Dr Whitehead: As the right hon. Gentleman has made specific mention of the consumer benefit that will arise from electricity market reform, would he care to

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place on the record this afternoon how many consumer-based levies are in his energy market reform proposals, and what price effect their implementation will have on consumer bills?

Mr Davey: When we publish the draft Bill for pre-legislative scrutiny, I will set out a range of details, with a lot of technical documents. What I can say to the hon. Gentleman ahead of that is that there will be fewer levies than Labour planned. Labour planned a levy on bills for carbon capture and storage, which I believe would have cost consumers £9 billion. We are not going ahead with that.

This is a difficult time for many households. I am sure that Members on both sides of the House have heard from constituents who are struggling to pay their bills or keep their businesses afloat. Promises from politicians will not make the end of the month come any sooner, but the Government are doing what they can to help. We are making it easier for people to get a better deal from their energy suppliers; we are bringing energy efficiency to the mass market, making homes in every corner of the country cheaper to heat; and we are reforming our electricity system, to protect consumers from a more unstable and more expensive energy future. These three objectives share a common cause: not only will they insulate our consumers from energy price rises, but they will deliver a cleaner, more secure and more affordable energy system for generations to come. This is government for the long term, and that is what this coalition stands for. We are taking action where the last Government delivered inaction.

Several hon. Members rose

Mr Deputy Speaker (Mr Nigel Evans): Order. Please resume your seats. I remind the House that the amendment in the name of the Leader of the Opposition has been moved and that the House is therefore now debating the amendment.

1.38 pm

Malcolm Wicks (Croydon North) (Lab): Welcome to our debate, Mr Deputy Speaker; it is good to see you again.

My intention today is to talk about aspects of family life and how they relate to the “cost of living” theme. However, as a former Energy Minister, I am bound to say that I have been stimulated by the debate to make a few other remarks. Let me offer some friendly advice to the Secretary of State: his soundbite of the speech—that he is in favour of the “solar many” rather than the “solar few”—may not go viral. Indeed, I think it represents a formidable rewriting challenge for his speechwriters, if I may say so.

I will not get too cross with the Secretary of State for saying, as a bit of political knockabout, that the last Labour Government made no strategic decisions at all. Empirically, that is incorrect, as I think of the formidable legislation on climate change, which was supported throughout the House. For the first time, Parliament—the Labour Government were in power—decided to legislate to reduce carbon emissions. That is probably the most radically ambitious piece of legislation ever to go before this House. As I recall—I do not work for News International, so I do have a memory—it was also the Labour Government who set renewable energy targets,

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although they were more than just targets.


I hear a Member mumbling “Europe” at me from a sedentary position. I do not know whether it was a Eurosceptic, but yes, of course Europe is relevant; our party believes in Europe. We subscribe to European targets and during the period of the Labour Government we became the biggest country in the world in terms of investment in offshore wind. So much for us not having any strategic direction!

Dr Huppert rose—

Malcolm Wicks: I will give way in a moment—if the intervention is a good one.

As a Government, we also tried to push forward carbon capture and storage—a formidable endeavour, and I congratulate the Norwegians on the progress they have made. It would be good to hear from the Government at some stage where they think we are on CCS because it is a vital part of our low-carbon objectives, given that despite renewables and nuclear, we will continue to invest in and use a great deal of fossil fuels in the future.

We also need to talk about nuclear energy. The withdrawal of the German consortium has been a formidable blow to our plans for nuclear energy, but I put it to the Secretary of State that, despite what he says, the last Labour Government’s decision to allow a new generation of civil nuclear reactors was a crucial strategic decision. As I recall—again I draw on my memory—one reason why Parliament took rather a long time to reach that decision was that one of our major parties, and I think it was the Liberal Democrats—

Jim Dowd (Lewisham West and Penge) (Lab): Major?

Malcolm Wicks: I am a kind person, and I suppose it was major until recently. That party was adamantly opposed to nuclear energy. I ask the Secretary of State whether he has now made a strategic realignment in his own mind to support nuclear energy. I hope he has. I think the fact that the Prime Minister has appointed Liberal Democrat Members to this important role of Secretary of State for Energy and Climate Change shows that he maintains a sense of humour—one that he will need in the weeks and the trials, which is a term I use in the generic sense, to come.

While I am speaking about energy policy rather than family policy, which I shall come to in a moment, I want to emphasise the importance of the global context. We cannot discuss this issue only domestically. If I am right, the International Energy Agency projects in one of its central scenarios that global energy demand, mainly from non-OECD countries, will rise by about 40% by 2035. We must view our issues within that global context, we have to take energy security seriously and we have to build up what I have always called home-grown energy as much as we can, alongside reducing energy demand—hence the importance of nuclear and of renewable energy.

Dr Huppert: To rewind, let me say that the Climate Change Act 2008 was an excellent Act, and it had cross-party support. I am delighted that it was enacted. Does the right hon. Gentleman agree that Governments have to take a lead in showing that they can use less energy? He will remember the 10:10 campaign, designed to persuade people across the country to reduce their

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energy usage by 10%. Does he regret the fact that his Government voted down a Liberal Democrat proposal that the entire Government should sign up to that? Will he congratulate this Government on signing up to it and on reducing energy usage by 14% in their first year?

Malcolm Wicks: What I am proud of is that across a range of fronts, including transport, where we saw the development of hybrid cars, for example—I do not say that the Labour Government were responsible for them, but we encouraged them—energy demand reduction in industry and in the service and retail sector, and, of course, literally on the home front, with our domestic dwellings, we made many efforts to reduce energy demand. We need to do deal a great deal more. Irrespective of what party we come from, the first item on the agenda for energy policy has to be energy efficiency. It is the cheapest and cleanest solution and the most secure, as we are not dependent on foreign shores for reducing energy demand. That is vital.

Simon Hughes rose—

Malcolm Wicks: I will give way one more time, but then I shall move on to discussing what I thought was to be my main subject today.

Simon Hughes: To clarify for the right hon. Gentleman, who raised the issue, the Liberal Democrats are opposed to nuclear power. We recognise that there is no majority in this House for that position, so a deal was done in the coalition agreement that allows the Government to pursue nuclear power provided that there is no subsidy—direct or indirect—for it. My view is that that means it will not happen because it has always needed to be subsidised.

Malcolm Wicks: A very senior Liberal Democrat Member says that nuclear will not happen, while the Liberal Democrat Secretary of State for Energy and Climate Change says that it will. I suspect that there may well be more rows in that party in the weeks and months to come—for other reasons, too—but an interesting divide has been opened up.

Let me move on from nuclear energy to the nuclear family—and other families, too—as the main focus of my speech today. I start with the proposition that although we are all currently concerned with how to develop a strong economy in really difficult times of economic austerity, equally important for the well-being of our society—I do not think I exaggerate—is what we might call the strong family. Whether families are based on marriage or cohabitation or whether they be two or one-parent families, it is important that they are strong, but many families are struggling and need our support.

Many issues that we debate in this Chamber—education, for example—depend as much on what I call strong families and strong parenting as on other measures the state can provide, such as support for schools and colleges, Sure Start and so forth. I have always taken the view that parents are as important as teachers for education and that families are as important as schools. Many do very well.

How family life has changed in this country is an issue we need to understand, as the family of today is not the family of 1945, and social policy needs to follow

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the grain of understanding these changes to family life. Not so long ago, a child left school at 14, 15 or 16 and became an economic asset to the family. Now, of course, as some of us know to our cost, our children are financially dependent on us often right into their early to mid-20s—and for good reasons, because of the development of higher education and the need for children to equip themselves for a more sophisticated society.

The strong family, then, is an important theme, and I want to touch on two policy consequences flowing from it. The first is child care and the related issue of parental leave, which is a welcome feature of the Queen’s Speech. We await the detail of the Government’s proposals on parental leave and we will need to scrutinise them. The importance of these issues relates to my theme of family change. Gone are the days when it was assumed that the father would go out to work full time and the mother would stay at home to look after the children—often, in the past, quite a number of children. The fact that those days have gone is very welcome—as is the water brought over to me by my ever-so-kind Whip. I do not want to get away from the idea that the Labour Whips are tough and fearless and nasty, but they can be kind too.

As I said, those days have gone, and the rise of what many people call the dual-worker family—the rise of women and mothers in employment—has come about for good reasons. It reflects a growing equality in our society, and the high educational achievements of our girls and young women. It also reflects the fact that people are now demanding a higher living standard than was experienced by their mothers and grandmothers. In a high-cost society, two incomes are more desirable than one.

Jim Shannon: Will the right hon. Gentleman give way?

Malcolm Wicks: May I pursue my theme for a while? The hon. Gentleman must remind me later that I was going to give way to him.

This is not a painless revolution. I do not want to compete with the Secretary of State’s soundbite, but for many women and men there is what might be called a care-career collision.

Mr MacNeil: That is much better.

Malcolm Wicks: The alliteration is better.

What I mean is that the time when young men and women in their mid-to-late twenties and thirties are working hard at their careers, and when their employers are watching them, is precisely the time when they think about the need to have children. That is a dilemma and a difficulty that we have not entirely thought through.

One consequence of the fact that women as well as men are working hard during their period of maximum fertility is the inability of many women to have families of the size that they would like. There is interesting evidence to that effect in a 2006 study by the Eurobarometer, the most recent that the Library could find for me. It states that in the UK in 2006 the mean ideal number of children for women—as it is an average, a funny statistic emerges—was 2.5, but the actual number of children achieved by women aged between 40 and 54 was only

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1.9. As I have said, it is possible to laugh at such statistics, but we can see what lies behind them. Many women, and men, who would have preferred to have, say, three children end up with two, many who might have wanted two end up with one, and others may not be able to have children at all.

I am not suggesting that there is some Utopia in which everyone can achieve their ideal family size, but I do believe that there are economic and employment pressures that make achieving an ideal family size difficult in Britain and, indeed, throughout Europe. That ought to concern us, not least at a time when data show that birth rates are below replacement level in this country.

Another consequence of the care-career collision is the sheer hassle and difficulty that many families have to undergo in order to organise substitute child care. The growth of child care is wholly beneficial—it has improved the lot of families and, in many cases, children—but whenever I discuss the issue with younger families today, I have the impression that there is barrier after barrier. Often it is not just one substitute child carer whom parents need to employ. Because of career patterns, children may have to be dragged out of bed early and sent from one carer to another. What happens when a childminder is ill? What happens when the mother herself, who should be working, knows that her child is ill? Many parents have to resort to fibbing to their employers that they themselves are ill, rather than their children.

What I am saying—not too controversially, I hope—is that I do not believe the development of child care has led to some kind of nirvana. People may say, “It would be better if we had more child care, if the training and the quality of child care were better, and if it were cheaper”, and I understand their argument, but I want to challenge more fundamentally the proposition that we have reached a nirvana. I believe that family decisions made by men and women, by dads and mums, would be better decisions for families and for children if parental leave became a much more important feature of our employment and social policy. We have made some progress and I welcome that, but the average citizen of the 21st century will live until her eighties or nineties, and we are threatened with the possibility that many children born today will reach the age of 100. That is a long life span. Are we really saying that, during the two or three critical years after a child is born, substitute child care is the only way of ensuring the well-being of our children and their parents?

Now I will give way to the hon. Member for Strangford (Jim Shannon), as I promised to do a long time ago.

Jim Shannon: I thank the right hon. Gentleman, and congratulate him on a speech that we are all finding very thought-provoking and stimulating. One aspect of child care that he has touched on but not dwelt on is the role of the grandfather and grandmother. Has the possibility occurred to him, as it has to some people, that the increase in pension age will mean that they cannot provide families with the free child care that grandparents have provided in the past? Might that not also be a critical factor?

Malcolm Wicks: It could well be a factor. Certainly I acknowledge the hon. Gentleman’s main point that, although we often talk about the childminder or the

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nursery or the crèche, as I have been doing today, the role of the extended family—granny and granddad—can be vital.

