Mr Osborne: Because we have earned credibility for this country. That is what this Government have done. That has not been an easy thing to do, but it has brought our borrowing costs down while other countries’ borrowing costs have gone up. When this Government came to office, the interest rates in Italy were lower than the interest rates in Britain. They have gone up in Italy

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and come down in Britain. Of course, we now have the new Labour party policy, which is that it wants to see higher interest rates. I am not sure that the Labour Back Benchers have fully realised what a completely stupid policy that really is.

Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC): With regard to the capital infrastructure investment, will the Chancellor confirm that the whole figure of £30 billion will be spent proportionately in Wales and the other devolved nations, and that in the case of Wales that will amount to £1.5 billion?

Mr Osborne: We absolutely will apply the Barnett formula to the infrastructure spending. I can confirm that. We specifically want to work with the devolved Administration on the M4 corridor in south Wales and, if possible, to do a deal on the future of the Severn bridge and its tolls. We are holding open the opportunity for discussion on that matter.

Andrew Percy (Brigg and Goole) (Con): I thank the Chancellor for his announcement about the Humber bridge and commend the work of the Transport Secretary. Does he agree that that proposal will benefit low-paid workers, especially in the Humber, who have suffered even in the times of growth, when the number of private sector jobs in the Humber decreased?

Mr Osborne: I pay tribute again to my hon. Friend and the other MPs in the area, including my hon. Friend the Member for Beverley and Holderness (Mr Stuart) who first raised this issue with me some years ago.

Karl Turner (Kingston upon Hull East) (Lab): What about me, George?

Mr Osborne: Absolutely, I happily pay tribute to all the MPs of north Lincolnshire and Humberside who have campaigned for the reduction of the tolls. This was an injustice. The bridge was built many years ago and the debt was paid off, but the tolls were still very high. I am glad that we have been able to help. Along with our enterprise zones in Humberside and our commitment to the renewable energy industry in the area, this will really help the economy.

Mr Barry Sheerman (Huddersfield) (Lab/Co-op): The Chancellor’s statement reminded me of the Budgets not of the last Chancellor of the Exchequer but of the one before that, because it included so much, and almost the kitchen sink. To change the mood in the country, most of which is now deeply in recession—certainly Yorkshire and the Humber are—were we not expecting some imaginative, bold policies today to end youth unemployment?

Mr Osborne: I suggest to the hon. Gentleman that a fairly stark difference between me and the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) is that I am trying to make the books add up, whereas he did not. We have all been paying the price for that ever since.

Mr John Baron (Basildon and Billericay) (Con): I know that the Chancellor will ignore the pleas of the Labour party, given that it more than doubled the national debt

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when it was in power, but will he revisit the massive net increases in our contribution to the EU that will come through over the next seven years? They will amount to something like £20 billion, which would fund a 5p to 6p cut in small business corporation tax.

Mr Osborne: We have negotiated the first real freeze in the EU budget. Important negotiations are coming on the future financial perspective. I am absolutely clear, as are some other member states, that the EU has to live within its means as well.

Caroline Lucas (Brighton, Pavilion) (Green): Will the Chancellor explain why he is taking £250 million from hard-pressed families and giving it to some of the country’s biggest polluters, especially as green economies employ far more people than energy intensive industries?

Mr Osborne: As I said, we have introduced and funded the green investment bank, and we are supporting the green deal. The hon. Lady did not mention that there are £200 million of incentives to make the green deal work so that people can insulate their homes, their bills can come down and we can reduce our carbon emissions. I do not see how we would save the climate of our country and the world by pricing ourselves out of steel making, operating chemical factories, aluminium smelting and so on. If anything, it is likely that those industries would continue in other countries and be more polluting because those countries do not have the same regimes. I think that it supports our effort to reduce carbon emissions around the world that we keep those industries in Britain.

Mr David Evennett (Bexleyheath and Crayford) (Con): I welcome my right hon. Friend’s statement and in particular the announcements on rail fares and the fuel duty. Does he agree that those policies and others that he has expressed today show that the Government are helping hard-working people with the cost of living wherever they can?

Mr Osborne: I absolutely agree with my hon. Friend. We have been able to take action on fuel duty so that taxes on petrol will be 10p lower than they would otherwise have been. We have taken action to reduce the increase in rail fares. I also stress that we have helped small businesses that employ people by extending the business rate freeze.

Mr Dennis Skinner (Bolsover) (Lab): If we are all in it together, why has the Chancellor announced further restrictions on pay for working people and their families, while the bankers who caused the recession are taking home salaries of up to £4.5 million? Is it because the people on that side on millionaire’s row are looking after their friends in the banking system, while kicking the workers in the teeth?

Mr Osborne: I think the hon. Gentleman will find that it is half of the last Labour Cabinet who are working in the City at the moment.

If the hon. Gentleman is so passionate about this issue, why did he not press the Government he supported for 13 years to introduce a bank levy? On public sector

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pay, the shadow Chancellor was completely silent about whether the Labour party supported 1% average increases after the freeze ends. No doubt we will find out more about that later this afternoon.

Margot James (Stourbridge) (Con): The Black Country chamber of commerce reports that 400 new businesses started in our region this year, 170 with help from the Government. I particularly welcome the national loan guarantee scheme. Does my right hon. Friend anticipate that that scheme might support business start-ups?

Mr Osborne: I think it will help new businesses borrow, but of course we have also announced today the seed enterprise investment scheme, a new scheme that will specifically help start-up businesses. It will give 50% income tax relief to anyone who invests up to £100,000 in a new company. Also, for one year only, we are allowing people to put capital tax-free gains of up to £100,000 into the scheme. It is all about trying to get investment into new companies such as the ones in the black country that my hon. Friend talks about.

Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op): On 20 October, the Secretary of State for Energy and Climate Change said in the House that there would be no Treasury backsliding on the £1 billion available for carbon capture and storage investment from the Government. Yesterday morning the Chancellor’s deputy, the Chief Secretary, suggested that part of his £5 billion investment would be funded by taking money from that £1 billion. Can the Chancellor confirm whether that is the case, and what implications that will have for potential CCS projects that are working to a timetable of being on a commercial basis before the end of this Parliament?

Mr Osborne: We absolutely want to support carbon capture and storage technology in this country. I confirm that we are still committed to a £1 billion investment, which is a very significant investment in a technology, but it cannot be on an unrealistic time scale. [Interruption.] Well, the previous Government—indeed, the Energy Secretary in the previous Government, who of course is the Leader of the Opposition at the moment—made all sorts of promises about getting carbon capture and storage demonstrations up and running, and that did not happen. We are operating on a more realistic time frame, but we are committed to a £1 billion investment in that technology.

Lorely Burt (Solihull) (LD): There is so much to welcome in this statement, and I especially welcome the £1 billion increase in the regional growth fund and the infrastructure changes to the A45. Will the Chancellor set the record straight and say that our youth jobs fund is nothing like Labour’s future jobs fund, under which only 2% of the jobs in the west midlands were in private companies, and that our scheme will create real jobs for young people?

Mr Osborne: Not only was the future jobs fund primarily aimed at the Government employing people in the public sector, which of course was unsustainable with the very large deficit that Labour was running, but actually it did not work on its own terms, because 50% of the people who used the fund were unemployed

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within 12 weeks. The youth contract that the Deputy Prime Minister has worked on, which he presented last week, will make a real difference.

Stewart Hosie (Dundee East) (SNP): There were two key announcements today. One was the national loan guarantee scheme and the £20 billion of credit easing, and the second was the investment in infrastructure of perhaps £30 billion. When does the Chancellor expect the business finance backed by the scheme to start flowing, and how much infrastructure spend does he expect this year and next, when it will have the biggest effect?

Mr Osborne: We are undertaking an ambitious programme of credit easing, and I hope to get it running in the next couple of months. We have to clear the state aid hurdles, and we are working flat out to do that, but I am confident that because we are partly following the European Investment Bank’s scheme in the UK, a lot of the work has already been done. The precise numbers on infrastructure in the next two years are set out in the book.

George Freeman (Mid Norfolk) (Con): I warmly welcome the statement on behalf of families and businesses in my constituency, particularly the billions for infrastructure, the strong support for science and innovation and the very imaginative scheme for unlocking credit easing for small companies. Does that not show that this Government are laying the foundations for sustainable economic growth, while the Labour party has nothing to offer but more debt, more tax and higher interest rates?

Mr Osborne: I completely agree with my hon. Friend. What was really striking in the shadow Chancellor’s response was that the heart of his argument was, “We’re borrowing too much, so let’s borrow more.” I do not think that is a very convincing argument. The only reason why he advances it is that he, almost alone in the Labour party, cannot admit that the last Government borrowed too much.

Joan Walley (Stoke-on-Trent North) (Lab): Can the Chancellor confirm that it is “rest in peace” for the “greenest Government ever”? As far as Stoke-on-Trent is concerned, can he tell the House why there is nothing in the autumn statement about why the Prime Minister came to Stoke-on-Trent and promised us a local enterprise zone? There have been two extra ones announced today, and still nothing for Stoke-on-Trent.

Mr Osborne: I completely understand why the hon. Lady is fighting hard for her constituency and her city. In the end, the proposal put forward by Stoke for an enterprise zone was not as compelling as the other enterprise zone proposals that were put forward at the same time. That was independently assessed by the civil servants. I am very happy to sit down with her, and indeed other Members from Staffordshire, to work with them on what we can do to make the proposal a success. I am very much open to considering whether we can get the enterprise zone bid into a state where it is successful and we can go ahead with it.

Harriett Baldwin (West Worcestershire) (Con): There were many measures in the statement that will help businesses with their cash flow, which is truly to be

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welcomed, for example extending the small business rate relief and credit easing. Will the Chancellor clarify that where business rates go up in line with RPI next year, there will be the ability to defer 60% for two years interest-free?

Mr Osborne: We are helping businesses with their cash flow, but it is not a subsidy to those businesses, more a cash-flow measure.

Mr Adrian Bailey (West Bromwich West) (Lab/Co-op): The Chancellor has announced a number of supply-side measures designed to help small businesses. However, that is only one part of the equation. One of the main obstacles now for small businesses applying for loans or investment is the squeeze on personal incomes in their market. Can he explain to me how removing current expenditure and squeezing incomes further at this time, albeit for some very worthy projects in two or three years’ time, will benefit unemployment and alleviate the feeling of deep insecurity that there is in my area at this moment?

Mr Osborne: I would argue that we are not squeezing incomes. We have frozen fuel duty in January and taken measures to uprate non-working benefits in line with CPI, which is a very big increase, and pensioners are getting the largest ever increase in the basic state pension. However, we cannot afford the additional £110 on top of the uprating that we promised on the child tax credit.

Mr Marcus Jones (Nuneaton) (Con): Does my right hon. Friend agree that measures such as extending the above-the-line research and development tax credits and the creation of enterprise zones such as the one at MIRA on the edge of my constituency will be extremely important in bringing new manufacturing jobs to the west midlands?

Mr Osborne: My hon. Friend is a powerful champion for Nuneaton, and I am glad that the enterprise zone is going to help his town. He specifically raised with me the issue of whether we could introduce an above-the-line R and D tax credit. I listened to his arguments and those of business organisations, and I am delighted that we are able to go ahead with that. We will set out the precise details of the rate and so on in the Budget.

Fiona Mactaggart (Slough) (Lab): In view of the fact that the published Treasury tables suggest that the poorest fifth of the population have lost more from the Chancellor’s statement than anyone else apart from the richest fifth, will he tell the House what impact his announcements will have on child poverty?

Mr Osborne: The Treasury is very clear that in the precise way in which child poverty is measured against the baseline, it has gone up. We have been honest about that in the document. However, there is also an inflationary increase in the child tax credit and other benefits, so the picture is more mixed and better for tackling child poverty. I would also make the broader argument that investing in early years education and schools, and so transforming people’s life chances, will do more to lift people out of poverty. That is surely a lesson that we have learned over recent years.

