“What are the chances that we will converge in the near future? What are the chances we will converge for ever, without ever diverging again? And would it be wise to run our economy so as to make it converge rather than prosper in its own right?”

Those were wise words, and I look forward to hearing many more in this debate.

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7.12 pm

Chris Leslie (Nottingham East) (Lab/Co-op): That was a paean of praise from the Minister for the right hon. Member for Richmond (Yorks) (Mr Hague); it is a pity that there was not quite so much for the Chancellor of the Exchequer. One of the strange things about this debate is the strong sense of having been here before to debate this issue. Indeed, it was about this time last year that we did so—and, sadly for me, the year before that as well.

Mr Cash: Twenty times.

Chris Leslie: In my case, it is not 20 times. I have responded to these debates only since the general election.

The key to the debate is the Budget Red Book. I suspect that many Members are not in the Chamber this evening because they have looked at the screens advertising the debate and seen a reference to some obscure European legislation, but I draw all Members attention to page minus 2 at the very beginning of the Red Book. In tiny 9-point font, beneath the statement that the Red Book is printed on paper containing 75% recycled fibre content minimum, it states:

“The Budget Report is presented pursuant to section 2 of the Budget Responsibility and National Audit Act 2011 and…constitutes the Government’s assessment under section 5 of the European Communities (Amendment) Act 1993 that will form the basis of the Government’s submissions to the European Commission”.

If Members knew that we were debating whether the Chancellor’s assessment of the economy was a true and accurate reflection of what is going on in the UK economy, for the purposes of that Act of Parliament, they would be absolutely astonished.

We have obligations under the Maastricht treaty articles; that is essentially what we are talking about when we refer to the European Communities (Amendment) Act 1993. Article 103 states:

“For the purpose of this multilateral surveillance”—

I know that those words stick in the throats of some hon. Members—

“Member States shall forward information to the Commission about important measures taken by them in the field of their economic policy”.

Mrs Anne Main (St Albans) (Con): Is the hon. Gentleman implying that the Opposition Benches are empty because none of his right hon. or hon. Friends could be bothered to come and scrutinise this document?

Chris Leslie: These Benches are not massively more empty than those on the Government side of the House. She will have to accept that this can, at face value, appear to be quite an obscure issue. [Interruption.] There are not many people on her side of the House, but I do not want to get into a contest on that matter.

Kelvin Hopkins: I want to pay my hon. Friend a compliment by saying that Labour Members do not need to turn up because they have such confidence in our shadow Minister and they know that he will speak for us.

Chris Leslie: That is one way of looking at it.

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The point that concerns me is that the Government have in recent days tried to shove this issue off the Floor of the House and sweep it upstairs to a Delegated Legislation Committee. The Minister has said that this is a busy time of year and that the Government do not want to waste the House’s time with these questions, but we are already faced with an opaque description of the legislation, so it is no wonder that they are trying to push it out of parliamentary time. It is, in fact, the kind of legislation that ought to be advertised more to hon. Members.

Mr Cash: I would no doubt have a lot in common with some of the remarks made by those who were critical of the Maastricht treaty. Will the hon. Gentleman be good enough to tell me whether he would like to leave the existing treaties, and to describe the basis on which this nonsense, this farrago, is now being conducted?

Chris Leslie: Well, this does feel like rather an anachronism, but we have legal obligations under those treaties. No doubt there will be revisions, and some of the reporting requirements ought to be considered afresh, but my principal concern is whether it is right for the House to endorse the Red Book as a true and accurate reflection of what is happening in the UK economy. In my view, the Government must be kidding if they are saying that the Red Book reflects the facts. It is more like a work of fiction. They have been spinning furiously as the key indicators have taken a turn for the worse, as my hon. Friend the Member for Luton North (Kelvin Hopkins) said. In fact, the Red Book is little more than a vanity exercise cloaked in an official publication. It revolves entirely around the Chancellor’s need to retro-justify his failing economic ideology.

I invite hon. Members to look seriously—and without cracking up—at page 1 of the Red Book, and to ask themselves genuinely and dispassionately whether it is a true reflection of what is happening in the UK economy. The first line states:

“The Government’s objective is to…build…a fairer society”.

Well, tell that to those who are struggling with the new bedroom tax while they watch the great and good millionaires of this country rake in a typical £100,000 tax cut, thanks to the reduction in the 50p rate of income tax for those earning more than £150,000. So much for a fairer society!

Here is another one:

“The Government’s plan…is based on…fiscal responsibility to deal with our debts with a credible debt reduction plan”.

That is in total contradiction with the first page of the Office for Budget Responsibility report, which states plainly that the deficit reduction plan has “stalled”. That is the word that the OBR uses. No one would think from reading the Budget Red Book that the Government had presided over an increase in the national debt of 38% during their three years in office.

Mark Reckless: Does the hon. Gentleman believe that the solution is to borrow more?

Chris Leslie: I am sorry to have to tell the hon. Gentleman that the Government are already borrowing more. We shall see the borrowing figures tomorrow, and we shall see what happens to their strategy. The deficit

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reduction plan has gone. It has vanished. It has totally disappeared. It is a dead plan. It is no more. It is deceased. It is incumbent on Government Members to realise that they need a different strategy for deficit reduction; they need one that will succeed.

I want to return to the first page of the Red Book, which we are asked to approve as a true reflection of the state of our economy. It states that

“the Government is committed to keeping costs down for families to help with the cost of living”.

Tell that to the typical household now being asked to pay an extra £891. People are worse off because of the measures taken since 2010—not to mention the shrinking real wages relative to rapid price rises. How about the following quote for masterly understatement? It states at the foot of the page that we are experiencing

“a more subdued and uneven recovery than expected”.

Our economy shrank in the last three months of 2012, and we will see whether we are recovering when we see the growth figures for the current quarter on Thursday. How on earth could that be viewed as a recovery? This is an exceptionally disingenuous document. Reading page 1 of the Red Book is enough to make any dispassionate observer double-take their grip on the tough realities of the world around them.

We should therefore dwell for a moment on the real-world evidence. A week is certainly a long time in the Chancellor’s political lifetime—what a week has just passed. The unemployment figures were exceptionally grim. The Bank of England’s latest release on trends in lending showed that, measured annually, the amount of lending to UK businesses from banks and building societies fell in the three months to February. The Bank of England said that lending to businesses fell by £5 billion during those three months and that the decline was broad based across all sectors. So much for funding for lending.

Way before we got to the Budget, we suggested that the Chancellor should take steps to reform the funding for lending programme, but he did not do so in the Budget. It should not take an intervention from the International Monetary Fund to prick up the Chancellor’s ears and make him realise that he needs to do something about funding for lending. Ministers will have to be far more adept and fleet of foot than that.

The Treasury Select Committee said last week that it was by no means clear that the cornerstone of the Budget—the Help to Buy housing scheme—would benefit first-time buyers and, as my hon. Friend the Member for Luton North alluded to earlier, the academic methodology underpinning the key paper written by the Chancellor’s favourite economic theorists—Carmen Reinhart and Kenneth Rogoff—was discredited when a graduate student found a fatal flaw in their excel spreadsheets that supposedly underpinned the whole extreme austerity course advocated by the Treasury.

Despite the usual diplomatic finesse employed by the IMF towards its affiliating member states, its chief economist Olivier Blanchard said that the Chancellor was “playing with fire”. A year ago, the IMF was forecasting growth of 2% this year, but it is now expecting growth of just 0.7%. It was a serious mistake for the Chancellor to ignore the IMF’s calls for a reassessment of fiscal policy in the Budget, and it is right to repeat its

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warnings. Even Christine Lagarde, not known for departing from the Chancellor’s opinions on these matters, said that the pace of fiscal consolidation

“has to be adjusted depending on the circumstances and given the weak growth that we have observed lately because of reduced demand addressed to the economy”

and that

“now might be the time to consider”

doing so.

Mr Nuttall: We are not talking about whether this document should be submitted to the IMF; we are talking about submitting it to the EU. If we compare our growth with that of the eurozone, the EU’s own body, EUROSTAT, is forecasting that growth in the eurozone will go down by 0.3% and that ours will go up by 0.9%.

Chris Leslie: To whomever we are asked to submit this document—to the IMF, the EU, the hon. Gentleman’s constituents or his mother-in-law—I would be embarrassed, if I were the hon. Gentleman, to stand behind it as a true reflection of the state of the UK economy. To cap it all, last week, we saw another humiliating blow to a Prime Minister and Chancellor who kept saying that our triple A credit rating was the No. 1 test of their economic and political credibility.

Mr John Redwood (Wokingham) (Con): Given that the latest Government plans envisage borrowing £60 billion more in 2014-15 than in the original summer 2010 plan, how much more than that extra £60 billion borrowing would the hon. Gentleman recommend?

Chris Leslie: Unfortunately, we are not likely to have a general election until 2015. I would be grateful if hon. Members did whatever they could to bring that forward a little, but heaven knows what state the economy will be in—even by the time we get to 26 June, which I believe encompasses the spending review period. I am sure that yet further revisions of these figures, which keep changing like shifting sands before us, will be made. We simply do not know what a future Labour Government will inherit—hopefully in 2015. I will get back to the right hon. Gentleman nearer the time. One thing seems clear to me: we have to take some bold action to stimulate the economy, rather than adopt this laissez-faire, arms-folded, non-interventionist approach. Even the Financial Secretary used to disparage that, but he has now signed up wholly to it.

Greg Clark: Does the hon. Gentleman agree with the right hon. Member for Morley and Outwood (Ed Balls), who said:

“Long-term interest rates are the simplest measure of monetary and fiscal…credibility”?

Chris Leslie: Long-term interest rates reflect a number of factors. Government Members would like to think that low bond yields were a reflection of fiscal policy measures alone—[Interruption.] The Minister should hear me out. He likes to think that that is the one test. As I say, it used to be retention of the triple A credit rating, but that has gone, so something else has had to

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be found. Long-term bond yields, however, are also a reflection of who is purchasing them. I do not know whether the Minister can help us out by elaborating on who exactly is purchasing the Government bond yields, because the Bank of England seems to be doing an awful lot. One branch of the UK Government institutions is helping out the other branch of Government institutions—depressing, of course, that yield. The Minister should not be too proud of market expectations that things are going to be so bad for so long that our interest rates are at the ultra-low level. It is not a reflection of fiscal policy; it is a reflection of expectations of future economic performance and of the interventions in monetary policy by the Bank of England.

Kelvin Hopkins: Is it not simply the case that bond markets can get things terribly wrong as well? We know of the 1929 crash and the 2008 crash, for example. I have no doubt that some have great optimism about the future of the world and national economies, but they can get it wrong, too.

Chris Leslie: That is why some in the bond markets in the City and even the IMF and other economic commentators and business leaders are increasingly saying—as PIMCO did today in its intervention on these issues—that we have to do something about this. Demand in the economy is cripplingly bad; we have to do something to take a different course. The Chancellor’s plan is not just failing; it is adding to our problems with the public finances. We will see the state of the deficit reduction plan and what is happening with this trajectory when we see the figures tomorrow. We hear of blaming the snow, blaming the royal wedding, blaming all sorts of other players including the European Union; it is amazing how we never hear that it is the fault of those who currently occupy the Treasury.

Greg Clark: I have a genuine question for the hon. Gentleman again. Was the shadow Chancellor wrong when he said:

“Long-term interests are the simplest measure of monetary and fiscal policy credibility”?