To support my case that we need to take parental leave far more seriously, let me cite a recent, or fairly recent, pamphlet published in 2008 and written by a number of people, including Catherine Hakim. The publisher was Policy Exchange. Politically I am widely read, or rather the Library has briefed me widely. Catherine Hakim and her colleagues produced some interesting data. When parents were asked what, ideally, they would like, they did not all say “More child care, more child care”. Many simply wanted to spend more time with their own children when they were tiny. According to the report,

“Overall, a two-thirds majority of working mothers of pre-school and school-age children would prefer to work fewer hours or not at all, even if better childcare were available. Given the choice, what mothers prefer is to be at home with their children, not more and better childcare”.

That is an interesting finding, but I would qualify it by saying that we must not turn this into a debate about how mothers should be at home, as we are in danger of doing. Many mothers have educational qualifications that are superior to those of their partners, and careers that are blossoming. The debate about parental leave is not just about mums, but about dads as well. Too often in family and social policy, we talk about families as if they were just women and children and do not talk enough about fathers.

Mrs Sharon Hodgson (Washington and Sunderland West) (Lab): Will my right hon. Friend give way?

Malcolm Wicks: I will give way to all sorts of people shortly.

We need to draw on some of the experience of Sweden and other Scandinavian countries. We need parental leave which—almost in a social engineering way—enables and encourages dads as well as mothers to take parental leave.

Mr Davey rose—

Malcolm Wicks: I will give way to the Secretary of State. Perhaps he is going to answer my question about nuclear energy. He has had enough time in which to think about it.

Mr Davey: I have been listening closely to the right hon. Gentleman’s speech. Before I became Secretary of State for Energy and Climate Change I was in charge of employment relations in the Department for Business, Innovation and Skills, and, indeed, did the work that took place before the announcement in the Queen’s Speech of legislation on flexible parental leave, and I can tell the right hon. Gentleman that that legislation will deliver many of the developments for which he is arguing. For instance, it will ensure that dads and members of extended families can be more involved. Shared parental leave, the extension to all of the right to request flexible working, and an increase in unpaid parental leave will tackle all the issues that he has raised. Those are the most radical proposals that have been made in this area, and they derive from the best practice in the world, which I believe is found in Sweden and Germany.

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Malcolm Wicks: That is good, and when we see the Government’s proposals we can debate whether they go far enough and what our long-term ambitions might be.

On parental leave, perhaps we should be thinking of several years, rather than shorter periods. However, with dads in more and more families playing a much greater role than their own dads did, we must concoct the policy so that we give them, as well as the mothers, maximum encouragement to take parental leave.

The Secretary of State’s intervention—on an aspect of nuclear family policy, rather than nuclear policy, which he is shyer about—made a point that Government Members need to understand. Getting the right balance between work and family life—not just for parents but for carers of elderly people and many others—is not a distraction from economic growth; rather, it enables us to have a modern work force that will help promote growth.

Mrs Hodgson: My right hon. Friend is making an excellent and thought-provoking speech, especially on child care. Only one in five women earn more than their partners, the effect of which on the ability to take shared parental leave we should consider.

Malcolm Wicks: That raises the serious and fundamental question of why this inequality still exists. It also raises a more practical question, which I think my hon. Friend was implying: how can dads who are bringing in the great majority of the family bacon take much in the way of parental leave?

Mrs Hodgson indicated assent .

Malcolm Wicks: I understand that point, which raises the difficult issue of what financial allowance we can make for parental leave. We need to get to grips with this.

I turn to an issue that the House has discussed before. I put it to the Government that their policy on child benefit is a case study in unintended consequences—and I am being kind here. I speak as a great advocate of child benefit, which, along with the family allowance before it, has had its supporters on both sides of the House, right back to the pioneering work of Eleanor Rathbone, who wrote such important works on the importance of what she called family endowment. This Government’s decision to end the universal nature of child benefit by withdrawing it from people who earn above a certain income is a catastrophic strategic decision. It is a move towards potential means-testing that we need to be aware of.

Jake Berry (Rossendale and Darwen) (Con) rose—

Malcolm Wicks: The hon. Gentleman wants to defend the policy.

Jake Berry: Is the right hon. Gentleman seriously suggesting that people in my constituency, where the average salary is well below the national average—some of my constituents earn £14,000 or £15,000 a year—should pay tax to give child benefit to Members of this House, who are earning £65,000?

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Malcolm Wicks: Yes, I am, because our welfare state, although a mixture of universal and selective provision, nevertheless needs that universal core if it is to command public respect. Those of the hon. Gentleman’s constituents who have a couple of children, and who will suffer as a result of this provision, have costs, by definition, which the single person or the childless couple do not have. It is part of a decent society that we recognise those costs. It is also important that we do not move toward arguing, as the hon. Gentleman might want to argue, “Why on earth provide free education or a free health service to people earning £70,000? Why not cut that out?” That is a very slippery slope.

Jim Dowd: Does my right hon. Friend agree that, given the orthodoxy among Government Members as articulated by the hon. Member for Rossendale and Darwen (Jake Berry), it is patently clear that the winter fuel allowance and universal free travel for pensioners cannot last?

Malcolm Wicks: That is the logic of the position and, to be fair, many on the free-market wing of the Conservative party—such as the Institute of Economic Affairs think-tank—have been arguing for decades against universal provision and for a move towards a residual welfare state just for the poor, guarded strictly by the means test. That is the logic of some of these arguments.

I want to make two more specific points that I think colleagues understand. As I said, this policy is a case study of unintended consequences. The Prime Minister, the Chancellor of the Exchequer, Treasury Ministers and officials did not set out to say—I am being generous now—“Let’s design a child benefit policy so that a family in which mum and dad earn just under £50,000 combined will maintain child benefit, but if there is only one earner bringing in over £60,000, that family will lose child benefit.” No sensible Treasury policy would have reached that conclusion, but because this one was rushed and ill-thought-out, that is the consequence. I do not know what the constituents of the hon. Member for Rossendale and Darwen (Jake Berry), some of whom will be affected by this policy, will make of that. Where both members of a couple are earning a lot of money—nearly £50,000 each, following the revision, so they will have almost £100,000—they will keep their child benefit. However, if their next-door neighbours consist of a mum at home looking after the young ones, and a father earning over £60,000, his child benefit will be lost. Not even the hon. Gentleman, in his loyalist rash of enthusiasm, would defend that, surely. Would he?

Jake Berry: Surely the logical conclusion of the right hon. Gentleman’s argument is that all benefit should be universal. Does he think that all benefit, such as council tax benefit, should be universal? If there is no means test and people get the benefit regardless of their earning capacity, even if they are among the richest people in the country, that is the logical conclusion of his argument.

Malcolm Wicks: As I said earlier, any sensible social policy balances universal and selective provision. Many of these higher-income groups are paying substantial amounts of tax and thereby contributing to the community chest.

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The story becomes yet more bizarre if we consider the second unintended consequence. Following the reaction against the Treasury decision to introduce a cliff-edge, resulting in the sudden loss of child benefit, Treasury officials were told to think again, and they came up with the idea of a taper. Those whose income is above the magic number will still get some benefit, but slowly but surely, it will be tapered away. As a consequence, it is estimated that 500,000 more people will have to go through self-assessment or PAYE. This Government, who are good on the rhetoric of cutting red tape and the “back room”, as they call it, have come up with a policy so bizarre that 500,000 more self-assessments or PAYE assessments will have to be made. I put it to them that it is time to admit that they have got this one wrong, to think again and to restore the child benefit, which is such an important policy if we are to build stronger family life.

2.9 pm

Mr Edward Leigh (Gainsborough) (Con): It is a pleasure to follow the right hon. Member for Croydon North (Malcolm Wicks). We all know that he has not been very well recently, but he gave a fantastic speech and we wish him well. I join him in a lot of what he said about promoting family life. He made some interesting comments about the desire of women to have more children—my wife and I would have liked to have had more children, but perhaps six is enough—and about child benefit, and I will say a bit about waste in Government spending in a moment. I support child benefit as we have always had it, because not only is it the most popular benefit, but there is no fraud, error or means-testing to it and it works. So much of the waste in government is down to excessive micro-management of benefits. That is why I, like the right hon. Gentleman, believe in child benefit as we have always understood it. Many middle-class people may be under heavy financial pressure and we should recognise in the benefits system the cost of children, although I suppose I must declare an interest, as people might say, “Well, he would say that, wouldn’t he?”

What I really want to discuss today is something that perhaps not many others—certainly not many Opposition Members—will be talking about. This debate is about the cost of living, but the greatest burden on families is the burden of government, and heavy and wasteful Government spending. Total Government spending increased under the previous Labour Government by 55% in real terms over the 13 years. We hear a lot from the Labour party, and indeed from the Government, about how we are now trying to correct that. Indeed, it is in the political interest of both the Labour Opposition and the Government to exaggerate what the coalition is doing to try to rein back a disastrous financial situation. Let us just imagine what would happen if a family’s spending increased by more than half but there was a paltry increase in the real wealth coming into that household. This coalition Government’s spending cuts from 2010 to 2015 will amount to only 3% of Government spending, so let us not get too excited when the Labour party tells us that these “horrendous cuts”—up to now there have been no cuts in spending; there have been cuts in the deficit, but no cuts in spending—have produced the dire economic situation we are in.

The Office for Budget Responsibility, an independent body, forecasts that for the coming year almost 41% of

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all output in our country—all that hard-earned money, from people slaving away in offices, factories and services—will go to the Government. That is more than the figures for America, Australia and Canada. We have heard a lot about the European Union in the past week—we have heard about its difficulties, its waste, its over-taxation and its overspending—but even many EU countries have a lower tax burden than Britain. Such countries include Ireland, Greece, which is apparently the basket case of Europe, and Spain; they all tax their economies less than we do. We are in a dire situation and we have to address it.

The Government expect to borrow a staggering £126 billion this year—imagine an ordinary family having to borrow such a proportion of their total spending every year. I take a particular interest in this because I firmly believe that we can deliver the same outputs for people in effective public services with very much more efficient inputs. I believe that big government is always accompanied by big waste.

Albert Owen: When the hon. Gentleman said that other European countries tax less, was he talking about the total tax take, including from industry, or just about personal taxation? As I recall it, personal taxation is significantly higher in the Republic of Ireland than in the United Kingdom.

Mr Leigh: I am talking about total taxation, which is the important thing to understand. I know that it is difficult to compare countries. For instance, we often talk about Italy being a basket case in terms of Government borrowing, but private borrowing is very low in Italy. We have to address this problem by considering the total taxation of all output, because that is what is of interest to efficiency and an efficient Government.

As I was saying, big government is accompanied by big waste. I am sure that many hon. Members were shocked, as I was, by a National Audit Office report in January—or rather by a report of reports; I am sure that everybody in this House avidly reads what the NAO says every week. This report was published in January, so it was not an attack on the previous Labour Government; it relates to now and the situation this minute. It is about this apparently hard-hitting, right-wing Government who are cutting left, right and centre, and persecuting the people—that is the charge against the Government; I would not say anything like that, of course. The report suggests that there is waste, at the moment, of more than £31 billion across government. Hon. Members may recall that Philip Green carried out an efficiency review, after which he said:

“You could not be in business if you operated like this. It would be impossible.”

His review identified, among other things, £700 million in saving on the Government telephone bill alone. In the past two Parliaments, the Public Accounts Committee conducted more than 400 hearings on waste. Such hearings are carrying on in this Parliament, as they will in the next Parliament and the Parliament after that. Nobody can tell me that enormous opportunities to cut waste do not remain.

Why is that issue important, given that this is a debate on the cost of living? This is not some anorak issue in which only accountants or economists should be interested. Every taxpayer in this country should be interested in

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what is going on in government at the moment, because the public sector is funded from the pockets of ordinary people and ordinary firms—many of them small, struggling firms—across Britain. Spending money in such a way means that the public and firms are being hit by a double-whammy, as prices are inflated by wasteful government spending, and firms have less of their own money to invest and families have less to spend. That situation is not fair.

We have mentioned the complexities of the benefits system and discussed child benefit. In addition to a hugely wasteful government system, Britain suffers from a horrendously complex tax system. Our tax code is now the longest in the world. Do a Conservative Government find that satisfactory? Our tax code has recently overtaken India’s in length and has doubled in size since 1997. Our horrendously complex tax system may have allowed the previous Government to keep many of their taxes a secret, but it has led to Britain being ranked 89th in the world, behind Nigeria and Zimbabwe, on the burden of government regulation in a recent World Economic Forum report. That simply is not good enough. I know that my friends on the Treasury Bench are doing their best, but they are not trying hard enough. They have to do better, because ordinary people and ordinary firms are paying for all this.

