Mr McLoughlin: My hon. Friend has long been an advocate of better rail services in the south-west. Following the storms, I said that I had asked Network Rail to do some detailed work on possible alternatives for the

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south-west, and that is happening. Network Rail is doing a huge amount of work to ensure the swift reopening of the Dawlish line, which is on course to happen on 4 April.

Stephen Pound (Ealing North) (Lab): In congratulating my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) on his tenacity and hailing the relief of Camden as a consummation devoutly to be wished, may I tell the Secretary of State that the dispassionate observer would still feel that the lack of connectivity between HS1 and HS2 represents a problem for the future? Will he give thought to the possibility of an underground connection from Old Oak Common?

Mr McLoughlin: Many suggestions have been made for the connection between HS1 and HS2. First, all the high-speed trains are likely to stop at Old Oak Common, which will also be served by Crossrail, and secondly Euston and St Pancras stations are not that far apart.

Sarah Newton (Truro and Falmouth) (Con): HS2 could have real benefits for Cornwall, especially if the First Great Western train depot at Old Oak Common were relocated to Penzance. My right hon. Friend has received proposals from me, First Great Western and the local enterprise partnership. When will he let us know his decision?

Mr McLoughlin: My hon. Friend raises one of the many issues that need to be considered and resolved, but Old Oak Common is likely to become a major new transport focus for future generations, and will have an important role to play. Getting the maximum development in that area will also be very important.

Mike Kane (Wythenshawe and Sale East) (Lab): I thank the Secretary of State for his statement and declare my interest, in that HS2 phase 2 will go directly under my house. Will he confirm the future journey times from Euston to Manchester airport in my constituency, now that phase 1 has been extended to Crewe?

Mr McLoughlin: I welcome the hon. Gentleman to the House. I am delighted to see him in his place, but I wish that his predecessor was still there—as I am sure we all do. He was a big supporter of HS2 and believed that it would bring tremendous benefits to his city of Manchester—I agree.

If we build to Crewe, as suggested by Sir David Higgins, it will result in immediate time improvements for Manchester, but I know that what people want to see is the connection to Manchester airport as well as to the city itself.

Alec Shelbrooke (Elmet and Rothwell) (Con): Speeding up delivery for this major infrastructure project for the north is to be welcomed, but—as my hon. Friends the Members for Leeds North West (Greg Mulholland) and for Colne Valley (Jason McCartney) suggested—deep concern is felt in west Yorkshire that economic advantage may come for the west side of the Pennines earlier than it will in Yorkshire if the extension goes beyond Birmingham before it goes to Manchester and then Leeds. I urge my right hon. Friend to engage more with the west Yorkshire councils to ensure that they have a strong, positive and

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simple message about the advantages of HS2, as their colleagues on the west side of the Pennines did, and which I am sure has influenced Sir David Higgins in his recommendation to extend on that side first, rather than ours.

Mr McLoughlin: I hear what my hon. Friend says. There has, rightly, been involvement: Julie Dore, the leader of Sheffield city council, was a member of the taskforce. The taskforce has stated that cities need to prepare, so that we can consider the long-term consequences of overall transport investment. They need to prepare for the benefits that HS2 will bring to their areas.

Mr David Hanson (Delyn) (Lab): I welcome the fact that the Secretary of State used the two words “north Wales” in his statement. He will have my support for the speedy development at Crewe to link to north Wales. Does he accept that this is about not just speed, but capacity? What steps will he take to increase capacity to north Wales, and, by extension, to Ireland?

Mr McLoughlin: The right hon. Gentleman is absolutely right. Too many people talk about high-speed trains as though they are just about speed. They are not just about speed. When Lord Adonis launched the initial plans he talked a lot, as I have done since I have been Secretary of State for Transport, about the need for additional capacity. One of the biggest reasons for the new railway line is capacity on links between north and south, and the extra capacity we need at Euston. The right hon. Gentleman is absolutely right: we need to ensure that that capacity serves north Wales well.

Guy Opperman (Hexham) (Con): The success and efficacy of HS2 in the north-east would be greatly improved if we reopened the Leamside line in future control periods. Will the Transport team look at this crucial improvement, and consider creating the HS2 skills academy in the north-east?