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Richard Harrington (Watford) (Con): I commend the Chancellor on his statement, particularly the parts about young people and small businesses, which will be gratefully received in my constituency. I am sure that he shares my concern about the shadow Chancellor’s seeming lack of interest in interest rates and the amount of national debt. With that in mind, will my right hon. Friend confirm that a top priority of the Government is to reduce the £130 million per day that taxpayers in my constituency—and all taxpayers—pay to get the interest on the debt down?

Mr Osborne: Despite the deterioration in the borrowing forecast, the debt interest payments that we are making are £24 billion less than forecast. That is the burden of the debt, and it would be billions more if the shadow Chancellor ever got his hands on the British economy again.

Sir Stuart Bell (Middlesbrough) (Lab): I welcome the Chancellor’s statement on the 100% capital allowances for the enterprise zones in the Tees valley. I refer him to his statement that he will target £20 billion from pension funds for infrastructure investment. May I draw his attention to the fact that the industry has something like £80 billion in its kitty? I invite him to go back and raise more money for more investment in the same project.

Mr Osborne: I would certainly like to see even more money coming from British pension funds, but £20 billion is an ambitious target. It is a shame that we have not been able to mobilise private sector resources from the pension funds in the past decade in the way that we should. The Government are making a determined effort to change that, and I hope that the memorandum of understanding that we signed with two groups of pension funds will lead to more infrastructure investment in the Tees valley and elsewhere.

Nadhim Zahawi (Stratford-on-Avon) (Con): I commend my right hon. Friend for his statement and for doing so much for hard-pressed families and working people. Today, Italy had to borrow billions of pounds at almost 8% interest. The UK borrows at German rates because of the confidence in our economic policy. The strikes planned for tomorrow will damage confidence in the British economy. Will the Chancellor condemn the strikes and urge the Opposition to come out and condemn them?

Mr Osborne: My hon. Friend is absolutely right. Let us look at the Italian bond auction this morning—that is the sort of interest rate we might have to pay if Britain’s ability to pay its way in the world lost credibility. Was it not surprising that the shadow Chancellor did not mention the fact that there are strikes tomorrow? It is because he is a wholly owned subsidiary of the Unite union.

Mrs Sharon Hodgson (Washington and Sunderland West) (Lab): The giving with one hand and taking away with the other for child care is, frankly, playing with children’s lives and is disgraceful. By how much will the Chancellor increase the early intervention grant to pay for the child care pledge that he announced today? How much capital funding will he provide to

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local authorities so that they can expand and build nurseries? From what children’s pot will he rob that money?

Mr Osborne: We have introduced, for the first time, an entitlement for disadvantaged two-year-olds to get 15 hours of free nursery care. Such a policy was never introduced in the 13 years of a Labour Government. We have increased the figure to 40% of all children of that age and the cost is just shy of £500 million by the end of the period.

Jessica Lee (Erewash) (Con): Erewash is at the heart of the manufacturing base in the east midlands. I therefore welcome the commitment to improving the infrastructure in the UK. To maximise that opportunity, reopening the train station at Ilkeston would really help us in Erewash, assisting businesses and commuters. Would my right hon. Friend or a colleague from the Treasury kindly meet me to discuss how the project can form part of the Government’s plans?

Mr Osborne: The Transport Secretary sitting next to me has just genuinely volunteered to meet my hon. Friend. We will look at improvements to Ilkeston train station. I did not set it all out in detail today, but there is scope for further smaller investments in rail stations and pinch points on our road network—we have set aside considerable sums of money for that. I will ensure that my hon. Friend meets the Transport Secretary soon to put her case.

Mr Nigel Dodds (Belfast North) (DUP): On credit easing, how will the Chancellor’s announcement today apply in Northern Ireland? He knows that some 60% of bank lending to business in Northern Ireland is done by non-UK clearing banks, so I would be grateful if he elaborated on how he thinks it will apply in Northern Ireland. Will he work with the Finance Minister there to find a way through the current credit crunch for business?

Mr Osborne: First, I am happy and keen to work with the devolved Administration in Belfast on how the scheme will apply in Northern Ireland, given the specific issues that Northern Ireland faces with the involvement of the southern Irish banks. It is certainly a UK-wide scheme and we are particularly aware of the acute problems that the financial crisis south of the border have caused in Northern Ireland.

Mr Mark Spencer (Sherwood) (Con): Today, we have seen a clear difference between a Chancellor who wants to manage and invest in our economy and an Opposition who spent and taxed their way through boom into bust. Will my right hon. Friend assure the House, for the sake of every home owner and small and medium-sized business with a mortgage, overdraft or long-term loan, that he will follow a fiscal policy that delivers low interest rates for the long-term future?

Mr Osborne: I absolutely will. We have had a startling admission by the shadow Chancellor that he wants interest rates to be higher in Britain at the moment. That would be a terrible thing for our economy, but I will give him this: his policies would certainly lead to higher interest rates in Britain.

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Gemma Doyle (West Dunbartonshire) (Lab/Co-op): The Chancellor is wrong to deny that the Government’s policies are making long-term youth unemployment worse. It is up by more than 80% since the start of this year. Would he now like to apologise for scrapping the future jobs fund?

Mr Osborne: As I said, the future jobs fund meant that 50% of people who went on it were unemployed within 12 weeks. The right hon. Member for South Shields (David Miliband) was very honest in saying that this Government did not create the problem of youth unemployment. Frankly, if we had more honesty from the shadow Chancellor, he would have a bit more economic credibility. I cannot help noticing that the British public think that the right hon. Member for South Shields would do a better job as shadow Chancellor than the man opposite jabbering at me.

Simon Kirby (Brighton, Kemptown) (Con): With the UK 10-year market interest rates at record lows, does the Chancellor agree that the rest of the world seems to support his plan, not the Labour party’s?

Mr Osborne: The short answer to that is yes.

Jack Dromey (Birmingham, Erdington) (Lab): Last year, the Chancellor cut £4 billion from housing investment. Does he accept responsibility for the catastrophic 99% collapse in affordable house building in the past six months, which is 187% in the west midlands? Does he agree that today he is restoring but 10% of what he cut, when the need for building homes and jobs has never been greater?

Mr Osborne: The Government’s capital spending plans are higher than those that the Labour party put forward in March 2010, which the Dromey family enthusiastically endorsed and tried to persuade the country to vote for. It is striking that, with the hon. Gentleman’s background, he has not mentioned the strikes, which will do huge damage to our economy and jobs. Why do not he and his colleagues condemn them and make sure that our country is working?

Jane Ellison (Battersea) (Con): I warmly welcome the Chancellor’s announcements on infrastructure. In particular, there is a hugely warm welcome for the announcement of Government backing for the Northern line extension to Battersea, which is key to unlocking many new jobs and homes in the Nine Elms/Vauxhall/Battersea development area. Does he agree that it is also important for the existing communities in that area, many of which are among the most disadvantaged in my constituency? It is good news for them, too.

Mr Osborne: I had the opportunity yesterday, with my hon. Friend and the Mayor of London, to visit one of the development sites between Nine Elms and Battersea. It is fantastic to see that project going ahead and I hope that the support and commitment we are giving to help with the borrowing required to fund the Northern line extension will help to create 25,000 jobs in that area of London.

Barry Gardiner (Brent North) (Lab): The £5 billion programme of capital infrastructure is to be welcomed. What is not to be welcomed is that it will be paid for out of the pay packets of individuals in both the private and

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public sectors. Last year the Chancellor said that he believed that the British public were able to spend their money better than the British Government. When did he stop believing that?

Mr Osborne: Perhaps I can explain to the hon. Gentleman that taxes come from people working in the public and private sectors. Money spent on infrastructure is well spent. For every £1 spent on infrastructure we have made savings in current spending, so we are not adding to borrowing in order to fund it. It will help to create jobs and support the economy.

Nicky Morgan (Loughborough) (Con): Did my right hon. Friend hear Opposition Members laughing when he initially mentioned help with the cost of living? Does he agree that that is backed up by the shadow Chancellor’s refusal to recognise that low interest rates have kept many families in their homes over the past couple of years, including the very women and children that he says he cares about?

Mr Osborne: My hon. Friend is right. Low interest rates are helping to keep people in their homes, mortgage payments down and businesses going. If hon. Members want to know what the alternative would be, they should look across the Channel to European countries in the middle of the debt storm, with interest rates going up. We can see that is a path that we must avoid, but we will only do so if we do not follow the policies advocated by that lot opposite.

Mr Andrew Love (Edmonton) (Lab/Co-op): Will the Chancellor now take the opportunity to admit at the Dispatch Box that £158 billion is the deterioration in the forecast that has just been announced? How long will it now take to balance the books, and is not the statement today an admission that this country will have more severe austerity going forward?

Mr Osborne: I said that the borrowing forecast had deteriorated, and—unlike the Labour party—I set up an independent body to ensure that those figures are independently verified and not fiddled, as they were by the shadow Chancellor when he was in office. I can confirm that borrowing would be £100 billion higher if we had pursued the spending policies set out by the Labour party.

James Morris (Halesowen and Rowley Regis) (Con): May I welcome the Chancellor’s statement today, especially in its support for small business? I recently visited a company in my constituency, Somers Forge, which is growing and providing young people with training and support. Does he agree that that is precisely the sort of business that will benefit from some of the measures that he has announced today?

Mr Osborne: Absolutely. We are doing a huge amount to support small businesses through our rate policy, the national loan guarantee scheme that we have announced and the support that we have given to companies that innovate and want to bring those innovations to market. We are doing all those things to help the small businesses of this country so that they can create jobs and grow.

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Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op): The announcement of new investment in transport infrastructure is very welcome. Can the Chancellor confirm that that investment will not be funded by reducing or delaying existing projects, and what will his announcement mean for the future of the northern hub and investment in rail across the north?

Mr Osborne: I can give that confirmation. This is additional money that has come from savings in current spending. Specifically on the northern hub, the first part of that is the electrification of the Manchester to Leeds trans-Pennine express, but that will also benefit train travel times from Liverpool across the Pennines. We have also made other improvements like the Ordsall chord, which will help. We want to go further on the northern hub and the Department for Transport will produce proposals on that early next year.

Mark Lancaster (Milton Keynes North) (Con): Mr Speaker, you, I and many other hon. Members have campaigned long and hard for east-west rail and today’s announcement is tremendous news for Milton Keynes. As the Transport Secretary is in her place, can my right hon. Friend the Chancellor confirm the possibility that we will have east-west rail and, at the junction between east-west and High Speed 2, could there perhaps be a Buckinghamshire Parkway station so that residents of Buckinghamshire could enjoy the benefits of High Speed 2 as well as the pain?

Mr Osborne: I do not think that a decision has been taken on stations, but I agree with my hon. Friend that we need to bring home to the people of Buckinghamshire the benefits of high-speed rail.

Mr Speaker: Hmm, yes.

Naomi Long (Belfast East) (Alliance): The Chancellor stressed the importance economically both of regional connectivity and infrastructure. Can he confirm whether the Northern Ireland Barnett consequentials of the infrastructure changes will be ring-fenced? Further, can he offer any good news on air passenger duty for those who rely entirely on regional flights for that connectivity?

Mr Osborne: It will be up to the devolved Administration to choose how to spend the money that is allocated to them, but of course as it is one-off money—being capital spending—they will need to think carefully about how they spend it. On aviation, the Department for Transport will set out an aviation strategy, but it is confirmed in today’s document that we were able to take the decision that saved the long-haul flight from Belfast to north America.