That complexity is structurally biased against ordinary workers and small businesses, because they lack the resources to investigate all the available loopholes. According to the Centre for Policy Studies, the effective marginal tax rate for some people on low incomes is as high as 96%. We know that, because we have done all these studies; the right hon. Members for Croydon North and for Birkenhead (Mr Field) served with me on the Select Committee on Social Security for many years, and for many years the right hon. Member for Birkenhead has campaigned on the issue of the trap for ordinary people, particularly those at the bottom of the heap, of paying marginal tax rates of 96%. We are crushing our own people, and not just with the waste for which we are responsible in our own spending. We oversee that waste in this House of Commons—we are responsible for it; nobody else out there is responsible. We crush our own people under a hugely wasteful system of government inefficiency and with increasingly complex taxes and benefits.

The rich do not suffer from that. The marginal tax rate for top-rate taxpayers is just 57.8%—the very richest do not even pay that. They do not even pay 57%. With the benefit of having successful and hugely expensive accountants, they are paying 10% or 15%.

In the most recent global competitors report by the World Economic Forum, three of the four biggest problems facing UK businesses were identified as tax rates, tax regulations and inefficient Government bureaucracy. Let me set out what I believe we should have in the Government. Apparently we are going to have a reshuffle soon. What we need are Ministers—the Prime Minister has to check on their performance—who are, like a non-executive director on the board of a private company such as Tesco, obsessed not by policy but by efficiency. We have three excellent Ministers sitting on the Front Bench—the Secretary of State for Transport, the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Wealden (Charles Hendry) and the Minister of State, Department of

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Health, my right hon. Friend the Member for Chelmsford (Mr Burns)—as well as our Whip. I am sure they are doing these sorts of things every day, but much more could be done. I hope the Whip is listening to all the kind comments I am making about the Ministers. I sincerely believe that this is one of the most important things the Government could do.

An obvious conclusion to reach, given what I have said, is that the tax system should be simplified. That would reduce costs and simultaneously be likely to increase revenues. As I have argued again and again, this is not necessarily a market-driven, right-wing point of view, because the lower-paid would benefit from it. The natural conclusion of such simplification would be a much flatter rate, or even a flat-rate tax system. Such a system has been successfully introduced in places as diverse as Serbia, Hong Kong and Russia. When I was in Russia recently, I spoke to a young entrepreneur. The flat-rate tax in Russia is 13%. How extraordinary that the former Soviet Union now has a more entrepreneurially based system than we have—a flat-rate tax of 13% in a large economy such as Russia.

There is a precedent for such an approach in this country. When the Thatcher Government more than halved the top tax rate, the proportion of income tax revenue paid by the highest earners rose. As I said in our debates on the Budget, I welcome what the Chancellor of the Exchequer did in cutting the top rate from 50% to 45%; indeed, I think it should be cut from 45% to 40%. Such people do not bury their money in the ground. If they are taxed less, there is more entrepreneurship and more of them stay in this country. They earn more and give more, and less effort is spent on tax evasion and tax avoidance.

As important as tax reform is, the key to Government finance is a reduction in spending. If we spend less, we can tax less—it is that simple. There is nothing inherently good about Government spending, although Ministers from parties on both sides of the House have apparently congratulated themselves on how much they have spent on the health service and education. They congratulate themselves on spending inefficiently what other people earn.

Mr MacNeil: The hon. Gentleman says there is nothing inherently good about Government spending, but good can come from Government spending if it is on assets in order to redevelop capacity in the economy. We could have that rather than the current austerity programme, which is starving the economy.

Mr Leigh: We all accept that the Government can usefully spend on assets. I do not deny that. There is nothing wrong with Government spending, but there is something wrong with wasteful Government spending. In a recent global competitiveness report, Britain was ranked an unbelievable 72nd in the world behind Ethiopia and Tajikistan on the wastefulness of Government spending. That simply is not good enough. If a private company was ranked so low in the pecking order, questions would be asked about the people serving on the board, would they not? We have to try harder and do better. Government money does not come from nowhere. Every

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pound wasted by Whitehall is a pound that could have been invested by a British company or spent by a British family.

Before I conclude, let me speak about a few other issues, including aspects of the Queen’s Speech which I welcome. The right hon. Member for Croydon North talked about family life. One reason I have supported a marriage tax allowance, which sadly was once again not in the Queen’s Speech, is that it would address precisely the point he was making—the tax disincentive for a parent, usually a woman, to stay at home to look after her children. Nobody pretends that a tax gets people married or keeps people married. It simply deals with the totally unjust situation that a married person, normally a woman, who stays at home and looks after her young children is uniquely attacked by the tax and benefit system. That cannot be right.

I am glad that the high-speed rail line was not in the Queen’s Speech. I will do a deal with my right hon. Friend the Transport Secretary, who will sum up the debate. I will support her high-speed line, which will admittedly cut the journey time between London and Birmingham—no doubt that is all very good and means spending the assets that the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) spoke about—if she will support the building of a third runway at Heathrow airport.

The Secretary of State for Transport (Justine Greening) indicated dissent .

Mr Leigh: She shakes her head, sadly, but one never knows: we might win this argument in the end. This is about ensuring that the UK is globally competitive. I have talked a lot about waste in Government spending and about spending less. We have to be globally competitive, and Heathrow has to remain globally competitive. The City of London and Heathrow are the two things that have really propelled the British economy forward over the past 15 years. The situation seems madness to me. If Heathrow is prepared to expand with virtually no cost to the Government, we should do it. I know there is a long way to go on that argument, but we will keep trying. By all means, if people want to build a new high-speed line between Gatwick and Heathrow, I am all in favour of that, but I want to create the biggest and best international airport in the world, because I want Britain to be a successful transport hub. I cannot believe that on, frankly, spurious green grounds—I do not think the argument has been particularly well made—we are denying ourselves the opportunity of creating the best airport transport hub in the world.

If I may change the subject before I conclude, I am sorry that we are not going further on education. The Secretary of State for Education gave a marvellous speech last week. He rightly bemoaned an issue about which there is very little conversation in the House. Why is it that half the places in our best universities are taken by private school pupils, despite the fact that only 5% or 10% of people go to private school? That is scandalous. What is the left doing about it? Why do we have a situation in which people are able to afford such an extraordinary advantage for their children by sending them to a private school?

I believe we should go further with the education reforms. We have created academies, which are a great success, and the Secretary of State for Education is one

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of the most successful members of the Government, but as well as creating academies we could learn from the success of the independent sector and create independent academies. I am not saying that the existing academies that perform well should be allowed to become independent, but what if the bottom half—those that are not performing very well—were allowed to become independent academies? What about free schools not being allowed to charge but in all other respects having the total freedom of independent schools? Let us set them up in the poorest areas and see if we can remove what is almost an appalling bias which prevents people from rising up from the ghetto and our poorest areas. Let us try to be innovative in education.

I was talking to a Labour councillor last week. Funnily enough he was from the Speaker’s constituency; I was amazed that there were any Labour councillors left in the Speaker’s constituency, but apparently there are. That councillor, who is a very good man, not a market-driven, Thatcherite, right-winger like myself, said, “This situation can’t carry on; perhaps we should actually pay some of our poorest people to go to private school.” As a way round, we could say that any child who has never been to a private school—so there would be no deadweight cost—or any pupil coming from one of the 100 poorest postcodes should be subsidised by the state to go to private school. Why should we not at least try that? Why should we, whether we are on the right or the left, be prepared to accept the great elephant in the room: that a smaller proportion of people on free school meals across the entire country get into Oxford or Cambridge than those from schools attended by the leader of the Conservative party and the deputy leader of the Labour party? Why do those two private schools send more people every year to Oxford and Cambridge than come from the entire stock of pupils in the country on free school meals? Why are we not prepared to be radical and try to think of new solutions to help those at the bottom of the heap to rise to the top and get the same opportunities enjoyed by people going to private schools?

Those are the kind of radical ideas that the coalition could propel. We have a coalition and we have to live with that. There is no point bemoaning its existence, because we did not get enough votes to get a purely Conservative Government. There are many areas where our two parties can work together. One of the best things the Liberal party has done in recent years is to make the economic the ideological case for taking people out of tax. That is the best way to help the low-paid—ordinary people—and it is one of the very best things the Government are doing.

We heard an excellent speech from the Secretary of State. He talked about freeing up the electricity sector. That is something we can work on with our Liberal friends—radical ideas to free up the economy.

This morning, there was a press conference about reforming the Public Order Act 1986 and getting rid of section 5, which outlaws insulting language. Again, Liberals, Labour people and Conservatives can unite. Section 5 has a chilling effect on debate out there. We want more vigorous debate not just out there, but in here. We want fresh and radical ideas to try to free people from the overwhelming incubus of wasteful Government spending and regulation that holds down

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families and small businesses. I firmly believe that this Government—a coalition of Conservatives and Liberals—is moving in that direction.

2.31 pm

Sir Gerald Kaufman (Manchester, Gorton) (Lab): It was deeply refreshing to listen to the hon. Member for Gainsborough (Mr Leigh) make—literally—a reactionary speech. We do not often hear such sentiments openly expressed in the House of Commons.

Although the hon. Gentleman claimed that he was seeking to bring us into the real world, he was actually creating a world of fantasy. He gave us two exemplars of countries with lower taxation rates. The first was Russia, one of the most corrupt economies in the world, and a country run to a large degree by corrupt oligarchs, where democracy is only marginal. In the United States, under their posturing President, taxation may be lower, but such is the extent of poverty that many, many millions of people live in abject poverty in slums, without jobs and food, under a Democrat President—something I never thought I would live to see. Statistically, the hon. Gentleman may claim those countries as exemplars, but I fear that in the real world not one of us would want to live in the United States or in Russia under the conditions that prevail there.

The hon. Gentleman talked about education, and young people rising from the ghetto. I represent a constituency that has some of the greatest deprivation in the kingdom. None of my constituents, whatever their income, would wish to be described as living in a ghetto, but the result of what the Government have done in two years, and what they propose in the Queen’s Speech, will be to turn parts of my constituency into a ghetto. I do not believe that the people I represent deserve the fate of living in such conditions.

The hon. Gentleman talked about cutting waste. Yes, of course all of us are strongly in favour of cutting waste, but it depends how we define waste. What the hon. Gentleman might regard as waste, large numbers of my constituents would regard as essential. For example, one of the best high schools in my constituency has opened a new kitchen—with finance from the Labour Government and Manchester council, although the building was completed under this Government—and the head teacher told me that for many of the children the meal they get in school is their only solid meal that day. We have to look at contexts.

I do not say this rudely. Just as the hon. Gentleman is an avowed reactionary, I am an avowed Keynesian. I believe in spending our way out of recession—while of course cutting out waste, as the hon. Gentleman recommends—because recession and poverty mean people out of work. According to today’s figures, just announced, 10.7% of people in my constituency are out of work. We have to give them benefits, however miserable they are to be, whereas if people had jobs they would be taking home money and paying taxes in order to fund the essential public services that the Government are attacking, downgrading and in some cases destroying.

In response to an intervention from one of my hon. Friends, the Secretary of State alleged that shameful scaremongering was coming from the Labour Benches, but the most shameful scaremongering of recent months was when the Prime Minister and the Minister for the

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Cabinet Office created a totally unnecessary panic about petrol supplies, which had appalling effects throughout the country. The Session that the Queen’s Speech covers will take us beyond the halfway point of the Parliament and into the run-up to the next general election, so one might think that the Government’s programme would deal with the problems and challenges of the present while looking to the future, including the cost of living issues referred to by my right hon. Friends the Members for Don Valley (Caroline Flint) and for Croydon North (Malcolm Wicks). No such luck.

