I became the Scottish secretary of the Labour co-ordinating committee, which had been set up by my right hon. Friend the Member for Oldham West and Royton at a meeting in Glasgow—on his son’s birthday, if I remember rightly. He had to rush back home after launching it. It was a bulwark against Militant, the ultra-left of the party. It was not an attack on the establishment, although some people saw it as such; it was an antidote to the anti-democratic, out-of-touch elite that ran the Labour party. For instance, I was nominated by my constituency’s branch of the GMB, which sent the form down to the national office. When

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it came back, my name had been not taken out but scored out, and someone else’s name had been inserted and signed by the national secretary of the union. That was a total denial of the democracy of the people in Scotland who had chosen me as a candidate. I won anyway, and I am here as a consequence, but Tony Benn was against what had happened in that instance as well.

Some people later tried to distance themselves from the distorted “bogey man” image of Tony Benn by saying that they were not Bennites, but belonged to some other kind of “left”. If I had been asked, I would have said that I was of the Bennite left, because that Bennite left was not militant, it was not Trotskyist, and it was not a compromising position in the Labour party. I hope I still stand by those principles today in the things I do, including wanting Trident to be banned. Tony wanted that, although his intelligence and logic had led him to support nuclear power. The anti-Trotskyite movement in Scotland saved the Labour party in Scotland in the 1980s, and was the driver for the devolved Parliament that we have today. All that was a part of the philosophies that Tony Benn understood. He understood Scotland in a way many politicians down here did not.

I was speaking to Tony Benn’s son Stephen last night in Portcullis House, and I now want to say a few words about the other part of the Bennite heritage. My wife Margaret Doran and I—

Mr Speaker: Order. I must ask the hon. Gentleman to be very brief. We should be grateful for a very few words on that point, because others wish to make contributions, and we need to move on.

Michael Connarty: I am conscious of that, Mr Speaker, but I am talking about a long life and a long friendship.

My wife Margaret Doran and I also knew and dearly admired Tony Benn’s wife Caroline. She was a great inspiration and support, and was a vibrant, lucid and deeply compassionate educationist. She was president of the Socialist Educational Association, and my wife and I have both been, at different times, presidents of the Scottish SEA. We often talked to her at length when we came to London for SEA meetings. I was with Tony and Caroline on the Terrace shortly before her passing. I agree with what was said earlier: a light went out of his life when Caroline died. But what was amazing was that he went on. Many of us would have been destroyed by losing such a life partner but he was inexorable, and that was a tribute to what they both stood for together and what their family stand for and what will be carried on.

When he left Parliament he spoke from outside this House. People have said he left politics. He did not leave politics. His thoughts reflect where the people are. Most of the people in this country are not with us in this House: they do not regard us highly; they think we are often irrelevant to their lives. They go day to day trying to make ends meet and they look to the words of Tony Benn and people like him to give them hope. If we could learn something from him and reconnect with those people we might actually carry forward something that would be beneficial to this House. That is what Tony Benn has given people: hope, and we are not giving people hope at this moment. Maybe in the future it is his words that will give them hope, and not ours.

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11.56 am

Seema Malhotra (Feltham and Heston) (Lab/Co-op): I am grateful to have the opportunity to speak in this special and important debate, and I want to say a few words of my own and put on record the thoughts of the members of my local Labour party, the constituency and my family on Tony Benn’s sad passing and send our very best wishes to his family, not least my right hon. Friend the Member for Leeds Central (Hilary Benn), whom I am sitting next to today.

Tony Benn was more than just a politician. I believe he was a man who truly wanted to change Britain, and in his own way he did. One aspect of his legacy that has been discussed today is how he stayed in touch with people—and people across generations. He truly cared about whoever he came across. I was lucky enough to meet him on a few occasions, the last one being when he came to the House to listen to the tributes to Nelson Mandela.

I want to share a couple of stories about him. The first shows how his diaries reached the front rooms of many households across this country, not least my own. My sister, Neeraj, absolutely loved his diaries and there have been several Christmases in the Malhotra household where her favourite extracts have been played to everybody.

He was also a serious democrat and he wanted people to understand politics, not just be told about politics or be told what politicians thought. He wanted politics to be done with people, not to people. His sense of commitment to different generations was also marked in a conversation I had recently with pensioners, who spoke of how they would pack out the town hall teas he held every year. The fact that people who were not interested day to day in politics were completely interested in everything he had to say, in that spellbinding way in which he said it, is truly a tribute to the man.

Politics is nothing if it is not for a moral purpose. Whether or not people agreed with how he went about his politics, they cannot deny what he stood for and what he fought for: liberty, equality, democracy. He was a man who had a true passion for progress. He was a thoughtful man and a kind man, and a man who lived what he believed, and a man who, in my view, truly touched the heart of this nation.

11.58 am

Hilary Benn (Leeds Central) (Lab): First of all, may I say on behalf of my sister Melissa and my brothers Stephen and Joshua and the whole family just how much the words we have heard today mean to us?

I do not propose to add to what has already been said, and indeed written, about my father’s political legacy—apart from anything else, everyone already seems to have their own opinion, as today’s debate has demonstrated—but I do want to say a few words about what Parliament meant to him, because it was the centre of his very long life. He won 16 elections, proudly representing first Bristol South-East and then Chesterfield. Fifteen of those elections enabled him to walk through those doors and take his place in this Chamber. One of them—the by-election he fought after the death of his father—did not. He was barred from entry to the Chamber on the instructions of the Speaker because, it was alleged, his blood was blue. His blood was never blue; it was the deepest red throughout his life.

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That moment taught him that the right of people to choose who will represent them here in this place—the very foundation of our democracy—was never, ever granted by those in power. It had to be fought for. That is why democracy is so precious.

His fight to stay in the Commons had, I think, a marked and profound effect on his life. It was why he was so determined to support others in their struggles: to bring an end to apartheid and the death penalty; in support of the miners, as we have heard; and to campaign for peace, because it was war that had taken from him his beloved elder brother Michael.

It was also why he was so determined to commemorate in Parliament the history of those struggles because, as he would often say, all change comes from below. That is why, as we have heard from many Members today, he went down into the Crypt with his screwdriver and put up that plaque in the broom cupboard. He wanted to teach us: why did that brave suffragette spend the night in the broom cupboard in 1911? The answer is because it was census night. What do you do in a census? You fill in a form, and she wanted to write: “Name: Emily Wilding Davison. Address: Houses of Parliament.” Why? Because she believed that a woman’s place was in the House—the House of Commons.

He was very fond of challenging those in authority, assisted by “Erskine May”. He once even moved a motion of no confidence in the Speaker. But he also had a great sense of fun. On one occasion, he was part of a group of Labour MPs who had decided to delay a Division in the Lobby because they wanted to make trouble for the Government. The Serjeant at Arms was dispatched in order to investigate and told them that if they did not move he would have to take their names. My father looked at him and, as his diary records, said, “But that would be completely contrary to Mr Speaker’s ruling of 1622.” After the Serjeant at Arms had departed from the fray, Dad turned to his fellow conspirators and, with that mischievous twinkle in his eye, admitted that he had just made that all up but it seemed to have done the trick.

He loved this place, the people who built it and those who help us in our work. He loved the debate and the argument. But he did not idealise Parliament. He saw it as the means to an end: to be a voice for the movements outside these walls that seek to change the world for the better, as well as being a voice for the people who send us here and whom we all have the privilege to represent.

That was the essence of his character. Yes, it was shaped, as we have heard, by events and experiences but also, as for many of us, by his childhood. He was, at heart, not just a socialist; he was a non-conformist dissenter. His mother taught him to believe in the prophets rather than the kings, and his father would recite these words from the Salvation Army hymn, which I think best explain what he sought to do in Parliament:

“Dare to be a Daniel,

Dare to stand alone,

Dare to have a purpose firm,

Dare to make it known.”

If we are not here to do that, what are we here for? Well, he was. He knew what he thought. He was not afraid to say it. He showed constancy and courage in the face of adversity. Whatever the scribes and the

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Pharisees may have to say about his life, it is from the words and kindnesses of those whose lives he touched that we—those who loved him most—take the greatest strength.

After all, any life that inspires and encourages so many others is a life that was well lived. [Applause.]

12.4 pm

Ms Angela Eagle (Wallasey) (Lab): Today, we have had the chance to pay tribute to the life and work of Tony Benn, one of the greatest MPs and certainly one of the greatest orators of his generation. He would have been gratified that Parliament has had this chance to recall his long involvement in our national political life in this way, despite the fact that he was neither a Head of State nor royalty. He did, however, serve in this place—with a couple of unintended interruptions—for more than 50 years, and was granted the freedom of the Commons when he retired as an MP.

As we have heard over and over again today, we never got doubt or ambiguity with Tony Benn. We have heard many moving anecdotes and tributes to him, and many Members have pointed out that he had strong views, and more talent than most for getting them across to his audience, either from a platform or in a book. He was passionate, and he was a lifelong socialist who never lost his appetite for the battle, even though he waged it in distinctly different phases during his long and fulfilled life.

Tony Benn was an assiduous Back Bencher, and the first to table a motion against apartheid. I last heard him speak during the Remembrance service for Nelson Mandela, held in Westminster Hall at your suggestion, Mr Speaker. He opposed capital punishment, and he championed human rights long before it was fashionable to do so, introducing his own human rights Bill in 1957. He also championed divorce laws, although he enjoyed a 50-year marriage to his beloved wife, Caroline. I can attest to the fact that she was a formidable campaigner in her own right. He was the Peter Mandelson of his day, demanding that Labour modernise its communication strategies, especially where television was concerned, although it is fair to say that his political journey took him in a slightly different direction thereafter.

Tony Benn served, as a junior Minister, as Postmaster General: as a republican, he tried and failed to get rid of the Queen’s head, but he did manage to shrink it down to a much smaller size. As technology Minister, he oversaw the development of Concorde, but I think he tired of the constraints of ministerial office. Instead, he decided that he needed to range more widely to change the political terms of trade by sheer rhetorical force. As we have heard today, he had plenty of sheer rhetorical force. It was for doing that that he came to be regarded by the media as “the most dangerous man in Britain”.

First and foremost, however, Tony Benn revered the House of Commons as the crucible of our democracy, as we have heard over and over again in today’s tributes. He said that it was the place where kings and tyrants could be tamed and revolution averted. This was in contrast to the House of Lords, which he described as the

“British Outer Mongolia for retired politicians”.

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His solution to most problems was more accountability and more democracy. Let’s face it, that is never a bad place to start.

Tony Benn fought a determined campaign to renounce the peerage that he had reluctantly inherited on the death of his father in 1960, and it was those sad circumstances that threw him out of the Commons for the first time. His ultimate success in renouncing his hereditary peerage had at least one unintended consequence. The Peerage Act 1963 allowed him to return to the Commons. It also allowed Sir Alec Douglas-Home to renounce his peerage so that he could mysteriously emerge as leader of the Conservative party and succeed Macmillan as Prime Minister, much to the chagrin of Rab Butler, who many still believe was robbed of the premiership in this dubious way. Such was the fuss that the Conservative tradition of allowing leaders to emerge without any obvious voting by anyone had to be abandoned.

Tony Benn was subsequently to lead another successful campaign to extend the franchise of Labour leadership elections beyond the parliamentary Labour party, which was to culminate in the creation of the electoral college at the Wembley special conference in 1981. He lived long enough to see the Labour leadership election franchise extended further to one member, one vote at the special conference that I chaired this March. So it is possible to argue that it was campaigning by Tony Benn that caused the methods of electing the leaders of both the Tory and Labour parties to be reformed, and in both cases it was to move them in a more democratic direction. Of course, his determined opposition to Britain’s membership of what was then called the Common Market helped to give us our first referendum, too.