Mr McLoughlin: Surprisingly, my hon. Friend is the first Member today to mention locating the skills academy in his region. That is probably because other Members have been asking questions on the details and might

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have felt that they would be testing your patience, Mr Speaker, if they also made a bid for the academy. The skills academy is essential to getting the message across to young people that engineering and the railways offer good opportunities for them in the long term.

Jenny Chapman (Darlington) (Lab): My constituency of Darlington is the indisputable birthplace of the railways—I do not think there are any Members for Stockton present—and my constituents currently enjoy a very good service to London. They are delighted that people in Leeds will soon be able to enjoy a good service too, but are concerned that that must not be at the expense of investment in the east coast main line. Will the Secretary of State commit to that not being the case?

Mr McLoughlin: Indeed I will. We are committed to providing brand new rolling stock for the east coast main line: one of the biggest orders placed for the railways has been signed off by the Government. I am delighted we have done that.

Sheila Gilmore (Edinburgh East) (Lab): Sir David Higgins stresses the importance of existing lines and HS2 working together. Will the Secretary of State reconsider the current plans for trains from Scotland to Birmingham and London to bypass Manchester and Leeds? Is this an opportunity to reconsider the possibility of linking them up?

Mr McLoughlin: It is essential that all these suggestions are considered. HS2 will fundamentally change capacity on our railway lines. It will give us many more opportunities not just for passenger numbers, but for more freight. In the past 10 years, there has been a 60% increase in freight. The issue of capacity is what is holding back a further increase. The west coast main line is the busiest railway line in Europe. An increase in capacity will free up a lot of other services and opportunities.

Mr Speaker: I am pleased to be able to advise the House that 37 Back Benchers were able to contribute in 37 minutes of exclusively Back-Bench time. I suggest that the Secretary of State issue his manual on pithy replies to all members of the Cabinet, who would profit greatly from reading that text. The journey time was very satisfactory.

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Contaminated Blood (Support for Infected and Bereaved Persons)

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

4.49 pm

Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab): I beg to move,

That leave be given to bring in a Bill to establish a committee to advise on haemophilia; to make provision in relation to blood donations; to establish a scheme for NHS Compensation Cards for people who have been treated with and infected by contaminated blood or blood products; to make provision for the financial compensation of people treated with and infected by contaminated blood and blood products and their widows, dependants and carers; to establish a review of the support available for people who have been treated with and infected by contaminated blood or blood products; and for connected purposes.

Let me first pay tribute to the late Lord Morris of Manchester, who not only campaigned on this highly disturbing issue, but persuaded another place to pass a Bill similar to mine, which I sought to promote in the House of Commons but which ran out of time. As well as paying tribute to Alf Morris for his huge commitment to those who suffered from problems arising from haemophilia and contaminated blood—he was indeed a tenacious fighter—I want to mention his successor in Wythenshawe and Sale East, our late and dedicated friend Paul Goggins, who held the most recent debate on this matter in Westminster Hall on 29 October last year. I also thank the Haemophilia Society as well as Members in all parts of the House for the support that they have given to an ongoing and thoroughly necessary campaign.

Let me say first that although the Bill applies to this Parliament, it is entirely appropriate for a Scottish Member to feel comfortable about advocating its provisions. I want to see an end to injustice throughout the United Kingdom, and I believe that the Bill runs in tandem with our expectations of the Penrose inquiry, which is currently taking place in Scotland, where similar injustices simply have to be put right.

I ask the House to consider a measure that was drafted to give recognition and support to one of the most needful minorities in Britain today. A group of nearly 5,000 people disabled by haemophilia—a rare lifelong blood disorder requiring continuous medical treatment—have been infected by contaminated blood and blood products used in their NHS treatment. Ninety-five per cent. of those people were infected with hepatitis C, and 25% were infected with both HIV and hepatitis C. Sadly, of those almost 5,000 people, at least 1,757 have since died from the effects of the viruses.