The Queen’s Speech proposals are a combination of irrelevance and actual damage. The Government have no more idea how to deal with the cost of living problem and the severe economic problems they have created than before they created them. Instead, they are making the poor and deprived, and average families, pay the price for the massive handouts they are providing for their rich cronies, including big business and the banks. Their cronies do not worry about the cost of living. Sir Philip Green, an adviser to the Government, whose money is stowed away in Monaco through tax dodges, and Lord Ashcroft are not interested in what anything costs; they are only interested in how much tax they can dodge and in what they can buy with the money on which they pay little or no tax.

From young children to pensioners, from Sure Start to winter fuel payments—one of the most valued innovations of the Labour Government, but which the Conservatives opposed—this Government are already deliberately inflicting grave harm. Public service pensions, including those of the police, are being wrecked. Massive unemployment is being created; as I said, in my constituency, the figure announced today is 10.7%—the 47th worst constituency for unemployment.

The policing cuts are having devastating consequences. Inspector Damian O’Reilly, one of the greatest police officers in this country, and a recipient of the national award for community police officer of the year, told me that in my constituency the ability of the police to prevent and pursue crime, on both of which they have a first-rate record, will be harmed irreversibly. No wonder he and other police officers took part in the march last week. Today in Bournemouth the Home Secretary is being told by the chairman of the Police Federation that because of her policies, we are

“on the precipice of destroying a police service that is admired throughout the world”.

That is the situation under this Government.

Meanwhile, not only are the cruel cuts continuing while the cost of living continues to rise, but we are told that further cuts are planned—that this Government are planning £25 billion-worth of cuts, all targeting the most vulnerable in our society—and all this comes from Ministers who themselves will not in the slightest feel the impact of those cuts. The whole ethos of this Government was demonstrated a few days ago when it was disclosed that the Prime Minister had sent a text message—one of a barrage of such messages—to a wealthy and controversial crony, saying that they must avoid being seen together. And where? At the Heythrop point-to-point. It almost makes one laugh out loud—or should I say, lots of love?

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This, in terms of cost of living, public services, creating unemployment and not creating wealth, is not only the most incompetent Government of my political lifetime, but the most right-wing that this country has had, with the connivance of the Liberal Democrats, since Neville Chamberlain in the 1930s—the most corrupt, but the most arrogant. The Prime Minister, the Deputy Prime Minister, the Chancellor of the Exchequer and the Home Secretary all refuse to sully their lily-white hands by replying personally to letters from Members of Parliament. The Prime Minister threw an infantile tantrum when he was called the other week to this House to respond—incompetently, inadequately and offensively—on a further example of current Government corruption.

The contrast with previous Conservative Governments is stark. Conservative Cabinet Ministers such as Douglas Hurd, Michael Heseltine, Willie Whitelaw and Margaret Thatcher all made themselves available to MPs seeking access on behalf of their constituents. Indeed, Margaret Thatcher issued an open invitation to MPs to come to No. 10 and discuss employment problems in their constituency with her. This Government, neither party of which has a majority and neither party of which has a mandate, are behaving in a far more right-wing way than Margaret Thatcher did when she had an overall majority with big electoral victories, which she scored over the Labour party at its worst.

If the Home Secretary, the worst in my experience, had been willing to take a hands-on approach to immigration problems, we might have avoided the awful crumbling mess in border control that she personally has created and which is in danger of humiliating this country as the Olympic games approach.

Meanwhile, the Liberal Democrats pursue irrelevancies, seeking always to advance not the interests of our constituents, but their own party’s self-interest, with an obsession with constitutional change which is irrelevant to the lives of our constituents, such as the alternative vote, on which happily they were defeated, and now the House of Lords, their action on which would gum up the parliamentary works—which might not be a bad thing, considering what damage the Government would otherwise seek to legislate.

Dr Huppert: I hope the right hon. Gentleman realises that he is the one who has raised this obsession. It was in his party’s manifesto as well, so I am sorry he feels that way. We have been focusing on things such as giving 24 million people who are poorly paid a tax cut, lifting the lower-paid people up. Will he welcome that as a Liberal Democrat obsession that will help many constituents across the country for all of us?

Sir Gerald Kaufman: What I would welcome would be for the hon. Gentleman, as parliamentary representative for a university city—the second university as between Oxford and Cambridge, naturally, but not a bad university in its way—to go to his constituency or stand up here and apologise for the deception of the Liberal Democrats on the issue of university fees.

Dr Huppert: I will make no apology for the fact that I voted against fees. I will make no apology for the fact that I campaigned against them when Labour introduced them, having a large majority and having promised not to do so, and when they tripled them, having promised

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never to increase them again, and claimed that they had legislated against them. Will the right hon. Gentleman apologise for that deceit?

Sir Gerald Kaufman rose—

Mr Deputy Speaker (Mr Nigel Evans): Order. Before the right hon. Gentleman resumes his speech, I remind the House that this is not a general debate; it is a debate on the cost of living. Touching on one or two other things I will allow, but not an in-depth debate on other matters.

Sir Gerald Kaufman: I am grateful to you, Mr Deputy Speaker, for that reminder, and I am sorry that I was diverted by the irrelevancies of the hon. Member for Cambridge (Dr Huppert). I will simply say to him that if he is talking about higher education, it is not only university fees, but the education maintenance allowance, the withdrawal of which is depriving thousands of my young constituents of getting advanced education.

Mr Leigh rose

Sir Gerald Kaufman: Oh, I must give way to the hon. Gentleman, if Mr Deputy Speaker will allow me to do so.

Mr Leigh: Will the right hon. Gentleman be too alarmed if an old reactionary like me supports him on House of Lords reform?

Mr Deputy Speaker (Mr Nigel Evans): Let’s not go there.

Sir Gerald Kaufman: The hon. Member for Gainsborough knows that I would have responded to him, but I have been banned from doing so by the Deputy Speaker, and I must maintain my cringing relationship to him.

On issues such as the cost of living, which was very much to the fore in my city, the Conservatives were obliterated in Manchester and the Liberal Democrats were massacred the week before last. One Liberal Democrat now ex-councillor in a formerly safe Liberal Democrat ward moaned at a hustings meeting that he was local and had nothing to do with the Government. But it did him no good.

The Roman historian Tacitus said of the emperor Galba, “Capax imperii nisi imperasset”, which, for those who did not have a public school education, translates as, “He would have been judged capable of government had he not governed.” Tacitus said as well, “Solitudinem faciunt pacem appellant”—“They make a wilderness and call it peace.” That will be the epitaph on this Government.

2.47 pm

Dr Julian Huppert (Cambridge) (LD): It is entertaining to follow the speeches from the hon. Member for Gainsborough (Mr Leigh) and the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman), who have shown that there is an obsession about House of Lords reform, at least in trying to stop it, among certain people who have been in this House for a very long time. It is a project that has been going on for a long time, too. It was in all three party manifestos. We can achieve it; it does not have to be an obsession for any of us.

Mr MacNeil rose

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Dr Huppert: If the Deputy Speaker does not object, I will happily take an intervention.

Mr MacNeil: Does the hon. Gentleman agree that House of Lords reform will not be meaningful in this place while there are a number of people hanging around who view the House of Lords as a political lifeboat when their careers here are finished?

Dr Huppert: I do agree, and at some point we can have the debate about why we need that reform to have a properly democratically accountable Chamber in the other place, but now is not that time.

We heard an interesting take from the hon. Member for Gainsborough on how the Government would be doing much better if they were a pure Conservative Government—they would be cutting much more—and we heard from the right hon. Member for Manchester, Gorton that they are cutting far too savagely. The truth is that a pure Conservative Government probably would be cutting more and we are acting as a restraint on that and trying to achieve the correct outcome, which lies somewhere between the—in my view—excessive cuts advocated by one side and the continued overspending advocated by the other.

There is often a debate about Keynesian economics. Keynes was a good Liberal and a good Cambridge man, and he said a number of very sensible things. One was about making sure that we spend in recessions, but the flip side of that is that we do not spend as much during the boom years, so that we have money left. We cannot spend in the boom and also have money to spend in the bust; it simply does not work. Keynes was also clear about how much could be spent and, indeed, the high priority on keeping bond yields low so all that could be afforded. He was a very complex man and his work should not be reduced to a simple catch phrase.

I want to talk about the cost of living in relation to transport, because it is one of the areas I focus on in this House and on which I lead for the Liberal Democrats, but also because it is one of the few parts of Government activity that affects most people pretty much every day of their lives. Transport has a huge effect on us, and the cost of travel affects a huge amount of what we do throughout our lives. Governments for many decades, when focusing on the cost of transport, have thought principally about cars; too little thought has been given to cycling, walking and public transport.

The Minister of State, Department of Health (Mr Simon Burns): And train spotting.

Dr Huppert: Let us consider the railways, as the Minister suggests. We know about the cuts. The length of our railway network has halved since 1950, but ever since 1980 the number of people using the network has doubled, resulting in a crippling downward spiral in which fare rises have been used to prop up a creaking system while services have declined. British railways are now 30% less efficient and 30% more expensive than their European counterparts. Under Labour, fares rose significantly above inflation year on year. The shadow Secretary of State for Energy and Climate Change did not seem to know the figures when I challenged her on this earlier, so let me give them to the shadow Secretary of State for Transport. Rail fares during Labour’s 13 years

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in government went up by 66%—inflation over that period was 17% in real terms—which is a huge increase. Even now their policy has not changed; it is still to have rail fares going up above inflation. Even the amendment to the motion calls for rail fares to go up 1% above inflation.

Maria Eagle (Garston and Halewood) (Lab): Will the hon. Gentleman give way?

Dr Huppert: I would be delighted to hear the shadow Secretary of State say that Labour accepts that fares are too high but, if she will not, will she confirm that her policy is still to have rail fares going up above inflation?

Maria Eagle: The hon. Gentleman fought the last general election on a promise to cut rail fares. His party and the Government whom he supports now support rail fare rises of 3% above the retail prices index. He voted for that. He is being just a tad hypocritical.

Dr Huppert: I am sorry that the shadow Secretary of State is not prepared to defend her party’s record in government or the fact that it is still calling for fares to rise above inflation. I would like them to go below inflation—[ Interruption. ] If the hon. Lady listened more and spoke less, she would hear what I am going to say. I think that rail fares need to come down, but we do not have a majority Government. As we heard earlier from the hon. Member for Gainsborough, this is not a pure Conservative Government, but it is not a pure Liberal Democrat Government either.

Mr Simon Burns: Thank God!

Dr Huppert: On that point we are all united.

George Freeman (Mid Norfolk) (Con): Does my hon. Friend agree that it was the Labour-led Transport Committee that produced the analysis revealing that the Labour party had shown “breathtaking complacency” towards value for money on customers’ rail fares?

Dr Huppert: The hon. Gentleman is absolutely correct, as he so often is on rail matters. The Labour Government failed on trains and, rather than trying to patch it up now, are looking for short-term political advantage.

Let me move on from trains to buses. We talk a lot about trains, but buses are used hugely. What is Labour’s record on buses? Bus fares during Labour’s years in government went up by 76%—24% in real terms—which is a huge amount, and that affects the cost of living for people who try to travel by bus. We know that there is a different socio-economic distribution for people who take buses, compared with those who take trains, so this is very tough.

In 2008, Dr Iain Docherty of Glasgow university and Professor Jon Shaw of the university of Plymouth reviewed Labour’s 10-year transport strategy and said that it was a failure. Bus services were described as “poor” compared with the rest of Europe. They said that the Government had pursued the

“wrong kinds of transport policies”.

To their credit, we saw some success in London, but that was the only part of the country that saw the sort of devolution and innovation that we would like to see

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across the country. Outside London, from 1997 to 2008, when the report was written, the number of bus trips fell by 10%, which is not exactly a resounding victory for Labour’s centralising 10-year plan, and something that the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), is taking steps to change.

We all know that our roads are utterly unsustainable. We have not yet managed to decarbonise our cars adequately. We failed to support the basic principle that road users should have to pay to use the roads, and the tax system has problems. Treasury Ministers are already nervous about how they will fund road infrastructure in future as we manage to reduce the use of fossil fuels.

I am proud of much of what the Government are doing on transport, although not absolutely everything, and pleased about the work being done by the Under-Secretary on issues such as cycling and bus use, which I will say more about later. I am also proud of the work being done by the other Transport Ministers. However, we need more radical and liberal thinking to heal our sclerotic transport network. What we need are bold reforms, but I am sad to say that what we have from the Opposition is short-term politicking, not long-term and evidence-based public policy making.