Tony Benn was a mesmerising speaker in any context: in the Commons; on a platform; and, latterly, on a theatre stage or in the Left Field tent at Glastonbury. He followed in the footsteps of the Levellers and the Chartists. He was a true English radical, evangelising, teaching and persuading generations of left activists about the power and potential of politics to change things for the better. Even when he was making a case with which I did not agree, I marvelled at his formidable communication skills; he had a way of making complex ideas seem simple, and a memorable turn of phrase ensured that his observations stayed with you long after the meeting had ended.

He revelled in social progress. I remember talking to him 20 years ago about the ordination of women into the Anglican priesthood. He had been down especially to watch the first women vicars being ordained and was delighted at the joyful occasion he had witnessed, and he was aware of its significance in the battle for women’s equality. I remember going as a young activist to campaign in the Chesterfield by-election in 1984, in which Tony was seeking to return to the Commons for the second time. My sister, my hon. Friend the Member for Garston and Halewood (Maria Eagle), and I went over to help with a contingent which included Allan Roberts, the then Member for Bootle. Things were looking a bit wobbly and the stakes were high. We were sent off to try to remove from a tower block, strategically placed on the main road into the town, a forest of Liberal posters, which had suddenly appeared, causing much consternation in the campaign headquarters. My sister discovered that the posters were down to a disgruntled Labour voter who had decided to switch sides. This lady had demanded,

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“Get that Tony Benn down here if you want me to change my mind.” By coincidence, we bumped into him a few minutes later and so my sister carted him off to the woman’s front door. She invited him in and he reached over to an old photograph that she had on her mantelpiece. It was a group shot of Labour politicians and he named every one of them, except one, which he correctly surmised was her husband—a former local Labour councillor. She was utterly charmed, and the Liberal posters all came down and were replaced by Labour ones. The tide turned and it was said that in the Labour club that weekend my hon. Friend the Member for Bolsover (Mr Skinner) started singing again.

The leader of the Labour party has paid a fulsome tribute to Tony Benn. He leaves behind many memories, and his fascinating and honest diaries, a legacy of which we have heard some today. Most of all, he leaves behind his devoted children, Stephen, Hilary, Melissa and Joshua, to whom we extend our sincere condolences. I believe that the tributes we have heard today do a great service to the memory of a great man who lived a long and fulfilled life. May he rest in peace.

12.13 pm

The Leader of the House of Commons (Mr Andrew Lansley): Today, this House has had its opportunity to bid farewell to one of our own—someone who gave so much to this House of Commons and who so passionately believed in the centrality of this House to our democracy. The debate has been full of memories. For one Parliament, I served in this House with Tony Benn. Even then, we knew that he was a great parliamentarian, one of the central parliamentary figures of the second half of the 20th century. I want to add my condolences to his family. There is no doubt that the sense of loss is great when one loses someone whose presence and character has been there throughout one’s life—we feel for them.

As a Member of this House for nearly 50 years, Tony Benn was a champion of the rights of Members to hold the Executive to account. He said in his book, “Arguments for Democracy”:

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“We need a strong government to protect us; and those who see that need must also be most vigilant in seeing that it is, itself, fully democratic in character.”

I hope that he would approve and applaud the changes that we make in this Parliament to promote the interests of Select Committees, which he called for in the 1980s, and indeed the rights of Back Benchers.

Tony Benn was also one of the central influences on the character of our modern Parliament, including in his role in the disclaiming of peerages. His views on reform of the House of Lords were trenchant from his early days in the Commons, as the shadow Leader of the House recalled. He consistently believed in the primacy of the Commons and argued strongly for the abolition of the Lords. He said:

“I am not a reluctant peer but a persistent commoner.”.

A commoner yes, but never commonplace.

Beyond this place, his influence was far-reaching. Even for those who did not share his ideology, the power of his speeches, the intellectual challenges of his views and the originality of his world view, provoked, inspired and always engaged.

Tony Benn himself said:

“I think the most important thing in life is to encourage. If anybody asked me what I want on my gravestone, I would like, ‘Tony Benn, he encouraged us’. That would be all I need!”

He can rest in peace in the knowledge that he did indeed encourage generations of his fellow commoners.

Mr Speaker: Right hon. and hon. Members might like to know that Her Majesty has agreed that Tony Benn’s coffin will be brought to the Chapel of St Mary Undercroft, the Crypt chapel, on Wednesday afternoon next to rest overnight before being taken to St Margaret’s church for his funeral service. The Speaker’s Chaplain, Rev. Rose Hudson-Wilkin will undertake an all-night vigil. The private family service to receive the coffin in the crypt will be followed by a period when parliamentary passholders may file past his coffin to pay their respects.

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Business of the House

12.16 pm

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

The Leader of the House of Commons (Mr Andrew Lansley): The business for next week is as follows:

Monday 24 March—My right hon. Friend the Secretary of State for Transport will update the House on high-speed rail, followed by a continuation of the Budget debate.

Tuesday 25 March—Conclusion of the Budget debate.

Wednesday 26 March—My right hon. Friend the Prime Minister will update the House following the European Council, followed by a motion relating to the charter for budget responsibility, followed by consideration of Lords Amendments to the Gambling (Licensing and Advertising) Bill, followed by remaining stages of the Inheritance and Trustees’ Powers Bill [Lords], followed by a motion relating to the appointment of electoral commissioners.

Thursday 27 March—A general debate on the background to and implications of the High Court judgment on John Downey. The subject for this debate was determined by the Backbench Business Committee.

Friday 28 March—The House will not be sitting.

The provisional business for the week commencing 31 March will include:

Monday 31 March—Second Reading of the Wales Bill.

Tuesday 1 April—Second Reading of the Finance Bill.

Wednesday 2 April—Opposition Day [Un-allotted half day]. There will be a debate on an Opposition motion, subject to be announced, followed by a motion to approve a statutory instrument.

Thursday 3 April—Business to be nominated by the Backbench Business Committee.

Friday 4 April—The House will not be sitting.

Ms Eagle: I thank the Leader of the House for announcing next week’s business. I also thank him for his written ministerial statement on the drafting of Government legislation today. There was great promise in the title given this Government’s woeful record on drafting legislation, but, as usual with this Government, the content was a complete disappointment.

The situation in Ukraine has continued to worsen. Crimea has been annexed and Russian troops appear to have taken control of several Ukrainian naval bases. During Tuesday’s debate in the House, there was cross-party agreement that the UK response needs to be much more robust than it has been so far. Will the Leader of the House confirm that if President Putin persists, the UK Government will support wider economic and financial sanctions against Russia? There is a meeting of European Council leaders in Brussels later today, and President Obama will be travelling to Europe next week. I ask the Leader of the House to confirm that there will be a statement from the Prime Minister on any developments.

I thank the Leader of the House for granting my request last week for an extra Opposition day to help fill the gaping holes in his increasingly threadbare legislative

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programme. Apparently, the void is now so bad that the Whips have resorted to e-mailing Tory Back Benchers to ask for suggestions to fill in the time. I think they might have forgotten what happened with last year’s Tory Tea party tendency’s alternative Queen’s Speech. Can the Leader of the House tell us whether, apart from our new Opposition Day, the rest of the time will now be filled with Europe, Europe and more Europe? Perhaps he is safer given all the yawning gaps he has left in the parliamentary timetable to us.

After the Prime Minister’s assurances that the House will have a say on his plans to bring back fox hunting, the Leader of the House keeps getting hon. Members excited by announcing unidentified statutory instruments. Can he tell us when we can expect the hunting debate to take place and how he and the Prime Minister will be voting when it does?

This week we learned the breathtaking extent of the hypocrisy on pay shown by this Government. Cabinet Ministers have been approving huge pay rises for their special advisers while imposing real-terms pay cuts on millions of public sector workers. The coalition agreement promised to cut the number, and cost, of special advisers, so may we have a statement from the Government on why they have done precisely the opposite?

Yesterday, the Chancellor delivered the Budget and hoped that no one would notice what is going on with his failing economic plan. He said that he had cut borrowing but now he is set to borrow £190 billion more than he first forecast. He said that the economy would grow by more than 8% but it has grown by less than 4%, and he said that he would eliminate the deficit by 2015 but now he has admitted that it will take until 2018. Only this Government could announce a five-year plan that, as they have now had to admit, is already four years late and only this Chancellor could expect us all to congratulate him for it.

Last night, the Conservative party released an ad that reveals what was really meant by its claims to be the workers’ party a few weeks ago. Even the Chief Secretary thought it was a spoof. The reality is that the Tories are patronising and have an insultingly clichéd view of working people. All I can say is that what was trending last night on Twitter showed their view of workers. Posh boys’ den, No. 10; bankers’ heaven, No. 11. It is all about bingo, this Budget.

I do have one positive thing to say about the Budget. It was good to see the Liberal Democrats’ role in the coalition memorialised with the new pound coin. It has about as many sides as they have Members and it has two faces, just like them.

Last Saturday was the ides of March, and our classically trained Education Secretary took the opportunity to strike. He criticised the number of Etonians in No. 10 as “preposterous” and, after a few glasses of fine wine, he waxed lyrical about the Chancellor’s prime ministerial potential to Rupert Murdoch. I think, Mr Speaker, you would need more than a few glasses of wine to think that.

Mr Lansley: I am grateful to the shadow Leader of the House for her questions, and particularly for her welcome for my written ministerial statement. We are pushing forward with the good law project to improve drafting. I am sure that Members will appreciate that

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after many years in which there has been a degree of confusion about the distinction in legislation between regulations and orders, we will be clear in future when they are regulations to avoid confusion and duplication of terminology.

On Ukraine, we have had the debate that Members sought, and it was right for us to have done so. In future business, I and my colleagues will ensure that the House is regularly updated and, if it becomes necessary, we will look to secure a further opportunity for Members to give their views on the situation. The House will know that after the Prime Minister secured a strategy at the previous European Council, he will be trying at the European Council today to secure the strongest sanctions as regards the Russians’ interventions in Crimea and their transgression of international law and the territorial integrity of Ukraine. He will get the strongest sanctions for which agreement can be secured and, as I told the House on Tuesday, there will be a meeting of G7 Ministers at the nuclear security summit in The Hague early next week. As I have told the House, I expect the Prime Minister to update the House next Wednesday.

I have to tell the hon. Lady that the business is not light, not least because I have announced in the provisional business for the week after next the Second Reading of two Bills, the Finance Bill and the Wales Bill. I am delighted to be able to say that the Wales Bill is being published and introduced today.

The reference to statutory instruments in the provisional business is simply to give the House an indication of what the nature of the business might be. When I announce the business next week, I will be able to give more details. I can tell the hon. Lady that they do not relate to a change to the Hunting Act 2004. No such statutory instrument under section 2(2) of that Act is before the House. If it is of any comfort to the hon. Lady, if there were it would have to go through the affirmative procedure and would require a vote of both Houses.

I am surprised that the hon. Lady had anything to say on the Budget, because her leader seemed incapable of finding anything to say about it. His speech yesterday consisted of an end-to-end collection of Labour press releases that we had known and forgotten. The first half tried to reheat arguments that had failed in the past, whereas the second half consisted mainly of things that he hoped we would have said in the Budget but that we had not. His principal attack seems to be, “Why didn’t you say this in the Budget, because then we could have attacked it?” I am afraid that that was not very compelling.

We did begin to get an idea of how the Labour party approaches such matters. Clearly, the Leader of the Opposition did not feel able to comment on the most important potential changes to pensions and savings for nearly 100 years. None the less, by the evening a Labour spokesman was on “Newsnight” giving it straight about what the Labour party thinks should happen in this country. I think it went along the lines of, “You cannot trust people to spend their own money.” That is what the Labour party thinks about the people of this country. We trust the people. The Conservative party has trusted the people and, if I may say so on behalf of our coalition partners, the coalition Government trust the people. We have worked together and I am looking

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forward to hearing the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb), further setting out that pension strategy.

