoticed. I believe in the importance of Parliament, but I cannot believe in a sovereign Parliament on the one hand and on the other say that some of its votes and decisions do not matter. I simply do not think that that is consistent.

Mark Reckless (Rochester and Strood) (Con): The Prime Minister tells The Daily Telegraph today that we should use any treaty change to shore up the euro to get powers over employment and social policy back, yet on 25 March, he agreed to precisely such a treaty change, but did not ask for anything in return.

The Prime Minister: I have to take issue with my hon. Friend. The very limited treaty change that is about to be debated in, and hopefully passed by, the House of Commons, gets us out of the bail-out mechanism that the previous Government got us into. I thought, and I still think as Prime Minister, that that was the single most important price that we could exact for that treaty change—that was the biggest concern of the British public. The point I made yesterday and that I will make again today is that I believe that huge changes will take place in the EU and the eurozone. That will give us opportunities to maximise the national interest, which is what we should be talking about and debating in the Conservative party, the coalition and the House of Commons as a whole. We will not further that by having a referendum that includes an in/out option. As I have said, that would be like walking away from a burning house. We should deal with that first, then talk about the future.

Hywel Williams (Arfon) (PC): What assessment has the Prime Minister made of the consequences of the eurozone crisis on UK regional export-led economic growth?

The Prime Minister: As I said yesterday, the eurozone crisis has clearly had a chilling effect, not only on eurozone economies, but on our economy, the American economy and economies elsewhere in the world. The eurozone is a huge market for the world’s goods, and clearly there has been a slow-down, partly because of the lack of confidence in the eurozone. We must also be clear that a break-up of the eurozone would have severe consequences for neighbouring countries and banks. That is why it is very important that we work with eurozone partners to try to sort this issue out.

Mr Bernard Jenkin (Harwich and North Essex) (Con): May I join others in commending my right hon. Friend for his leadership on Libya, for which he deserves considerable credit? May I also thank him for the constructive tone that he is adopting towards those of us who will support today’s motion? So many parties have again and again promised a referendum, and the British people clearly want a say over our future relationship with the European Union. Does he understand our anxiety that it is ironic that the House of Commons is likely to vote heavily against what the British people want?

The Prime Minister: I thank my hon. Friend for his kind remarks about Libya and my tone, which I shall try to keep constructive throughout. I completely

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understand people’s frustrations: they were promised a referendum on the Lisbon treaty, but they did not get it because the treaty was put in place by the previous Government, which meant that it was not then possible to hold the referendum. However, the answer to the frustration in the country over not having a referendum on the last thing is not to offer one simply on the next idea. The most important thing is to deliver what people want, which is to ensure that we get the best out of the EU and that, where there are opportunities as Europe changes, we take those opportunities. That should be the focus in this Parliament and beyond.

Sir Stuart Bell (Middlesbrough) (Lab): The Prime Minister rightly said that the 27 nation states will make any decision on the single market. He has not told the House that the President of the European Council, Herman Van Rompuy, has been elected president of the 17 nation states within the eurozone, with France on one shoulder and Germany on the other. The President has said that he will inform the British Government prior to any summit meetings and inform them of the results. Does the Prime Minister think that to be “informed” is the same as to be “consulted”?

The Prime Minister: The hon. Gentleman makes an important point: as the eurozone comes together and the governance arrangements change, it is important that those countries that are not in the eurozone—and, in our case, do not want to join—have their interests protected. That is why, in the Council conclusions, I secured specific language about ensuring a level playing field and that countries outside the eurozone are protected. This is a journey. The eurozone is going on one journey, where it sees closer collaboration and co-operation, but I believe that countries outside the eurozone will be looking for further protections to ensure that some of our vital national interests—things such as financial services—are properly protected and not put at risk by what is happening in the eurozone.

Mark Lancaster (Milton Keynes North) (Con): History tells us that following military victory, such as in Iraq and Afghanistan, we have just 100 golden days to deliver stabilisation before the joy of victory turns to despair among the local population. The clock is now ticking, so will the Prime Minister say a few words about how we will deliver this stabilisation?