Let me give an example. The shadow Secretary of State made an interesting series of comments to The Guardianrecently. She said that she accepted two thirds of the coalition’s transport spending cuts. I think we all agree with her when she said:

“Labour will not be elected unless it has credibility on the deficit and recognises the new economic reality.”

She said that she was committed to two thirds of the cuts. The interesting question is this: which two thirds? It is a nice game to keep whichever third of things seems politically sensible and cut the things that are not popular. I have been trying to find out from the hon. Lady—

Maria Eagle: I have replied to the hon. Gentleman’s letter, but I can tell him that Labour supported the entire £1.7 billion of efficiencies that Ministers have required across the transport expenditure. We have not opposed cuts beyond those efficiency savings in the Highways Agency totalling £3 billion or in Transport for London totalling £1.7 billion, a total of £4.7 billion, so we have not opposed £6.4 billion of cuts, which is more than two thirds of the efficiencies and cuts that the Government are making. But we would not have made the other £3 billion of cuts, which would have given us extra money so that we could cap annual fare rises, protect local bus services and deliver additional investment. Our plan is quite clear.

Dr Huppert: The hon. Lady is absolutely correct. I wrote to her in February asking for the figures and it took her over a month to respond—

Caroline Flint: Pathetic.

Dr Huppert: I absolutely agree with the right hon. Lady that that is pathetic—[ Interruption. ]

Mr Deputy Speaker (Mr Nigel Evans): Order. This is not a general conversation; it is a debate and Dr Julian Huppert has the Floor.

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Dr Huppert: Thank you, Mr Deputy Speaker. It took the hon. Lady over a month to direct me to a speech in which a shadow Minister outlined some of those figures. I do not know how much was made in the London election about the fact that Labour proposed taking £1.73 billion out of the TfL budget, which is interesting, but the key point is that she is yet to reply to a letter I wrote to her a month ago asking, of the £3.36 billion that she would take out of the Highways Agency’s budget, as opposed to the half a billion she would leave in, which—

Maria Eagle: Will the hon. Gentleman give way?

Dr Huppert: I will if the hon. Lady lets me finish my sentence. Which half a billion pounds would she leave in, and which £3.36 billion would she take out? She has not responded to the letter, but she can respond now.

Maria Eagle: I promise to respond in great detail to the hon. Gentleman when he gets his ministerial team to reply to letters from me and to answer parliamentary questions properly.

Dr Huppert: I am flattered by the shadow Secretary of State’s faith that I have the power to control the ministerial team. She can certainly control when she responds to letters, and I think that a delay of over a month is rather poor. I am sure that she thinks she has better things to do, but I would still love to hear how Labour would fund the rest of its budget on this area.

If the Opposition are truly concerned about the cost of living, surely one way of addressing that is to let people keep more of the money they earn. Raising the income tax threshold puts money back into people’s pockets and lets them spend it on whatever they want: rail fares, fuel for their car, a new bike, bus tickets, training, or whatever it is that they would like to do with that money. Of course, that is something that Liberal Democrats campaigned for and it was on the first page of our manifesto, and it is exactly what Liberal Democrats in government are doing and which, for reasons I simply do not understand, the Opposition voted against. I simply fail to understand why they are against giving money back to people who earn £10,000 a year. It makes no sense to me. I assume it was some sort of error, like the fact that they failed to vote on various aspects of the Budget which they said they would vote on.

In my view, this tax cut, combined with the uprating of unemployment benefits and the triple lock in pensions so that pensioners get a better deal than the 75p that the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) offered them, is exactly the right mix of measures. It allows people to keep their money and spend it as they please when times are tight. It is a responsible, liberal approach, and one that we need to take further, as I am sure we will do during the rest of the Parliament, but it is there—[ Interruption ]—and it has been supported by the Conservatives, as the hon. Member for Mid Norfolk (George Freeman) reminds me.

But let me return to rail fares. I passionately believe that rail fares are too high and need to be lower, and, unlike Labour and the Conservatives, both of which have argued for above-inflation increases, we in the

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Liberal Democrats believe that they are too high and should not be made any higher. I am delighted that we managed to persuade our coalition colleagues to reduce the most recent rise by 2%, and I have to say that Conservative Transport Ministers supported it.

I hope that we can do the same or better in the years to come, but it cannot be a one-off measure; it has to be part of the kind of serious structural reform that the McNulty review will bring. If it is true that the McNulty changes will save £1 billion a year, half of it should be used to reduce rail fares and half to invest further in rail infrastructure, although this Government are already investing massively in our railways—more than any Government since Victorian times.

We have committed to electrifying more than 800 miles of track. How much did Labour manage? The answer is less than 10 miles, in 13 years: less than 1 mile per year. The Victorians would not have been impressed by that rate. The Liberal Democrats in government are firmly committed to getting people and freight on to our railways so that they do not take up space on our roads, and that applies to my local road, the A14, where we have to ensure that as much freight as possible is put on to railways in order to avoid the congestion that we see. We need to invest in services to make them cheaper, more affordable and more attractive. That is the right thing to do.

What about buses? We believe firmly that the way forward is devolution, community involvement and more effective funding. Services have to be local for them to be popular and effective, and communities must have their say in the governance of local buses. I believe, from what the shadow Secretary of State says, that the Labour party is finally looking at ways of devolving bus services. We have argued for that measure for decades, so I am delighted that Labour agrees, and I hope that we will be able to deliver it. We have had less than two years with very little money to spend; Labour had 13 years, so I am delighted that it is finally coming around to the idea and I hope that we will be able to deliver it. Indeed, I hope that Labour supports the reforms that we are implementing, such as the local sustainable transport fund, which is delivering £500 million to local communities. Just before the Queen’s Speech my hon. Friend the Under-Secretary announced new funds for better bus areas and green buses: a £120 million boost for buses which will enable people to take affordable buses more easily.

By trusting communities to do what is best for themselves, we are revolutionising bus travel. Already since 2010 we have seen bus patronage rise outside London and throughout the country, and seen funding for 439 low-carbon buses, helping us to be a much greener Government. That is a fantastic achievement after a decade of decline and without spare money to slosh around.

Of course, if we really want to reduce the cost of living, we will find that there are even cheaper forms of transport. A huge number of journeys could be taken on foot or by bike, and that really would save people money. More people should do that. This Government have invested millions of pounds in promoting cycling, from the local sustainable transport fund, to Sustrans funding for new routes, bikeability training and new cycle-rail links, and they have also taken other steps to promote safe cycling by, for example, making it easier to introduce 20 mph zones.

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We have heard much from the Opposition about the lack of a Bill in the Queen’s Speech to deal specifically with the cost of living, but we have heard also from my right hon. Friend the Secretary of State for Energy and Climate Change about the steps being taken with the Bills that are in the Queen’s Speech, and in any case the Opposition should know that it is not necessary to announce a Bill in a Queen’s Speech in order to help with the cost of living. Not everything needs legislation.

Laura Sandys: This Queen’s Speech is very much directed at the consumer and at consumer prices. We have a draft water Bill, which is looking at supporting water prices; the grocery adjudicator measure, which is looking to develop a much more effective supply chain and to deliver better prices to consumers; and we have an energy Bill, which will make the market more responsive to the consumer. This is a consumers’ Queen’s Speech.

Dr Huppert: I thank the hon. Lady for her comments—and I will leave out the next paragraph of my speech. She is absolutely correct to highlight the importance of all those issues, which will make a real difference to consumers, as will a range of other activities, such as breaking up the banks so that they can focus more on consumers and less on the casino capitalism that we saw in the previous decade.

We do not need to legislate to make a difference. We gave money back to millions of working people without any new Bill; it did not take a Bill to make that happen. After reams and reams of failed legislation, one would have thought that Labour would have learned one simple fact: we cannot just legislate our way out of a problem. But I am not surprised that Labour’s response to a Queen’s Speech that, as well as the items mentioned earlier, finally tackles defamation law and Lords reform is that we need more legislation. It is certainly true that if the test of a successful Government was the volume of laws they introduced, 13 years of Labour would have been an unmitigated success, because the sheer volume of legislation was a record, but that is not what government is about.

I am deeply proud to be a Liberal Democrat in government, standing up to vested interests to ensure that every citizen, no matter how poor, will be able to protect their reputation from defamation—and that we will not see the chills that we have seen from the threat of action. I am proud that we are tackling constitutional reform, because I am sure that all honest politicians know that the Government are quite capable of doing more than one thing at once, and of course we are cleaning up the mess that this country was left in by Labour and continues to be left in by what is happening in the eurozone.

There is much more to do on fares, and I should like to see a more efficient local transport system with greater support for community services, which is something we are already working on, but we have achieved a lot with what we have got—much more than can be said for the squandered Blair-Brown years. In 1997 a Liberal Democrat majority Government, enjoying an unprecedented period of global growth, would not have jacked up fares year after year. We would not have let transport services decay in the dead hand of Whitehall, and we would certainly not have introduced tuition fees in the way the Labour party did.

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Anas Sarwar: Will the hon. Gentleman give way?

Dr Huppert: I should like to conclude so that others can speak.

I welcome the Queen’s Speech and all the things that Liberal Democrats in government have done already to help with the cost of living. I hope to see members of the Labour party welcome those achievements and support our measures, which will put our transport system on a sustainable footing for the long term and help to reduce the cost of living for everyone in this country.

3.6 pm

Barbara Keeley (Worsley and Eccles South) (Lab): There was little, as we have already heard today, in the Queen’s Speech to do with the rising cost of living. We have recently had a Budget that helps millionaires with tax cuts while penalising pensioners and families, and throughout the country people are struggling with the impact of a double-dip recession made in Downing street, so the Government, whether in the Budget or in the Queen’s Speech, are offering little help to those working people or pensioners on modest and low incomes who are struggling to manage.

But I want to talk about the Government’s failure to introduce in the Queen’s Speech a Bill on the financial reform of social care, because it has implications for the cost of living of the millions of vulnerable people who need care. There is also a major effect on carers who drop out of work or reduce their working hours in order to care, because that has an impact on the economy.

First, however, I send best wishes for a speedy recovery to the hon. Member for Truro and Falmouth (Sarah Newton), who I understand has had a fall—an accident here—and is in hospital. She is the vice-chair of the all-party group on social care, and we work well together. This is a vital time for social care, so I am really sorry that she might not be with us for a few weeks, but I wish her well.

Every few weeks we see another article or report about the crisis in social care. The Association of Directors of Adult Social Services has reported cuts of more than £1 billion in local council budgets for adult social care since the general election, with a further £1 billion of cuts expected this year. Those cuts have led to service reductions and to substantial increases in charges.

We learned today from research by my hon. Friend the Member for Leicester West (Liz Kendall) that the number of vulnerable, older and disabled people who have home care services fully paid for by their local authority has fallen by 11% in England over the past two years, and a survey by the Care and Support Alliance also shows that services to 24% of disabled adults have been cut, even though their needs are the same or have increased.

Research by Age UK shows that cuts to council budgets mean increased fees for services. Two thirds of local councils are increasing fees for services such as meals on wheels, and fees have increased by 13% over two years. Almost half of all local councils are charging more or making new charges for home help or day care services, and my hon. Friend’s research shows that the average charge for one hour of home care has risen by 10% in the past two years, from £12.29 to £13.61. On average, older people pay for 10 hours’ home care a

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week when they are using it, so the annual bill for care has risen to more than £7,000, an increase of £680 since 2010. Yet, as we know as Members of Parliament, these services are a lifeline to many vulnerable people. The Age UK research also showed that one in six councils has reduced personal budgets for care packages and that almost half of councils have frozen the rates that they pay for residential care, leaving older people and their families who pay top-ups to absorb any price increases—and there have been price increases. Care homes have been increasing their fees. The fees for residential care have increased by 5% on average over the past year, taking the average up to £27,200 a year. Nursing home fees have risen by a similar amount and now cost £37,500 a year on average.