The plan is working and we are sticking to our long-term economic plan. The Chancellor of the Exchequer was able to say that the deficit is forecast to have halved by next year and if one looks at the Office for Budget Responsibility’s report one can see clearly that that is because we have taken the difficult decisions. It is not the product of economic recovery on its own, but is principally about making decisions on public expenditure and bringing down the costs of administration and the extent to which the people’s money is taken to pay for public expenditure and borrowing.

One of the most interesting numbers was the reduction of £42 billion in the cost of borrowing. That is a measure of the advance we have been able to make from the position we inherited from the Labour party, which borrowed so much. The Budget will help hard-working people by bringing 3.2 million people out of income tax altogether, with £800 for all basic-rate taxpayers. It is helping businesses to invest through the investment allowances and helping them to export through the export finance changes, and it is helping people to save through the changes in ISAs, pensioner bonds and other measures. It is giving people who have retired and are not in a position to change their circumstances so readily the security not only of the triple lock and the single-tier pension, which mean that they have a secure basic state pension that does not expose them to means-tested benefits, but the opportunity to use the money they have saved through pensions as they see fit to boost their standard of living in old age.

Mark Pritchard (The Wrekin) (Con): “Absolution”, “Atonement”, “The Pickwick Papers”, “A Christmas Carol” and “Clockwise” were all films made in Shropshire. May we have a debate on making Shropshire the pre-eminent and premier—if hon. Members will forgive the pun—film location in England for British, American and international film makers? That will be good for Shropshire, for businesses and for tourism.

Mr Lansley: I hope that my hon. Friend will forgive me if I am not as knowledgeable on the relationship of the film industry to Shropshire as I should be. That is interesting. He and other hon. Members might seek such a debate, either on the Adjournment or through the Backbench Business Committee. Certainly, there will be other places in this country that also have a lot to say about the film industry, but I hope that it would also be an opportunity to demonstrate what a success this country now is in terms of our film and creative industries, not only as evidenced by the success of the film “Gravity” at the Oscars, to which the British film industry contributed so much, but by so many successful films that are being made in this country with this Government’s support.

Natascha Engel (North East Derbyshire) (Lab): Both general debates and votes on Back-Bench motions have led to some notable shifts and changes in Government policy, such as the forcing of the Prime Minister to recall Parliament before going to war in Syria, compensating the victims of contaminated blood, taking action on payday lenders, and the Hillsborough inquiry. What,

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then, is the criteria that the Government use to take decisions on when to listen to Parliament and when just to ignore it?

Mr Lansley: The Government always listen to Parliament, and we are always very clear, often in the debates that take place, about our position. The hon. Lady instanced in a press release of her own that debates on contaminated blood, fisheries policies, high speed rail, metal theft and fuel prices have led to Government responses and changes of policy. She will no doubt have noted in yesterday’s Budget that the Chancellor of the Exchequer announced that the Government will refund VAT on fuel for air ambulances and inshore rescue boats. That, of course, follows a review established after an e-petition on the subject, which had more than 150,000 signatures, and a debate held through the Backbench Business Committee’s decision in the House in July 2012.

Andrew Selous (South West Bedfordshire) (Con): May we have an early debate on the proposed teachers’ strike for next Wednesday? The National Union of Teachers is calling out on strike many fine and hard-working teachers next Wednesday, which will cause huge disruption to school children coming up to the exam period, and it is difficult for parents to find child care at short notice. Does my right hon. Friend agree that it would be helpful if all parties in the House strongly urged the NUT not to go ahead with that action?

Mr Lansley: I completely agree with my hon. Friend. I hope that between now and next week it will be possible, as he says, for not only Government Members to be clear that whatever one’s disputes may be, it is wrong to pursue those grievances by damaging the education of the young people whom we are there to look after. I hope that the Opposition spokesman will do exactly the same thing and advise the NUT not to proceed with this.

Keith Vaz (Leicester East) (Lab): The Leader of the House will know that next Tuesday marks the third anniversary of the launch of the responsibility deal, of which he was the architect. He will also know that of the 40 pledges that businesses have to sign up to, none relates to a reduction in sugar. May we have a debate or statement on the progress of the responsibility deal to see whether we can include the reduction in sugar as one of the pledges that should be made?

Mr Lansley: Yes, I am very familiar with that, and I am proud of what the responsibility deal has been able to achieve in terms of the further reduction in salt content and the calorie challenge, which is relevant to the point to which the right hon. Gentleman alludes. The calorie challenge in itself—the reduction of the equivalent of 100 calories per person per day in this country on average—would bring the population to a sustainable weight, broadly speaking. That would make an enormous difference to our long-term prospects on morbidity in older age. There are other responsibility deal achievements that are too numerous to mention, but questions on the levels of consumption of fat and sugars are part of achieving that calorie challenge.

Neil Carmichael (Stroud) (Con): With the CBI noting that we need even more engineers to strengthen our already powerful, long-term economic plan, may we

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have a debate to encourage school governors to think more in terms of business links and developing relationships with businesses so that we can get schools to fill these extra engineering places?

Mr Lansley: My hon. Friend is quite right. It is very important that every school should engage fully with local employers and the professional community to get real work connections with employers. As my hon. Friend mentioned, employer involvement in school governing bodies, is one way of achieving that. The Government are funding a range of programmes to encourage young people to consider careers related to science, technology, engineering and manufacturing. The stimulating physics network aims to increase the take-up of physics A-levels, particularly among girls, and the STEM ambassadors programme raises awareness of the range of careers that science, technology, engineering and maths qualifications can lead to.

Diana Johnson (Kingston upon Hull North) (Lab): May we have a debate in Government time to educate those on the Government Benches that working-class culture is not just about beer and bingo, or for that matter, pigeon fancying, wearing a flat cap or having a whippet? If they are left in any doubt, perhaps a visit to Hull for city of culture 2017 might be in order.

Mr Lansley: I look forward to the opportunity to visit Hull as the city of culture. I would certainly appreciate that, but I am afraid I cannot agree with the hon. Lady on her first point. It does not patronise or disparage anybody to recognise that in a Budget we address the issues that people care about. We talked earlier about Back-Bench motions. There was a considerable Back-Bench effort on the part of Government Members to secure a reduction in bingo duty, and they got what they were looking for. In fact, they got more than they were looking for from the Chancellor of the Exchequer. It is in the context of a Budget that was about supporting hard-working people, not least because all of those who are basic rate taxpayers, by virtue of a personal tax allowance rising to £10,500, will have seen their tax reduced by £800.

Dr Thérèse Coffey (Suffolk Coastal) (Con): I was recently in a pub enjoying a pint with local farmers, and I am delighted that I will go back and do it again. The topic we discussed then was water abstraction and the changes that are coming into force. Will my right hon. Friend find time for a debate to discuss that matter, which was not particularly considered during the Water Bill?

Mr Lansley: My hon. Friend is the very person, in the sense of having recently had a debate on bingo duty. I congratulate my hon. Friend.

My hon. Friend will be aware that the House of Lords is completing consideration of the Water Bill, and the future of abstraction reform may well arise on consideration of Lords amendments on that Bill.

Mr Gareth Thomas (Harrow West) (Lab/Co-op): Will the Leader of the House look into the case of my constituent Gordon Mansbridge, who is 90 and has terminal cancer. He flew some 33 Wellington bomber missions from an Italian airbase during the second

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world war. Sir John Holmes is investigating the possibility of recognition in the form of a medal clasp, but that review is not likely to be completed until the end of the year. Given the circumstances of my constituent, might the right hon. Gentleman explore with the Ministry of Defence whether that could be speeded up?

Mr Lansley: I will of course do that. I am pleased to be able to help the hon. Gentleman in relation to his constituent. In recent years, like many hon. Members, I have appreciated the recognition, through the Bomber Command medal and the Bomber Command memorial here in London, and in other ways, of the courage displayed by those who were part of Bomber Command in the second world war.

Martin Vickers (Cleethorpes) (Con): North East Lincolnshire council is proposing to close the youth centres under its control, which—needless to say—is extremely unpopular. The overwhelming local view is that the council is not using its resources wisely. This highlights the limited scope local authorities have in determining their budgets, because most of the services they have to provide are statutory. Will the Leader of the House find time for a debate either on giving councils more freedom or on reducing the amount of statutory provision?

Mr Lansley: My hon. Friend will recall the debate on the local government finance settlement, during which it was illustrated that although every bit of the public sector, including local government, must do its bit to pay off the budget deficit we inherited from the previous Government, there are particular ways in which all administrations can focus on cutting waste and making savings in order to protect front-line services. Of course, we are enabling local authorities to keep council tax down. In particular, our “50 ways to save” document contains practical tips and guidance on making sensible savings and highlights how councillors can challenge officers to deliver savings and how taxpayers can challenge councils. I hope that he, along with his constituents, will be challenging his council to protect the front-line services that are most important to them.

Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): My constituent Robert Barlow graduated with an honours degree and worked for some years as a microbiologist. He was then diagnosed with a serious heart defect and told that his working days were over. He was sent to Atos for an assessment. They stopped his benefits, which ended his access to free prescriptions. He was too ill to appeal. Robert died at the age of 47, struggling to get by. May we please have an urgent debate on the impact of too many of these Atos decisions on sick people, particularly when access to free prescriptions is taken away?

Mr Lansley: As the hon. Lady will know, the House has had many opportunities to debate how we are proceeding with welfare reform, and rightly so. I hope she understands that we are proceeding on the basis of reforming what we inherited, because it was the previous Government who put work capability assessments in place. We have gone about ensuring that they work

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more effectively for the future, which is a continuing process. Welfare reform, and indeed the need to maintain the downward pressure on what would otherwise be escalating welfare budgets, which were not controlled under the previous Government, is not the issue. We need to focus resources on the people who are most in need, and that is what we are doing. I will talk with my right hon. and hon. Friends at the Department for Work and Pensions about the circumstances of the case she describes—




I completely understand that, but I will talk with them so that she can have a response on the circumstances and how we are addressing those issues.

Henry Smith (Crawley) (Con): Will my right hon. Friend join me in congratulating Crawley borough council on its plan to plant Flanders and wild flower poppies in every single neighbourhood and park in my constituency later this year to mark the centenary of the first world war? Will he ensure that there are ample opportunities throughout this year for the House to commemorate that most important event in our history?

Mr Lansley: I applaud my hon. Friend and Crawley borough council for the way they are commemorating the first world war. I can remember talking with my grandfather about the great war, so in a way I can conjure up a sense of what it must have been like. Younger generations should also have an opportunity to understand the nature of what happened, the character of those who went from this country to fight and what they achieved. I think that is well worth commemorating. The House had an important and constructive debate on the first world war at the end of last year, and I hope that we will have another opportunity between now and August to debate how to commemorate it.

Michael Connarty (Linlithgow and East Falkirk) (Lab): On that issue, the European Scrutiny Committee has asked for a debate that would have freed up the Europe for Citizens programme, which is now frozen for the whole of Europe because we are the last country that has not had that debate and lifted the scrutiny. The House has passed a Bill to allow the programme to go ahead, and it has been granted Royal Assent, but it appears that since November neither the Leader of the House nor the Department has been able to find time for a debate to allow the programme to go ahead across Europe.

Mr Lansley: The hon. Gentleman will know that, contrary to some impressions, we have had difficulty scheduling a number of debates on the Floor of the House. I hope that the issue he raises can be considered in one of the European Committees very shortly.

Mr Mark Harper (Forest of Dean) (Con): I know that the Leader of the House has found time for debates on the Budget, but if he can find more time, I think that the full quotation he referred to earlier could be exposed more thoroughly. It was from a Labour party adviser, who said that

“you can’t trust people to spend their own money sensibly, planning for their retirement”.

He was an adviser at the beginning and end of the previous Labour Government, including several years in No. 10 advising Tony Blair. That sentiment says

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everything we need to know about that party and about the parties on the Government side of the House, because we trust people to spend their own money sensibly. The more times we say it, the better.