When he said that, interest rates were at 4.75%. Was he wrong?

Chris Leslie: The Minister can ask me the same question as many times as he likes, but I will give him exactly the same answer. There are a number of reflections and metrics for judging economic performance, but in these particularly stagnant economic circumstances, I do not think that he should wear as a badge of honour those ultra-low bond yields because they actually reflect low and depressed expectations about the future performance of the economy. He knows that that is true. It is also a reason why not just Moody’s but Fitch have taken out the legs from beneath the UK’s triple A credit rating after three years of stagnation, rising unemployment and billions more borrowing to pay for economic failure. It is time that the Treasury woke up and realised that its plan is causing long-term damage not just to the public finances, but to British families and businesses as they pay the price. When even their biggest allies—the IMF and the credit rating agencies—abandon the Government, it is time to put political pride aside and finally act to kick-start the economy.

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Most independent forecasts suggest that on Thursday the GDP figures will show small positive growth, but growth of just 0.3% would simply mean that the economy was back to where it was six months ago. After three years of stagnation, we need to see decisive evidence this week that a strong and sustained recovery is finally under way—otherwise the Chancellor will definitely be in real trouble. We cannot seriously be expected to ratify this Budget Red Book as our representation to the European Union, or anyone else, of how our economy is performing.

Are we supposed to ignore the double downgrading of the UK’s credit rating, first by Moody’s and then by Fitch? Are we supposed to skim over the new figures from the Office for National Statistics, which show that the average weekly pay packet was £464 in February and £480 in the same month last year? That is the worst set of data since the ONS started recording such facts. Are we supposed to turn a blind eye to the fact that youth unemployment rose by more than 20,000 last month? The total figure is now just under 1 million. Should we just forget about the risks of that lost generation?

The Red Book is a staggering work of deception wrapped in the heroic conceit of a Government who are trying to fool people into thinking that they are on track. They are losing control of the public finances because they have lost the plot when it comes to the relationship between economic growth, jobs, the economy, and the revenues that we need in order to get the deficit down. It would be far simpler for the House to reject the motion and return the Government to the drawing board to get their act together and work on an alternative plan that might actually give us the bold action that we need, rather than the stagnation that we are suffering.

7.31 pm

Mr William Cash (Stone) (Con): This is an extremely important debate, but I am sorry to have to say that the Government did their best to prevent it from being held on the Floor of the House. Speaking as the Chairman of the European Scrutiny Committee, I feel that that must be put on the record. It was very unfortunate, to say the least, and no doubt the Committee will consider it when we meet next Wednesday.

Having said that, I must add that this is an opportunity to put in context the tributes that should be, and indeed have been, paid not just to Margaret Thatcher but to Alan Walters and all who took part in the Maastricht rebellion, and also to those who have fought so tenaciously throughout the accretion of these treaties, from the early days until the present time. I use that collective term because many new Members who are in the Chamber now—notably my hon. Friends the Members for Rochester and Strood (Mark Reckless), for Bury North (Mr Nuttall), for St Albans (Mrs Main), for North East Somerset (Jacob Rees-Mogg) and for Bedford (Richard Fuller)—are apprised of the seriousness of the situation, as indeed we were at that time.

Section 5 of the European Communities (Amendment) Act 1993 was passed 20 years ago as a result of a very tense debate about these questions. In the last 20 months, there have been at least 20 economic summits in an attempt to unravel the dysfunctional nature of the economic requirements with which we are having to comply, in the context of the convergence criteria and

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as set out in papers that have been placed before the House. I imagine that many Members have not had an opportunity to read those papers, but they have been placed in the Vote Office for the benefit of those who wish to do so.

While we are dealing with the consequences of the Maastricht treaty, I want to take the opportunity to put on record a correction to a book by the former Chief Whip in the House of Commons, Lord Renton. After making some fairly disobliging remarks about certain Members—I need not ignore the fact that I was one of those of whom he did not particularly approve—he wrote that

“the vehicle for their resistance was the parliamentary approval for the Treaty of Maastricht.”

He went on to observe, astonishingly,

“Although this had been signed by their heroine, Margaret Thatcher, they revelled in defying three-line whips in order to vote against its enactment into British law”.

That is complete and total arrant nonsense. Margaret Thatcher did not sign the Maastricht treaty, although she certainly became a patron of the Maastricht referendum campaign, which I organised along with Bryan Gould and a Liberal Democrat Member who represents one of the Devon seats. However, the present Prime Minister himself has now said that there should have been a referendum on that treaty, and I believe that, had there been one, we would have won. The father of my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) was one of the leading campaigners in the House of Lords for the referral of the treaty to a referendum, but his campaign was defeated by a monstrous whipping operation, with the result that we are where we are.

There was a complete refusal to listen to what was said at the time, and there has been a complete refusal to listen to what has been said ever since. I fear that the coalition is still not listening, although it is now clear as crystal that our predictions were right and that riots, massive unemployment, the rise of the far right and the failure of the system are destroying not only the European economy but Britain’s prospects for growth. I shall say more about growth in a moment, because it is fundamental to the issue that we are discussing.

Mark Reckless: As my hon. Friend pointed out, the Prime Minister now says that there should have been a referendum on the Maastricht treaty. Does he recall that the Prime Minister was at the time a special adviser to the then Chancellor of the Exchequer, who had been Chief Secretary to the Treasury under Margaret Thatcher and who refused to sign the treaty? A junior Minister, my right hon. Friend the Member for Horsham (Mr Maude), had to go and do it instead.

Madam Deputy Speaker (Dawn Primarolo): Order. That really is not part of the subject of the debate. We are not having a history lesson on how we came to approve section 5, or on the players in that event; we are considering the documentation that the Government have asked us to approve this evening in connection with section 5, and I should be grateful if all Members would remain in order. I feel sure that Mr Cash is going to come to the point now, in the context of that documentation.

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Mr Cash: The hon. Member for Stone—who is also Chairman of the European Scrutiny Committee—will of course do just that. I am grateful to you, Madam Deputy Speaker, for drawing my attention to these interesting documents. Among the interesting statements in the documents is this in paragraph 2.17:

“The euro area is the key market for UK exporters, accounting for 42 per cent of UK exports in 2011. As a consequence, the euro area sovereign debt crisis and subsequent recession have weighed heavily on the UK recovery. Action by European policy makers in 2012”—

I must say that I am astonished by the phrase that follows—

“helped ease the crisis and there are signs of investor confidence improving, but as the situation in Cyprus demonstrates the challenges facing the euro area are not fully resolved.”

Well, we can tell that to the people of Cyprus, but we can also say it to the people of Britain. This is not just a eurozone problem; it is a European Union problem, but above all else it is a British problem, and that is why we must take the necessary action.

The document is completely wrong to describe the euro area as “the key market”. In fact, as I pointed out in a paper that I wrote with my hon. Friend the Member for Harwich and North Essex (Mr Jenkin), the UK runs a trade deficit with the other 26 member states of £47 billion a year, yet we have a surplus of about £20 billion in our trade with the rest of the world. Furthermore, the Germans—about whom I shall say more in a moment, because of what was said by Angela Merkel at 3 pm today—run a surplus of no less than £29 billion a year with the other 26 member states.

That is why the debate is so important.

Jacob Rees-Mogg (North East Somerset) (Con): On paragraph 2.17, does my hon. Friend share my view that it is a mistake to look at the euro area as one export market, as the individual countries that make up the eurozone have their own characteristics, and we naturally have a huge trade with Ireland, as all countries do with their nearest nation, irrespective of which currency bloc they belong to?

Mr Cash: Absolutely, and one of the greatest pleasures I have had in the past couple of years has been to have my hon. Friend serving on the European Scrutiny Committee, with the diligence, knowledge and judgment he brings to all these matters.

It is also stated, at paragraph 2.19, that

“Brazil, Russia, India and China taken together were the destination for 6.5 per cent of UK exports in 2011.”

The real problem here is that our exports certainly have to go to the BRIC countries and also to the rest of the Commonwealth, which is where the emerging markets are, as well as to the United States.

I strongly recommend that this House of Commons and this Government start waking up a bit. I really mean that, as I am very concerned indeed, as any right-minded person in this country should be.

It is also argued in this paper that:

“Between 2009 and 2012 UK goods exports to Brazil increased by 49 per cent, to Russia by 133 pre cent, to India by 59 per cent and to China by 96 per cent.”

I have heard those figures before, but I asked what our actual import penetration into China was in relation to that of the rest of the world. It is 2%. The 96% increase

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is entirely relative, therefore. The real question is how much we are managing to export into China. Germany exports into China 45% of all the EU exports into China. I do not cite that figure in order to denigrate the expert efficiency, determination and political will of those who run Germany, but I do say that we had better get our act together. Continuing to be locked into these absolutely penalising treaties is causing us enormous damage, when we could gain so much by trading not only with Europe, but with the rest of the world on a much more enhanced basis.

There is far too much discussion and not enough action, and I was glad to note the campaign launched today by 500 business men and run by Matthew Elliott, and I also commend the book about the euro by the Institute of Economic Affairs, which puts its finger on many of the problems in the euro area.

Richard Fuller (Bedford) (Con): I am very interested in what my hon. Friend is saying. Does he agree that this report has given us an opportunity to put an alternative argument against the strong argument about commonality? I know he will draw the House’s attention to the interesting comments about Europe by the Chancellor of Germany today. My hon. Friend talks about those other economies, and there is an argument against commonality and for the UK having an opportunity to be able to trade with the rest of the world, but that is being lost as a result of such statements. Is there an opportunity for us to make this case, because I am not sure we are making it strongly enough?

Mr Cash: I agree with my hon. Friend. We must be realists. T. S. Eliot once said,

“human kind

Cannot bear very much reality”,

but Britain has got to wake up. It is crucial at this stage that we understand—in a constructive, not a negative, sense—that we have both a problem and an opportunity, but that opportunity will not last much longer, and we must not simply repeat the recitations and mantras about section 5 while not tackling the intrinsic problems.

These papers were, no doubt, prepared by worthy civil servants, but they may well not reflect the real situation. Let us look at the question of the level of debt, for instance. I mentioned that in an intervention on my right hon. Friend the Financial Secretary, and I gave him the percentage figures. However, under the previous Government—I now turn my attention to those on the Opposition Benches—I repeatedly said, along with my right hon. Friend the Member for Wokingham (Mr Redwood) and one or two other Members, that the debt that was accumulating under them was causing so much damage to our economy. Furthermore, as I said at the time of the last election in my manifesto—or, rather, in my personal message to my constituents—the stated debt levels, which is the key issue, were based on what could only be described as a lie.

Chris Leslie: What does the hon. Gentleman think about the fact that the national debt has risen by 38%—by over a third—in the past three years, while the current Front-Bench team has been in charge?

Mr Cash: Not only am I appalled by that, but I also recognise that the genesis of much of this can be traced back to the time of the previous Government. Furthermore,

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we now understand from the official figures published by the UK Statistics Authority that the level of debt—which at one time was, astonishingly, described as being “merely” £1 trillion—will go up to £1.5 trillion. However, under the previous Government the real level of debt—taking into account public pensions, Network Rail, nuclear decommissioning and several other factors, which we cannot ignore—was actually up at about £3.25 trillion, as I argued at the time, and if we include those factors it is now likely to be about £4 trillion.