David Rutley (Macclesfield) (Con): I welcome the Chancellor’s statement and the announcement today that the Manchester airport A6 link road will be brought forward. That will be a real boost for Manchester and north-east Cheshire. Does my right hon. Friend agree that capital investment is the right way to strengthen our regions, rather than relying on the increases in public sector spending that we saw from the last Government?

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Mr Osborne: My hon. Friend is absolutely right. As my constituency is affected by that road link, I very much welcome it, although I stress that the decision was not taken by me for that reason. He will know, and local people will remember, that that road scheme was cancelled in the first week of the Labour Government in 1997, and I am glad that we have now been able to take steps to help south Manchester and north Cheshire grow.

Geraint Davies (Swansea West) (Lab/Co-op): The Chancellor has already announced 500,000 job cuts in the public sector alongside pay freezes, both of which have deflated demand, reduced growth and helped to increase the deficit by £158 billion. He is now imposing a 3% income tax on all public servants dressed up as a pension contribution for a lower pension after working longer. Will he accept that that will mean a 3% reduction in the spending power of all public servants, which will be deflationary and which, as well as being unfair, unwise and discriminatory, will provoke an unnecessary strike tomorrow?

Mr Osborne: We are basing our pension reforms on the report from Lord Hutton. He particularly focused on the benefit, but he said that there was a case for the increase in contributions. He also said recently that it was frankly difficult to imagine a better deal. That was the former Labour Pensions Secretary. What I do not understand is what exactly the Labour party’s policy is on this. It is absolutely silent. Are you in favour of increased contributions? [ Interruption. ] If you are not in favour of the increased contributions, where in your so-called five-point plan are you spending the money to stop those contribution increases? It is completely economically illiterate—[ Interruption. ] The hon. Member for Dudley North (Ian Austin) talks about negotiations. Why do he and his party not condemn the strike, urge the unions to sit round the table and negotiate with us to get a deal, especially as the former Labour Pensions Secretary, John Hutton—a man I know the hon. Gentleman really admires—says that it would be difficult to get a better deal?

Mr Speaker: Order. I may or may not be economically illiterate, but I gently, tentatively and courteously point out to the Chancellor that I do not have a five-point plan.

Robert Halfon (Harlow) (Con): I thank the Chancellor for listening to millions of hard-pressed motorists and the Fair Fuel UK campaign and for not raising fuel duty next year. Is he aware that that will save 37,000 Harlow motorists more than £1 million next year? Will he listen to Essex man once again and set up a commission to look at the long-term problems of petrol and diesel price rises and see whether anything more can be done?

Mr Osborne: I should pay particular tribute to my hon. Friend, who has led a dogged campaign on behalf of the people of Harlow and of the whole country to get some relief from the increases in petrol taxes that were planned by the last Labour Government. I am delighted that we have been able to help. I always listen to Essex man, who is represented in the form of my hon. Friend.

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Mrs Mary Glindon (North Tyneside) (Lab): Will the Chancellor acknowledge that public sector workers are themselves taxpayers who make a massive contribution to the good of the country, and will he stop treating them like leeches on the public purse?

Mr Osborne: Of course people who work in the public sector pay taxes and make an enormous contribution to the British economy, but the hon. Lady should recognise that public sector pay restraint and pension reform at a time such as this is one of the ways in which we can reduce the impact of the very large deficit that her Government ran up on the public sector work force.

Charlie Elphicke (Dover) (Con): I give a wholehearted welcome to the announcement concerning the lower Thames crossing, which will make a big difference to Kent, as will the massive help for small business finance. May I make a plea to the Chancellor to look further at small business equity finance? In particular, will he consider whether there is scope for expanding, or possibly floating, the business growth fund?

Mr Osborne: I am very happy to look at ideas to enhance the business growth fund, which is principally operated by the banks, under which they have committed to invest in the equity of small companies. We have already announced the seed enterprise investment scheme, which will help angel investments in companies. I am glad that my hon. Friend supports the commitment that we made to the new crossing at the lower Thames.

Mark Durkan (Foyle) (SDLP): The Chancellor has proclaimed support for business and jobs in the present climate. He also puts at a premium innovation, productivity and exports. Do his plans therefore extend to assisting firms in the sterling zone—I am talking particularly about the areas of medical devices, life sciences and sustainable technologies—that are finding the flow and scale of orders from eurozone countries compromised and the reliability of payments damaged because of austerity measures in those countries?

Mr Osborne: I am not sure that I agree with the hon. Gentleman that austerity measures are to blame, but I certainly agree that that is a real problem. Of course one of the consequences of the ongoing eurozone crisis has been an increase in bank funding costs across the European continent. The further disruption to the financial system is having an impact on exports to the eurozone, which is one of the reasons that this crisis is having a chilling effect on the British economy. Later today, I will be going to another meeting of European Finance Ministers in Brussels to try to get a better resolution of the problems.

Mary Macleod (Brentford and Isleworth) (Con): In my constituency in the London borough of Hounslow, we have a real and immediate shortage of school places. I therefore welcome the Chancellor’s announcement today of the £600 million investment in school places. Will he confirm that that will mean an extra 40,000 places for school children and will he say when that money will become available?

Mr Osborne: We are addressing the problem of basic need, which was ignored by the previous Government. I know in places such as my hon. Friend’s constituency,

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the problem is acute. Let me write to her about the specific impact on her constituency and how many additional places the investment will create in the surrounding area.

John McDonnell (Hayes and Harlington) (Lab): In my constituency, religious and community organisations are now providing food parcels to poor families. At the same time, we are seeing executive pay and remuneration soar. There was nothing in the Budget statement that addressed executive pay or remuneration. Are the Government going to bring forward some controls to tackle that obscene inequality?

Mr Osborne: I know that the previous Government were

“intensely relaxed about people getting filthy rich”.

We are introducing transparency in pay. We are bringing regulations before the House to force banks to disclose the incomes of their eight highest paid employees. We are also consulting on high pay more generally. We have introduced the bank levy, which the previous Government failed to introduce in 13 years and which the shadow Chancellor could have introduced when he was City Minister, but never did.

Anne Marie Morris (Newton Abbot) (Con): I congratulate the Chancellor on his support for micro-businesses, which, as he well knows, I extensively champion. The extension to small business relief is great and the new seed enterprise investment scheme is fantastic. Can we hope to have more focus on the very important tiny companies that are too often overshadowed by the big brother SMEs? They are the area for new jobs and for growth in the economy.

Mr Osborne: My hon. Friend is indeed a powerful champion of micro-businesses. She has spoken to me about them on a number of occasions in the past year. We have set out a number of measures that will help such businesses, including the rate relief holiday, the seed investment scheme and the support for innovation. We are consulting and having a call for evidence specifically on compensated no-fault dismissal for firms of fewer than 10 employees.

Lilian Greenwood (Nottingham South) (Lab): Why are hard-working families on tax credits, low-paid public sector workers and the thousands of young people in my city with no job paying the price of the Chancellor’s economic failure while he lets bankers keep their bonuses?

Mr Osborne: It was the Labour Government who let the City explode. They allowed that to happen when the shadow Chancellor was the City Minister. They had 13 years to regulate the City and I suspect that on not one occasion did the hon. Lady write to either Tony Blair or the last Prime Minister calling for that regulation. The Labour party presided over the biggest financial crisis in our country’s history. We are properly regulating the banks and introducing ring-fencing. We have brought in a permanent bank tax and transparency in bankers’ pay. None of those things existed in the 13 years of Labour Government.

Jeremy Lefroy (Stafford) (Con): I welcome the Chancellor’s statement which includes measures that will really help Staffordshire such as the M6 managed

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motorways scheme and the announcement on energy-intensive industries. How much does my right hon. Friend expect to make from the anti-tax avoidance measures that he has taken and that the previous Government did not?

Mr Osborne: I am glad that my hon. Friend welcomes the support that we have given to businesses and families in Staffordshire. I am also glad that he welcomes the M6 managed motorways scheme. We have taken specific measures to deal with both tax avoidance and unfair tax treatment. For example, the measures that I have announced to deal with double tax relief and asset-backed pension contributions will raise £450 million and the measures to deal with low-value consignment relief, which was strangling music shops on our high street, will raise £100 million. We have taken action, which the previous Government failed to take, to ensure that everyone pays their fair share.

Paul Farrelly (Newcastle-under-Lyme) (Lab): I look forward to meeting the Chancellor over the Prime Minister’s broken promise to award an enterprise zone to north Staffordshire.

Regarding lending to small business, can the Chancellor confirm that under his loan guarantee scheme, the credit risk will remain with the banks? If so, how will it work in practice given that the banks have been averse to lending and expanding their balance sheets? Furthermore, what safeguards will there be to ensure that they do not largely fatten interest margins and their profits under his scheme?

Mr Osborne: Of course I am happy for the hon. Gentleman to be part of those discussions on enterprise zones. Many areas of the country put in bids for enterprise zones. We were able to give the go-ahead to only the 22 that we announced previously and the two now for Humber and Lancashire, which I have confirmed today. There is also the expansion of the north-eastern one to the Port of Blyth, which is warmly welcomed on the Opposition Benches. I am happy to meet the hon. Gentleman to discuss the problem. On the national loan guarantee scheme, he is right to say that we have to get the audit trail right. We are looking very closely and seeking to model a lot of what we are doing on the European Investment Bank’s scheme, which already delivers lower rates to small businesses in Britain. It is a small scheme but the procedures are already in place. I can confirm that the credit risk of the small business loan sits with the banks.

Andrew Bridgen (North West Leicestershire) (Con): Does the Chancellor agree that the Government must continue to oppose the calls from the Labour party to adopt its plan B? When in government, it took our country to the brink of bankruptcy, and adopting its plan B would risk pushing it over the edge. The B in Labour’s plan B stands for bankruptcy.

Mr Osborne: It is indeed a plan B for bankruptcy. It is striking that no mainstream or centre-left party in Europe, other than the Labour party, currently advocates more spending. I can reach only one conclusion: the Labour party does so only because the man that it has

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chosen to be its shadow Chancellor is the man more identified than almost anyone else apart from the previous Prime Minister with the financial and economic mess that this country got into.

Chris Williamson (Derby North) (Lab): The Chancellor claims to support the manufacturing industry and told the House at the conclusion of this year’s Budget speech that he wanted to be

“carried aloft by the march of the makers” —[Official Report, 23 March 2011; Vol. 525, c. 966.]

in order to create jobs and support families. Will he explain, therefore, why he thinks it a good idea that the Government are undermining and potentially destroying the British train-building industry by building trains for the Thameslink line in Germany rather than at the Bombardier factory in Derby?

Mr Osborne: The hon. Gentleman should be straight with the House. That was a contract signed by the previous Labour Government—[Hon. Members: “No it wasn’t.”]It was a procurement process initiated by the previous Labour Government that left no other option for the British Government than the contract signed. That was the contract that we were forced to deal with under the rules of the previous Labour Government. In the autumn statement document, we set out changes to procurement rules to ensure that these sorts of things do not happen again. I can also confirm that we have committed to building 130 carriages on Southern Rail, and I very much hope that they can be built in Britain.

Sarah Newton (Truro and Falmouth) (Con): From his statement, it is clear that my right hon. Friend has listened carefully to businesses in the port of Falmouth, where we want to strike the right balance between protecting our environment and developing a sustainable regional economy and new jobs. Will he detail what measures he has put in place to overcome the obstacles in our way?

Mr Osborne: I remember visiting the Falmouth estuary with my hon. Friend and talking to the local harbour master, the port authority and others about the ridiculous situation whereby we cannot dredge the Falmouth estuary and expand the port. The specific reference in my speech to the EU habitats directive was in part a reference to what was happening in Falmouth. As Members will know, I am working extremely hard to overcome these problems so that we can get the estuary dredged, as it has always been dredged, create jobs in Falmouth and address the ridiculous imbalance in our society whereby, in order to protect seaweed at the bottom of the Falmouth estuary, we cannot dredge it and create hundreds of jobs in Falmouth.