Apart from the obvious impact on health, such conditions have implications for people’s ability to work full time, if at all. They face many burdens, and extra costs that are far too high for many of them to cope with. People who are suffering in these dreadful circumstances—and we should also bear in mind the impact on their families—have waited far too long for the remedies that I believe are in my Bill.

In January 2011, two years after the independent inquiry led by the late Lord Archer, the Government concluded their review of the support available. Although we welcomed the lump sum and annual payments that

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were awarded to the 20% of sufferers who had reached stage 2 of hepatitis C—which is, essentially, cirrhosis of the liver—that clearly did not go far enough, given the 80% of patients who are not supported and who carry very painful physical burdens.

John Prior, a 39-year-old who lives in Moodiesburn in my constituency, contracted hepatitis C from contaminated blood in 1994, when he was just 20 years old. When I spoke to him at the weekend, he told me of the difficulties and stigma involved in having hepatitis C. He had been told for many years that he did not have hepatitis A or B, and was lucky not to have HIV. Information on his particular case was withheld for long periods. He and so many other people are clearly being penalised again and again. They had the misfortune to find themselves with haemophilia, and their condition was then made worse when they approached the NHS.

Philip Dolan is a former vice chair of the UK Haemophilia Society. He has haemophilia himself. He explained to me that he asked his consultant in 1991 whether he had hepatitis C and was told that in 1978 he had been tested without his permission for hepatitis. His doctors informed him that “We knew in 1978 that you had non-A and non-B hepatitis,” so he sadly had been diagnosed with hepatitis C but not informed.

Like many others, Philip recently received a letter from the NHS and was told that he may have received a blood donation from an individual who later died from variant Creutzfeldt-Jakob disease. That raises profound questions for Philip and those others, given that there is no known cure for that condition.

It cannot be right that 80% of the sufferers involved receive no financial support. It cannot be right that many are left without counselling and that there is such an absence of transparency. It cannot be right that in Yorkhill children’s hospital in Glasgow many of those who received contaminated blood were infected with HIV and that a large number of those patients’ medical notes were simply lost. It cannot be right that 365 patients throughout the UK have had the same experience.

Too much has been hidden for too long. That is why I am proposing to establish a committee to advise on contaminated blood; I believe it should have comprehensive powers and the right to ask whatever questions it feels are appropriate. My Bill seeks to establish a scheme for NHS compensation cards that would allow those affected to receive freely, if needed, prescription drugs, counselling, physiotherapy, occupational therapy and other therapies allied to medicine and home nursing.

It is essential that we create a better and more comprehensive screening programme to establish what viruses the patients may or may not have contracted. It is essential to make provision for financial compensation for people treated with, and infected by, contaminated blood or blood products and their widows, dependants and carers. It is essential to establish a review of the support available to people treated with, and infected by, contaminated blood or blood products.

The truth is that Britain compares very unfavourably in these matters with other countries—the Irish Republic, for example. It, too, had an inquiry, as a result of which comprehensive and substantial support was given, including the underwriting of mortgages and travel insurance. It also gave upwards of €300,000 in one-off payments to each of the patients affected. The comparisons are bad

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enough, but those decisions were taken 13 years ago. The truth is that sufferers in Britain have been incredibly patient and are now rightly telling us that they have waited for far too long.

It is important that we address the unmet needs of infected patients and bereaved families. We have to be honest about highly disturbing administrative shortcomings, serious omissions and a failure to inform Parliament of the facts as to why provision made in other countries is so much better than here in Britain.

For us, justice postponed is justice denied. I very much welcome the fact that Lady Morris has been following our proceedings this afternoon, and I hope my Bill does justice to her husband’s memory and the people whom he spent a lifetime serving.

Question put and agreed to.


That Mr Tom Clarke, Mike Kane, Mr Nicholas Brown, Sandra Osborne, Mr Jim Cunningham, John Healey, Alistair Burt, Ann McKechin, Jason McCartney, Mr Charles Kennedy and Joan Walley present the Bill.

Mr Tom Clarke accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 6 June and to be printed (Bill 187).

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Ways and Means

Budget Resolutions and Economic Situation

amendment of the law

Debate resumed (Order, 20 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.

