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House of Commons

Thursday 2 February 2012

The House met at half-past Ten o’clock


[Mr Speaker in the Chair]

Oral Answers to Questions

Business, Innovation and Skills

The Secretary of State was asked—

Red Tape Challenge

1. Rehman Chishti (Gillingham and Rainham) (Con): What recent progress he has made on the red tape challenge. [92997]

4. Brandon Lewis (Great Yarmouth) (Con): What recent progress he has made on the red tape challenge. [93000]

5. Alun Cairns (Vale of Glamorgan) (Con): What recent progress he has made on the red tape challenge. [93002]

The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk): To date, of the more than 1,200 regulations considered under the red tape challenge, we have agreed to scrap or substantially overhaul well over 50%. That is in addition to our plans to cap the cost of new regulations through the one-in, one-out system.

Rehman Chishti: I am very grateful to the Minister for that answer. Will he clarify how much the one-in, one-out rule saved businesses in 2011?

Mr Prisk: My hon. Friend is absolutely right: it is costs that businesses are focused on. I can tell him and the House that last year we were able to rein back planned regulations, which will save businesses more than £3.2 billion a year.

Brandon Lewis: Businesses across my constituency and elsewhere, and organisations such as the Federation of Small Businesses, are making it clear that red tape and bureaucracy are the biggest blocks to growth and employment. After six new pieces of red tape or regulation a day under the Labour Government, will the Minister outline how many regulations have already been cut and what his ambitions are for the rest of this Parliament?

Mr Prisk: We inherited a scenario in which there was the equivalent of six new regulations every working day. I am therefore pleased to say that in the last year we

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have identified 600 regulations under the red tape challenge which we will either scrap or substantially overhaul, and we intend to ensure that we increase that number in the years to come.

Alun Cairns: Reducing the number of regulations is extremely important, but so are the interpretation of regulations, particularly those from Europe, and the risk of gold-plating regulations, such as the agency worker directive. What action is the Minister taking to ensure that in interpreting regulations, we use the lightest touch possible to comply with the law?

Mr Prisk: We have changed the guiding principles from those that we inherited. That means, first, that we are not going to tie British business down by implementing early, as we have in the past. We will implement on the last legal day, under transposition rules. Secondly, my hon. Friend is absolutely right about interpretation. We will ensure that we copy regulations out and do not embellish them, as was sadly all too often the case under the last, Labour Government.

Pat Glass (North West Durham) (Lab): Higher education applications in this country have collapsed, although not across the board—I think applications to Oxford, Cambridge and Durham have increased. However, in the universities that ordinary people go to, they have collapsed.

Mr Speaker: Order. With reference to the red tape challenge.

Pat Glass: I just wanted to ask a question about—

Mr Speaker: The hon. Lady will have her opportunity another time.

Ian Austin (Dudley North) (Lab): Nobody disputes that unnecessary regulation and red tape have to be dealt with, but Government Members are deluding themselves if they think that is the central issue, when unemployment is at record levels and the economy has ground to a halt. Every time I go to meet a successful manufacturing company that has orders waiting and wants to take on new staff, I am told that the central problem is the lack of finance. Instead of trying to pursue this issue, the Minister should be concentrating on getting money from the banks to manufacturers so we can get the economy moving and they can take on more staff.

Mr Prisk: I am glad to say that we are capable of doing both. Unlike the last, Labour Government, we are tackling finance. It is sad that the Opposition are not listening to small businesses. We are, and we are working to make sure we help them.

Jim Sheridan (Paisley and Renfrewshire North) (Lab): As part of the red tape challenge, will the Minister look again at the regulations that deny employees the right to proper compensation or redundancy payments if their workplace has fewer than 20 people, as is the case for ex-employees of Woolworths? That is regulation that successive Governments have failed to address.

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Mr Prisk: I am aware that what the hon. Gentleman refers to is a live case, so I must be careful in the sense that it is before the tribunals. However, I am sure that the representations he has made are clear. Again, we need to strike the right balance so that employers and employees have a fairer deal. Frankly, I do not think that was the case in the 13 years of the last, Labour Government.

Mr David Hanson (Delyn) (Lab): Last year, 171 people were killed at work and 115,000 were seriously injured. Is the Minister really saying that now is the time to water down health and safety legislation?

Mr Prisk: The changes that Professor Löfstedt has identified are not about reducing safety at work; they are about cutting unnecessary red tape. That is clear; indeed, it is why one Opposition Member has been part of that panel and has supported its proposals, which this Government will implement.

High Pay Commission

2. Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab): For what reasons he does not plan to implement all the recommendations of the High Pay Commission. [92998]

12. Mr Wayne David (Caerphilly) (Lab): For what reasons he does not plan to implement all the recommendations of the High Pay Commission. [93009]

The Secretary of State for Business, Innovation and Skills (Vince Cable): I welcome the High Pay Commission’s valuable contribution to this debate. The proposals that I announced to the House last week drew on its analysis, and we are taking forward 11 of its 12 recommendations either in full or in spirit. We have chosen not to implement its recommendation requiring workers to be put on all remuneration committees.

Gregg McClymont: Most people in this country would consider £180,000 a year to be high pay. Will the Secretary of State tell the House who signed off the special dispensation with Her Majesty’s Revenue and Customs regarding the extraordinary tax arrangements of Mr Ed Lester, the chief executive of the Student Loans Company?

Vince Cable: I understand that there is to be an urgent question shortly, when hon. Members will be able to go into that issue in detail if they wish. I simply say that this concerns an exceptionally useful individual who has helped to turn around that organisation. The arrangements under which the negotiations took place involved substantial value for money for the taxpayer and a tax cut by the individual. We will pursue matters of public concern on the tax issues, and the answers will be given by the Chief Secretary to the Treasury in response to the urgent question.

Mr David: Further to that point, may I ask the Secretary of State who on earth signed it off? Answer!

Vince Cable: These issues will be answered, and the mechanics dealt with, in the urgent question in an hour’s time.

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George Freeman (Mid Norfolk) (Con): Does my right hon. Friend agree that, as we all share an ambition to put the employee’s voice on the board, the best way to do that is to encourage employee share ownership?

Vince Cable: It is indeed. Employee ownership is an expanding movement, and a popular one. It allows employees to become involved in the companies in which they have a share, and we wish to see it encouraged. We also wish to see workers properly consulted; there are powers to achieve that under existing legislation, but they are not being sufficiently used.

Lorely Burt (Solihull) (LD): Does my right hon. Friend agree that it is better to force companies to consult all employees, rather than consulting one individual? How would that individual be chosen, especially in a company that might be located in many parts of the world?

Vince Cable: My hon. Friend is absolutely right. That is why we are stressing employee participation in remuneration discussions. There are powers under existing regulations and we want to encourage people to take more advantage of them. As she rightly says, there are enormous practical difficulties involved in choosing one employee who can properly represent the whole of an international labour force.

Mr Nicholas Brown (Newcastle upon Tyne East) (Lab) rose—

Mr Speaker: Order. The right hon. Gentleman is being saved up for later. It would be a pity to waste him at such an early stage in our proceedings.

Ian Murray (Edinburgh South) (Lab): You can waste me first, Mr Speaker.

The Secretary of State will be aware of the performance targets set down in the Project Merlin agreement. One of the agreed measures to determine the bonuses of bank chief executives was to examine whether banks were providing the promised credit to businesses and, in particular, to small and medium-sized enterprises. The agreement also clearly stated that there would be no rewards for failure. Why, then, did the Government wave through the bonus for the Royal Bank of Scotland chief executive before the Bank of England had published the annual Project Merlin lending figures?

Vince Cable: The chief executive was on a contract, which I think was negotiated when Labour was in government. It had five separate metrics, of which that was one. It is certainly true that, according to the provisional data, RBS has not quite met its gross lending targets, but the Merlin agreement has not yet run its course, and we shall await its findings with interest.

Prospects for Growth

3. Huw Irranca-Davies (Ogmore) (Lab): What assessment he has made of the prospects for growth in 2012. [92999]

The Secretary of State for Business, Innovation and Skills (Vince Cable): The Office for Budget Responsibility produces independent forecasts for the economy and

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for the public finances. The OBR’s November 2011 economic and fiscal outlook predicts that the UK economy will grow by 0.7% this year and by 2.1% in 2013.

Huw Irranca-Davies: I thank the Secretary of State for that answer, but consumer confidence is plummeting, the retail sector is struggling, the growth in jobs in the private sector is not matching the losses in the public sector, and in my constituency scores of people are chasing every single job. So if not Labour’s five-point plan for jobs and growth, what? This Government are not working.

Vince Cable: If the hon. Gentleman actually read the analysis produced by the Bank of England and, more recently, the Institute for Fiscal Studies, he would understand why the economy is growing slowly. The combination of higher commodity and oil prices last year and, more recently, the crisis in the eurozone is affecting all developed countries, many of them much more than the UK.

Mr Brian Binley (Northampton South) (Con): As confidence in growth continues to diminish among members of the small business community, does the Secretary of State share my view that the Chancellor should use more than one tool to get the economy moving? Many people think that he has lost the tool box. What influence is the Secretary of State bringing to bear on behalf of small businesses to nudge the Chancellor into creating greater private sector demand?

Vince Cable: My hon. Friend is absolutely right to stress the crucial importance of small business. As he well knows from the autumn statement, the Chancellor has come forward with ideas about credit easing to make credit more easily available at lower rates to small companies, and we will wait for the Budget to see how that will be elaborated.

Mr Gordon Marsden (Blackpool South) (Lab): Our economy contracted in the last quarter, with small business confidence at rock bottom in the latest Federation of Small Businesses survey, and we teeter on the edge of recession, yet Ministers have lost control of the levers that active government has for growth. Why, 10 months after the first regional growth fund winners were announced, do a third still wait for their money while £1 billion from Europe lies idle? With national apprenticeship week about to start, why are Ministers not, as we have urged them, taking unused money from the growth and innovation fund to expand local schemes for small businesses to take on thousands more young people? Is it not true that today, under this Government, growth is just as glacial as the weather?

Vince Cable: On the specifics, as the hon. Gentleman will know, a third of regional growth fund projects have already started. I am surprised that he picks up apprenticeships as a theme, because we have increased their number by 50% in the last year from the rather depressed levels we inherited. In terms of broad policy, I understand that the hon. Gentleman is standing in this morning for my opposite number, the hon. Member for Streatham (Mr Umunna), who wrote to tell me that he has gone to Germany looking for inspiration. I think the first thing the Germans will tell him is that if he wants sustainable growth, there has to be fiscal discipline.

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Roger Williams (Brecon and Radnorshire) (LD): In these difficult times, the food and drink sector is an example of success with year-on-year growth. I commend the report by the Department for Environment, Food and Rural Affairs and UK Trade and Investment entitled “Driving Export Growth in the Farming, Food and Drink Sector”, but trade barriers still exist. Will the Secretary of State ensure that such trade barriers are broken down so that this sector can go from strength to strength?

Vince Cable: My colleague is right to stress the importance of the food sector, including food manufacturing. We often talk about advanced manufacturing, but some of the most sophisticated industries are often in those traditional product areas. He is right about the importance of opening barriers. In the European Union context, my team is actively pursuing trade liberalisation with a variety of Asian countries, the Mercosur countries and others. We hope that those agreements will be delivered soon.