In addition, councils are raising or abolishing the caps on the care costs met by individuals who need care. Four out of 10 councils have abolished funding caps in the past two years, with another four out of 10 increasing the cap so that people now have to pay more, while rates charged for respite care have tripled in some parts of the country. My hon. Friend the Member for Leicester West is calling these increased care charges a stealth tax on the elderly and people with disabilities, and I agree. More and more people are footing the bill for care themselves, and that bill has grown. The need for care often starts suddenly and unexpectedly due to a medical event such as stroke or the sudden worsening of a condition such as Alzheimer’s or vascular dementia. That often leads to bills that are very hard to meet. A quarter of people are faced with care costs in their lifetime of over £50,000, with one in 10 paying £100,000. These care costs can be catastrophic. Indeed, more than 20,000 pensioners every year have to sell their homes to pay for residential care.

It is not just a question of care charges, which are bad enough. People needing care often tend to be disproportionately hit by increases in the everyday cost of living. People who are older and frail, or ill or with a disability, spend more time at home and need to keep warm, so increases in heating and electricity bills hit them hard. Besides paying more for care, they have had to cope with VAT increases, higher fuel and travel costs—this group of people spends a lot of time attending GP surgeries and hospital visits—and increased prescription charges. All these have increased the cost of living for people needing care.

Under this equation, reduced care services and increased costs for care ultimately mean that unpaid family carers take on heavier caring workloads. Carers UK has estimated that 1 million carers have given up work or reduced their working hours in order to care. Over two thirds of those who had given up work to care were more than £10,000 a year worse off as a result. Over 45% of the carers it surveyed were cutting back on essentials such as heating or food in order to make ends meet. Sadly, the cost of caring can push carers into debt. Almost half the carers surveyed by Carers UK had fallen into debt. While over half the younger carers had been in debt, for carers over 65 the debts were greater; 15% of them had debts of at least £25,000. Unsurprisingly, the stress of this financial hardship had affected the health of nearly half those carers.

We can therefore say that the need for reform of the funding of social care is urgent. In fact, it is so urgent that 78 charities wrote an open letter to the Prime

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Minister ahead of the Queen’s Speech reminding him that social care is in crisis. They said that without reform

“too many older and disabled people will be left in desperate circumstances”.

Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con): The hon. Lady is making a very good speech outlining many of the problems with caring for the elderly and the challenges that carers face. Will she accept, though, that while it is right to highlight these problems, the Labour party, when in government for 13 years, did nothing substantially to tackle these problems, many of which have taken a long time to manifest themselves and should have been dealt with under the previous Government when this country had more money?

Barbara Keeley: The hon. Gentleman was not here in the previous Parliament. As somebody who was here, I can say that we did take substantial steps. I have been speaking on these issues ever since I came into Parliament in May 2005. With cross-party talks, we came very close to achieving consensus until the Conservative shadow Secretary of State—now the current Secretary of State—walked out on those talks and did a lot of scaremongering in the general election with posters about a “death tax” featuring tombstones. I am sure that Members will remember that.

Moreover, we did not just have a draft Bill; we had the Personal Care at Home Bill, which went through Parliament. That would have helped the 400,000 people with the greatest needs, while 300,000 people with very substantial care needs, such as those with dementia, could have had personal care at home, and over 100,000 people would have been helped with reablement. I know from working with the hon. Gentleman on the Select Committee that he is very keen on dealing with issues such as reablement, for which support would have been provided. Those 400,000 people are now paying for that themselves. They could have been helped if this coalition Government had not got rid of that Bill, which they could have enacted, as it had gone through this House. It is not true to say that we did nothing on this; we did a lot.

Dr Poulter: It is wrong to say that Members who came into the House in the 2010 intake do not understand these issues, because many of us, including me, were working in the real world picking up the pieces of the broken care system. The hon. Lady is looking around for little bits and pieces that the previous Government may or may not have done to address the issue. The previous Government had 13 years to deal with these big challenges of elderly care, of better integrating health and social care, and of dealing with the funding crisis. They did nothing substantial to deal with those things; will she accept that?

Barbara Keeley: No, I absolutely do not accept that. In our 13 years in government, the first thing we did was to fix the health service following the mess that we inherited from the Conservative Government. We had a lot of other priorities in dealing with what the Conservative Government had done through privatisation. I am amazed that Members are arguing about bus fares and train fares. It was not a Labour Government who privatised these things. All the privatisations and reductions in services came about through Conservative Governments, not Labour Governments. We were tackling these issues.

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We now have a Minister for social care who believes that there is no funding gap. He is arguing with all the directors of adult social care services, who say that £1 billion has gone out of adult social care in the past couple of years, with the loss of another £1 billion to come. The crisis that I am detailing as regards the cost of living impacts on individuals and their families is undoubtedly made hugely worse by the £2 billion that is going out of adult social care. However tight things were or whatever struggles were going on during the last Parliament, when I did a lot of work on this topic, it was never said that social care is in crisis, whereas now that is said every single week.

In the open letter to the Prime Minister ahead of the Queen’s Speech, 78 charities reminded him that social care is in crisis. As I said, they feel that older and disabled people will be left in desperate circumstances. There are 800,000 people with unmet needs, and that figure will possibly grow to 1 million. Some people will struggle on alone and do not even have an unpaid family carer to help them.

Dr Poulter: I do not always like to quote outside agencies or charities in this House. However, Age UK successfully put together a campaign, with a petition that was handed into Downing street, in which it acknowledged that the chance to tackle this issue was flunked by the previous Government and should have been better dealt with. That was an inherent part of that campaign. This is a creeping crisis that began and was manifested over a number of years, and it is very disingenuous of the hon. Lady to say otherwise.

Barbara Keeley: It is very disingenuous of a member of a Government who have just massively ducked this issue in the Queen’s Speech, causing huge disappointment across any organisation that is involved in social care, to talk about the previous Government.

Jim Dowd: Whether or not this goes back to the letter from the 78 charities before the election, the Local Government Association, on behalf of all the parties represented in social services authorities throughout England and Wales, wrote to the Government immediately before the Queen’s Speech highlighting the fact that there was this crisis which needed to be dealt with now, and that if they did not do so in the Queen’s Speech—not as a draft Bill but as proposed legislation—an already alarming position would be made far worse.

Barbara Keeley: I thank my hon. Friend for that clarification. The letter went on to say that “delay or half-measures” cannot be tolerated because of how hard it is for people to manage, as I have just outlined.

In July 2010, the Government promised that they would introduce

“legislation in the second session of this parliament to establish a sustainable legal and financial framework for adult social care”.

That could not have been clearer, but we do not have that legislation. All that was mentioned in the Queen’s Speech was a draft Bill on social care law, with no Bill on the funding of social care.

What does the delay in reforming the funding of social care mean? It means that people who need care will have to continue paying larger and larger bills or go

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without and struggle. There are also costs to the NHS and to the economy. That should concern us. The lack of appropriate social care for older people at home is costing the NHS £18.5 million a month, or more than £600,000 a day, in delayed discharges. Since August 2010, the total bill to the NHS of delayed discharges has been £324 million. Delayed discharges keep on increasing, which is an indication that the crisis in social care is deepening.

On the cost to the economy, a recent report by Carers UK suggests that failing to address the funding of care, as other countries have done, means that we are missing out on jobs and growth. The biggest thing that was missing from the Queen’s Speech and the Budget was action on jobs and growth. In France, a development strategy for the home care sector led to a growth of 100,000 jobs a year. A recent report by Dr Linda Pickard of the London School of Economics shows that it costs about £1.3 billion a year in lost tax revenue and benefits when carers give up work to care. The adult social care system has been pushed into crisis by cuts, and that is costing the economy more than a billion pounds and the NHS hundreds of millions of pounds. Surely that shows that we should do something about social care.

The Government’s distinct failure to deliver on their promise to bring forward legislation, which I think will become more apparent in the coming months, is hitting older people and those who need care. It has cost £324 million since 2010, and that bill is climbing by £18.5 million every month. As carers give up work to care, it is costing the economy £1.3 billion every year in lost revenue. It is time the Government delivered on their promise and addressed the vital issue of the funding of social care.

3.22 pm

Mr Robin Walker (Worcester) (Con): It is a pleasure to follow the hon. Member for Worsley and Eccles South (Barbara Keeley), who made a thoughtful speech on the important issue of social care, about which people from all parts of the House feel strongly. I echo her good wishes to the hon. Member for Truro and Falmouth (Sarah Newton).

It is a pleasure to be called to speak in the debate on the Gracious Speech and to be able to mark, as MP for the faithful city of Worcester, the celebrations that will rightly take place around the country for the diamond jubilee of our sovereign. After the splendour and pageantry of last week’s Gracious Speech, this debate focuses on its grittiest elements—those that relate to the cost of living. I am constantly reminded on the doorsteps of Worcester and in my surgeries that the cost of living is a matter of prime concern for many constituents. I will first address the parts of the speech that relate specifically to the cost of living, before making a few broader points on the economy, which is referenced in the Opposition amendment.

There was much to be welcomed in the Gracious Speech on the cost of living. Contrary to the rhetoric that we have heard from Opposition Members, the speech is imbued with concern over the cost of living. It promises vital reforms that will make a difference to the price of the water and electricity in our homes and the food in our shops.

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There are some things that I would have liked to have been included in the Queen’s Speech that were not present. In some quarters, the speech has been criticised for not doing more to tackle the issue of fuel duties or to spearhead vitally needed growth. I will return to the latter point at the end of my speech. On the former point, I have enormous sympathy for people across the country and from all parties who want to see a permanent shift in the balance of fuel duties. Although I am doubtful that a programme of legislation is the right place for such a move, I will continue to push for it in future Budgets and Bills. The price of petrol has become too high. It is a major cost to our economy and a driver of inflation. I hope that the Government will listen carefully to the many voices that have been raised—from Upper Bann and Belfast to Harlow—to call for more action on this front.

I want to see a Government who are resolutely focused on supporting the economic growth that will deliver better living standards. I am confident that we will see that, without the need for further legislation. The best weapon that we can wield against the cost of living is material prosperity for the many, not the few. In that regard, we should look at what has been done to help the lowest-paid workers stay out of tax and at the commitment in the Budget to extend the tax-free threshold to up to 2 million more lower-paid workers, which have been mentioned by my hon. Friend the Member for Bury St Edmunds (Mr Ruffley) and the hon. Member for Cambridge (Dr Huppert).

I do not accept the suggestion from some quarters that economic growth is the enemy of sustainability and that we should juxtapose the need to grow our economy with the desire to be green and efficient. Nor do I accept the argument so often heard from the Opposition that fiscal stimulus is the only path to growth. I believe that we can deliver greener, more diverse and more sustainable economic growth that will increase the wealth of our nation and provide individuals and families with the tools to overcome a higher cost of living. That does not mean that the Government can neglect the need to deal with the cost of living.

I am delighted that the Government are committed to major reforms in the provision of electricity and water to make those industries more efficient, to ensure that there are clean, secure and affordable supplies, and to ensure that prices are fairer over the long term. It is a shocking indictment of the last Labour Government that we inherited a situation in which a fifth of the UK’s energy generation capacity was due to be taken offline within 10 years, while electricity demand is to double in the next 40 years. We need to act fast to secure the £100 billion of investment that is necessary to keep the lights on.

I am glad that the Government are setting out detailed plans for an energy Bill to bring market reform. Winston Churchill said that energy security is energy diversity. The Bill must reflect that by supporting all technologies, whether nuclear, renewable or gas-based, that can make our electricity more affordable, more efficient and more sustainable. The introduction of a capacity mechanism will be vital to improve our security and to maximise the enormous potential for diversity that our island nation has.

The introduction of an emissions performance standard, alongside the Government’s earlier decision to look at

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carbon pricing, should ensure that we have cleaner, greener generation in the future. However, that must be carefully balanced, so as not to push costs too high.

I understand that the Government’s analysis shows that although some years might see higher prices as a result of the electricity market reforms, the overall impact will be to bring prices down. That is to be welcomed, but I urge the Government to recognise the need to do everything in their power to accelerate that trend. By 2020, it is expected that bills could be 7% lower than they would have been without the reforms. As the Secretary of State said earlier, over two decades, bills are expected to be 4% lower. I would like to see more progress and a greater impact as the Bill makes its way towards becoming an Act.