Derek Twigg (Halton) (Lab): In view of the decision that the Chancellor has announced regarding the reduction in tolls on the Humber bridge, may I ask him—he, too, is a Cheshire MP—whether he will consider what can be done to reduce the proposed level of tolls on the Mersey gateway? More specifically, will he consider the condition limiting how much of the toll revenue Halton council can use to give discounts to local residents? As he knows, they can travel across the current bridge for free, but when the new bridge is built, both bridges will be tolled.

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Mr Osborne: I very much want the second Mersey crossing to get the go-ahead, and the Government have committed the support, including financial support, to the specific plan. It has to be tolled to be paid for, however, as I am sure people understand, but I would draw a distinction with the Humber bridge: the debt on the Humber bridge was paid for many years ago and so the tolls were unreasonable. However, when providing new infrastructure, we have to find a way of funding it. It has to come either from general taxation—we are providing tax support—or out of the tolls. However, I shall consider the hon. Gentleman's specific point about the arrangements with Halton council, speak to my right hon. Friend the Transport Secretary and get back to him.

Iain Stewart (Milton Keynes South) (Con): Just three weeks ago, I set up an all-party group to campaign for the reopening of the east-west rail link. May I thank the Chancellor for agreeing to our requests, and will he confirm that the project has a benefit-cost ratio of more than 6:1 and is in line to generate up to 12,000 high-quality jobs along the route?

Mr Osborne: This is evidence of what a powerful campaigner my hon. Friend is on behalf of his constituents and Milton Keynes, and I am delighted that we can develop these plans, which have the potential to create many, many thousands of jobs. It would be good to reopen a railway line in Britain.

Catherine McKinnell (Newcastle upon Tyne North) (Lab): I am concerned that the Chancellor might be missing a trick. Hundreds of millions of pounds of European regional development funding are waiting to be drawn down by the UK, including £100 million for the north-east alone. Is the Government’s failure to take steps to secure match funding—for example, through the regional growth fund—a deliberate policy or simply an oversight?

Mr Osborne: We are keen to make use of European funds where available, but there are issues of affordability with match funding. I can assure the hon. Lady, however, that if she contacts me with specific examples of European funding that she wants us to draw on, I will see whether it can be done.

David Mowat (Warrington South) (Con): The Chancellor will be aware that in the last year of the previous Government, the discrepancy in gross value added between London and the English regions reached 100%—the worst for two decades—so can he confirm that it remains at the forefront of his policy to fix this appalling situation?

Mr Osborne: Yes, absolutely. We must get the private sector in our regions growing. It is striking that, through all the years of the Labour Government—with the regional developments and their like—the disparity between the English regions actually grew. That is what happened under their regional policy. That was because they did not focus enough on getting the private sector growing. The Government can do that by supporting things such as the regional growth fund and through investment in transport infrastructure. I know that my hon. Friend has made a powerful case for improvements to Warrington town centre and traffic flow in the borough.

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Stella Creasy (Walthamstow) (Lab/Co-op): The Government have today announced plans that take three times as much from families as from banks. Given that, as we now see, half of all households cannot make ends meet at the end of the month, does the Chancellor think that, under his plans, more or fewer people will be forced to borrow from legal and illegal loan sharks?

Mr Osborne: That is a pretty ludicrous question. We have tried to help families through the freeze in fuel duty in January and with rail fares, and we are uprating working and non-working-age benefits in the way that I set out. We were unable to pay the additional £110 on the child tax credit child element, as I explained. That is because of the substantial increase that the uprating will provide.

Mr Julian Brazier (Canterbury) (Con): I congratulate my right hon. Friend on focusing firmly on monetary policy. May I urge him to consider the box-ticking farce that is the lending policy of most banks and to focus his excellent credit-easing policy on those sectors, such as suppliers to the construction industry, that are particularly disadvantaged by it?

Mr Osborne: I want to ensure, in the way that I set out, that the national loan guarantee scheme is available to companies with a turnover of less than £50 million. As I mentioned in my statement, the business finance partnership, which has not had as much attention as the national loan guarantee scheme, is a £1 billion fund—it can be more if it succeeds—specifically targeted at mid-cap companies to provide non-bank financing for those companies alongside, for example, pension and insurance funds.

Mr David Anderson (Blaydon) (Lab): At a time when inflation is 5% and when the average nurse in this country has had a two-year pay freeze, faces two years of a 1% pay limit, a 3% theft on her pension and frozen or capped increments, does the Chancellor agree that over this Parliament the average nurse’s living standards will fall by 10%, and that, if the plans for regional pay go through, people in the regions might be even worse off?

Mr Osborne: First, we have committed to real increases in the health budget, and the official—

Mr Anderson: Talk about pay!

Mr Osborne: Well, the pay comes out of the health budget, and the official policy of the Labour party is not to increase health spending in real terms. [ Interruption. ] This is rubbish: that is the stated position of the shadow Health Secretary; that is what he says. On pay, I want to hear from the shadow Chancellor at some point this evening whether he supports a 1% average pay rise in the next few years, because then we will know whether the complaints that the hon. Gentleman has just made have any force.

Michael Ellis (Northampton North) (Con): I warmly welcome the Chancellor’s statement. Can he confirm that, despite the quack economics cited by those on the Opposition Front Bench, the chief economist of the OECD has said not only that we are on course, but that plan A is the right plan for this country?

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Mr Osborne: My hon. Friend is right. The OECD was absolutely explicit in saying yesterday that we were right to be dealing with our debts, and if one looks, the forecasts for the UK were tough, but they were worse for many eurozone countries, which I am afraid is just an indication of the difficult world that we are in.

Richard Burden (Birmingham, Northfield) (Lab): The Chancellor will be aware of the widespread calls from manufacturing businesses to increase the range and extent of capital allowances. Did I hear him correctly that his proposal to increase them to 100% is restricted to some enterprise zones and is not available to others? If that is the case, how will he ensure that this will lead to an increase in investment, rather than displacement investment? In a place such as the west midlands, which already has some of the poorest areas in the entire country, how would a public sector worker reach any conclusion from today’s announcement other than that he or she is being asked to work harder, for longer and for less, for doing the same job as somebody in the south-west or south-east?

Mr Osborne: First, we are today asking the independent pay bodies—which I think everyone in this House supports—to look at more local pay. That is the start of this process. Secondly, we increased capital allowances for short-life assets in the previous Budget. On the enterprise zones and the 100% relief that I have announced, there were specific proposals from the enterprise zones that I mentioned to attract new manufacturing and business into the zones. We are conscious that we want to avoid displacement activities, so we have given those capital allowances not to all enterprise zones, but to the enterprise zones that we think have the most compelling plans to create new businesses, and I hope that the hon. Gentleman would welcome that.

Joseph Johnson (Orpington) (Con): Hard-working commuters and others in Orpington who depend on Southeastern trains have for years been hit by a fare increase regime of RPI plus 3%. May I therefore welcome my right hon. Friend’s decision to cap rail increases at RPI plus 1%, which will provide hard-working families with much needed support in these difficult times?

Mr Osborne: I welcome my hon. Friend’s support. I hope that this measure will help people living in Orpington who commute into London to work and that it will really enable us to help local people at this difficult time with their costs of living.

Mr Ronnie Campbell (Blyth Valley) (Lab): I welcome the Chancellor’s statement on the port of Blyth, which is something for which I have been fighting for a long time—I asked the Business Secretary about that only last week, so this is good, quick thinking. However, is the Chancellor aware that south-east Northumberland, where Blyth and the estuary are, has the highest unemployment in the north-east and perhaps the country? Will he consider making the estuary and all the land around it into an enterprise zone, bringing the jobs to where the unemployment blackspots are?

Mr Osborne: I think I had better capture the moment when I get a compliment from the hon. Gentleman. We have acted quickly on a specific proposal that was made

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for the port of Blyth. We are going to consult on it and get the detail right. I am happy to consider the proposal that he makes. It has to be affordable, of course, and it has to work in terms of encouraging enterprise and new business, but we are absolutely committed to the north-eastern zone and to the port of Blyth being a successful part of it.

Angie Bray (Ealing Central and Acton) (Con): I congratulate the Chancellor on a statement that is absolutely right for these tough times and, particularly for Londoners, on his investment in infrastructure projects. Will he consider, in discussion with the Transport Secretary, bringing forward the Crossrail infrastructure project to parts of London? That would be good not only for parts of London, but especially for my constituents. We have a station—Ealing Broadway station—that has been urgently in need of an upgrade for many years now.

Mr Osborne: I can give my hon. Friend an assurance that we are certainly not going to delay on Crossrail, which is currently being built—we can see that at the moment around London. We have looked at this, but with such a complicated project, I do not think that it is possible to advance it faster than it is going at the moment, because it is going as fast as it can.

Hugh Bayley (York Central) (Lab): I welcome the Chancellor’s plan B. It is a small start, but at least it shows that his previous plan A—reduction of public infrastructure investment—was a mistake. Can he tell me what steps the Government will take to ensure that the construction companies that pick up contracts under his infrastructure investment scheme will take on apprentices, and also say how many jobs in the construction industry he thinks will be created by this £30 billion of investment?

Mr Osborne: I explained that, pound for pound and in each year, we were paying for infrastructure spending with savings in current spending or underspend, so the position is absolutely consistent with the plan that I set out before. On jobs, I have not put a figure on the total number of jobs created by all this infrastructure—I do not want to over-promise and under-deliver. It will create jobs, but we do not have a figure. We are dramatically expanding the number of apprenticeships. I want to ensure that they are in the construction sector, and I would certainly hope that large firms taking part in Government infrastructure investment projects—and, indeed, firms in our small business scheme—are also taking on apprentices.

Penny Mordaunt (Portsmouth North) (Con): May I welcome the Chancellor’s vote of confidence in the space sector today? I hope that Portsmouth, via Astrium, might benefit directly from that investment, but wherever the money goes, can he confirm that this Government will be—if he will forgive the expression—a “launch customer” and that our procurement will support those companies in massively increasing their exports?

Mr Osborne: We are giving specific support to new satellite manufacturing, which is a real success story in Britain—it is one of those untold stories. I know that the sector is particularly successful in the area that my hon. Friend represents. From memory—I will certainly

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correct the record if I have got this wrong—we are providing £25 million to support the development of new satellites, as a result bringing, we think, an additional £150 million of private sector investment into the small satellites sector, which I think is also taking place in the area that she represents. That is a good example of the Government trying to encourage the private sector and get jobs across the country.

Simon Danczuk (Rochdale) (Lab): The retail sector is finding it extremely difficult and is being hammered in the current economic climate, yet it is a sector that usually provides lots of jobs for young people. Did the Chancellor not consider a scheme to help underwrite credit insurance, in particular to help independent retailers?

Mr Osborne: If the hon. Gentleman has specific proposals on credit insurance, I will be very happy to look at them. When it comes to credit easing more broadly, I have set a £40 billion envelope, although I have committed only £21 billion today, as it covers the two schemes that were ready to go: the national loan guarantee scheme and the business finance partnership. We are looking at partnership schemes and other things that might work within the envelope, and of course we are vigilant about conditions in the broader economy—including issues such as trade finance—that might be affected by the eurozone crisis.

Gavin Williamson (South Staffordshire) (Con): I am sure that the Chancellor is aware that Jaguar Land Rover is currently constructing an engine plant in an enterprise zone in my constituency of South Staffordshire. Does he agree that measures on enterprise zones, R and D tax credits and infrastructure development will help the continued manufacturing revival?

Mr Osborne: Yes, I of course agree with my hon. Friend. Again, another success story at the moment is the car industry. I am absolutely delighted by Jaguar Land Rover’s announcement, which is a real vote of confidence in the UK—the company could have constructed that engine plant elsewhere in the world. The announcements that I have made on R and D above-the-line tax credits will also help larger companies do their R and D in Britain.