The Prime Minister: We worked closely with others on a stabilisation and reconstruction plan for Libya. A lot of work went into that. I am optimistic because we have seen how the national transitional council is genuinely national and bringing the country together, not wanting a division between Benghazi and Tripoli. It is transitional, and the clock is now ticking for it to set up a genuine transitional Government within 30 days. Everything that I have seen of the Libyan leadership shows that it wants to get on with rebuilding its country, and because of its oil wealth and the size of its sovereign wealth fund, it has the means by which to do it.

Fiona Mactaggart (Slough) (Lab): In the Prime Minister’s statement, he suggested that the EU economies could be as productive as the US economy if we had the same proportion of women in the work force. However, with unemployment among women in the UK higher than at

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any point since 1988, will he tell us three things that he has done to increase the proportion of women in the work place?

The Prime Minister: We have increased the hours available for free nursery care for three, four and two-year-olds. That is what we have done.

Nadhim Zahawi (Stratford-on-Avon) (Con): Will the Prime Minister tell the House whether the President of Switzerland and the Prime Minister of Norway were at the table arguing with the French? I suspect that the answer is no because their relationship is different from ours. [Hon. Members: “They are not in the EU.”] That is absolutely right. They are not in the EU, which is why amendment C to the motion is completely the wrong option for our country to pursue.

The Prime Minister: My hon. Friend makes an important point. We have to ask clearly, “What is in the UK national interest?” At the heart of our national interest, when it comes to the EU, is not only access to that single market but the need to ensure that we are sitting around the table of the single market determining the rules that our exporters have to follow. That is key to our national interest, and we must not lose that.

Mark Durkan (Foyle) (SDLP): Which situation does the Prime Minister hope that we will arrive at first: the eurozone passing a brink without teetering on it, or his Eurosceptics passing a top without going over it?

The Prime Minister: That one obviously took a long time to construct. I believe that the eurozone countries are coming together and seeing the need for a big and bold solution. That needs to happen. It will not solve the problem—because there are still major stresses and strains within the eurozone that need to be dealt with in the long term—but I think that it will happen this week. It is up to the House of Commons how it votes tonight, but I am clear that it is in our interest to be in the EU but seeking our national advantage and national interest at all times.

Mark Pritchard (The Wrekin) (Con): May I congratulate the Prime Minister on his leadership on Libya? Returning to fiscal union, may I ask him what part of fiscal union he believes could trigger the European Union Act 2011?

The Prime Minister: The key point about the European Union Act 2011 and the referendum lock that we put in place is that any passage of powers from Britain to Brussels results in a referendum. That is the key thing that we have delivered, which means that never again can we have a situation where, as with Maastricht or Lisbon, a treaty is passed that transfers powers from this House to somewhere else without the British people being asked first. I sometimes think that we have lost the ability to make clear what a significant change that is. That is the key thing that the referendum lock delivers, and I think everyone on this side of the House can be very proud of it.

Mr Wayne David (Caerphilly) (Lab): Following on from the last question, just a few months ago this House spent 42 and a half hours debating the European

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Union Bill, the purpose of which is to allow for referendums on the EU. Is there any chance of seeing a referendum in the near future on the EU at all?

The Prime Minister: The point is that if a Government propose to pass powers from this House to Brussels, they should ask the British people first. That is the simple principle that we have put into law. It is important that we try to establish clear rules for the use of referendums in a parliamentary democracy, and I absolutely believe that rule 1, line 1 is: “If you’re giving up powers that belong to the British people, you should ask them first.”

Richard Harrington (Watford) (Con): I commend the Prime Minister on his statement, not least because it will reassure the thousands of my constituents who work for companies whose European headquarters are based in Watford. Can he reassure me that the things that my constituents do not like about Europe—for example, bureaucracy, reckless profligacy, gross overspending and too much regulation—will be dealt with to the best of his ability in the course of this Government?

The Prime Minister: I can absolutely give my hon. Friend that assurance. If he looks at what we have achieved in a relatively short time—getting out of the bail-outs, getting agreement among the big countries for a freeze in the European budget this year and getting the European Commission to focus on deregulation rather than regulation—he will see that they are all important. I agree with his first point. A lot of companies come and invest in Britain not just because of our economic strengths, our flexible labour markets and all the rest of it, but because of access to the world’s biggest single market, which is important for investment into Britain by American, Japanese and other firms, creating the jobs and wealth that we need.