Daylight Saving Bill

6. Hugh Bayley (York Central) (Lab): What his policy is on the Daylight Saving Bill; and if he will make a statement. [93003]

The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey): May I first pay tribute to my hon. Friend the Member for Castle Point (Rebecca Harris) for her excellent work on her private Member’s Bill? As the House knows, the Government supported the Bill, as amended in Committee. Unfortunately, and as the Leader of the House made clear last week, there is no way the Bill could complete its passage through both Houses in this Session, but it could be taken forwards by a private Member’s Bill in a future Session. The Government would not, however, expect to introduce any trial of daylight saving time if there was clear opposition in any part of the UK.

Hugh Bayley: In the Western Morning News, the Secretary of State is reported as saying that he is disappointed that the Bill was killed by a handful of Back Benchers who could not see the light, and that he did not rule out Ministers—I repeat, Ministers—finding more time. If the Government are genuinely committed to this measure, as they say they are, and if it is not just warm words and they really want it to happen, will they commit to bring forward a Bill of their own in this Session or the next?

Mr Davey: The Leader of the House explained the problems of doing so in this Session and was equally clear that we would welcome a private Member’s Bill in the next Session. This Government have worked harder on this issue than the last one did, and we have made more progress. I would hope for emerging consensus in the House because this Government are making real efforts.

Mr Peter Bone (Wellingborough) (Con): The Minister seems to be trying to face two ways at once. It is quite clear that time could have been made. We have a general debate later today and the time for it could quite easily have been devoted to private Members’ Bills. I doubt whether today’s business will run the full course. Come on, let’s put this Bill back on and let Parliament decide.

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Mr Davey: I know my hon. Friend is a huge supporter of the Bill, but the Leader of the House has made clear the problems of getting it through both Houses during this Session, and I am certainly not one to challenge his judgment.


7. Anne Marie Morris (Newton Abbot) (Con): What steps his Department is taking to support micro-businesses. [93004]

The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk): The Government have already acted to make it easier to start and grow micro-businesses. Action has included cutting corporation tax rates, extending relief from business rates, and introducing a moratorium from regulation for all micro-businesses.

Anne Marie Morris: The Minister is conducting a review of disruptive business models as part of the red tape challenge. Has he considered introducing a new limited liability scheme for sole traders, similar to the limited liability partnership? I believe that such a scheme operates in France, and it would be fantastic to see one like it operating here.

Mr Prisk: I know that my hon. Friend is a real champion of micro-businesses. The Government have focused on practical measures that help the micro-businesses’ bottom line, but, as she knows, I am happy to consider the legal issues with her and her all-party parliamentary group.

Dame Anne Begg (Aberdeen South) (Lab): On Friday I attended the opening of a micro-business in my constituency, Little Rembrandt’s Café in Ferryhill. That business opened despite the Government and despite the banks, which refused to lend. The owner had to put her own financial security on the line by remortgaging her house. That situation obviously cannot be right, because it is stifling growth in the economy.

Mr Prisk: I understand the hon. Lady’s point. Two thirds of small businesses are able to secure the money that they want, but that is no consolation to those who are not. Perhaps I could write to the hon. Lady about the community development finance institutions, which we have been funding and which are well placed to help the kind of micro-business to which she has referred.

Julian Smith (Skipton and Ripon) (Con): When will the call for evidence on making it easier for micro-businesses to part company with their employees begin, and what will be the terms of reference?

Mr Prisk: Not yet, but soon.

Toby Perkins (Chesterfield) (Lab): The Minister was right to describe the hon. Member for Newton Abbot (Anne Marie Morris) as a great champion of micro-businesses. Last week she called for the Government to introduce a VAT cut to 5% on construction, which is part of our five-point plan.

The truth is that the Government are failing Britain’s small businesses. They have failed to live up to expectations on regulation, they have failed to persuade the banks to

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lend to small businesses, and they have failed to get growth into our economy. Why does the Minister keep pretending that small businesses think his policies are working when it is so clear that they are not?

Mr Prisk: There are substantially more small businesses now than there were when we came to office, and they have confidence in what we are doing. We need to support and encourage them, and we will do that. I do not accept the hon. Gentleman’s wholly negative analysis.

Executive Pay

8. Simon Hughes (Bermondsey and Old Southwark) (LD): What steps he plans to take to address executive pay and reduce rewards for failure. [93005]

The Secretary of State for Business, Innovation and Skills (Vince Cable): Last week I announced a comprehensive package of measures to tackle the disconnect between executive pay and company performance. These proposals will increase simplicity and clarity, give shareholders more effective power through binding votes, increase the diversity of boards and remuneration committees, and encourage employees to be more engaged.

Simon Hughes: In the last few weeks the chief executive of Lloyds TSB, then the chairman of the Royal Bank of Scotland, and then its chief executive appear to have got the message that huge bonuses are not acceptable in this time of austerity. Given that this month we expect both banks to announce significant losses amounting to millions of pounds, how can Government, Parliament and constituents such as mine in Southwark convey the message to the rest of the directors and investment bankers in the publicly owned banks that they too should not have huge bonuses in times of austerity?

Vince Cable: Those two individuals are symbolically very important, but what is much more important is that we have a proper system governing executive pay over the long term, and that is what my proposals were designed to achieve. Bonuses in the banking sector as a whole are now running at roughly a third of the level at which they operated at the peak of the boom when Labour was in power. As for the state-owned banks, my right hon. Friend will know that a set of disciplines is being introduced through United Kingdom Financial Investments Ltd.

Ann McKechin (Glasgow North) (Lab): Does the Secretary of State agree with Will Hutton, the chair of his High Pay Commission, that there should be a definite risk to the basic pay of executives who fail to meet their targets?

Vince Cable: Yes. I have talked extensively to Will Hutton about that. In the proposals that I will bring forward next week, we will introduce the principle of a clawback; that clawback can operate in different ways, and we are certainly looking seriously at one of the ways that Will Hutton has recommended.

Neil Parish (Tiverton and Honiton) (Con): To get to the dizzy heights of executive pay, one must first get a job. What are Ministers doing to reduce the red tape

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and bureaucracy relating to apprenticeship schemes for small and medium-sized businesses?

Mr Speaker: That question is fascinating, but sadly it bears absolutely no relation to the question on the Order Paper, so the hon. Gentleman should keep it for the spring, or some other suitable time.

Mr George Mudie (Leeds East) (Lab): In view of the Secretary of State’s answers, will he assure the House that he has made representations to the Chancellor and United Kingdom Financial Investments Ltd to make sure that in the RBS last year’s practice of giving 323 bankers bonuses in excess of £1 million is not repeated, and that the anticipated payment of £4.5 million to John Hourican, a senior banker in RBS, does not go ahead?

Vince Cable: Of course there is a continuing issue with the scale of bonuses in RBS, but they are vastly reduced from their former level. We are conscious of the issues involved. Many of those people are American traders operating in the United States, but we are conscious that every amount that goes out in bonuses is money that could otherwise have gone to small businesses.

Further and Higher Education

9. Henry Smith (Crawley) (Con): What plans he has to facilitate the provision of higher education in further education institutions. [93006]

The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes): The Government see a crucial role for further education colleges in delivering higher education, because demand cannot be enlivened unless supply is diverse, so we are extending loans to part-time students; freeing up controls on student numbers; increasing directly funded places at FE colleges; widening access to higher learning; and changing assumptions about the modes of and access points to learning. It is higher education for the many, not the few.

Henry Smith: I am grateful to my hon. Friend for his answer. Will he join me in congratulating Central Sussex college in my constituency, which last September started a university presence on its campus? It is linking local students—under the previous Government, only 17% of them went on to higher education—with first-class local employers. Of course, he has an open invitation to visit.

Mr Hayes: I am aware of that excellent development, which enjoys the wholehearted support of my right hon. Friend the Minister for Universities and Science, who has done much to encourage the widening of access to higher education. My right hon. Friend will offer some exciting news about additional places when he rises to his feet, because we are determined that everyone, wherever they begin, should have their chance of glittering prizes.

Mr Adrian Bailey (West Bromwich West) (Lab/Co-op): There is very real concern in the FE sector that, arising from the core and margin provisions for higher education

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and a potential reduction in university places, higher education institutions may claw back provision from FE colleges. What reassurance can the Minister give the sector that that will not happen?

Mr Hayes: The hon. Gentleman is right to draw attention to that risk, and it is absolutely right that, given our ambition to widen access, which I articulated a few moments ago, universities should not engage in anti-competitive practices. The Secretary of State has made it clear that that is not acceptable, and my right hon. Friend the Minister for Universities and Science is taking action to prevent it. We will take a very dim view of universities that are not engaged with our mission to elevate the people through access to learning.

Dr Thérèse Coffey (Suffolk Coastal) (Con): University Campus Suffolk is based in Ipswich, in a neighbouring constituency to mine. One of the challenges it faces is that as it does not award its own degrees, it is not allowed to appear in the league tables, or in other listings that students readily access. Is there something that can be done to remove that element of bureaucracy, so that it can appear alongside any other university?

Mr Hayes: Sometimes, my relentless drive to remove bureaucracy is regarded as excessive, but if that is the charge, I plead guilty. My hon. Friend is absolutely right: we need to make the process as straightforward as possible, and we will take action to do so, partly stimulated by her question and her excellent work in this area.

Shabana Mahmood (Birmingham, Ladywood) (Lab): The expansion of the role of further education colleges in providing higher education is a positive step, but it sits alongside the Government’s plans to expand the role of for-profit providers in delivering higher education. Will the Minister tell us whether the Government will bring a higher education Bill to the House later this year, and will he undertake not to introduce regulatory changes that make it easier for for-profits to enter the sector without full parliamentary scrutiny?

Mr Hayes: If I were a less experienced Member of this House, the hon. Lady’s erudition and charm might encourage me to make predictions about the Queen’s Speech, but it would be quite wrong to do so and I cannot possibly answer that question. What I will say is that the determination on this side of the House to seed opportunity by providing greater access to higher education is a profound one.

Green Investment Bank

10. Catherine McKinnell (Newcastle upon Tyne North) (Lab): What recent progress he has made on determining the location of the green investment bank. [93007]

The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk): In December, the Department invited applications to bid for hosting the green investment bank. The closing date was Monday 30 January, and a total of 32 bids were received. My right hon. Friend the Secretary of State will make a decision shortly.

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Catherine McKinnell: Newcastle has submitted an outstanding bid to host the green investment bank, and as a region we have the right mix of natural environment, green expertise, infrastructure and professional services, all supported to grow under the last Government in order to make it a success. However, bearing in mind that we are the region with the highest unemployment levels, to what extent will the Government’s commitment to supporting private sector growth, particularly in areas suffering the greatest loss of public sector employment, be a factor in the decision-making process?

Mr Prisk: I do not wish to prejudice the case Newcastle has put forward as one of the applicants. All I will say is that we will look at the points the hon. Lady has raised as part of the criteria for all applicants, and make sure that we can get a decision out by the end of the month.