5.1 pm

The Secretary of State for Communities and Local Government (Mr Eric Pickles): Before I start, may I say what a pleasure it is to see the right hon. Member for Leeds Central (Hilary Benn) replying to the debate? The House had an opportunity last week to express its great affection for his father. But no matter how distinguished or old a person is when they depart, to lose a parent, as those of us who have lost a parent understand, is a bitter blow. I just wanted the right hon. Gentleman to know that we express our deep condolences to him and his family at this very difficult time, and we wish him very well.

By sticking to our long-term economic plan, we have brought the deficit down by a third, we have helped a record number of people into work and we are continuing to boost Britain’s resilient economic growth. This is a Budget that literally places new pounds in the pockets of taxpayers. It is creating opportunity and putting Britain on a path to a secure future, and it will reward pensioners, savers and hard-working families. It has drawn a clear distinction between a coalition Government doing everything in their power to bolster Britain’s recovery, and a Labour party that just offers more borrowing, more debt, and more taxes, and ducks the major challenge.

We want to see a fair and fast recovery across the country. This can only be achieved by galvanising all forms of growth—whether inside a local enterprise zone or on a building site—and by firing up businesses and home builders, getting them investing, exporting and creating jobs. Local economies are providing the solid foundation for a national recovery. The economy is stronger and more resilient, and is rewarding the hard-working British public.

The Budget has recognised those who were so badly affected by poor winter weather. Some £300 million has already been announced to support the individuals, businesses and councils that were hardest hit by the flooding and storms. The Chancellor has made available an additional £140 million—money that will go towards immediate repairs to, and maintenance of, damaged

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flood defences across Britain. The £200 million pothole challenge fund will fill holes in the road that have already been a blight to road users.

Getting these communities back on their feet after such a devastating period of weather remains a high priority across government.

Mr John Redwood (Wokingham) (Con): Those are very welcome announcements. Is my right hon. Friend also going to take action to stop rapacious councils making a misery of the lives of normally law-abiding motorists who slightly overstay their welcome at parking places and are then treated as if they were criminals? I am sure it would lift confidence if they were spared some of the excess.

Mr Pickles: My right hon. Friend and I are as one on that matter. He will recall that the Government have consulted on this and on other issues related to parking, and that the consultation period has recently ended. We hope to make an announcement in the very near future.

New measures in the Budget will also help to support the building of a further 200,000 new homes for hard-working people, on top of the work we have already done to kick-start house building. New house building and construction output in England is now at its highest level since 2008, and new housing construction orders are at their highest levels since 2007. More than 170,000 affordable homes have been delivered since 2010, and £20 billion has been invested in affordable housing over the spending review period.

More council housing has been built under this coalition Government than in all the 13 years of the previous Government. I honestly do not understand why Labour Governments do not build council houses. Since the last quarter of the last century, the two really big builders of houses have been the Thatcher Administration and this coalition Government.

The number of first-time buyers is at its highest since 2007, and mortgage arrears at their lowest since the Bank of England’s figures began in 2007. The number of empty homes is at its lowest rate since records began and, in the last year, new housing registrations rose by 30% in England and by a massive 60% in London. In fact, the number of new homes registered in London last year was the highest since electronic records began more than 26 years ago.

By contrast, new home registrations fell in Labour-run Wales. House builders have shifted their business across the border to England because of the Welsh Government’s anti-business policies. This is due to Labour’s extra red tape, and to its botched implementation of home ownership schemes. By contrast, thanks to this Government, more than 17,000 people have already bought a home through Help to Buy. Overwhelmingly, these are first-time buyers, and they are mainly outside London and the south-east. This shows how we are supporting all parts of the country, north and south. Help to Buy is a key part of our long-term economic plan, giving thousands more people the security and independence that comes from owning their own home.