Mr Lansley: My hon. Friend is absolutely right. I wish that we had more time to debate the Budget, not least because the longer we debate it, the greater the chance that at some point we might find out what the Opposition’s alternative would be. I agree about the sentiments of the Labour party, as expressed in the claim that people cannot be trusted to spend their own money. That has been true in the past, is true today and, no doubt, will be true in the future.

Steve McCabe (Birmingham, Selly Oak) (Lab): May we have a debate on the pressures caused by councils such as Oxford and Newham relocating their homeless people to Birmingham while the Government simultaneously relocate Birmingham’s resources to places such as Oxfordshire and Surrey?

Mr Lansley: I cannot promise a debate on accommodation issues for people who are dependent on local authority housing. Of course, one of the answers to the hon. Gentleman’s point is our ability to build more houses. He talks about Newham. Just imagine what kind of progress we could make with the Government support the Chancellor announced yesterday for substantial additional developments in Barking and Barking Riverside.

Andrew Bridgen (North West Leicestershire) (Con): The Derbyshire, Leicestershire and Rutland air ambulance flies out of East Midlands airport in my constituency. It is funded totally by charitable donations and saves countless lives across the region each year. May we have a debate on the value that air ambulances add to our emergency services and the impact on them of the excellent news announced by my right hon. Friend the Chancellor yesterday that VAT on the fuel they use will be scrapped, something for which I and many colleagues on the Government Benches have been campaigning for some time?

Mr Lansley: My hon. Friend has indeed fought that campaign successfully, along with other Members, for which I applaud him. As there is a Budget measure providing for the relief of VAT on fuel for air ambulances, I hope that he and other Members might find an opportunity to raise the matter during the Budget debate.

Nick Smith (Blaenau Gwent) (Lab): May we have a statement on the delivery of the Department for Work and Pensions? Following big problems with the Work programme and universal credit, it now appears that the personal independence payment has dreadful teething problems.

Mr Lansley: We will have an opportunity in the Budget debate to look at some aspects of the Department’s delivery. As its title indicates, the Department is there to get people into work and to reform and improve pensions, and I think that it can be immensely proud of what it has achieved. We have 1.6 million more people in private sector employment—[Interruption.]

Andrew Selous: It is now 1.7 million.

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Mr Lansley: Of course, because we had data yesterday showing that it has gone up. There are something like 1.4 million more jobs in this country—I will be corrected if I am wrong—and the smallest number of workless households. Our pension reforms, which the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb), has been steering through, are delivering for the people of this country the triple lock, the single-tier pension, auto-enrolment and, following yesterday’s Budget, a dramatic new potential for people to use their pensions funds as they think best. We are also ensuring that where we are reforming—this is true of personal independence payments—we are doing so carefully and steadily, recognising where there are difficulties and addressing them.

Debbie Abrahams (Oldham East and Saddleworth) (Lab): On Tuesday, the Work and Pensions Committee published a report which, in addition to reporting on the delays in assessments, also showed that the Department for Work and Pensions is distorting statistics, which is denigrating to people such as the person my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) mentioned. The Secretary of State for Work and Pensions has been rebuked by the UK Statistics Authority at least twice. Does the Leader of the House agree that the ministerial code of conduct is not worth the paper it is written on unless it is enforced, and will he report back to the House on exactly what he is going to do about this matter?

Mr Lansley: No, I do not agree with that. I cannot see any evidence that my right hon. Friend the Secretary of State has breached the ministerial code of conduct. There are often, rightly, debates about policy and, indeed, about the statistics that support policy, but I do not see any basis for the accusation that, in using the arguments that he has, he has in any way breached the code.

Mr David Hanson (Delyn) (Lab): May we have a further debate on the effectiveness of the green deal? In Wales this week, we have had figures showing that with a population of almost 3 million people, only 4,202 green deal assessments have taken place and only 382 projects have been signed off—fewer than 10 per constituency. Providers in my constituency are now saying that the Conservative coalition has wasted two years, with fewer homes being insulated and real damage being done to the insulation industry.

Mr Lansley: I cannot offer the immediate prospect of a debate. In any case, one has to look very carefully at the way in which the green deal is developing. It is developing in terms of assessments, which are not always turning into contracts, but that does not mean that, as a consequence, people are not taking the energy-conserving and carbon-reducing measures that are the basis of the assessments.

Paul Flynn (Newport West) (Lab): May I refer the Leader of the House to early-day motion 1156?

[That this House congratulates Age Cymru on its timely and vital campaign to protect vulnerable older people in Wales from scams, such as postal scams, nuisance calls, investment scams, fake PPI recovery offers, internet repair scammers, courier scams and internet scams; and

20 Mar 2014 : Column 949 calls for the Government to examine the case for drastically increasing the scope and the scale of No Cold Calling zones to protect older people from rogue traders and high pressure salespeople on their doorstep and for internet service providers to work with other service and product providers to supply easily and affordably higher levels of security capable of blocking or quarantining scams.]

The EDM supports the campaign by Age Cymru to draw attention to the many callous and cruel scams against the vulnerable and the elderly to try to rob them. May we have a debate so that we can find out how to publicise the nature of these scams, some of which are very subtle and very clever and which do so much damage and rob so many elderly people of their hard-won money?

Mr Lansley: The hon. Gentleman raises an important point. I recognise that his EDM has secured support from a number of Members on both sides of the House, and rightly so, because it is a concern for our constituents that they are not subject to these exploitative and damaging rogue traders and others. I cannot promise a debate immediately, but I will of course raise the matter with my hon. Friends to see whether they can reply to him and other Members or inform the House a little more about how they are addressing some of these issues.

Mrs Mary Glindon (North Tyneside) (Lab): Last week the Government announced that they plan to introduce an early access to medicines scheme. Such a scheme was a central point in the recent report by the all-party group on muscular dystrophy. Will the Leader of the House provide some time to debate the scheme, and will he ask the relevant Minister to meet me, patients and representatives from the Muscular Dystrophy Campaign to discuss it further?

Mr Lansley: I will of course ask my hon. Friends at the Department of Health whether they might be able to meet the hon. Lady. I cannot promise an immediate debate, but this is an important issue, and I hope that we may have such an opportunity before too long. The early access to medicines scheme, like the breakthrough fund in America, raises the real possibility that, in addition to what we have already done through the cancer drugs fund, which provides the ability to access licensed medicines, drugs that have evident efficacy and safety can be made available through the NHS, even before the point at which they have been through all the formal licensing processes, for patients who often have relatively few other opportunities.

Kerry McCarthy (Bristol East) (Lab): The United Nations Human Rights Council is currently in session, as it has been throughout most of March, and there are a lot of important issues on the agenda. Will the Leader of the House advise on whether there will be a mechanism for us to debate what is decided at the HRC? Will the Foreign Secretary be making a statement, or will there be any other opportunity for us to discuss its outcomes?

Mr Lansley: I cannot say that there will be a statement to the House, but I will talk to my hon. Friends at the Foreign Office to see how the House might indeed be informed of the outcomes of the Human Rights Council.

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Pensions Strategy

12.55 pm

The Minister of State, Department for Work and Pensions (Steve Webb): With permission, Mr Speaker, I would like to make a statement setting out the Government’s strategy for future pension provision in the light of the Chancellor’s bold and radical reform proposals announced in the Budget statement yesterday.

Our first priority has been to do the right thing by people who have already retired—people who have spent a lifetime paying in to the system and who now have a right to expect a decent income in retirement. That is why one of the first measures taken by this coalition Government was to implement the triple lock policy, which ensures that the basic state pension increases each year by the highest of the growth in earnings or prices, with a minimum increase of 2.5%. As a result of this policy, the basic state pension is now a higher share of the average wage than at any time in the past two decades. But we also need a system that works for tomorrow’s pensioners. That is why we have introduced the single-tier state pension. This will provide a simple, single, decent state pension, set above the level of the basic means test, so that working people will know what they will get in retirement from the state and can plan accordingly.

We also needed to reverse the decades-long decline in workplace pension provision. With barely one worker in three in the private sector building up any pension provision at all, urgent action was required. That is why in 2012 we began the process of automatically enrolling more than 10 million people into workplace pensions. That programme has been a stunning success. Last week, we announced that over 3 million workers have already been automatically enrolled. Only about one in 10 workers is exercising their right to opt out of the scheme, as most realise that the combination of an employer contribution and tax relief from the Government make this a very attractive proposition. Figures published at the end of last week for April 2013 showed the biggest rise in workplace pension coverage since figures began in 1997, and we expect the figures for 2014 to show a much bigger increase.

We need to make sure that these pension savings are invested in value-for-money schemes that are well governed, and we plan to publish next week measures to deliver this policy goal. We will also ensure that individuals do not build up multiple stranded small pension pots but that their pensions follow them when they change jobs so that they build up a worthwhile sum in their current scheme. In addition, we will create a new “defined ambition” framework for workplace pensions, enabling new forms of risk sharing between employers and employees.

Having ensured that the vast majority of workers build up a worthwhile pension pot on top of a simplified state pension, we now have a new opportunity to think about the choices people have in retirement. In the past, retirement was often a relatively short period of time, and the priority for most was to turn their pension savings into a regular income for as long as they lived. But in a world where people will routinely live for 25 years in retirement, we need to think more creatively and give people new options about what they will do

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with their own money. In the past, Governments were concerned that if people had freedom over their pension pots, they would run them down too quickly and then depend on state support in later life. The single-tier pension provides a game-changing opportunity to rethink this model. With people receiving a full single-tier pension already clear of the basic means test, the state need be much less prescriptive about how people use their accumulated pension savings.

That is why the Government have announced a plan for radical liberalisation of the retirement savings market with effect from April 2015. Gone will be the detailed rules on how quickly people can turn their pension pot into annual income. Instead, for the first time, we will treat people as adults, giving them the flexibility to choose how best to use their hard-earned savings in the way that suits their personal circumstances. People will still be free to take a tax-free lump sum and turn the balance of their pension pot into an annuity, providing a guaranteed income for life, but they will also be able to withdraw the whole of their pension pot as cash to spend as they see fit, subject only to taxation on the balance in excess of the tax-free lump sum. Or they can decide to allow their money to go on growing, drawing cash as and when they wish, perhaps as part of a phased retirement—something that we have talked about for years and are now delivering. By lifting the rules, we anticipate that industry will respond with new products that meet consumers’ income needs in new and innovative ways.

These reforms will increase the attractiveness of saving for retirement, and will allow people to shape their finances in retirement as they see fit, not as the Government tell them. To support people in making good choices we will introduce a guidance guarantee—a legal requirement on pension schemes to offer all scheme members a conversation about their options with someone who is impartial. This may lead them to take full independent financial advice, or it may enable them to make informed choices without further advice. As a down payment on these increased flexibilities, we will dramatically relax the rules on turning small pension pots into cash and the rules on existing drawdown products with effect from 27 March.

We anticipate that annuities will continue to be an important part of retirement provision and the FCA will continue with its review of the workings of the annuity market, to ensure that consumers get maximum value for money from their hard-earned pension savings. But we also expect that our reforms will pave the way for new financial products which will give people new freedoms over how they turn their retirement savings into quality of life in retirement, as well as potentially link to options for funding the long-term costs of social care.

The pensions system that was inherited by this coalition Government was broken. Declining coverage of workplace pensions and a declining basic state pension meant that mass means-testing had become the order of the day. We were determined to reverse that spiral of decline. We have done the right thing by today’s pensioners by starting to restore the real value of the state pension through the triple lock. We have reformed the state pension to provide a simple, decent foundation for retirement saving and have implemented automatic enrolment, leading already to millions more in workplace

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pensions. And now we have ripped up the red tape that prevented people in retirement from making their own choices about how they want to spend their own pension pot. This is truly a pensions revolution, and I commend this strategy to the House.

1.1 pm

Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab): No one can say that pensions is not a fast-moving and exciting world. The Minister was halfway through his statement before yesterday’s announcements were mentioned. The reason for that is straightforward. The announcements yesterday cannot be bold and radical and also be a logical extension of the Government’s existing pensions policy, as the Minister strains to claim. Let us be clear about that.