Economic Growth

11. Lilian Greenwood (Nottingham South) (Lab): What recent assessment he has made of prospects for economic growth and their effect on business confidence. [93008]

The Secretary of State for Business, Innovation and Skills (Vince Cable): As I noted earlier, the independent Office for Budget Responsibility forecasts that the UK economy will grow at 0.7% this year and 2.1% in 2013. The OBR states that the intensification of the European sovereign debt crisis has

“doubtless helped to reduce confidence”.

Lilian Greenwood: One of Nottingham’s Work programme providers recently told me not only that she was disappointed that the future jobs fund had been scrapped, but that local employers were reluctant to invest in apprenticeships because they simply were not confident they would have jobs for the apprentices to fill at the end of the process. Is it not time that this Government admitted that their economic plan has failed dismally, and that they need to adopt Labour’s plan for growth and jobs?

Vince Cable: I am very surprised that the hon. Lady gives apprenticeships as the central example of failure, given that apprenticeship numbers have risen by 50% and apprenticeships are extremely popular with young people and employers. This is a success story, and I am surprised she is denigrating it.

Perhaps I should also point to the most recent indicators, which were published yesterday. In the manufacturing sector, which is absolutely critical for recovery, the purchasing managers index suggests a significant recovery in the short run.

Andrew George (St Ives) (LD): The Government had the good sense to award a grant under the regional growth fund to the Goonhilly radio astronomy project in my constituency. That is very welcome, but the implementation of the decision seems rather slow. Will the Secretary of State look into the matter and accelerate the implementation of that project, which will generate many jobs in our local community?

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Vince Cable: I am aware of the difficulties associated with that project, which relate to the fact that we are trying to integrate two separate bidders. My hon. Friend knows the practical difficulties, but we will certainly do the best we can to expedite the project.

Mr Iain Wright (Hartlepool) (Lab): The Secretary of State will be aware of the chorus of disapproval at the manner in which the Government have handled the decision on solar power feed-in tariffs. Both the CBI and the Environmental Audit Committee have stated that it has wrecked supply chains and undermined confidence. Erica Robb of Spirit Solar told the Prime Minister last month that “weeks of chaos” have resulted in her having to lay off more than a third of her work force. As the Minister charged with responsibility for growth and co-ordination of industrial policy, what role did the Secretary of State and his Department have in this debacle, and how does the Government’s decision help the establishment of a long-term, credible and co-ordinated industrial strategy that supports fledgling sectors and provides the environment for business confidence and economic growth?

Vince Cable: This Department certainly does wish to promote the renewables sector and the supply chains. However, given the history of this problem, the hon. Gentleman will know that the level of subsidy—which I think his Government fixed—was totally unsustainable, and action had to be taken to cap it.

Miss Anne McIntosh (Thirsk and Malton) (Con): Has the Business Secretary had the opportunity to assess the implication of the growing places fund for infrastructure projects such as that relating to the A64 in North Yorkshire? What criteria will apply to selecting such projects, and how can we guide the local enterprise partnership in the right direction?

Mr Speaker: Order. I know that the Secretary of State’s reply will relate to economic growth and business confidence.

Vince Cable: That infrastructure fund, which relates specifically to small projects, has proved very valuable and the local enterprise partnerships have an important role in working up those projects. There are set criteria, of which they are well aware, that they must meet.

Job Creation (Scotland)

13. Jim McGovern (Dundee West) (Lab): What recent discussions he has had with the Scottish Government on promoting job creation in Scotland. [93011]

The Minister of State, Department for Business, Innovation and Skills (Greg Clark): Ministers in the Department have regular conversations with Scottish colleagues on areas of mutual interest. I have been invited to meet representatives of Scotland’s cities to discuss their contribution to the economy and I expect to do so shortly. Much of Britain’s future prosperity depends on our cities, including Dundee.

Jim McGovern: I thank the Minister for that response. Job creation is of paramount importance in my constituency in Dundee. Dundee has a highly skilled and highly

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educated work force, but despite that fact unemployment figures remain stubbornly high, particularly those for youth unemployment. There is an increasing feeling that that is the fault of both the coalition Government and the separatists in Edinburgh, who seem unwilling to use their powers to promote economic growth—they are too busy pointing their finger at other people for that. Will the Minister make an urgent assessment of how he, working with the Scottish Executive, can improve job creation throughout Scotland?

Greg Clark: I will, but it is fair to point out that, under the Labour Government, youth unemployment increased by 40%, so I think the hon. Gentleman is wrong to imply that that phenomenon has just established itself. He will know that the best and only way to create jobs is on the basis of a successful, stable economy. He will have seen the Institute for Fiscal Studies report yesterday that made it very clear that had the previous Government’s plans been in place, borrowing would have been at £76 billion in 2016-17 rather than £26 billion. That would have been disastrous for the credit rating of this country and the interest rates on which job creation depends.

John Stevenson (Carlisle) (Con): Does the Minister agree that one way to create jobs and promote job creation is for cities to embrace the concept of elected mayors and would he encourage the Scottish Executive to do so?

Greg Clark: That is a matter for the Scottish Executive, but my hon. Friend will know that we are debating orders in Parliament to require referendums in the cities of England to give people the choice of whether they should have elected mayors. We would not be doing that if we did not think that elected mayors gave the kind of leadership that London has benefited from considerably through the leadership of the Mayor of London, Boris Johnson, in recent years.

Business Growth

14. Thomas Docherty (Dunfermline and West Fife) (Lab): What steps his Department is taking to promote business growth. [93012]

The Minister for Universities and Science (Mr David Willetts): The plan for growth commits the coalition to creating the most competitive tax system in the G20. We will make the UK the best place in Europe to start, finance and grow a business and we will create a more educated work force who will be the most flexible in Europe.

Thomas Docherty: I am most grateful for that answer. Given the vital role of exports in trying to grow our economy and yesterday’s disastrous news about Typhoon not being take up by the Indians, will the Minister meet me and other BAE Systems MPs to find out what his Department can do to get behind BAE Systems?

Mr Willetts: Let us be absolutely clear that the Prime Minister, the Secretary of State and I have all been on trade missions to India because we recognise its importance as an export market. British exports are growing by 10% and we will continue to argue the case for Typhoon

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as an excellent and cost-effective deal for the Indian Government. Of course, Ministers would be very happy to meet employees.

Laura Sandys (South Thanet) (Con): Economic growth has been greatly enhanced in east Kent by the huge amount of work done by BIS for the enterprise zone and the regional growth fund. What more can be done through UK Trade & Investment to promote life sciences internationally and to get inward investment into east Kent?

Mr Willetts: My hon. Friend is absolutely right. Of course, this week is the first anniversary of the announcement by Pfizer that it was planning to close completely its facility at Sandwich. That will now be transformed into a research and business park, not least thanks to the excellent efforts of my hon. Friend. Indeed, Pfizer will be an anchor tenant employing, we believe, 750 Pfizer staff. That shows we can fight back and we can maintain life sciences activity in this country. Through the proposals we set out in December, we aim to increase that.

Mr Barry Sheerman (Huddersfield) (Lab/Co-op): If we are to get business growth in our country, we must provide finance. Does not the report that the Minister has just made on the green bank show the truth that we want that sort of bank in each region, particularly in Yorkshire and the Humber? We want a bank for every region that knows the local circumstances and will invest in our regions.

Mr Willetts: I have a lot of sympathy with the argument that overall we need to see much greater diversity in British banking. Indeed, one reason why the Government are implementing the proposals from the Vickers commission is precisely to make it possible to have once more local banks that understand the needs of the local business community and local individuals, but our position on the green investment bank has been made clear by the Secretary of State.

Construction Industry

15. Heidi Alexander (Lewisham East) (Lab): What recent assessment he has made of the strength of the construction industry. [93013]

The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes): The construction industry, as with much of the economy, has come through a difficult period and faces a challenging year ahead but, as ever, in the areas for which I am responsible I offer sunny uplands. Figures published just yesterday show that construction industry apprenticeships for 2010-11 saw an increase of 11.4%—fine words, still finer deeds.

Heidi Alexander: The Minister says that the construction industry faces a challenging year, but it faces a challenging decade. The Construction Industry Training Board points to new research suggesting that employment and output in the construction industry in 2016 will be 5% lower than 2007 levels. Given that the construction industry could be a real stimulant to jobs and growth, will the Minister tell me when the Government are going to come up with policies that actually work instead of ones that just sound good on paper?

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Mr Hayes: The figures I just revealed show that the construction is not being hampered by current difficulties but is investing in its future. We know that industry sectors that invest in the future bounce out of the kind of downturn that the industry currently faces. However, I accept what the hon. Lady says and we will go further. As a result of her question and my consideration of these matters, I will, with the CBI and the Federation of Small Businesses, invite the construction industry into BIS to talk about how that boost in apprenticeships can feed the kind of improvements that she seeks and Britain needs. Talking down business is talking down Britain, and that is something we will never do on this side of the House.

Mr Marcus Jones (Nuneaton) (Con): Construction is an important sector in my constituency, but its future very much depends on making sure that we have the skills available to support this sector for the future. Will my hon. Friend set out what actions he is taking to make sure that we support skills in this vital area?

Mr Hayes: As I said, the investment in apprenticeships is critical. No one doubts that construction industry apprenticeships are vital to building the skills the industry needs. I just want to say that no Member of the House has been more doughty in championing the interests of business in his constituency than my hon. Friend. He personifies our determination to boost skills, improve our prospects and build recovery.

Mr Speaker: I am sure the hon. Gentleman is very grateful for the Minister’s tribute.

Tuition Fees

16. Tristram Hunt (Stoke-on-Trent Central) (Lab): What assessment he has made of the effect of higher tuition fees on the level of university admissions in the next academic year. [93014]

The Minister for Universities and Science (Mr David Willetts): UCAS published figures on 30 January 2012 covering applications to higher education institutions by its main deadline. That independent information shows that the proportion of English school leavers applying to university is the second-highest on record and is higher than in any year under the previous Labour Government. It is also encouraging that applications from people from some of the most disadvantaged backgrounds remain strong. We will continue to monitor closely the data on applications.

Tristram Hunt: I thank the Minister for his answer and draw attention to my interest in this matter, as set out in the Register of Members’ Financial Interests. Since this Government’s punitive and regressive £27,000 tuition fees have been introduced, university applications for design are down more than 16%, applications for history are down more than 7%, applications for classics are down more than 8% and applications for non-European languages are down more than 21%. Britain has long had a world-class reputation for the humanities; why are this Government so determined to kill it off?

Mr Willetts: I am amazed that the hon. Gentleman could refer to an arrangement under which graduates pay for their higher education only if they are earning

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more than £21,000 a year as a regressive policy. It is a progressive and fair way of maintaining higher education. Because, unlike him, young people across the country understand that, we have had a very healthy level of applications to universities this year—down only 1% on last year’s peak.

Mr Rob Wilson (Reading East) (Con): What assessment has my right hon. Friend undertaken of the impact on admissions of university access agreements supervised, and indeed enforced, by the Office for Fair Access?

Mr Willetts: It is very encouraging that when we look behind the 1% fall in applications overall, it looks as though the fall in applications from prospective students in the most disadvantaged areas is actually only 0.2%. That tells us that the message is getting across, and I pay particular tribute to the efforts of my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) and the advice we have had from him, and to the work done by OFFA to get that crucial message across.