The Budget’s pension reforms will offer freedom of choice for people who work hard. It would be helpful if the right hon. Member for Leeds Central could clarify whether the Opposition support these reforms, or whether

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some ambiguity still exists. Our pension reforms, such as allowing the newly retired to pay off their mortgage and be liberated from the banks, will also lead to greater security in old age. I do not agree with the doom-mongers who say that this will somehow lead to a problem with buy to let. This Government are dramatically expanding the opportunities for institutional investment in the private rented sector, through guarantees and our build to rent schemes. These offer the opportunity for savers to invest in new built rented accommodation and to receive long-term, stable returns from the property market.

Sheila Gilmore (Edinburgh East) (Lab): I have a genuine question for the Secretary of State. If someone used their ability to draw down their pension to pay off their mortgage, have the Government considered the impact that that might have if they were to require social care assistance in the subsequent years?

Mr Pickles: We have to understand that people who save up for their retirement have worked hard to put together a nest egg and are therefore unlikely to squander it. We should trust people to put together their own schemes. This move has been widely welcomed across the industry and by pensioners groups. Indeed, it has been widely welcomed by everyone but the hon. Lady.

Sheila Gilmore rose

Mr Pickles: No, the hon. Lady has had her chance. That’s it.

We are also ensuring that small and medium-sized house builders get a share of our housing revolution. A new £525 million finance fund will deliver 15,000 houses on smaller sites. We are cutting red tape, too. Today, we have published our proposals for scaling back section 106 charges on small home builders. We are introducing an exemption from section 106 tariffs for self-builders and extensions, building on our exemptions already delivered from the community infrastructure levy. Yet again, the Labour party has not been clear about whether it supports cutting these stealth taxes on self-builders. Self-builders will also benefit from further steps to free up land for self-build; a £150 million investment fund for custom-build plots; and a new right to a plot and to build from councils. Further planning reforms will help get empty and under-used buildings back into use. Those build on the success of our “office to residential” planning reforms, measures the Labour party opposed, despite the fact that they are providing new homes on brownfield sites in our towns and cities.

We are also supporting the first garden city for a generation, at Ebbsfleet—decisive action and investment that Labour failed to deliver. The original announcement was made in John Prescott’s 2003 sustainable communities plan, but the Labour party failed to build at Ebbsfleet.

Nicholas Soames (Mid Sussex) (Con): Does my right hon. Friend agree that the good thing about Ebbsfleet is that it commands the near unanimous support of the local community—of Members of Parliament, councillors and local citizens—which is very important for a project of this size? Does he also agree that speculative developments such as those in my constituency and in Arundel and South Downs produced by Mayfield are entirely unwelcome and command no local support at all?

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Mr Pickles: My right hon. Friend has carefully, and with his customary style, signposted where developers should go, from his constituency to parts of Kent. The top-down eco-towns built nothing but resentment, but this Government are working with communities to support large-scale development. As he said, this works only if local councils are in favour, and we work with local developers and with the local community to build something together in a proper partnership.

Mr Redwood: My right hon. Friend might like to know that about a decade ago I wrote a pamphlet called “Thames Reach”, recommending a new town in the Ebbsfleet area. I recommended it to the Labour Government, as I am full of generous good ideas and thought they might want to take it up. I think they agreed with it, but they did absolutely nothing. Can he explain why?

Mr Pickles: No, I cannot explain why. I suspect that my right hon. Friend’s reputation as a scourge from the right may have put the Labour Government off. I suspect they never got further than the title page, but had they gone on they would have seen some very sensible suggestions. We are free from that prejudice and, of course, he is an inspiration to us all.

Further support will come in due course from the second round of the local infrastructure fund and a prospectus on support for locally led garden cities. Increased output, increased supply and increased jobs, with stable recovery, low interest rates, and support for firms and sites of all size—we have got Britain building again. Labour’s threats of land grabs and a new development tax on house builders would cut the level of house building and undermine investment in complex land assembly projects. Against a backdrop of anti-business sentiment, perhaps epitomised by the Labour Department for Communities and Local Government team’s campaign against free Waitrose coffee, it is no surprise that this week’s Investors Chronicle warns savers to sell their shares in house builders if Labour were to win the election. That is not going to build more homes; it is a recipe for stagnation and for unemployment. As Wales shows, Labour’s anti-business dogma will have a chilling effect on jobs and the economy.