That is the inheritance of the young people of this country. They have got to be brought into work as a result of growth, but the prescription from the Opposition Benches is more debt, not less, and more Europe, not less.

Regardless of how I vote this evening, I pay tribute to the fact that at least the coalition Government have begun to look at these questions. My complaint is that they have not done enough and they are going too slowly. If they do not get on with it, there will be a catastrophe. In fact, we are already living through the beginnings of a catastrophe.

There is another question to be asked about growth. We can only grow our economy by growing from the other countries with whom we trade. In a nutshell, we must engage in cuts, but we need the taxation from the growth of small and medium-sized businesses in order to provide the public services those on the Opposition Benches say we need to provide. All they do is call for ever more cuts, but they talk about growth but do not actually do anything about it.

The European approach of large, and greater, Government spending tends both to increase the rate of Government debt and to lower the GDP growth rate. As a result, growth in most European countries, and the possibility of getting Government debt under control, recedes. The rigidities imposed by a single currency—the euro—and the burden of EU regulation on EU economies are continuing to cause frictions and difficulties and will destroy the countries in the European monetary union.

If only people would listen at the time, when it matters, rather than afterwards and then try to cover things up. Only a few weeks ago, Moody’s downgraded our economic performance, and Fitch did so in the last couple of days. Portugal, Ireland, Greece, Spain, France and Italy are now all countries of perpetual economic concern. There is a black hole, but the call is for more and more Europe.

I referred to the remarks of Angela Merkel today. It is regrettable and unfortunate that she was quoted as saying that countries in the eurozone must accept that Europe “has the last word,” and need to work more closely together if the continent is to avoid going into decline. I am sorry to have to say this so specifically, but that is precisely because there is a centralised approach, which is driven by German requirements and goes back to Chancellor Kohl.

In the 1990s, I wrote a pamphlet called “British and German National Interest”, and we are seeing a repetition of that time. Chancellor Merkel said:

“We need to be prepared to break with the past in order to leap forward. I’m ready to do this.”

In fact, she is going back to the past—not the dark past we all witnessed so vividly, but the kind of past that

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assumes it is not actually a European Union, but in practice, a German Europe. We should ask people in Cyprus and Greece what the position is. She said:

“Germany will only act together with the others—hegemony is totally foreign to me.”

It may be foreign to what she wants, but the practical reality is that it is happening.

We are now being lectured by Madame Lagarde, who was a French economic Minister and is now head of the International Monetary Fund. She said:

“We violated all the rules because we wanted to close ranks and really rescue the euro zone.”

Those are the rules we are discussing. On top of the theft in Cyprus, everyone knows that those of us who argued the case have been proved right.

I am sorry to hear that Madame Lagarde appears to have criticised our Chancellor. It is some gratitude for all the work he did urging her to accept the presidency of the IMF, and leading the charge to make sure she got it.

Everyone wrings their hands, but what are the Government doing? We are being locked into the question of whether the debt is being sufficiently reduced, but the debt is escalating and the deficit remains unacceptably high. Problems in the eurozone have a real effect on the UK economy. I repeat that it is not just about the eurozone, or just about the European Union; it is about Britain, which is why we have to get our act together. I notice that the Chief Whip has just come into the Chamber, so I hope he will listen with care, because these debates will unravel.

Real GDP fell in every quarter of 2012 in the eurozone, and by 0.6% over the year as a whole. The IMF forecasts a further fall of 0.3% this year. What is happening is completely unacceptable. No wonder the UK Independence party is making such headway; it will continue to do so until there is real growth.

We have the opportunity. We can deliver. No doubt the commentariat will fail to report this debate, as it fails to report other debates when we deal with facts and not mere speculation, but that will not prevent us from continuing the fight. We have the means to achieve the results. Some of them will come from a change of position by the Government, going for more and more growth based on real policies for growth and disentangling ourselves from the shackles of the regulatory arrangements of the European Union, making sure that the EU does not dominate the free trade agreements that are being determined. We have to be able to trade on our own terms, just as we in this Westminster Parliament have to decide the future of British policy.

As the Prime Minister said in his five Bloomberg principles, our national democracy depends on our national Parliaments. European democracy depends on their national Parliaments. He was right about that. Let us do something about it. Let us make sure that we run our own economy based on our own assessment and that we do not remain shackled to the existing treaties. It is time to put an end to them.

7.55 pm

Kelvin Hopkins (Luton North) (Lab): I rise to speak briefly in support of my hon. Friend the Member for Nottingham East (Chris Leslie) about the nonsense of

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presenting the fiction of the Red Book as though it represented the truth about our country. Another organisation—perhaps the Institute for Fiscal Studies—would do a better job.

Last week, in a speech in the Chamber, I reminded colleagues of an organisation that used to get forecasts right: the Cambridge Economic Policy group. But it was a left-leaning Keynesian group and the Conservative Government of the time withdrew its funding, because they did not like its answers and chose to follow the London Business School, which always got the forecasts wrong. TheSunday Times always gave it nought out of 10. Let us not pretend that all forecasts speak the truth. Officials will never present the Chancellor with a gloomy picture; they try to put as big a gloss on things as possible so that the Chancellor can say nice things to us in the Budget speech.

I only wish that the colour of the Red Book represented some of the policies inside, but I am afraid it does not. The antiquated language is nonsense. The Minister drew our attention to the fact that the reference to convergence was born of the past assumption that all countries would be in a single currency, we would all be growing nicely together, and poorer countries would become rich countries. That has all been washed away; it is all complete nonsense. It seems the only convergence we seek now is with an area that might be in terminal decline—the European Union. It is in serious economic difficulty, so do we want to converge with it? I suggest we want to diverge from it and make our economy work.

Although there are areas where we would have definite disagreements, the hon. Member for Stone (Mr Cash) often says things I agree with. He said we were talking about a German European Union. In 1989, the Institute for Public Policy Research published a document called “The German Surplus,” which was quickly suppressed because it was too explosive. The whole political establishment was moving towards a pro-euro, “Let’s join the single currency and the exchange rate mechanism at the wrong time” approach. I still have a copy of the document and I think it can still be found on the internet. It said that Germany had built an economy around itself, such that it could sustain low parity for its currency against all the others. Building that low parity for their currency into the euro meant that the Germans would always have a competitive edge over the other countries and could export to them freely. What they did not appreciate was that over time those countries would run out of money and Germany would have to lend them money to buy German products, which is what has been happening. Germany either has to dissolve the whole arrangement or carry on giving vast sums of money to other members of the eurozone to help them buy German goods.

Mr Cash: The hon. Gentleman may find it interesting to read the book by the Institute of Economic Affairs on that very subject.

Kelvin Hopkins: I shall certainly look it up.

Ministers go on and on about the importance of exports to the rest of the European Union—our Ministers did too—but they rarely talk about imports. We have a gigantic trade deficit, which is getting worse and worse

22 Apr 2013 : Column 716

every year. Even between January and February, the goods deficit with the EU rose from £4.8 billion to £5.1 billion. It now looks as though the trade deficit this year may be £60 billion. That is enormous; it is more than £1 billion a week. We are buying £1 billion more goods from the EU every week than the EU buys from us. That is not a sensible way to run an economy.

Mr Nuttall: Does that statistic not put the lie to all the people who claim that 3 million jobs would be lost if we left the EU?

Kelvin Hopkins: Indeed. If we just maintained balance, we would gain a million jobs overnight. If we go back to the Bretton Woods arrangements following 1944, Keynes was concerned about trade imbalances and he wanted arrangements to be put in place across the world that would avoid big deficits and big surpluses. Also, he wanted to require those with big surpluses to appreciate their currencies, as Germany should have done a long time ago. We are just going through the motions of arrangements made years ago which no longer have any serious meaning.

Germany is now in trouble. It has faced a savage reduction of 17% in car production in the space of one month. It is in difficulty and will have to look to itself to solve that problem. George Soros has suggested that one of the ways out of all the present problems is for Germany to leave the euro and to recreate the deutschmark, which would naturally appreciate. All the countries now tied into the euro would then have difficulty. Denmark, for example, would want to devalue straight afterwards. Others are now talking about what George Soros said. There are people in Germany who want to leave the euro.

There was an extremely interesting article in The Guardian this morning, suggesting that the only way out of this is for all the countries of the European Union to recreate their own currencies and to find appropriate parities for those currencies. If a country has its own currency, it can borrow and it can print money. It may be forced into a devaluation but it manages its own economy nationally and it can adjust the shock absorbers of separate currency, which are vital. The example used is Japan, which has had serious problems but is managing its economy internally.

I draw Members’ attention to the one country that has come out of the current crisis rather better than all the others—that is, America. It is surprising, but American growth is at 2%, whereas ours is well below 1%. Although America still has serious difficulties and serious unemployment, it is doing better than Europe because it is pursuing growth policies, which necessarily mean more borrowing.

I know that hon. Members on the Government Benches are horrified at the thought of more borrowing, but I urge them to read the great book by John Kenneth Galbraith, “The World Economy since the Wars”, where he pointed out that during wars—classically, the second world war—America borrowed vast sums from its own citizens. They finished up with lots of war bonds which they cashed in, and the American economy started off as the strongest economy in the world, stronger than it has ever been because of the massive investment in manufacturing that took place during the war. Its debt was based on borrowing, which was paid back over time, as the American economy grew, with full employment.

22 Apr 2013 : Column 717

I could go on, but I will not. Debating the motion every year is a nonsense. We ought to be looking at more sensible ways of running our economies.

8.2 pm

Jacob Rees-Mogg (North East Somerset) (Con): May I begin by saying how pleased I am that this debate has come to the Floor of the House and commend my right hon. Friend the Leader of the House for bringing it here? He was unduly modest to send it upstairs to Committee because this gives us an opportunity to highlight the Government’s achievement and send it to Brussels with a panache that says, “We know what we are doing and we are pleased to educate you.” Unlike the hon. Member for Nottingham East (Chris Leslie), who I think has been confused in his economics this evening, the document shows how well we are doing, compared to our continental colleagues.

Before I adumbrate our great achievements and the success of this Government since 2010 as set out in the document before us, there is one little matter that I wish to raise about the surveillance mission that the European Union is entitled under a 2011 agreement to send into a country that is not meeting the convergence criteria. Although it cannot punish us for failing to meet the convergence criteria, the European Union can, I believe, send in a surveillance mission or even a rather ominous-sounding enhanced surveillance mission.

I hope the Government will be clear, and I thought from what my right hon. Friend the Minister was saying that the Government are being clear, that they will not accept such surveillance and will use all their abilities to discourage the European Commission from sending any surveillance mission. It would be a great audacity—a great cheek—if it were to do so when 19 member states are in special measures for their economic failings for the excessive deficit procedure. We, of course, are in it too because of our deficit, but those 19 other members are in the eurozone, which is why bringing their budgets together is so important, whereas for us it is essentially a technicality from the Maastricht treaty.

It is a matter of importance that the Government have got the policy right. The key to getting it right is found on page 31 of the documentation and then on page 15. Page 31 deals with the quality of the public finances. It deals with what the Government are doing to consolidate our situation and the projection. Projections should be treated with the greatest suspicion. All forecasts are wrong, and it is merely a question of how wrong they will turn out to be. None the less—

Stephen Pound (Ealing North) (Lab): Is that a forecast?