There is a wider context to the statement. Given that so much time was spent on the wider pensions strategy, it is surprising that the Minister made no mention of his retreat, so far at least, from clamping down on fees and charges in individual pension schemes. The stridency of the Minister’s statement results from the fact that he knows that on that fundamental issue he has not delivered for the millions of people saving in the new pension schemes for which he claims all the credit. It is important to put that on the record.

We welcome greater flexibility and choice, especially in the announcements— which are easy to understand and the impact of which is easy to interpret—regarding the changes from 26 March this year. It makes sense to allow greater flexibility, particularly for those with small pots, which the new auto-enrolment system is producing. An annuity will not deliver value for money for these small pots, so we welcome the changes. With the increase to £30,000 in the trivial commutation rules and the changes to the number of pots that can be taken in cash, some individuals will be able to take, by my calculations, up to £60,000 as cash. That is to be welcomed.

Let us probe a little more deeply, especially the new developments surrounding the changes from April 2015, which the Minister dealt with in the second half of his statement. He made great play of the fact that there will be a statutory right to guidance via pension providers. We welcome that. It is our policy, which the Government have taken. After all, imitation is the sincerest form of flattery. Is the guidance to be mandatory for all those approaching the point where they turn their pension pot into retirement income? If not, how does it deal with the cardinal feature of the current annuities market, which is that the majority of people do nothing other than take the current offer from their provider? Government Members have gone quiet now. When we get into the detail, which they do not understand, the picture looks a little different.

We need clarity on that guidance. We need to know what protections there will be for savers in the new investment products that are to be developed. What is the track record of the investment industry in delivering innovative new products that deliver value for money at low cost? [Interruption.] The Secretary of State says something but he has no idea of what he speaks.

What will be the safeguards around the guidance? Will it be mandatory? Will it ensure that people get the best possible deal for their cash? These savings measures are supposed to be part of a Budget that is meant to be

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for savers. Why, then, does the OBR forecast that the savings ratio will fall? Will the Minister tell us what these changes will mean for savings in future? There is nothing in the Budget about the savings ratio. More widely, how many people will continue to annuitise? The Minister talks of a radical liberalisation, but if a significant number of individuals continue to annuitise, surely the priority should be to ensure that that annuity market also delivers value for money.

Finally, the Minister made great play of his defined ambition agenda, which is buried in his statement. How can one develop the collective pensions to which he subscribes when they depend on intergenerational risk-sharing? As we understand it, intergenerational risk-sharing becomes extremely difficult, if not impossible, if people exit the system at the age of 55. On all these questions—the safeguards surrounding the guidance, and the recognition that the Minister has, to some extent, taken our policy, which we welcome—how do these reforms marry with the wider pensions agenda? We look forward to the Minister’s response.

Steve Webb: I am grateful to the hon. Gentleman for his wholehearted endorsement of our plans. The guidance guarantee is as it says on the tin: it is guaranteed. It is a right of members of the scheme. It is a duty on schemes to make sure, for the first time, that people coming up to retirement have a conversation with someone who is independent and who is on their side, and the schemes will have to make that happen. The Financial Conduct Authority will oversee that process. We will look into whether we can involve the voluntary sector and the advice sector in that.

We often hear the phrase “advice gap”. The hon. Gentleman suggests that we started from a blank sheet of paper, but we did not. We started from a situation where many people coming to retirement were making the wrong decisions and buying poor value products. This is the sort of thing that we have had to address.

The hon. Gentleman asks whether the Budget was really one for savers. To me the increase in ISA limits sounds like good news for savers. The new pensioners bond coming in next year sounds like good news for savers. New freedoms for pensioners with regard to how they can use their pensions sounds like good news for savers. Perhaps the hon. Gentleman wanted still more, but I quote to him Dr Ros Altmann, who said that yesterday was like London buses—all the good news for savers came at once.

The hon. Gentleman asked the question I thought he might ask. If I paraphrase it loosely, his question, as a former academic, was on “the consistency of the defined ambition framework with liberalised decumulation”. I think that is what he wanted to know about. It is perfectly reasonable for people to have collective provision in accumulation. People can build up pensions collectively and many people will go on buying annuities. Many people will still want an income, but we are giving them new options. Plenty of people will want a scheme in which to go on investing their money into retirement. That will be their choice. Our whole agenda is about new models and new options, not just going from one extreme to another.

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The hon. Gentleman asked about action on charges. I assume that he had written his questions before he read my statement. Given that we gave him the statement well before the speech, I am surprised at that. I confirm that next week we will announce the conclusions and the action we are taking—action to tackle problems that were never tackled in 13 years of a Labour Government.

The hon. Gentleman says that guidance is Labour’s policy. I am delighted to hear that, but why was there none in place when his party was running the country? It is good of him to support the plans.

This is bold and radical stuff. People will have guidance for the first time and new flexibilities. Some Labour MPs are saying that this should be blocked because we cannot trust people to spend their own money. I think we should.

Mr Mark Hoban (Fareham) (Con): I welcome the reforms announced by my right hon. Friend the Chancellor yesterday and the further detail my hon. Friend the Minister has given today. I urge him not to overlook the Pensions Advisory Service and the Money Advice Service as potential sources of advice for people approaching retirement. How will he take forward discussions with the industry and the regulator to ensure the availability of good quality products for new pensioners that not only represent good value for money but are properly regulated?

Steve Webb: My hon. Friend has great knowledge of these matters from his time at both the Treasury and the Department for Work and Pensions. He is absolutely right to say that we need to make sure that people have guidance that enables them to make informed choices. They will still be able to proceed to formally regulated independent financial advice, but the industry will have to up its game, because now people will have much more choice to take cash, and if they want to take an annuity they will have to be persuaded that it is good value for money. That will be a market impetus to provide better quality products. We have asked the FCA to make sure that a good guidance regime is in place, potentially involving groups such as the excellent Pensions Advisory Service, to which my hon. Friend referred.

Gavin Shuker (Luton South) (Lab/Co-op): As a result of these changes, will taxpayers pay more or less to the Exchequer?

Steve Webb: The beauty of theses proposals is that individuals will choose: if they want to spread their income over their retirement they will pay less tax, and if they bring forward their cash they will pay more tax. We think people will take advantage of those freedoms, which will bring forward taxation revenue in the shorter term, and there will be a reduction later on. People will be able to make free choices, something I hope the hon. Gentleman is in favour of.

Dr Julian Lewis (New Forest East) (Con): I am genuinely not sure what the previous position was on whether the pension pots of elderly people going into residential care contributed towards the total assets they were allowed to retain before they got help from the state. If that was separate and did not count, will the fact that

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pension pots can now be turned into cash disadvantage people going into residential care in terms of the assets they can retain, or will the situation remain unchanged from their point of view?

Steve Webb: The interaction between these measures and the funding of long-term care is important. There are various rules. If someone takes their pension pot as income, it will be counted as income in the means testing for residential care. If they have capital assets, we assess them on a different basis. We have to make sure that these measures are joined up with our policy on long-term care so that we have the right outcome. What we hope will happen is that new financial products will allow people to use their pot to possibly get care insurance as well. The industry has asked for this; now it has to raise its game.

Mark Durkan (Foyle) (SDLP): Beyond the guidance guarantee, will the Minister assure us that when these innovative products are offered for sale, the regulator will be able to guarantee that it will in effect have pre-assured them, not least regarding the transparency of charging schemes?

Steve Webb: As the hon. Gentleman knows, we are taking steps to make sure that charges in the pension sphere are made much more transparent. Any new products, particularly if they are sold, will be regulated by the FCA. The guidance is simply a conversation, as it were, with someone who will enable people to get basic information. People will still be able to take regulated independent financial advice, and that will be a regulated process.

Paul Burstow (Sutton and Cheam) (LD): The Minister has rightly championed the triple lock, making sure that the pension goes up by whichever is highest: earnings, prices or 2.5%. That is making a huge difference to pensioners in my constituency and, I suspect, the constituencies of hon. Members across the House. Will he confirm that it is the Government’s intention to make that very important change a permanent feature of the pension landscape so that it gives people certainty for the future? As part of the guidance guarantee, will he ensure that a linkage is made to the duty in the Care Bill to provide information and advice in respect of care?

Steve Webb: I am grateful to my right hon. Friend for making the crucial point about the link between this new freedom and the level of the state pension. If we are able to keep the triple lock going, what will happen with a means-tested earnings-linked pension credit is that there will be more and more clear blue water between the means test and the triple-locked pension, which will greatly reduce the risk of anyone falling back into means testing in retirement. I would certainly like to see that continue beyond this Parliament.

On guidance on care, we will liaise with our colleagues at the Department of Health to make sure we are taking best advantage of this conversation.

Sheila Gilmore (Edinburgh East) (Lab): Given the track record of the DWP and the Government on universal credit, the employment and support allowance, the personal independence payment and universal jobmatch,

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I think people might be a little sceptical about a proposal that appears to have been drawn up on the back of an envelope. The Red Book expects the savings ratio to fall from 7.2% to 3.2% by 2018. How will these proposals help savers?

Steve Webb: We heard earlier that these are Labour policies, but now we hear that they were drawn up on the back of a fag packet. Perhaps both statements are true—I do not know. Just to be clear about what the Labour party has been demanding: it has been demanding not a guidance guarantee, but annuity brokers. It wanted everyone to buy an annuity. This is about freeing people up. That is why it will be good news for saving. Let me give the hon. Lady a brief example. Under auto-enrolment, the people most likely to opt out are the oldest—people in their 50s and beyond—partly because they do not want to tie up their money late in life. This will give them a guaranteed return, in cash, within a few years, and we think it will lead to more pension saving and that it will be a boost to savers.

Penny Mordaunt (Portsmouth North) (Con): The older someone is, the higher their cost of living. Does the Minister agree that our reforms of the state pension and these new freedoms in private provision should result in increased income and opportunities for people in retirement, and that it is therefore vital that they get good quality financial advice?

Steve Webb: My hon. Friend is right. The key word she used was “opportunities.” If people want to take more of their pension wealth earlier in retirement—perhaps when they are more fit and able—they should be free to do so. As she says, however, they need to make informed choices, which is why the guidance guarantee is so important.

Mr Mike Weir (Angus) (SNP): Although I am generally supportive of the changes to the private pension—they are sensible, especially for those with smaller pots—I wonder what the difference is between one of these new pensions and other savings vehicles. Will there be any impact on the assessment of someone in their late 50s who unfortunately finds themselves seeking means-tested benefits? Will they be looked at differently compared with the current pension plans, given that they will now be able to draw down money at any time and it will no longer be necessary for them to purchase an annuity at the end of the scheme?

Steve Webb: The hon. Gentleman is right to say that we are going to have to think about pensions and retirement saving in a new way. One of the differences between workplace pensions and other forms of saving is the employer contribution. Whereas someone of working age can save through any savings vehicle they like, it is only through workplace pensions that they get not only tax relief but the employer contribution. They will, therefore, remain particularly attractive products, including for people on low wages.

Mr Crispin Blunt (Reigate) (Con): Thousands of people in my constituency work in this industry, from the blue-chip leaders working for Legal & General and for Fidelity to those working for two companies that have led the way in innovative products, namely Partnership

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and Just Retirement, whose share prices took a hammering yesterday because of the language being used about the future of annuities. Will the Minister make it absolutely clear that the delivery of good guidance is essential—that would reinforce the position of those who are delivering innovative products—and that annuities will be an extremely important part of the industry in future provision?

Steve Webb: We know that many people will still choose to have an income for life rather than a capital sum, so we do not think this is the death of the annuity. We think it will give a bit of a jolt to the annuity market and make providers do better. For example, Standard Life, a major annuity provider, said yesterday:

“Today’s wide ranging reforms of the UK savings and pensions regime have the potential to provide the simplicity, choice and flexibility for savers we have been calling for.”