Michael Connarty (Linlithgow and East Falkirk) (Lab): With some financial analysts saying that banks holding sovereign debt might have to take a 25% to 60% write-down on that, can the Prime Minister elucidate for the benefit of the House what he means by a “financial firewall big enough to contain any contagion”, and say whether he thinks that the IMF needs to be involved and that the problem cannot be solved in Europe?

The Prime Minister: There are two issues if we are going to see a decisive resolution of the Greek situation. Obviously we need a recapitalisation of Europe’s banks, so that they have sufficient capital to withstand the losses that would otherwise affect them. Credible stress tests are crucial to that: there has been round after round of stress tests in Europe, but they have not been robust and credible enough. I believe that that has now been secured, not least because of my right hon. Friend the Chancellor’s work in the ECOFIN meeting. The second thing we need—the firewall; what I called the “big bazooka”, which the shadow Chancellor referred to the other day—is to ensure that we have a mechanism big enough to help to stop contagion to other countries. There will be discussions in the eurozone and outside it about how big that needs to be, but the answer is: bigger than is currently proposed, and they need to keep working on it.

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Sarah Newton (Truro and Falmouth) (Con): I very much welcome the possibility that treaty changes will be needed in the next few months. Will the Prime Minister assure me and businesses the length and breadth of this country that he will use that opportunity to get rid of ridiculous regulations and laws that are impeding growth and job creation in our country?

The Prime Minister: I agree with my hon. Friend’s approach. We should use these opportunities as the European Union changes and the eurozone changes to maximise Britain’s national advantage. We have to be clear: we do not yet know how much of a treaty change will be proposed by the Germans and others, or how extensive it will be. We shall have to look carefully at that to see what is right for Britain in response. However, I should say to my hon. Friend that, so far in this Government, one treaty change has been proposed and we exacted an important price, which was to get us out of the bail-out funds from 2013, which was a clear and present danger to the United Kingdom.

Mr Jim Cunningham (Coventry South) (Lab): Is not the tragedy about the Prime Minister the fact that, as Leader of the Opposition, he totally underestimated the world crisis? As a result, he has had to grow up very fast in regard to European politics. What is his next alibi going to be in regard to the postponement of a referendum? I am sure that there is going to be one.

The Prime Minister: I have not for one minute underestimated the scale of the crisis that we face in Europe and across the world economy. Sadly, that crisis has been made worse by the vast overspending that took place under the Government whom the hon. Gentleman supported.

Tony Baldry (Banbury) (Con): Will the Prime Minister confirm that, at the last general election, the Conservative manifesto committed us to seeking to return powers from Europe on economic and social policy, but that nowhere did it contain a commitment to seek an in/out referendum or to seek to renegotiate our terms of membership of the European Union?

The Prime Minister: My hon. Friend makes an important point. We did have a commitment to seek the return of important powers from the European Union, such as the social and employment legislation. Obviously, we are in a coalition, but as Conservative leader, I remain committed to achieving that, because it is in the British national interest to do so. My hon. Friend makes the important point, however, that it was not part of our manifesto or our policy to seek a referendum that included an in/out option. I completely respect the fact that there are Members, not only on this side of the House but on the Labour side as well, who have long wanted an in/out referendum, not least because some of them would like us to get out of the European Union altogether. But that is not our policy, and that is the reason we having the debate on this on a Monday, on a proper motion, in the proper way. This is not some side issue; it is an important issue. As I said before, I believe in the sovereignty of Parliament. To me, all decisions of Parliament matter, and the idea that we could sweep this off into a debate on a Thursday and that no one

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would notice is wrong. What Parliament decides matters, and that is why the Government are taking the motion seriously.

Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab): A few weeks ago, I visited the Weir Group in my constituency. Its representatives explained the difficulties that they had had in evacuating British staff from Libya. They also told me of their keen desire to get back to working on vital infrastructure projects there as soon as possible. Will the Prime Minister tell us how he is going to ensure that that can happen?