Pat Glass (North West Durham) (Lab): Higher education applications have collapsed. In teaching, we have a simple way of measuring whether children are learning by rote or are actually learning and understanding: we ask them what would happen next. When the Minister tripled tuition fees and abolished education maintenance allowances, what did he think was going to happen next?

Mr Willetts: I thank the hon. Lady for the advance notice of her question. Contrary to the stories of collapse and disaster, we believe that the fact that applications have fallen only by 1% is evidence that the message that students do not have to pay is getting across, and this summer I shall once more sadly be in the position of having to explain why young people applying to go to university do not have a place. In other words, we have succeeded in explaining the truth about our proposals, contrary to the misleading allegations of the Opposition.

Mr Speaker: I know that the Minister will not be suggesting that any Opposition Member has misled the House. I am sure he is referring to activity outside the House.

Mr Willetts indicated assent.

Mr Speaker: I am extremely grateful for that ministerial head-nod, if I can put it that way.

Stephen Metcalfe (South Basildon and East Thurrock) (Con): Will my right hon. Friend the Minister join me in reassuring my constituents that, unlike the views of the Opposition, under our scheme a top-quality university degree will actually cost them only £30 a month when they are earning £25,000 a year?

Mr Willetts: I entirely agree. Indeed, that figure on earnings of £25,000 a year contrasts with payments of £75 a month under the arrangements we inherited from the Labour Government.

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Public Interest Declarations

17. Mr Nick Raynsford (Greenwich and Woolwich) (Lab): What his policy is on responding to public interest declarations made to him or his Department. [93015]

The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey): My right hon. Friend the Secretary of State takes seriously any public interest declarations made to him. If a declaration alleges that a company is trading in a fraudulent manner, the Secretary of State can authorise an investigation into the affairs of that company, using powers under the Companies Acts. Such investigations are confidential and it is seldom possible to confirm or deny whether an investigation is in train, but if there is an enforcement action as a result of the investigation, that can be made public. My officials will of course be willing to take further details of the allegations.

Mr Raynsford: I am grateful to the Minister for his answer, and to the Secretary of State for the letter he sent me yesterday in response to my constituent’s public interest declaration. I cannot but note that it is only since the question appeared on the Order Paper that his Department appears to have been taking the matter seriously, because the declaration was made in mid-December. Given that it is a serious declaration, involving allegations of unethical and probably criminal behaviour by a significant company, will the Minister ensure that the investigation takes full and detailed evidence from my constituent?

Mr Davey: I am sorry that after the initial e-mail sent just before Christmas there was no substantive follow-up. I apologise to the right hon. Gentleman’s constituent, but the Secretary of State has now written to the right hon. Gentleman, as he acknowledged, and I confirm that officials of the Insolvency Service who exercise those powers will now make contact with his constituent as he has requested.

Topical Questions

T1. [93022] Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab): If he will make a statement on his departmental responsibilities.

The Secretary of State for Business, Innovation and Skills (Vince Cable): My Department has a key role in supporting the rebalancing of the economy and business to deliver growth while increasing skills and learning.

Gregg McClymont: A moment ago, the Minister for Universities and Science referred to student loan repayments, which the right hon. Gentleman will know are deducted at source, which is more than can be said for the extraordinary contract awarded to Mr Ed Lester of the Student Loans Company. Will the Minister explain why he signed off those extraordinary tax avoidance arrangements?

The Minister for Universities and Science (Mr David Willetts): Let me be absolutely clear that this arrangement is set out very clearly in the Student Loans Company annual accounts. If Labour Members had cared to

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study the report, they would have seen on page 42 a completely transparent account of the arrangements for Mr Ed Lester’s reimbursement. It is set out very clearly there. The payments are to the recruitment consultancy company that found him, and he was appointed on an interim basis to tackle a disaster in the SLC that we inherited from the Labour Government. We of course recognise the importance of ensuring that proper arrangements are in place and will continue to monitor the situation, but I can inform the House that we have agreed that, for the remainder of the chief executive’s contract, the SLC will account for PAYE and national insurance at source.

T3. [93024] Mr Peter Bone (Wellingborough) (Con): Last Sunday I attended Indian republic day at the Wellingborough Hindu Association, yet the same week we learn that a £20 billion fighter contract has been lost to, of all people, the French. We now know that the lead bidder was not the British Prime Minister or the British Government, but the Germans. What on earth do they know about cricket and curries? Why was the British Government not leading on that? How did the Secretary of State allow such a cock-up?

Vince Cable: As was explained earlier, the Prime Minister, the Trade and Investment Minister, I and others have made strong representations to the Indian Government on the merits of BAE Systems for this contract. The hon. Gentleman will know that the contract was narrowed down to two companies on the basis of quality. The Indian Government appear to have made a narrow decision based on price, but this is by no means the end of the process. BAE Systems will have plenty of opportunities to restate its case on quality and life-time costs and we shall reinforce it.

Chi Onwurah (Newcastle upon Tyne Central) (Lab): The Secretary of State has leapt to the defence of the tax deal by which a public servant running the Student Loans Company avoids tax of £40,000 a year. It is a pity that the right hon. Gentleman is not as vigorous in defending the interests of small businesses when it comes to bank lending. Can he confirm, as the Minister implied earlier, that this arrangement will end immediately? Does he agree that when his Government say, “We’re all in this together”, they mean the tax avoiders and the excessively paid, not the people in businesses who desperately need support in order to get our economy working again?

Vince Cable: My colleague, the Minister for Universities and Science, has already given a very full answer on this issue. When I spoke about it earlier, I should have made it clear that Mr Lester had accepted a pay cut, not a tax cut. In addition, there will shortly be an urgent question on the matter, when any further details can be pursued. As for the wider policy questions, we made it very clear last week that we believe that our reforms of executive pay will radically reduce the rewards for failure and mediocrity in business.

T4. [93025] Mark Menzies (Fylde) (Con): I welcome the Government’s plan to set up catapult centres. Will the Minister update the House on what progress has been made in setting these centres up?

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Mr Willetts: Our proposals for launching the catapult centres are proceeding. We have already announced five technology and innovation centres across the country and will announce the remaining two soon.

T2. [93023] Ian Lavery (Wansbeck) (Lab): The Secretary of State is aware of the imminent closure of the Rio Tinto Alcan plant in my constituency. Rio Tinto Alcan said recently that it puts the blame firmly on the Government because of the lack of investment. The £250 million for energy-intensive industries is too little, too late, and there are also the green taxes. Would he care to comment on those allegations?

Vince Cable: Those were certainly not the allegations Rio Tinto Alcan made to me when I met representatives of the company. They made it clear that this was part of a global downsizing of their operations and that many countries are affected by it. I have visited the site and met the hon. Gentleman to discuss this. We are concerned about the future of the labour force, and we sought to help the company through the support for energy-intensive industries. Now that the company has decided to go ahead with closure, we will see what we can do to help the people in the area.

T7. [93028] Tony Baldry (Banbury) (Con): What can the Department for Business, Innovation and Skills do to support the more than 1,500 community-led work clubs across the country to help young adults to recognise the apprenticeship opportunities that exist, ensure that further education colleges can provide training opportunities for those out of work, and link in the national careers service?

The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes): I am delighted that my hon. Friend has raised that matter again, as he has done frequently. He has done much work in Banbury in this area. The important thing to do next is to match the businesses to the young people. We can do that by getting businesses into schools and by speed-dating—that is an exciting prospect, is it not, Mr Speaker? We must use all modern media to ensure that young people know about the jobs and opportunities that exist—where they are, what they are and how they can find them.

T5. [93026] Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op): Somethin’ Else is a design and creation company on Silicon roundabout in my constituency. It employs 65 people and recently produced a film that was shown at the Conservative party conference. Recently, it has been battling with Her Majesty’s Revenue and Customs over disproportionate fines for the alleged late payment of tax. That has led to a fine of more than £25,000. Given HMRC’s deals with large corporations and the Government’s professed support for small businesses, which the Secretary of State has reiterated today, what discussions is the Department having with HMRC and the Treasury to ensure that businesses are aware that it is on their side and that the Government are acting in a joined-up fashion so that punitive tax attacks are not made on small businesses?

Mr Willetts: That is, of course, a matter for the Treasury. The Department is on the side of small businesses. I have visited that business in Tech City and was very

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impressed with what it does. Tech City, which had about 100 small businesses when the coalition came to office, now has more than 600 small businesses because of our commitment to the area.

T8. [93029] George Freeman (Mid Norfolk) (Con): May I, on the eve of national apprenticeship week, congratulate the Minister and the Government on the steps they are taking to increase the number of apprenticeships? I invite him to support the Norfolk Way project, which is giving youngsters work experience and entrepreneurial mentoring. I also invite him to agree with the wonderful words of Galileo Galilei, “We cannot teach people things; we can only help them discover it within themselves.”

Mr Hayes: John Clare, who is greatly admired by my hon. Friend, said:

“The best way to avoid doing a bad action is by doing a good one”.

Of course, he ended his life near Norfolk. My hon. Friend understated his own involvement in the project that he mentioned; he launched it, but he was too modest to say so. It says here that the project is “determined to nurture the ambition of enterprising young people and to encourage a can-do attitude.” I cannot do better than that.

T6. [93027] Mr William Bain (Glasgow North East) (Lab): The Government have been sending out mixed messages recently about the extent of their financial commitment to the proposed green investment bank. Will the Secretary of State confirm that the proposed public contribution will be £3 billion as promised and not up to £3 billion, and that the bank will assume its borrowing powers in 2015?

Vince Cable: I can confirm the first part of the hon. Gentleman’s question: the £3 billion is fully committed to and there are no mixed messages. On borrowing, it is not merely a question of the date, but of the fiscal position of the country.

T10. [93031] Damian Hinds (East Hampshire) (Con): This week’s National Audit Office report on apprenticeships shows that for every pound of public money that is invested, there is a return of £18. Will my hon. Friend reassure us that he is taking all reasonable steps to continue the successful growth of apprenticeships?

Mr Hayes: My hon. Friend will know that the figures published this week show a record number of apprenticeships across the whole country, in all sectors and at all levels. What does the NAO report say? As my hon. Friend described, it shows a massive return on public investment. This is success by any measure. By the way—I did not want to emphasise this, Mr Speaker—it also states that our policy is far better managed than was Train to Gain by the previous Government.

Diana Johnson (Kingston upon Hull North) (Lab): How hard did Ministers press the case for British business with their colleagues in the Ministry of Defence, who yesterday produced a written ministerial statement which said that the Government will no longer prioritise UK suppliers when purchasing defence equipment? That is

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another kick in the teeth for all of us who are fighting to prevent British BAE Systems jobs from being exported, at a cost of £100 million to British taxpayers.

Vince Cable: Of course we have discussed those issues extensively with the Ministry of Defence, and if the hon. Lady actually reads the statement, she will see that it is absolutely clear that in defence, as in other areas, public procurement will operate on a strategic, long-term basis, not as it did under the last Government when narrow contractual arrangements involved purchases off the peg.