A representative of the Association of British Insurers was on the radio this morning, and the providers are realising that this is an opportunity. They will have to up their game, but this is a chance for them to provide new and innovative products and we are happy to work with them on that.

Debbie Abrahams (Oldham East and Saddleworth) (Lab): How will the Government’s measures protect people like a constituent of mine who is a baker in his mid-70s? He had a lump sum pension pot of £250,000 and received independent advice, but that advice was poor and he lost almost everything. He is in his mid-70s and does not think he will ever be able to retire.

Steve Webb: As the hon. Lady knows, there are redress mechanisms for people who receive poor quality independent financial advice. It is a regulated process. [Interruption.] I cannot hear what she is shouting at me. When there is a process of regulated advice, there are compensation mechanisms, which is right and as it should be.

Dr Thérèse Coffey (Suffolk Coastal) (Con): I have to thank my hon. Friend because the statement and what was announced in the Budget yesterday take pensions to a whole new level. Now we have the single-tier state pension, we can free people to make their retirement decisions. Frankly, the Opposition do not seem to recognise the issues that people on defined contribution schemes have had or how annuities have fallen, so I really welcome what he has said today. In particular, will he tell us a bit more about when pensioner bonds will come into effect?

Steve Webb: Certainly. My understanding is that National Savings and Investments will bring forward pensioner bonds next January. The Chancellor has indicated that the gross interest rate will be about 2.8% for a one-year bond and about 4% for a three-year bond, but that will be reviewed later in the year. It depends on market movements between now and then, but it is designed to be a market-leading rate to recognise that people who have worked hard and saved hard should get a decent return on their money.

Alison Seabeck (Plymouth, Moor View) (Lab): It is interesting that the consultation is coming after the facts in this case. Will the Minister place in the Library

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a list of all the people he consulted prior to the announcements today and yesterday, as well as the risk assessment of where the Treasury will benefit or lose out from the proposal and, importantly, of the impact on women, because I suspect that women will yet again be net losers?

Steve Webb: There is a risk of being rather patronising to women in saying that giving them new freedoms will somehow result in their losing out. The hon. Lady will have seen that the markets moved following the announcement yesterday, so there is a sense in which such decisions have to be made through a confidential process. We are in constant dialogue with trade bodies and providers, and we will continue to be so. It is a three-month consultation, so we want to ensure that we get it right. On the principle of giving people freedom, she is shaking her head; I think that Labour Front Benchers might support it, but I really cannot tell.

Nigel Mills (Amber Valley) (Con): I warmly welcome the reforms, which are a great step forward for the pensions industry. The solution to the annuities problem is perhaps more radical than even the Work and Pensions Committee envisaged. May I urge the Minister to make sure that the new guaranteed guidance arrives before people reach retirement age, so that they can have a plan in their mind about what they want to do and what is there for them to choose before they reach that date?

Steve Webb: My hon. Friend is a distinguished member of the Select Committee, which has scrutinised the issues very effectively. He is quite right that the guidance must come at the right time. We want people to think about their retirement planning much earlier. Certainly, when they are thinking about buying financial products—or, in the jargon, decumulating—we need to make sure that there is someone on their side to give them impartial guidance. We will make sure that that happens.

Mr Andrew Love (Edmonton) (Lab/Co-op): The Financial Conduct Authority is not only a process regulator but a product regulator. Will the Minister ensure that it is seized of the need to look carefully at new, innovative products, because the group of people with whom it is dealing are very vulnerable, and it is important for the regulator to keep an eye on the market?

Steve Webb: The hon. Gentleman is quite right that products must be properly regulated. The difference between the current situation and what we propose is that, under our proposals, before going to independent financial advisers, people are guaranteed to have a conversation with somebody who is independent and on their side to talk them through their options. All too many people simply do not get that at the moment, and they risk making the wrong choice as a result. We will put that right.

Henry Smith (Crawley) (Con): Despite the Labour party’s scaremongering since the Budget yesterday, will my hon. Friend confirm that other countries—such as the United States, Australia and Denmark—do not restrict access to pension funds for those seeking to access them on retirement?

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Steve Webb: Yes. My hon. Friend is quite right. Many countries have different systems, but the presumption that as soon as someone has a pension pot, they are forced to take annual income is far from universal. We clearly need to make sure that people have proper guidance before they do so, but giving people freedom is what my right hon. Friend the Chancellor’s announcement was all about.

Richard Graham (Gloucester) (Con): I welcome the further detail given by the Minister on the savings and pensions elements of yesterday’s Budget. By contrast, we have had the bizarre spectacle of the shadow Pensions Minister chuntering—yak, yak, yak—like an excited tourist on a Tibetan plateau. Clearly, there are huge elements that will help savers in all our constituencies. Will the Minister say a little more about one of the most important of those elements, which is the axing of the 10p tax rate on savings income of up £5,000, which I believe will affect 1.5 million low earners in all our constituencies?

Steve Webb: Gladly. My hon. Friend is quite right. The Opposition have asked, “Where are the measures for savers in the Budget? How does it help savers?” We have already gone through a list, and he has kindly added another element, which is the abolition of the 10p tax rate. As my right hon. Friend the Chancellor said yesterday, when this Government abolish a 10p tax rate, we take it to zero, not double it as others have done.


Wales Bill

Presentation and First Reading (Standing Order No. 57)

Secretary David Jones, supported by the Prime Minister, the Deputy Prime Minister, Mr Chancellor of the Exchequer, Secretary Alistair Carmichael, Secretary Theresa Villiers, Danny Alexander, Mr David Gauke and Stephen Crabb, presented a Bill to make provision about elections to and membership of the National Assembly for Wales; to make provision about the Welsh Assembly Government; to make provision about the setting by the Assembly of a rate of income tax to be paid by Welsh taxpayers and about the devolution of taxation powers to the Assembly; to make related amendments to Part 4A of the Scotland Act 1998; to make provision about borrowing by the Welsh Ministers; to make miscellaneous amendments in the law relating to Wales; and for connected purposes.

Bill read the First time; to be read a Second time on Monday 24 March, and to be printed (Bill 186) with explanatory notes (Bill 186-EN).

Mr Deputy Speaker (Mr Lindsay Hoyle): We now come to the main business of the day, but may I ask for brevity? There are 30 Members down to speak, so I also make that appeal to Front Bench speakers.

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Ways and Means

Budget Resolutions and Economic Situation

Amendment of the Law

Debate resumed (Order, 19 March).

Question again proposed,


(1) It is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance.

(2) This Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—

(a) for zero-rating or exempting a supply, acquisition or importation;

(b) for refunding an amount of tax;

(c) for any relief, other than a relief that—

(i) so far as it is applicable to goods, applies to goods of every description, and

(ii) so far as it is applicable to services, applies to services of every description.

1.25 pm

Ed Balls (Morley and Outwood) (Lab/Co-op): Yesterday’s Budget was the Chancellor’s last chance to make decisions and announce measures that will make a difference before the general election. For all his boasts and complacency, the Budget did nothing to address the central reality that will define his time in office—the fact that for most people in our country, living standards are not rising but are falling year on year, and that working people will, in fact, be worse off in 2015 than they were in 2010.

Yesterday the Chancellor tried to claim that everything is going well and according to plan, but millions of working people on middle and lower incomes are still not feeling any recovery. Young people stuck on the dole for months are not feeling it. Pensioners seeing their gas and electricity bills rise each year are not feeling it. Parents facing child care costs so high that it barely adds up for them to go to work are not feeling it. People aspiring to own their own home but finding that rising prices have put that beyond their dreams are not feeling it. Small businesses struggling to get a loan from the banks are not feeling it. Nurses who have been told that they will not even get the below-inflation pay rise they were promised certainly are not feeling it.

With wages still rising slower than prices, and working people worse off than they were when this Chancellor took office, the Office for Budget Responsibility revealed yesterday, in table 3.6 of its economic forecast, that real wages will be 5.6% lower in 2015 than in 2010. [Interruption.] I will tell the House what is awful—that people are not better off under the Tories; they are worse off under the Tories.

Andrew Selous (South West Bedfordshire) (Con): Does the shadow Chancellor agree with the former Labour adviser who said about pensioners last night that

“you can’t trust people to spend their own money”?

Ed Balls: I do not agree, but I will come on to that in a moment.

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We will study very carefully the proposals put on the table for discussion. We have just had a statement. The proposals are important, and it is important to have more flexibility and choice. We have been calling for reforms of the annuities market: to be honest, the price of annuities and competition in the market have not been good enough over the past few years. I must say that we all remember the pensions mis-selling of the early 1990s, and we need to make sure that there is a tight grip on tax avoidance. That is why we will look carefully at the proposals.

I must tell the hon. Gentleman that if he looks at table 3.6 on page 87 of the Office for Budget Responsibility’s report on this so-called Budget for savers, he will see that the savings ratio was 7.2% in 2012 and 5% last year and—here is what will happen to savings in the next five years—then goes from 4.1% to 3.6% and down to 3.2%. The Budget for savers will see savings fall every year in the next five years, with each of the figures revised down by the OBR in its latest forecasts. I must say that I am not sure whether this is quite the Budget for saving that it is stacked up to be.

What we desperately needed was a Budget that delivered for the many, not just a few at the top. What a wasted opportunity it was. The annual increase in the personal allowance is outweighed completely by the 24 tax rises that we have seen since 2010. The Chancellor’s welcome conversion to the importance of capital allowances for business investment means that he has reversed the cuts to capital allowances that he made in 2010. Let me tell him what the OBR says in the Budget documents about the overall impact of all the Budget measures:

“The measures in the Budget are, in aggregate, not expected to alter the OBR GDP growth forecast.”

This Budget will have no impact on growth at all.

As for the Chancellor’s 1p cut in beer duty, welcome as it is, it means that people have to drink 300 pints to get one free. This morning’s Tory poster says:

“Bingo! Cutting the bingo tax & beer duty to help hardworking people do more of the things they enjoy”.

How patronising, embarrassing and out of touch that is. The Tory party calls working people “them”—them and us. Do the Tories really think that they live in a different world from everyone else? Does that not reveal just how out of touch this Tory Government are? It is no wonder that they do not understand the cost of living crisis and no wonder that the Chancellor did nothing in the Budget to tackle it.

We are told by the Chancellor that he did not know that the poster was coming out. The Tories’ chief election strategist did not know about the ad campaign that came out straight after his Budget—pull the other one! It gets worse. I hear that the Prime Minister did not properly understand what the Chancellor was saying. Apparently, when he told the Prime Minister that he wanted to cut taxes for Bingo, the Prime Minister thought he was referring to an old school chum: “Hurrah, another tax break for millionaires. Bingo, Bingo!”

It is okay though, because we know that the job of the chair of the Conservative party is safe. No. 10 says that the Prime Minister has full confidence in the Tory party chair. That’s the end of him then! According to The Sun, the Tory party chair is currently on a tour of northern cities, presumably to see how the other half

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live. I wonder how it is going. Can you imagine, Mr Deputy Speaker? “Goodness me, the houses even have indoor toilets these days.” I wonder whether he is looking for pigeon fanciers up north. My advice to him is to change his name back to Michael Green. That was a bit safer.

The problem with the Budget was not what it did, but what it did not do. Where was the freeze on energy prices that Labour has called for? Where was the 10p starting rate to cut the taxes of 24 million working people? Where was the expansion of free child care to 25 hours a week for working parents? Where was the compulsory jobs guarantee, paid for by a tax on bank bonuses? Where was the cut in business rates for small firms? Where was the new investment in affordable housing? Where was the reversal of the £3 billion top rate tax cut to balance the books in a fair way? We got none of Labour’s cost of living plan to balance the deficit in a fairer way, just more of the same. Working people are worse off, while millionaires get a tax cut—just more of the same from the same old Tories.

Sir Edward Leigh (Gainsborough) (Con): If I may gently return to the Budget, I understand that the Labour party accepts the welfare cap—that is fair enough—but that it wants to restore the spare room subsidy, which would cost £465 million. Will the shadow Chancellor explain to the House what other bit of welfare he would cut?

