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Maria Miller: Let me emphasise again that we have read all the petitions and all the submissions to the consultation, and reassure my hon. Friend that every single one of those submissions has validity. However, I must also remind her that our starting point was not whether we would introduce these measures, but how we would do so. While the strength of feeling is clearly there, other Members have mentioned organisations and individuals who support these measures, and we must ensure that we take a balanced approach.

Mr Philip Hollobone (Kettering) (Con): I am afraid that that answer simply is not good enough. I put it to the Government that their professed deep-seated and heartfelt commitment to equality does not appear to have applied to the consultation itself. Can the Minister explain to the very fair-minded residents of the Kettering constituency why the views of the overwhelming majority of respondents have been rejected, including a massive petition with more than half a million signatures?

Maria Miller: I know that my hon. Friend speaks powerfully for the people of Kettering, and I know that he will want to stand up for the wide range of views that undoubtedly exist in his constituency. I assure him that all those views have been considered, and that they have helped us to form our response today. We have proposed a quadruple lock to protect religious institutions, but it is also important for us to represent people who may even live in his constituency: gay couples who want to be able to celebrate their love and commitment to each other through marriage.

Kris Hopkins (Keighley) (Con): I warmly welcome my right hon. Friend’s statement and this important legislation. On Saturday I had the pleasure of attending the installation of the Rev. Pat Bateman as vicar of All Saints church in Ilkley. Several religious leaders who attended the ceremony expressed a fear that they might be forced to conduct gay marriages in their churches. Can my right hon. Friend reassure them that that is not the case?

Maria Miller: I welcome my hon. Friend’s support. I can certainly reassure him that it will be for religious organisations and, indeed, individual ministers to discuss the issue themselves, and to examine the protections that we have introduced in order to ensure that no ministers or religious organisations will be forced to conduct same-sex marriages if they feel that that does not accord with their own religious beliefs.

Craig Whittaker (Calder Valley) (Con): The Minister has said today that she has given a clear articulation of protection for religious freedoms by introducing a quadruple lock. However, she has also said that there is a “negligible” chance that that will be challenged. Can she tell us what the risk of a challenge is in percentage terms?

Maria Miller: I remind my hon. Friend that it is not just the quadruple lock that will provide that protection. The case law of the European Court of Human Rights, and the rights in the European convention, put the protection of religious belief in this matter beyond doubt, and I ask him to focus on that.

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Mr John Leech (Manchester, Withington) (LD): I warmly welcome the Minister’s commitment to the introduction of equal marriage. I also welcome the quadruple lock guarantee which will ensure that churches that do not wish to conduct such ceremonies do not have to do so. We must accept, however, that the consultation process has been divisive. Does she agree that we should now seek to reassure all those churches that they have nothing to fear from the legislation?

Maria Miller: I hope I can convince my hon. Friend that the consultation was absolutely fair, but he is right to say that we now need to work not just with the churches but with religious institutions throughout our country to ensure that the safeguards that are clearly necessary are effective.

David Rutley (Macclesfield) (Con): Many Macclesfield residents have expressed concern about the legislation. Having known the Minister for many years, I am aware that family and marriage are very important in her own life. What those residents want to know is how churches and faith groups will be protected not just from human rights laws but from equalities legislation. That is what worries them.

Maria Miller: The people of Macclesfield are well represented by my hon. Friend, and I know that the importance of family ranks high in his life as well. I can assure him that the amendments that we will introduce to the Equality Act 2010 will provide protections in local law to ensure that individuals, and indeed religious institutions, need have no fear of action being brought against them on equality grounds. I hope that he will be able to convey those reassurances to his constituents.

Richard Graham (Gloucester) (Con): Although the debate is still divisive, I welcome the balance struck by my right hon. Friend’s proposals to make marriage—which so many of us value hugely—available to all who want to be married, while protecting the freedoms of those who disagree. The last of the four important proposed legal locks recognises the opposition of the Church of England, and will make it illegal for same-sex marriages to be conducted in C of E churches. Can my right hon. Friend confirm that it will be possible for Roman Catholic and evangelical churches to opt out in a similar way if they so wish?

Maria Miller: My hon. Friend is right to say that what we are trying to establish today is a balanced approach. I can tell him that the various mechanisms that I have outlined today will provide protections that both the Roman Catholic Church and the Evangelical Church have identified to me at both national and local level.

Mr David Nuttall (Bury North) (Con): Will the Minister please tell the House how many respondents to the consultation were resident outside the United Kingdom?

Maria Miller: The hon. Gentleman will know that there were more than 200,000 responses to the consultation, and that people outside the United Kingdom were given an opportunity to participate. We collected all the information and examined it in detail, and it helped us

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to think about how, not whether, we should implement the proposals. That is what I ask my hon. Friend to focus on.

Jeremy Lefroy (Stafford) (Con): Can my right hon. Friend unequivocally guarantee freedom of conscience and speech to my constituents, at work and elsewhere, allowing them to disagree publicly with the redefinition of marriage without sanction by their employers?

Maria Miller: As I said earlier, a case involving an individual who articulated a view about equal civil marriage has already gone to court. I think that the courts have upheld the view that individuals are entitled to their private views, and that their jobs can be safeguarded on those grounds.

Alec Shelbrooke (Elmet and Rothwell) (Con) rose—

Mr Speaker: Order. The hon. Gentleman has perambulated around the Chamber. If he assures me that he has at all times remained within it, we must hear him. It is a very curious approach, but it is not of itself a breach of the Standing Orders of the House. [Hon. Members: “He has been hiding.”] He has been hiding! Let us now hear from Mr Alec Shelbrooke.

Alec Shelbrooke: I am most grateful to you, Mr. Speaker. I have indeed moved around. I was not going to get involved, but I just want to say this to the Minister. The fact is that the vast majority of my constituents simply do not believe that the European Court of Human Rights will not take this further. I think that a great many Members on this side of the House would support the Bill if we withdrew from the European convention on human rights and introduced a British Bill of Rights. That, by the way, was in the Conservative manifesto.

Maria Miller: I know that my hon. Friend never hides his views—although he may have been hiding himself from you in the Chamber today, Mr. Speaker—but I ask him to join me in trying to move away from the hyperbole that has been employed in campaigns that we have all witnessed in recent months. When the facts are looked at, the safeguards are clear. I remind him—at the risk of repeating myself unduly—that the case law of the European Court of Human Rights, as well as the European convention, clearly puts the protection of religious belief in this matter beyond doubt, and that is the Government’s legal position.

Mark Pawsey (Rugby) (Con): The Minister herself described the institution of marriage as a building block of our society, but last year nearly 50% of all babies were born to couples who were not married. Given that marriage rates in Spain and Holland collapsed after the introduction of same-sex marriage, does she not fear that in this country even fewer couples intending to have children will choose to marry?

Maria Miller: I respect my hon. Friend’s views on this, and share his concern that many people today do not view marriage as relevant to them. I hope all Members will take this issue very seriously, because we should encourage more people to see marriage as an important way to cement their relationships and show commitment and responsibility, and so strengthen our society. I do

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not think that what my hon. Friend has said would happen in the UK, however. I think our proposals will be welcomed and will serve to promote the relevance of marriage today.

Rehman Chishti (Gillingham and Rainham) (Con): How many people of the Muslim faith—and of the Sikh and Hindu faiths—responded to the consultation, and how many were for this proposal and how many were against? I must tell the Minister that in my constituency concerns have been raised with me about this redefinition by people from the churches, the mosques and the gurdwaras. I ask her to take that on board.

Maria Miller: My hon. Friend is right to suggest that this issue is important for not only the Churches, but for faith groups across the board. That is why the protections I have outlined will work across the board. This is not a numbers game, but I am happy to look at whether we can provide the detailed information that my hon. Friend requests.

Bob Blackman (Harrow East) (Con): I welcome the tone in which the Minister delivered the statement. One concern, however, is that there has not yet been any mention of what changes will be made to the Marriage Act 1949, which guarantees the rights of individuals to get married in a place of their choosing where they live or where they have a residence, and that many religious institutions—particularly those with relatively small congregations—will be forced against their will to host marriages.

Maria Miller: My hon. Friend must look at the quadruple lock I have announced today for the reassurance he seeks. Under that, there is no way a religious institution or individual would be forced to do what he says. I have already acknowledged the particular situation of the Church of England, which is why we have taken specific measures to protect it.

Penny Mordaunt (Portsmouth North) (Con): I would like to reassure the House that, as an unmarried heterosexual woman, if these measures go through I will certainly consider the institution. The heart of the matter, however, is whether it will be possible to allow same-sex marriages, whether civil or religious, and still protect those religious organisations that do not wish to participate. What can the Minister do to reassure Members who might be sceptical that that will be possible?

Maria Miller: I believe that we can provide local reassurance through the law, and I have already outlined the European situation. By working together with religious organisations, we can build confidence in what we are

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proposing. It is right that following this statement we should work collaboratively, and I would be happy to meet any Member who wants to discuss these matters in more detail.

Richard Drax (South Dorset) (Con): I do not agree with the redefinition of marriage, and nor do the majority of the constituents of South Dorset. Other than arrogance and intolerance, what right have the Minister and the Government got to stamp their legislative boot on religious faith?

Maria Miller: My hon. Friend represents the people of South Dorset extremely well. He rightly vigorously puts forward his own views, and I respect that. However, the state has had a stake in the institution of marriage for more than 170 years, and I therefore believe it is right that the state asks itself whether it is right to exclude people from the institution of marriage simply because they are gay. I do not believe that is right, which is why these changes have been proposed and the Government are presenting our response to the consultation.

Dr Julian Huppert (Cambridge) (LD): I congratulate the Minister on her comments. The state should not bar a couple who want to marry just because of their gender, and the state should not bar a religious body that wishes to do so from conducting same-sex marriages. Will she also look, however, at providing in England legally binding humanist weddings, which work so successfully in Scotland?

Maria Miller: That is a detail I am happy to look at. It is not part of our proposals today, but, in the spirit of collaboration, I will be happy to talk to my hon. Friend about it.

Andrew Bridgen (North West Leicestershire) (Con): I have listened to the Minister’s remarks on the legal robustness of this possible change in legislation and redefinition of marriage, but I am somewhat sceptical. Why has she not made public the Attorney-General’s specific advice on this matter?

Maria Miller: As I am sure my hon. Friend knows, any advice the Government receive is privileged information. I have set out the Government’s legal position, which is straightforward and clear, and I hope it will provide my hon. Friend with the reassurance he seeks.

Mr Speaker: I am grateful to the Minister, the shadow Minister and all colleagues. Some 62 Back Benchers were able to contribute in 60 minutes of Back-Bench time. That shows what we can do when we put our minds to it. I warmly thank the Minister of State for her statement.

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Northern Ireland

1.55 pm

The Secretary of State for Northern Ireland (Mrs Theresa Villiers): With permission, Mr Speaker, I would like to make a statement about recent events in Northern Ireland.

Over the past week a series of protests has taken place relating to the decision taken by Belfast city council on the flying of the Union flag. A number of these have witnessed violence, rioting and attacks on police officers. Yesterday evening, a masked gang threw a petrol bomb inside an unmarked police car; a young policewoman narrowly escaped very serious injury. That is now being treated by police as attempted murder.

As I made clear in the House last Wednesday, there can be absolutely no excuse or justification for this kind of thuggish and lawless behaviour. It is despicable. We condemn it unreservedly, and it must stop immediately. I welcome the motion passed unanimously yesterday in the Northern Ireland Assembly, which unequivocally condemned

“rioting and the campaign of intimidation, harassment and violent attacks on elected representatives”

and reaffirmed

“the absolute and unconditional commitment of all its Members to respecting and upholding the rule of law and the pursuit of their political objectives by purely legal and political means”.

Let us be very clear: no one can be in any doubt about the Government’s support for the Union and its flag, but the people engaged in the kind of violence we have seen in the past few days are not defending the Union flag. There is nothing remotely British about what they are doing. They are dishonouring and shaming the flag of our country through their lawless and violent activities. They discredit the cause that they claim to support. They are also doing untold damage to hard-pressed traders in the run-up to Christmas, and they undermine those who are working tirelessly to promote Northern Ireland to bring about investment, jobs and prosperity.