The Prime Minister: I completely understand why the hon. Gentleman has raised that issue. It is important to his constituents and to that business, and, frankly, it is important for British investment in Libya. I can tell him that Stephen Green, Lord Green, has already held a Libyan investment conference and has plans to travel to Libya. I recommend that the hon. Gentleman contacts that Minister, and I will make sure that that happens so that we can help the Weir Group with the important work that it does.

Robert Halfon (Harlow) (Con): Many of my constituents who have contacted me over the past few days tell me that they lost their trust in politics because the previous Government refused to give them a referendum on the Lisbon treaty. What substantive message can my right hon. Friend give me to take back to those constituents?

The Prime Minister: I completely understand their concerns, but just because the last Government failed to hold a referendum on the Lisbon treaty does not mean that we should vote tonight for a referendum on an in/out option that was not in any of our manifestos. The reassurance that I would give to my hon. Friend’s constituents is that the Government are doing all the things that people care about most in Europe, such as constraining the European budget, getting out of the bail-out funds and cutting unnecessary regulation. We are doing all those things, and there will be more to come.

Chris Leslie (Nottingham East) (Lab/Co-op): Did I hear the Prime Minister correctly when he said earlier that he now believes that there should have been a referendum on the Maastricht treaty? In the light of the Foreign Secretary’s well-rehearsed opposition to that, will he tell us exactly when he changed his mind?

The Prime Minister: I have always felt that, and our Bill is clear. Under our Bill, Maastricht or any of those treaties would have triggered a referendum. That is the point. I do not think that the hon. Gentleman has been keeping up. I hope that Labour will commit to that legislation, which will mean that if any Government ever try to give away powers from this House, they will have to ask the British public first.

Harriett Baldwin (West Worcestershire) (Con): Has the Prime Minister noticed that, while this Government have ruled out joining the euro, it is the continued policy of Her Majesty’s Opposition, regardless of who is leading them?

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The Prime Minister: There was an interesting series of interviews with the Leader of the Opposition over the weekend. As well as saying that if he were Prime Minister for long enough, he would like to get us into the euro, he responded to being asked whether he thought that Brussels had too much power by saying:

“No, I don’t think Brussels has got too much power”.

That is the official position of the Labour party: wrong about the euro, wrong about Brussels, wrong about Britain. Wrong about everything!

Naomi Long (Belfast East) (Alliance): I share the Prime Minister’s optimism at the formal liberation of Libya, and I pay tribute to the role our armed forces have played in that process. Is the Prime Minister as concerned as I am, however, at the allegation of the summary execution of any human being—even of a violent tyrant such as Gaddafi? Does he share my view that there is a need urgently to re-establish the rule of law and proper democracy in that country?

The Prime Minister: I think the hon. Lady makes an important point. We all saw those pictures on our televisions and newspapers; they were not pleasant images. I think everyone understands that that is not what should have happened; it should have ended in a trial and in Gaddafi facing justice. As I said earlier, Chairman Jalil has announced that there will be an inquiry, and I think it is important that the Libyans carry it out properly.

Rory Stewart (Penrith and The Border) (Con): May I respectfully disagree with the Prime Minister’s idea that there are no lessons from Libya? The lesson from Libya, which could be applied to Europe, is that what matters is not what you ought to do, but how you do it, with whom and when.

The Prime Minister: I did not say that there are no lessons to learn; I think there are lessons to learn. The Government are carrying out a lessons learned process and will be announcing the key results from it. The point my hon. Friend makes about what you are able to do and how you build alliances to do what you want to do is absolutely vital—and was vital in this case. What I was trying to say—perhaps I did not put it across properly—is that we have to be careful not to say that because Libya was successful in this way, we can read that across to every single other proposed intervention. We cannot do that. As a liberal Conservative, I believe that a bit of scepticism should be brought to these schemes before we embark on them.

Steve McCabe (Birmingham, Selly Oak) (Lab): For the sake of absolute clarity, is it now this Prime Minister’s position that he could accept substantial German-led changes to the Lisbon treaty without it requiring the referendum he promised the British people?