After months of drought followed by torrential rain, it might be suggested that water reforms would be best focused on regulating the weather. However, I am pleased to see a serious focus on that industry as well. It cannot be right that we have one of the lowest proportions of metered households in Europe, and that prices are rising so sharply for everyone, including the poorest in the country. The measures to encourage the water companies to introduce cheaper tariffs to support the most vulnerable customers are welcome. It is vital that the Government work to drive down water bills by increasing competition in the water industry.

Across water and energy, there is increasing pressure from a growing population for finite resources. As the right hon. Member for Croydon North (Malcolm Wicks) pointed out in a thoughtful speech, it is important that we do not just concentrate on the day-to-day minutiae of market structures and prices or on what is happening just within the boundaries of the UK, but that we raise our eyes and recognise that there are big strategic challenges for our management of energy and water supplies. In a world in which the population is growing fast and where the wealth of those who previously consumed the least is rising more swiftly than that of the formerly gluttonous west, we will face increased competition for all resources. Realistically, politicians of all colours have to admit that we cannot wave a magic wand and bring prices down every year for the resources we need. We have to face up to a far more competitive and far more volatile world and take on the long-term challenge of keeping costs under control and reducing consumption. Acknowledging that entails an ever greater focus on efficiency and on ensuring that resources are not wasted—itself a potential driver of growth for businesses such as Worcester Bosch, which makes energy efficient boilers in my constituency, or Vickers Electronics, which I visited recently and which has opened an office in Worcester to market its energy saving devices for factory heating.

There is an old saying, “Where there’s muck, there’s brass,” and we should ensure that where there is a waste of resources, there are opportunities for British businesses to get involved in reducing it. Previous actions by the Government, such as the green deal and the renewable heat incentive, are important elements of that, and I encourage Ministers to take those measures forward further and faster. The creation of the Green investment bank will provide vital investment for the sector and encourage its growth. That does not mean that the Government are wrong to be acting on prices and reforms, but action must be part of a bigger strategic

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approach to ensure that Britain is best placed to compete in the 21st-century world. In that respect, I recognise the enormous value of many of the initiatives discussed in yesterday’s debate on foreign affairs: the emerging powers initiative, the commitment to work with the Commonwealth, and the broad focus that this country is putting on maintaining our place on the world stage. Our energy and water resources will not be secured in isolation, nor can we feed our nation purely from the produce of our own shores.

Moving closer to home, I strongly welcome the introduction of a groceries code adjudicator to regulate the big supermarkets, ensure a better deal for our farmers, and put fairer food at the heart of our food system. The adjudicator must have strong powers to act on behalf of shoppers and suppliers and it must be prepared to take on some of the powerful vested interests that have dominated the sector hitherto. Diversity of production is as important in food as it is in energy and we must support diversity of supply so that there are more farmers markets, more co-operatives and more direct selling of food by growers or producers. Worcestershire has some fantastic food producers, whether it is our fruit growers and asparagus champions of the vale of Evesham, our dairies and sheep farmers across the county, or global brands, such as Lea & Perrins Worcestershire sauce, which is produced in the very heart of my constituency. I want all those producers to be able to get a fair price for their product and to market those products at a reasonable price to consumers. I believe that the groceries code adjudicator can play a key role in achieving that.

Keeping down the price of food would also be helped enormously by a reduction in the price of diesel, which is important both in the growing and harvesting of our crops and in their delivery to market. That is another reason why the Government should consider further action on that important issue.

Dr Poulter: My hon. Friend is making a very good speech. On the subject of the groceries code adjudicator, I am sure he agrees with me that it is important to have fair prices not only for consumers, but for producers, and that if we do not look after our food producers prices will go up for our consumers, because we will be far too reliant on food imported from overseas. Does he also agree that one of the key purposes of establishing the groceries code adjudicator must be to support producers better and ensure that we have a more sustainable food and agriculture sector in this country?

Mr Walker: I could not agree more with my hon. Friend.

Albert Owen: The hon. Gentleman mentioned the importance of diesel prices. This is not a party political point, but one of the stark problems confronting this country is our lack of diesel refining capacity. Much of the oil extracted from the North sea is exported to India and the sub-continent, refined there and brought back to this country, which puts up the price. As a result, we have a shortage of diesel and pay more for it. Surely we should all work together on ways to increase distillery capacity, so that we can refine diesel in this country? Diesel used to be a damned sight cheaper than petrol, but the reverse is now true because of this problem.

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Mr Walker: I absolutely agree that we need to work together on long-term planning to get back some of the refining capacity that we have lost. I also think we should consider the potential for differential taxation of diesel and unleaded petrol, which most other countries in Europe already have, and I have mentioned that idea in previous debates. This is an issue that should be debated and explored in more depth.

Pensioners are people living on fixed incomes and are directly affected by changes in the cost of necessities. I am proud that our coalition Government have not only restored the link between the basic state pension and earnings, which the Labour Government failed for such a long time to do, but strengthened it with the triple-lock guarantee. It is crucial that the Government legislate to make public sector pensions sustainable—to reduce the cost not just for the sake of it, but so that we can continue to provide high-quality pensions for public servants.

Council tax is a major issue for pensioners, and we have a good record on keeping it frozen. Earlier, we heard a little Labour triumphalism from the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman) about the local election results, but I am pleased to say that, in Worcester, the Conservatives remain the largest group, although Labour gained seats and the Liberal Democrats lost one to us. The Liberal Democrats are now working with the Conservative administration in Worcester to try to make the council more efficient and to keep council tax down.

As I said, the hon. Member for Worsley and Eccles South (Barbara Keeley) spoke passionately about social care. I am pleased to see in the Queen’s Speech a draft Bill on modernising social care, but I agree with the hon. Lady that there is more to be done and that the Government have to take yet more action to tackle the enormous challenges set out clearly in the Dilnot review. I urge the Government to make swift progress on that issue, which is hugely important for the long term. As has been pointed out, Labour does not have a strong record of addressing it.

Part of the cost of living is the need to ensure that there is the best possible support for those in the later stages of life, which means better provision of social care as well as more investment in palliative care, an issue that is dear to my heart.

I am glad that the Government are doing more to support families by expanding child credits for those most in need, protecting child benefit for people earning up to £50,000 and expanding the provision of nursery education. The right hon. Member for Croydon North (Malcolm Wicks) described the changes to child benefit as a “case study in unintended consequences”, and that accusation certainly could be levelled, but I would say they are a case study of the Government listening to concerns and doing something about them. That is to be commended.

My hon. Friend the Member for Witham (Priti Patel), in an earlier part of the Queen’s Speech debate, and the right hon. Member for Croydon North today, pointed out that child care is a huge cost to many families. Like them, I hope that the Government can do more to help on that front in the future. I hope the contentious and argumentative line in the Gracious Speech that states:

“My Government will strive to improve the lives of children and families”

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will enable the Government to act on both that issue and the essential one of delivering fairer funding for our schools.

The greatest thing that the Government can do to improve the standards of living of people in this country, and to help them overcome the challenge of the rising cost of living, is to succeed on the economy. As I mentioned earlier, there has been some commentary that there was not enough about the economy in the Queen’s Speech. As I discussed with businesses at my business breakfast in Worcester last week, that misunderstands what the Queen’s Speech is about. It is not a description of everything that the Government must do but a programme of legislation. As the hon. Member for Cambridge eloquently pointed out, the Government do not need to legislate to make a difference. Most of the major issues affecting our country and economy do not require legislation. As shown by today’s welcome job numbers, which have improved in Worcester, across the country, we can create jobs and grow the economy without new laws.

Mrs Madeleine Moon (Bridgend) (Lab): One thing that the House desperately needs to do is give a feeling of hope to young people, who are being particularly badly hit at the moment. The hon. Gentleman mentions the unemployment figures. In Bridgend, I had five youngsters between the ages of 18 and 24 claiming jobseeker’s allowance in April 2011, and in April 2012 I had 70. That is an increase of 1,300%. That is not a message of hope, and the House has to do something about it. There was nothing in the Queen’s Speech about—

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. We must have shorter interventions. I know that it was important to the hon. Lady to get that point on the record, and she has done so now.

Mr Robin Walker: The hon. Lady is of course right to be concerned about youth unemployment. In my constituency it is lower than when we took over from the Labour Government, but there is clearly more to be done. The Government are already investing in apprenticeships and many other schemes to help people into work, and we must continue to do more, but I do not believe that that required legislation to be announced in the Queen’s Speech.

Fixing the deficit and getting our country to live within its means is firmly at the centre of the coalition’s programme for government, and there it must remain. The cost of living for millions of families and for businesses that employ young people would increase appallingly if the Government were to lose control of those central aims and allow interest rates to spiral out of control. It is our responsibility to all our constituents to ensure that that does not happen, and good government and efficient management, not legislation, will deliver what we need.

As my hon. Friend the Member for Gainsborough (Mr Leigh) suggested, we need not more laws and regulation but less. However, there are some important measures that require legislation, including supporting enterprise and encouraging small businesses. As a former entrepreneur, I am glad that the Queen’s Speech included an enterprise and regulatory reform Bill, which will repeal many unnecessary requirements on business and promote early resolution of employment disputes.

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Earlier this week, I was pleased to attend the launch of the all-party small business group’s recent report on breaking down the barriers to entrepreneurship, and to hear from local entrepreneurs such as Neil Westwood of Magic Whiteboard. The more the Government can do to implement the all-party group’s proposals the better.

Safeguarding our banks and ensuring that they continue to lend is another vital matter for economic growth, and I am pleased that the Government will bring forward measures to ring-fence commercial banking and encourage lending. I also welcome the fact that they are already beginning to support alternative lending sources, including community development financial institutions such as Impetus, which is doing good work in Worcestershire, and innovative new private sector solutions such as ThinCats.

Of course issues beyond our control affect the economy, and at a time of crisis in Europe, when the eurozone appears to be teetering on the brink, it would be wrong to omit a mention of the broader economic crisis that persists and is driving up the cost of living for everyone. I am as disappointed as anyone that the UK’s growth figures have not been stronger, and as determined as anyone that the cost of the European project should not become an unfair burden on our country. I am glad we have a Prime Minister who is prepared to stand up in Europe and say no when he needs to, and I am confident that he and our Foreign Secretary will continue to hold the line that the UK cannot be asked to pay for the failings of a currency we rightly stayed out of. Britain must continue to forge its own path through this crisis, working with our friends and allies all over the world, not just in Europe, to ensure that we have the best possible opportunities for growth and to protect our economic stability. We should continue to refuse to allow the costs of the EU to increase and guard our own interests in foreign policy and international trade. I believe the time will come when we have to renegotiate our relationship with the EU. Although that is not referred to in the Gracious Speech, it is essential the Government stand ready on that vital matter.

Overall, I welcome the Queen’s Speech. I welcome the fact that, in the year when we celebrate a glorious 60-year reign, we have a Government who are firmly focused on the future. I want to see a thousand flowers flourish in small business and I am excited by the opportunities that will be created in this programme of legislation, whether for companies engaged in helping us to manage energy and resources better, for small enterprises, or for food producers, who will benefit from the new groceries code adjudicator. The economy is at the heart of the Government’s programme, and growing it will be key to allowing Government and people to deal with the cost of living in the years to come.

Several hon. Members rose

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. We have quite a lot of people to get in and speeches are getting rather long, so I have to put a 12-minute time limit on speeches.

3.40 pm

Albert Owen (Ynys Môn) (Lab): It is pleasure to follow the hon. Member for Worcester (Mr Walker), who was courteous in giving way. I pay tribute to his late father, who was Secretary of State for Wales and an

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Energy Minister—I will discuss energy reforms later in my speech. When I lobbied him when he was Secretary of State and a Minister, I found that he agreed with me more than he agreed with Mrs Thatcher, his leader at the time.

The grocery market ombudsman is a very good inclusion in the Queen’s Speech. In the previous Parliament, I introduced a private Member’s Bill on a supermarket ombudsman, which gained cross-party support and went into Committee. We unfortunately ran out of time, but there was a consensus. The Conservative party said at the time that such an office would be a priority in government, as did the Liberal Democrats and the Labour party, and here we are, two years down the road. I am a bit disappointed that it has taken two years for the Government parties to achieve action on a “priority”, but I welcome the fact that it has been achieved.