Ed Balls: I will. We have said very clearly that we would take the winter fuel allowance away from the richest 5% of pensioners, which would be a saving. We would also invest in affordable housing to get the housing benefit bill down. I do not know whether the Chancellor gets to read the OBR report. I think that he should listen to what it says:

“The rising proportion of the renting population claiming housing benefit may be related to the weakness of average wage growth relative to rent inflation. This explanation is supported by DWP data, which suggest that almost all the recent rise in the private-rented sector housing benefit caseload has been accounted for by people in employment.”

People in employment are seeing their wages fall and are having to claim housing benefit. It is no wonder the welfare bill has gone up by £13 billion since 2010.

It was not supposed to be this way. We all remember what the Chancellor promised in 2010: he would make people better off, balance the books by 2015 and rebalance the economy for the future. We know that people are worse off. We also know, after three years of flatlining growth, that his commitment to balance the books in 2015 is in tatters. He does not expect a balanced budget in 2015, but a deficit of more than £75 billion. It is all in the OBR report. There will be £190 billion more in borrowing than he planned in 2010. The national debt is rising this year, next year and the year after.

Mr Stewart Jackson (Peterborough) (Con): Will the right hon. Gentleman give way?

Ed Balls: Perhaps the hon. Gentleman would like to explain why the national debt is still rising.

Mr Jackson: I thank the right hon. Gentleman for his helpful suggestion, but I will ask my own question. As we are on the subject of history and mea culpas, would he like to apologise for running a structural deficit for the entire period of his Government’s administration?

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Ed Balls: The Chancellor promised that he would abolish the structural deficit in this Parliament and he is going to fail absolutely. We went into the financial crisis with a lower national debt than America, France, Germany and Japan. The deficit went up because of a financial crisis and the failure of the banks. There was a recovery in 2010 and his failed policies choked it off. That is the reality. Let me tell the hon. Gentleman the facts. The Chancellor has already borrowed more in the three years of this Government than the last Labour Government borrowed in 13 years. Perhaps he should be apologising for his abject failure on the deficit, the debt and growth. That is what we should be hearing from him.

It will take the next Labour Government to clear up the mess left by this Chancellor. The Government have failed to get rid of the deficit. We will have to do the job. That is why we have been clear that we will balance the books in the next Parliament. We will have the current budget back in surplus and the national debt falling as soon as we can and before the end of the next Parliament. We will abolish his discredited idea of rolling five-year fiscal targets, which he never meets, and instead legislate for tough fiscal rules.

I will tell you what else we will do, Mr Deputy Speaker. I hope that the Chancellor will reflect on what I am about to say and think again.

The Financial Secretary to the Treasury (Sajid Javid): I don’t think so!

Ed Balls: I do not think he will either. May I ask the Financial Secretary how it is going since his comments on women and the Monetary Policy Committee? Is he still revelling in that? If things were done on merit, he would be out on his ear.

I hope that the Chancellor will think again and join me, the Chair of the Treasury Committee and the Chief Secretary to the Treasury in supporting reforms to allow the Office for Budget Responsibility to audit independently the spending and tax commitments in the manifestos of the main political parties before the next election. We know from the head of the OBR that that can be done. Let us be honest: it is all a matter of political will. The problem with the Chancellor is that he wants to set traps, but he cannot be transparent on the matter of OBR audits. Why does he not think again, join the cross-party consensus and do the right thing?

Mark Garnier (Wyre Forest) (Con): Why was the right hon. Gentleman formerly so keen that the OBR should not do that? Why did Labour members of the Treasury Committee argue in 2010 that it should not happen?

Ed Balls: The irony is that back in 2011 the Chancellor was in favour of it, and now he has changed his mind. The OBR, which we supported from the outset in this Parliament, has established a good track record, and we are happy for our manifesto to be audited. What is it about the Conservative Front Benchers that means that they are scared of independent OBR audit of their manifesto? Who knows?

I return to the welfare cap, and I will give a bit more detail for Government Members. We have had a lot of tough and divisive talk from the Chancellor on welfare over the past three years, but it cannot hide the fact that

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social security is up by £13 billion compared with his plans, particularly because of his failure on housing benefit. We have called for a cap on social security spending, and we will support the welfare cap next Wednesday, but we will make different and fairer choices to keep the social security bill down. We will introduce a compulsory jobs guarantee to get young people back to work. We will scrap the bedroom tax, which is not only unfair but could end up costing more money, not less. We will also scrap the winter fuel allowance for the richest 5% of pensioners, get more houses built and tackle the low wages that have pushed up spending on housing benefit. That is the fair way to ensure we get people back to work and get welfare costs under control.

Christopher Pincher (Tamworth) (Con): What I have heard from the shadow Chancellor reminds me of the words of Errol Flynn, when he said, “I find difficulty in reconciling my gross habits with my net income”. The right hon. Gentleman has just made promises to the tune of £465 million of spending. How is he going to find that money and still not breach his welfare cap?

Ed Balls: When the hon. Gentleman referred to my gross assets, was he making a personal point? I am running the marathon in four weeks’ time, and I was rather hoping the Chancellor might join me, but unfortunately his assets do not seem to be up to it.

The hon. Gentleman made an important comment just two months ago, saying to the Tamworth Chronicle:

“There are too many young people without employment and there are too many in longterm unemployment.”

I agree. Why will he not back our bank bonus tax to get young people back to work? That is what he should be doing. The Chancellor has failed on living standards growth and deficit reduction; he has also failed to deliver the balanced recovery that we need.

Mr Tobias Ellwood (Bournemouth East) (Con): The right hon. Gentleman has just touched on banking. The Opposition constantly belittle our financial services industry. J. P. Morgan is an important bank, one of many in Bournemouth, with 5,000 employees who are not all millionaires. Every time Labour does that, all those companies think a little bit more about possibly leaving the UK and moving elsewhere, and that would be devastating for the economy.

Ed Balls: Jobs in our banking and financial services industry are very important indeed. We need to ensure that we have reforms that strengthen our banking industry rather than undermine it. Many hard-working people on ordinary salaries in our banks feel let down by the mistakes made in the banks and by the bonus culture. I have to say to the hon. Gentleman, though, that I have checked the figures in Bournemouth East. He opposes a tax on bank bonuses to get young people back to work, but in his constituency there has been a 1,000% rise in long-term youth unemployment since 2010. He is not willing to act.

Mr Ellwood: I am not sure where the right hon. Gentleman is getting those figures from. The figures released this week show that the number of people in employment has risen by 400 since a year ago. Employment is doing well in Bournemouth, as it is right across the country.

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Ed Balls: Can the hon. Gentleman tell me how many people are long-term unemployed in his constituency? No? If I were him I would not try, because he would almost certainly get it wrong.

The Chancellor has failed on living standards, growth and the deficit, and he has also failed on balanced recovery. When the country is crying out for reforms to our banks to balance the recovery, back wealth creation and get an economy that works for all, not just a few, all that he seems to do is say that we can wait for the wealth to trickle down. Why are apprenticeship numbers for young people falling? Why is bank lending to small businesses still falling? Why are the Government planning to cut infrastructure investment next year?

Phil Wilson (Sedgefield) (Lab): Is my right hon. Friend aware that today, Hitachi has announced that its global rail building capacity is moving to the UK? Is he aware that the factory where the trains will be built is in my constituency, and that it was a Labour Government who had the wherewithal to bring about the intercity express programme to ensure that Hitachi came to this country?

Ed Balls: The site for that new and welcome investment was designated under the last Labour Government as a result of my hon. Friend’s campaigning. We all want manufacturing investment to rise, but what worries me is that over the past two years, since the Chancellor’s “march of the makers” speech, manufacturing output has actually fallen by 1.3%. That is the reality.

As for house building, it is at its lowest level since the 1920s. We believe that the new Governor of the Bank of England is right to be worried that the recovery is not yet secure or balanced. That is why it is vital that the Chancellor does more to get more homes built for millions who aspire to get on to the housing ladder but find it hard at the moment. I have to say to him, we backed Help to Buy, but he should have reduced the limit from £600,000. There should not be a taxpayer guarantee for people buying homes for £500,000 or £600,000. We also need to do more to invest in affordable housing. That is the only way to avoid a lop-sided recovery, demand running ahead of supply and rising prices, putting pressure on the Governor of the Bank of England to slow the housing market through higher mortgage rates earlier than we need in the recovery. That would put business investment at risk and undermine the budgets of hard-working people across our country.

The Chancellor should have listened to the CBI, the International Monetary Fund and the Opposition and acted more boldly to boost investment in housing supply. He should have listened to Labour, and he should have listened to the Business Secretary, too. We have both warned of the danger of lop-sided and unbalanced growth. Like us, the Business Secretary was right to warn back in 2010 that the pace of deficit reduction risked choking off recovery. The Prime Minister was wrong last autumn to dismiss the Business Secretary as a Jeremiah when he warned about the unbalanced nature of the recovery by saying:

“We mustn’t now settle for a short-term spurt of growth, fuelled by an old-fashioned property boom…there are already amber lights flashing.”

I also remind the House of what the Business Secretary said about unbalanced growth just a few weeks ago:

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“The shape of the recovery has not been all that we might have hoped for”.

He was right to make those warnings, but time after time over the past few years when he has publicly made such warnings about the risks, he has been ignored. The problem is, the Business Secretary is a member of the Cabinet that is doing the ignoring. How can he keep on ignoring himself again and again?

As for the top-rate tax cut, which I know a number of Government Members have criticised, I remind the Business Secretary that he said at the weekend:

“I don’t understand why people need a million quid a year.”

What we do not understand is why he has given people on a million quid a year a tax cut of £42,500 each and every year. He asks for sympathy—he told The Guardian a few weeks ago that

“since being in government I have become much more enslaved these days”.

I say “Free the Cable One”. Is it not the sad truth that he is not enslaved but in hock? He is not captive, he has capitulated. It is a Tory agenda, and he is part of it. He knows it, and he should get out of it before it is too late.

As for the Chancellor, he has certainly been busy in recent weeks, and not just preparing his Budget. The manifesto is being written, the team is being assembled, the campaign is under way. But the enemy is not called Ed, and it is not the general election that is preoccupying him. He has his eyes on a different prize. This is what his new best friend, the Education Secretary, said to The Mail on Sunday[Interruption.] Government Members do not want to hear what he said, do they? [Interruption.]

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. I think we do want to hear what the right hon. Gentleman has to say.

Ed Balls: They do not want to hear this, so before I remind people of what the Education Secretary said, let me tell the House what was said yesterday about the cost of living, the Budget, and all those matters, by the outgoing Conservative hon. Member for Thurrock (Jackie Doyle-Price): “The biggest impediment”—[Interruption.] I really think that hon. Members, especially those with small majorities, should listen to what she said.

Mr Stewart Jackson: That’s you!

Ed Balls: I have read it, and I think maybe you should too, my son—[Interruption.]I think they should listen. The hon. Member for Thurrock stated:

“The biggest impediment that this Party has when trying to secure a majority at the next election is that on one key question we constantly perform badly. That is on the issue of whether the Party is in touch with ordinary people.”

That was before the poster. She said that

“while people are worrying about whether they are keeping their jobs, whether they will be able to afford the electricity bill and how much it costs to fill the car these days,”

all the Tories seem to be doing is “talking about Boris.” She went on:

“We need to stop talking about ourselves and talk about the things that really matter to people. Otherwise we will be seen as out of touch, and Labour’s message will resonate.”

It certainly will, Mr Deputy Speaker.

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In the light of the advice from the hon. Member for Thurrock about the cost of living, let me remind Members what the Education Secretary said over a wine-fuelled dinner with his old boss, Rupert Murdoch. He said that Boris Johnson “has no gravitas”, that the Home Secretary “has no friends”, and that only Osborne is “fit to lead.” Only Osborne is fit to lead? How did the Education Secretary explain his comments? He said he was “tipsy”. Tipsy? He must have been completely legless.