Esther McVey (Wirral West) (Con): Will the Minister support me in establishing a pilot scheme on Wirral bringing female business role models into schools and thereby working towards the coalition’s intention of practical, real-life role models?

The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk): I would be delighted to support that. It is an excellent idea and builds on the work that we are doing to recruit 5,000 new business mentors—real business women, helping those who want to start their own enterprise.

Nic Dakin (Scunthorpe) (Lab): What is the Secretary of State doing to stimulate growth in manufacturing industries, particularly the steel industry, which is so important to UK plc and my constituents?

Vince Cable: As the hon. Gentleman will know, because I have visited his constituency and discussed these issues with him, the steel industry is going through an extremely difficult time not just in the UK, and steel makers have made losses. We are helping them through energy-intensive support, and there are other forms of help such as the regional growth fund and enterprise zones. We are doing what we can to help steel areas that are affected by the current contraction.

Greg Mulholland (Leeds North West) (LD): The one seemingly hopeful part of the Government’s otherwise dreadful response on pub companies was the unfortunately named PICAS—the pub independent conciliation and arbitration service. However, hope soon faded when it was revealed that it was to be pubco-funded, and this week it has been announced that it will be chaired by a Punch Taverns surveyor. Does the Minister think that licensees will want to use that supposedly independent body?

The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey): I am afraid that as in a number of aspects of this debate, my hon. Friend does not reveal the full details. Rodger Vickers has been appointed with the unanimous support of the board of the pub independent rent review scheme, which includes two members of the Independent Pubs Confederation, the champion of licensees and tenants. I have made it clear to the independent chairman of

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PIRRS, Mr Brindley, that its efforts to appoint a vice-chair, again with high standing among the licensee community and close links to the IPC, should continue.

Mr Jim Cunningham (Coventry South) (Lab): Will the Secretary of State clarify what is actually happening to the Typhoon contract? There was an implication that it could be renegotiated. If he fails to renegotiate it, will he blame the previous Government?

Vince Cable: There is no question of renegotiation. The Indians have had a pre-selection process, from which the French bid has gone ahead on the basis of price. There is a lot of experience of contracts being reconsidered at the final stage, and at that stage BAE Systems has a very good case to make as part of its consortium. We will support it thoroughly.

Simon Kirby (Brighton, Kemptown) (Con): Although I understand that the Minister does not want to be unfair to other cities, does he agree that Brighton would make a fantastic choice of location for the green investment bank?

Mr Prisk: My only worry is that I did not have the opportunity to travel to all 32 locations and be wined and dined, but I note Brighton’s application and we shall have to see.

Emma Reynolds (Wolverhampton North East) (Lab): British Aerospace has a 17% global share, and as such is No. 1 in Europe, but its future depends on not only exports but on investment in research and development. Given that many other Governments in Europe and around the world give more support to research and development than we do, what more can the Government do to help in that vital area?

Mr Willetts: That is why the Government have provided cash protection and ring-fenced the science and research budget, and why in the autumn statement we were able to announce significant increases in funding for the Technology Strategy Board.

Richard Fuller (Bedford) (Con): With no pressure from the Secretary of State for a cut in the jobs tax, no meaningful roll-back of job-destroying red tape, no pressure from him for a cut in enterprise-sapping tax rates and his lauding as a good example the pillorying of people for fulfilling their Government contract, can he advise me of what he is doing to encourage enterprise rather than to discourage it?

Vince Cable: I think my ministerial team have given an extremely good account of the many things that we are doing in that area, starting with an extraordinary cut in the amount of red tape, which I think is the issue that most concerns my hon. Friend.

Several hon. Members rose

Mr Speaker: Order. There is unsatisfied demand, as tends to be the case. I am sorry to disappoint colleagues, but we must now move on.

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Tax Avoidance (Public Servants)

11.34 am

Mr Nicholas Brown (Newcastle upon Tyne East) (Lab) (Urgent Question): To ask the Chief Secretary to the Treasury if he will set out the Government’s policy on the operation of tax avoidance schemes in the civil service.

The Chief Secretary to the Treasury (Danny Alexander): I am very grateful to the right hon. Gentleman for giving me the opportunity to set out the answer to this question. As hon. Members might be aware, departmental public spending encompassing the appointment of senior civil servants is audited against the Treasury’s “Managing Public Money” guidance. That document makes it clear that

“public sector organisations should avoid using tax advisers or tax avoidance schemes as any apparent savings can only be made at the expense of other taxpayers or other parts of the public sector.”

There is no place for tax avoidance in Government.

A recent case has highlighted those issues, and although I cannot comment on the specifics of an individual’s tax affairs, for reasons of which the right hon. Gentleman will be fully aware, I want to take the opportunity to explain the action that I have taken.

As hon. Members are already aware, for senior civil service appointments whose salary exceeds £142,500, terms and conditions are negotiated by the appointing Department and are presented to me for approval of the salary. Those arrangements are in place to control excessive pay.

In the light of that recent case, I have asked the Treasury urgently to review the appropriateness of allowing public sector appointees to be paid through that mechanism—[ Interruption. ]I have also asked the Treasury Officer of Accounts—[ Interruption. ]

Mr Speaker: Order. I granted this urgent question because I thought it warranted ministerial comment and scrutiny by the House. The House can rely upon me to ensure that there is plenty of time for Back Benchers, but as a matter of procedure, propriety and courtesy, we must hear what the Chief Secretary has to say, preferably without constant interruption and heckling.

Danny Alexander: I am grateful, Mr Speaker.

As I was saying, I have also asked the Treasury Officer of Accounts to write to all accounting officers across Whitehall to remind them that all appointments should, in line with existing guidance, consider the wider cost of lost revenue to the Exchequer when considering value for money.

Furthermore, I have requested that all Departments carry out an internal audit by the end of March. As my right hon. Friend the Minister for Universities and Science has said, the Student Loans Company will for the remainder of the contract in question change the arrangements and deduct tax and national insurance at source. Across Government, if any appointments that do not provide value for money are found, whether agreed by this Government or the previous one, I have

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urged Departments to seek to unwind them as quickly as possible and as quickly as is compatible with securing good value for public money.

At a time when we all have to pull in the same direction to tackle the country’s financial problems, it is essential we all pay our full and fair share. That is why I have taken this action to ensure that Government Departments do not support tax avoidance schemes.

Mr Brown: May I point out to the Chief Secretary to the Treasury that the chief executive of the Student Loans Company is the accounting officer? Perhaps the Chief Secretary can tell the House what sort of reply he expects from that accounting officer when he writes to him.

It is reassuring that the Chief Secretary told the House that national insurance and income tax will be paid in future, but the purpose of those arrangements was to avoid paying income tax and national insurance. When considering those arrangements, did he consider the demoralising and corrosive effect that such an arrangement must have on the rest of the public service? What fees are paid by the Department to the service company that is laundering that money? The loss is to the Exchequer and not to the Department’s budget, in which I would have thought the Chief Secretary would take an interest.

The Chief Secretary says—I support him in this—that he will now, belatedly but correctly, scope how many such arrangements there are in the public service. When his investigation is completed, will he put the facts—all of the facts—in front of the House of Commons? Given the controversial nature of those arrangements, will he tell the House whether the Cabinet Secretary approved them, and whether the Prime Minister, the Deputy Prime Minister and the Secretary of State for Business, Innovation and Skills, which is the Department responsible for the Student Loans company, were explicitly aware of those arrangements and whether they explicitly agreed to them?

Danny Alexander: I am grateful for the right hon. Gentleman’s support for the action that I have taken in respect of this case. He is right that accounting officers of organisations are responsible for implementing the “Managing Public Money” guidance. That is why the Treasury Officer of Accounts is contacting all such officers within the Government as we speak. I look forward to seeing the responses, including from the range of individuals to whom he referred.

As I said in my response to the right hon. Gentleman’s original question, my responsibility in such matters is with regard to the salary level. In this case, I reduced the salary level and amount of expenses paid under the contract, the details of which were the responsibility of the Student Loans Company and the Department for Business, Innovation and Skills. I was not made aware of any tax benefit to any individual as a result of this case, which is precisely why I have put in place the arrangements for the review that I have set out.

I can tell the right hon. Gentleman that I would of course want to update the House on the results of that review when it is completed, and I look forward to having a further opportunity to discuss the matter with him.

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Mr Richard Bacon (South Norfolk) (Con): May I say how much I welcome the Chief Secretary’s urgent review? There has been too much of this going on; there was certainly a similar case involving the chief operating officer of the Rural Payments Agency, who was appointed in an interim way under the previous Government, which should not have happened. May I invite the Chief Secretary, in the spirit of the coalition, to say whether he agrees with the former leader of the Conservative party, Michael Howard, who is now in another place, when he said:

“Special rules for special…groups breed anger and division. They blur the distinction between right and wrong. And they give the impression that some people are above the law”?

Danny Alexander: I am grateful for the hon. Gentleman’s support for the action I have taken. I was not aware of the example he gave in relation to the Rural Payments Agency. Of course, if other such cases still exist in other parts of Government, that is something the review I have instituted will bring out. I do agree with the statement the hon. Gentleman read out, which is why the Government have taken a series of strong steps—much greater steps, frankly, than the previous Government—to deal with tax avoidance and make sure that everyone pays their proper amount of tax.

Margaret Hodge (Barking) (Lab): I welcome the commitment that has been made to review the arrangements relating to this individual and to review whether such things happen anywhere else across Government. Will the Minister agree to publish the complete list of senior civil servants whom the Government pay through companies when he completes his review by the end of March? In particular, will he report to the House on the role of Her Majesty’s Revenue and Customs in authorising the arrangement with this individual? Will he also report to the House on why the Cabinet Secretary appears to have authorised it? Will he ask officials about, and report to the House on, why a contribution to this particular individual’s pension was also agreed?

Danny Alexander: First, I am grateful for the right hon. Lady’s welcome for the action we are taking on this issue. As I said in answer to the original question, I will certainly make available to the House, and indeed to the Public Accounts Committee, if she is interested to follow the issue through that route, too, the results of the inquiry that we have set out and the information on the number of individuals—if there are any others—who are paid under similar arrangements. As I have also said, if there are such arrangements in other places, Departments have actively and urgently to consider unwinding them and making sure that proper arrangements are put in place so that people pay their full share of tax.

There will be opportunities for the right hon. Lady’s Committee to scrutinise the role of HMRC and the Cabinet Secretary in these issues, if it wishes to. It is a matter of public record that the Cabinet Secretary signed off these arrangements. The original arrangements were put in place before I was appointed Chief Secretary, but the salary was brought to me when the appointment was turned from an interim one into a temporary one for two years, which is what the arrangements now are. I am delighted that my right hon. Friend the Minister for

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Universities and Science has decided, through the Student Loans Company, to make sure that these arrangements apply no further in this case.

Lorely Burt (Solihull) (LD): Will my hon. Friend confirm that the urgent review will also investigate the terms of appointments made by the previous Government?

Danny Alexander: Yes, I said that in answer to the original question. The cases that are brought to me are cases in which the level of pay is in excess of £142,500. Of course, the review will look not just at those cases, but, potentially, at the cases of people on lower salary levels. Appointments that are currently in operation may well have been put in place under the previous Government. I do not know that there are any; that is why I have instituted a review, and we will see in due course what that brings forward. As I say, I will be happy to share that information with the House.