If we are to have an adjudicator for the code of practice, it is important that it has the right tools and the teeth to do the job. The adjudicator should not exist in name only. We should work together to continue that consensus to ensure that our suppliers, producers and consumers get a better deal out of the code of conduct by having an independent adjudicator to oversee it. I look forward to scrutinising and improving the Bill.

As hon. Members know, the code of conduct has been in place for a couple of years, which is why it was a priority to have an adjudicator. I want the adjudicator to be more proactive in looking at the industry—not just waiting for there to be victims of rogue trading in the grocery market industry. It is important to include in the legislation provision for a third party to bring a problem to the attention of the grocery market adjudicator.

I welcome that proposed legislation, but given that it has been two years since the last Queen’s Speech—Her Majesty has not visited Parliament in only three years of her 60-year reign—many people, including me, were expecting this one to be a beefy Queen’s Speech. However, it is paper thin. The hon. Member for Cambridge (Dr Huppert), who is not in his place, said that we do not need a legislative programme to create growth and do many of the things we need to do in the country, but then he mentioned Liberal Democrat taxation policies. I must remind him that getting taxation measures through the House needs a Finance Bill, so he was not quite correct.

It is important that we have a programme, particularly after what has been described—not by Labour Members, but by the Tory-friendly press—as a botched Budget and a Queen’s Speech that lacked any strategy for growth and job creation. I welcome the drop in unemployment announced today, but it is not a trend and we should not get carried away. As the Prime Minister said in Question Time earlier, we must do more to stop the increasing number of part-time jobs. The rate of full-time equivalent employment is falling not rising. Many people are moving from full-time employment into part-time jobs, and as a result their cost of living is rising and their standard of living falling. We need to address that issue.

I want to mention the Chancellor’s botched Budget. Like the hon. Member for Worcester, I have been visiting businesses in my community, including Conservative

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businesses that have never been particularly Labour friendly. They have told me that the measures on VAT have reduced their capacity to invest, and that is hurting them. The fact that the Foreign Secretary, the Defence Secretary and others have said that businesses need to work a little harder shows, unfortunately, how out of touch the Government are. Those businesses are telling me that they are working flat out, while their costs are rising. Some of those rising costs are the result of external factors—I acknowledge that energy and wholesale prices have risen—but many extra burdens are not as a result of that.

For instance, the Budget contained a 20% increase in taxation on the caravan and hospitality industry. Many hon. Members either abstained or voted for that measure and did not vote against it. Operators have told me that it is a huge burden, because 60% of their turnover comes from the sale of caravans. In the past, it was from that profit that they could reinvest in their parks—and they invested substantial sums. In my constituency alone, an estimated 300 jobs will go if that measure is introduced, because operators will be unable to reinvest. That is a tax on jobs. Before the election, the Chancellor, with his political hat on, talked about a tax on jobs, yet now he has created a tax on jobs by increasing VAT.

Mr MacNeil: The hon. Gentleman mentioned the vote on VAT. Was it a mistake, therefore, for Labour not to vote with the Scottish National party and Plaid Cymru against the rise in VAT from 17.5% to 20% and instead to abstain?

Albert Owen: The hon. Gentleman knows that I do not always vote with my party, and if he checks the record, he will see that I have voted for several SNP measures. If they are sensible, I will vote for them, but not many are. [Interruption.] I cannot speak for the rest of Labour, but I can speak for myself very comfortably in this House, and have done from both the Government and Opposition Benches.

It was wrong to increase VAT. It took money out of the economy at a time when we needed a fiscal stimulus. That is what business is telling me. That is why it is disappointing that the Budget increased VAT instead of addressing the situation. As the Institute for Fiscal Studies said, VAT is a regressive tax which most hurts the poorest and most vulnerable in our society. The Prime Minister and the leader of the Liberal Democrats said as much before the general election, yet when they entered government, they increased it. That is what turned small economic growth into a double-dip recession. That is what business tells me. I am willing to stand up and speak for businesses, especially hard-working businesses. It is a disgrace for senior Ministers to say that businesses should simply work harder, given that the Government are increasing taxation and taking money out of the economy, as a result of which people are not spending on their businesses.

Laura Sandys: I remind the hon. Gentleman that the former Chancellor of the Exchequer, the right hon. Member for Edinburgh South West (Mr Darling), wrote in his published memoirs that he, too, was going to increase VAT.

Albert Owen: I had many debates with my right hon. Friend when he was in office. I did not shirk that responsibility. He felt that increasing VAT was the best

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thing to do but was outvoted in Cabinet. It was not a Government decision. He wanted to increase VAT, but he was wrong. He also wanted to increase vehicle excise duty, but I argued and voted against that measure because it, too, was wrong. On those issues, he was wrong. He did many brave things. For instance, he introduced the 50p rate at the end of our time in office.


Government Members laugh. He did it at the end, but he did it because we were in a crisis and needed extra revenue. That was supported by a lot of people at that time, yet this Government have managed to reduce the taxation for the richest while putting VAT on businesses and as a result a tax on jobs.

Dr Poulter: Does the hon. Gentleman accept that the biggest tax on jobs would be if this country tried to spend its way out of debt, which is exactly what Labour would have us try to do?

Albert Owen: I understand what has come from the Government Whips—I have seen copies of it, and it says that all the time; indeed, it has probably got into the psyche. However, let us look at proper economics. When we have low interest rates—and we have had historically low interest rates—it is during a recession. That is what happens; it is a natural phenomenon. Since January 2009, interest rates have been at an historic low. That did not start when this Government came in; it started in January 2009. Gilts and bonds are low as well, which gives us a golden opportunity to borrow at lower rates. That is how we got out of recessions in the past across the world. Pure austerity measures have never worked. People should look at economic history. Austerity is part of the package, but unless we get growth and jobs, we will not get out of the double-dip recession we are in.

We sometimes get accused of being deficit deniers. I am neither a deficit denier nor a deficit extremist. It is extremism that gets us into trouble, and I have to say that there are many people in this House who are recession deniers—they are denying the fact that we are going down. Many people are paying the price, and that is why the cost of living is so important.

Let me move on to energy and electricity market reform. I support reform in principle, although we do not know the details, so it would be a little naive to support it fully until it is implemented. I am a member of the Select Committee on Energy and Climate Change, and we have looked at the principle of electricity market reform. We produced a report highlighting some of our concerns. There has been a White Paper for a long time, but we are only going to get pre-legislative scrutiny. We need to know what is in the Bill in order to deal with the issue properly and provide the certainty needed to invest in our infrastructure.

The Government have missed an opportunity in this Queen’s Speech. On one side, yes, there should be incentives for investment—that is very important—but there is very little protection for consumers. I have long argued in this House that Ofgem, the energy regulator, should have more teeth. It should be standing up. It is a damned cheek for the new Energy Secretary—whom I welcome to his place today—to try to claim some credit for the fact that energy companies are providing greater transparency in their bills. It is campaigns by the likes of Which? and Consumer Focus and so on that have

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highlighted the problems and embarrassed the energy companies, while the Government stood by and watched. Ofgem should have greater teeth. I make a plea to the Government to take that on board, because energy costs are hurting people, in peripheral areas in particular. Many are off the gas mains and off the grid. I want Ofgem, the regulator, to have the same powers to protect customers who are not on the gas mains as it enjoys in protecting those who are on the gas mains.

Finally, let me move on to the subject of transport. I welcome the concept of High Speed 2, but I want to see it up and running. The Transport Secretary is quoted as saying, “Well, we’re preparing for legislation.” The legislation is vital, so can she give some indication of when it is likely to be introduced? We have done the consultation and the matter has been agreed by this House, although it is not popular with certain sections.

Justine Greening: The hon. Gentleman is right that there is an awful lot of preparatory work to be done to ensure that the hybrid Bill contains the information that this House needs to scrutinise the proposal properly. We expect that preparatory work to be done through the course of this year and next, and for a hybrid Bill to be introduced by the end of next year.

Albert Owen: I appreciate that. A hybrid Bill in itself will take a long time, so we are unlikely to see anything soon. However, I support the main thrust of high-speed rail. We saw benefits under the previous Government in north-west Wales, north-west England and Scotland after we invested in faster line speeds. High-speed rail is important.

My final point is about VAT on fuel duty. Every time people spend £1 on petrol, they have to pay an extra 2.5p. That really hurts people. It is wrong, and it should be reversed.

We needed a Queen’s Speech that set out proposals for jobs and growth. This has been a missed opportunity, on top of a botched Budget which has led us into a double-dip recession. That is damaging the living standards of my constituents and those across the United Kingdom.

3.55 pm

Sir Bob Russell (Colchester) (LD): The title of today’s Queen’s Speech debate is “Cost of Living”, yet at 10 o’clock this morning, only 10 Members had put their names down to speak, and the Whips were rushing around trying to get more people from all parts of the House to participate. That suggests to me, despite the Opposition amendment, that the serious financial situation facing millions of low-income and disadvantaged people is considered to be a lower priority than the subjects debated on other days when so many MPs wanted to speak that there had to be a time limit of as little as six minutes for each speaker.

The Chancellor’s decision to cut the top rate of income tax from 50p to 45p was a political error on a big scale, for it gave the impression that this Government are one who favour the rich at the expense of the poor. The notion that “we are all in it together” lacked credibility because of the Cabinet’s decision on that. It is the way the Chancellor tells them that is the problem. Regrettably, his announcement on the reduction from the 50p top rate completely overshadowed the good

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news that 20 million people would have lower taxes. In the context of the cost of living, that is wonderful news. The last Budget resulted in a tax cut of a further £220 on top of the £550 income tax cut already achieved since Labour lost the 2010 general election. That has to be good news, too, in the context of the cost of living. In my Colchester constituency, nearly 5,000 low-income people will, thanks to the coalition, be lifted out of paying any income tax. That is the second-highest number in any local authority area in Essex.

Albert Owen: The hon. Gentleman is right to say that the thresholds have raised and that some people are coming out of paying income tax. Does he not acknowledge, however, that his party and coalition colleagues voted in favour of VAT rises, which will wipe out any gain that the lower-paid will have had? The VAT has increased Budget on Budget.

Sir Bob Russell: If the hon. Gentleman checked the record, he would see that I voted against the VAT increase.

The headlines were all about the cut to the 50p top tax rate for those earning more than £150,000 a year. There are very few people in my constituency who get paid upwards of £3,000 a week. Thus, all the good things done to help those on low incomes—whether they be families or old-age pensioners—have been lost in the minds of many people because of the cut in the 50p tax rate.

Before the Opposition get excited, I must point out that, for all but the final few weeks of the last Government—and let us not forget how Labour left the country in a financial mess—the top rate of tax under new Labour was 40p for high earners, and that for almost 13 years. Our 45p rate is higher than the 40p rate levied by new Labour.

Let me remind the House of what I said on 11 May last year at Prime Minister’s Questions:

“The Labour Government took Britain to the brink of bankruptcy. The gap between rich and poor widened, and nearly 4 million children were left living below the poverty line. Last month, the coalition Government cut income tax, liberally helping millions of people, but I have to ask the Prime Minister this: if we are all in this together, what is he going to do about the obscenity of 1,000 multi-millionaires boosting their personal wealth by 18% in the past year?”

Responding, the Prime Minister said:

“One of the things we absolutely will do—and we have put in the money to make sure it happens—is crack down on the tax evasion that takes place so widely in our country. The Treasury has put money into that campaign to make sure it happens. The hon. Gentleman makes a good point.”

Well, I normally do. He continued:

“Because of our coalition Government, we have lifted 1 million people out of income tax and, at the same time over the past year, we see exports up, private sector jobs up, the economy growing and borrowing down—all radically different from what would have happened if we had listened to the recipe from the Labour Party.”—[Official Report, 11 May 2011; Vol. 527, c. 1158-9.]

In concluding today’s debate, will the Minister give us a progress report on what the Prime Minister said a year ago? Perhaps what is needed on both Front Benches are people with experience of the university of life, and the school of hard knocks.