Jacob Rees-Mogg: That was a wonderful interjection, as always, from the hon. Member for Ealing North (Stephen Pound). I fear not. It is a statement based on a knowledge of history that forecasts invariably turn out to be inaccurate and it is merely a question of how inaccurate they turn out to be.

But if we look at what the Government are trying to do, they are getting spending down from 47.4% of GDP to about 40% of GDP. We know from our history that about 40% of GDP is a sustainable level of Government spending. It is a level that I personally would like to see reduced further, but it is none the less a level that has

22 Apr 2013 : Column 718

been consistently affordable over the long run, certainly going back to the early 1970s, based on taxation revenues going up to 38.3% of GDP. Now, 38.3% of GDP for tax revenues is very near the peak level that has ever been achieved. It is rare for tax revenues to go above 38% of GDP or to remain there for a sustained period.

So what is being done with the public finances is an extraordinarily effective consolidation on both sides, with taxes being pushed up and expenditure being cut, with most of the burden being taken by expenditure cutting and with a small amount of it on tax raising. That is setting the basis for a long-term recovery of the economy. Where I think the hon. Member for Nottingham East was perhaps unduly party political in what he said—uncharacteristically so, because he is normally a man of such consensus, support for the middle way and so on—was in ignoring the benefits of monetary activism.

I refer right hon. and hon. Members to page 15. The key difference between the UK economy and the continental economies is that we have the ability to change our monetary policy to ease the austerity—[Interruption.] Indeed, printing money. Absolutely right. It is the printing of money that is allowing the deficit to be sustainable and is allowing businesses and individuals to carry on borrowing and work through a consolidation of their finances, which is also in the document—the consolidation of individual finances—to take place in a way that is not crippling. On the continent that is not happening, which is shown up in the gilt yield figures. The latest gilt yield figure is 1.65%. That is the lowest in our history. In Italy it is at 4.05% and in Spain just under 4.5%, which shows the much tighter monetary situation in Spain and Italy as compared with the United Kingdom. That is why the austerity programmes in those countries are causing such extraordinary pain, whereas in this country it is manageable.

That is why I say the document is a model for our friends and neighbours across the channel. We ought to send it to them with a fanfare, with trumpeters, with Garter King of Arms leading the way, to say to them, “Look, this is how you do it. This is how you restore a country to fiscal sense, and you do it through monetary easing.” Although I loathe the fact that we have to report to a multinational body about matters that are our own sovereign right and should not be interfered with from abroad, on this occasion we can take real pride in what the Government are achieving and what they are working towards and the manner in which they are doing it.

8.9 pm

Mr David Nuttall (Bury North) (Con): It is, as always, a great pleasure to follow my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg), if, as always, somewhat of a challenge to match his oratory. If, as will no doubt be the case after tonight’s proceedings, the Government eventually send this tome to the bureaucrats in Brussels, it would be sensible and appropriate for them to append to it a copy of my hon. Friend’s speech, which succinctly set out the Government’s achievements in managing so sensibly the British economy since they took office in 2010.

This evening, in the few minutes that remain for the debate, I want briefly to set out why I oppose, as so many have, this annual charade of going through the

22 Apr 2013 : Column 719

process of submitting a document entitled “Convergence Programme for the United Kingdom”. As always, the question is: what on earth are we converging with? Why would this country want to converge in any way, shape or form with the other countries of the European Union, when our growth, as judged by the EU’s own statistical body, EUROSTAT, is forecast to be 0.9%, the EU average to be 0.1% and the eurozone to be minus 0.3%? It is forecast not to grow at all. Why on earth would we want to try to converge with it? What is the point of submitting this convergence report every year?

I do wonder whether we ever get any feedback. Every year, the eurozone stumbles from crisis to crisis. It does not appear to take any notice of this document in which, since 2010 when the Government took over the nation’s finances, we have set out for the benefit of our European partners the way in which we manage our affairs in this country. We may have our political differences in this Chamber as to the right way forward for our economy, but those arguments are solely for this Chamber and for the other place, for this Parliament, to determine. We should in no way be beholden to the Brussels bureaucrats when it comes to British finances.

The Minister referred to the convergence programme document, saying that no time was spent in producing it. Nevertheless, there is a document. Someone has spent some time putting together this weighty tome, which this year runs to some 235 pages. It is a bespoke document, submitted in accordance with the European treaties. This evening, time does not permit us to go through the long process of how we got to the state that we are in today, but the question remains as to why we go through this annual charade. Surely it would be much better if, as I have said in previous years, we simply said to the bureaucrats in Brussels, “Look, if you are that interested in finding out what we in the UK are doing, just log on to the internet and have a look at all the documents on the Treasury’s website. You will see the Budget statement and the Red Book. That is what we are doing, and if you want to comment on it, go ahead and do so. But why on earth should we waste our time and money in submitting this convergence document to you?

What really matters is not what the Brussels bureaucrats think, but what the British people think. At the next general election, the British people will have a crucial choice to make. Should they vote for the party that has led this country through the most difficult of times and put it back on the road to recovery, taking very difficult decisions that may well have adversely affected them? They will know in their heart of hearts that the decisions were right; they were right for the British economy and ultimately they will be right for them and their families. Should they vote for the party that has put us on the road to recovery or for the party that got us into this mess in the first place? That is the crucial decision that really matters at the next election. It does not matter what the Brussels bureaucrats think about the running of the British economy.

I oppose the motion not because I oppose the Government’s economic programme, but because I oppose the idea that we should in any way be beholden to Brussels. We should not be spending our time submitting this document or any others for its consideration.

22 Apr 2013 : Column 720

Question put.

The House divided:

Ayes 264, Noes 216.

Division No. 223]


8.17 pm


Afriyie, Adam

Aldous, Peter

Amess, Mr David

Andrew, Stuart

Arbuthnot, rh Mr James

Bacon, Mr Richard

Baker, Norman

Baker, Steve

Baldry, Sir Tony

Barclay, Stephen

Barwell, Gavin

Bebb, Guto

Beith, rh Sir Alan

Bellingham, Mr Henry

Beresford, Sir Paul

Berry, Jake

Bingham, Andrew

Birtwistle, Gordon

Blackwood, Nicola

Blunt, Mr Crispin

Boles, Nick

Bottomley, Sir Peter

Bradley, Karen

Brady, Mr Graham

Brake, rh Tom

Bray, Angie

Brazier, Mr Julian

Bridgen, Andrew

Brine, Steve

Brokenshire, James

Brooke, Annette

Browne, Mr Jeremy

Bruce, Fiona

Buckland, Mr Robert

Burley, Mr Aidan

Burns, Conor

Burns, rh Mr Simon

Burrowes, Mr David

Burstow, rh Paul

Burt, Alistair

Burt, Lorely

Byles, Dan

Cairns, Alun

Campbell, rh Sir Menzies

Carmichael, rh Mr Alistair

Carmichael, Neil

Chishti, Rehman

Clark, rh Greg

Clarke, rh Mr Kenneth

Coffey, Dr Thérèse

Colvile, Oliver

Cox, Mr Geoffrey

Crabb, Stephen

Crockart, Mike

Crouch, Tracey

Davies, Glyn

de Bois, Nick

Dinenage, Caroline

Djanogly, Mr Jonathan

Dorrell, rh Mr Stephen

Dorries, Nadine

Doyle-Price, Jackie

Duddridge, James

Duncan Smith, rh Mr Iain

Ellis, Michael

Ellison, Jane

Elphicke, Charlie

Eustice, George

Evans, Graham

Evennett, Mr David

Fabricant, Michael

Fox, rh Dr Liam

Francois, rh Mr Mark

Freeman, George

Freer, Mike

Fuller, Richard

Garnier, Sir Edward

Garnier, Mark

Gauke, Mr David

George, Andrew

Gibb, Mr Nick

Gilbert, Stephen

Glen, John

Goldsmith, Zac

Goodwill, Mr Robert

Grant, Mrs Helen

Gray, Mr James

Grayling, rh Chris

Green, rh Damian

Grieve, rh Mr Dominic

Griffiths, Andrew

Gummer, Ben

Gyimah, Mr Sam

Halfon, Robert

Hames, Duncan

Hammond, rh Mr Philip

Hammond, Stephen

Hancock, Matthew

Harper, Mr Mark

Harrington, Richard

Harris, Rebecca

Hart, Simon

Haselhurst, rh Sir Alan

Hayes, rh Mr John

Heaton-Harris, Chris

Hemming, John

Hendry, Charles

Herbert, rh Nick

Hinds, Damian

Hoban, Mr Mark

Hollingbery, George

Holloway, Mr Adam

Hopkins, Kris

Horwood, Martin

Howarth, Sir Gerald

Howell, John

Hughes, rh Simon

Hunt, rh Mr Jeremy

Hunter, Mark

Huppert, Dr Julian

Hurd, Mr Nick

Jackson, Mr Stewart

Javid, Sajid

Johnson, Gareth

Jones, Andrew

Jones, rh Mr David

Jones, Mr Marcus

Kawczynski, Daniel

Kelly, Chris

Kirby, Simon

Knight, rh Mr Greg

Kwarteng, Kwasi

Laing, Mrs Eleanor

Lamb, Norman

Lancaster, Mark

Lansley, rh Mr Andrew

Latham, Pauline

Laws, rh Mr David

Leadsom, Andrea

Lee, Jessica

Lee, Dr Phillip

Leech, Mr John

Lefroy, Jeremy

Leslie, Charlotte

Letwin, rh Mr Oliver

Lilley, rh Mr Peter

Lopresti, Jack

Lord, Jonathan

Lumley, Karen

Macleod, Mary

Maude, rh Mr Francis

Maynard, Paul

McCartney, Jason

McIntosh, Miss Anne

McLoughlin, rh Mr Patrick

McPartland, Stephen

McVey, Esther

Menzies, Mark

Metcalfe, Stephen

Miller, rh Maria

Mills, Nigel

Milton, Anne

Moore, rh Michael

Mordaunt, Penny

Morgan, Nicky

Morris, Anne Marie

Morris, David

Mosley, Stephen

Mowat, David

Mulholland, Greg

Mundell, rh David

Munt, Tessa

Murray, Sheryll

Newmark, Mr Brooks

Newton, Sarah

Nokes, Caroline

Norman, Jesse

O'Brien, Mr Stephen

Offord, Dr Matthew

Ollerenshaw, Eric

Opperman, Guy

Ottaway, Richard

Paice, rh Sir James

Patel, Priti

Paterson, rh Mr Owen

Penning, Mike

Penrose, John

Percy, Andrew

Perry, Claire

Phillips, Stephen

Pickles, rh Mr Eric

Pincher, Christopher

Poulter, Dr Daniel

Prisk, Mr Mark

Pritchard, Mark

Raab, Mr Dominic

Randall, rh Mr John

Rees-Mogg, Jacob

Reid, Mr Alan

Rifkind, rh Sir Malcolm

Robathan, rh Mr Andrew

Robertson, rh Hugh

Robertson, Mr Laurence

Rosindell, Andrew

Rudd, Amber

Russell, Sir Bob

Rutley, David

Sanders, Mr Adrian

Sandys, Laura

Scott, Mr Lee

Selous, Andrew

Shapps, rh Grant

Sharma, Alok

Shelbrooke, Alec

Skidmore, Chris

Smith, Miss Chloe

Smith, Henry

Smith, Julian

Smith, Sir Robert

Soames, rh Nicholas

Soubry, Anna

Spelman, rh Mrs Caroline

Spencer, Mr Mark

Stanley, rh Sir John

Stewart, Bob

Stewart, Iain

Stewart, Rory

Streeter, Mr Gary

Stride, Mel

Stunell, rh Andrew

Sturdy, Julian

Swayne, rh Mr Desmond

Swinson, Jo

Thornton, Mike

Thurso, John

Timpson, Mr Edward

Tomlinson, Justin

Tredinnick, David

Truss, Elizabeth

Tyrie, Mr Andrew

Uppal, Paul

Vara, Mr Shailesh

Vickers, Martin

Villiers, rh Mrs Theresa

Walker, Mr Charles

Walker, Mr Robin

Ward, Mr David

Weatherley, Mike

Wharton, James

Wheeler, Heather

White, Chris

Whittaker, Craig

Wiggin, Bill

Williams, Mr Mark

Williams, Roger

Williams, Stephen

Williamson, Gavin

Wilson, Mr Rob

Wollaston, Dr Sarah

Wright, Jeremy

Wright, Simon

Yeo, Mr Tim

Young, rh Sir George

Zahawi, Nadhim

Tellers for the Ayes:

Greg Hands


Mr Robert Syms


Abbott, Ms Diane

Abrahams, Debbie

Ainsworth, rh Mr Bob

Ali, Rushanara

Allen, Mr Graham

Anderson, Mr David

Ashworth, Jonathan

Austin, Ian

Bailey, Mr Adrian

Bain, Mr William

Balls, rh Ed

Banks, Gordon

Barron, rh Mr Kevin

Bayley, Hugh

Beckett, rh Margaret

Begg, Dame Anne

Benn, rh Hilary

Berger, Luciana

Blackman-Woods, Roberta

Blears, rh Hazel

Blenkinsop, Tom

Blomfield, Paul

Bradshaw, rh Mr Ben

Brennan, Kevin

Brown, rh Mr Nicholas

Brown, Mr Russell

Bryant, Chris

Buck, Ms Karen

Burden, Richard

Burnham, rh Andy

Byrne, rh Mr Liam

Campbell, Mr Alan

Caton, Martin

Champion, Sarah

Chapman, Jenny

Clark, Katy

Clarke, rh Mr Tom

Clwyd, rh Ann

Coaker, Vernon

Coffey, Ann

Crausby, Mr David

Creagh, Mary

Creasy, Stella

Cruddas, Jon

Cryer, John

Cunningham, Alex

Cunningham, Mr Jim

Cunningham, Sir Tony

Curran, Margaret

Dakin, Nic

David, Wayne

Davidson, Mr Ian

Davies, Philip

De Piero, Gloria

Denham, rh Mr John

Dobson, rh Frank

Docherty, Thomas

Donohoe, Mr Brian H.

Doran, Mr Frank

Doughty, Stephen

Dowd, Jim

Doyle, Gemma

Dromey, Jack

Dugher, Michael

Durkan, Mark

Eagle, Ms Angela

Eagle, Maria

Edwards, Jonathan

Efford, Clive

Ellman, Mrs Louise

Esterson, Bill

Evans, Chris

Field, rh Mr Frank

Fitzpatrick, Jim

Flello, Robert

Flint, rh Caroline

Flynn, Paul

Fovargue, Yvonne

Francis, Dr Hywel

Galloway, George

Gapes, Mike

Gilmore, Sheila

Glass, Pat

Godsiff, Mr Roger

Goggins, rh Paul

Goodman, Helen

Greatrex, Tom

Green, Kate

Greenwood, Lilian

Griffith, Nia

Gwynne, Andrew

Hain, rh Mr Peter

Hamilton, Mr David

Hamilton, Fabian

Hanson, rh Mr David

Harman, rh Ms Harriet

Harris, Mr Tom

Havard, Mr Dai

Healey, rh John

Hendrick, Mark

Hepburn, Mr Stephen

Hillier, Meg

Hilling, Julie

Hodge, rh Margaret

Hodgson, Mrs Sharon

Hoey, Kate

Hollobone, Mr Philip

Hopkins, Kelvin

Hosie, Stewart

Howarth, rh Mr George

Hunt, Tristram

Irranca-Davies, Huw

Jamieson, Cathy

Jarvis, Dan

Johnson, rh Alan

Johnson, Diana

Jones, Graham

Jones, Helen

Jones, Susan Elan

Kaufman, rh Sir Gerald

Keeley, Barbara

Kendall, Liz

Khan, rh Sadiq

Lammy, rh Mr David

Lavery, Ian

Lazarowicz, Mark

Leslie, Chris

Llwyd, rh Mr Elfyn

Lucas, Caroline

Lucas, Ian

MacNeil, Mr Angus Brendan

Mactaggart, Fiona

Mahmood, Shabana

Malhotra, Seema

Mann, John

Marsden, Mr Gordon

McCabe, Steve

McCann, Mr Michael

McCarthy, Kerry

McClymont, Gregg

McCrea, Dr William

McDonald, Andy

McDonnell, John

McFadden, rh Mr Pat

McGovern, Jim

McGuire, rh Mrs Anne

McKechin, Ann

McKenzie, Mr Iain

McKinnell, Catherine

Meacher, rh Mr Michael

Mearns, Ian

Miller, Andrew

Mitchell, Austin

Moon, Mrs Madeleine

Morden, Jessica

Morrice, Graeme


Morris, Grahame M.


Mudie, Mr George

Murphy, rh Mr Jim

Murphy, rh Paul

Murray, Ian

Nandy, Lisa

Nash, Pamela

Nuttall, Mr David

O'Donnell, Fiona

Onwurah, Chi

Paisley, Ian

Pearce, Teresa

Perkins, Toby

Pound, Stephen

Powell, Lucy

Raynsford, rh Mr Nick

Reed, Mr Jamie

Reed, Mr Steve

Reynolds, Emma

Robertson, Angus

Robertson, John

Robinson, Mr Geoffrey

Rotheram, Steve

Roy, Mr Frank

Roy, Lindsay

Ruane, Chris

Ruddock, rh Dame Joan

Sarwar, Anas

Sawford, Andy

Seabeck, Alison

Sharma, Mr Virendra

Shuker, Gavin

Simpson, David

Skinner, Mr Dennis

Slaughter, Mr Andy

Smith, rh Mr Andrew

Smith, Nick

Smith, Owen

Spellar, rh Mr John

Sutcliffe, Mr Gerry

Tami, Mark

Thornberry, Emily

Timms, rh Stephen

Trickett, Jon

Twigg, Derek

Umunna, Mr Chuka

Walley, Joan

Watts, Mr Dave

Weir, Mr Mike

Whiteford, Dr Eilidh

Whitehead, Dr Alan

Williams, Hywel

Wilson, Phil

Winnick, Mr David

Winterton, rh Ms Rosie

Wishart, Pete

Wood, Mike

Woodward, rh Mr Shaun

Wright, David

Wright, Mr Iain

Tellers for the Noes:

Alison McGovern


Lyn Brown

Question accordingly agreed to.

22 Apr 2013 : Column 721

22 Apr 2013 : Column 722

22 Apr 2013 : Column 723


That this House approves, for the purposes of section 5 of the European Communities (Amendment) Act 1993, the Government’s assessment as set out in the Budget Report, combined with the Office for Budget Responsibility’s Economic and Fiscal Outlook, which forms the basis of the United Kingdom’s Convergence Programme.

Business without Debate

European Union Documents

Motion made, and Question put forthwith (Standing Order No. 119(11)),

Implementation of the Common Commercial Policy

That this House takes note of European Union Document No. 11762/11, a draft Regulation amending certain Regulations relating to the common commercial policy as regards the granting of delegated powers for the adoption of certain measures; supports the Government’s view that power is delegated to the Commission in a way which ensures an appropriate balance remains between

22 Apr 2013 : Column 724

the roles of the EU institutions; and further supports the Government’s aim to ensure that urgency provisions are justified and that delegated powers are granted for fixed periods.—

(Anne Milton.)

Question agreed to.

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),


That the draft Renewable Heat Incentive Scheme (Amendment) Regulations 2013, which were laid before this House on 4 March, be approved.—(Anne Milton.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),


That the draft Companies Act 2006 (Amendment of Part 18) Regulations 2013, which were laid before this House on 6 March, be approved.—(Anne Milton.)

Question agreed to.

Business of the House

8.31 pm

The Leader of the House of Commons (Mr Andrew Lansley): I beg to move,

That at the sittings on Tuesday 23 and Wednesday 24 April paragraph (2) of Standing Order No. 31 (Questions on amendments) shall apply to the Motion in the name of Mr Edward Miliband as if the day were an Opposition Day; proceedings on the Motion may continue, though opposed, for three hours and shall then lapse if not previously disposed of; and Standing Order No. 41A (Deferred divisions) shall not apply.

I shall not detain the House for long. I simply want to draw attention to the fact that, as I announced at last Thursday’s business questions, tomorrow and Wednesday will be Opposition unallotted half days. The debates are guaranteed to last three hours and will be treated as Opposition days, notwithstanding what might happen with regard to the consideration of Lords amendments.

Question put and agreed to.

Business without Debate

Business of the House


That at the sittings on Tuesday 23, Wednesday 24 and Thursday 25 April—

(1) any Lords Amendments or Lords Message in respect of any Bill may be considered forthwith without any further Question being put, and may be proceeded with, though opposed, after the expiration of the time for opposed business;

(2) The Speaker shall not adjourn the House until any Messages from the Lords have been received and any Committee to draw up Reasons has reported.—(Mr Lansley.)

22 Apr 2013 : Column 725

Fixed-odds Betting Terminals

Motion made, and Question proposed, That this House do now adjourn.—(Anne Milton.)

8.32 pm

Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op): I am pleased to have secured this debate. I know from the number of letters, e-mails and, indeed, tweets I have received in the past few days that there is concern about the prevalence of fixed-odds betting terminals—or FOBTs, as they are commonly known—primarily in high street betting shops. A number of hon. and right hon. Members, some of whom are present, have also expressed concerns. Given that we have more time available than anticipated they will be able to make contributions, or if they want to intervene I will seek to accommodate them.

I will begin by clarifying my own position on gambling. Participants in debates such as this are often portrayed as being either pro or anti-gambling. I am not anti-gambling, nor do I seek to persuade the Minister of State to prevent people from being able to gamble in betting shops if they so choose. There are 32 such shops in my constituency—they exist across the whole country—and I received a briefing earlier today that informed me that they employ 152 people. Many people gamble for entertainment and in their own time—some occasionally, some regularly—on sport, in the casino, at bingo and in other forms, and they do so without any problems. Indeed, most years I place a bet on Fulham winning the FA cup. That one has not come in yet, and my annual visit to the bookmakers seems to be as much for their amusement as for mine. [Interruption.] My hon. Friend the Member for Ealing North (Stephen Pound), a fellow Fulham supporter, reminds me that in 1975 we came quite close. I was about eight months old at the time, so I do not really remember it, but I am sure that he had a bet that day.

The serious point is that my inclination and that of many Members of this House is to be very cautious about regulating how people choose legally to spend their money. That should be a matter for them and in most cases it is. There is also a danger in seeking to extrapolate policy from the worst cases of problem gambling. That does not mean, however, that the Government should simply ignore the issues and concerns that arise from the fact that between 2007 and last year, the number of FOBTs on high streets throughout Britain near enough doubled from 16,380 to some 32,000.