Shabana Mahmood (Birmingham, Ladywood) (Lab): The Government have a duty to ensure that everyone pays their faire share of taxes. They should be especially careful when making senior appointments themselves. At a time when the economy is flatlining, families are being squeezed and students are facing the tripling of tuition fees, the news that Ministers approved the contract of a senior official that allowed tax and national insurance to be avoided shows just how out of touch they are.

There are several important questions that the Chief Secretary must answer. When he approved the contract, did he ask about the tax and national insurance implications of employing Mr Lester on this basis? Did HMRC approve the arrangement after Mr Lester was appointed chief executive on a permanent basis, or only when he was the interim chief executive? Does the Chief Secretary know how much tax and national insurance has been avoided by these arrangements? Has he now withdrawn his approval of Mr Lester’s contract, and is it being redrawn? How many other senior appointments have the Government made on these terms? Surely the right hon. Gentleman will know how many he has signed off. If he does not know, is it not time that he started asking questions of his colleagues and defending the interests of taxpayers?

The Government’s handling of higher education has been disastrous. This week, we have heard that their tripling of fees and botched reforms have cut applications to university, and before Christmas the Public Accounts Committee criticised HMRC for its cosy relationship with big business. There will be great concern if it turns out that the Government have turned a blind eye to tax avoidance. I look forward to the Chief Secretary’s answers about what seems to be a Treasury-backed tax dodge, and to a full investigation into the facts of the case.

Danny Alexander: I agree with the hon. Lady’s first remarks: of course we have a duty to ensure that every individual pays their fair share of tax. That is why the Government have done much more to tackle tax avoidance than Labour ever did during its 13 years in office.

The hon. Lady asked some important questions. I was not made aware, when approving the salary level for this post, of any tax benefit to the individual concerned. As I said earlier, the initial interim arrangements were approved before my time as Chief Secretary. I was

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involved in the re-appointment. As far as I am aware, having looked through the cases, of the 180 appointments with salaries of more than £142,500 that I have approved as Chief Secretary, this is the only one to which such arrangements apply. That does not mean, however, that there are not similar existing arrangements for people appointed under the previous Government or for those with lower salary levels. That is why I have implemented the review that I have set out to the Chamber. I am sorry that she did not feel able to welcome that step. I would have thought that she would have. As I have said repeatedly, however, I will happily bring the information that we unearth back to the House.

Several hon. Members rose

Mr Speaker: Order. There is much interest in this subject, and if I am to accommodate it, brevity is required in both questions and answers.

Conor Burns (Bournemouth West) (Con): Does my right hon. Friend understand that those genuinely working on the front line in the public sector will find these revelations obscene? When his review is complete, will he be able to tell us when such practices first entered the public sector, and whether it was under this Government or the previous one?

Danny Alexander: I well understand why people would see it that way—frankly, I see it that way myself. It is interesting that already today we have heard one example, from my hon. Friend the Member for South Norfolk (Mr Bacon), who is a member of the PAC, of a similar arrangement made under the previous Government. Of course, the review will not look back on arrangements that have now been discontinued, but will look at those currently in existence in the public sector in order to ensure that everyone pays their fair share of tax. I know that my hon. Friend the Member for Bournemouth West (Conor Burns) will strongly agree with that.

Mr Gareth Thomas (Harrow West) (Lab/Co-op): In December, I tabled a round robin question to every Department asking whether senior staff in Departments, Executive agencies and non-departmental public bodies were

“paid by means of payments to a limited company”.

On 5 December, the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for Kingston and Surbiton (Mr Davey), who has responsibility for consumer affairs, replied on behalf of BIS:

“The Department's policy is that staff salaries are paid into employees’ bank accounts.”

He also wrote that

“there is no evidence that any senior civil servants in the Department for Business Innovation and Skills and its non-departmental public bodies are paid by means of payments to a limited company in lieu of a salary.”—[Official Report, 5 December 2011; Vol. 537, c. 152-3W.]

Why did they get it wrong, and why did I not get an answer from the chief executive of the Student Loans Company?

Danny Alexander: That answer described the arrangements as I understood them until I received information about this case in the past few days. The inquiry that I have put in place will reveal whether any more of these arrangements exist elsewhere in Government.

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Mr David Nuttall (Bury North) (Con): Does the Minister accept that, regardless of whether someone is employed in the public or private sector, tax avoidance—otherwise known as tax mitigation—is actually legal, whereas tax evasion is illegal?

Danny Alexander: Yes, the hon. Gentleman is absolutely right on the point of fact. It is fair to say that this Government have taken strong action to deal with both tax avoidance, where we wish to remove schemes that people use to minimise the amount of tax they pay, and tax evasion, which, as he says, is illegal. We announced an initial £900 million in the spending review for HMRC to invest for that purpose. As a result, we are, for example, quadrupling the number of court cases for tax evasion, to ensure that we make an example of people.

Julie Hilling (Bolton West) (Lab): At this time of austerity, when the poor are being made to suffer for the behaviour of the rich, is the right hon. Gentleman ashamed that his Government have failed to do anything to stop such tax avoidance? What will he do to close that loophole across all taxpayers?

Danny Alexander: I think a better way to characterise what is going on in the economy at the moment is that the whole country is being made to pay for the mistakes made by the previous Government. I have already set out the action that we taking. An urgent review is taking place, both in Departments and through the Treasury, which I put in place because I take such matters incredibly seriously. That review is of a piece with the enormously wide range of action to tackle tax avoidance and tax evasion that has been put in place by this Government. As just one example, the high net worth individuals unit was not put in place by the previous Government until they had been in office for 12 years. That was 12 years of inaction on tax avoidance in that part of the population. Contrast that with the record of this Government and we see a coalition Government who view making sure that everyone pays their fair share of tax with the utmost seriousness.

Claire Perry (Devizes) (Con): I think there is a word, Sir, for the mock indignation on the Opposition Benches, but as I was reprimanded for anti-parliamentary language previously, I will not say it today. Will my right hon. Friend please set out what specifically we are doing about tax avoidance in foreign domiciles, which is an equally important issue?

Danny Alexander rose—

Mr Speaker: Order. I should just emphasise that the right hon. Gentleman will want to focus specifically on the terms of the urgent question, and I know that that is what he will do.

Danny Alexander: The question is a broad one about tax avoidance in Government. There are Government employees in other jurisdictions, and I am sure that the measures we have taken—for example, in relation to Switzerland and Lichtenstein, the non-dom levy that we have put in place, and so on—will ensure that any practices that might have been in place in the past no longer occur.

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Simon Danczuk (Rochdale) (Lab): My understanding is that a service company managed the arrangement for Mr Lester. Can the Minister tell the House what fees were paid to that company?

Danny Alexander: I cannot give a detailed answer about the fees paid to that company. My understanding of the arrangement that was in place is similar to that which the hon. Gentleman has described.

Mr Rob Wilson (Reading East) (Con): I know that the Chief Secretary well understands that there is a question of fairness at the heart of this issue for all public sector employees, so should we not either allow all employees of the Government the same advantages of tax efficiencies, if legal, or stamp out such practices altogether, right across the public sector?

Danny Alexander: I would not agree with the hon. Gentleman that such arrangements should be put in place for every public sector employee. The review that I have put in place is precisely designed to root out such arrangements across Government.

In answer to the earlier point, I gather that the fees that the hon. Member for Rochdale (Simon Danczuk) asked about are set out in the Student Loans Company annual report, which is available publicly, so he may wish to avail himself of a copy.

Mr Barry Sheerman (Huddersfield) (Lab/Co-op): We all know, if we are honest, that the administration of student loans had been a mess for years. However, the fact is that this man was appointed on a higher package of emoluments than the Prime Minister. Why was that?

Danny Alexander: What we had was a situation where, as the hon. Gentleman rightly says, for many years—including for many years under the previous Government —the Student Loans Company was in a mess. This man was brought in to run it, and in fairness I think it is widely agreed that he has done a good job of turning it around. In the context of this conversation, I hope that the hon. Gentleman would also recognise that.

Mr Peter Bone (Wellingborough) (Con): I do not think there is a problem with what was set up; the problem is that the Inland Revenue allowed it to happen. I do not understand how such a contract can be awarded to somebody working full time. Unless there was some agreement to the avoidance scheme by the Revenue, it is not the law that is wrong, but the interpretation by the Revenue.

Danny Alexander: It is precisely those sorts of issues that the review will seek to examine and properly understand, and I am sure that the Public Accounts Committee might wish to take an interest in that issue.

Mr Alan Campbell (Tynemouth) (Lab): Will the urgent review extend to the top salaries of people employed in local government?

Danny Alexander: I have so far written to Cabinet colleagues for salaries in central Government, and the Treasury Officer of Accounts has written to accounting officers in central Government, but I will take that suggestion away and discuss with my right hon. Friend

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the Secretary of State for Communities and Local Government whether that particular extension would be appropriate.

Simon Hughes (Bermondsey and Old Southwark) (LD): The Chief Secretary has always been very robust in dealing with tax avoidance and tax evasion. May I seek an assurance that the Government’s policy will be what all those who have submitted their tax returns in the past few days want, namely to ensure that everybody in the public service, from the Cabinet Secretary downwards, and in local government service, pays normal tax like the rest of us, in a normal way, with no funny business on the side?

Danny Alexander: My right hon. Friend is absolutely right that we need to be robust about these matters. Frankly, I think this Government have been a great deal more robust on tax avoidance and tax evasion than our immediate predecessor. I certainly agree with the principle that he annunciates, which is that we need to ensure that everyone pays their fair share of tax and that arrangements are not put in place that are in breach of the guidelines that I set out earlier, which specifically say that arrangements to avoid tax for individuals should not be put in place.

Mark Durkan (Foyle) (SDLP): Can we really have any remedy to such scandalous devices without restitution? Will any review by Revenue and Customs have an eye to possible recovery?

Danny Alexander: As I said, the arrangement has been ended by the Student Loans Company in this case, as my right hon. Friend the Minister for Universities and Science has said. The review that I have undertaken is looking at the degree to which such practices are prevalent across the rest of Government. I have not given any consideration to the question of restitution, but I shall certainly do so in the light of the hon. Gentleman’s question.

David Mowat (Warrington South) (Con): Will the Chief Secretary confirm that his review will include all parts of the public sector, including, for example, the BBC, in which daily rates are quite prevalent?

Danny Alexander: The review that I have put in place covers all central Government Departments and their non-departmental public bodies. I will have to get back to the hon. Gentleman on whether that includes the BBC, but I can see the point he is making.

Mark Tami (Alyn and Deeside) (Lab): What message does the Chief Secretary think this arrangement sends to ordinary taxpayers in the public sector?

Danny Alexander: I do not think it sends a very good message. That is why we have ended the arrangement and why I have put in place a review to ensure that any other such arrangements, put in place by either this Government or our predecessors, is unearthed and that appropriate action is taken.

Brandon Lewis (Great Yarmouth) (Con): Bearing in mind that what has happened is, technically, entirely legal, as my hon. Friends have noted, and that this issue

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is a matter of what the Government feel is right in policy terms for Departments to do, can my right hon. Friend outline what safeguards, regulations or guidelines from the previous Government he has found in his early investigations that were designed to ensure that such practices do not happen in Departments?