In addition to outbreaks of violence, appalling threats have been made against elected politicians, including a death threat to the hon. Member for Belfast East (Naomi Long). I know that the whole House will join me in expressing our complete solidarity with the hon. Lady and her colleagues in the Alliance party and all the people who have been threatened and intimidated over the last week by this disgraceful conduct. The right of elected representatives to go about their daily business without the threat or fear of intimidation is one of the hallmarks of our democracy, and these threats are nothing less than an attack on democracy in this country.

Throughout this crisis, I have stayed in close contact with the Chief Constable for Northern Ireland. Some 32 police officers have been injured in the line of duty during the last week, and I want to take this opportunity to pay the warmest of tributes to the brave men and women of the Police Service of Northern Ireland, who once again find themselves in the front line in countering and tackling violence, and once again they have shown themselves to be fearless guardians of the rule of law whenever, and from wherever, it comes under attack. I received a further update from the Chief Constable this morning. He informed me that about 38 people have now been charged in relation to this disorder. Those engaged

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in violence should be in no doubt of the determination of the Chief Constable and the PSNI to apply the full force of the law—those engaged in violence should be well aware of that fact. I have also discussed with the Chief Constable the threats to elected politicians. Again, I am in no doubt as to the extreme seriousness Matt Baggott, like the rest of us, attaches to those unacceptable threats. I assure the House that the PSNI is doing all it can to enable elected politicians to carry out their duties and serve their constituents.

For our part, the UK Government will continue to give their fullest backing to the PSNI. That is why, in the face of the deteriorating security situation we inherited, the Government secured an exceptional additional £200 million from the Treasury reserve. We will continue to do all we can to assist the Chief Constable in keeping the people of Northern Ireland safe and secure, whether from so-called dissidents or from those responsible for this week’s events.

Yet responsibility for solving the underlying issues that have led to the violence does not rest solely with the police or with the UK Government, and it is right that local politicians in Northern Ireland take the lead in trying to reach agreement on a way forward. In tackling these issues, I believe that everybody has a responsibility to consider very carefully the impact of their words and deeds on wider community relations.

Once again, the trouble we have seen in Belfast and elsewhere underlines the urgent necessity of working towards a genuinely shared future for all the people of Northern Ireland. We have made it clear that where the Executive take the difficult decisions needed to deliver that, they will have the Government’s full backing. It would be a huge lost opportunity if Northern Ireland politics were to continue to be defined by questions of identity. There is a pressing need to focus on the wider issues of the economy, jobs and delivery.

The scenes of the past few days have been deplorable, but we should not let them detract from the positive progress that Northern Ireland has made in recent years. That was highlighted last Friday by the visit to Belfast of US Secretary of State Hillary Clinton. She rightly pointed to the many difficult decisions taken by local politicians and the leadership they have shown in bringing us to where we are today. I am sure that those politicians will not allow the achievements that have been made to be undermined by lawless violence of the kind we have seen over the past week. I am also sure that this House will remain united in support of their efforts to move the peace process further forwards towards a genuinely shared future for all in Northern Ireland.

2.2 pm

Vernon Coaker (Gedling) (Lab): I thank the Secretary of State for coming to the House to make this statement and for advance sight of it. Let me say why I, and the Opposition, called on her to do so. There have been eight consecutive nights of violence in Northern Ireland. A Member of this House has had her life disgracefully threatened, and her Alliance party has seen its representatives intimidated and subjected to violence, and its property attacked.

Violence against the police has escalated, to the extent that an attempt was made to murder a female officer last night by breaking the window of a police car and throwing a petrol bomb inside while she was still in the

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vehicle. Dozens of officers have been injured after coming under sustained attack over the course of the week. A few days before, another murderous attack on the police was narrowly avoided only when a vehicle carrying a rocket was apprehended in Derry. It cannot go on, and Westminster’s voice must also be heard. This violence would not be tolerated in London, Cardiff or Edinburgh, and it should not be tolerated in Belfast. A clear and strong message must be sent from this place today that says this violence is wrong, unacceptable and without justification.

May I join the Secretary of State in once again paying tribute to the Police Service of Northern Ireland for its dedication and bravery? I spoke earlier to the Justice Minister, whom I also met a few days ago in Belfast. What discussions has the Secretary of State had with him and the Chief Constable about resources and the police’s capacity to deal with this disorder, and the continuing national security threat? Will she update the House on what her latest security assessment is?

The homes of public representatives have been vandalised and attacked. Local councillors, who are doing their best on behalf of the communities they serve, and their families have seen their homes targeted and vandalised. I am sure I speak for the whole House when I say that whether we are talking about a Democratic Unionist party councillor in Dungannon, two Alliance councillors and their family in Bangor, or the husband of a Sinn Fein councillor in Armagh, such violence is wrong and must stop. I stand shoulder to shoulder with public representatives in Northern Ireland, for democracy and against violence. When a Member of Parliament is threatened and attacked, I view it as a threat to and attack on all of us and everything we stand for.

Will the Secretary of State tell me what assessment she has made of the involvement of loyalist paramilitaries in the rioting? Does she view their actions as a threat to national security? What discussions has she had with the Prime Minister about this? Has he discussed the ongoing violence with the First Minister and Deputy First Minister, or the Justice Minister?

I know there are underlying issues and I am realistic about the challenges we face. I have been with Unionist and loyalist political representatives to visit areas in Belfast and other parts of Northern Ireland, and I want to say this: hon. Members and others from Northern Ireland are doing a really difficult job in these circumstances in these communities. I do not doubt their sincerity, integrity or hard work. They are dealing with frustration and anger, and they need support in helping to channel that away from violence and towards politics. I will do what I can to help, and I make that offer in republican and nationalist communities, too. But violence is never justified and it is wrong. It is damaging those communities and until it stops we cannot even begin to discuss or do anything about the longer-term issues that need to be resolved. What discussions has the Secretary of State had with political representatives about supporting work in these communities? Will she consider bringing political leaders together to see what can be done and what support the UK Government can give to any initiatives in these areas?

I care deeply about Northern Ireland and its people, and I know the Secretary of State and all other hon. Members do, too. I think it was exceptionally important today that we came together as the United Kingdom

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House of Commons and said that. Northern Ireland matters; it is important. I hope that we see this awful violence ended and that we can look forward to a 2013 in which Northern Ireland is showcased on the world stage as the great place it truly is.

Mrs Villiers: I thank the shadow Secretary of State for the measured tone of his response. Like him, I believe that violence of the sort we have seen over the past week is unacceptable in Northern Ireland, just as it would be unacceptable anywhere else in the United Kingdom. In particular, I fully agree with him that these attacks on the police are absolutely despicable and should not be tolerated.

The hon. Gentleman is right to highlight the arrests recently made in Londonderry in relation to an explosively formed projectile device. They were very significant arrests and Northern Ireland is a safer place as a result of their having taken place. He asked about my contacts with the Justice Minister. I believe I have spoken three times to the Justice Minister since these events started to unfold. I have also spoken to Deputy Chief Constable Judith Gillespie and spoken three times to the Chief Constable to make sure that I am fully aware of their concerns. I know that the Justice Minister continues to work extremely hard to ensure that the police have all the resources they need, and the UK Government are entirely supportive of him in his efforts to do that.

The shadow Secretary of State asked for an update on the general security situation. The threat level from dissident terrorism remains at “severe”, meaning that an attack is highly likely. The PSNI continues to focus strongly not only on these disturbances, but on all activities undertaken by paramilitaries and all terrorist activities in Northern Ireland. He particularly asked me about the investigation of loyalist paramilitary involvement in the disturbances, and I was discussing that with the Chief Constable this morning. It appears that some loyalist paramilitaries attended some of these events. There does not appear to be evidence of organised orchestration by paramilitary groups, but I am sure that the PSNI will be reviewing this carefully and will continue to investigate it as part of its wider investigation, which is extremely serious in relation not just to the disorder, but to the disgraceful threats received by elected representatives.

The shadow Secretary of State asked me whether I have discussed this matter with the Prime Minister. I have been keeping the Prime Minister fully informed on this; a copy of my statement was sent to him, I discussed this matter with his chief of staff this morning and he is following events very closely. The shadow Secretary of State also asked about my contact with Northern Ireland politicians. I spoke this morning to the First Minister about this situation specifically, and I have had a whole series of meetings; pretty much every discussion I have had with Northern Ireland politicians since being appointed Secretary of State for Northern Ireland has focused on building a shared future and dealing with sectarianism, because that is one of the crucial challenges we face as a nation, in the United Kingdom in general and in Northern Ireland in particular.

The shadow Secretary of State was right to focus on and express concern about frustration and anger. It is essential that that frustration is channelled only into legitimate protest and into the political process as well.

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The history of Northern Ireland shows what incredible progress can be made once people abandon violence and promote the peaceful and democratic resolution of differences across the community.

Mr Laurence Robertson (Tewkesbury) (Con): As a Unionist who believes that the Union flag should fly over every public building in the United Kingdom, may I join the Secretary of State in condemning the violence that we have seen in the Province? I join her also in paying tribute to the members of the PSNI and in sending our sympathies to those who have been injured. I pay great tribute to the hon. Member for Belfast East (Naomi Long), who has shown great courage and determination at this time. She is a very valuable member of the Select Committee—a Committee that is working hard to try to help improve the economy of Northern Ireland. Does the Secretary of State agree that nothing could do more to undermine those efforts than the violence that we are currently seeing on our television screens every day?

Mrs Villiers: I thank my hon. Friend for giving me another opportunity to express my concern and sympathy for the hon. Member for Belfast East and all the others who have found themselves in a similar position, not least Sammy Brush, the DUP councillor.

I completely agree with my hon. Friend, the Chairman of the Northern Ireland Affairs Committee. This is absolutely the last thing Northern Ireland needs. At a time when so much effort is going into reviving the private sector in Northern Ireland and boosting its economy, to promote inward investment and to promote Northern Ireland as a great place to live, to work and to invest, it is hugely damaging to see scenes of riot and disorder on our TV screens. That is another reason why it is imperative that no matter how strongly people feel about flags, they express themselves only through democratic means and never by violence and disorder.

Naomi Long (Belfast East) (Alliance): I thank the Secretary of State for her statement, and I join her in condemning last night’s wanton and gratuitous attempt to murder police officers who were guarding my constituency office and for whom I have the utmost admiration and respect. That attack is no different from previous murder attempts by dissident republicans against the security services.

Can the Secretary of State therefore confirm that this violence is being treated as a matter of national security, and advise when the Prime Minister will meet the Northern Ireland Justice Minister to discuss the security situation in Northern Ireland, as has been requested? Finally, does she agree that if we are to have a shared future capable of dealing with emotive and charged issues such as the flying of flags, it will require strong, courageous and above all generous leadership, willing to give a little of their own position in order to gain the greater prize for the whole community?

Mrs Villiers: I am grateful to the hon. Lady for her question. However one chooses to label these attacks, whether one calls them terrorism or criminal activities, they are utterly unacceptable. There is a technical definition

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of national security, but whether or not one applies that in this case, it is unacceptable for these attacks and threats to take place.

With reference to the Prime Minister and the Justice Minister, as Northern Ireland Secretary I remain happy to meet the Justice Minister whenever he would like, and I am happy to pass on again his request to the Prime Minister for a direct meeting with him. I have every sympathy with the hon. Lady’s call for generous leadership. Again, the successes of the past 20 years demonstrate that generous leadership and being prepared to compromise can lead to tremendous benefits right across the community, and I have every confidence that the political leadership in Northern Ireland is capable of that form of generous leadership on flags, as it has been on so many other issues.

Kris Hopkins (Keighley) (Con): May I reiterate my support and admiration for the brave men and women of the Police Service of Northern Ireland, and condemn the mindless thugs who are betraying the name of Unionism, which I support? Does the Secretary of State agree that every brick and petrol bomb that is thrown damages inward investment, job creation and tourism in Northern Ireland?

Mrs Villiers: Yes, I agree that significant economic damage is being done as a result of these riots, which is another reason why it is urgent that they cease.

Paul Murphy (Torfaen) (Lab): Does the Secretary of State agree that although the priority must be to end the appalling violence, the Alliance party genuinely tried to find a compromise on a very difficult issue? Does she accept that it is important for her, as the United Kingdom Secretary of State not only to talk to the political leaders in Northern Ireland—that is vital—but to engage in conversation with leaders of local government in Northern Ireland, to try to stop the violence happening elsewhere?

Mrs Villiers: I agree that it is very important for me and for my Minister of State to engage with local government on these and other issues, and with the wider community as well. It is essential that councillors from Belfast city council are able to take decisions on issues such as flags without being intimidated, and without having a riot outside their door. It was a disgraceful start to a sad series of events that a council was prevented from taking a vote on the issue. It is down to the council to take its own decisions on these matters.

Stephen Lloyd (Eastbourne) (LD): I wholeheartedly support the Secretary of State’s statement today and endorse, from my own perspective and that of my party, the dignity with which the hon. Member for Belfast East (Naomi Long) has dealt with the very challenging scenarios of the past 10 days for her and for the Alliance party that she represents. I represent a constituency whose Member of Parliament, Ian Gow, was murdered many years ago by the IRA. He is still fondly remembered across the whole party political spectrum in Eastbourne. I seek reassurance from the Secretary of State—it is particularly relevant to what the hon. Member for Belfast East and some other politicians have been going through—that both the UK Government and the devolved Government will work closely together to ensure that

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elected politicians in the north of Ireland continuously and continually have the appropriate levels of security for their protection?

Mrs Villiers: Yes, I can certainly give the hon. Gentleman that assurance.

Dr William McCrea (South Antrim) (DUP): At the outset, on behalf of my right hon. and hon. Friends, I unreservedly condemn those who have engaged in violence on our streets and assure those injured or affected by such violence, including the police, of our support. I also unreservedly condemn any threat against the hon. Member for Belfast East (Naomi Long) and her colleagues. I certainly know what that is like because the IRA tried not only to attack my property, but to assassinate me and my complete family because I wanted to hold to the Union flag. However, does the Secretary of State agree that it is not right to demonise those who wish to protest peacefully against a decision to remove the Union flag from Belfast city council? That flag is the very core of the Unionist identity and many people of Northern Ireland died in order to keep it aloft in our Province. Can the Secretary of State therefore assure me that the PSNI has every resource that it needs to maintain law and order and to facilitate peaceful protest?

Mrs Villiers: I very much welcome the hon. Gentleman’s forthright condemnation of what has gone on. Clearly, he has a special perspective on this, having himself been a victim of such terrible threats in the past. It is a fundamental part of our democracy that people have the right to protest peacefully. That cannot, of course, justify the terrible scenes that we have seen on our television screens over the past week.

Ben Gummer (Ipswich) (Con): Everyone in the House will have seen how communities across the United Kingdom have fought hard over the past few years to reclaim the Union flag as an identity for everyone who lives in this country—something that we saw so splendidly this summer in the jubilee and the Olympics. Is my right hon. Friend not frustrated that in this year when the flag really did become a symbol for everyone who lives in this country, no matter from what background they come, it is being so abused at present?

Mrs Villiers: It is a concern that we see our Union flag being abused. Like my hon. Friend, I shared the joy that I think everyone felt with fantastically successful events this year, such as the Queen’s jubilee and the Olympics, where the Union flag played such a wonderful central role and such a positive one. That is another reason why those who persist in that course of conduct should stop immediately and confine their activities to peaceful participation in the democratic process, rather than seeking to hold people to ransom by rioting and threatening them.

Paul Goggins (Wythenshawe and Sale East) (Lab): I, too, offer my full support to my hon. Friend the Member for Belfast East (Naomi Long). The Secretary of State referred to her conversations with the Chief Constable of the PSNI, who has indicated that the violence has been stoked up by individuals using social media. Does she agree that in order to identify those responsible it is essential that the police, with proper authorisation, can access relevant details of the communications of those

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causing the chaos? If she agrees, does she think that the Deputy Prime Minister’s threat to block the draft Communications Data Bill will help or hinder those who have to keep order in such circumstances?

Mrs Villiers: The right hon. Gentleman, who is a former Minister, will appreciate that, regardless of what happens to the proposed Bill, there are already opportunities for the police to look at social media: they can do that in a public way, as everyone else does. I can assure him that the PSNI is carefully monitoring social media within the parameters of what it is allowed to do by law.

Mr David Anderson (Blaydon) (Lab): I agree entirely with the Secretary of State’s claim that this is nothing less than a fundamental attack on democracy. Part of being a democracy is accepting that sometimes we do not get what we want. Opposition Members know that very well, as every day of the week we have to accept things we do not like, and the same was true for Government Members when they were in opposition. Can we be very clear, on behalf of everyone in this House, that there is no way that the people leading the riots will succeed and that we will support the people in Belfast in carrying out their democratic mandate in what they have agreed to do properly?

Mrs Villiers: I welcome that firm statement, which I am sure that everyone will endorse. Such decisions need to be taken on the basis of democracy and consent, and indeed decisions on matters as sensitive as flags need to be taken after calm reflection. It is important that a real effort is made to take into account the concerns of people right across the community. There is a way forward. Northern Ireland has demonstrated that it can resolve seemingly intractable problems that have divided people for 800 years, so I am sure that they can find a sensible way forward on flags as well.

Ms Margaret Ritchie (South Down) (SDLP): I thank the Secretary of State for her statement. In condemning the levels of unrest on the streets of Belfast and the assault on democracy and on our hon. Friend the Member for Belfast East (Naomi Long) and others across Northern Ireland over the past few days, does she agree that parties that agreed to designated days for flying the Union flag at Stormont should not have exaggerated the significance of having the same policy at Belfast city hall and that the consequences of such agitation, including the distribution of inappropriate literature door to door in east Belfast, have contributed considerably to the unrest on the streets?

Mrs Villiers: As I have said, the important approach is to recognise that those decisions are very sensitive and that different people in Northern Ireland view flags in completely different ways. I think that the guiding principle should always be that those decisions should be taken with care and thought after dialogue and with a mind on the impact on community relations and an understanding of their impact on people who have different views right across the community.

Kate Hoey (Vauxhall) (Lab): Does the Secretary of State accept that for many hard-working, decent, pro-Union people there is a feeling that a shared future sometimes looks like a dripping away of their British identity?

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Does she accept that the Taoiseach and the Irish Government continually stand up for the nationalist community and their idea of a united Ireland? Will she, as Secretary of State, stand up more for the pro-Union community and the fact that this is the United Kingdom, and will she help by condemning the fact that a children’s playground has been named after an IRA gunman?

Mrs Villiers: It is my job, as Northern Ireland Secretary, to stand up for all the people in Northern Ireland. I say to the hon. Lady what I have said many times: this Government are not neutral on the Union, and neither am I. I am very supportive of the Union and Northern Ireland’s place within it. She invites me to get involved in the dispute about the naming of a playground. It is for the council involved to take that decision. I repeat what I have already said: it is very important that decisions on sensitive matters, whether playgrounds or flags, are taken in a measured way with appropriate attention to community relations and the consequences of those decisions on the wider community, including on people whose views are very different from those of the people taking the decisions.

Ian Paisley (North Antrim) (DUP): If I am reading the Secretary of State correctly, I agree that it is completely insensitive and foolish for people to think that they can name play-parks after murderers and terrorists and remove the national flag from Northern Ireland, or reduce its flying, and think that there will be no consequences whatsoever. Sadly, we have seen that identity and the struggle for identity have consequences, and I condemn the violent consequences that have occurred. In giving meaning to the words in her statement, that nobody can be in any doubt about the Government’s support for the Union and its flag, will she go to Northern Ireland at her earliest convenience and reiterate again and again the view that Ulster’s Britishness is not diminished whatsoever?

Mrs Villiers: As I have said, I have repeated on many occasions the Government’s support for the Union and for Northern Ireland’s place within it. The question of Northern Ireland’s future is settled on the principles of the Belfast agreement; it will only ever be decided by democracy and by consent. When it comes to the politics of identity, I think that it is very important that when decisions are taken, whether on flags or other issues, the very different traditions, perspectives and perceptions of identity in Northern Ireland are taken into account, but I will never be in doubt about my support for the Union or about the UK Government’s support for it.

Michael Connarty (Linlithgow and East Falkirk) (Lab): I fear that in many of these replies to the questions on the statement the idea of identity in Northern Ireland is being treated as somehow a theoretical construct. Last Thursday, when you, Mr Speaker, assisted by calling me to speak on the 41st anniversary of the McGurk’s bar bombing, what was revealed to me was that the people who had researched a book on the bombing and come here to launch it are deeply locked in the past. Clearly those people from west Belfast still feel a deep bitterness towards the United Kingdom and the involvement of its armed forces in their community. Similarly, in my work in the peace process over there, I have found that

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the people on the ground, not the politicians, feel deeply threatened by the turmoil that goes on at street level about identity, which leads to continued violence by IRA paramilitaries and the clear ability in loyalist communities to round up people on the streets and create violence. I urge the Secretary of State, apart from helping me get to the truth about the McGurk’s bar bombing, to get on the ground, talk to people and stop lecturing them from above.

Mrs Villiers: I can assure the hon. Gentleman that I and the Minister of State do talk with people on the ground about these matters—it is a crucial part of being effective in our roles. With regard to the matter of identity, the important thing is to remember that one of the fundamental principles of the Belfast agreement was the need to recognise that people in Northern Ireland view their identities differently. The agreement recognised the ability of individuals in Northern Ireland to define themselves as British or Irish, and indeed some may choose to define themselves simply as Northern Irish. The politics of identity is fluid and changing, but a key part of the Belfast agreement was recognition of an individual’s right to define their identity in whatever way they choose.

Catherine McKinnell (Newcastle upon Tyne North) (Lab): I want to add my voice to those that have expressed solidarity with the hon. Member for Belfast East (Naomi Long) and with those brave public servants who put themselves in harm’s way to protect the public. Will the Secretary of State provide some reassurance about discussions she might have had with the Justice Minister in Northern Ireland and the Chief Constable on the violence and whether they have all the resources needed to deal with it?

Mrs Villiers: I have discussed both matters with the Justice Minister and the Chief Constable on a number of occasions over the past few months. The Chief Constable is on record as indicating previously that he has the resources necessary to police Northern Ireland, and that is in no small part because of the £200 million that this Government allocated from the Treasury reserve to the PSNI to support its efforts to keep people in Northern Ireland safe and secure and to combat the terrorist threat. The Chief Constable has not raised resourcing with me, but I am always open to conversations about that. Indeed, I am working with him on what will happen once the four-year period of the £200 million that has already been allocated expires and on what future arrangements might be made.

On conversations with David Ford, I am always happy to listen to his concerns, and if he feels that further resource issues need to be addressed, I am happy to discuss them with him.

Mark Durkan (Foyle) (SDLP): I commend the Secretary of State for her statement and join her in offering support to my colleague, the hon. Member for Belfast East (Naomi Long), to all her party colleagues who have endured attack, and to representatives of Sinn Fein and the DUP who have endured attack. That empathy comes from a party that has suffered attack from loyalists and republicans. Does the Secretary of State agree that no national flag, whether the Union flag or the tricolour,

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should be used or abused as a visual aid to sectarianism or as a partisan prop in the way that has happened all too often in the past?

Does the Secretary of State recognise that in circumstances where Northern Ireland will be moving towards having 11 new councils under a carve-up determined by Sinn Fein and the DUP, there is a danger that the whole issue of flags being determined at council level will be played out in those new council chambers in a very difficult and dangerous way? Does she further recognise that there needs to be real dialogue among all parties about how we handle and manage that situation, in relation not only to flags but to the sensitive issue of the naming of public amenities run by councils, including play spaces, which in my view should be neutral and apolitical?

Mrs Villiers: Given the sensitivity of issues relating to national flags, yes, one does need to be cautious in terms of how the flag is approached in political debate. Certainly, any kind of inflammatory approach to these issues is not helpful. The key lies in dialogue and learning from past successes in the peace process where many more intractable issues have been resolved and compromises have been found. There is a real opportunity for the political parties, working together, to find a resolution on this. I welcome last night’s statements from the DUP and the Ulster Unionist party that they want to start such a dialogue.

Kevin Brennan (Cardiff West) (Lab): I, too, express solidarity with the hon. Member for Belfast East (Naomi Long), who has shown great courage and dignity in the light of the attacks that she has suffered, and with all our colleagues from Northern Ireland—our valued colleagues in this place—who operate in a political environment in the north of Ireland which perhaps some of us can never fully understand. What is the Secretary of State going to do to make sure that this dialogue between the political parties takes place? It is all very well for us here in this House to express our condemnations of violence, but what needs to be done on the ground is to ensure that the political parties agree that they will operate with statesmanship and not just through rhetoric.

Mrs Villiers: I am very happy to engage in whatever way would be found helpful by the Northern Ireland parties. I echo the hon. Gentleman’s praise for hon. Members from Northern Ireland and the tremendous work that they do for all their constituents. Matters relating to the flag raise difficult issues. This is an opportunity for me, and indeed for the whole House, again to endorse the need to address sectarian barriers. There is very good work going on by the Northern Ireland Executive on things such as shared education—for example, getting schools working together so that children have an experience of being educated alongside those from other faiths. A lot of work has gone into the Executive’s cohesion, sharing and integration strategy. There is the will to make the change. The Northern Ireland parties have delivered phenomenal success in changing in the past, and it is now time to press ahead

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further and faster in addressing the sectarian barriers and moving towards a genuinely shared, cohesive and integrated society.

Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op): I, too, express solidarity with the hon. Member for Belfast East (Naomi Long) on the difficult issues that she is facing.

The Secretary of State said that the Chief Constable had not asked for additional resources, but I understand that Terry Spence, the chair of the Police Federation for Northern Ireland, has called for 1,000 extra officers in the PSNI to help deal with the possibility of further terrorist threats. Given the recent events, does the Secretary of State intend to pursue that, particularly with the Treasury in light of the additional resources that have been supplied previously?

Mrs Villiers: As I said, I am working directly with the Chief Constable on what will happen in the period after the current additional four-year spending uplift of £200 million comes to an end. I am also working with him and others on the preparations for the G8 summit to ensure that the PSNI have all the appropriate resources. So yes, this is something that I keep a very close eye on. It is always difficult in these times when we need to deal with the deficit, but we are determined to ensure that the PSNI have all the support they need to keep Northern Ireland safe and secure.

Jim Shannon (Strangford) (DUP): I thank the Secretary of State for her statement. In the early hours of Saturday morning, the Alliance councillor in my constituency had her home attacked. I visited her, first, to give her support, but also because she is a personal friend. I have worked with her on many constituency issues for the betterment of the whole community. She had the living room windows, porch windows and bedroom windows smashed in her home, which she has lived in for 24 years, and her car windows broken as well, in what can be described as a cowardly and shameful attack. This single lady, who lives on her own, said to me that it will cost some £5,000 for her windows to be fixed and had some concern about how that was going to happen as Christmas approaches. What steps can the Secretary of State take to ensure that the £5,000 is made available for the replacement of her windows and, indeed, that there is help for everyone else who has had cars burned, windows smashed and houses damaged?

Mrs Villiers: I thank the hon. Gentleman for drawing the House’s attention to yet another very sad case. I am particularly concerned about the number of women who have been targeted as a result of these threats—not only the hon. Member for Belfast East (Naomi Long) but a number of her Alliance local councillor colleagues. That is of course a matter of very grave concern, particularly at a time when everyone says that we need to attract more women into politics. Few things would provide more of a deterrent to entering politics than the idea that one’s front windows are going to be smashed and one is going to be intimidated. As I said, the PSNI are very focused on protecting those who are subject to these threats. It is difficult for me to comment on individual cases, but I am happy to discuss this one on a bilateral basis with the hon. Gentleman.

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Bill Presented

Energy Efficiency and Reduction in Energy Costs Bill

Presentation and First Reading (Standing Order No. 57)

Dr Alan Whitehead, supported by Mr Tim Yeo, John Hemming, Caroline Lucas, Martin Horwood, Sir Peter Bottomley, Martin Caton and Joan Walley, presented a Bill to promote energy efficiency and a reduction in energy costs; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 18 January 2013, and to be printed (Bill 105).

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Planning Applications (Community Right of Appeal)

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

2.37 pm

Chris Skidmore (Kingswood) (Con): I beg to move,

That leave be given to bring in a Bill to provide that communities may appeal against planning decisions on collection of the signatures of a required percentage of the electorate in the relevant ward within a designated time period; and for connected purposes.

I should inform the House of my own personal interests with regard to this Bill. Ever since I became the Conservative candidate for Kingswood, which lies principally on green-belt land between Bristol and Bath, I have campaigned with local community groups to protect green-belt land from the threat of over-development. The previous Government had the top-down regional spatial strategy under which over 10,000 houses were planned in that area. Local community organisations such as the fantastic Save Our Green Spaces group, which represents Oldland Common, Warmley and Siston, and Hanham District Greenbelt Conservation Society, worked tremendously hard on collecting signatures for petitions and letters opposing the regional spatial strategy, which thankfully this Government have removed. They have introduced the national planning policy framework, which has provided specific protection for green-belt land, and that is incredibly welcome.

We were able to defeat planning applications from developers to build on green-belt land because South Gloucestershire council was on our side—it has now introduced its core strategy to protect green-belt land in Kingswood—but under the previous Government, each time the applications were defeated, the developer was allowed to appeal, and appeal again, gradually eroding local people’s faith in the whole planning process.

Other applications have been made on non-green-belt land since 2010. Local residents have fought such applications for nearly a decade, particularly one by Tesco to build a large supermarket in Hanham. Local residents opposed the application for 10 years and every time they managed to defeat it, with the council’s support, Tesco would simply come back, appeal the decision and put in another application.

This seems to be a David and Goliath-type situation in which the developers are Goliath and the residents are David. When the residents lose an application, as they did a couple of months ago when Tesco won over the council, which was afraid of the legal costs—I think that played a big part in its decision to allow the application to go through—do they have a right of appeal? No, they do not. The planning process remains dangerously unequal. We have taken away David’s sling, so he cannot even try to bring down the monster.

This Bill would address that problem. To restore confidence in the planning system, we need to have in place a right of appeal for residents when an application goes through and the developer wins. I do not intend this proposal to be another piece of red tape, which is why I have suggested that it should involve certain percentages. For example, 50% of those registered on the electoral roll in the local authority ward would have to sign a petition within a designated time period of one

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month—two months at most—to trigger an appeal to the Planning Inspectorate or even the Secretary of State.

That would be vital. I am sure Members will recognise that every single constituency has constituents who fight planning applications based on the claim that they represent the views of the silent majority. No one likes to be called a nimby—not in my back yard—but, for want of a better word, that is what the press call them. How do we define whether someone is a genuine nimby who simply does not want a development to take place? I am pro-development and keen to have thousands of houses built in south Gloucestershire on non-green-belt land, which has been agreed in the core strategy, but a persistent minority will claim that they have majority support and will continue to do so even once an application has gone through. If we introduce the appeal mechanism, it would ensure not only democratic accountability, but shut up those people who claim that they have support. If they cannot get 50% of the electorate to subscribe to a petition within a month, they will lose their case to claim that they represent the majority.

This Bill would help to restore confidence in the planning system and to create a symmetric planning system. The Conservative party’s “Open Source Planning” Green Paper discussed introducing something similar in February 2010. The Government have yet to do so, but I hope that the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Grantham and Stamford (Nick Boles), who is listening and who kindly came to Kingswood to meet community groups—their members spoke of their frustration at the lack of accountability and lack of the right of appeal for local residents—will take this on board and that it will end up as a future programme.

This is ultimately a question of fairness. The fact is that we allow developers to appeal planning decisions and they often have big pockets and barristers on their side, but where are we for the little man? We need to stand up for residents who are genuinely concerned about planning applications that will blight their local areas for generations. It is not good enough to say, “The council passed it and it is democratically elected, so you can vote them out in five years’ time.” The councillors may well be voted out, but the community as a whole will have to live with their decisions for generations to come. A community right of appeal would restore the local population’s confidence in a planning system that will allow them to become democratically engaged, so I recommend this Bill to the House.

Question put and agreed to.


That Chris Skidmore present the Bill.

Chris Skidmore accordingly presented the Bill.

Bill read the First time; to be read the Second time on Friday 1 March, and to be printed (Bill 106).

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The Economy

2.45 pm

The Chief Secretary to the Treasury (Danny Alexander): I beg to move,

That this House has considered the matter of the economy.

I am pleased that this House has the opportunity to discuss the economic challenges that our country faces. The statement delivered by the Chancellor last week was a statement for the world as it is, not a statement about the world as we had hoped it would be, but in it we took the tough but fair decisions needed to fix the mess that we inherited, by bringing the deficit down, maintaining our international credibility and creating a platform for jobs and growth.

We ensured that the burden was fairly shared, asking those who have the most to contribute the most, bringing the cost of our welfare system under control and further squeezing Whitehall bureaucracy. We also addressed issues to make life easier through these tough times by cutting income tax and fuel duty and putting more money back into the pockets of working families.

That is why the autumn statement has been welcomed widely by the CBI, the British Retail Consortium, the Institute of Directors, the British Chambers of Commerce, the Federation of Small Businesses, the Engineering Employers Federation and many others that have the best interests of the British economy at heart. We inherited a mess, but we are clearing it up and building a stronger economy and a fairer society so that every person in Britain is able to get on in life.

As the Chancellor made clear last week, the road to recovery is longer than we had hoped, but this Government are committed to finishing the job and strengthening the British economy. Despite the mess we inherited and despite the headwinds from the eurozone and the impact of the banking crisis, we are making progress. The deficit has been cut by a quarter and, as the shadow Chancellor himself rightly observed last week, the deficit is falling in each and every year of the forecast. More than 1 million private sector jobs have been created and nearly 1 million young people have started apprenticeships, and exports of goods to major emerging markets have doubled since 2009.

Mr David Hanson (Delyn) (Lab): Two years ago I sat on the National Insurance Contributions Bill Committee, which considered the national insurance contributions holiday. The Government then promised that some 400,000 employers would take up that scheme, but we were told by the Exchequer Secretary in a parliamentary answer today that only 20,000 have done so. If the Chief Secretary is not even good enough at forecasting the development of his own schemes, how can we trust his forecasts for the economy?

Danny Alexander: The right hon. Gentleman is right that take-up of that scheme has been much lower than we had expected. I think, therefore, that he would welcome the additional measures that we have taken in the autumn statement to support small businesses by, for example, continuing the small business rates relief holiday for another 12 months. The additional increases in capital allowances, which are particularly directed towards small and medium-sized enterprises, are precisely designed to encourage small businesses to invest.

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Gavin Shuker (Luton South) (Lab/Co-op): Will the Minister give way?

Danny Alexander: I want to make some progress first. I know that many Members want to speak and there is already a time limit on speeches.

The forecasts are those of the independent Office for Budget Responsibility, and I do not think that the Labour party’s trend of attacking it is welcome.

Gavin Shuker: Will the Minister confirm that, under any measure, this Conservative-led Government will borrow more in the five years of this Parliament than Labour did in 13 years?

Danny Alexander: It is transparent from the figures presented by the Office for Budget Responsibility that borrowing is higher than it forecast in 2010. If the hon. Gentleman was being fair-minded, he would also draw the House’s attention to the analysis by the Institute for Fiscal Studies, which suggests that if we had continued with the path of spending set out by the previous Chancellor, we would be borrowing a further £200 billion —something that the country can ill afford.

Alison Seabeck (Plymouth, Moor View) (Lab): The OBR, which is independent and gives interesting forecasts, has said that the unemployment count is likely to rise in each of the next four years. Will the right hon. Gentleman explain why that is?

Danny Alexander: The OBR has forecast that unemployment will be slightly higher next year and then fall in subsequent years. It also forecasts a rise in employment over that period. If the hon. Lady is looking for variances between reality and the OBR’s previous forecasts, it is fair to say that unemployment is now considerably lower than the OBR forecast a year ago. I hope that she welcomes that fact.

It is true that the OBR has lowered its growth forecasts and that the recovery is slower than we would have liked, but we are on the right road and the announcements that we made last week will help the country to make further progress along it. I should add that the OBR does not attribute the slower growth to the Government’s fiscal policy, but to external pressures from the eurozone and other parts of the world, and to the long-term impact of the financial crisis, especially on our banking system. If the Labour party wants to accept the OBR’s figures, it also needs to accept its analysis.

As the House knows, savings had to be found and we have decided to reduce departmental resource budgets by 1% next year and 2% the year after. We are confident that that will not impact heavily on front-line services. For example, according to the recently published “Digital Efficiency Report”, if all Departments continued to move their transactional services online and became digital by default, we could save £1.2 billion over the next two years. If all Departments moved to the property occupation benchmark of 10 square metres per person, they could save a further £300 million each year.

Emily Thornberry (Islington South and Finsbury) (Lab): Does the right hon. Gentleman agree with the following analysis? Two and a half years ago, he asked for five years to balance the books, but without a plan

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for jobs and growth, he needs another five years. He still does not have a plan for jobs and growth, so it will always be five years.

Danny Alexander: No, I do not agree with the hon. Lady’s analysis.

There are still savings to be made in day-to-day administration costs. I am confident that the civil service can continue to produce more for less and provide excellent value for money to the public.

The welfare system makes up more than £200 billion of public spending and cannot be immune from the effort to deal with the deficit. As a result of the financial pressures that we are facing, we have had to take the difficult decision that we can uprate working-age benefits by only 1% in the coming three years. That figure represents a rise each year, but it will be below the rate of inflation. It is not as high as some may have expected, but it is what the country can afford. That is a tough choice, but an even-handed one, and it avoids some of the more punitive proposals that have been floated in recent months.

Most benefit claimants would love to work and are trying their best to find a job. However, we need to recognise that in-work incomes have risen at half the rate of benefits since the financial crisis. Those who are in work will be better off thanks to our income tax cuts. When we are increasing public sector pay by only 1%, it would simply not be fair to increase the benefits of those who are out of work at a higher rate than those we employ to work for us.

Even while making those cuts, we have taken steps to protect those who are most in need. That is why disability living allowance and other benefits specifically for the most disabled and their carers will continue to increase in line with inflation. It is also why the basic state pension will increase by 2.5% next April, which is higher than either earnings or prices, honouring our commitment to the triple lock. The application of the triple lock means that there will be a better rise in the basic state pension than pensioners have seen before. Pensioners will see a cash increase of £2.70 a week in the basic state pension in 2013-14.

While we are protecting those in need, it is only right that we ask the most from those who earn the most. That is why the higher rate threshold for personal income tax will also be uprated by only 1% in 2014-15 and 2015-16. It is also why the annual allowance for pensions tax relief will be reduced from £50,000 to £40,000, and the lifetime allowance from £1.5 million to £1.25 million. That will raise more than £1 billion a year by the end of the period and is something for which I, for one, have argued for quite some time. The savings from Whitehall, welfare and the wealthy, and the targeted tax rises, are helping to cut the deficit in the medium term and to boost growth now.

Our capital spending plan will see £5 billion switched from current spending to investment in infrastructure, providing a better connected UK on roads, on rails and online. We will provide £350 million for the regional growth fund, enabling it to continue its success in creating jobs throughout the country. We are rolling out rural broadband across the country and have announced

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£50 million for the second wave of super-connected cities across the UK from Portsmouth to Perth, via Newport and Northern Ireland.

We have announced funding for a number of road building and maintenance projects. We will be dualling the A30 in Cornwall—an improvement that has long been campaigned for, not least by my hon. Friend the Member for North Cornwall (Dan Rogerson), who is in his place. I congratulate him on his efforts. We will also bring the A1 up to motorway standard all the way to Newcastle. I have been made aware of the need to improve that road north of Newcastle, not least by my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith), and have asked my right hon. Friend the Secretary of State for Transport to work up plans for potential improvements north of Newcastle.

The capital projects will not only create jobs in the short term, but crucially will raise the quality of the country’s infrastructure and our growth potential in the medium term. Labour Members may be interested to know that during the previous Government’s time in office, we fell from eighth to 33rd in the global league table for the quality of infrastructure. That is not good enough and is why John Cridland of the CBI said last week that it is

“absolutely right to shift the focus from current to capital spending to boost jobs today and the UK’s competitiveness tomorrow.”

As colleagues will know, our plans will mean that as a share of the economy, the investment that the Government are putting forward in this Parliament is greater than the average over Labour’s period in office. These investments, not just in roads, but in schools, colleges and flood defences, can only serve to help our businesses in the future.

Andrew Gwynne (Denton and Reddish) (Lab): I am pleased by the Chief Secretary’s recent conversion to investing in capital projects, such as building new schools. Now is perhaps an opportune time for him to apologise to the schools in my constituency that had their Building Schools for the Future funding taken away. Can they expect it back?

Danny Alexander: I have not had a recent conversion to capital expenditure. The hon. Gentleman will remember that in the spending review in 2010, we committed over £2 billion a year more to capital expenditure than had been set out in the previous Government’s plans. In the autumn statement last year we added £5 billion and in this year’s autumn statement we added another £5 billion for a range of projects. I hope that he will recognise that the Building Schools for the Future programme was expensive and bureaucratic. The proposals that have been brought forward by the Department for Education are a better and more cost-effective way to meet at least some of the needs in the school system in this country.

Mr Stewart Jackson (Peterborough) (Con): On the subject of apologies, will my right hon. Friend invite Her Majesty’s loyal Opposition to apologise for the debt millstone of the private finance initiative in the national health service, which amounts to more than £63 billion? The right hon. Member for Morley and Outwood (Ed Balls) is aware of that, because it was all about hiding the debt off balance sheet and ensuring that our children struggle with it. [Interruption.]

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Madam Deputy Speaker (Dawn Primarolo): Order. I am sorry to interrupt the hon. Gentleman. We will not have shouting across the Chamber and we will not have wagging of fingers, even from a Whip. Have you finished, Mr Jackson?

Mr Jackson: I am sure that my right hon. Friend will agree with my analysis of PFI.

Danny Alexander: My hon. Friend adds another item to the long list of items for which the people of this country deserve an apology from the Labour party. We have had no such apology yet, but we live in hope. Perhaps the shadow Chief Secretary will begin her speech with an apology for the many and various mistakes. [Interruption.]

Madam Deputy Speaker: Order. Let us try just once more. By Whips, I mean Government Whips as well as Opposition Whips. Government Whips are not to shout across the Chamber. Is that clear?

Greg Hands (Chelsea and Fulham) (Con) indicated assent.

Madam Deputy Speaker: Good.

Danny Alexander: Thank you, Madam Deputy Speaker. I hope this debate will be conducted in a calm manner as befits the seriousness of the issues we are discussing.

Frank Dobson (Holborn and St Pancras) (Lab): Can the Chief Secretary to the Treasury tell the House of a single Tory or Liberal Democrat MP who objected to a PFI hospital or school being built in their constituency under the Labour Government?

Danny Alexander: Not off the top of my head, but I dare say that hon. Members on the Government Benches can speak for themselves. I have, however, heard a number of objections to the structure of PFI contracts. In fairness to the right hon. Gentleman, the PF2 model is not designed to abolish PFI and can play an important role in developing new projects. We want to strip away some of the most egregious features such as facilities management costs—a couple of years ago the Treasury was going to be charged several thousand pounds by the PFI holder for putting up a Christmas tree. That issue was resolved but it is a small example of the excessive costs involved. In Treasury questions earlier today the Chancellor gave an example concerning the cost of changing a light bulb in a hospital in Cumbria.

I am sure that on reflection the right hon. Member for Holborn and St Pancras (Frank Dobson) would agree that reforming PFI to strip out some unnecessary features such as facilities management costs and so on, and having a simpler, clearer model in which the taxpayer can share in any gains, is a big improvement. I hope that when he has looked at what is being proposed, he will welcome it.

Mr Stewart Jackson: My right hon. Friend may wish to comment on the fact that another example of Labour prudence was spending £250 million on private contractors in the NHS for operations that were never carried out.

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Danny Alexander: The Government are trying to move to a system of payment by results. Too often the model of spending under the previous Government was payment for absolutely no results—[Interruption.] I will make some progress, despite the shouting from the second row of the Opposition Benches.

The Government know how important businesses are to growth, and we are taking the necessary steps so that businesses can increase employment and exports and lead the country back to prosperity. That is why we have announced, among other things, an extension of the small business rate relief scheme that will benefit over 500,000 small businesses. The extension of empty property rate relief to newly built commercial property has been called for by Members across the House, and I hope it will enable commercial property development to move forward in many parts of the country that have recently been blighted.

We have announced increased funding for UK Trade and Investment to support the growth in exports, particularly in emerging markets, alongside a substantial new trade finance scheme that will significantly help medium-sized exporters looking to win new markets across the world. Most importantly, we have announced an increase in the annual investment allowance limit from £25,000 to £250,000 for a time-limited period of two years—a capital allowance relief that I hope will send a signal to medium-sized manufacturers that now is the best time to invest in new plant and machinery. I pay particular tribute to my hon. Friend the Member for Burnley (Gordon Birtwistle) and the Liberal Democrat campaign for manufacturing that he has set up for arguing so cogently and strongly for that measure.

The Government have also announced a further drop in corporation tax to encourage investment in the United Kingdom. From April 2014 the rate in Britain will stand at just 21%—significantly lower than current levels in France, Germany or the USA. We want the world to know that the United Kingdom is open for business and that companies that invest and employ people in this country are very welcome. At the same time, however, Her Majesty’s Revenue and Customs is also receiving a further £77 million in this spending review period to ensure that where taxes should be paid, they are paid—I am sure that even the shadow Chancellor welcomes that. That increase, on top of the £900 million I announced at the spending review, will mean that HMRC will bring in total additional revenues of £9 billion each year by the end of 2014-15.

Our agreement with Switzerland to recover previously unpaid UK tax is expected to bring in a further £5 billion over the next six years. We have signed a ground-breaking agreement with the United States on automatic exchange of information, setting a new standard in tax transparency. Today we are publishing the draft Finance Bill for 2013, which confirms the introduction of the UK’s first ever general anti-abuse rule in the tax system. That measure will act as a significant deterrent to all those engaged in abusive tax avoidance. It could have been introduced at any point in Labour’s 13 years in office, but it was not. That is an example of the failure to act on tax avoidance and evasion that we saw during that time. This is not just a matter of finance; it is a matter of principle. Millions of small businesses and tens of millions of people across the UK pay the proper

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amount of tax, day in, day out. Ensuring that people cannot avoid our tax system is a priority for the Government so that the burden can be spread fairly.

There has been a lot of recent interest in this area, particularly with regard to the tax payments of specific multinational companies. I will not comment on individual cases but I am sure that all businesses, large or small, will take note of the reaction of the British people to recent events. Everyone understands that we must all work hard to get the economy going again and that businesses will play a key role in ensuring that growth. The reaction also shows that people believe that those at the top who earn or profit the most should also contribute the most. I agree with that—yes, we want a stronger economy, but we also want a fairer society.

Measures announced by the coalition last week will help millions of people across the country who are working hard. I am proud that we will be increasing the income tax personal allowance by a further £235 next April. That will mean that 2.2 million people have been taken out of tax by this Government, leading to around 20 million people being nearly £600 a year better off from next April. That is £50 a month extra in people’s pockets as a result of the Government’s measures on income tax and is, quite simply, the biggest income tax cut for working people in a generation—from the front page of the Liberal Democrat manifesto to the pockets of 24 million working people.

I am also proud that the coalition Government are cancelling the fuel duty increase that was planned for next month.

Nic Dakin (Scunthorpe) (Lab): Will the Chief Secretary to the Treasury remind the House which page of the Liberal Democrat manifesto the increase in VAT was on?

Danny Alexander: No, because it was not there. That was one of a number of difficult choices that we as a Government have had to make to clean up the mess in the British economy that was left by the hon. Gentleman and his colleagues.

Emily Thornberry rose

Danny Alexander: I will give way once more to the hon. Lady and then I will make some progress

Emily Thornberry: Am I right in remembering—I think it was on page 14 of the Liberal Democrat manifesto—a pledge to cut 7,000 tax inspectors?

Danny Alexander: The hon. Lady will know that HMRC has had to make efficiency savings along with the rest of the Government. It had to make savings when the Labour party was in office and it continues to have to do that. We have increased investment specifically in the part of HMRC focused on tackling tax avoidance and evasion—an area that saw underinvestment during Labour’s time in office. As a result, 2,000 extra specialist tax inspectors—[Interruption.] My hon. Friend the Exchequer Secretary to the Treasury brings me up to date and tells me that the figure is 2,500. Those inspectors are specifically focused on tackling tax avoidance in the

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affluence unit and those units that focus on offshore companies and all other tax avoidance schemes, and on implementing the anti-avoidance rule.

Dan Rogerson (North Cornwall) (LD): Will my hon. Friend give way?

Danny Alexander: I will give way one more time and then I will move on.

Dan Rogerson: I am grateful to my right hon. Friend, not least for his response to Cornwall’s call for investment in the A30 infrastructure project and his earlier kind words. Does he recall that when in opposition we had to watch the then Labour Government cutting and closing HMRC offices in a lot of regions around the country, and putting on the scrap heap a lot of skilled tax inspectors, the benefit of whose experience we sadly no longer have?

Danny Alexander: As always, my hon. Friend makes a good point. We need people with experience in compliance and enforcement, and we are expanding employment in those areas. That is the right thing to do and it should have been done a long time ago.

The previous Government set out plans to increase fuel duty above inflation last year, this year and again in 2013 and 2014. However, as a result of repeated action by this Government, pump prices will remain at least 10p per litre lower for the remainder of this Parliament than they would have been had the Labour party remained in government.

Rachel Reeves (Leeds West) (Lab): Slide 24 of the report by the Institute for Fiscal Studies shows that, including fuel duty changes and the changes to the personal allowance and tax credits, a one-earner couple with two children will be £534 worse off on average as a result of the changes in the autumn statement. Will the right hon. Gentleman confirm that?

Danny Alexander: No, I cannot confirm that. I do not recognise those figures—[Interruption.] Labour Members are waving bits of paper—

Madam Deputy Speaker (Dawn Primarolo): Order. The shadow Chancellor absolutely knows that he is not to throw papers across the Dispatch Box. It is no good him blaming his hon. Friend the Member for Leeds West (Rachel Reeves) for following his example. That will not happen again.

Danny Alexander: That is another way in which the shadow Chancellor is setting a bad example. Littering in the Chamber is not to be encouraged, and I am glad you, Madam Deputy Speaker, took a tough line on it.

The Government’s fuel duty measures will keep money in the pockets of millions of fathers on the school run or mothers driving to the office. As a highland MP, I know the burden that fuel costs can place on people in remote areas. That is why we are piloting the fuel rebate scheme for motorists on the Scottish islands and the Isles of Scilly. I am keen to push for EU approval for an extension of the scheme to other remote parts of the country that display similar characteristics. Of course, that will be a long and difficult job, but I am determined to gather evidence to support the case.

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Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP): The right hon. Gentleman will know that the rebate scheme has been a success. When will mainland areas of Scotland be included? There are already such schemes in continental mainland areas, so why is there a delay in its introduction in mainland Scotland? Areas such as Caithness, Sutherland and Argyll need it—and need it quick.

Danny Alexander: I am grateful for the hon. Gentleman’s endorsement of the current scheme as a success. I hope he will spread the word to his constituents and ensure that the credit goes to the appropriate place.

To win the argument at European level for an extension of the scheme, we must pass the same test and provide the same evidence to justify including such remote areas. We are working with local authorities in various parts of the country to gather evidence to support our case. As the hon. Gentleman will recall, we must take that evidence to the European Commission. If it approves our proposal, it must in turn be approved by all 27 EU member states. There are a number of hurdles and a significant process to engage in to gather evidence.

Mr MacNeil rose

Danny Alexander: If the hon. Gentleman will forgive me, I will make progress. Many hon. Members wish to speak in the debate.

There has been good engagement between the Treasury and the FairFuelUK campaign, which has pressed its case very strongly. I welcome its engagement.

The Government are on the road to cutting the deficit we inherited, but we are also building a fairer society. The distributional analysis that we publish shows that that continues to be the case, despite the tough choices we have made. It is worth pointing out that, under the previous Government, the Treasury never published detailed distributional analyses of its decisions, but under this Government the Treasury publishes them at every fiscal event. The analyses show that the top 20% of households continue to make the greatest contribution. In fact, the cumulative impact since the June 2010 Budget of tax, tax credit and benefit reforms shows that households in the top 10% see the greatest reduction in their income, both in cash terms and as a percentage of net income or expenditure.

Alex Cunningham (Stockton North) (Lab): People in my constituency who cannot afford a car and who earn much less than most others tell me that the inflation rate on the things they have to buy is several times greater than the headline figure, which includes goods that they would just love to be able to buy. When will the Government recognise that inflation for the poorest people in our society is much higher than it is for the rest of us, and do something real? The Government have done some things, but when will they do something that makes a difference to those people instead of cutting their food intake, which is exactly what is happening?

Danny Alexander: A range of goods is included in the consumer prices index of inflation, which the Office for National Statistics constructs—it is an independent body and is responsible for constructing those baskets of goods. Some items go up in price faster than others.

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We are doing what we can and what the country can afford, but our priority must be to get this country back to a position in which we can pay our way in the world. Nothing would hurt the poorest in society more than losing control of our public finances, which I suspect would happen if the Labour party ever again gained the reins of power.

The quad discussed introducing a mansion tax, but a fair tax on homes worth more than £2 million was not agreed. However, the good news is that we have established a sensible, workable plan for raising additional revenues from the highest-value properties. If that does not happen in this Government’s term of office, it will be in the Liberal Democrat manifesto for the next election.

Emily Thornberry: Hooray!

Danny Alexander: I am grateful for the hon. Lady’s support—I take support from wherever it comes these days.

The Government have taken sensible further steps to restrict pensions tax relief. The decisions the Government are taking are not easy, but as a country we must live within our means. The scale of the problems this country faces means that the period of fiscal restraint must continue for longer. That is why the Government will shortly set out spending plans for the financial year 2015-16. I will carry out a spending round in the first six months of next year to set those budgets and ensure that we continue to build a sensible long-term plan for the country’s finances. We will need to find an extra £10 billion of savings from Departments in the spending round. That will mean more difficult choices, but they are also responsible choices as the coalition continues to work to restore stability to the UK economy.

We have heard this afternoon and in Question Time that some criticise the autumn statement. The division in British politics is very clear. Government Members live in the real world. We understand that times are tough and that there is no endless supply of money, and recognise that the right and responsible action is to take the difficult decisions to ensure we can live within our means. Labour Members appear to live in a fantasy world. They still believe that they ended boom and bust, despite the events of the past five years. They still refuse to apologise for the mess they created and fail to be honest with the British people about the tough decisions that any party in government would have to take.

It will come as no surprise to hon. Members that I will not take advice from the Labour party, which wrecked our economy because it allowed the country to become too dependent on revenues from the City of London and paid too little attention to the rest of the country. Labour insulted pensioners up and down the country by increasing the basic state pension by 75p, and insulted 5 million of the lowest-paid workers by increasing their income tax bill with the abolition of the 10p rate.

Mr MacNeil rose

Danny Alexander: I will not give way—I will finish my speech shortly.

The Labour party thought it was right that private equity managers should pay a lower rate of tax on their earnings than the person who cleaned their office, and

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insulted hard-working people and businesses up and down the country by failing to crack down on tax avoidance and evasion in 13 years in office.

This Government face some of the most serious decisions we have had to make in our recent history. We are recovering from a decade of debt, we inherited the largest deficit since the second world war, and we have had to face a multitude of problems abroad. However, we continue to take simple, sensible steps towards recovery. We continue to build a strong, sustainable economy and to build a fair society. I commend the autumn statement to the House.

3.17 pm

Rachel Reeves (Leeds West) (Lab): The Opposition welcome this opportunity to debate the state of the economy, the Chancellor’s record over the past two and a half years and the measures he has introduced in the autumn statement. Last Wednesday he came to the House and admitted that he had failed—failed to get the economy moving, failed to meet his borrowing targets and failed to listen to our advice and change course.

First, though, let us go back to the heady first months of this coalition Government—when they were still getting on, when they were fraternising in the rose garden. In the 2010 spending review, the Chancellor decided to implement a programme of unprecedented fiscal contraction. We said it was not the right time to cut demand, given that the economy was only just recovering from the global financial crisis, and that the cuts went too far and were being implemented too fast.

Kwasi Kwarteng (Spelthorne) (Con): Is it not true that we are actually spending more than we were two years ago and that no real cuts have been made? What would the hon. Lady like to say about that?

Rachel Reeves: There is one particular area where the Government are spending more money, and that is welfare, on which they are spending £13.6 billion more during this Parliament, because more people are out of work or in part-time work and so receiving more tax credits. That is a sign of the Government’s failure, not of their success.

In the 24 months since the spending review, where have we got to? How much progress has been made? Is the Chancellor’s plan working? The verdict is in. We now know that borrowing and debt figures have been revised up for this year, for next year and for every year of this Parliament. The Government are borrowing £212 billion more than they planned. They said that five years of austerity would be difficult, but that it was necessary to support our economy, and they said that it might hurt, but that it would work. Well, it has not worked, but it has hurt, and we are no closer to clearing our deficit than we were two years ago. [Interruption.]

Hon. Members: Bye, bye!

Madam Deputy Speaker (Dawn Primarolo): Order. Where is the hon. Member for Spelthorne (Kwasi Kwarteng) going? Excuse me. He has just intervened on a debate. Normally, one stays for a debate that one intervenes in.

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Rachel Reeves: Thank you, Madam Deputy Speaker. Perhaps the hon. Gentleman did not like the answer to his intervention. Fair enough—I would not be pleased to hear that my Government were spending an extra £14 billion on welfare because of their failure.

This year the economy will shrink by 0.1%. The Chancellor’s two gap years—two years of painful cuts, more borrowing and no growth—are a shocking indictment of a failed plan. He stands up and tells the nation that the British economy is healing and that he is equipping Britain to win in the global race, yet over the 24 months since the spending review the UK economy has grown by just 0.6%. In the same period, the US economy grew by 4.1% and the German economy by 3.6%. Helpfully, the International Monetary Fund’s world economic outlook data allow us to put together a league table of 184 countries based on total growth between 2010 and 2012, so we can now analyse our performance in the global race that he describes with this Government at the helm. Of those 184 countries, where do Members think Britain comes? We are 158th. It is a relegation battle. We are behind Togo and Namibia, Albania and Macedonia, but there is no need to worry—apparently we are hot on the heels of Mali, Samoa and Fiji! We are the worst performing G7 country, apart from Italy. In the global race, Britain is well and truly in the slow lane with this Chancellor at the helm.

Mr MacNeil: Does the hon. Lady agree that the context she has rightly given the House is the reason the Scottish referendum on independence will be won in 2014?

Rachel Reeves: I will let the good people of Scotland make their decision when the time comes, but I believe that we are stronger together—stronger united than divided.

The worst aspect of the Chancellor’s two wasted years is the long-term damage being done to our economy. Every month of inaction, every failed initiative and every growth forecast downgraded is another hammer blow to the work force, our businesses and our national infrastructure. The skills and motivation of British workers are going to waste, with one in three of our 2.5 million unemployed out of work for more than a year and 3 million of those with jobs wanting to work more hours, but unable to find the work. In reality, we are falling behind, and the Chancellor has nobody to blame—not the snow, not the royal wedding, not the eurozone.

I agree with the chief economist of UBS, George Magnus—[Interruption.] [Hon. Members: “He’s gone!”] Obviously the hon. Member for Spelthorne (Kwasi Kwarteng) does not want to hear what the chief economist of UBS has to say. I will send him a copy of Hansard. George Magnus said that the Chancellor’s excuse

“falls under the category of ‘Sorry Miss, the dog ate my homework’”.

He also said that

“the problem I think that the Chancellor has with the eurozone is that we are just like them. We have this single-minded focus on austerity and the lack of growth is basically crippling our ability to meet our fiscal targets.”

I agree that the Chancellor and his economic plan are to blame. Two and a half years of austerity, two and a half years of this Chancellor, and what do we have to show for it? We have no growth, more borrowing and a tragic

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waste of time.


It is good to see the hon. Member for Spelthorne in his place again.

A year ago the IMF warned:

“If activity were to undershoot current expectations and risk a period of stagnation or contraction, countries that face historically low yields (for example…the United Kingdom) should also consider delaying some of their planned consolidation.”

At that time the IMF was predicting 1.6% growth this year; now the OBR tells us that the economy is more likely to shrink by 1.6% this year.

Gordon Birtwistle (Burnley) (LD): Would the hon. Lady like to comment on the 6.4% collapse in GDP in 2008, and at the end of her speech will she enlighten us all on what her economic policy will be?

Rachel Reeves: Like other countries around the world, our GDP contracted during the global financial crisis. Germany and the United States have managed to recover that growth; we have not, because our Chancellor chose a different course—austerity—when jobs and growth are needed to get the economy moving and the deficit down. Unlike this Government, we recognise that we need to take action to stimulate jobs and growth. That is why we have said there should be a national insurance holiday for small businesses taking on new workers and a bank bonus tax to fund a programme of youth jobs, and that we should genuinely bring forward infrastructure investment and temporarily cut VAT to 17.5%. Those are the policies that would get the economy moving, get jobs back in our economy and help to bring the deficit down in a sustainable way.

Andrew Gwynne: The Government have placed great emphasis on the views of the Office for Budget Responsibility. My hon. Friend will be aware from reports in today’s media that Robert Chote of the OBR has suggested that the UK need not fear losing its triple A rating. Does she see us losing our triple A rating as a ringing endorsement of this Government’s economic policies?

Rachel Reeves: Let us see what the rating agencies have to say in the new year. Of course we are on negative watch, but it was not we who said the rating agencies should be the be-all and end-all. Indeed, they were giving Lehman Brothers a triple A rating until that company crashed and almost took the global economy with it. It was the Chancellor who said that a triple A rating would be the watchword of his chancellorship, so if it were to go, it would be a damning indictment of what this Government have presided over.

What was the Government’s response to all the bad economic news last Wednesday? Let us give credit where it is due. The Chancellor now agrees with us that we should not go ahead with the fuel duty increase in January; he agrees with us that introducing regional pay in our public services would be costly and impractical; he agreed with us that we should reverse the relaxation of restrictions on pension tax relief for the very rich; he agreed with us that it was a mistake to implement deep cuts to capital programmes such as Building Schools for the Future; and he agreed with us that cutting investment allowances risked damaging incentives for long-term wealth creation. We propose the creation of a British investment bank to support small businesses, and the

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Chancellor has produced a pale imitation of that, but I am afraid that all these measures are too little, too late—robbing Peter to pay Paul. Smoke and mirrors will not hide the lack of a real, purposeful growth strategy.

The chief executive of British Airways summed it up yesterday when he said:

“I don’t see an agenda for growth.”

I agree, and so does the Office for Budget Responsibility. Taking into account all the Government’s measures from the autumn statement, the OBR has concluded that they will add just 0.1% to UK GDP over the next five years. The economy is shrinking this year. Growth next year—forecast at 2.9% just two years ago—is now forecast at just 1.2%. Indeed, we have seen downgrades not just this year and next, but the year after.

Charlie Elphicke (Dover) (Con): Why does the Institute for Fiscal Studies say that there would be £200 billion more borrowing under Labour’s plans?

Rachel Reeves: There is £212 billion more borrowing under this Government’s plans.

Families will continue to feel the Chancellor’s failure in their wallets and their homes. Average earnings will not outpace inflation until the second quarter of 2014. It will take even longer for families to recover the loss to their living standards that this Government’s economic failure has cost them.

The lack of growth and the increase in borrowing under this Chancellor have meant that he has had to come back and ask the country for more. And who are the Government asking to bear the brunt of the past two and a half years of failure? Luckily, Andrew Neil asked the Chief Secretary to the Treasury that question on BBC1 last Wednesday. He asked him whether

“those who are on ordinary incomes are suffering a lot more than most”.

The Chief Secretary to the Treasury replied: “That is absolutely right.” That was the only sense he spoke all day. It is no surprise that he is increasingly described as the Conservatives’ favourite Liberal Democrat in the Cabinet. Apparently, they regard him as easier to deal with and more persuadable. The Chancellor’s favourite Liberal Democrat has finally told the country what we have known for a long time: that this Government are asking ordinary families to foot the bill for their economic mess.

The facts speak for themselves. Analysis by the House of Commons Library shows that a one-earner family on £20,000 with two children will lose £279 a year from next April. Slide 24 of the Institute for Fiscal Studies report shows that a two-income family with children will lose £534 as a result of the changes, including all the measures in the autumn statement. Slide 17 of the IFS assessment shows that middle and lower earners will lose most as a result of the autumn statement, with the poorest 40% losing more than the richest 10%. How can that be fair? And this is all to pay for the Government’s £212 billion of extra borrowing. They are hurting those who are trying to get on and do the best for themselves and their families. That cannot be fair.

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Mothers across the country will be worried about the real-terms cut in maternity pay, worth £180, that the Chancellor announced last Wednesday. That comes on top of other deep cuts that will hit pregnant women on low incomes, such as the abolished Sure Start maternity allowance and the health in pregnancy grant. This is further proof that the Government are out of touch and simply do not understand the pressures families are facing, day in, day out.

Gavin Shuker: What assessment has my hon. Friend made of the impact of the changes, particularly those relating to people on low incomes, on the overall growth of the economy? It strikes me that they are exactly the people we ought to be encouraging to spend right now.

Rachel Reeves: My hon. Friend is right. It is a false economy to cut the incomes of the lowest paid, because they will have less money to spend in their communities. What really matters, however, is the real impact that the changes will have on their living standards and those of their children.

The Resolution Foundation has said that 60% of the cuts to benefits and tax credits will hit working households—that is, those who are trying to get on in life. Given that the welfare bill is forecast to be £13.6 billion higher in this Parliament than the Chancellor thought it would be—another target tossed aside—perhaps it is time for the Government to concentrate on getting people back to work in order to reduce the welfare bill. In February this year, the former employment Minister, now the Secretary of State for Justice, said:

“The Work Programme is doing a good job and is on track. It is helping long-term unemployed people into work.”

And only today the Chief Secretary to the Treasury said that the scheme was going well, but we now know that for every 100 people who are unemployed, the programme has seen only two people back into work. If that is the Government’s idea of a programme that is on track, I would hate to see one that is not.

It is not surprising that OBR documents released last week showed that the number of people claiming jobseeker’s allowance was set to rise from 1.58 million this year to 1.69 million in 2014, and that the number forecast for 2016 had been revised up by 340,000. That will be a third of a million more people receiving JSA compared with the number forecast in March this year.

Let us not forget that the Prime Minister dismissed the last Labour Government’s future jobs fund, which helped 120,000 young people back into work, yet an impact analysis for the Department for Work and Pensions found that we all gained £7,750 per participant through wages, increased tax receipts and reduced benefit payments. This Government ditched a plan that worked for one that has failed, so we will not be lectured by them on welfare or on job creation.

At the same time, one group of people continue to gain from the Chancellor and the Chief Secretary’s policies. If someone earns more than £1 million a year, next year they will receive an average tax cut worth £107,000. It beggars belief that while taking from families

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on low incomes with one hand, the Chancellor gives to millionaires with the other—there is one rule for the very richest, another for everyone else.

Charlie Elphicke: The hon. Lady talks about the Government favouring the richest, but if we look at the distributional impact of tax and benefit reforms on the IFS slides to which she has referred, we can see very clearly that the richest 10% lose £260 in net income whereas everyone else is far less disadvantaged. Does she not agree that the richest are shouldering more of the burden?

Rachel Reeves: If the hon. Gentleman thinks that those on average incomes being worse off by £534 year is not very much, it is up to him to justify that to the people of Dover and Deal. Page 17 of the IFS analysis shows that the poorest 10% are 1.6% worse off, the second decile are 1.7% worse off, the third 1.3%, the fourth 0.6% and the top only 0.5%. The four lowest deciles—those on the lowest and modest incomes—are being hit hardest by the changes in the autumn statement, while those at the top get off relatively unscathed. That is the reality and if he wants to put that slide in his leaflets in Dover and explain it to his constituents, I am sure that they would appreciate it.

As I have said, it is one rule for the richest and another for everyone else. The poor are expected to work harder or else they will be made poorer, but apparently the rich will work harder only if they are made richer. It is the same old out-of-touch Tories and their Liberal Democrat accomplices.

There are some who think that the Chancellor is a master of political strategy; his autumn statement was clearly delicately put together. He said that borrowing was down this year, but that is only by using money from the sale of 4G contracts, which has yet to happen. He said that his cuts were targeting the workshy, when in reality they hit working people. He said that austerity was necessary for us to compete with our global competitors when, after two years of austerity, we have fallen further behind. He lived up to his reputation as a part-time Chancellor, because it was a statement that worried more about tomorrow’s headlines than the economic reality. For all of the Chancellor’s cynical political games and for all the smoke and mirrors, the real story is being felt across the country. Living standards are being squeezed, long-term unemployment is rising, borrowing is up, growth is flatlining: it is a story of a failed Chancellor and his Lib Dem accomplice desperately trying to find a way out of the mess their economic failure has got them into.

Several hon. Members rose—

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. I remind hon. Members that we will start with an eight-minute time limit on speeches.

3.37 pm

David Rutley (Macclesfield) (Con): There is one form of climate change that would be welcomed on both sides of the House, and that is the creation of a climate in which enterprise can thrive and flourish. The autumn statement reconfirmed that this Government are committed to ensuring that those conditions are in place and have made positive strides in that direction.

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The statement builds on the sound economic platform that has been in place for some time now. The deficit has been cut by a quarter and because of the tough action that had to be taken, the cost of borrowing is at historically low levels. What is more, 1.2 million jobs have been created in the private sector—something that was not mentioned by the hon. Member for Leeds West (Rachel Reeves)—and more jobs are being created in the private sector than are being lost in the public sector. That is true in the north-west, where I live, and across the whole country.

Last week’s policy announcements were well received by businesses and it is easy to see why. There was a further reduction in corporation tax from 28% to 21% in 2014 and a rise in the additional investment allowance from £25,000 to a whopping £255,000 for two years. That shows that, under this Government, Britain is definitely open for business.

The Government’s strategy for enterprise has strong foundations, much stronger than the so-called industrial strategies that have been debated for decades. Between the end of the second world war and the 1970s, Governments in this country and France tried to pick winners only to fail spectacularly. West Germany and the reunified Germany were much more resistant to that temptation. As Sir Geoffrey Owen of the London School of Economics recently wrote:

“The German economic miracle that began in the 1950s was not the result of industrial policy, but underpinned by a broader set of policies of which the promotion of competition and openness to foreign trade were probably the most important.”

He went on to advocate a “horizontal” approach in which competition is promoted, innovation is encouraged and industrial change is positively facilitated—as this Government are doing.

Hon. Members may have noticed how Sweden, which was so bedevilled by high taxes, high spending and massive inflation in the 1980s has coped well with the current global economic challenges. Rather than picking winners, the Swedish Government, who have driven forward a sector-by-sector approach, focused on deregulation, and that has spurred on their success. They have identified ways to deregulate banking, transport, power production, telecommunications, postal services and even food retailing.

Sweden’s Anders Borg is not the most conventional of Finance Ministers. While I would not advise the Chief Secretary to follow Mr Borg’s lead in sporting a ponytail and an earring, I think we can learn from Sweden’s approach. In a recent speech, Mr Borg explained:

“There was a very, very broad-based deregulation. Today, if you go to the OECD, going for growth report, they are looking at 8 different sectors, 6 out of those…have less regulatory burden than the US. So we have gone from being one of the heaviest regulated economies of Europe to one of the least regulated when it comes to product markets.”

As a result, Sweden’s economy is going from strength to strength.

In the UK, in “The Plan for Growth” published in March 2011, the Government set out actions to clear pathways in a number of important key sectors, including advanced manufacturing, digital and creative sectors and, importantly for Macclesfield and north-east Cheshire, life sciences. Both the Macclesfield and Tatton constituencies are home to AstraZeneca’s largest operations in the UK, which account for an amazing 2% of UK exports.

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I am delighted that, working together with my constituency neighbour the Chancellor, Cheshire East council and AstraZeneca, we were able to secure funding from the regional growth fund to create a bioscience park at the Alderley Park site, which is a positive step for the highly skilled work force in the area and a huge priority for the local economy.

As with Sweden, deregulation is a critical step for our enterprise agenda. Sadly, under the last Government, Britain fell from fourth to 89th in the World Economic Forum’s league table for countries with the lowest burden of regulation. Their lasting legacy was not just the deficit, as it was also the burden of regulation. I am proud that, under this Government, we have been able to claw back 17 places in those rankings—but we are not complacent. The Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon) is leading the deregulatory charge. The autumn statement has built on that momentum and taken the deregulatory agenda to a much higher level. The innovative one-in, one-out strategy is being replaced with a one-in, two-out approach from January. In the spring, the second phase of the red tape challenge will be launched. This will give businesses another chance to highlight those regulations that are holding them back from delivering more for the economy.

The Government’s continuing commitment, refreshed with the energy of a new ministerial team, will be vital in making progress in engaging Whitehall Departments in this critical task. Again, there are lessons to be learned from overseas—whether it be from New Zealand, the Netherlands or even from Bosnia. My favourite example is looking at what has been happening with the “Bulldozer” deregulation initiative in Bosnia, which was particularly progressive. After the Bosnian war, the bulldozer programme was instigated by no less than Paddy Ashdown—one of our coalition colleagues—who was serving as a high-level diplomat in Bosnia at the time. The programme identified 50 roadblocks or regulations that were holding back the economy, and changes were pushed through in 150 days. The bulldozer committee, working with local entrepreneurs and businesses prioritised the areas for reform and worked with the Government to see them through.

I think that we can learn from others who have advocated intervention on behalf of business. I am not usually favourable towards that, but I think we can take a lesson from the Bosnian bulldozer approach, breaking down barriers to business—not intervening, but breaking down barriers before breakfast, before lunch, before tea and before dinner. I am pleased that the Government are taking a clear lead in that direction.

While the present Government are actively proceeding with their strategy for enterprise, the Labour party has offered no apology for their shocking record in office, and has certainly offered no alternative. The truth is that Labour has no clear plans for the economy, which is the single biggest issue facing the current Parliament. However, we can get a sense of what life would be like under a Labour Government by observing what is going on across the channel. President Hollande’s socialist economic policy is one that the Labour party would

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be proud to call its own, but matters have gone from challenging to absolutely disastrous.

The Economist

recently described France as a

“time-bomb at the heart of Europe.”

This Government are right to take a different course, and the autumn statement is an important step on that journey. Putting the public finances in order and implementing a strategy for enterprise by breaking down barriers for business and opening the doors to new opportunities in export markets is the right approach, and I commend it to the House.

3.45 pm

Mr Alistair Darling (Edinburgh South West) (Lab): I hope that the hon. Member for Macclesfield (David Rutley) will forgive me if, in the time available to me, I do not follow him down the road of bulldozers or anything else. I should begin by drawing the House’s attention to my entry in the Register of Members’ Financial Interests.

I am sorry that the Chancellor is not present, partly because he used to kick up a real fuss whenever I did not appear in the House or was slightly delayed. It would have been nice if he had been here: I am sure that plenty of us would have liked to press him on the question of how on earth he can claim abject failure as success, which is what he was trying to do last week.

Two years ago, it was not meant to be like this. Two years ago, the new Government said that they would be able to balance the books by the end of the current Parliament, and that debt would be falling as a proportion of national income. In 2010, they said that all the problems we faced were entirely home-grown. They compared this country mendaciously with Greece, and said that we would lose our credit rating, which they may yet regret. In other words, they set about trashing confidence and blaming the last Government for everything. That is despite the fact that the Conservatives supported every single penny of our spending until December 2008, and the Liberals were doing exactly the same until the evening of 10 May 2010, when they changed their minds.

The new Government’s position was that it was all the fault of the previous Government. How much has that changed? Last week, they began saying that this was an international crisis. They said that it had been caused by the eurozone; by the United States fiscal cliff; by inflation. However, all three of those things were around in 2010, and were known about. The problem that we have at present is that we simply do not have the growth that we were expecting, with the result that the Government have missed their debt reduction target and are experiencing serious difficulties in relation to borrowing. I shall say more about that shortly.

The Chancellor’s problem is that the growth profile that is presented in the report from the Office for Budget Responsibility, which was published last week, is remarkably similar to the profile that was published two years ago, but it is now running at least between two and four years late. If we do not achieve the growth profile that is set out in the report, both our borrowing and our debt will be higher, because the two are completely interlinked. I see no evidence for believing that the figures will be any more right this time than they were two years ago.

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It is interesting to note that the OBR assumes, just as the Treasury modelling used to assume, that somehow we will always return to a 2.5% trend rate of growth. That theology was being questioned when I was in the Treasury, and I think that we will have to look at it again now. The Japanese are apparently contemplating what would be the fifth recession in 15 years. I honestly do not think that those of us in the western world—and Japan is, economically, in the same position—can assume that everything will bounce back as if nothing had happened. This will have a profound implication for all the political parties in the House, as well as further afield.

However, it is in relation to borrowing that I would have taken the Chancellor to task had he been here. During his speech last week, he made great play of how transparent he was being in taking into account the money that he had managed to find as a result of quantitative easing at the Bank of England and from the Royal Mail’s pension funds. What he did not say was that he could claim that borrowing was falling this year only because he had banked the sale of the 4G auction, which will bring in a very handy £3.5 billion—and, furthermore, will have to bring it in before the end of March if it is to score properly. That is the only reason why he could claim that, because the figures show that although borrowing has a downward profile, we are in fact borrowing £212 billion more than the Chancellor intended to borrow. We are borrowing much more, therefore.

The OBR report contains a number of findings that ought to worry those on the Treasury Bench as well as the rest of us. For example, over the next few years a very handy cumulative total of £73 billion will come in from the asset purchase facility—quantitative easing by the Bank of England. That money is not being created because of increased revenues or increased economic activity, however. It is basically a financial transaction that the OBR has said is okay to put in the books in this way, as opposed to scoring things differently which would have left a large hole in the economic figures.

Charlie Elphicke: The right hon. Gentleman is making a typically thoughtful speech. If he were the Chancellor, would he pursue the five-point plan the shadow Chancellor has proposed, given that it would cost £20 billion? Does he think there is the capacity to do that, and does he think it would be a sensible policy to pursue?

Mr Darling: I will address that point later. It is an important point, and I do not believe we should just sit back and hope that growth returns. The shadow Chancellor and many others both inside and outside the House also do not believe that the Government’s approach is right.

We are heavily dependent on money that is coming in from a financial transaction. In addition, the OBR has now found that by 2016-17 our revenues will be £30 billion less than it forecast in March. That is a huge gap, which will have to be filled.

What should we do? Whenever the Opposition suggest that perhaps the Government could do a little more, the Government parties—the Conservatives and Liberal Democrats—always say, “That’s all about borrowing more.” This Government are borrowing £212 billion

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more than they said they would not because we are spending money on projects and so forth, but because of failure—because our revenues are down. That is why we have got this gap.

When we eventually have a recovery, this country will need infrastructure. Over many years, we spent a lot of money on transport and energy. That was the sort of spending the Government say should not have been made, but we now know it was desperately needed, and we need to invest more in infrastructure, as well as get debt and borrowing down. We must invest in education, too.

On energy, the Government’s policy is completely contradictory. We are getting different signals every day of the week. On transport, I say again that it is not good enough to have no airport policy until halfway through the next Parliament, when we will not be able to do anything as another election will be coming up. That is not the right signal to send to our country, let alone the outside world.

Investing more in infrastructure projects would be one way to get confidence back. Confidence was trashed two years ago. If anyone were running a business now, would they hire more people or open a new production facility? No, they would not, because it appears that the economy will be bumping along the ground for another five years or so. I again remind Members of what has happened to Japan. People say, “We would never be like that,” but Japan has had non-existent growth for 15 years.

Mr MacNeil: Some commentators—at one time Ben Bernanke, and lately notably Paul Krugman—have talked about higher inflation targets for Japan, and also for the UK and other countries that are suffering a downturn. What is the right hon. Gentleman’s opinion on that? Does he, too, support higher inflation targets as a way of stimulating recovery?

Mr Darling: There is a lot of debate about that issue. I do not have the time to address it in detail, but I have said—including in a programme that will be broadcast tonight—that I think the Bank of England needs to examine its role, because for a long time we have said its job is purely to target inflation, yet central banks across the world are now also targeting growth, and perhaps we should consider whether we should formalise that role. Mark Carney was an excellent choice as the next Governor, and I hope he will think about that.

Talking about Governors, the current Governor, Sir Mervyn King, made an important point in New York last night when he talked about the G20, which had done so much at the height of the crisis in 2009, showing the determination that people expected in order to prevent the entire world economy from going over a precipice, and said that that spirit was now dead. He is absolutely right about that. It is important that we in this country, along with President Obama, now that he has been re-elected, look again at what we can do collectively as part of the global community to try to get the world economy not only to resolve some of the problems we face, but get growth going again.

That inevitably takes me on to Europe and the eurozone, because it is a tragedy that a legal structure and an economic structure that could do something about getting growth going again is simply failing to do so. Greece is not sorted out yet; another attempt was made a couple

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of weeks ago, but as far as I can see it leaves Greece with even more debt than it had. Until the Spanish banks are bailed out, they will simply hold back the whole of the eurozone, and the sooner Spain goes to get the bail-out it needs, the better it will be. Then we need to deal with the question of austerity. Austerity on its own does not work. Those who are interested may wish to know that there is an interesting article by Olli Rehn, the economic Commissioner, in today’s

Financial Times

, in which he just asserts that it is going to work, in the same way as this Government assert that austerity is going to work—frankly, I do not see it. We need to use our engagement in relation to the eurozone and to the European Union to try to persuade countries that unless they act together, in the same way as we did three or four years ago, although in a slightly different context, we and the eurozone countries are simply going to bump along on the bottom for years. If that is the case, the human cost is that we are condemning tens of thousands, if not hundreds of thousands, of people in this country, and perhaps millions of people in the European Union, to unemployment and low standards of living. If we do that, future generations will never forgive us.

Several hon. Members rose

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. I call Kwasi Kwarteng.