Jim Shannon (Strangford) (DUP): One of the biggest problems of modern society is youth unemployment. The Chancellor said that companies would be given national insurance discounts and other incentives to recruit and train young people. What other help will they be offered for that purpose?

Mr Osborne: We are helping companies to train young people through our apprenticeship programme, and I am happy to be engaged in active discussion with the devolved Administration in Northern Ireland about how that help can best be delivered there.

Stephen Metcalfe (South Basildon and East Thurrock) (Con): I thank my right hon. Friend for his statement and welcome his announcement of a national infrastructure plan, particularly in the context of south Essex. There is no doubt that investment in vital infrastructure is a key driver of growth. Will he agree to work with Members

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in areas that will benefit from the investment, to ensure that we obtain the best return on it both locally and nationally?

Mr Osborne: I certainly give that commitment, and I hope that south Essex will benefit from the commitment that we have already given today to work on a third crossing over the lower Thames. There are a number of possible locations for it, but it will definitely help economic activity both north and south of the Thames.

Julie Hilling (Bolton West) (Lab): Before the general election, growth was increasing, the deficit was being reduced and unemployment was falling. Since the election, growth is down, borrowing is up and unemployment is going through the sky, and ordinary people are feeling the pain. Can the Chancellor truthfully tell us that his plan is working?

Mr Osborne: I had probably forgotten that we had inherited a golden economic legacy from the Labour party. What I remember is that we inherited a country that did not have a credible plan to deal with the deficit, which the credit rating agencies had put on negative outlook, and which the CBI, the OECD and all the other international organisations said lacked a credible plan.

Of course, as the OBR has made clear in its independent report, we are dealing with the consequences of the catastrophic failure of the last Labour Government to regulate financial services better, not least during the period when the shadow Chancellor was City Minister. That caused one of the deepest crashes of our country’s history. [Interruption.] We no longer hear the phrase “No more boom and bust” from the shadow Chancellor. He invented that phrase, and he gave us the largest boom and the biggest bust in our entire history.

Mr Rob Wilson (Reading East) (Con): I congratulate the Chancellor on his statement, and in particular on the new tax breaks for private investors in start-up companies. As I have not seen the details yet, can the Chancellor briefly elaborate on how the system will work for smaller investors?

Mr Osborne: The seed enterprise investment scheme will provide 50% tax relief for all who invest in a qualifying start-up, even if they do not pay the 50% rate of income tax. The investment can be up to £100,000, although of course it can be much less. The companies involved can receive a maximum of £150,000. Those who have a capital gain can invest up to £100,000 of it in the scheme, and the amount will be tax-free for the next financial year. The scheme is aimed at small as well as slightly larger investors, and is designed to help start-up companies to obtain the finance they need.

Toby Perkins (Chesterfield) (Lab): The last Chancellor to see interest rates go through the roof was not a Labour Chancellor, but the one who was advised by this Chancellor’s right hon. Friend the Prime Minister. If the Chancellor seriously thinks that the current level of interest rates is a sign of his success, will he consider any increase in interest rates to be a sign of failure?

Mr Osborne: We are doing all we can to keep our country safe in a debt storm. We need only look at the Italian bond auction today to see the market rates that

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Italy is paying. We are currently, in a debt crisis, borrowing money more cheaply than Germany. That represents a vote of confidence in the deficit plan of the United Kingdom.

Mark Pawsey (Rugby) (Con): I thank the Chancellor for listening to the representations of energy-intensive industries, and I welcome the measures that he has announced. They will be examined closely by companies such as CEMEX, which is in my constituency. Can he give us an estimate of the number of UK jobs that will be saved as a result of his measures, both directly and in the supply chain?

Mr Osborne: We have not made an exact estimate of the number of jobs that will be saved, but I am certain that these measures will help to keep such industries in the United Kingdom. It is important that we do not price our industry out of the world market. That would do nothing to reduce our carbon emissions, but it would damage our economy. We have worked with the energy-intensive industries and the business organisations to develop our package, and I think that it achieves the right balance between ensuring that those industries remain competitive and meeting our international environmental obligations.

Sheila Gilmore (Edinburgh East) (Lab): The Government have made a virtue of wanting to make work pay. How does it make work pay first to reduce child care tax credit, and then not to upgrade working tax credit in the same way as out-of-work benefit?

Mr Osborne: We are uprating the child care element of child tax credit, along with other elements of child tax credit, in line with September CPI inflation, so it is not true to say that we are not uprating child tax credit. We had to make a difficult decision on working tax credit, but we think that one of the best ways of supporting low-income working people is to take them out of the tax system altogether.

Richard Graham (Gloucester) (Con): Last week I met members of the committee of the Federation of Small Businesses in my constituency to hear about their principal difficulties, one of which was gaining access to affordable finance. Today I believe that both they and manufacturers in Gloucester will be especially pleased to hear about the Chancellor’s creation of a national loan guarantee scheme to provide more and affordable finance. As he said, that will be the best key to increasing growth and the number of apprenticeships and reducing unemployment in our city and elsewhere. When does he expect the scheme to be open for business?

Mr Osborne: We hope to get it up and running in the next couple of months. We must clear the state aid hurdles—I am afraid that that is a fact of life—but we have been making good progress, and we hope that following the European Investment Bank scheme that already exists will make the process relatively simple. We are open to other credit-easing programmes such as partnership schemes, which some people have suggested, and we want to work with the Federation of Small Businesses and others to ensure that small businesses receive their money in the form of reduced rates for those who participate in the scheme.

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I said explicitly in my statement that we would not make the best the enemy of the good. We must get the scheme up and running as quickly as possible in order to help companies in Gloucester and elsewhere that have found it difficult to gain access to finance over the last three or four years.

Jessica Morden (Newport East) (Lab): The Chancellor referred earlier to the Severn bridge tolls. Can he be more specific about what he can do to help, in view of the assistance that he has given to the Humber bridge?

Mr Osborne: The issue of the Severn bridge tolls is different. There will come a point later in the decade when the question arises of what we do with the toll income and how it is allocated between England and Wales. I want to establish, in discussion with the Welsh Government in Cardiff, whether we can arrange to use the money from the tolls to support the M4 corridor in south Wales.

Rehman Chishti (Gillingham and Rainham) (Con): I welcome the Chancellor’s statement, and, in particular, the help given to commuters in my constituency who will save £67 on their season tickets to London. Will he confirm that the shadow Chancellor’s illegal fuel tax policy contravenes annex III of the EU directive on VAT?

Mr Osborne: It does. It is an illegal policy, which is a novel thing for an Opposition to advance. As I have said, fuel duty and taxes would be 10p higher if we had not acted in the Budget or in the autumn. [Interruption.] I still have not heard whether the shadow Chancellor supports what we have done on fuel duty. He will probably say yes, but he will not say how he would fund it. As, unfortunately, he did not discover at the Treasury, we must make the sums add up in order to keep the country’s books balanced and ensure that we stay out of a debt storm.

Heidi Alexander (Lewisham East) (Lab): In the first nine months of this year, on the Chancellor’s watch, long-term youth unemployment in my constituency increased by 192%. I ask the Chancellor this: how can it be right that young people in my constituency are paying the price for the Government’s abject failure to get the economy moving?

Mr Osborne: Unfortunately, the young people the hon. Lady refers to are paying the price for the biggest boom and bust in our country’s economic history, which the Government she supported presided over. What this coalition Government are doing is introducing a youth contract to help those people in Lewisham and elsewhere. It will provide work experience after three months for the unemployed, it will require weekly signing on after five months, and it will provide subsidised jobs in the private sector, encouraging businesses to get people into work and offer apprenticeships. In return, it will ask those young people actively to look for work, and there are sanctions if they do not do so. That is what we are offering the young people of Lewisham, who were so badly betrayed by a Labour Government.

Mr Philip Hollobone (Kettering) (Con): I thank the Chancellor for his £110 million vote of confidence in Kettering with the approval of two major road schemes:

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the widening of the A14 Kettering bypass, and the go-ahead for the A43 Corby link road, which is also known as the Geddington bypass. When does he anticipate the diggers will move in and construction can start?

Mr Osborne: If I may, I will write to my hon. Friend with a specific answer on when the diggers will start on the widening of the A14 Kettering bypass and on the Corby link road, but these are commitments for this spending review so it is in the next few years and not at some future date. I know how important both those roads are for the local economy and for local people, and I am really pleased that, thanks in part to the campaign and the support of the local Member of Parliament, we have been able to give them the go-ahead.

Mr Speaker: We look forward to hearing about the dates for the diggers, as I am sure do the people of Kettering.

Jonathan Ashworth (Leicester South) (Lab): May I push the Chancellor a little further on borrowing, because so far in the exchanges he has not quite brought himself to admit that he is going to be borrowing £158 billion more than he planned to borrow a year ago? Will he confirm that that is the case—yes or no?

Mr Osborne: I set out the borrowing figures to Parliament and what the hon. Gentleman should admit is that the plan he is pursuing would add to the borrowing. We cannot borrow our way out of a debt crisis, and as long as the Labour party goes on advocating that approach, I suspect that its credibility will fall and fall.

Mr Peter Bone (Wellingborough) (Con): I am slightly concerned about whether the health of the shadow Chancellor is in order, as he has spent the past hour muttering to himself. However, may I ask the Chancellor whether he thinks that new Government policy should be announced to Parliament first?

Mr Osborne: I am always keen that Parliament is kept fully informed.

Martin Vickers (Cleethorpes) (Con): On behalf of my constituents, I thank the Chancellor for the many initiatives that he has introduced for northern Lincolnshire and Humberside. Of course I cannot let the moment pass without a particular word of thanks for what he has done on the Humber bridge tolls, as it will be a great boost to the local economy. The national infrastructure plan rightly says that we have to wait until the new planning framework is in position before we can speed up the planning process. A number of major investments are pending in my constituency. Can he assure me that the full weight of the Government will be behind them to speed them along?

Mr Osborne: My hon. Friend absolutely has my assurance. If he wants to contact me with specific proposals that will create jobs in Cleethorpes and elsewhere in Lincolnshire, would he please let me know and I will do what I can to advance them, within the rules and the planning laws. As he knows, I am trying to reform those laws to make it easier to get the go-ahead for development that is sustainable and in tune with our broader

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environmental objectives. I want to make the planning system more rapid, and I should put on the record that the campaign that he has fought with other Members to get those Humber bridge tolls reduced shows that Cleethorpes has a powerful champion in my hon. Friend.

Julian Sturdy (York Outer) (Con): As a Yorkshire MP, I strongly welcome the Government’s decision to electrify the trans-Pennine rail link between Leeds and Manchester and the huge boost that that will bring to our northern economy. As a York MP, too, may I ask the Chancellor whether the Treasury has examined the strong economic case for linking Leeds to York?

Mr Osborne: I do not have the specific details in front of me, but I will certainly engage with my hon. Friend on that proposal, and I hope that we can advance it.

Neil Carmichael (Stroud) (Con): There are many substantial measures to welcome in this package, but I wish to focus on the national loan guarantee scheme, because it will help many small businesses in my constituency, particularly those in the manufacturing and engineering sector. Does the Chancellor agree that what we should be hoping for from banks is more sophistication when they allocate money to small businesses and more analysis of what the prospects of small businesses actually are?

Mr Osborne: Yes, I think that we all want to see a move to a banking system that is more responsive to local businesses and local people and that is not just based on a computer model that allocates credit and the computer says no. We want to return to having local bank managers empowered to make decisions, and a number of banks are doing this. One of the notable successes at the moment is Handelsbanken, which is out there lending money to small businesses and taking more of this local approach.