Danny Alexander: There are strict guidelines from the Treasury that have been in place for some time, which are set out in the document “Managing Public Money”, the most recent edition of which was published in October 2007. I quoted the relevant section in my answer to the original question from the right hon. Member for Newcastle upon Tyne East (Mr Brown). The important thing is that Departments, and indeed accounting officers, understand that it is their responsibility to ensure that the rules for managing public money are followed in every case, and I regard it as my responsibility as Chief Secretary to ensure that they are.

Chris Bryant (Rhondda) (Lab): Clearly two Ministers were involved in the decision—the Minister for Universities and Science and the Chief Secretary—but so far the Chief Secretary has used practically every Murdoch excuse in the book: “I didn’t know the detail,” “Nobody showed me exactly what was going on,” and all the rest of it. Will he publish the precise documents that he and the Minister for Universities and Science signed off, so that the public can make a decision about whose responsibility it is?

Danny Alexander: The hon. Gentleman might not have caught up with this, but a great deal of information has already been released on this issue under the Freedom of Information Act, which is precisely how it has come to my attention and that of others. As I said, my role in such matters is to sign off the salary arrangements and ensure that they are appropriate, given the level of salary in place. As I said at Treasury questions a few days back, in the 83 cases in which I have been involved where a previous post holder has been in place, I have reduced the salary substantially in 45 cases and frozen it in a further 23.

Andrew George (St Ives) (LD): Although my right hon. Friend has already covered this matter to an extent, will he tell me what effective measures he inherited, and if they were inadequate, what action he took to put them right?

Danny Alexander: As I have said, the terms and conditions of appointments are negotiated by the appointing Department. I have a responsibility to control the salary levels in these sorts of cases, which I discharged in this case. I was not aware of any particular tax benefit to the individual involved. The arrangements in relation to tax avoidance and tax evasion that we inherited were not robust enough, and that is why we have taken significant steps to tighten them up, to ensure that we get the maximum amount of money from people across society. As several hon. Members have said, that is particularly important, given the difficult economic circumstances in which we find ourselves.

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Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op): As my hon. Friend the Member for Rhondda (Chris Bryant) has pointed out, the Chief Secretary to the Treasury has repeatedly denied knowledge of this arrangement, yet we know from “Newsnight” that the Minister for Universities and Science, the right hon. Member for Havant (Mr Willetts) signed off the deal. Will the Chief Secretary acknowledge corporate responsibility across Government and, despite all his protestations now, acknowledge that it was signed off by the Government?

Danny Alexander: As was revealed on “Newsnight”, and as I have said, a number of Departments were involved in this—the Cabinet Office, and so on. What I am trying to do now, through the review that I have put in place, is to ensure that these arrangements are not repeated in the future, and that any existing arrangements approved by this Government or the previous one are dealt with.

Alun Cairns (Vale of Glamorgan) (Con): Is not the root of this issue based in the complex tax structure that has grown up over the past 15 years or so? What reassurance can the Chief Secretary to the Treasury give the House that such issues will be rooted out during the tax simplification review?

Danny Alexander: My hon. Friend makes an important point. It is precisely the complexity of the tax system that creates some of the opportunities of which many people take advantage. That is why we have created the Office of Tax Simplification, which continually makes recommendations for ways in which we could simplify the tax system and tackle some of the avoidance schemes. The very complicated tax arrangements that we inherited are gradually being changed by this process, which is in the best interests of the country.

Paul Flynn (Newport West) (Lab): Will the Chief Secretary to the Treasury be the first Minister to accept responsibility for the conduct of the coalition in creating an “ineptocracy” of greed?

Danny Alexander: I am not quite sure how that relates to the question on the Order Paper today. I do not accept that description of what the coalition is doing. We are cleaning up the terrible economic mess that we inherited from Labour, and we are doing so in a way that is fair and that asks those with broader shoulders to bear the greater share of the burden. Frankly, if the hon. Gentleman’s party had not made such a mess, the country would not be in this position.

Miss Anne McIntosh (Thirsk and Malton) (Con): Will the Chief Secretary to the Treasury extend his review to cover the culture of bonus payments that has built up? Is he aware, for example, that the chief executive officer of the Rural Payments Agency is being paid a bonus for the work that he did while presiding over the Child Support Agency? Will my right hon. Friend root out this culture of bonus payments for poor performance, when they are simply not warranted?

Danny Alexander: My hon. Friend has raised an important point, although it will not necessarily fall within the scope of the review, which will look at the

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specific arrangements that we are discussing. However, we have substantially reduced the bonus payments to many individuals and the total amounts available in Departments’ bonus pools. That is the right approach. Of course, we also need to ensure that good performance is properly recognised at all levels in the public sector, and that is what the arrangements that we have in place do.

Mr Dennis Skinner (Bolsover) (Lab): Which Minister is going to carry the can for this mess?

Danny Alexander: Well, I am here answering questions about it, and that is appropriate, given that the question was a general one about tax avoidance, which I am very pleased to answer.

Jeremy Lefroy (Stafford) (Con): I welcome the Chief Secretary to the Treasury’s announcement today, and the robust action that the Government are taking against tax evasion and tax avoidance everywhere. They are certainly doing more than the previous Government did. Will he extend his review to cover the extraordinary salaries paid by NHS trusts up and down the country?

Danny Alexander: I am grateful to my hon. Friend for welcoming the tough action that we have taken in this case. I have contacted the Secretary of State for Health and the accounting officer in the Department of Health to ask whether any such arrangements apply in the areas for which they are responsible.

Jonathan Ashworth (Leicester South) (Lab): I welcome the review that the Chief Secretary to the Treasury has announced, but why did it not occur to him to launch such a review when he was asked to sign off this deal? Secondly, he said that he was not aware of the tax benefits to the individual involved, yet a BIS spokesman said last night:

“Details of the arrangement were transparent throughout”.

The right hon. Gentleman will presumably have received a submission from officials. Will he put that submission in the Library? At what point did the Minister for Universities and Science know about the tax benefits to the individual? Will all the submissions that the right hon. Gentleman received be put in the Library as well?

Danny Alexander: I am grateful to the hon. Gentleman for generously welcoming the steps that we have taken to deal with this issue. As I said in my statement, and in answer to several questions, I was not made aware of any tax benefit to any individual in this case. There is a great deal of information in the public domain that has been released under freedom of information, and I would urge him to study it.

Mr George Mudie (Leeds East) (Lab): So, is the Chief Secretary to the Treasury actually telling the House that the information passed to him when clearing the arrangement did not include details relating to the unusual aspects of the case, and that they were withheld by the Minister for Universities and Science?

Danny Alexander: No, I am not saying that at all. What I am saying is that the arrangements were put in place by the Department for Business, Innovation and

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Skills. Terms and conditions of employment are a matter for individual Departments. My role is to sign off the salary level for appointments paying over £142,500. As I have said in answer to several questions, in this case we reduced the salary and the expenses payments. I think that that was an appropriate response to the information that I was provided with.

Bill Esterson (Sefton Central) (Lab): Who signed off the tax avoidance measures in this deal?

Danny Alexander: I think the hon. Gentleman should be careful about how he characterises these arrangements, given that they are currently subject to a review.

Mr Dave Watts (St Helens North) (Lab): On a day when another 100 of my constituents have lost their jobs because of the failed economic policy of this Government, how does the Chief Secretary to the Treasury think those people will feel about the Government allowing tax dodges, and allowing Ministers to take no responsibility for their actions? When are the Government going to come clean?

Danny Alexander: I suspect that they will feel, as I do, that urgent action needs to be taken. We have changed the arrangements in this case, and the review will root out whether any other such arrangements were put in place either under this Government or when the hon. Gentleman’s party was in office. He should wait carefully for the results of the review.

Helen Jones (Warrington North) (Lab): The Chief Secretary to the Treasury has still not answered the question, so I shall put it to him again. Which Minister or Ministers signed off this tax avoidance scheme, and on what date?

Danny Alexander: I have made clear the answer to that question throughout my statement. I am responsible for signing off the salary level for appointments over £142,500, and I discharged that responsibility in this case.

Nick Smith (Blaenau Gwent) (Lab): Yesterday’s Financial Times reported: “Treasury beset by exodus of top staff”. Officials have also reported that the Treasury’s staff turnover rate is now “higher than McDonald’s”. Can the Chief Secretary to the Treasury ensure that there will be sufficient firepower at the Treasury to thoroughly scrutinise tax avoidance across Government, and did the Minister for Universities and Science, the right hon. Member for Havant (Mr Willetts) agree to this arrangement?

Danny Alexander: It is precisely for the reason that the hon. Gentleman suggests that, in the spending review, we announced an additional £900 million for Her Majesty’s Revenue and Customs to enable it to focus attention specifically on tax avoidance and tax evasion. I very much hope that he welcomes that decision.

Diana Johnson (Kingston upon Hull North) (Lab): Does the Chief Secretary to the Treasury regret not having asked more questions when he was asked to sign off this deal?

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Danny Alexander: As I have said, I signed off the salary level for the appointment. I reduced it significantly, and reduced the expenses paid under the arrangement. As soon as the fact that there was a potential tax benefit to an individual was given to me, in the last few days, I took the action described, including writing round to Cabinet colleagues on Tuesday.

Thomas Docherty (Dunfermline and West Fife) (Lab): Given that this is the Chief Secretary to the Treasury’s third and last chance, will he now tell us which Minister or Ministers signed off the tax arrangements on this deal?

Danny Alexander: I can tell the hon. Gentleman what I have said already. I signed off the salary level in this case. The terms and conditions of the appointment were put forward by the Student Loans Company in the Department for Business, and came to me for approval in the usual way, given the salary level that was being proposed.

Mr Speaker: Order. I am grateful to the Chief Secretary to the Treasury, the Opposition Front-Bench team and the 34 right hon. and hon. Members who were able to question the Chief Secretary. [ Interruption. ] The hon. Member for St Helens North (Mr Watts) is thirsting to raise a point of order, but I am afraid he will have to wait until after business questions.

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Business of the House

12.10 pm

Ms Angela Eagle (Wallasey) (Lab): Will the Leader of the House please give us the business for next week?

The Leader of the House of Commons (Sir George Young): The business commencing 6 February will be:

Monday 6 February—Second Reading of the Financial Services Bill.

Tuesday 7 February—Opposition day (un-allotted day) (half day). There will be a debate on responsibility and reform for British banks. This debate will arise on an Opposition motion. It will be followed by a motion relating to metal theft. The subject for this debate has been nominated by the Backbench Business Committee.

Wednesday 8 February—Motions relating to the police grant and local government finance reports.

Thursday 9 February—General debate on Somalia.

The provisional business for the week commencing 20 February will include:

Monday 20 February—A debate on Iran. The subject of this debate has been nominated by the Backbench Business Committee.

Ms Eagle: I thank the right hon. Gentleman for his statement. I commended him last week for announcing three days of actual Government business. Clearly exhausted after their exertions, next week the Government are to manage only a paltry one day of legislative business.