My interest in this issue began late in 2011, when I was approached by a constituent who in one month had gambled more than £25,000 on a single machine in a betting shop in my constituency. He approached me not because he had accepted that he had a gambling problem caused by the use of the roulette game that he played, but because he was convinced that that game was rigged. At that point, he had not thought that he had a problem. I am pleased to say that he has now accepted that he has a problem and is involved in a number of groups to deal with it. A feeling that the game is rigged is often the first indication that somebody has a problem that is getting out of control.

When my constituent approached me, I was astonished that somebody who was not a bored millionaire professional footballer betting on the horses or a property tycoon at

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the casino could lose that amount of money in such a short space of time at the local betting shop during the day on a single machine. What I had not appreciated is that we are not talking about machines with a £1 or £2 spin like the fruit machines in a pub, on a ferry or in a chip shop. B2 machines, as they are known, are casino-content terminals with high stakes, fast play and randomly generated results. The maximum stake is £100 per spin. It is possible, therefore, to stake £300 in a minute. In the extreme, that means that it is possible to stake up to £18,000 in an hour.

Ian Lavery (Wansbeck) (Lab): The anti-gambling lobby says consistently that gamblers can lose up to £18,000 per hour on these machines. Will my hon. Friend comment on the likelihood of that?

Tom Greatrex: My hon. Friend anticipates my next point. Even if somebody played at the maximum speed for an hour, it would be highly unlikely that they would lose every single time. I suspect that the odds of losing £18,000 in an hour are pretty long. However, this is not just an idle way to use up some spare change, with the anticipation of winning a few pounds. Many people who use these machines lose a significant amount of money in a relatively short period.

I am sure that many Members have received cards via betting shops from the “Back your local bookie” campaign, which has made points about the economic value that bookmakers contribute. Betting shops often invite Members to go along and have a go on one of these machines. They will put it in demo mode and one can press a button and see that it is all very straightforward and fine. However, I have chosen to be an unannounced visitor to betting shops in London and in my constituency. What I have seen is quite alarming. People sit on the machines for a prolonged period, playing continuously and obviously staking significant amounts of money. Other than on weekends such as the grand national weekend or the Scottish grand national weekend, there is next to nobody betting over the counter. Many shops are staffed by a single individual. Other than overseeing the premises, it appears that there is relatively little for that individual to do. The machines do the work, take a lot of the money and, as the published figures demonstrate, deliver half the profit of high street betting shop chains.

I also recently spent a morning with the Hamilton Gamblers Anonymous group, who by definition are people with a gambling problem. I would not seek to suggest that everybody who gambles from time to time, or even a significant proportion of them, develop a problem, but from meeting that group, it struck me that there was a clear divide between the younger and older members. Many of the older members had developed a problem associated with gambling on horses or sometimes dog racing, or in casinos or on cards. All the younger members of the group had bet significant amounts of money on betting shop machines. Either that had been their way into gambling, from which they had developed a problem, or they had moved on to it from other forms of gambling in betting shops. I am sure that we have all heard stories about the impact on homes, families and children, with relationships breaking down because of a compulsive habit that people can indulge every day from 8 o’clock in the morning in the betting shop around the corner.

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Ian Lavery: Is there not a bigger problem for individuals who have problems with gambling, in that they can sit at home gambling online 24 hours a day, often with bigger stakes than £100 every time? I wonder why the anti-gambling lobby and a lot of people do not focus on that potential problem rather than on what is happening in betting shops.

Tom Greatrex: My hon. Friend makes an important point, and I would not describe myself as anti-gambling. Some industry representatives seem to take quite an arrogant and dismissive attitude to concerns that are expressed, but I would not call myself anti-gambling. He is right that people can gamble significant amounts on the internet in their own homes, but we cannot take comfort from the fact that significant amounts can be gambled on machines on the high street in a short period.

Mr David Hamilton (Midlothian) (Lab): Does my hon. Friend agree that at least a betting office pays taxation and can deal with problems and give advice in-house, whereas gambling on computers is a whole new direction, with a lot of young people involved? No money comes back to the country, because it all goes offshore. Surely the betting offices’ argument is that they are having to do this because of the offshore betting that takes place elsewhere.

Tom Greatrex: My hon. Friend is absolutely right about where the profits of a lot of internet gambling go, but I would have more sympathy with his argument about high street betting shops if I could be more confident about the supposed self-regulation for people who have a problem. People have to sign themselves in and suggest that they have a problem, which misses out many people who have not yet accepted that they have a problem. That is related to a point that I will make later about the clustering of betting shops in particular parts of high streets, which suggests that the idea is to maximise the number of machines in close proximity so that people go from one to another. It is hard for betting shops and the big chains to deal with problem gambling as they encounter it when so much activity is automated; it is much harder than in the case of traditional, over-the-counter gambling.

Tracey Crouch (Chatham and Aylesford) (Con): I congratulate the hon. Gentleman on securing this debate on an issue that is incredibly important in the Medway towns and Chatham, where we have seen a proliferation of bookmakers on the high street.

It is wrong that people who raise concerns about fixed-odds betting terminals are considered part of the anti-gambling lobby. Surely it is our duty and responsibility as constituency MPs to look after the most vulnerable people in our constituencies, some of whom are drawn into gambling addiction because of the number of FOBTs in each betting shop.

Tom Greatrex: I thank the hon. Lady, who makes her point well. It is easy to dismiss concerns as coming from people who are anti-gambling or who want to abolish it. I understand that that is not her position, and it is certainly not mine. She is absolutely right to highlight the fact that there has been clustering of an increasing number of betting shops in certain communities. I have

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evidence of that in my constituency, and there is a danger of people being drawn in. That is why I think it is the Government’s responsibility to monitor the situation closely. As the hon. Lady said, the impact on some people should be of concern to any individual constituency MP.

Robert Flello (Stoke-on-Trent South) (Lab): I am taking great notice of what my hon. Friend is saying as it is important not to characterise this debate as being either for or against gambling; it is not as simple or straightforward as that. May I put the record straight and say that not all online gambling is offshore? Indeed, the excellent bet365 in the adjacent constituency to mine is most determinedly remaining onshore in the face of competition—

Stephen Pound (Ealing North) (Lab): Hasn’t it sponsored Stoke?

Robert Flello: Indeed, as my hon. Friend says from a sedentary position, the chairman of Stoke City is also the chairman of bet365. As well as putting that important point on the record, may I stress that other aspects in life are regulated, such as drinking? We are not for or against drinking just because we raise a concern about alcohol, but we are rightly expressing a point. It is important that my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) has initiated this debate, and I look forward to listening to more of his speech.

Tom Greatrex: I thank my hon. Friend for his intervention. He is right to make that point about bet365 and the chairman of Stoke City, although I am not sure what odds he would have put on Stoke winning at the weekend and seemingly escaping relegation for another year, and near enough relegating Queens Park Rangers in the process, which I am not necessarily hugely unhappy about—I digress, Mr Deputy Speaker.

My hon. Friend is right to make a point about how this issue is sometimes characterised and how things are regulated. As I said earlier, my inclination is that we should not try to over-regulate individual behaviour. Where harm is caused, however, the Government need to take the issue seriously. The right level of regulation is always a balance that the Government need to strike on the basis of evidence, and I will come on to that. That, however, is a different position from a blanket opposition to gambling, and I am grateful to my hon. Friend for intervening and allowing me to reiterate that point.

I was referring to the younger members of the Gamblers Anonymous group whom I met, and my concern has developed from those individual accounts. In recent weeks I have met those campaigning against a proliferation of these machines—people from a range of different organisations, both locally and nationally, who are concerned about their potential impact—as well as representatives from high street bookmakers. I have spoken to my own local authority, South Lanarkshire council, and received briefings from a range of organisations, including the Association of British Bookmakers. I believe the Government should be concerned about some of the issues that arose from those discussions.

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As the Minister will be aware, and as I said earlier, it takes 20 seconds to complete a spin, and for each spin the maximum stake is £100.

Mr Andy Slaughter (Hammersmith) (Lab): I congratulate my hon. Friend on securing this debate. He has already made this point but I think it deserves repeating. The £100 spin—50 times the normal limit—is an anomaly that allows people, very easily and conveniently, to walk off the high street and into a betting shop and gamble large sums of money. I popped into my local Ladbrokes last Friday evening to put an unwise bet on a dog at Romford—a tip given to me by the former Member for Hammersmith and Fulham—so I am not anti-gambling. The only four people in that betting shop were those playing on fixed-odds betting terminals. That is not what I expect a betting shop to be.

Tom Greatrex: My hon. Friend makes an important point. I, too, would be reticent about taking too much advice from a former Member for Hammersmith and Fulham in relation to sport.

Stephen Pound: Particularly on the night of the Arsenal-Fulham game.

Tom Greatrex: Since the former Member for Hammersmith and Fulham is an Arsenal fan, that is right. The experience of my hon. Friend the Member for Hammersmith (Mr Slaughter) in visiting betting shops mirrors mine in terms of where people are and what they are doing. It is the same at different times of the day.

On the limit, I am sure that the Minister will refer to the consultation, which recently closed. A range of organisations made submissions. The ABB briefing makes the case for the economic impact of changing the stake, but there is a social and economic impact in favour of such a change. I hope the Minister considers that carefully along with other representations. My hon. Friend was right to describe the stake as an anomaly. The machines are different from the fruit machines that we find in pubs, clubs and other places, and different from other gaming machines. I am not suggesting that everybody would stake that amount of money each time, but people can do so. They might have access to that amount of money for only a short period and it could be better used in other ways. If people have developed or are in the process of developing a problem, they might well stake that amount. I do not claim that every single machine user will bet £100 a go or £300 a minute. As I said in response to my hon. Friend the Member for Wansbeck (Ian Lavery), I suspect that people doing so would win as well as lose. Suggesting that someone could lose £18,000 in an hour is extreme—it is possible but highly unlikely.

I am concerned both by what I have seen and by the research that I asked my member of staff to carry out ahead of the debate. It is very easy to gamble a lot of money very quickly. People almost do not realise the amount they are gambling and the speed with which they are doing it. The nature of the machines is that they encourage people both to chase their losses and to try to increase their wins. It is impossible to deny that people can play roulette on an FOBT in the bookies at four and half times the speed they can play roulette in

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a casino. The ability to get hooked, even for a short period, is apparent. That is the experience of those I have met who have gambled on FOBTs, partly because they are perceived by punters to be a good bet. Why would people not believe that? The machines tell people that there is a 97% payback, which is not that far from 100%. People therefore believe they have a good chance of winning. Why would they play a £70 jackpot machine in the pub when they can nip next door to the bookies and play for a £500 jackpot on a machine that they believe has 97% payout?

However, people only believe that there is a 97% payback. I asked representatives of one of the large bookmakers how those figures were calculated. They told me that the 97% payback is not what an individual will win, and that it is unlikely that someone playing for 10 minutes or half an hour will win at that rate. The 97% is an average taken from the cash inputted into all machines against the return as a whole. That confusion could be addressed relatively easily. Will the Minister therefore press representatives of the gambling industry to use a more appropriate and straightforward figure? The Gambling Act 2005 states that gambling should be “fair and open”. Surely explaining the chances of winning in a much clearer way, and in a way that is much less likely to be misunderstood, is the least we can expect.