Alun Cairns (Vale of Glamorgan) (Con): The Chancellor’s statements of support in favour of energy-intensive industries will be welcomed in south Wales, the midlands and the north, which are areas that have seen a particular decline in manufacturing over the past decade. The statements will be particularly welcomed by Dow Corning, a chemical manufacturing company in Barry in my constituency. How will they work in practice in order to support these companies in reducing their energy bills?

Mr Osborne: We are going to provide specific compensation for electricity-intensive businesses affected by the EU trading system and by the carbon price floor. We are also going to increase the climate change levy relief and work to make sure that those businesses are not adversely impacted by the electricity market reforms. We have a suite of measures, but the overall intention is clear: we want to help businesses such as the one in my hon. Friend’s constituency. I should say that I was first alerted to what we can do by a visit before the election to the steel works in Port Talbot, where I was very struck with the argument made there that the business could simply be moved to Holland if we did not act. We have been able to come forward with help that I think is going to support industries in south Wales.

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Stephen Hammond (Wimbledon) (Con): I warmly welcome my right hon. Friend’s statement, the many measures in it and, in particular, the reaffirmation of his commitment to ensuring that we overcome Labour’s debt storm. Many hard-working families in my constituency who aspire to buy their own homes will be pleased with today’s measures to ease the housing market. Will he confirm how many people nationally he expects the mortgage indemnity scheme to help, when it might start and how many jobs it is likely to create?

Mr Osborne: From memory, I think it is going to help 100,000 people, and that is a real boost. With the other housing measures we are taking, including the support for stalled sites—the £400 million package we are providing—we hope that that is going to create several hundred thousand jobs in the construction industry over the period going forward. The 50% right-to-buy discount we are introducing revives one of the most effective social policies of the past few decades—one that the Labour leader recently had to admit had worked and that the Labour party was wrong to oppose. A crucial additional element is that we are going to use the money to build social housing, which is why I think it is a policy appropriate to the modern age.

Bob Blackman (Harrow East) (Con): One of the key inflationary pressures on the cost of housing is the level of housing benefit available, which was scandalously allowed to rise out of all proportion under the previous Government. Will my right hon. Friend confirm that there will be no slackening of controls over housing benefit, so that housing costs can be controlled?

Mr Osborne: I can absolutely assure my hon. Friend that we are going ahead with the cap on housing benefit, which is an important part of controlling costs. It is not

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fair that working people pay taxes to fund the rent for people who live in houses that those working people could never afford out of their salaries. It is quite right to introduce a cap to try to control those costs. Of all the benefits provided under the previous Government, this was one that really went through the roof, so to speak. Dealing with it and controlling it is a very important policy and it is a tragedy that the Labour party opposes the measure and no doubt wants to get rid of it at the next election.

Graham Evans (Weaver Vale) (Con): Mrs Evans informs me that my three children will be on an unforeseen holiday tomorrow and I wondered whether my right hon. Friend would join me in urging the unions to call off tomorrow’s irresponsible strike. Does he agree with the shadow Chancellor’s “huge sympathy” for those going on strike tomorrow?

Mr Osborne: We should not be having a strike tomorrow. Negotiations are ongoing and we want those negotiations to conclude. I urge the unions, even at this late hour, to call off the strike and stop doing something that will damage the British economy and potentially cost jobs. Let us get around the table and try to get a deal, because I think that what is on offer is not only generous to the public sector and people who rely on public sector pensions but is also fair to the taxpayer. As Lord Hutton, the former Labour Pensions Secretary, has said,

“it is hard to imagine a better deal”.

I urge the trade union movement to take the deal.

Mr Speaker: I am grateful to the Chancellor and to colleagues, whose succinctness has enabled 96 Back-Bench Members to question the Chancellor in 97 minutes of exclusively Back-Bench time. That shows what can be done.

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Points of order

3.20 pm

Mrs Anne McGuire (Stirling) (Lab): On a point of order, Mr Speaker. Yesterday, just after Department for Work and Pensions questions, you said, in response to my hon. Friend the Member for Wallasey (Ms Eagle), that you were concerned that Government statements were being given to the media before coming to the House. In response to a question from the hon. Member for Wellingborough (Mr Bone), the Work and Pensions Secretary said that all statements from his Department would be made to the House.

When the Minister with responsibility for disabled people, the Under-Secretary of State for Work and Pensions, the hon. Member for Basingstoke (Maria Miller), was asked a direct question yesterday on what she was going to do about disability living allowance and people in residential care homes, she said that she would come forward with her final response. However, the 80,000 people who were affected by the relevant proposal could have found out the answer this morning, had they turned to page 8 of The Times, where the Minister says that she will announce that she is going to reverse the decision.

Mr Speaker, have you received any indication from the Secretary of State or the Minister as to why they did not seek the opportunity to make that statement at yesterday’s DWP questions, during Report of the Welfare Reform Bill in the House of Lords, or at any point during the progress of that Bill through the House of Commons, but instead waited to give a statement to The Times?

Chris Williamson (Derby North) (Lab) rose—

Mr Speaker: I am grateful to the right hon. Lady for her point of order. The short answer to her inquiry is no, I was not given any indication by any Minister on that matter. Naturally, the timing of Government statements is a matter for Ministers, as is whether a Minister chooses to make an announcement via oral questions or during a debate in the House. However, the basic point stands that policy announcements should first be made in the House and not through the newspapers. I understand the very real concern that exists on this matter because it is shared by me, and I have discussed it with the Leader of the House.

More widely—I will entertain the point of order from the hon. Member for Derby North (Chris Williamson)

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in a moment if he wishes to pursue it—let me emphasise my approach to today’s proceedings. I hope that the House will understand that I felt the matters in question had been rather fully aired outside the House, and it is therefore entirely to be expected that the opportunity should be provided for matters to be fully aired in the House. I know that the Chancellor would accept that as being entirely right and proper. The issues have been explored very fully. That, at least, is a satisfactory state of affairs.

Chris Williamson: On a point of order, Mr Speaker. In his response to my question, the Chancellor inadvertently misled the House when he said that the previous Government had signed the contract for the Thameslink rolling stock programme. Can you, through your good offices, invite him to come back to the House to set the record straight so that there is no doubt about the situation—that the contract has been signed, at least to preferred bidder status, by this Administration and not by the previous one?

Mr Speaker: That is a testing point of order from the hon. Gentleman. All hon. Members, including Ministers, are responsible for the content and accuracy of the statements they make to the House. If an error has been made it is the responsibility of the Member who made it to correct it. I am sure that the Chancellor’s attention will have been drawn to the point of order raised by the hon. Gentleman and there may or may not be a response from him. If, however, the hon. Gentleman is dissatisfied, I feel sure, on the strength of my 18 months’ acquaintance with him, that he will pursue the matter like the veritable woodpecker he has proved to be. Perhaps we can leave it there for today.

Mr Peter Bone (Wellingborough) (Con): On a point of order, Mr Speaker. I wonder whether you could advise me how I can get on the record the fact that the Backbench Business Committee has arranged a debate on Monday about ministerial statements.

Mr Speaker: Well, the hon. Gentleman has done so. He will have warmed the cockles of the hearts of committed parliamentarians in all parts of the House. For my part, I will go about my business with an additional glint in my eye and spring in my step by virtue of knowing what he has just told me.

As there are no further points of order, we come now to the ten-minute rule motion, for which the hon. Member for Mitcham and Morden (Siobhain McDonagh) has been so patiently waiting.

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Electoral Register (Access to Public Services)

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

3.25 pm

Siobhain McDonagh (Mitcham and Morden) (Lab): I beg to move,

That leave be given to bring in a Bill to introduce a requirement that electoral registration be a condition of access to public services; and for connected purposes.

I am introducing this Bill because I believe in the power of democracy. Earlier this summer, we saw the consequences of alienation. The Secretary of State for Work and Pensions described

“a divided society, with a destructive minority apparently detached from notions of right and wrong”.

Of course, the riots were individual acts of criminality, but I agree with him that a large number of people feel so detached from society that they have nothing to lose. There is a democratic deficit. I therefore believe that we should actively include our whole community in our democracy, to combat such alienation.

At present, registering to vote is just about the nearest thing that we have to a social contract. It is an acknowledgement that we live in a democracy and that we abide by the outcome of that democracy, yet around 3.5 million people are not registered to vote. According to the Electoral Commission that minority, who are not engaged, are likely to be made up of the disadvantaged: young people, people on low incomes, private sector tenants, some but not all ethnic minorities, and people with disabilities.

My Bill aims to bridge the gap between that excluded group and the rest of our community because social breakdown takes place in that gap. If someone wants to access housing benefits, a state pension, a national insurance number or even a driving licence, they will need to be on the electoral register if the Bill is passed. I do not think that that is a great imposition. After all, if someone needs to be on the electoral register to get a credit card, why is it a problem to be on it to get a driving licence?

Linking access to public services with the electoral register will increase participation and provide an explicit link between the democratic process and the benefits that we enjoy because we live in a democracy, and, yes, it is tough love. It will mean that if people want the benefits of living in a democracy, they need to sign up to democracy. If they do not like living in a democracy, fine, they need not sign, but they should not expect all the good things in return.

Already, the electoral register has many useful purposes —for instance, it is the source of deciding who does jury service—and it is already possibly the country’s most cost-effective anti-crime database. The police use it if they want to catch up with someone or need to find out who a suspect might live with or know. Banks and credit companies use it to prevent fraud. Many councils already use it to check that people are paying their council tax or are on the right benefits. Charities and direct marketing companies use it to help their businesses and to raise funds for countless good causes. Finally, of course, its most important role is to give people a chance to vote. It is therefore in everyone’s interests for the electoral register to be as comprehensive as possible.

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My Bill will target precisely the people who are unlikely to register, to bridge the 3.5 million gap. Sadly, we also need the Bill now to remedy a number of other measures being introduced by the Government that every commentator expects will widen that gap. First, they plan to make registering to vote optional. That is a dangerous step. It will legitimise disengagement and institutionalise an underclass. In countries where registration is optional, the already disadvantaged are those most likely to lose out. In the US, only six in 10 people on incomes below $20,000 register, and registration rates are just as low among under-25s and people who rent their homes—precisely the demographic of those who were involved in our riots.

The Government have suggested that councils might not need to chase up electoral registration forms with an annual canvass of every property. Again, I think that that is a retrograde step. My council, Merton, has told me that its canvass is effective. Before it took place, only 65% of homes returned their forms; afterwards, 97% did so. Finally, the Government have said that they would stop mums and dads registering their children to vote. When individual registration was introduced in Northern Ireland, the register collapsed by 11%, and the Electoral Commission said that that adversely affected disadvantaged groups—just the sort of people with whom we most need to engage to prevent exclusion.

Combined, the Government’s measures are likely to take about a third of voters off the register—more in areas of deprivation. People on the edge of society will further disengage, and we will institutionalise the underclass. What is worse, because the register will be less accurate and comprehensive, far from preventing fraud the proposals will increase it. The Government’s own papers admit that fraudulent electoral registration is “rare”, and that 20 times more people are satisfied with how they register to vote than dissatisfied. Only 2% of us think that registering to vote is “very unsafe”.

There is little incentive to register fraudulently, because councils such as mine already use the electoral register to ensure that everyone pays council tax. In fact, the electoral register is widely seen as more accurate and less prone to fraud than virtually any other data set. A number of councils have looked at using other databases to improve the electoral register, but the consensus seems to be that the electoral register is already the best. They have told the Select Committee on Political and Constitutional Reform that other databases

“tell us what we do know, rather than what we don’t”.

Many other databases are terrible by comparison. The Department for Work and Pensions database, for instance, includes people who are dead or who have left the country, and it does not include any information about nationality. As the information industry and crime fighters have known for years, the electoral register is the most accurate, because it is based on better intelligence from the people who actually live at each address and know who else does. Instead of undermining the electoral register in the mistaken belief that fraudulent voting is widespread, we should place greater emphasis on it in order to tackle other fraud.