A few weeks ago, when I asked the Leader of the House for the date of the Queen’s Speech, he promised it “in due course”. On Sunday, The Independent on Sunday announced that the Queen’s Speech was delayed because the Government needed “more time” to secure their legislation. Given the Government’s incompetent handling of the legislative programme, if we have to wait for them to get their act together, we will not have a Queen’s Speech this year at all. Government business managers might find a deadline helpful, so will the Leader of the House finally tell us the date of the Queen’s Speech?

May I suggest to the right hon. Gentleman that one way to end the legislative logjam and enable the Government to get around to having a Queen’s Speech this year would be to drop the Health and Social Care Bill? This week, the British Medical Journal, the Health Service Journal and Nursing Times called for the Bill to be dropped because the NHS was

“far too important to be left at the mercy of ideological and incompetent intervention”.

The Prime Minister has told Ministers that he wants “less and better legislation”, yet last night the Government put down another 136 amendments to the Health and Social Care Bill—adding to the 1,800 already tabled. Does the Prime Minister actually know what is going on with his own Health and Social Care Bill? Can the Leader of the House find time for a debate on the NHS to give the Prime Minister the opportunity to inform himself on what the Government are doing and to give the Health Secretary the opportunity to come to this House to announce that he has finally seen reason and will drop this disastrous Bill?

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I note that the Prime Minister did not tell his Ministers that he wanted fairer legislation. Yesterday, the Government voted to cut support for disabled children; they voted to cut support for people recovering from cancer; and they voted for a crude cap that even the Secretary of State for Communities and Local Government says will increase homelessness. Can the Leader of the House find time—again, he has plenty of it—for a debate on fairness? That would give Ministers the opportunity to explain why, when they are cutting support for those who have the least, all we have had from the Prime Minister about the excessive rewards for those who have the most is pointless press releases.

The Chancellor, who has not been seen at the Dispatch Box since mid-December, is fond of saying, “We’re all in this together.” Will the Leader of the House explain, then, how this Government can triple student fees, leading to an almost 10% drop in university applicants, at the same time as they sign off a tax dodge for the chief executive of the Student Loans Company, which saves him tens of thousands of pounds a year? Will the Leader of the House explain, since the Chief Secretary to the Treasury did not, how that can be fair? While he is at it, will he explain which Minister was aware of this issue and went ahead and approved it?

Will the Leader of the House explain how it is fair that the Government did nothing to stop the chief executive of RBS taking a £1 million bonus and why it took the threat of an Opposition motion to put a stop to it? What have the Government been doing? If the Leader of the House could find time for a debate on fairness, perhaps the Deputy Prime Minister could lead it. There has been no sign of him explaining in public why the Liberal Democrats did nothing to stop bankers awarding themselves multi-million pound bonuses, yet voted to cut support for those who have the least.

The Deputy Prime Minister did pop into the Chamber for the European statement earlier this week—at least he turned up for some of that one, although he was too busy sulking to turn up in December. On that occasion, the Prime Minister told this House there would be absolutely “no way” other European Governments would be allowed to use EU institutions to enforce a fiscal compact. He said “no way”, as he had vetoed it. This week, the Prime Minister slunk back to announce that EU institutions would be allowed to enforce it after all, but it was all right because he was going to be watching them “like a hawk”. Who is he kidding? The only thing the Prime Minister watches “like a hawk” is the news cycle. We have a veto that has been un-vetoed to a treaty that is not a treaty—it is like the mad hatter’s tea party.

Sir George Young: Three of this week’s four days have been on Government business, on Monday we have the Second Reading of the Financial Services Bill, and on Wednesday we will deal with the local government and police grant orders, without which no local authority will get its funding next year. I hope the hon. Lady agrees that that is important legislation. There is an Opposition debate on Tuesday—I hope she is not going to describe that as “thumb-twiddling”, as she said last week. Next Thursday we have an important debate on Somalia, which some Opposition Back Benchers have asked for. I hope she will not be so dismissive about the House of Commons programme.

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As for the Queen’s Speech, the date will be announced in due course in the usual way—a response with which the hon. Lady may be becoming familiar. There is legislation still to get on to the statute book. On the one hand, she wonders why things are taking so long, but on the other hand I am constantly being asked for more time for debates. At some point, the shadow Leader of the House will have to work out whether the Government are pushing their programme through the House of Commons too fast or whether they are taking a leisurely time about it.

We have no plans to drop the Health and Social Care Bill. The principles of clinical-based commissioning, of patient choice and of any qualified provider as well as the linking of health and social care are important reforms. There will be an opportunity for further debate when the House returns.

We discussed the issue of fairness at some length yesterday. We are convinced that work must always pay more than benefits, which is at the heart of our welfare reform. We owe it to people who work hard, do the right thing and pay their taxes to make sure that there are some limits on welfare. Some families in Westminster receive £2,000 a week in housing benefit; I think that position is wholly unsustainable.

So far as the Chancellor of the Exchequer is concerned, I have announced a Second Reading on Monday of the Financial Services Bill; the hon. Lady may find that the Chancellor of the Exchequer is in the House for that. On student loans, we have just sat through 40 minutes of an urgent question, and I have nothing to add to what the Chief Secretary to the Treasury said.

As to bankers’ bonuses, the hon. Lady keeps on asking who signed off the contract with Mr Lester, but we know who signed off the contract for the bonus for Mr Hester at the Royal Bank of Scotland. There is no doubt that the Labour Government signed off that contract, which entitled him to the bonus. Since then, we have taken steps, which Labour never took, to cap bankers’ bonuses in cash. Last week, the Secretary of State for Business, Innovation and Skills announced new reforms to empower shareholders to control future pay.

Finally, the hon. Lady asked about the EU treaty. Perhaps at some point we could have an answer to the question of whether or not the Leader of the Opposition would have signed the proposed treaty.

Mr Stewart Jackson (Peterborough) (Con): We shall never know the true circumstances behind the murder of Avtar and Carole Kolar by, allegedly, the Lithuanian career criminal Rimvydas Liorancas, but we do know that he entered the United Kingdom without a passport. May we have an urgent debate on the sharing of criminal records data with law enforcement agencies throughout the European economic area, which would prevent such tragedies from ever happening again?

Sir George Young: I am sure that the House has sympathy for my hon. Friend’s constituents who were murdered. As for the Lithuanian, who I think has taken his own life, I understand that police inquiries are continuing, so it is difficult for me to comment specifically on the case. I will, however, raise the general issue of the sharing of information about criminals with the Home Secretary, and will ask her to write to my hon. Friend

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giving the details and specifying the concordats that have been entered into ensuring that relevant information is shared between countries.

Natascha Engel (North East Derbyshire) (Lab): Obviously I do not want to sound dismissive, but despite the ample amount of time that has been available in the Chamber recently, the Government have chosen not to allocate it to Back Benchers, choosing instead to allocate it to general debates both today and next Thursday on subjects that they have chosen themselves. Meanwhile, Back Benchers have suggested to our Backbench Business Committee almost 20 debates on important matters such as assisted dying, the future of social care and the state of mental health services. I know that the Leader of the House is aware—because he himself has written to me about it—that there are three outstanding e-petitions which have secured 100,000 signatures. He has asked me to consider them for debate without giving me any time for them to be debated. Will he please stop bed blocking Back-Bench time, so that we can meet our basic commitments to Back Benchers and to e-petitioners?

Sir George Young: I commend what the hon. Lady said at the beginning of the Back-Bench debate on the European Council a week ago, when she made clear that responsibility for finding time for pre-European Council debates fell within the remit of her Committee, but of course the Government will do what they can to ensure that dates are available for such debates. She will have seen the recommendation in the Procedure Committee’s report that on Monday afternoons Westminster Hall should be used specifically for debates on e-petitions, with which I have some sympathy. The Government will respond in due course, and that will provide a partial solution to the issue that she has raised.

I am aware of the pressure on the hon. Lady’s Committee, and we will try to accommodate her with some extra time between now and the end of the Session. We are committed to providing 35 days in a Session; so far we have provided at least 49, and we hope to provide more. A number of days were provided before the Committee was set up, which were used for general debates. I sympathise with the hon. Lady over the problem that confronts her, and I will do what I can to help.

Martin Vickers (Cleethorpes) (Con): The wife of my constituent Mr Gordon Roberts has been placed in a home against the wishes of Mr Roberts. Sadly she suffers from dementia. May we have an urgent debate to consider the criteria according to which patients can be placed in homes against the wishes of their next of kin?

Sir George Young: I am sorry to hear about what has happened to my hon. Friend’s constituent. He will know that, under social care legislation, relatives of an individual such as his constituent have a right to be consulted before any package is put in place, and that that entitlement is accompanied by certain other rights. I will raise the matter with my right hon. Friend the Secretary of State for Health to see whether any intervention is possible, but in this particular case much will depend

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on the role of the local authority, and on who was responsible for making the final decision to place the wife of my hon. Friend’s constituent in a home.

Mr Tom Watson (West Bromwich East) (Lab): A debate on the future of the Freedom of Information Act would allow us to test the use of private e-mails by Ministers. I fear that my constituents are losing out because Sandwell council may not have been able to test the validity of the decision to cut the Building Schools for the Future programme from £120 million to zero. However, there is a way of getting round that, which is for the Secretary of State for Education to publish all the private e-mails relating to Building Schools for the Future that he has exchanged with his special adviser Dominic Cummings and the civil servant Ms Narozanski.

Sir George Young: The freedom of information legislation is on the statute book. I advise the hon. Gentleman to take the action that is available to him through the process of appeal against decisions if he is unhappy with some of those decisions, and has not obtained information that he wants.

Andrew Jones (Harrogate and Knaresborough) (Con): Every day about 75 people in Yorkshire and the Humber are diagnosed with cancer, but at the same time great work is being done in our area in the form of medical research and work on improving training techniques for surgery. I have seen that work being done at the Leeds cancer research centre, which is a partnership between the NHS, the voluntary sector and Leeds university. May we please have a debate on medical research and all that the Government are doing to support it?

Sir George Young: I should welcome such a debate. Within the budget of the Department of Health, research is a priority. As for the specific issue of cancer, we have created a £200 million a year cancer drugs fund to help cancer patients gain more access to the life-extending drugs that they need, which has financed more than 10,000 treatments. I know that my hon. Friend will welcome that.

Kate Green (Stretford and Urmston) (Lab): Will the Leader of the House arrange a debate on dignity at work in Parliament? Last night I was disturbed to learn that the guest beer in the Strangers Bar is called Top Totty, and that there is a picture of a nearly naked woman on the tap. As well as arranging a debate, will the Leader of the House join me in asking for that beer to be withdrawn from the bar immediately?

Sir George Young: I was not aware of that particular picture in the bar. I will raise the matter with the appropriate Officer of the House through the House of Commons Commission, and I am sure that appropriate action will be taken. I should very much regret it if any offensive pictures were on display in any part of the House.

Mark Pritchard (The Wrekin) (Con): May we have an urgent debate on Sudan? Will the Leader of the House join me in calling on the Governments of North and South Sudan successfully to conclude the talks in Addis Ababa today on the outstanding issues of the border, the sharing of oil transit costs, and the stopping of the funding by the north of militia in the south?