Another aspect of the debate—this has been mentioned in interventions—is high streets. Those of us who live close to high streets and main streets throughout the UK have seen a number of betting shops opening in recent years. The most recent ABB briefing to MPs and its press release boast of the number of shops in the high street and their employment impact. A cluster of betting shops in one street or one part of a street has become a common sight. Sometimes, branches of the same firm are in very close proximity. My right hon. Friend the Member for Tottenham (Mr Lammy) has highlighted that previously. The Government’s review of the high street—the Portas review—drew attention to that point with a proposal for betting shops to be put in a distinct category. As I am sure many hon. Members are aware, betting shops are currently in the same bracket as banks and building societies, and there is no need to apply for change of use through the planning processes.

Many retail businesses, including estate agents and coffee shops, cluster together, and retailers will always seek to locate where they believe there is a market—supermarkets are notoriously focused on, and efficient at, doing so—so why is there a problem with betting shops?

The Minister is of course aware of the increase in the number of these machines in the past five years. As I have said, there are almost twice as many as there were just five years ago. I am sure he also knows that half the profits of high street bookmakers come from the machines and that there is a limit of four machines per betting shop. It is increasingly apparent that the opening of new betting shops is driven by the ability to have more machines. From the figures available, it is also apparent that clustering tends to occur in places with more social deprivation and lower overall incomes.

I do not believe that the Government should seek to determine on a national level whether there is over-provision of businesses in a particular area, but it should be open to local authorities and licensing authorities to do so.

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The case being pursued by Newham council is indicative not just of a community that feels it has enough betting shops and machines already, but of a wider frustration that all too often local authorities feel there is very little they can do to address their concern. I do not expect the Minister to comment in detail on that case as it is in the process of going through the courts, but does he think that it should be possible for local councils and licensing boards to have the flexibility to determine whether there is a need for further betting shops in particular communities and how many machines should be available in each betting shop?

The thrust of the campaign postcards we have been receiving in recent weeks is that machines make a contribution to the economy, keeping betting shops going and employing people in constituencies across the UK. The economic impact of betting shops is important, but it needs to be assessed in the context of the total impact on local economies. As the Minister may be aware, a recent study by Landman Economics found that the £1 billion in FOBT spend supports 7,000 jobs in the gambling sector, compared to 20,000 jobs if that expenditure were used elsewhere. Put another way, there could be 13,000 fewer jobs for every £1 billion spent through the machines. Money being used to gamble in local high streets may be good for the big chains and their overall profit margins, but the local impact can be less beneficial. More and more betting shops are employing fewer staff, as gambling through machines has less need for personal interaction.

The gambling industry groups are robust and sometimes dismissive in their response to those concerns. Their perspective can be summarised thus: something being popular means that it does not cause problems; look at all the people employed in betting shops and the shops’ contribution to the local economy; and everybody knows exactly what they are doing because lots of them have A-levels. That type of attitude highlights precisely why the Government should keep the impact of the machines under review and not leave the industry to act under its own initiative.

While the industry argues that there is no evidence to suggest that FOBTs are addictive, anecdotal evidence suggests that there is a problem. The confusion in the Government’s own statements is apparent. In the consultation document I referred to earlier, they say that the causal link “remains poorly understood”. However, they also say that the association between high stake, high price machines and gambling-related harm is widely accepted, which makes the decision to end the gambling prevalence study all the more concerning. Will the Minister respond, in particular, to the point that research is required to determine the evidence on the likelihood of problem gambling? I am conscious that the people I have spoken to in my constituency are those with problems and that there are many who do not have problems, but the level of concern suggests that much closer attention should be paid.

Robert Flello: My hon. Friend seems to be concluding his remarks and I want to ask this question before he does so. On the impact of gambling addiction on communities, the cost to the Government of families where there is an addicted gambler spending money

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that should be spent on the children is huge. The cost to the nation of such addiction is massive. Does my hon. Friend agree that it would be in the Government’s best interests to have the best possible analysis of the impact of machines on addiction rates, so that it could guide their policies and ultimately, perhaps, even save some money?

Tom Greatrex: My hon. Friend makes an important point about how we assess the cost to the public purse and the impact on communities. It is an argument often used in relation to other policy areas, such as early-years intervention and so on, that can save money. I hope therefore that the Minister will comment on the level of evidence required, and how wide-ranging it needs to be, in order to assess the scope of the problem and how it could best be addressed.

There is some evidence on the proportion of gambling that is problem gambling. I think the Minister will be aware of the Birmingham university study based on analysis of the 2010 British gambling prevalence survey. It is a valuable piece of work that starts to consider some of these issues, but it needs to be constantly monitored and updated. In 2007, when the Department for Culture, Media and Sport commissioned a scoping study on the impact of the Gambling Act 2005, it recommended that FOBTs be closely monitored because they contained features closely associated with problem gambling. Will he explain what his Department has done, and will be doing, to monitor their impact?

Mr David Hamilton: I am following this debate intensely. I am not a gambler, but constituents have indicated to me the problems specifically with these machines. Is my hon. Friend saying that we should revert to how things used to be and that these machines should not be in the bookies? If so, there would be fewer bookies, because, as he said, 40% of their profits come from the machines. But how would that address the computer issue, which I believe is a big problem? There is no regulation there at all. If we want to resolve the problem, we have to address the computer issue, as well as the machines. If we removed the machines, it would reduce profits by 40% and it might also prevent the clustering he is talking about.

Tom Greatrex: My hon. Friend makes a point about the number of betting shops. He will be aware of the relatively recent increase in the number of betting shops in certain areas, which I contend is due, at least in part, to the ability to have more machines. The benefit of that is to the betting shops and chains—they are nearly all chains, and in some cases there is more than one branch of the same chain, but there will certainly tend to be one of each in close proximity. An assessment of their economic impact and their benefit to the local community, including from the jobs they provide, must be set against the negative impact of the problem gambling associated with the machines.

That does not take away from my hon. Friend’s point about internet gambling, which needs to be looked at again, but I think that collecting evidence on the extent of the problem and then giving more flexibility to local authorities and licensing authorities is a better way of establishing what is tolerable in particular areas. Otherwise, we get the clustering in particular areas where the problems tend to occur.

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Mr David Hamilton: I thank my hon. Friend for that clarification, but I want to return to the main point. He started with the point that these new machines, which have been put in over time, are attracting people in off the streets and allowing them to make massive bets that they could not make before. If we took out the machines, or reverted to what is acceptable in clubs, pubs or other gambling establishments, where much less money can be spent, the logical outcome would be fewer betting shops. These are not betting shops as we know them, with betting on horse racing and football, if, as he says, people are going in to use the machines. If we eliminated the machines and reverted to what used to be the case, would we not reduce the number of betting shops?

Tom Greatrex: Certainly, most activity in betting shops takes place on the machines, rather than on over-the-counter betting, and that seems to have led to a change in the number of people being employed. Not in all chains, but certainly in some, there used always to be at least two people, with people betting at the counter, but now there is often only one person. So these machines might already have had an impact on jobs. We need to look at the issue carefully, because these machines have a significant impact. That is not good for any community, no matter how many betting shops there are there, nor does the number in a particular area necessarily justify a high prevalence of machines or the high stakes that can be gambled each time.

Before I conclude—I am conscious that I have gone on much longer than would normally be allowed in such a debate—

Mr David Hamilton: You have 55 minutes to go.

Tom Greatrex: I do not want to alarm other hon. Members, but I do not intend to speak for 55 minutes more, although the Minister may wish to do so.

I want to ask the Minister a couple of further questions about the vital research that, as I have said, needs to be done. I am sure he will refer to the research into all category B machines commissioned by the Responsible Gambling Trust and the time scale for that research. Obviously, he will look at it once it is completed—I think it is due to take 18 months, which is a considerable time—but I wonder whether he is aware of the concerns that have been expressed that the chair of the Responsible Gambling Trust is also the chair of the Association of British Bookmakers, which is the trade association that represents the industry. What reassurances has the Minister sought to ensure that the research that the Responsible Gambling Trust is undertaking is credible and that there is not a conflict of interest in the way it is undertaken? Is he also aware that the vice-chair of the Association of British Bookmakers is on the Responsible Gambling Strategy Board’s machines expert panel or that a special partner in a company that owns an FOBT supplier is also a member of the board? If so, does the Minister believe that that undermines the credibility of the research? What reassurance can he give that it will not and that the research commissioned by the Responsible Gambling Trust will be comprehensive and robust?

I make those points not because I wish to denigrate the reputation of any individual, but because the outcome of that research will be vital, as will be the research needed to understand the extent of the problem. This evening I have outlined anecdotal examples from my

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constituency, and I am sure many hon. Members present could do the same—indeed, some have done so in interventions on me. When the industry claims that there is no problem and no evidence to show that there is, it is incumbent on the Government to ensure that the research is done and the evidence provided, because despite all the claims that are made, we do not want more people to get into gambling problems much more quickly than they would otherwise as an unintended consequence of allowing new machines to be made available for people to gamble on.

I hope the Minister will take the remarks I have made this evening as I hope they came across—that is, as those of a concerned constituency Member of Parliament, not someone who is anti-gambling, who has the intent to close down every bookmaker or who would suggest that people should not gamble. People can gamble if they wish—I do occasionally, as do others. There is nothing wrong with that: it is a legitimate entertainment and leisure pursuit for many people—sometimes occasionally, sometimes regularly, as I have outlined. However, if we get into a situation where very many people have serious problems as a result of being able to gamble large amounts of money in a short period on such machines, that is something that the Government should address, as I hope the Minister will.

9.8 pm

Tracey Crouch (Chatham and Aylesford) (Con): I rise briefly to offer some cross-party support for the hon. Member for Rutherglen and Hamilton West (Tom Greatrex) and the concerns he has raised. I am not anti-gambling; in fact, I like more than a regular flutter, normally on the horses, not the football—I have much better sense than that. However, I have concerns about the proliferation not just of betting shops, but of the number of FOBTs in them. I am not one often to engage in tribal politics and I certainly do not want to do so on this occasion, but that is clearly a consequence of the liberalisation of gambling that we saw under the previous Government.

That said, it is incumbent on us as a responsible Government to try to reach a solution to the problem. I share the hon. Gentleman’s view about giving local authorities the opportunity to provide part of the solution. A cross-party working group on Medway council has recently produced a paper, to try to ensure that it can have a role to play in reducing the number of bookmakers on the high street. Bizarrely, Chatham high street is not in the Chatham and Aylesford constituency, but that is where the heart of some of these problems lies.

I can see the benefits of having fixed-odds betting terminals in betting shops, but I have concerns about the number of such machines in those shops and about the amount of money that can very quickly be staked, lost and won on them. That creates an incentive to people to go in and use the machines. I long for the day when I can go into my local bookies and queue up to place a bet on a horse, but, as the hon. Gentleman said, more people are playing on the machines than are filling out the card. In fact, I quite enjoy going into a bookies and shocking people when I place a bet on a horse. I do not think they expect a woman, let alone the local Member of Parliament, to walk into a bookies.

I am particularly concerned about the Medway towns, in which people are experiencing increasing levels of personal debt. It is an area of deprivation, and there are

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problems relating to the clustering of bookmakers, payday loan companies and pawnbrokers. This is an issue for the whole area. I therefore want to offer my support for the hon. Gentleman. Like him, I do not think that we should eradicate the machines from betting shops, but I believe that we should look carefully at limiting them or limiting the stakes that people can place on them.