The problem with our electoral register is not that there are too many people on it; it is that there are still 3.5 million who are not. My Bill is therefore a remedy for the Government’s proposals. It will reinstate those missing millions, the majority of whom may be eligible

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for benefits, tax credits, a state pension, a driving licence and so on. It will make the register even more accurate, and it will ensure that even more disadvantaged people engage in the democratic process.

In the past few months, I have heard many speeches about social breakdown and an excluded underclass without a stake in their community. I have not heard anyone calling for a “something for nothing” society. What this Bill says is that we should live in a “something for something” society: public services in return for a civic duty. Registering to vote might seem like a small thing, but if we send the message that people have to sign up to democracy if they want the rewards of living in a democracy, who knows, we might even strengthen it.

Registering to vote is a symbol of engagement, and recognition that people are not on the margins but a full part of our society. We do not need to take millions of people without a stake in their community off the electoral register—that will only institutionalise the underclass. We need an explicit social contract, and the Bill will achieve that. It will tackle fraud and reduce social exclusion, but more than that, it will ensure that more people have a chance to vote. If they do not like what is going on in their community, they will not have to destroy local shops—they can get rid of us. On that positive note, I commend the Bill to the House.

Question put and agreed to.


That Siobhain McDonagh, Ian Austin, Hazel Blears, Mr Russell Brown, Rosie Cooper, Nic Dakin, Mike Gapes, Meg Hillier, Mrs Sharon Hodgson, Mr Andrew Love, John Mann and Mr John Spellar present the Bill.

Siobhain McDonagh accordingly presented the Bill.

Bill read the First time; to be read a Second time on 20 January 2012, and to be printed (Bill 255).

London Olympic Games and Paralympic Games (Amendment) Bill (Programme) (No. 2)

Motion made, and Question put forthwith (Standing Order No. 83A(7)).

That the following provisions shall apply to the London Olympic Games and Paralympic Games (Amendment) Bill for the purpose of supplementing the Order of 28 April (London Olympic Games and Paralympic Games (Amendment) Bill (Programme)):

Consideration of Lords Amendments

1. Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement at today’s sitting.

Subsequent stages

2. Any further Message from the Lords may be considered forthwith without any Question being put.

3. The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.—( Mr Newmark .)

Question agreed to.

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London Olympic Games and Paralympic Games (Amendment) Bill

Consideration of Lords amendments

3.35 pm

The Minister for Sport and the Olympics (Hugh Robertson): I beg to move, That this House agrees with Lords amendment 1.

Mr Deputy Speaker (Mr Lindsay Hoyle): With this we may take Lords amendments 2 and 3.

Hugh Robertson: The amendments address a technical concern raised by the Delegated Powers and Regulatory Reform Committee in the other place.

Hon. Members will recall that the London Olympic Games and Paralympic Games Act 2006 provides for the making of advertising and trading regulations. Under the Act, all such regulations, including amending regulations, are subject to the affirmative resolution procedure. The Bill, when we debated it earlier this year, would have amended the 2006 Act to provide that advertising and trading regulations, apart from the first set, could be made via the negative resolution procedure.

The Delegated Powers and Regulatory Reform Committee, in its report of 14 October, accepted the need to amend the 2006 Act to facilitate the amendment of the regulations via the quicker negative resolution procedure.

Keith Vaz (Leicester East) (Lab): I wonder whether the Minister has heard of the controversy surrounding the sponsorship of the Olympics by the Dow Chemical Company. As we approach this Friday, the 27th anniversary of Bhopal, there is concern among Indian athletes and Indian parliamentarians about the issue. Will it affect the regulations? If, for example, Dow withdraws its sponsorship or is asked to withdraw its sponsorship, will these regulations affect that in any way?

Hugh Robertson: The short answer is no. I am entirely aware of the controversy that the right hon. Gentleman mentions. I believe the Indian Olympic committee is meeting this week and plans to make a decision. I am told that it is not planning a boycott or anything like it, but clearly that is a matter for the Indian Government and their Olympic committee.

It is recommended that the Bill be amended to provide that the affirmative resolution procedure must be used unless the Minister considers it necessary, by reason of urgency, to use the negative procedure. As I made clear when clause 2 was debated in this House, it was always my intention that the negative resolution procedure would be used only when there was an urgent need to do so. As such, the Government were happy to accept the Committee’s recommendation and to provide the additional clarification, and tabled amendments in Committee in the other place accordingly.

The effect of these amendments is that advertising and trading regulations will be made via the negative procedure only if the Minister considers that that is necessary by reason of urgency. In such a case, the regulations will confirm, on their face, that this is the

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Minister’s view. They also provide for the corresponding procedure in the Scottish Parliament, for advertising and trading regulations made by Scottish Ministers.

What we mean by “urgency” is that, for reasons of time, it would be impractical to use the affirmative procedure and necessary instead to use the negative procedure. This is likely to be because the amending regulations have to take effect quickly, before the earliest date that affirmative regulations could practicably be made. In essence, then, the amendments simply provide further assurance that the negative procedure would be used only when there is an urgent need to do so, and as a result provides extra assurance to Parliament. That was always the intention.

Tessa Jowell (Dulwich and West Norwood) (Lab): I am pleased to support the Government’s technical amendments, which I think strike the right balance between parliamentary accountability and the need to be able to respond flexibly to urgent changes in situations. As we draw this process to a close, I will take the opportunity to commend all the officials who worked on the earlier legislation with me when I was Secretary of State and now support the Minister in taking it forward. This legislation is important for protecting the essential vision and ambition shared by Members on both sides of the House for our Olympic games. It relates to protection against ticket touting and the need to ensure the smooth operational running of the servicing for Olympic and Paralympic venues.

There are just eight months until the start of the Olympics. They are under budget, the venues and the Olympic village have been built on time and the torch relay has been announced. There is a real sense of excitement across the country. There may not be many other opportunities allowed by the long title or any other event to debate the Olympics, but I know that the Minister is always available to discuss matters of outstanding concern, such as that raised by my right hon. Friend the Member for Leicester East (Keith Vaz) and the legacy. I can assure the Minister that all those discussions will be in the spirit of the cross-party support that has been such an important feature of the preparation for the games.

Keith Vaz: Before my right hon. Friend brings her remarks to a close, may I pay tribute to her—she has rightly paid tribute to the Minister and the fact that the projects are on time—for all she has done over the past six years to help to secure the Olympics and to work with the Government on an all-party basis? We are very proud of what she has done.

Tessa Jowell: I thank my right hon. Friend for his generous comments. I warmly support the amendments to the Bill.

Mr Don Foster (Bath) (LD): The right hon. Member for Leicester East (Keith Vaz) rightly praises the right hon. Member for Dulwich and West Norwood (Tessa

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Jowell), who praised the Minister, and I would like to praise them both for the excellent work they are doing.

It is interesting that we are debating two minor technical amendments to a Bill we debated not long ago. On Second Reading I pointed out that the explanatory notes stated that the Bill

“makes a small number of technical amendments to the advertising and trading, ticket touting, and traffic management provisions of the London Olympic Games and Paralympic Games Act 2006.”

We are now debating minor amendments to a Bill that itself made minor amendments to another Bill, but they are none the less important, because they reflect the spirit of what the Minister said when we debated the Bill. In relation to the advertising regulations contained therein, I think that we were all encouraged to hear that he is keen to introduce those as sensibly as possible. Indeed, on Second Reading he said that the advertising regulations would be treated with a “light-touch approach”. He later said that they would be handled “sensitively”, and on another occasion he said that they would be dealt with “proportionately”. We are grateful for all three assurances.

We are also grateful for the assurance that if, for example, the venue or timing of an event need to be altered, we have the ability to debate the matter in Parliament if those necessary changes relate to advertising. We all recognise that if, for example, a major burst water main causes a change in venue or timing at short notice, it is important, as others have suggested, that we have the power to ensure that we can continue to do what the Act is for: protecting the main sponsors of the event so that people do not leap on to a sudden change in order to introduce ambush marketing, for example. They are small amendments, but they are sensible and important and we certainly support them.

Lords amendment 1 agreed to.

Lords amendments 2 and 3 agreed to.

Terrorism prevention and investigation measures bill (Programme) (No. 2)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Terrorism Prevention and Investigation Measures Bill for the purpose of supplementing the Order of 7 June (Terrorism Prevention and Investigation Measures Bill (Programme)):

Consideration of Lords Amendments

1. Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement at today’s sitting.

Subsequent stages

2. Any further Message from the Lords may be considered forthwith without any Question being put.

3. The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.—( Mr Newmark.)

Question agreed to.

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Terrorism Prevention and Investigation Measures Bill

Consideration of Lords amendments

Clause 8

Directions hearing

3.45 pm

The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire): I beg to move, That this House agrees with Lords amendment 1.

Mr Deputy Speaker (Mr Lindsay Hoyle): With this it will be convenient to consider:

Lords amendments 2 to 10.

Lords amendment 11, and amendment (a) thereto.

James Brokenshire: The Bill returns to the House after its consideration in the other place. It was subject to lengthy and detailed scrutiny here in the summer, with 10 sittings in Committee, a Report and a Third Reading, all of which were characterised by a high standard of debate.

Their lordships have now given the Bill the full benefit of their expertise, and I am pleased to say that its main provisions are largely as they left this House, reflecting an acceptance that, however unfortunate this might be, there are a small number of individuals involved in terrorism whom we cannot successfully prosecute or deport, and the measures in the Bill are needed to deal with such individuals.

The Bill returns from the other place subject to 11 Government amendments, which are largely minor and technical changes to clarify drafting and better to reflect the policy intention. I will briefly explain why we have made those amendments, dealing first with Lords amendments 1 to 10 before moving on to Lords amendment 11 and Opposition amendment (a).

Lords amendments 1 and 2 make a small but necessary change to clause 8. The clause provides that the court must, when granting permission to impose a terrorism prevention and investigation measure notice—a TPIM notice—at the outset of the process give directions for a directions hearing in relation to the automatic full review of the case. As the Bill was originally drafted, that directions hearing would have had to have taken place within seven days of the TPIM notice being served, unless the individual agreed to postpone it.

The programming of such hearings is, of course, a matter for the courts. It became clear that the original provision had unintentionally introduced a restriction on the discretion available to the courts to manage similar directions hearings in the control order context. We were therefore asked by Her Majesty’s Courts and Tribunal Service to make a change to the Bill in order to provide the courts with a degree of flexibility in that respect and to facilitate effective management of court time.

We have therefore amended clause 8 so that the court may programme the directions hearing later than seven days after service of the TPIM notice, if it so directs. Of course, the intention is that directions hearings will be listed within those seven days where possible, but when the court is unable to do so, for example over a holiday period, the amendment will give the court the discretion to list the hearing slightly later.

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Clause 8 still ensures, at subsection (5), that directions given at the hearing must provide for the substantive review hearing to be held as soon as reasonably practicable.

Bob Stewart (Beckenham) (Con): How much later might it be possible to review the decision? The period is one week to start off with, but could it amount to 28 days, three months, or will it be flexible, with the court having the jurisdiction to decide that issue as well?

James Brokenshire: It is the purpose of the amendment to give the court discretion, although a practice has been established through the jurisprudence on control orders which informs that process. It is therefore intended to provide the court with the flexibility, as I explained in my introductory remarks.

Richard Fuller (Bedford) (Con): May I probe and press my hon. Friend a little further on this point? As he knows, a number of colleagues in the House have the same concern about the TPIMs regime as they had about the old control orders regime: the uncertainty that arises for individuals in the court process. Does he accept that the amendments to clause 8 will increase that level of uncertainty for people who are put under TPIMs? Does he agree that there is scope for providing, if not a seven-day limit, at least a definitive statement about for how long, at each stage of the process, such individuals will be detained?