Penny Mordaunt (Portsmouth North) (Con) rose—

Ed Balls: Does the hon. Lady want to intervene? Does she think the Education Secretary was tipsy, legless or just deluded?

Penny Mordaunt: If press reports, which are what we are talking about, are to be believed, the right hon. Gentleman was critical of the Leader of the Opposition and his speech yesterday for not responding to a single measure in the Budget—there was nothing on support for manufacturing or reforms to pensions. The right hon. Gentleman is well into his speech, which is incredibly amusing, but does he realise that he is in danger of doing exactly the same thing?

Ed Balls: It was very interesting because we scoured the Chancellor’s speech and all the documents for one mention of the cost of living and living standards, and there were none at all—none! Conservative Members say that we are not talking about what is in the Budget, but they are not talking about what is undermining the living standards of people up and down our country.

Last year, the hon. Lady said:

“If we do not believe that the poorest are best served by our policies, we might as well give up and go and do something else.”—[Official Report, 20 March 2013; Vol. 560, c. 1023.]

I am afraid we are going to ensure that she has to give up and do something else.

It has been hard to understand what has been going on, but it is starting to make sense given all the Chancellor’s rebranding of recent weeks and months: the new less foppish hairstyle, the 5:2 diet, the new estuary accent, even photo opportunities down a coal mine—all part of his leadership business; the new working-class hero, not Gideon but George these days.

This weekend the Education Secretary took a further step in the Osborne rebranding. He said that it is “ridiculous”, and “preposterous” that Downing street is governed by a tight clutch of Etonians, and that that has got to change—we say “Hear, hear” to that, Mr Deputy Speaker. However, we all know what he was really trying to say through the pages of the Financial Times. He was saying, “Boris is a toff because he went to Eton, but George is a pleb because he only went to St Paul’s.” The Tory party is having a class war with itself. An Etonian elite has grabbed hold of the commanding heights of the economy, opposing the masses of Tories who went to lesser public schools. Old boys from Harrow and St Pauls, throw off your chains. What are they going to call themselves? The Bullingdon Bolsheviks? The Trust Fund Trots? Posh boys of the world unite?

In all seriousness, does the Chancellor really think that he can stand up for the interests of the energy companies, the hedge funds, Tory donors, deliver a massive tax cut to people earning more than £150,000,

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and then claim to be on the side of hard-working families—the party of the workers—just because he did not go to Eton? Posing as the posh boy proletarian will not wash when his own Budget ad campaign refers to working people as “them”, and when he will be remembered only as the Chancellor who cut taxes for millionaires while everyone else was worse off.

I know that many hon. Members wish to speak so I will conclude my remarks.

Dr Thérèse Coffey (Suffolk Coastal) (Con): I do not think this clownish class warfare is fooling anybody, but does the right hon. Gentleman welcome the fact that 472 of his constituents will no longer pay income tax as a result of yesterday’s Budget?

Ed Balls: The problem is that they are all worse off because VAT went up to 20%. Is the hon. Lady worried that in her constituency there has been a 600% rise in long-term youth unemployment since 2010, which she is doing nothing about? As for the idea that class war will not wash, if I were the Chancellor I would try to find a different way to take on Boris, as I do not think this way will work.

There is a cost of living crisis, we do not have a balanced recovery, and all this complacent Chancellor does is play party politics in the Tory party. What a mess—a right old Eton mess! Surely we can do better than this. This was the Chancellor’s last chance, his final opportunity to tackle the cost of living crisis and make decisions that will directly affect people before next year, and he has blown it. Working people will be worse off in 2015 than they were in 2010, and the country now knows, especially after today’s patronising “them and us” advert for the Conservative party, that it will take a Labour Budget to put things right.

1.57 pm

The Secretary of State for Business, Innovation and Skills (Vince Cable): I have calculated that this is the 18th Budget to which I have responded in some capacity, and the fourth directly to the shadow Chancellor, the right hon. Member for Morley and Outwood (Ed Balls). However, since he wrote many of the others, I was probably responding to him indirectly. Having heard the right hon. Gentleman over the years, I have picked up on some traits. First, he obviously has a capacity for a crunchy, memorable soundbite that often turns out to be wrong. I think he was the author of the phrase “No more boom and bust”, the consequences of which we are still living with. I also think he was the author of “triple-dip recession”, which of course we never had.

When we first had these exchanges a couple of years ago, the right hon. Gentleman had a very good football chant going on the Back Benches behind him: “Growth down, inflation up. Unemployment up.” Now of course we have growth up, unemployment down and inflation down. His current favourite is the “millionaires’ tax cut”, which I would find a little more persuasive had I not sat on on the Opposition Benches for 10 years being lectured by him and his boss that any increase in the top rate of tax above 40% would be counterproductive and damaging to the economy.

One feature of the right hon. Gentleman’s speeches that we all look forward to is the annual conjuring trick, and the 10 different ways we could use a bankers’ bonus tax. The rabbit out of the hat trick gets progressively

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more difficult because the rabbit gets bigger and the hat gets smaller as time passes, so I shall remind him of some of the figures.

When the right hon. Gentleman was City Minister and presiding over all of this, the total bankers’ bonus pool was something in the order of £11.3 billion, and it was £11.5 billion the following year when the Labour Government brought in a bankers’ bonus tax. According to the Centre for Economics and Business Research, which monitors these things, the bankers’ bonus pool was £1.6 billion last year. In the current year, it is estimated to be £1.3 billion. That is one-tenth of the size of the bonus pool on which the original tax was placed. We are then left with the question that is at the core of his fiscal policy: how is he going to get £3 billion in tax out of a £1.5 billion bonus pool? The charitable way to describe that is as a mathematical puzzle. We ought to refer it to the new Turing institute to investigate.

I should perhaps declare one self-interest. I do not have an interest in the millionaires’ tax, but compared with both the shadow Chancellor and the Chancellor I am more likely to take advantage of the relaxation in the annuity rules. It is worth recalling that over many years I came to this House on many Friday mornings, with Back Benchers from my own party and Conservative Opposition MPs, to try to achieve this reform. We were confronted with relentless stonewalling by the Labour Government of the day, of which the right hon. Gentleman was a part and in which he participated directly, with the very simple message that pensioners were far too stupid and irresponsible to be trusted with their own pension savings. This is one of the really big, major positive changes to come out of the Budget.

Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab): I hope the Secretary of State can explain to me and my constituents, who have seen their average gross weekly earnings decline by £160 since the general election, when adjusted for the consumer prices index, how they will be able to afford to exploit the new annuities rules on pension savings?

Vince Cable: The hon. Gentleman poses an issue that I am coming on to immediately, which is why we are a poorer country. There are people who have saved and have annuities, and there are many middle-income occupational pensioners who will take advantage of that. The central economic question raised is this: why are we a poorer country and how has that affected our living standards?

The question goes back to the financial crisis, which occurred when the right hon. Gentleman and his colleagues were in government. The Chancellor reminded us yesterday of the brutal fact that the British banking collapse and rescue was the biggest in the world. It was the biggest collapse in our history, going back not just decades but centuries, and it has done enormous harm. It has made the country poorer. The immediate after-effects of the collapse were to reduce output in this country by 7.5%, which is more than in the great depression. Not surprisingly, that has affected living standards in a radical way. It has impaired our capacity to recover from the damage inflicted on the banking system. It has required our country and the United States, but particularly here,

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under the right hon. Gentleman’s Government and the coalition Government, to resort to very unorthodox monetary policy. That has had a major impact on savings—which the Chancellor is now trying to remedy—asset prices and other factors. Opposition Members are surprised and indignant when they tell us that people are poorer than they were before the financial crisis. What are they comparing it with?

Sheila Gilmore (Edinburgh East) (Lab): The Secretary of State seems to be avoiding the fact that people are poorer not since the financial crisis, but since 2010. Changes to tax credits, benefits uprating and so on have, for the lowest paid workers, more than outweighed any advantage gained from raising the tax threshold.

Vince Cable: The distributional analysis, which I am sure the hon. Lady has studied, suggests that the biggest impact of this shock has been on the highest 10%. That may be surprising, but that is what has happened.

Sheila Gilmore rose—

Vince Cable: Let me just take apart particular aspects of the argument that has been put forward: how it relates to jobs, production and earnings. Let me start with jobs.

Sheila Gilmore rose—

Vince Cable: I have taken an intervention.

Let me start with employment. What could well have happened, as a result of the financial crisis and its aftermath, was mass unemployment of the kind we had in the 1930s. We could very easily have got up to 20% unemployment, but we did not. We now have the lowest unemployment of any major country except Germany—lower than France and Sweden. This is partly a reflection of Government policy, but it is mainly a reflection of the common sense and flexibility of British workers, who accepted that in this crisis it was most important to be in work. We are now seeing the success of employment policy in the fact that we have had an enormous growth in employment, with 1.25 million net of public sector job losses and a gross increase of 1.75 million. Roughly five private sector jobs have been created for every one lost in the public sector. These are predominantly, in fact overwhelmingly, full-time jobs. The Opposition’s argument has been, “Well, okay, there are lots of jobs but they are part time,” but last year, in 2013, there were 460,000 new jobs, of which 430,000—95%—were full-time jobs.

Tom Blenkinsop: Since this Government came to power, the number of zero-hours contract jobs has trebled to more than 500,000. In 2012-13, some 3.48 million people had an average national insurance liability of £172 and were earning less than the lowest income tax threshold. That is an indicator of the type of work that people are having to take now, and they are still having to pay national insurance contributions on income below the income tax rate.

Vince Cable: We are well aware of some of the problems that arise with zero-hours contracts. That is why, as the hon. Gentleman knows, some months ago I commissioned a full consultation on dealing with abuses.

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What has come out of that consultation suggests that it is actually a very complex story. A lot of workers benefit from being on zero-hours contracts and want them to continue. Many do not and do encounter abuse. I am sure that before the end of this Parliament, Members will have an opportunity to vote on measures designed to deal with those abuses.

Debbie Abrahams (Oldham East and Saddleworth) (Lab): Will the Secretary of State confirm what his colleague, the Chief Secretary to the Treasury, had difficulty in doing the other day: confirm that the employment rate is still below pre-recession levels?

Vince Cable: My understanding is that the employment rate, if the hon. Lady is talking about the total adult population in work, is now at its highest level ever—higher even than in the United States, which is famed for a flexible labour market.

I am surprised that Opposition Members feel that there are issues to pursue. [Interruption.] Somebody muttered “Immigration”. Last year, overwhelmingly the largest number—well over 90%—of jobs went to British workers. I do not know if they have studied those figures.

Mr Stewart Jackson: Does my right hon. Friend not think it disingenuous, given the Government’s inheritance of a 7% reduction in GDP presided over by the Labour party, for Opposition Members to categorise changes in personal allowances, which will affect 25 million people and take 3 million people out of tax altogether, as having nothing to do with the cost of living?

Vince Cable: Yes. I am delighted that the hon. Gentleman has raised that point, and I was going to dwell on it more later. It is a considerable achievement of this coalition that we have delivered, and indeed over-delivered, on the commitments I and my colleagues made before the previous general election. That helps people who are relatively low paid by lifting them out of tax, not just because they pay less tax but because it reduces the tax rate at the margin and provides a significant incentive to work.

Grahame M. Morris (Easington) (Lab): Will the Secretary of State address the issue of youth unemployment? In my constituency, 825 under-24s are out of work and almost 200 of them have been out of work for almost a year.

Vince Cable: Yes, I will address the issue of youth unemployment and the hon. Gentleman is right to raise it. This is an issue that has, of course, been with us for many years, including under the previous Government when economic conditions were much more benign. Youth unemployment is currently at about 20%, but of course that includes many full-time students. The key trend is that youth unemployment is now declining rapidly. It is certainly less now than the level we inherited, and we have a whole set of policies designed to deal with it in a systematic way.