9.12 pm

The Minister of State, Department for Culture, Media and Sport (Hugh Robertson): I am grateful to the hon. Member for Rutherglen and Hamilton West (Tom Greatrex) for securing the debate and giving the House an opportunity to discuss this issue. He correctly states that it is a matter of concern for many hon. Members. Let me reassure him that I do not in any way take what he said as an indication that he is either pro-gambling or anti-gambling. He made a well-balanced contribution that reflected concerns that I have heard when we have debated this issue and others associated with it. These concerns have been raised with me on many other occasions.

The hon. Gentleman is a diligent Member who does his research, and he will be aware that he is catching me at a slightly awkward time, in that the triennial review into stakes and prizes has just closed, on 9 April. My Department has received more than 9,000 responses to the review, and we are in the process of analysing them. For reasons that he and any other Members with experience of dealing with the gambling industry will know, it is important, given that these are big, litigious organisations, for any Government to proceed on the basis of evidence. I hope, particularly in view of what he has said tonight, that he has submitted a response to the millennium review.

Rehman Chishti (Gillingham and Rainham) (Con): The consultation started in January and finished in April, but will the Minister take account of any further new evidence? For example, BBC South East carried out an independent survey of betting and gambling problems and of fixed-odds betting terminals in Gillingham and the wider Medway area, but the survey was carried out after the consultation closed. Will he take that new evidence into consideration?

Hugh Robertson: I thank my hon. Friend for that contribution. I will have to check the legalities and get back to him. The consultation period was open for a specific time, and if we were to reopen it to the BBC, we would have to reopen it to everyone else to be fair. I am slightly inclined to ask why, if the BBC was going to carry out a major study, it did not do so in time to submit it to the consultation, especially when it had three months in which to do it.

We have heard many distressing tales of where people have run into problems using the type of machines that the hon. Member for Rutherglen and Hamilton West has spoken about this evening. Each one of those stories is, of course, a personal tragedy not just for the individual, but for their friends and colleagues—and indeed, for the wider society. As was pointed out earlier, however, we also have to balance such matters with a recognition that for the majority of people, gambling does not develop into a problem. As I think the hon.

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Gentleman was fair enough to say, the gambling industry is a legitimate part of the leisure industry that creates jobs and harnesses investment.

According to the Gambling Commission’s industry statistics for the period April 2011 to March 2012, the gambling industry employed almost 110,000 people—a considerable number—with the betting sector making up the largest component, employing nearly 55,000 people in full or part-time posts. That makes the gambling industry a significant contributor to the UK economy. The Office for National Statistics estimated that in 2009 it was directly worth £4.9 billion in gross value added terms. What I think I am saying to the hon. Gentleman is not one thing or the other, but that there is a balance to be struck here. To be fair, he recognises that.

Let me say a few words about betting shops. The hon. Gentleman mentioned what has been a recurrent theme during recent times, about which concerns have been raised by a large number of stakeholders: the clustering of betting shops within certain local areas. The key concern—it has been raised tonight—often relates to the B2 machines and their impact on local communities in respect of problem gambling.

The overall number of betting shops has remained reasonably stable in recent years. In 2009, there were 8,862 and by September 2012 there were 9,049—not a huge difference. Those figures are well down on the peak of 16,000 during the 1960s. The hon. Gentleman is absolutely right, however, that more betting shops are relocating to the high street, which makes them more visible.

I am not entirely shrugging my shoulders when I say that planning policy is, of course, an issue for the Department for Communities and Local Government. It is relevant to the debate to note that local authorities have a range of enforcement powers—I appreciate that the hon. Gentleman would like them to have more—that can be used to manage the overall retail diversity and the viability of town centres. Tools such as article 4 directions allow local authorities to restrict nationally permitted development rights if they are not suitable for their area.

Ian Lavery: Anybody can see the clustering of betting shops on the high street. What is the Minister’s view of why that is happening, as he is right that there are fewer betting shops now than 20 years ago?

Hugh Robertson: That is a very good question. I have to tread a little carefully because of the consultation. As a Minister who has already been judicially reviewed once, over a football stadium, I am not in hurry to go through that joyous process again, to be honest, so I will tread reasonably carefully here. Many of the factors mentioned tonight may be behind this particular development. It is pretty clear where betting shops are making their money at the moment. As my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) mentioned, the pattern of betting has changed quite a lot over recent years. Betting shops are sometimes able to pay rents that other retail outlets cannot afford, there have been changes in shopping patterns and there is also the changing nature of the high street. All those things are factors, but I will not go a great deal further than that until we have had the chance to analyse the responses to the consultation.

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Mr Slaughter: Let me try to push the Minister a little further. It is perhaps not so much the absolute numbers or even necessarily the clustering itself that is the issue, but where the clustering is taking place. In my relatively poor constituency, there are two or three times the number of betting shops as there are in neighbouring more prosperous constituencies. In Chelsea or Richmond, a third or half the number of betting shops will be found than in an area such as Shepherd’s Bush. That is the concern.

Hugh Robertson: The hon. Gentleman made his point very well. The rent that betting shops with machines of this kind are able to pay is crucial. Presumably, if they move to Chelsea the retail rents will rise, and that may price them out of the area. There is almost certainly a social element in all this, and I suspect that that is the answer that the hon. Gentleman hoped I would give him. We will consider all the evidence in the course of this review and the review that will be undertaken in due course by the Remote Gambling Association. I shall say more about that shortly.

Robert Flello: Is the Minister saying that the work that he and his civil servants are considering will include a mapping exercise to establish where betting shops are located in relation to, for instance, the index of deprivation?

Hugh Robertson: It is important to note that two separate reviews are taking place. The triennial review of stakes and prizes closed on 9 April, and produced 9,000 responses which we must work through. The wider issues will be addressed by the review that will take place next year, and I hope that we will be able to reach some worthwhile conclusions on that basis.

The Gambling Commission’s statistics show that between March 2011 and April 2012, an average of just over 35,500 machines were capable of offering B2 category games in betting shops in Great Britain. The number has remained relatively stable since 2009, but, as was pointed out by the hon. Member for Rutherglen and Hamilton West, that stability has occurred at a time when machine numbers elsewhere have declined. For example, according to Gambling Commission figures, the overall number of gaming machines fell by 10% between 2011 and 2012, and the number of B2 machines increased by 1% during the same period. That would appear to show that B2 machines are popular consumer products, which may give rise to some of the problems identified by the hon. Gentleman. They are, of course, also crucial to the profitability of many betting shops.

I absolutely agree with the hon. Gentleman that, in the light of concerns raised by him and others, it is appropriate for the Government to look into the issue. I assure him that I am well aware of the concerns that he and many other Members have expressed about B2 machines in particular. In dealing with the problem, for reasons that I have already given, I must proceed on the basis of evidence. I hope that the combination of the two reviews that I have mentioned will give us the evidential base that we need in order to work out exactly what is happening and what needs to be done as a consequence. We want to balance the harmful effects that he and many others have described with the contribution that gambling properly makes to employment and the local economy in many areas, which has been mentioned by Members on both sides of the House.

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I congratulate the hon. Gentleman both on securing the debate and on the way in which he has prosecuted his case. The evidence that he has presented illustrates the problem, and as he said, it is up to the Government to determine how best to tackle it. I can reassure him that the Government are listening—I am absolutely listening—and that we will take action if it is necessary. However, we must act on the basis of the evidence that is available to us.

Ian Lavery: I thank the Minister for giving way again. There is evidence that it is possible to spend £18,000 in an hour on FOBT machines. I agree with the hon. Member for Chatham and Aylesford (Tracey Crouch) that the people whom we should be looking after are the most vulnerable in society. Like every other Member who is present tonight, I recognise that that is the case and that there is a problem with these machines. We need a fair and balanced review. We need people to be honest about this. People cannot lose £18,000 in an hour on one of those machines. They can go to Cheltenham and spend £100,000 in one minute on one bet; they can put £250,000 on a horse in one minute with one bet. We would not multiply that by 60 and say that is how much money people can spend at Cheltenham, and then look to prevent them from doing so. That is a ludicrous argument.

Hugh Robertson: I understand much of what the hon. Gentleman is saying. The challenge for us as a Government and me as a Minister is to work out a way to deal with the problem that has rightly been identified—the fact that some people get addicted through this sort of gambling—but to do so, if we can, in a way that does not discriminate against the many people who use those machines perfectly safely and perfectly reasonably, and not to overdo it in such a way as to harm the local economy and the employment prospects of many of the hon. Gentleman’s constituents. It is a question of getting that balance right.

Graham Jones (Hyndburn) (Lab): The Minister talked about a solution that involves the Government, but has he had any conversations with his colleagues in the Department for Communities and Local Government about licence fees and local authorities, because they have a role to play in this and they can represent their communities? If the licence fee cap by Whitehall were lifted and they were able to make their own local decisions on what the initial fee should be and what the annual fee should be after that, that might have an impact on the high street, with decisions being made by local government and therefore taken out of the hands of central Government. Has the Minister looked at those questions, and has he had any conversations with his colleagues in DCLG?

Hugh Robertson: The simple answer is that we are in constant contact with DCLG. The Under-Secretary of State for Communities and Local Government, my right hon. Friend the Member for Bath (Mr Foster), used to speak on these matters for the Lib Dems and is now the Minister with responsibility for them. He is very much across the subject; he understands these points extremely well, and all of them will be looked at. Let me make the point again, however, that we have to follow the evidence, which is precisely why we are trying to put these two studies together.

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Mr Hamilton: I congratulate my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) on securing this debate, because I have learned one or two things tonight. I have constituents who have come to see me about some real problems. The comparisons that we must think about, however, go further than those he has made. We take into account the fact that local pubs, clubs and bingo halls also have machines, but not machines of such an infectious nature, perhaps because they cannot afford the licence. The comparison that has to be made is this: are people more likely to go to the betting office to get a bigger gamble or go to the local pub or bingo hall where the sums they can put in are limited to 10p, 20p or £1, which is the highest stake?

Hugh Robertson: I thank the hon. Gentleman for making that point. It is, indeed, in theory perfectly possible—although we will have to wait and see where the evidence from the consultation leads us—to deal with one set of machines in one way and another in another way, and we may want to do so to reflect the different reasons why people play.

Mr Slaughter: One piece of evidence the Minister may take into consideration is that the average spin on a B2 machine is about £15, which is seven or eight times the maximum on a B3 machine. That, rather than the

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possibility of spending £18,000 in an hour, is what concerns to me. This is an anomaly, because these are off-site betting opportunities, where the server is off-site, and suddenly people can gamble a much higher sum. I am sure the Minister is aware of that, although he may not be commenting on it tonight. That is a major difference with regard to the type of gambling that has just been talked about, which is available now just by walking off the street.

Hugh Robertson: The hon. Gentleman makes a fair point of which I am aware. I hope everybody who has spoken in the debate contributed to our consultation; if so, their responses will be lying there among the 9,000 that I am sure my civil servants are looking forward to wading through over the coming months.

Once again, I congratulate the hon. Member for Rutherglen and Hamilton West on securing this debate; it proved a popular activity for an hour. I assure him that we are listening and that we will act on the available evidence, for all the reasons I set out tonight. We will also listen carefully to all the responses to our consultation.

Question put and agreed to.

9.29 pm

House adjourned.