James Brokenshire: As I have already explained, we received this request following the consideration by Her Majesty’s Courts and Tribunals Service. The Government have not been seeking to provide any uncertainty—far from it. The provision is intended to reflect the practice of the courts. Therefore, following consideration of the representations that we received, we have introduced the Lords amendment that is before the House.

Richard Fuller: I greatly appreciate the Minister’s clarification. I fully accept that this is not a request by the Government. I am saying, from a political perspective on that role of the courts, that we are talking about the start of a process that imposes penalties on people and that, at almost every stage, has a level of indeterminacy about what is being put in place for them and how long it will last. Will my hon. Friend give some perspective on the suggestion that this change, even though it has been requested by the courts, further exacerbates the uncertainty in the imposition of such controls?

James Brokenshire: I do not accept that it provides uncertainty. It provides the courts with the ability to operate the regime effectively. As this matter was raised in the Lords, we are seeking this House’s consideration to ensure that the measure is properly applied. That is the basis on which we have introduced the amendment. I think it is appropriate to provide flexibility in the way that has been proposed.

Amendment 10 relates to the police reporting measure. It makes it clear that in addition to requiring the individual to report to a police station at specified times and in a specified manner, the Secretary of State may require the individual to comply with directions given by the police in relation to such reporting. That is necessary to ensure that the individual can be required to co-operate with the practicalities of reporting—for example, requiring

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him to report to the front desk of the police station, to speak to the officer there, and to sign to confirm his attendance. That has always been the intention behind the measure, and it is the current practice for control orders. It is necessary to ensure that the provision reflects the reality of how the measure is intended to operate. It is also in line with the general procedures for individuals required to report to a police station for any other reason—for example, individuals on police or court bail. Lords amendment 3 is necessary in consequence. It specifies that the definition of “TPIM decision” at clause 17(3) includes such a direction given by a constable in relation to the reporting measure.

Lords amendments 4 and 5 are essentially technical amendments which are necessary in consequence of changes to other legislation currently before Parliament. Section 154(1) of the Criminal Justice Act 2003, which has not been commenced, increases the maximum sentence on summary conviction in England and Wales from six months to 12 months. When the Terrorism Prevention and Investigation Measures Bill was drafted, the intention was that that provision would be repealed by the Legal Aid, Sentencing and Punishment of Offenders Bill. Because of this, clause 23 provides that the maximum sentence on summary conviction for contravening a measure specified in a TPIM notice is six months. However, section 154(1) of the 2003 Act will not now be repealed. On that basis, these amendments are needed to revert to the previous practice when legislating for offences that are tried summarily. They provide for a maximum 12-month term in England and Wales, but include a transitional provision limiting the sentencing power to six months pending commencement of section 154(1) of the 2003 Act.

Lords Amendments 6 and 9 relate to the overnight residence measure. That is intended to ensure that the individual can be required to reside at a specified address and to remain there for specified periods overnight. The clear purpose of that is to manage risk. As part of that measure, it may be necessary to require the individual to remain within the residence and to prohibit them from entering any garden or outside area that forms part of the property or any communal area in a shared property during the specified hours overnight.

As it was drafted, the provision did not necessarily make it clear that the measure could be applied in that way. These are essential drafting amendments to remove that uncertainty and to make clear the policy intention. They put it beyond doubt that the individual may be required to remain within their residence—that is, essentially, behind their front door—during the specified overnight period. I should make it clear that, where individuals are required to remain at their residence or are electronically monitored in other contexts, they will usually be required to remain in their house or flat and will not be allowed out into their garden. The particular requirements imposed by the Secretary of State in each case must, of course, always be necessary and proportionate. The court will subsequently consider the proportionality of each measure as part of its review of the notice.

On the point about directions hearings that my hon. Friend the Member for Bedford (Richard Fuller) made, I should add that clause 8(5) still provides that the substantive hearing is to take place as soon as possible.

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I just wanted to reassure him in case he thought that the proposal was open-ended. That is certainly not the intention. I hope that the need to act expeditiously in this regard is clear to him.

Lords Amendment 7 deletes subsection (11)(a) of clause 26, which allowed a temporary enhanced TPIM order to amend any enactment. That subsection was drafted on the basis that the temporary enhanced TPIM order would need to amend other legislation to ensure that the enhanced TPIM system would function correctly. The Government considered it further following an amendment helpfully tabled in Committee in the other place by Baroness Hamwee. We concluded that the subsection was not necessary for this purpose and therefore amended the Bill on Report to remove it.

Lords Amendment 8 is necessary to ensure that the power to make a temporary enhanced TPIM order does not impinge inappropriately on devolved matters in Scotland. Clause 26, as amended, provides that a temporary enhanced TPIM order may not make any provision relating to devolved matters in Scotland, other than those already contained in the Bill, without the consent of the Scottish Government. In relation to those provisions touching on devolved matters that are already contained in the Bill, I can confirm that the Scottish Parliament passed a legislative consent motion on 17 November. I am grateful to Scottish Ministers and officials for their help in that regard.

Finally, Lords Amendment 11 relates to the transitional period provided by schedule 8. In the period following the coming into force of the Bill, the control orders in force immediately before the commencement of the Bill will remain in force, unless revoked or quashed before the end of that period. Such a period is needed to ensure that there can be a safe, orderly and managed transition of individuals from the old system to the new system. As the Government have consistently made clear, the police have confirmed that extensive preparations are being made and that arrangements will be in place to manage the move from the control order system to the TPIMs system.

Paul Goggins (Wythenshawe and Sale East) (Lab): Will the Minister give way?

James Brokenshire: I will just finish this point and then I will gladly give way to the right hon. Gentleman.

We have received advice from the police that as the transitional period will fall over the Christmas and new year holiday period, a small extension to the period is necessary. That will assist in the effective management of the process of transition for individual cases over the holiday period. It does not reflect on preparedness. Lords amendment 11 therefore extends the transitional period from 28 to 42 days.

I give way to the right hon. Gentleman.

Paul Goggins: I am delighted that the Minister did not give way when I sought to intervene, because he has been able to enlighten the House and demonstrate that Opposition Members who have been pressing him for months on whether the police and Security Service would be ready have partly been proved correct. Let us look at the bigger picture, however. With the Olympic

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games, a new system and the end of relocation, why does such a moderate Minister want to take so many risks with the safety of the public?

4 pm

James Brokenshire: I certainly do not accept that characterisation, and I am very happy to come on to amendment (a). We regard national security as a top priority. The right hon. Gentleman has heard me say that, and I stand by those words. He will know the responsibilities that Ministers hold in dealing with such matters, and the very careful consideration that we apply when considering changes to legislation.

Amendment (a) to Lords amendment 11, which stands in the names of the right hon. Gentleman and other Opposition Members, would replace the 42-day transitional period with one of 365 days. It brings us back to an issue that was debated at length during the Bill’s passage through this House and the other place. To that extent, it takes us back over a number of points that have been debated and discussed in great detail, and my response is unchanged: I believe that the amendment is simply not necessary.

As I have repeatedly made clear, the Metropolitan police and the Security Service have confirmed to the Home Secretary and myself that extensive preparations are being made and that arrangements will be in place to manage the move from the control orders system to the TPIMs system effectively. Indeed, the Home Secretary received a detailed briefing from the Metropolitan police only last week on the transitional plans that it has drawn up. However, the police recently advised us that a slightly longer transitional period was needed, as it will fall over the Christmas and new year period. We have consequently increased the transitional period to 42 days, which will assist in the effective management of the process of transition in individual cases. It was for that reason that the Lords amendment was introduced.

Mark Field (Cities of London and Westminster) (Con): I would not in any way wish to accuse the Minister of being soft on terrorism, but equally, given the relatively small number of people who are currently subject to control orders—about nine—does he not see that it might be more sensible to have an overlapping system of control orders and TPIMs for the difficult period of unknown threat around the Olympic games? There is some sense in that, given that at most nine people would be affected.

James Brokenshire: We have considered the issue very carefully, and as I said on Report, we have received assurances from the police and Security Service that effective arrangements will be in place to manage the transfer to TPIMs when the new regime comes into effect. What I said on Report remains the case: the police and Security Service have been developing the additional capacity and capability needed to prepare for the transition to the new TPIMs regime. That preparation has been ongoing for a considerable time.

I should be absolutely clear that the additional resources are not simply about providing additional human surveillance capacity. The police and the Security Service are using the additional money to enhance their use of a range of covert investigative techniques, including human and technical surveillance. Inevitably, some of the benefits

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from the additional resources will take time to be fully realised, as it will be necessary to take the time to train and deploy additional staff in order to derive full benefit from technical investment. However, the key point is that at the point of the transition to the new TPIMs arrangement, effective arrangements will be in place in both the police and the Security Service.

Jeremy Corbyn (Islington North) (Lab): Can the Minister explain the exact thinking behind that relatively modest extension of the transitional period to 42 days? I do not quite understand why its coinciding with the Christmas and new year period makes it difficult to introduce what will presumably be a simpler system than the one that we currently have.

James Brokenshire: Christmas and the holiday season obviously have operational impacts, and we are therefore simply adding those 14 days to the 28 days for which the Bill originally provided to assist in the effective transition and management at that time. It is not about readiness; it is simply to aid the transition process for those people who are already on control orders and who may subsequently move on to terrorism prevention and investigation measures.

On Report and Third Reading, I was told, “Well, you say that the police are prepared and that appropriate arrangements are in place to manage the transfer effectively from control orders to TPIMs”, and I heard clearly the comments that were made then. I will put in the Library a letter from Assistant-Commissioner Cressida Dick, which sets out the preparedness of the Metropolitan police and underlines that arrangements will be in place to manage the transfer effectively. I note that the Opposition have consistently made several points about that. Again, I underline that effective arrangements will be in place to manage the transition. In the light of my continued assurances on the matter, I hope that Opposition Members will be willing to withdraw amendment (a).

Diana Johnson (Kingston upon Hull North) (Lab): I thank the Minister for clearly setting out the bulk of the amendments. Having read the transcripts of the evidence sessions in Committee, it is clear that the Government were pushed and pressed, as is right, through effective scrutiny from all members of the Committee and Members in the other place, to table amendments to clarify the Bill’s intention. On that basis, the Opposition are satisfied with Lords amendments 1 to 10.

However, I want to comment on Lords amendment 11 and amendment (a) to it. As the Minister said, the Lords amendment increases the transitional period for which schedule 8 provides, during which a control order that is enforced immediately before the commencement of the Bill will remain in force, unless revoked or quashed before the end of that period, from 28 days to 42 days. The Opposition Front Benchers’ amendment would increase that transitional period to 365 days. It is worth pointing out that those who have put their names to the amendment include two former police and terrorism Ministers and a former Minister who dealt with terrorism in Northern Ireland in the previous Government. Those Members clearly have a lot of detailed information and experience in dealing with such matters, and they thought it appropriate to put their names to the amendment.

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Why have we tabled amendment (a)? It is because we want to support the Government in keeping the country as safe as possible as they move to the new regime of TPIMs. I heard clearly the Minister’s comments about his commitment to national security being a top priority. Of course, the Opposition support that priority. However, we believe that a more flexible approach would be a better way forward on the transitional period that is in the Bill.

I certainly do not wish to reopen the debate on control orders, but we know that nine people are currently subject to them—a small number of people who are intent on doing grave harm to this country. It is not possible to prosecute them, but to keep the country safe, we need to impose intrusive restrictions on them. I think that there are 11 control orders in total, but nine have the power to relocate as one of the conditions. We know that the Home Secretary has used control orders with relocation provisions in cases CD and BM. In the case of CD, a challenge to the decision to relocate went to the High Court. It was dismissed and the relocation was upheld.

It is important to quote the Mayor of London, who obviously has a keen interest in those matters. He said on the case of CD: