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House of Commons

Monday 4 February 2013

The House met at half-past Two o’clock


[Mr Speaker in the Chair]

Oral Answers to Questions

Communities and Local Government

The Secretary of State was asked—

Council Tax Benefit

1. Mr Dave Watts (St Helens North) (Lab): What plans he has for reform of council tax benefit; and if he will make a statement. [140749]

11. Andy Sawford (Corby) (Lab/Co-op): What plans he has for reform of council tax benefit; and if he will make a statement. [140759]

The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis): Spending on council tax benefit doubled under the last Administration, and welfare reform is vital to tackle the budget deficit we inherited from the last Labour Government. Replacing council tax benefit with local support schemes gives councils control over how to achieve a 10% saving, and a direct incentive to help local people into work.

Mr Watts: At a time when the Government are giving massive tax cuts to the rich, will the Minister explain why council tax will increase for low-paid families, disabled people and single mums in St Helens?

Brandon Lewis: I hope that the hon. Gentleman will make the case clearly to his own local authority, which is looking at a scheme at the moment that would not necessarily do the most to help local people into work. The whole point of what we are doing is that it will give local councils the power to be part of their local economy, to drive economic growth and to get people back into work.

Andy Sawford: One council told the Communities and Local Government Select Committee that the reduction would create additional financial pressures through administration and debt collection, as well as having an effect on services such as debt advice, welfare support and housing advice, and a huge effect on homelessness. Given that that was Tory-controlled Croydon council, does the Minister accept that even his own friends recognise that this is an ill thought out cut that will hurt the poorest?

Brandon Lewis: Similarly, I hope that the hon. Gentleman will talk to Corby council about coming up with a scheme that will help people back into work. Our scheme will give local authorities the power to look at what their communities need and to deliver for their communities. It will then be up to the communities to hold their councils to account, as I hope they will in Corby.

Mr John Leech (Manchester, Withington) (LD): Manchester city council could more than make up the loss of council tax benefits from empty and second homes, but is instead planning to force thousands of people to pay extra council tax. Does the Minister agree that this is yet another example of Labour-run councils making the wrong choices and attacking the vulnerable?

Brandon Lewis: The hon. Gentleman makes a good point. Like the two Labour authorities that I have just mentioned, that is another that is not putting its local

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people first. It really needs to look at its schemes again and put local people first.

Hilary Benn (Leeds Central) (Lab): In December, the Secretary of State tried to justify his plan to increase council tax bills for people on low incomes, including his own constituents. He assured the House that he had intervened to

“protect people and ensure that nobody has to pay more than 8.5%.”—[Official Report, 17 December 2012; Vol. 555, c. 559.]

Is it still the case that no one in Brentwood will have to pay more than 8.5%?

Brandon Lewis: The right hon. Gentleman gives me another chance to highlight that what we are doing is taking control of a situation in which council tax doubled under the last Government and council tax benefits rose from around £2 billion to £4.5 billion. That benefit has to be got under control as part of deficit reduction, and I wonder whether it would be part of the £52 billion of cuts from his own Government’s proposals that he has not yet even outlined.

Hilary Benn: Once again, we have no answer to a straight, factual question. The Minister is in denial. The answer is 20% in Brentwood. Why is that? It is because councils up and down the country, Tory and Labour, have been put in an impossible position by Ministers. Is it not the truth that

“the very lowest paid are going to be in a very difficult place”?

Those are not my words but those of the Conservative leader of the Local Government Association. While the Secretary of State has been travelling up and down the country lecturing councils about not increasing their council tax, he has all along been masterminding a council tax increase for those who can least afford it. Does he not understand that the public will see that happening in the very same month that the top rate of tax is cut, and that they will say, “This is unfair”?

Brandon Lewis: I am afraid that the right hon. Gentleman oversimplifies things. Local authorities have, as we have said, the right to look at their local communities and design schemes that they think are right for them, in contrast to the central diktat that the last Government used to impose. The authority that he has mentioned in Brentwood is a good example, because what he did not mention was the way it had changed the taper to ensure that it will pay to work.

Small Shops (Rates)

2. Peter Aldous (Waveney) (Con): What steps he is taking to help small shops with business rates. [140750]

3. Mel Stride (Central Devon) (Con): What steps he is taking to help small shops with business rates. [140751]

The Minister for Housing (Mr Mark Prisk): The Government have taken significant steps to help small retailers, including doubling the level of small business rates relief for a further year until March 2014. This will benefit 500,000 small and medium-sized businesses.

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Peter Aldous: I am grateful for that answer. Business rates for shops are a particular concern for small shops in my constituency. Has my hon. Friend’s Department carried out any analysis to ascertain how many local authorities are using the powers provided in the Localism Act 2011 to give discretionary rate relief to small businesses? If not, what can be done to encourage them to use them more extensively?

Mr Prisk: We are collecting that information right now, and we will present it to the House shortly. What I can say is that we have given new powers to councils to be able to provide further business rate discounts, and also the flexibility to be able to use them when and where they think is best. I would strongly encourage councils, whether they be in my hon. Friend’s constituency or elsewhere, to use those powers so they can better help their high streets.

Mel Stride: Small shops in Crediton, an important market town in my constituency, suffered greatly under the last Government’s planning guidelines, which pushed up car parking charges in the centre of town and pushed away trade. Will my hon. Friend outline the steps that the Government are taking to ensure that, under our planning guidelines, car parking charges will be pushed downwards, not up?

Mr Prisk: We have scrapped Labour’s red tape so that councils can be far more flexible about the way in which car parking charges and associated rules work. That will enable more people to be attracted into excellent towns such as Crediton in my hon. Friend’s constituency. Again, I urge councils to be more innovative in how they manage to make their charges for parking. I have seen a number of instances where simple changes can make a real difference to our local high streets.

Seema Malhotra (Feltham and Heston) (Lab/Co-op): Liz Peace, chief executive of the British Property Federation, said:

“The decision by Government to delay revaluation until 2017 is a real shot in the foot for the retail industry”.

Does the Minister agree?

Mr Prisk: No, I do not agree. As I have said to the British Property Federation on several occasions, we looked very carefully at the valuation office evidence that was presented to us. What it showed was that for every three businesses that might gain, eight could lose—including, potentially, a loss of £100 million to retailing in London. That is why we have taken what I think is the correct decision to defer that revaluation until 2017.

Mr Russell Brown (Dumfries and Galloway) (Lab): Undoubtedly, business rates can be a burden on many small shops, but has the Minister had any discussion with his colleagues in the Department for Work and Pensions because, as a result of the freezing of the benefits uprating at 1%, £6 billion will be taken out of local economies the length and breadth of this country? That will hit small shops hardest, will it not?

Mr Prisk: Disposable income is very important—the hon. Gentleman is right—which is why I am proud that our Government are unlike the Labour party, which

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doubled council tax bills during its term in office. That hits the disposable pound, and it is a shame that the Labour party did not understand that while in government.

Fire and Rescue Service

4. Sarah Champion (Rotherham) (Lab): What assessment he has made of the effect of spending reductions in each fire and rescue service area. [140752]

15. Mr Jim Cunningham (Coventry South) (Lab): What assessment he has made of the effect of spending reductions in each fire and rescue service area. [140763]

16. Mrs Mary Glindon (North Tyneside) (Lab): What assessment he has made of the effect of spending reductions in each fire and rescue service area. [140764]

The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis): Fire and rescue authorities have been protected by back-loading grant reductions into years 3 and 4 of the spending review period. That has provided time to meet the reductions without impacting on the quality of local services. There is scope for fire and rescue authorities to make sensible savings.

Sarah Champion: In South Yorkshire, we are losing 140 firefighters, and we are currently advertising for contract part-time reservists, not full-timers. Will the Minister assure us that these actions and the restrictions on growth will not affect response times, which could put lives at risk?

Brandon Lewis: As I am sure the hon. Lady will appreciate, local response times and decision making over local things like that are a matter for the local fire service. I am pleased to say, however, that the fire service has been protected; indeed, South Yorkshire will receive an extra £2.4 million in capital funding.

Mr Cunningham: Why are fire authority areas with higher incident rates suffering the largest cuts? The West Midlands fire service has been the hardest hit, with cuts of nearly 19%. Will the Government not have another look at that?

Brandon Lewis: The West Midlands fire service also benefits from the de minimis changes in this year’s settlement. It is also one of the authorities that has gained most from the capital grant funding of £11.5 million.

Mrs Glindon: Tyne and Wear fire and rescue service would have suffered a 16% reduction in grant funding over this coming year had it not been for the floor mechanism. Given the reliance on the floor, does the Minister believe that the formula accurately reflects the relevant needs and local risks? Will he review the formula now before it is locked in?

Brandon Lewis: I believe that a report from the House of Commons Library stated that this year’s formula and settlement were fair to north, south, east and west. However, to offer some extra support to fire and rescue authorities, I have asked the outgoing chief fire and

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rescue adviser, Sir Ken Knight, to look at ways in which they can deliver savings and improvements without reducing the quality of their lifesaving work.

Rehman Chishti (Gillingham and Rainham) (Con): Will the Minister join me in welcoming the introduction by Kent fire and rescue service of a new system in Medway that helps to reduce damage caused by fire?

Brandon Lewis: I am happy to congratulate Kent fire and rescue service on its work. When I visited its headquarters recently, I observed some of the innovative work that it is doing in both protecting the front line and making savings by, for instance, sharing its call centre with the police. I hope that fire services across the country will learn from that innovative way of working.

Chris Williamson (Derby North) (Lab): The average spending power reductions are 14.5% for metropolitan fire authorities and 7.5% for combined fire authorities. That has resulted in fewer appliances, fire station closures, reductions in fire-prevention work, and an increased response time in certain areas. However, the fire Minister wrote to me last month that

“savings should be made without… affecting…frontline services.”

As Winston Churchill once said, “The truth is incontrovertible.” Will the Minister now accept the incontrovertible truth that his cuts are adversely affecting front-line fire and rescue services?

Brandon Lewis: In the interests of absolute truth, let me reconfirm that the reduction in spending power for fire and rescue authorities was 2.2% for 2011-12 and 0.5% for 2012-13. As was said earlier, that moves to 4.7% in 2013-14, with the back-loading, and to just 3.3% in 2014-15. Those figures are slightly different from the ones given by the hon. Gentleman.

Social Housing (Under-occupancy)

5. Kerry McCarthy (Bristol East) (Lab): What assessment he has made of the availability of accommodation for those who downsize as a result of the new under-occupancy rules for social housing. [140753]

The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Don Foster): I am sure that the 278,000 families in overcrowded social housing will welcome the increased availability of larger homes, given that some 390,000 families under-occupy their properties by two bedrooms or more.

Kerry McCarthy: According to the Department’s own impact assessment, more than 660,000 housing benefit claimants will be affected by these changes. It is ridiculous to assume that they will be able to find the money out of their own pockets, given all the other cuts that are being introduced. They will be forced to lose their homes. What assessment has the Minister made of the availability of smaller accommodation? Will those people not just be pushed into expensive private sector accommodation, meaning that the housing benefit bill will go up?

Mr Foster: I have already pointed out that a large number of properties are currently under-occupied. The position will be helped enormously by a policy that is identical to the one adopted by the Labour Government

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in respect of the payment of housing benefit in the private rented sector. We are taking the advice of the Labour party, which said a year ago that housing benefit was “simply too high” and that we needed “tough-minded” reform.

Annette Brooke (Mid Dorset and North Poole) (LD): In the light of the expected mid-term review statement on housing, will my right hon. Friend consider the capacity of councils to borrow—for example, to facilitate the building of one and two-bedroom properties where they are so much needed by councils and arm’s length management organisations?

Mr Foster: As my hon. Friend will know, as a result of changes made by this Government to deal with the borrowing pressures placed on local authorities, they have been more able to borrow. The review that we are currently undertaking will include the issues that she has raised.

Ms Karen Buck (Westminster North) (Lab): According to the Government’s impact assessment, most of the under-occupied properties are in the north of England and most of the overcrowded properties are in the south. Can the Minister confirm that part of his strategy is to move Londoners in overcrowded housing to the north?

Mr Foster: No, it certainly is not. Having recognised that in some parts of the country there will be problems with the introduction of this policy, the Government have provided councils with large sums of money to help them with their transitional arrangements and ensure that everyone can have a decent home over their heads—unlike the last Government, who reduced the amount of social housing by a staggering 421,000 properties.

Helen Jones (Warrington North) (Lab): Last week, the Tory deputy leader of Cheshire West and Chester council wrote to Ministers outlining the consequences of this policy. Can the Minister now tell him and us: where are the homes for families deemed to be over-occupying because they have a special room for a disabled child? Where are the homes for foster carers who are deemed to be over-occupying because they keep a spare room for emergency placements? Where are the homes for families who have a son or daughter in the armed forces who are deemed to be over-occupying because they keep a spare room for when those people are on leave? The Minister knows that the homes are not there, so why does he not abandon this vindictive policy?

Mr Foster: The Government are well aware of these issues, which is why we made an additional £25 million available to help in relation to the disabled people the hon. Lady talks about, and it is why we have made an additional £5 million available in relation to carers. While armed forces personnel are living at home, the home would have a £70 per week discount, whereas while the person is serving, the discount would be only 14%—a very much lower sum.

Refuse Collection (Derby)

6. Pauline Latham (Mid Derbyshire) (Con): What recent discussions he has had with Derby city council on its refuse collection policies. [140754]

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The Secretary of State for Communities and Local Government (Mr Eric Pickles): I have had no discussions with Derby city council, but I am disappointed to hear of plans by the Labour council to charge residents for collecting their garden waste.

Pauline Latham: What assessment has my right hon. Friend made of Labour-run Derby city council’s proposed £40 brown bin tax?

Mr Pickles: There is a very good case for comparing that bin tax with what the neighbouring Amber Valley borough council is doing. That Conservative authority is about to introduce a new recycling service, which will be more convenient for households and will reduce the amount of waste that goes into landfill, and includes a free garden waste collection service. That is good practice and I encourage other councils to follow suit.


7. Natascha Engel (North East Derbyshire) (Lab): Whether his Department plans to review change-of-use planning regulations. [140755]

The Parliamentary Under-Secretary of State for Communities and Local Government (Nick Boles): We have recently announced a significant package of improvements to support economic growth and the free school movement. We will continue to keep the use classes system under review.

Natascha Engel: I thank the Minister for that answer, although I was more after details on the regulations for changing a pub into a supermarket, a process for which there is absolutely no need for change-of-use planning permission. Does he have any plans to introduce planning permission for that, so that local people have a say in a change of use that significantly alters the communities in which they live?

Nick Boles: All local authorities have the possibility of resorting to an article 4 direction to restrict the application of a change-of-use permitted development right in their area, and they can do so if they are concerned about the loss of pubs in the way that the hon. Lady describes.

Geoffrey Clifton-Brown (The Cotswolds) (Con): Will my hon. Friend ensure that very clear planning guidelines are introduced for five-year housing supply, housing numbers and, above all, deliverability, because on the ground at the moment the methodology is arbitrarily decided on appeal? It is very unsatisfactory when local people and local authorities cannot make decisions that benefit their areas.

Nick Boles: My hon. Friend rightly says that it is important that local authorities take an objective approach to the assessment of their housing needs and of the five-year supply. Lord Taylor of Goss Moor is conducting a review of the complete set of planning guidance, and high on his list of priorities is producing new guidance on exactly that question, certainly before the end of July.

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Stephen Timms (East Ham) (Lab): Local authorities that refuse permission for yet another betting shop in their high street find that at the moment the refusal is often overturned by the Planning Inspectorate. Is the Minister examining the possibility of a separate use class for betting shops?

Nick Boles: The Department for Culture, Media and Sport is reviewing the whole situation for betting shops, but we have no specific plans to do as the right hon. Gentleman suggests at this time.

Greg Mulholland (Leeds North West) (LD): The Minister is right to say that local authorities can, and indeed should, introduce local planning policies to deal with the kind of problems that we have heard about. Will he therefore join my condemnation and that of the all-party save the pub group of the extraordinary decision taken by the British Beer and Pub Association to seek to overturn Cambridge city council’s elected policy for pubs, given that that is what the council wants to do and the people want it as well?

Nick Boles: If the policy of the city of Cambridge is properly arrived at as an expression of local feeling, I am sure that it will be able to defend it from any challenge from whatever quarter.

Local Government Finance

8. Paul Maynard (Blackpool North and Cleveleys) (Con): What recent assessment he has made of the local government finance settlement; and if he will make a statement. [140756]

The Secretary of State for Communities and Local Government (Mr Eric Pickles): The local government settlement that we have confirmed today provides councils with an average of £2,216 per household, which will enable them to freeze council tax and deliver essential front-line services to their residents. The figure for Blackpool is £2,458, well above the national average.

Paul Maynard: I thank the Secretary of State for that reply. What role does deprivation play in reaching a local government finance settlement with individual councils, such as Blackpool, where deprivation is very high? Will the Secretary of State reassure me that those councils are not disproportionately penalised in reaching that settlement?

Mr Pickles: I can give my hon. Friend that reassurance. The figures show that the scheme that gives the weighting for deprivation is essentially unchanged from Labour’s scheme, apart from one significant change. We have introduced banded floors—damping floors—that mean that those who are more dependent on grant receive more protection than those who are more prosperous. It is fair to say that the settlement is more progressive and gives greater weight to deprivation than Labour’s scheme.

Mr Clive Betts (Sheffield South East) (Lab): When the Secretary of State first announced the settlement for next year he referred to a cut in spending power of 1.7%. Will he confirm that that should have been 2.6%, as he double-counted the council tax support money? Will he also confirm that the cash handed over to local

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authorities in the start-up funding assessment next year will be 8.4% less than this year’s formula grant, which it replaces? Will the Secretary of State stop pretending that cuts of that magnitude can be managed without hitting front-line services?

Mr Pickles: I am delighted to confirm to the hon. Gentleman that the reduction in spending power is not 1.7% but 1.3%. That represents good news. Figures tend to move about—[Laughter.] That is why we have a provisional settlement. I do not know why Opposition Members are laughing; I respectfully remind them that in several settlements things changed dramatically and that one year Labour was forced to go out to consultation again.

Peter Luff (Mid Worcestershire) (Con): Does my right hon. Friend realise that the £1.3 million new homes bonus paid to Worcestershire is being funded by a £3.5 million reduction in its baseline funding and that Wychavon district council’s new homes bonus of £1.2 million over the past three years has been matched by a £2.2 million reduction in its baseline funding? Does he understand the inexorable logic of the position that including the new homes bonus in spending power perverts the purpose of the new homes bonus, which is to incentivise communities to accept new development?

Mr Pickles: My hon. Friend must accept that we took more into consideration than the grant going in and that we have moved on to spending power, which is what the Local Government Association and the Labour Opposition wanted to see. The local government spend is £114 billion. That is twice the size of the defence budget and more than we spend on the national health service. Even his own authority must play a part in reducing public spending to deal with the deficit we were left by the Opposition. The new homes bonus gives the authority an opportunity to make money.

Mr Nicholas Brown (Newcastle upon Tyne East) (Lab): I understand what the Secretary of State just said, but the obligation is not fairly spread across all local authorities in England. Will he reconsider central Government grant aid to local authorities and the relationship between that and the obligation to provide statutory social services, as the demand for such provision is steadily rising in inner-city areas while the grant is steadily being reduced?

Mr Pickles: That is of course why we have given additional sums to help those areas that are more reliant. That is why a place such as Newcastle will receive something like £600 per household more than somewhere like Wokingham. That is a sensible thing to do, and the right hon. Gentleman should support that, rather than decry it.

Local Government Finance

9. Mr John Whittingdale (Maldon) (Con): What assessment he has made of the effect of the local government finance settlement on local authorities in rural areas. [140757]

The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis): We have confirmed the increase in the sparsity weighting and top-ups that

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we proposed at consultation. Further, we are providing an £8.5 million grant to support the delivery to sparsely populated areas of efficiencies in services.

Mr Whittingdale: May I welcome my hon. Friend’s recognition of the fact that the provision of services in rural communities such as Maldon district where populations are sparsely distributed often costs more, but does he accept the disappointment that the local government finance settlement appears to do little to reduce the rural penalty? In fact, it entrenches it for forthcoming years.

Brandon Lewis: We recognise the concerns of rural areas such as Maldon and similar areas where the costs that sparsity can bring are clear. The £8.5 million that we have announced in the statement today will go to 95 local authorities, all of which are rural. However, I would point out that in meetings that my officials and I have had with people from rural networks we have confirmed that the gap is narrowing thanks to changes that we made in the settlement. It is becoming smaller than it ever was under the previous Government, who put the finances in a situation that was detrimental to rural areas across the country.

Duncan Hames (Chippenham) (LD): Those newly announced funds are certainly welcome. Is the Minister aware that in his Department’s own analysis shire districts such as Watford borough council count as rural while unitaries, including Wiltshire council, are lumped in the urban category? Given that, how can he be sure of the boast that the proposed settlement is fair to urban and rural alike?

Brandon Lewis: I am quite happy to meet the hon. Gentleman to go through the situation. We have confirmed with rural networks that across all types of authorities the gap between rural and urban has narrowed as a result of the statement.

Illegal Encampment

10. Gavin Barwell (Croydon Central) (Con): What steps he is taking to help local authorities tackle illegal encampments. [140758]

The Secretary of State for Communities and Local Government (Mr Eric Pickles): Councils and the police have a range of strong powers to take action against illegal encampments and unauthorised development. We recently reminded councils of the extensive powers at their disposal to deal with the problems swiftly.

Gavin Barwell: Over the summer, a group of Travellers moved back and forth between several sites in Croydon, costing council tax payers and private landowners thousands of pounds. What else can the Government do to help councils tackle that antisocial behaviour, and in particular, will the Minister look at allowing councils to use their byelaws against encampments on private as well as public land?

Mr Pickles: Significant powers already exist, and the police have powers to deal with people who are causing a public nuisance by consistently making illegal encampments. I draw my hon. Friend’s attention to the

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Criminal Justice and Public Order Act 1994, which gives the police considerable powers to deal with that. In addition, we are consulting on the introduction of a temporary stop notice with immediate effect, which will put considerable powers in the hands of the local council.

House Building

12. Simon Danczuk (Rochdale) (Lab): What steps he is taking to increase the number of housing starts; and if he will make a statement. [140760]

14. Mr Nick Raynsford (Greenwich and Woolwich) (Lab): What steps he is taking to increase the number of housing starts; and if he will make a statement. [140762]

The Minister for Housing (Mr Mark Prisk): Over the past 15 years or more, this country has been building half the number of homes that we need. This Government are determined to reverse that trend, by reforming the planning system, expanding the private rented sector and by building 170,000 more affordable homes.

Simon Danczuk: There are thousands on the housing waiting list in Rochdale, and homelessness is rising. Like Rochdale residents, does the Minister not regret his Government’s decision to cut the affordable housing budget by 60%?

Mr Prisk: In fact, the £19.5 million is an important investment, not least to try to reverse the fall in social housing under the previous Government of some 421,000 homes. We want to build those 170,000 homes, but there is a long way to go before we can clear up the mess that we have inherited.

Mr Raynsford: May I draw attention to my interests as declared in the register?

Over the past few weeks, the Minister has answered some very interesting questions, and has provided data about the new homes bonus. He will have looked at the figures as closely as I have, and will therefore know that it is not only very expensive but a complete failure. Does he accept that the 17 local authorities that are receiving the largest amount of new homes bonus are granting substantially fewer planning permissions than they were—37% below the levels of 2005-06, and 6% below the abysmal levels of last year?

Mr Prisk: Some of the questions were from the right hon. Gentleman, though whether they were interesting or not is another matter. I would say to him, if I may, that he needs to understand that the principle of the new homes bonus is very simple: “The more you build, the more you get.” That is why we see that Manchester, Sheffield and Bradford have shown the way. They are willing to do that, which is why we recognise that there will be at least 400,000 additional homes as a direct result of the bonus.

Mark Pawsey (Rugby) (Con): Does the Minister agree that more authorities should take the approach of authorities such as Rugby borough council, which has allocated land in its local plan, with two sites coming forward, to enable the development of 7,500 new homes?

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Mr Prisk: I very much welcome that. It is important that some authorities are being proactive in the way in which they handle their planning system and engage with the new homes bonus. We have a shared ambition to overturn something that has happened for the past 15 or 20 years. I wish sometimes that Labour would be a little more positive about it.

Sir Bob Russell (Colchester) (LD): In the context of housing starts, does the Minister agree that planners and developers of grotesque schemes such as the proposed 1,600-homes estate in my constituency to be accessed by a 1 mile cul-de-sac should be forced to live there for a minimum of five years as a condition of any planning consent?

Mr Prisk: The safest answer for me to give is that that is a novel idea. I will reflect on it in due course.

Jack Dromey (Birmingham, Erdington) (Lab): The Secretary of State told the BBC that on house building “signs are encouraging,” boasting of building 132,000 homes. “Encouraging”? Far from encouraging, housing completions have fallen in both financial years since Labour left office, and housing starts have fallen to 98,000. Does the Housing Minister recognise those figures? He should, because they come from his own Department. Will he take this opportunity of correcting the misleading impression given by the Secretary of State? Does he accept that no amount of massaging statistics can conceal the fact that this is a Government who are presiding over the biggest housing crisis in a generation?

Mr Prisk: Gosh! What a lot of rhetoric, but not a lot of facts. The reality is that the net addition to the housing stock is up 11% on the last four figures that we have, at 135,000. That is the highest level in four years. Is there more to do? Absolutely. Do we want to make sure that we reverse the trend on affordable homes? Yes, but carping from the Opposition Benches will not help that process or the people whom the Opposition claim to represent.

Right to Buy

13. David T. C. Davies (Monmouth) (Con): What steps he is taking to promote the right to buy. [140761]

The Minister for Housing (Mr Mark Prisk): Last year we reformed the right to buy both to increase the discounts for tenants and to ensure that the receipts from sales are recycled into building more affordable homes. We are now actively informing and helping thousands of tenants to turn their ambition into reality.

David T. C. Davies: I commend the Minister on the work that he is doing. Will he explain these benefits to his colleagues in the Welsh Assembly, who seem wedded to some sort of out-dated socialist-collectivist dogma which is denying the people of Wales the right to buy homes, which they could enjoy in England?

Mr Prisk: Unlike the Opposition, we believe that credit-worthy council tenants should be able to buy their home. That is why this spring in England we will

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have directly contacted 95% of the eligible families. These people have rights. We will make sure that they can put them into practice.

Graham Jones (Hyndburn) (Lab): I notice in the Minister’s answer the absence of like-for-like, one-for-one replacements. Can he clarify that and give the House information—or put it in the Library—about the number of right-to-buy properties that have been sold and the number that have been built as replacement units?

Mr Prisk: I am happy to clarify the situation. In the last six months for which we have records, £86 million has been recycled from those sales back into affordable homes. I should have thought the hon. Gentleman would welcome that fact.

Troubled Families

17. Mike Freer (Finchley and Golders Green) (Con): What steps he is taking to support local authorities in helping troubled families. [140765]

The Secretary of State for Communities and Local Government (Mr Eric Pickles): We are providing local authorities with £448 million over three years, including funding for troubled families co-ordinators in all 152 upper- tier councils. My troubled families team works closely to support councils and has recently published reports on effective family intervention and the significant cost savings that this work can bring. This would not have been possible without the active encouragement of Members in all parts of the House.

Mike Freer: Is my right hon. Friend aware that my local council has been doing excellent work and that Barnet council has identified one troubled family who are benefiting by £400,000 a year from the public sector? What additional help can the Department give to good councils such as Barnet in tackling this problem?

Mr Pickles: When my hon. Friend was leader of Barnet council he was a very early adopter of this intervention model. As he rightly points out, it is not as though that money is spent terribly wisely; the majority is simply spent on reacting to the troubled family rather than positively getting them on side. Thanks to the work of my hon. Friend and of hon. Members all around the Chamber, we can jointly say that we have made significant progress on troubled families.

Mr Barry Sheerman (Huddersfield) (Lab/Co-op): Does the Secretary of State agree, though, that those of us on both sides of the House who want this policy to come to fruition and to work well are finding it very difficult at the grass roots, especially in an area that I know well, education, with people in schools saying that it is still very difficult to get a link between the Department for Work and Pensions, the Work programme and the police—across the agencies and Ministries? Will he talk to colleagues in other Departments to try to help to make this a real success?

Mr Pickles: Absolutely. There is an intense understanding of the need for co-operation across Government. If the hon. Gentleman has a particular local authority in mind and would write to me or speak to me after questions, I will personally intervene.

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Redundancy (Local Government)

18. Mr John Spellar (Warley) (Lab): What his policy is on redundancy payments to senior local government officers; and if he will make a statement. [140766]

The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis): Excessive payouts to senior local authority staff have been too frequent. Thanks to the Localism Act 2011, local taxpayers can now see and challenge how their money is being spent on pay and reward, including redundancies. We are also scrapping regulations that saw councils pay out inflated severance packages to chief executives in order to avoid a lengthy and costly review process.

Mr Spellar: When the chief executive of Tory Kent county council left after 16 months with a £420,000 pay- off, the then local government Minister, now Tory party chairman, the right hon. Member for Welwyn Hatfield (Grant Shapps), described this as “disturbing” and said:

“I find dipping into the public purse to make such an eye-watering pay-off unacceptable”.

Yet shortly thereafter the Minister’s colleague, the Minister for the Cabinet Office and Paymaster General, hired this individual as director general of civil service reform. Does he think that this sets a good example?

Brandon Lewis: The right hon. Gentleman has outlined exactly why the changes we are making are so needed.

Fire and Rescue Service

19. Alison Seabeck (Plymouth, Moor View) (Lab): What assessment he has made of the local government finance settlement 2013-14 and its effect on fire services in Devon and Somerset; and if he will make a statement. [R] [140767]

The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis): Grant reductions to the fire and rescue authorities are back-loaded in the spending review period, allowing them to make sensible savings without impacting on the quality of local services. Rightly, operational activities are decided by each authority, subject to local consultation.

Alison Seabeck: I declare an indirect interest in the interests of my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford). On 6 December, during a visit to Taunton, the Minister seemed impressed by Devon and Somerset fire service’s plan to make significant —I repeat, significant—savings through efficiencies and lower fuel costs by purchasing light rescue pumps, yet when push came to shove, the fire service, ravaged by cuts and trying to find innovative ways to reduce costs, was told, “Sorry, no, you can’t have those pumps.” Why did he change his mind in the space of a few weeks?

Brandon Lewis: As the hon. Lady outlined, I had a very good visit to Somerset and saw some of the plans that people have for how they want to take things forward to save money, which is exactly what many fire

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authorities across the country should be looking at. It is also why Devon and Somerset will be receiving £2.7 million of capital money in 2013-15.

Local Government Finance

20. Graham Evans (Weaver Vale) (Con): What steps he is taking to encourage sensible savings by local authorities. [140768]

The Secretary of State for Communities and Local Government (Mr Eric Pickles): I published a document called “50 Ways to Save” with, as the title suggests, no fewer than 50 great ideas for sensible savings that councils can adopt. Our fair funding deal and council tax freeze will give all councils time to put these ideas into practice.

Graham Evans: I thank my right hon. Friend for visiting God’s own county of Cheshire over the weekend. Will he share with the House what guidance his Department is giving to local authorities such as Cheshire West and Chester and Halton to help to identify wasteful spending?

Mr Pickles: It was indeed a pleasure to visit Cheshire over the weekend and see so many active Conservatives. We have set an example. My own Department’s procurement spend has come down by 54% and that of the Government’s procurement card has decreased by 87%, while spending on technology has dropped by 69%. We recognise that it is not our money, but the public’s money. Unlike the Labour spendthrifts, we have been prepared to deal with it face on.

Steve Reed (Croydon North) (Lab): The cross-party Local Government Association estimates that, over a five-year period, it costs local authorities more than £200 million to publish statutory notices in local papers as the Government force them to do, instead of online, which would be more convenient for local people to access. Why will the Secretary of State not allow local authorities to make that sensible saving?

Mr Pickles: This is something that we are actively considering, but we need to bear in mind the importance to the local economy of local newspapers. We have made clear to local editors that the days of those statutory notices appearing in newspapers are numbered.

Topical Questions

T1. [140774] Gordon Henderson (Sittingbourne and Sheppey) (Con): If he will make a statement on his departmental responsibilities.

The Secretary of State for Communities and Local Government (Mr Eric Pickles): A written statement has been laid detailing the final local government financial settlement. Despite the need to tackle Labour’s deficit, last year councils were still spending £114 billion. The overall reduction in spending power this April, taking into account the new health funding grant, is just 1.3%. Our decentralising reforms mean that an estimated 70% of council income will now be raised locally. Councils are now in the driving seat to help firms and support local jobs.

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Gordon Henderson: My right hon. Friend has often said that planning laws should treat all applicants in the same way. That being the case, will he undertake to write to the planning department at Swale borough council to make clear its responsibilities to determine applications from both the settled and the Traveller communities in the same way, and to refer the planning officers to the document in which that policy is set out?

Mr Pickles: Of course. The Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Grantham and Stamford (Nick Boles), who is responsible for planning, will have heard what has just been said. We have been clear that we want to ensure that the Traveller community gets a fair deal. Indeed, we have been doing all kinds of things relating to commercial dealings, education and health, and it is massively important that the community is treated with exactly the same level of respect as the rest of the population.

Roberta Blackman-Woods (City of Durham) (Lab): Will the Minister tell the House how many additional affordable homes he expects communities to approve for a share of community infrastructure levy receipts? How many affordable homes are likely to be lost as a result of the changes that the Growth and Infrastructure Bill will make to section 106 agreements? Will the Minister produce figures to show the net impact of these totally contradictory policies?

The Parliamentary Under-Secretary of State for Communities and Local Government (Nick Boles): The hon. Lady asked three questions, so I will not necessarily answer all of them in full. First, she will be well aware that the measures in the Growth and Infrastructure Bill tackle those affordable housing developments that will never happen in current market conditions. We believe that some homes are better than an unrealistic target of homes that will never come through. Secondly, she will also be aware that, as well as the Bill’s measures, we announced an additional £300 million to support further affordable housing. There is no question but that the combination of those measures will produce a net increase, both in market homes and affordable homes.

T2. [140775] Chris White (Warwick and Leamington) (Con): Last week Warwickshire county council unveiled Operation Footfall, an initiative that will give local business groups the opportunity to bid for up to £30,000 to develop ideas to encourage people to shop in our town centres. Will the Minister join me in congratulating the county council, and will he detail what support the Government are giving to improve our town centres?

The Minister for Housing (Mr Mark Prisk): I am very happy to join my hon. Friend in congratulating Warwickshire county council in that context. We have a settled programme looking at making sure that we strengthen the way in which the planning system works and ensuring that the business rates are reduced for the smallest of firms. However, I think that the key issue, rather than the individual programmes, is the question of how we ensure that high streets today adapt to the new world of online shopping. Consumer habits have

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changed. We are standing ready to work with our high streets to make sure that they can adapt in that new environment.

T4. [140777] Chi Onwurah (Newcastle upon Tyne Central) (Lab): On Saturday, I met the Newcastle youth council to discuss its report, which I shall pass to the Secretary of State, on the impacts of his £100 million of cuts to the council budget. Its members explained that many children cannot understand the magnitude of the cuts and have offered to give up sweets or donate their pocket money to save local libraries, swimming pools and youth services. Does the Secretary of State understand the magnitude of his cuts and their impact on young people in Newcastle? If so, what is he going to do about it?

The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Don Foster): I am grateful to the hon. Lady for her question, but perhaps she is not aware that the spending power reduction in Newcastle is lower than the national average and that there will be £2,516 per dwelling. I am sure that she will also welcome the additional £2 million of new homes bonus that has gone to her local authority.

T3. [140776] Karl McCartney (Lincoln) (Con): I expect that my right hon. Friend will agree that local authorities need to balance their budgets by making efficiency savings, rather than by imposing council tax rises on hard-pressed taxpayers. Does he also concur that billing residents in Lincoln for flights to China, external consultancy fees for possible Traveller sites and self-aggrandising pseudo-green energy summits will not inspire much sympathy if families in Lincoln see an increase in their rates?

Mr Pickles: My hon. Friend makes a reasonable point. In these difficult times, when councils are expected to play their part in reducing Labour’s deficit, it is difficult to look electors in the eye and explain why councillors have been using this money for self-aggrandisement. I hope that the councils to which he referred will take heed.

T5. [140778] Kelvin Hopkins (Luton North) (Lab): Some 8,000 families are on Luton borough council’s housing waiting and transfer lists, yet the Conservatives’ policies will force thousands of low-income Londoners to seek homes elsewhere, with Luton a primary target. Does the Minister accept that the Government’s policy is not only unjust, but a recipe for social chaos?

Mr Prisk: I do not accept that. We have made it clear to councils that out-of-borough changes are not desirable. It is not right, as happened in the ’70s, for large groups of people to be dumped a long way from their homes. That is why we changed the law last year so that councils have to take into account the suitability for each individual. Dumping is something that we will challenge. The law is clear and the hon. Gentleman has my support on the matter.

T6. [140780] Lorely Burt (Solihull) (LD): Given that the number of empty homes fell by more than 21,000 in 2011, which is the biggest drop since 2004, does my right hon. Friend agree that local solutions, supported by central Government, provide the best means of tackling the long-standing problem of empty homes?

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Mr Foster: I am grateful to my hon. Friend for recognising the success that our empty homes policy has already had. She is right that local decisions are the best way forward. That is why we have given local councils the ability to increase the council tax on empty properties, introduced the new homes bonus and increased the flexibility in a range of other areas to get even more empty properties back into use. Local decisions are undoubtedly the best way forward.

T8. [140782] Julie Hilling (Bolton West) (Lab): During the inquiry of the Communities and Local Government Committee into welfare reform, a housing provider in one of the universal credit pilot schemes reported that it would lose one proposed new-build property a week from its development programme because of welfare reform. Has the Minister assessed the impact of welfare reform on the ability of social housing providers to build new homes, and can he tell us how many proposed new homes will now not be built?

Mr Foster: The hon. Lady is in a rather difficult position, given that she supported a Government who caused us to lose 421,000 social homes and who saw the benefits bill, the housing benefit bill and the council tax bill double. Labour Members now say that we need to take tough decisions. That is what we are having to do to sort out the mess created by the Labour Government.

T7. [140781] Mr Marcus Jones (Nuneaton) (Con): Recent figures reveal that councils have increased their reserves by £4.5 billion over the past five years and that those reserves now stand at almost £13 billion. Does my right hon. Friend agree that councils that have reserves should not be hoarding cash while complaining about the changes to Government grant, but should be using that cash to protect front-line services, keep council tax down and support the hard-pressed council tax payer?

Mr Pickles: My hon. Friend makes a reasonable point, although the situation has moved on since he got that figure. It is now £16 billion, which represents the largest ever council reserves, not including schools, so it is difficult to say that local authorities are hard-pressed. We need them to use their balances sensibly while taking measures to get costs out of their base.

T9. [140783] Natascha Engel (North East Derbyshire) (Lab): Two elderly constituents who live in a retirement complex recently received a bill for £200 from their managing agent completely out of the blue. Managing agents of leasehold housing are completely unregulated, so those elderly constituents have nowhere to turn either to appeal or to demand a review. What steps is the Minister taking to ensure that managing agents of leasehold housing are brought under the regulation of the Financial Services Authority?

Mr Foster: I am grateful to the hon. Lady for raising an important issue. Many Members of all parties are concerned about managing and letting agents. As she will know, a detailed investigation is being carried out, and as I have said before from the Dispatch Box, the Government are listening. After we have seen that report, we will bring forward recommendations.

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Andrea Leadsom (South Northamptonshire) (Con): The iconic Silverstone circuit is adjacent to the village of Silverstone in my constituency. Silverstone has grown by several hundred houses over the past few years. A further application for more than 200 houses is being strongly fought by local people, and my right hon. Friend the Secretary of State has called it in for review. I appreciate that he cannot comment on individual cases, but will he take into account the real conflict between the development of that nationally important circuit and having yet more housing on its doorstep containing people who do not like the noise it generates?

Mr Pickles: My hon. Friend is quite right that I cannot comment on planning, but she has made her point most forcefully.

Andrew Gwynne (Denton and Reddish) (Lab): The Government’s own research suggests that more than 42% of people affected by the bedroom tax will not be able to make up the financial difference and will instead go into arrears. I asked the Secretary of State for Work and Pensions this question last Monday and did not get an answer. Perhaps the Secretary of State for Communities and Local Government can answer instead. Given the Government’s own research, how many people does his Department expect will now lose their homes?

Mr Pickles: One would think that the Labour party had not been committed to doing precisely this when it was in government, and that it was not prepared to make such sensible decisions. A few moments ago the Under-Secretary of State, my right hon. Friend the Member for Bath (Mr Foster), clearly demonstrated the number of houses that have more than two bedrooms empty and rightly pointed out that exactly the same arrangements existed for the private sector under the Labour Government. We are introducing uniformity between the private and public sectors.

Mark Pritchard (The Wrekin) (Con): On the important issue of social cohesion, does the Secretary of State agree that there is no room in any community in the United Kingdom for sharia law-controlled zones?

Mr Pickles: Of course sharia law should not have control, but it is important for us to recognise the significant number of Muslim organisations that have rightly condemned the patrols in question. We need neighbours to feel that they can walk the British streets safely no matter what their background or sexual orientation.

Diana Johnson (Kingston upon Hull North) (Lab): Last year, the then Housing Minister proposed outlawing council tenants from sub-letting, with up to two years in prison or a £50,000 fine. Now the Government are advising people to sub-let to cover the bedroom tax. Do the Government actually know what they are doing?

Mr Prisk: I am sorry that the Labour party does not understand this issue. As the Under-Secretary of State, my right hon. Friend the Member for Bath (Mr Foster), rightly pointed out, a substantial number of households have two or more spare bedrooms. Is it right that the 250,000 people who are living in overcrowded

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accommodation should simply allow that to persist? Why did the Labour party not do anything about that in 13 years? That was an abject failure on its part.

Charlotte Leslie (Bristol North West) (Con): There is concern that the local government finance settlement penalises councils such as Bristol by using old data for the allocation of local authorities into damping bands. Will the Minister meet me to discuss that further?

The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis): The short answer is yes, I am happy to.

Helen Goodman (Bishop Auckland) (Lab): At the moment, people from some eastern European countries are entitled to housing benefit and council tax benefit, but not to income-related jobseeker’s allowance. Following the localisation of council tax benefit, will those people be entitled to that benefit or will it be a matter of discretion for each local authority?

Mr Pickles: It is entirely localised; it is a matter for local councils to determine.

Robert Neill (Bromley and Chislehurst) (Con): Has my right hon. Friend seen the recent Ofcom report that criticises the London borough of Tower Hamlets for what is described as political advertising? Under those circumstances, will he revisit the strength and effectiveness of the local authority publicity code?

Mr Pickles: I was shocked to read that report and I am very unhappy with what is going on in the borough. I will look as a matter of urgency at putting the publicity code on to a statutory basis.

Paul Goggins (Wythenshawe and Sale East) (Lab): According to a recent survey, more than 500 families in social housing in my constituency would like to move to a smaller home when the bedroom tax is introduced. Given that those properties simply do not exist, does the Minister have any advice for my constituents, or will they simply have to join the 3,500 local families who face paying £12 or £22 extra in rent?

Mr Foster: The Government have already put in place a number of measures to help people such as those the right hon. Gentleman describes. HomeSwap Direct is now available, and there is additional funding in local authority budgets to assist those who wish to move into the privately rented sector, with still more money for areas where rents are increasing.

Peter Luff (Mid Worcestershire) (Con): Will the Minister explain to me and the communities of south Worcestershire why the Planning Inspectorate measures the existence

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of a five-year supply of land for housing not on the basis of planning permissions granted, but on completions achieved?

Nick Boles: Planning permissions that have been granted and are still viable will count towards any local authority’s five-year housing supply. They are withdrawn only in exceptional circumstances when it is clear that they can never be fulfilled.

Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): Last month at the Come Together conference in Liverpool, political and faith leaders from across the country called on the Government to think again about the unfair distribution of local government cuts. Places such as Liverpool will lose £252 per head while the Prime Minister’s local authority of West Oxfordshire will lose just £34 per head. Will the Secretary of State listen to the message of the Come Together conference and look again at how the cuts can be redistributed fairly?

Mr Pickles: Liverpool has received a very generous settlement—far more generous than the constituency of my right hon. Friend the Prime Minister. The hon. Lady must understand that the level of grant allocated to Liverpool far exceeds the money that is being taken away. She will recognise that under this system, with the city deal and the extra help and considerations, Liverpool has a far better deal than it would have had under Labour.

Greg Mulholland (Leeds North West) (LD): Does the Secretary of State share the dismay of the residents of Otley, where the Labour-controlled town council has introduced a record-breaking 14.5% increase in the precept to pay for swanky new town council offices?

Mr Pickles: The good people of Otley live very close to Harrogate but no one would describe them as moneyed folk. I suspect that they are feeling pretty angry about that increase, and that they will punish at the ballot box those councillors who put self-aggrandisement above the needs of the population.

Paul Flynn (Newport West) (Lab): Does the right hon. Gentleman know that Newport council, and Leicester council on which our friend the late David Taylor served, were selling council houses in a fair, sustainable way for more than a decade before the dawn of Thatcherism? Does he acknowledge his debt to those pioneering Labour authorities?

Mr Pickles: That interesting view no doubt has some weight in a parallel universe. No doubt the hon. Gentleman will support the Government’s push to increase the sale of council houses to their tenants. I look forward, for the first time ever, to hands across the Chamber.

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Banking Reform

3.34 pm

Chris Leslie (Nottingham East) (Lab/Co-op) Urgent Question: To ask the Chancellor of the Exchequer if he will make a statement on the Government’s approach to banking reform.

The Financial Secretary to the Treasury (Greg Clark): The Government have today laid before the House the Financial Services (Banking Reform) Bill and their response to the Parliamentary Commission on Banking Standards report, which was published on 21 December 2012 following the commission’s pre-legislative scrutiny of a draft Bill.

I thank and pay tribute to the members of both the Independent Commission on Banking and the Parliamentary Commission on Banking Standards. The two commissions, whose membership comprises some of the most distinguished policy makers and formidable intellects in the world, have between them shaped a set of reforms to British banking that will lead the world and set an example to other countries in the seriousness, radicalism and meticulousness of the changes that are proposed.

The Bill published today reflects their painstaking work and the Government have accepted almost all their recommendations. The reforms address what the Chancellor has called the British dilemma—how Britain can be a leading global financial centre with more than its fair share of international trade in financial services while at the same time not exposing ordinary working people in this country to the catastrophic risks of banks failing.

The reforms were and are necessary because the previous regime was tested and failed. UK taxpayers had to bail out the banks with £65 billion of the hard-earned money of ordinary working people, while those who had taken a one-way bet with that money slunk away, losing nothing more than their jobs, and sometimes not even that. The anger that the country feels about what happened must be channelled into change to reset Britain’s banking system. The objective of the Bill—proposed by Vickers and endorsed by the commission—is that any failure of any bank in future should not impose a cost on the taxpayer and not interrupt for a second vital banking services. That is a high ambition, but one that is appropriate for a country with the reputation for financial stability and confidence, which has for centuries been one of Britain’s chief assets in the world.

As is well known, the Bill will erect a ring fence around the core operations of banks headquartered and regulated in the UK. Within that ring fence, banks must be completely insulated from activities such as using depositors’ funds to speculate for the banks’ own benefit in capital markets.

As a result of the commission’s recommendations, the Government are making a number of further changes to the Bill. First, in the acute phrase of my hon. Friend the Member for Chichester (Mr Tyrie), which will permanently enter the lexicon of banking, the ring fence will be “electrified”. The regulator will be given the power to order the full separation of any bank that attempts to undermine the ring fence. Directors of the

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banks will be personally responsible for ensuring that their banks comply with the ring-fencing rules, and the Prudential Regulatory Authority will conduct an annual review of the operation and adequacy of the ring-fence rules.

Secondly, there are explicit provisions on the face of the Bill for the principal aspects of ring-fencing, including that there should be separate boards of directors, remuneration arrangements, treasury management operations, balance sheet management and human resource management of ring-fenced banks.

Thirdly, the Bill gives us an opportunity to make an historic change in the competitive environment in UK banking. Competition is essential to ensure that customers benefit from innovation and from demanding customer service and efficiency from their banks. That has not always been customers’ experience in the past. As well as bringing in a seven-day automatic account switching service from September this year, the Government will take steps to tackle the cosy arrangement whereby the banks determine how payment systems will be run. Why should it be necessary in 2013 for a cheque to take six days to clear, with the banks and not the customers scooping up the interest on the balances during the delay? Why should a new bank have to beg an incumbent bank for permission to use their payment system? We will therefore require access to payment services that are fair, reasonable and transparent. The commission has rightly emphasised the importance of competition, and I am grateful to it for propelling that drive further, as I am to my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) for what she has done on greater competition in banking, which has been a personal crusade of hers.

The fourth and final change is that more parliamentary scrutiny will be built into the secondary legislation that implements what is a high-level Bill. Drafts of the principal statutory instruments to be made will be made available to the House before Second Reading, and the Government accept the recommendations of the Delegated Powers and Regulatory Reform Committee on the type of scrutiny each should receive.

These are historic reforms, but it is appropriate that, in our country—directly and indirectly, 2 million people work in the industry, it is our biggest export earner, and contributes £1 in every £8 of our tax revenue—we take the steps necessary to restore confidence in, and to, an industry that has fallen so far. There is much scrutiny of the Bill before us, both here and in the House of Lords, and I look forward very much to our discussions during the weeks and months ahead.

Chris Leslie: If the Government believed this issue was important, would the Chancellor have not made a statement to the House of Commons today? It should not take an urgent question for Parliament to hear why the Government are taking such a half-hearted approach to banking reform.

In a week when our national banks are facing record-breaking fines for LIBOR manipulation, when the Financial Services Authority is struggling to get a fair deal on payment protection insurance mis-selling for small businesses, whose customers have been mis-sold interest rate hedging products, when we see the bumper bonus season continuing to roll on and on for banking executives as if nothing had happened, and in a week when all this

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suggests we should be getting serious about real reform, what has the Chancellor said in his seaside speech today? He has fudged the tough stance recommended by the Vickers report, and has stopped short on backstop powers and legislation for the leverage ratio envisaged by the Parliamentary Commission on Banking Standards, a commission that the Chancellor himself agreed to set up last summer.

I have to ask the Minister: why then does it feel as though the Chancellor has to be dragged kicking and screaming towards serious reform? Is it because, despite all the rhetoric and feigned concern, the Government know they face certain defeat in the House of Lords on the sensible recommendations of the parliamentary commission, and so think it best to try to salvage something from what is in reality a strategic retreat? Why will the Minister not legislate for a full reserve power for total separation of retail and investment banking if ring-fencing does not work, something that we called for last year and the commission specifically recommended? Surely it would be sensible to legislate now, not just if one or two individual banks misbehave, but in case ring-fencing fails the sector as a whole. He may think he has found a cunning ploy, but stopping short with only half the backstop powers just means that they are unlikely to be used. Corporate lawyers across the City will be rubbing their hands with glee at the prospect of taking on the regulator on a case-by-case basis. Worse still, why is he ducking the main conclusion of the Vickers report? Specifically, why is he refusing to adopt the commission’s recommendations on the leverage ratio and rein in the over-exposure of banks whose excessive risk-taking caused the problems in the first place?

Should there not be a clause in the Bill so that regulators can restrain such hazardous behaviour? Does the Minister agree that the implementation of the Bill needs a full parliamentary review on a regular basis, with genuine scrutiny of detailed secondary legislation on exactly how ring-fencing will work in practice? If the commission recommends a tougher code of conduct for bankers, proper professional qualifications and a fiduciary duty of care for customers, together with stronger controls on bonuses and remuneration, will he accept its judgment in the Bill?

With the economy flatlining and no plan for growth, why is there nothing in the Bill to improve the funding for lending scheme? We should not still be seeing lending to businesses falling further and further, month after month. The Minister has to realise that the public, the taxpayers and Parliament want to tackle this issue once and for all. The Bill needs further amendment, and if the Government do not have the courage to radically reform the banks, we will.

Greg Clark: I had rather hoped for a serious response to a serious matter. When the Bill has its Committee stage, I hope the hon. Gentleman, with whom I am happy to work on the details, will be able to make some more substantial reflections than those he has offered the House today. Frankly, the idea that the Opposition should have the brass neck to table an urgent question on banking reform is almost unbelievable. At no point in 13 years of power did they show a scintilla of urgency in facing up to, never mind solving, the catastrophic absence of banking reform that led to the financial

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crisis being particularly damaging to this country. The failure of the botched regulatory system they introduced in 1997 has played a large part in the burden that the ordinary working people of this country are still having to shoulder today to bail out the banks. They were in office after the crisis, too. Even then they did nothing urgent apart from hurriedly plunge their heads in the sand to hope that the nightmare would pass.

It has fallen to this Government—as it regularly does, I am afraid—urgently to clear up the chaos in which Labour left the country. It should not have taken so long, but since the Government have been elected—from the beginning of our tenure in 2010—we have set up the Independent Commission on Banking, which has done a superb job, and we have created a separate conduct regulator and a prudential regulator that are now on the statute book. Why did we need to wait for this Government to be elected to do that? Why did Labour not set up a parliamentary commission on banking standards? [Interruption.] Of course, I will answer the pitifully few points that the hon. Gentleman made.

The hon. Gentleman asked, perfectly reasonably, why we had not given the Bank of England the power to split up the whole banking system. One of the principal reasons for not doing so was that the Governor of the Bank of England, in evidence to the commission, said that he did not want that power. It would seem odd to foist on the Governor a power that he does not want. The hon. Gentleman also asked why we did not adopt the higher backstop ratio. One concern expressed was by building societies worried about being disadvantaged by that. That was a concern we had.

The hon. Gentleman asked about a full review. If he had read closely the statement we published in response to the commission’s report, he would have known that the PRA would conduct a full annual review of the ring-fencing rules, and we will obviously act on any recommendations that it makes. He also asked about further recommendations that might come from the commission, which is chaired by my hon. Friend the Member for Chichester. The hon. Gentleman seems surprised that, having set up the commission, we might be interested in taking seriously its recommendations. I hope it is apparent from our response today that we take its recommendations very seriously, and I look forward to its further recommendations, particularly on competition, which have a great deal to offer. I greatly respect the commission’s work and look forward to making time available when the next report is published to make the necessary changes to the Bill to accommodate the recommendations.

Mr Andrew Tyrie (Chichester) (Con): The commission will look carefully at the detail that the Government have published today, but in the meantime I warmly welcome the Government’s acceptance of several of our key proposals, including on electrification of the ring fence.

Last night, journalists were briefed by the Treasury that the Government had also accepted our proposal that an external assessment should be made before the PRA could exercise its reserve power, but there is no mention of that in the Government’s response. Will the Minister confirm that such an assessment will be provided for in the Bill?

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Greg Clark: Of course. I pay tribute to my hon. Friend and the other members of the commission. It might not be known just how many hours of the day they are working on it, but they are doing a service to the country in doing so. We accept his recommendation. This is a high-level Bill and we have said that we will introduce amendments to reflect the recommendations. When we do that, we will invite him to consider whether they appropriately address his recommendations.

Mr Pat McFadden (Wolverhampton South East) (Lab): I welcome the change of heart announced by the Chancellor today. It is in contrast to the dismissive noises that came from the Government when our report was published just before Christmas. I am sure that that change of heart had nothing to do with the vision of amendments in the other place being supported by one of the Chancellor’s predecessors, Lord Lawson, a former Cabinet permanent secretary and the new Archbishop of Canterbury.

I would like to ask the Minister why today’s response was silent on the commission’s recommendation for a general reserve power for the sector as a whole. I must correct him: if adopted, such a decision should not be left to the Bank of England, but be taken by the Chancellor.

Greg Clark: I am grateful for the right hon. Gentleman’s question, to whom I extend my thanks for serving with distinction on the commission.

I said that the Bank of England did not want a general reserve power, but the right hon. Gentleman made the perfectly valid point that it might not necessarily be a choice for the Bank. It seems to me, however, that the power to break up any individual bank is a very strong one, and quite rightly, as the commission recommended, it would make the ring fence more impenetrable. Nevertheless, to provide for a reserve power in this Bill that would change the whole system would, in effect, be a different policy. I understand the reasons for wanting to do that, as many distinguished members of the commission do, but changing the whole policy would deserve the scrutiny of a Bill of its own—any future Government would be free to introduce such a Bill. To have it as a rider to a Bill designed to implement the Vickers report would be the wrong step forward.

Finally, as for accepting amendments, there are several Members of this House who have served on Bill Committees with me in the past. My demeanour, now and throughout the passage of the Bill, will be to listen to good and sensible suggestions from wherever they come—not to treat this as an exercise in partisanship, but to try to find consensus on the best system for financial regulation in this country.

Mr Peter Lilley (Hitchin and Harpenden) (Con): Is my right hon. Friend confident that the very welcome proposals he has announced will not be swept away by the tsunami of regulations bearing down on us from Europe under the Single Market Act, even though none of those regulations creates a single new opportunity for financial services businesses to trade on the continent and all of them result in the transfer of power from this country to Europe to regulate our most important industry?

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Greg Clark: My right hon. Friend is right when he talks about our most important industry—certainly in terms of exports and what it contributes to the taxes that pay for public services. It is significant that more euros are traded in this country than across the entire eurozone. For that reason, we need to continue to have access to the single market and to argue—as I and the Chancellor do in ECOFIN after ECOFIN—to ensure that we secure our interests there. That is a constant fight, but I know that I and my right hon. Friend the Chancellor will always take that view when we are in Brussels.

Mr Andrew Love (Edmonton) (Lab/Co-op): I am a member of the commission, and we will of course examine the detail included in the Bill. The right hon. Gentleman’s reasons for not including a reserve power require further explanation. The Chancellor said that our commission ought not to unpick the consensus. We have taken evidence from a wide range of people—academics, bankers and others—who have all supported our recommendations on electrifying the ring fence. Will the Minister again give serious consideration to the recommendations that we have made?

Greg Clark: I do take seriously those recommendations, but this is not a difference between just the Government and the commission. The shadow Chancellor himself said only a little while ago that

“there is no need to break up institutions but there has got to be clear separation.”

I think people across all parts of the House have come to the same view on this, but I am respectful of the conclusions that the hon. Gentleman has reached.

Mr John Redwood (Wokingham) (Con): If break-up and segregation may be necessary for a bank in a future crisis, why do the Government not understand that they may need those techniques to deal with the inherited, still very serious banking crisis that we are living through, which is preventing the financing of a full recovery? Will the Government look at what they can learn from their studies to sort out the problem of RBS today, which is our biggest obstacle to recovery?

Greg Clark: My right hon. Friend makes a forceful point. The legislation is about the future. It is quite right that it should proceed with consideration and that we should not introduce things that might have unintended consequences without adequate consideration in this House. The Government are obviously the major shareholder in RBS. It is important that RBS should be returned as swiftly as possible to private hands. The current situation is far from ideal, and I know that my right hon. Friend shares our ambition on that.

Stewart Hosie (Dundee East) (SNP): It is right that the taxpayer should never again be on the hook for the bad decisions taken by investment banks or the bad regulation that allowed them to be taken. I therefore welcome the ring-fencing and the provision to separate a given bank if necessary. However, I am not yet convinced of the need for the reserve power to separate any bank. Does the Minister envisage any circumstances under which the Government might include the reserve provision to separate a bank in this or future legislation?

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Greg Clark: I confess that I did not quite understand whether the hon. Gentleman’s point was that he objects to the power to separate any particular bank or the general point, but we can talk about it afterwards. It is important that the regulator—the Bank of England—should have the ability to address a bank that breaches the rules and that does not respect the integrity of the ring fence with consequences, those consequences being full separation.

Stephen Williams (Bristol West) (LD): Does my right hon. Friend agree that consumers and businesses want the existing banking sector to receive the hot blast of competition and that, in order for that competition and choice to exist, we need a regulatory regime that will allow in new entrants, especially those that specialise in community-based banking and in lending to small businesses and social enterprises? Might not one such new entrant emerge from the break-up of the state-controlled RBS?

Greg Clark: My hon. Friend and I completely agree about the need for more competition in the banking sector. It is one of the features of the banking crisis that it has resulted in a concentration in the number of banks. Frankly, there were never enough in the first place, and we need urgently to see more new entrant banks of all types coming in. We are working with the existing regulatory authorities and, through amendments to the Bill, we will transform the state of competition in the banking sector. I very much hope to see an infusion of new energy and talent into the banking system in this country.

John Mann (Bassetlaw) (Lab): Given that we have the highest high street lending rates in the European Union, along with the lowest high street saving rates, why is not the Minister proposing the break-up of Lloyds TSB in addition to that of RBS? That would immediately create proper competition in the banking sector.

Greg Clark: As I am sure that the hon. Gentleman would acknowledge, the Government have promoted the sale of Northern Rock to Virgin, for example, to try to encourage new entrants, and he will see more of that in the future. On interest rates, those that are being paid on mortgages and small business loans at the moment are very much lower than they would have been had we not taken the necessary action on the economy to keep them competitive.

Mark Garnier (Wyre Forest) (Con): The British Bankers Association has said this morning that the electrification of the ring fence might cause some uncertainty in the City. Does my right hon. Friend agree that the only banks that need to be worried about the future are those that game the ring fence and try to burrow underneath it?

Greg Clark: My hon. Friend is absolutely right. Any bank can have complete certainty that it will not be subject to being broken up if it respects the ring fence. Indeed, given the standing of the City of London, it is important that we all have confidence and trust in the British banking system, on which the credibility of that standing depends. The reforms recommended by Sir John Vickers and his commission will achieve precisely that.

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Kevin Brennan (Cardiff West) (Lab): Is not the truth that, by failing to take full reserve powers, the Chancellor has not so much electrified the ring fence as raised it by a mere millimetre? Why were the full recommendations of the commission not implemented?

Greg Clark: We have addressed that point. Obviously, it is the behaviour of any particular bank that will cause problems, and the sanctions against such behaviour are clear. If a bank breaches the ring fence that has been established, it will be split up. That is as clear as day to the directors of every bank, who, by the way, will now have a personal responsibility to respect the ring fence.

James Duddridge (Rochford and Southend East) (Con): About 650 people work for Lloyds TSB in Southend, with a similar number working for RBS. In addition, there are about 20 branches, each employing 10 individuals. Does my right hon. Friend agree that this banking reform is just as much about helping the banking industry in the whole of the United Kingdom as it is about the square mile of the City or Canary Wharf?

Greg Clark: My hon. Friend is absolutely right. One of the real tragedies, and one of the things that makes me most angry about the declining reputation of banking in recent years, is that the reputations of many hundreds of thousands of people who work in banks up and down the country and who have chosen banking as a career because of its associations with probity and respect in the community have been besmirched by the actions of a very small number of people. Our purpose in restoring the reputation of financial services in this country is also to allow those people to go to the pub without being teased and ribbed because they work in a bank, which is something that should never have happened to them.

Alison McGovern (Wirral South) (Lab): My constituents want banks to serve industry and our community, not themselves. May I try the Minister yet again on the question of full reserve powers? Why should the evidence of one institution hold sway over that expert commission?

Greg Clark: It is the hon. Lady’s objective that banks should serve businesses and their customers, and that is precisely what Sir John Vickers has in mind. That is the purpose of the exercise, and it is exactly what I want to achieve. Any ring-fenced bank that strays from that purpose and neglects its core customers—its retail depositors and the other people who bank with it—by taking their money and playing with it in the casino will be broken up.

Mr Brooks Newmark (Braintree) (Con): I welcome the points the Chancellor made this morning on facilitating account switching, which I think will be most welcome to all our constituents. Will the Minister outline in a little more detail how this will work?

Greg Clark: I will certainly pass on my hon. Friend’s comments to my right hon. Friend the Chancellor. What we are saying when it comes to the regulation of payment systems is that, through the Bill, we will set up a regulatory responsibility to promote competition on the part of the regulator of payment systems. One thing regulators will want to look at is how they can quickly make accounts portable between customers. That, however,

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is only one of the innovations that could be made. I mentioned in my response to the urgent question the requirement to speed up the clearing of cheques. My hon. Friend will recall that the Payments Council once introduced a statement—almost ex cathedra—to the effect that cheques would be abolished in future. What kind of contempt for the consumer does that show? It should not happen again, and it will not happen again.

Mr Ronnie Campbell (Blyth Valley) (Lab): Why are we pussyfooting with these banks? Why not just nationalise them and make them into a good public service? After all, we own half of them.

Greg Clark: As a result of the chaos of the previous Government, we almost ended up nationalising the banks. I want to see our banks back in the private sector; I want to see them competitive; I want to see them making money, providing jobs and getting credit to businesses and consumers.

Nadhim Zahawi (Stratford-on-Avon) (Con): The Financial Services Authority says that one reason why RBS failed was the political pressure put on the regulator to ignore the risks banks were taking. It named the shadow Chancellor as one of the three politicians responsible for that. What checks and balances are in place now to ensure that that does not happen again, and has my right hon. Friend had an apology from the shadow Chancellor?

Greg Clark: One of the principal innovations was to get rid of the shadow Chancellor who was then in a position to interfere. The reason we are setting up the system and giving powers to the Bank of England and the regulator is to make it very clear that any bank that breaches the rules can forget about lobbying Ministers. The banks will be responsible to the Bank of England, which will enforce the law that I hope this House will see fit to pass.

Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab): Let me take the Minister back to the question posed by my right hon. Friend the Member for Wolverhampton South East (Mr McFadden), who is a member of the banking commission. In simple language, what possible reason do the Government have for not accepting the commission’s recommendation to take that reserve power? After all, only banks that do not conform with the Government’s wishes would have anything to fear from the reserve power. Why not go on and take that power?

Greg Clark: I have explained on a number of occasions why we have not done so. One reason is that the regulator does not want that power, and a second reason is that it seems to us more appropriate that individual banks feel the consequences of their breach. The system itself does not have a mind to breach the rules; it is individual banks that do so. It is thus appropriate for the sanctions to apply to individual banks.

Charlie Elphicke (Dover) (Con): In addition to the electrification of the ring fence, has the Minister considered adding a bit of barbed wire on top? We should look

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at depositor preference, so that deposits rank above the bondholders to give extra security. What are the Government’s thoughts on that at the moment?

Greg Clark: We agree with my hon. Friend, and that will form part of the Bill.

Toby Perkins (Chesterfield) (Lab): The Minister is absolutely right to say that the reputation of our banks has never been lower. We hope that we will start to see the important changes we need. One reason for that reputation is the experience that many small businesses had with interest rate swap agreements. While many welcome the FSA announcement on that, there are still some concerns about whether people will really consider that they have had justice at the end of the process. Will the Minister confirm what representations he has made to the FSA about what it should find during the deliberations, and will he give us any assurances that the interest rate swap problems we have had in the past will not reappear in future?

Greg Clark: The hon. Gentleman raises a very important point. I met the Federation of Small Businesses and the Bully-Banks organisation and I conveyed their concerns to the FSA, which the hon. Gentleman knows is set up to be the independent regulator. I think most people were relieved that the FSA proposals of last week will result in compensation for the affected businesses within a rapid time frame. What happened is totally unacceptable, and is another feature of the scandalous decline in reputation that the banks have suffered. Small businesses in particular have a right to regard their bank manager as someone who acts in their interests, rather than someone who flogs them dodgy products that they do not need in the first place. That is a breach of trust in banking. I am absolutely insistent that the FSA should conclude this process, giving full recompense to those who have been mis-sold products.

Andrea Leadsom (South Northamptonshire) (Con): The retail ring fence is a good idea, but the real game-changer for banking will be the introduction of full bank account number portability, because it will break open the oligopoly banks. Does my right hon. Friend agree that it is also important for the Payments Council no longer to be controlled by the big banks? Breaking open competition and introducing new challenger banks is of key importance.

Greg Clark: I thank my hon. Friend for the effort that she has devoted to promoting this agenda. It seems to me that if there is to be genuine competition, people should have a choice of banks, and it should be easy, not difficult, for them to make changes. I hope that the work that my hon. Friend is doing will be reflected in the policies that we are enshrining in the Bill, and I look forward to detailed discussions with her about how that may be possible.

Mr William Bain (Glasgow North East) (Lab): If the public are to have confidence in the new system, they need to know that lawyers or bankers will not be able to circumvent the ring-fencing regime. Can the Minister come up with a better justification for the Government’s

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not taking a full reserve power for full separation, in order to protect the public, than those that he has produced so far?

Greg Clark: The hon. Gentleman is right: we need to protect the ring fence from the ingenuity of the lawyers who are sometimes in the vicinity. The history of financial regulation shows that banks have been able to discover ways of circumventing the rules, which is why we have given the regulator robust powers to insist on the full separation into retail and investment of any bank that makes any attempt to breach those rules.

Jason McCartney (Colne Valley) (Con): Can the Minister confirm that, under this Government, the taxpayer will never again be required to bail out the banks while a minority of bankers are picking up huge bonuses?

Greg Clark: I agree with both parts of my hon. Friend’s question.

Mr Dave Watts (St Helens North) (Lab): The Minister says that he wants to establish new bodies to set bonuses and pay in banks. Can he guarantee that on those boards will be ordinary customers and businesses, and that they will not be stacked with bankers’ friends?

Greg Clark: I think it important for the responsibility exercised by remuneration committees in particular to have regard to the experience of ordinary working people up and down the country. I see no reason why the way in which bonuses are thought about in boardrooms in the City should be any different from the way in which they are thought about in any other industry.

Alun Cairns (Vale of Glamorgan) (Con): I welcome the Minister’s statement, which confirmed the Government’s policy on ring-fencing the banks and its extension to electrification. Does the Minister agree that some of the products or derivatives of investment banks—particularly fixed-rate mortgages—can offer certainty and security to retail customers, and that we need an intelligent debate about the issue?

Greg Clark: My hon. Friend is right, but I think we have already had the intelligent debate. The Government asked the commission to look into that issue in particular

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and to make recommendations, and the commission expressed the interim view that it was reasonable—as my hon. Friend says—for simple derivatives to be provided from within a ring-fenced bank. However, it wants to reflect further on whether any of its inquiries into the culture of banking may have implications for that. We will await its conclusions.

Diana Johnson (Kingston upon Hull North) (Lab): Following the bank mergers, many regional banks and building societies have gone, and we have lost the investments that they would have made at local level. Will the Minister explain how the Bill will enable areas such as Yorkshire to benefit, and can he assure us that it will not be just the south-east that benefits from the increase in the number of banks?

Greg Clark: The hon. Lady makes an excellent point. I should like very much to see banks in our great regional cities, as used to be the case: banks that can take deposits from local people and, knowing what local investment opportunities they have in the area, can establish a connection. So far it has been very difficult for new banks to obtain banking licences within a reasonable period, and to satisfy the regulatory requirements. We are doing all that we can to lower the barriers to entry, so that we can achieve exactly what the hon. Lady has described.

Guy Opperman (Hexham) (Con): I welcome the proposal, as well as the fact that we are taking on the bully banks on interest rate swaps and clearing up the big banks, which have had grave deficiencies for a considerable time. Does the Minister agree that the Bill will also make it easier to create the local, regional banks that we need to provide the competition, access to finance and community trust we are trying to establish in places such as the north-east, where we are proposing a bank for that region?

Greg Clark: My hon. Friend is right about that, and it may interest the hon. Member for Kingston upon Hull North (Diana Johnson) to know of the example that he and I were discussing in Newcastle recently. We were looking at ways in which we can make it possible for there to be a north-eastern or Tyneside bank that can specialise in the north-eastern economy.

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Syria (Humanitarian Response)

4.10 pm

The Secretary of State for International Development (Justine Greening): With your permission, Mr Speaker, I would like to update the House on the United Kingdom’s response to the humanitarian crisis in the Syrian region. On 30 January, I attended the UN high level humanitarian pledging conference on Syria in Kuwait. The conference was co-hosted by the Emir of Kuwait and the United Nations Secretary-General, and had two objectives. The first was to raise the international profile of the deepening humanitarian crisis unfolding across the Syrian region. The second was to secure $1.5 billion of urgently needed funding requested by the UN to meet the humanitarian needs it has seen until June 2013—that represents the largest ever short-term appeal by the UN.

The pledging conference took place at a critical point in the Syria crisis. The humanitarian needs across the region are immense and show no signs of decreasing while the fighting continues. I would like to set out some of the numbers for the House, which illustrate the severity of the situation: 743,000—nearly three quarters of a million—is the number of Syrians who have had to seek refuge outside their country; 4 million is the number of people still in need in Syria; 2 million is the number of people displaced in Syria; 60,000 is the number of Syrians killed in the conflict so far; and 26 is the number of aid workers who have been killed in Syria while helping those in desperate need.

During my visit to Jordan just over a week ago, I was able to meet some of the people affected by the crisis. Walking through the Za’atari refugee camp and meeting families who had welcomed refugees into their homes, I was heartened by the scope of the humanitarian response, and by the resilience of mind and spirit shown by the people I met. The people of Lebanon, Jordan, Turkey, Iraq and now Egypt are showing tremendous generosity, supporting the hundreds of thousands of people who have fled the violence. It is essential that the Governments of those countries receive adequate support for their efforts from the international community.

I also commend the UN for its strong leadership of the international humanitarian response and the partnerships it has built. Its efforts have kept thousands of people sheltered and fed every month in contested, Government and opposition-held areas in Syria, and more than a million children protected against life-threatening diseases such as measles and polio. Those achievements are a reminder of the UN’s capacity and reach, if given adequate political and financial support, and demonstrate that the UK’s confidence in the multilateral aid system has not been misplaced.

At the Kuwait conference, I announced another £50 million of new UK aid towards the UN appeals. That was in addition to the £21 million that I announced on 26 January during my visit to Jordan—£10 million of which was specifically for Jordan— and brings the UK’s total humanitarian support for the response to the Syria crisis to £139.5 million. I am very pleased to report the successful outcome of the conference. As well as the UK, more than 60 countries participated in the pledging conference and raised over $1.5 billion, exceeding the UN’s target. I welcome the generosity that was shown by donors, particularly those from the Gulf region; Kuwait, Saudi Arabia and the United Arab

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Emirates together pledged $900 million. I should take this opportunity again to thank the Emir of Kuwait for hosting such an important conference.

I also commend my right hon. Friend the Foreign Secretary for the support provided by his Department in lobbying donor countries to attend and pledge funds at the Kuwait conference. The next priority for my Department is to see that those pledges are turned into tangible commitments so that the humanitarian agencies can scale up their activities and provide the food, shelter, health and medical care that are so urgently needed by the millions of men, women and children affected by the crisis. However, although the Kuwait conference was a success, we must be realistic. The more than $1.5 billion raised, although a great sum, will support the humanitarian response only until June. The Syrian people will still need help long after that, and the shocking level of human suffering inside and outside Syria will keep rising while the conflict continues.

A political settlement is sorely needed. The UK remains steadfast in our support for the joint UN and Arab League special representative, Lakhdar Brahimi, in his work towards a political settlement and transition process. It is also vital that the UN-led humanitarian response be given agreement for increased access to all areas of the country, including the ability to reach people in need across conflict lines and from neighbouring countries if necessary. Until this happens, pockets of need will persist despite the UN’s best efforts. The dire humanitarian situation deserves the continued attention and support of this Government, and I commit my Department to that effort. I commend the statement to the House.

4.16 pm

Mr Ivan Lewis (Bury South) (Lab): I thank the Secretary of State for advance sight of her statement. The right hon. Lady and I differ on many things, but I begin by paying tribute to her for the good and important work she has done to galvanise an international response to the grave humanitarian crisis arising from the conflict in Syria. She deserves support from both sides of the House for her efforts.

Although the international community has largely focused on the political and security aspects of the conflict, the scale of the humanitarian impact in Syria and across its borders has been enormous. As the right hon. Lady highlights, more than 700,000 people have fled unrelenting violence, 2 million Syrians are internally displaced and 4 million people are in desperate need of basic assistance.

The situation inside Syria is abysmal. One quarter of schools and one third of public hospitals are not functioning, there are shortages of bread and medicine, and critical infrastructure has been destroyed. The UN estimates that 2 million people who have fled their homes are living without the most basic services: clean water, sanitation and electricity. The harsh winter has compounded their suffering and many are living in shelters lacking adequate insulation with no winter clothes and no blankets. Even those who still have homes are suffering from the cold, unable to heat their houses owing to shortages of fuel and electricity. With the UN estimating that the number of refugees will surpass 1 million by June, no end to their suffering is in sight.

The success of the UN pledging conference in Kuwait last week will provide much needed support for the millions of Syrians affected by this growing crisis. I welcome the

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Secretary of State’s announcement of an additional £71 million of UK aid to Syria. Will she clarify where she expects those additional resources to be focused? As she has acknowledged, aid to Syria is a question of not only funding but humanitarian access and respect for international humanitarian law. Donors have repeatedly raised concerns about support reaching all areas of the country. There is limited capacity and expertise in both Government-held and opposition-held areas, with the conflict’s front lines constantly shifting.

The right hon. Lady has said that we must ensure that co-ordinated aid reaches people across Syria, including agreed cross-line and cross-border work. Will she elaborate on how the Government are assisting NGOs and UN agencies to provide humanitarian access in the area? Is she suggesting that the UK would be open to funding projects outside the UN’s direct response plans?

Questions are also being asked about a strategic response to refugees. As the right hon. Lady has acknowledged, thousands of Syrians are arriving in neighbouring countries every day, yet the humanitarian system does not have the capacity to keep up with the growing demands on registration, co-ordination or shelter. The UN estimates that only 20% of Syrian refugees are in camps. What steps is the Department taking to develop a strategic plan with the United Nations High Commissioner for Refugees that ensures that the needs of all refugees are being met?

The conflict has taken a brutal toll on Syrians, more than 60,000 of whom have been killed. Those who have fled report stories of ongoing violence and human rights violations, including sexual abuse, arbitrary detention and indiscriminate shelling. A report by the International Rescue Committee identifies rape and sexual violence as primary factors in the decision of many Syrians to flee. Given that disturbing revelation, will the Secretary of State assure the House that UK aid will focus on the protection of women against sexual violence? Crucially, the humanitarian crisis will not be resolved until the conflict in Syria is resolved, and we must continue to push for a ceasefire.

On international efforts to bring about negotiations to stop the fighting, what assessment have the Government made of reports that the head of the major opposition coalition, Moaz al-Khatib, is willing to talk to Government representatives? Will the Secretary of State update the House on what progress the Government have made in encouraging the Syrian national coalition to accept the Geneva plan as the basis for transition? What were the objectives and impact of the reported recent Israeli air strikes in Syria?

The brutality of the Assad regime is clear for all to see, but as we seek change in Syria through a ceasefire and political process, it is essential that we do not forget the here and now suffering of the Syrian people. That is why I welcome today’s statement, and I hope that the Secretary of State will keep the House informed of developments on a regular basis.

Justine Greening: I very much appreciate the way in which the shadow Secretary of State approached his response. There was a huge effort across the international community to make sure that the donor conference was a success, and the UK certainly did as much as it could to try to make sure that that was the case. The hon. Gentleman asked how the funds would be spent. The £50 million that we donated at the conference will sit

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alongside the UN co-ordinated response to the humanitarian crisis. Of the requested $1.5 billion, about $1 billion goes to helping refugees outside Syria, and about half a billion dollars of that is planned to help people still suffering inside Syria. In relation to how we can make sure that we reach the many parts of Syria that are difficult to get to, we have to take the opportunities, and we work through humanitarian partners all the time. They are neutral and impartial but nevertheless have the ability to go into parts of Syria that are often contested. Some of them are Government-controlled, some opposition-controlled, but others are still contested, and as I said in my statement, they are dangerous places. We therefore support those humanitarian agencies. When I talk to the people who head up the World Food Programme, for example, they are clear that they have to take opportunities when they arise. They often find a contact whom they believe is trustworthy, and through them can gain access to a new area, and they will take that opportunity. They have to be prepared to act very quickly and flexibly. We support them in doing so, and the main concern for them in recent weeks has been funding, which is why the donor conference was so important.

As for what the UK has done directly in Syria, we have provided medical support. We have trained—I think I am right in saying—250 health workers, and we have helped open about 130 mobile medical units that provide care. We are also providing food and shelter wherever we can. The UN Security Council has called for the Syrian authorities to provide full, immediate and unimpeded access to all areas of Syria so that humanitarian support can get through. That is absolutely vital, and we urge the opposition forces to allow unimpeded access for humanitarian actors. It is critical, if we are to be able to use that $1.5 billion effectively, that we make sure that we have the routes to get through to the people who need our support.

The hon. Gentleman asked about the strategic response, and he is quite right to flag up the fact that this humanitarian crisis is perhaps different from many others with which the Department deals. Often we are dealing with a natural disaster, and people act to tackle the aftermath. This is a humanitarian crisis that has unfolded over many months and seems likely to continue to unfold over a prolonged period. It may be that we have not seen the worst of the humanitarian crisis in relation to Syria, which is why it is vital that Assad goes, and goes now, so that the work to rebuild Syria can begin.

We are talking with the UNHCR and other humanitarian bodies about how we can make sure that we are set up to deal with a crisis that could become significantly worse in the coming months if the violence continues. As I said in my statement, there are 2 million internally displaced people within Syria. Many of the refugees with whom I spoke a couple of weekends ago had tried their best to stay in Syria. They had moved from Homs to a different place, to a different place again and so on, but were finally left with no choice but to leave Syria. If just a fraction of the 2 million internally displaced people end up having to leave Syria and become refugees, we will see a dramatic increase in the humanitarian problems outside Syria. That is why the donor conference was so important.

I can assure the hon. Gentleman that we are looking at how we can make sure that we are positioned to take care of those people. For neighbouring countries such

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as Jordan, Lebanon, Iraq and Turkey, the strain and the pressure put on them are immense. We should always bear that in mind when we are looking at the support that we provide. As he rightly pointed out, most of the refugees in Jordan, for example, are not in camps but in host communities. When I was in Jordan I was told that the local education system has had to absorb 22,000 children who arrived with refugee families. There are significant challenges ahead, which is why we need to continue to keep international attention focused on a very grave humanitarian situation.

The hon. Gentleman asked about women and girls, and he is right to do so. We have been particularly concerned to make sure that we have supported children. One in five of the people turning up at the Za’atari refugee camp that I visited was a child aged four or under. Nearly 60% of the refugees who have turned up at that camp were 30 or under. Alongside others, we are providing clinical care and counselling to women and we are helping to provide education to children. We are also providing specific support to about 1,800 women we believe are at risk of possibly being coerced into marriage. We are therefore providing support to them to ensure, wherever possible, that that does not happen. The hon. Gentleman will be aware that my right hon. Friend the Foreign Secretary is raising on the international stage the broader issue of preventing sexual violence in conflict, and it will be one of the subjects that we try to push internationally at the G8.

The hon. Gentleman asked about coalition talks. There is a general recognition in the international community that the solution in Syria is a political one, which will involve talks, including between the coalition and the Government. It is clear from talking with the coalition that any future transitional Government must be one that has no Assad as part of it. I therefore come back to my earlier comments that for things to move forward, it is time for Assad to go so that the rebuilding of Syria can start.

Finally, the hon. Gentleman asked about Israeli air strikes. It is too early to speculate on exactly what happened, but we can see that ensuring stability in that region is critical. It is why the donor conference was so important, so that in the short term we have the funding in place at least to deal with the humanitarian crisis. More broadly, we need stability in the Syrian region. That will mean a political solution to the challenges and to the civil war that is under way in Syria.

Mr Edward Leigh (Gainsborough) (Con): Once before, in another crisis, we made the terrible mistake of arming rebels—in Afghanistan. Can the Secretary of State give an absolute commitment that in no way, either directly or indirectly or through surrogates, are we giving any aid to Syria that can be used for any offensive purposes, for military purposes or to take life?

Justine Greening: I can certainly be clear with my hon. Friend that DFID support is non-lethal: underpinning absolutely everything we do is the fact that it has to be humanitarian-focused. He is therefore right that we are not in the business of arming to perpetuate this violence. We want to see an end to it, and that will require a political solution.

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Keith Vaz (Leicester East) (Lab): I welcome the Secretary of State’s statement and the work that she has done in this regard. There are 150,000 Syrian refugees in Turkey. So far, 23,500 have claimed asylum in the EU, mostly crossing the border between Greece and Turkey, and that is the pressure point as far as the EU is concerned. She mentioned many countries in her statement, but what support is being given to the Greek Government to help them to deal with this problem, which will eventually become a problem for the United Kingdom?

Justine Greening: I will need to write to the right hon. Gentleman to give him further details on that. He is right to point out that a number of countries in the EU have taken in Syrian refugees, including Sweden, which has a substantial Syrian diaspora. We need to make sure that we deal with the totality of this humanitarian crisis, and that involves making sure that when refugees end up in the EU we provide the support they need.

Martin Horwood (Cheltenham) (LD): I strongly welcome the Secretary of State’s statement, particularly the confidence that she expressed in the UN-led multilateral response. She is right that this intolerable situation needs a regional political solution. Will she therefore tell us whether Russia attended the Kuwait conference and what constructive contributions it is making to the humanitarian and political processes?

Justine Greening: I can confirm that Russia was at the donor conference. We have pressed the Russians to work with us to get a UN Security Council resolution that will start to put in place the building blocks for a political settlement and a political solution to Syria. As the hon. Gentleman will be aware, that has proved to be beyond reach to date. We very much hope that through continued discussions with the Russians and, to a certain extent, with the Chinese, we will be able to make progress at some point, but thus far the signs have not been positive.

Richard Burden (Birmingham, Northfield) (Lab): In recent months I have been able to visit camps in Turkey and Jordan for people fleeing Syria. May I endorse what the Secretary of State said about the efforts of the Governments there and elsewhere and of the international agencies, but also mention the incredible generosity of ordinary people in taking Syrian refugees into their own homes? Last night it was estimated that over 2,000 Syrians crossed the border into Jordan. Winter is now coming on, and the Za’atari camp that she mentioned faces exposure. The donor conference decisions are great, but the UNHCR co-ordinator in Jordan makes it clear that it is not the pledges of money that make the difference but the money actually getting in and being translated into action. What can we do to ensure that aid gets in and that we do not just have pledges?

Justine Greening: The hon. Gentleman is absolutely right. The UK will certainly be doing our bit to make sure that the pledges made at the donor conference translate into real money that can make a real difference on the ground. Probably about half the $1 billion set aside to help refugees will go to those who are in Jordan. It is worth pointing out that well over 200,000 refugees have arrived in Jordan, and the total population of that country is 6 million, so in the context of its overall

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population it is a significant influx. It is therefore right that we look at what we can do to help the Jordanian Government, but also the UN agencies there, to deal with that.

Michael Ellis (Northampton North) (Con): The savage brutality of the Assad regime is plain for the world to see. I congratulate the Secretary of State and the Government on the work that they are doing to assist with much needed aid for people in the region. Will she join me in welcoming the fact that as a result of the conference, some of that aid that will now be coming from, and has been pledged by, the region itself, including from the Gulf states, which is particularly important in this crisis?

Justine Greening: My hon. Friend is absolutely right. I sensed at the conference that one of the most important aspects was not just the fact that the United Nations put out a call for funds that was met—it was its largest ever call for short-term funds—but, critically, that there had been real ownership of making sure that target was met by Gulf nations. Not only did Kuwait generously host the conference but key Gulf nations such as the United Arab Emirates and Saudi Arabia and Kuwait itself made substantial donations. That was welcomed throughout the donor conference and I think it shows not only that the region itself recognises the gravity of the situation, but that it is prepared to step up to the plate and be a key partner in delivering the humanitarian aid.

Diana Johnson (Kingston upon Hull North) (Lab): The Secretary of State has commented on the political stance that China and Russia have taken. May I press her to say whether China and Russia are now making significant contributions to the humanitarian aid required?

Justine Greening: I do not believe that Russia made a significant contribution at the donor conference. The most important thing that we would like to achieve with Russia and China is a breakthrough that would enable us to have a UN Security Council resolution, which would be similar to the approach taken in Mali, where it was possible to take action as a result of a consensus across the international spectrum. That UN Security Council resolution cannot be passed at the moment, which, critically, makes it much more complex for us to be able to reach people inside Syria with humanitarian aid. It also makes it much more complex to start the political and diplomatic dialogue needed to reach a long-term settlement. That is what is needed and I am absolutely clear that, although we are providing humanitarian support, the UK has not ruled out any action. Ultimately, however, we want to press forward on a political and diplomatic route.

Geoffrey Clifton-Brown (The Cotswolds) (Con): I was at a conference over the weekend with both Turkish and Jordanian representatives, both of whom said, independently, that the international community could do more to help with the refugee problems in their respective countries. I say to my right hon. Friend that simple things, such as blankets to keep children warm, are needed now in the camps in Jordan. Could they not be delivered quicker bilaterally—that is, we give directly to the country rather than through the UN mechanism?

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Justine Greening: That is something that I have also considered, but it is clear that the UN process and logistics are well set up. The road block over recent weeks has been in funding. The channels and the people are there, but we have not been able to scale up support because the money has not been in place. The donor conference means that that money is now in place and the scale-up can take place. My hon. Friend is right to say that basic shelter is one of the key aids that we have given many of the refugees. It is freezing over there and they need to be protected from the cold.

Mr William Bain (Glasgow North East) (Lab): The UNHCR estimates that there could be more than 430,000 refugees from Syria in Jordan by the end of this year. Will the Secretary of State tell the House how the money provided by this Government will help the condition of children who have had to flee appalling conditions in Syria?

Justine Greening: One of the key things that can now happen is that the Za’atari camp itself can grow in a more structured way. That includes the establishment of a school and the development of education for children in that refugee camp. I can therefore provide the hon. Gentleman with some assurance that there is now a structure plan in place to grow the camp in order to accommodate more refugees as they turn up. That is about providing not just shelter but other things that they will need, such as education for the children and medical support.

Mr Brooks Newmark (Braintree) (Con): I wholeheartedly support the Foreign Secretary’s preventing sexual violence initiative. Can my right hon. Friend the International Development Secretary assure me that the UK Government are doing all they can to support women and girls affected by the violence, especially those affected by sexual violence?

Justine Greening: I certainly can. My right hon. Friend the Foreign Secretary has a long-standing interest in preventing sexual violence against women and girls during conflicts. It is right that he is now pursuing that issue on the international stage. As I said earlier, we have provided specific support to ensure that there is not only clinical care but counselling for the many women and children who have been through horrific experiences as they have fled the violence.

Paul Flynn (Newport West) (Lab): The right hon. Lady deserves gratitude for her statement and for her work in relieving suffering in Syria. Is she concerned about reports that the most merciless slaughter of women and children has been carried out by the al-Nusra Front, which is linked to al-Qaeda? Given that that group is part of the opposition, will she do all she can to ensure that the al-Nusra Front does not receive arms, comfort or support from us?