By contrast, this Government welcome enterprise and the free market. Enterprise zones have led the way in creating jobs all over the country, as well as helping the UK to become a world leader in a range of technologies and for inward investment.

Mr Brooks Newmark (Braintree) (Con): On the subject of jobs, my right hon. Friend might be interested to know that not a single Labour Government have left power with more jobs than when they came in. Not only have this Government created 1.7 million jobs in the past four years, but the Red Book is predicting another 1.5 million jobs in the next five years.

Mr Pickles: I am not sure whether I was aware of that. I am surprised but not shocked by the revelation. It is a good job that we have had an opportunity to make that difference to the British economy.

Enterprise zones have led the way in creating jobs all over the country as well as in helping the UK to become a world leader in a range of technologies and for inward

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investment. The existing 24 zones have created 7,500 jobs, and multinational companies have been tempted to the UK thanks to our business rate and simplified planning offers and other financial benefits.

To sustain that momentum, we have extended the business rate discount to 2018, offering up to £55,000 off business rates a year for five years, and extended the enhanced capital allowances incentive for those zones that have it. That includes Northern Ireland’s first enterprise zone, which is being established close to the university of Ulster campus near Coleraine. That measure comes on top of the business rates announcement in the Budget for small firms and local shops. By backing new and developing businesses and offering exclusive packages to entice new investment, we are confident that enterprise zones will carry on creating jobs and specialist local economies.

Mark Menzies (Fylde) (Con): I thank my right hon. Friend for the work that his Department has put in on the Warton enterprise zone to ensure that there has been joined-up thinking in Government with regard to the Preston city deal. Will he assure me that Lancashire and Warton will remain at the forefront of his Department’s thoughts?

Mr Pickles: I can assure my hon. Friend that, as an ethnic Yorkshireman, Lancashire is rarely out of my thoughts. That is also true of the enterprise zone, and I look forward to visiting it very soon and seeing him there.

The Budget has ensured that areas all around the country will benefit from steady growth. The Mersey gateway bridge has been guaranteed to the tune of £270 million, the Cambridge city deal will accelerate 33,000 houses, and the second phase of city deals will bring improved transport links and employment opportunities to 15 places around the country.

The Budget will build a more resilient economy. Working through our long-term economic plan is the only way to deliver what the British people want, which is the economic security that comes with a good job and the prospect of a better future for all. That plan has delivered economic stability and low mortgage rates for hard-working families, and it has laid the foundations for a sustainable economic recovery. I commend the Budget to the House.

5.18 pm

Hilary Benn (Leeds Central) (Lab): Let me say how grateful I am to the Secretary of State for his very kind words of condolence, which mean a great deal to me personally and to the rest of our family.

We have a chance today to discuss the impact of the Budget on families and communities when it comes to their chances of getting a home, deciding where that home will be built and by whom and whether the policy the Government are pursuing meets the simple test of fairness. Those are the things that I want to address in my remarks.

We know that housing is at the heart of the cost of living crisis facing many of our constituents. Parents worry about whether their children will be able to afford a home. Young people who want to get a foot on the housing ladder see house prices disappearing into the

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distance. People who are renting worry about the impact of rents that are going up faster than their wages. As I think the whole House will acknowledge, that is the result of a housing crisis that has come upon us over many years, as successive Governments have failed to build enough homes. Let me just say before anybody jumps up that it is a fact that, despite all the words we have heard from the Secretary of State and his colleagues today and on previous occasions, housing completions were higher in every single year of the previous Labour Government than they have been in any year under this Government. That puts into context what the Secretary of State had to say. Although I recognise that the previous Labour Government and our predecessors from both parties did not do enough to build homes, I would take our record over his any day.

Jonathan Evans (Cardiff North) (Con): The right hon. Gentleman suggests that the Government before the previous Labour Government had a similarly poor record, but in fact theirs was better.

Hilary Benn: I am very proud of the record of the previous Labour Government: 2 million new homes, including 500,000 affordable homes, and a huge number of social homes that were brought up to decency standard. One thing that the previous Conservative Government bequeathed the previous Labour Government was a lot of council houses that were in poor condition because they had not invested any money in improving them. When the Secretary of State is next having a conversation with the Prime Minister, he might point out that the next time he walks down that famous staircase in No. 10 past the photographs of his predecessors, he will have to get all the way to Stanley Baldwin to find a Prime Minister with a worse record of building houses than the current occupant of that office.

In his 2011 Budget speech, the Chancellor told us that he would deliver an economy

“carried aloft by the march of the makers.”—[Official Report, 23 March 2011; Vol. 525, c. 966.]

Although, as the Secretary of State says, housing starts are now finally up, what has happened to construction output overall? It has fallen by 4.2%. I do not know how many marches the Chancellor has been on, but the general idea of a march is that one goes forwards rather than backwards.

Although the Government’s record of building houses has been poor, they have intervened in the mortgage market through Help to Buy, and last Wednesday the Chancellor made an announcement about extending the equity loan scheme to 2020. As I have said before from this Dispatch Box, we support help for people, especially first-time buyers, to realise their dream of home ownership, but if the Government simply increase demand and do not do enough to increase supply, all that will happen is that house prices will rise further out of reach of the very people we are seeking to help. That is why the Treasury Committee and the International Monetary Fund express concerns about Help to Buy. I presume that the Chancellor has now finally acknowledged that, as he told the House last week that he has asked the Bank of England

“to be particularly vigilant against the emergence of potential risks in the housing market.”—[Official Report, 19 March 2014; Vol. 577, c. 783-84.]

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That is progress, but could the Minister tell us when he replies exactly what that means in practice and how we and the public will be kept informed of how that vigilance is operating?

Alec Shelbrooke (Elmet and Rothwell) (Con): First, I offer my condolences to the right hon. Gentleman, as a fellow Leeds MP, for the loss his family has suffered. As a fellow Leeds MP, he will know some of the pressures of development in Leeds, with some 70,000 units to be built in the city, despite talk in the Leeds core strategy. Does he agree that we must be careful about where these large-scale developments are built? If we are massively to change the shape of the village of Scholes in my constituency, say, that would have the unfortunate effect of lowering house prices and putting people into—

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. I think that the right hon. Gentleman, as he knows the area so well, has the message.

Hilary Benn: I am grateful to the hon. Gentleman for his kind words. If he will bear with me, I shall directly address his point about where the houses should go in a moment.

We need to build more homes. Everybody recognises that. That is why, for example, we called for a help to build fund supported by Treasury guarantees to assist small and medium-sized builders in accessing finance to build some of those homes. I welcome the fact that the Government have listened and set up a builders’ finance fund, but history teaches us that we need to do more if we are successfully to change the way in which the market works.

Let me reflect on that for a moment. In the 1930s, when we reached the highest level of private house building ever achieved in the UK, the top 10 house building companies had a market share of 6% or 7%. In 1988, firms completing fewer than 500 units a year produced about two thirds of UK housing but by 2012 that had fallen to less than a third. In other words, as the number of small and medium-sized builders has declined and the big firms have grown larger, it has become easier for the more dominant firms to buy up the land. That is why small and medium-sized builders and custom builders say that it is hard for them to get access to land, so I agree that it is about helping them with finance, but it is also about enabling them to get the soil they need to build on.

The Secretary of State spoke about self-build and the House will remember that the former Housing Minister, now the chair of the Conservative party, promised a self-build revolution and pledged to double––double––the self-build sector. But the facts show that, last year, far from doubling the size of the sector, the number of self-build homes fell to the lowest level for 30 years. That is some revolution.

Gareth Johnson (Dartford) (Con): The right hon. Gentleman talks about the lack of house building. Will he therefore use this opportunity to support without reservation the development corporation that is being introduced to build houses in Ebbsfleet in my constituency?

Hilary Benn: I certainly support all measures that will help us to get housing supply up because that is an objective shared across the House. I shall have something more to say about Ebbsfleet in a moment.

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We have also called for local authorities to have a higher proportion of small sites in their five-year land supply and to give guaranteed access to public land for small firms and custom builders, something to which the Secretary of State referred and that was also in the Budget. That is also why we have said that a proportion of homes in new towns and garden cities should be built by smaller firms and custom builders. The truth is that if we are going to make progress, we have to change the way in which the housing market and the building market work, which is something that Ministers have not yet acknowledged. Why? We know that the high cost of housing is driven by the cost of land. We know that not enough land is being released for housing development. We know that by the time that land is given planning permission, it is often prohibitively expensive and we know that this can create an incentive to bank, rather than build on, the land.

As the Planning Minister told me in a written answer earlier this year, as of January there were 538,000 units with planning permission that had not yet been completed. About half had been started and the rest were working towards a start or were on hold. He says that land banking is not an issue. He says that in many an answer to a written question, but he forgets that a 2008 Office of Fair Trading survey found that strategic land bought with options, which accounted for about 83% of land banks, was worth 14.3 years of production. That is about enough land to build 1.4 million homes.

What is more, under the current system, there is very little that local authorities can do about it, because existing compulsory purchase order powers are legalistic, expensive, time-consuming and complex. Authorities are in a weak position to try to get the land brought forward. That is why we have argued for and will deliver much greater transparency in the system by ensuring that developers register the land that they own or have options on. We will give councils the power to charge developers escalating fees for sitting on land with planning permission to incentivise them to actually build the homes they said they wanted to build.

The idea is denounced by the Secretary of State but it is supported by the International Monetary Fund and by the hon. Members for Rossendale and Darwen (Jake Berry) and for Stratford-on-Avon (Nadhim Zahawi) and indeed it was supported by the Planning Minister before he got his job. As a last resort, we will give local authorities proper compulsory purchase powers so they can, in the right circumstances, buy, assemble and grant planning permission on land that is being held back from development.

What is the purpose of this? It is to address the current imbalance in power between communities and developers. This is the point the hon. Member for Dartford (Gareth Johnson) raised. Where communities decide where new housing needs to go, which is what neighbourhood planning is all about and why I strongly support it, and when permission has been given, they should be able to do more to ensure that the houses actually get built. But there is a problem here, and it is the reason why the Planning Minister gets a lot of stick from many of his Back Benchers. When a five-year land supply has been identified, all the cards are stacked in the developers’ favour. They can look at one site and

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say, “That’s brownfield, too expensive to develop, there is contamination. We are not going there.” They can look at another site and say “That’s not viable.” They do not explain their measure of viability but just end the conversation by saying it is not viable. They look at a third site and say, “Okay we can do about 100 houses a year on that site”, even though, physically, it could take 250, 500, or say, 1,000 houses. Then, at the end of the process, when the numbers are added up against the council’s assessment of its annual housing need, what happens? Lo and behold, developers say, “Your five-year land supply is inadequate and therefore, we would like to build there and there and there.” That is what is going on up and down the country.

I think the deal is that communities have to take responsibility for identifying sufficient land for housing supply, but they then have to be able to ensure that the houses that are needed are built on the land that they have identified. What we have at the moment is a system in which communities and their local authorities have very little power and that is why change is required.

Sir Edward Garnier (Harborough) (Con): What does the right hon. Gentleman mean by community? How does he identify the community in this context?

Hilary Benn: First, the community is represented by the local authority, and, secondly, I think the community has a really important part to play by joining in the process of neighbourhood planning. We have seen from some parts of the country—Thame is probably the best example—that the community took responsibility. It consulted and had a referendum and, from memory, 73% of people voted in favour of the plan. It identified sites for housing development. I think that is the right approach, because for too long, we have had a system where no one has taken responsibility and everyone has pointed the finger at somebody else when it comes to housing supply. That is why we need change.

Mary Macleod (Brentford and Isleworth) (Con): Will the right hon. Gentleman join me in urging the Labour Hounslow council in west London, which has development sites of 900 units, to include some affordable housing?

Hilary Benn: I am very strongly in favour of affordable housing—I was not aware that we had any county councils in west London, but I think that the hon. Lady was referring to something else. We need more private housing, more housing for rent and more social housing at a price that people can afford.

We also need new towns and garden cities, so what about what I would refer to as the great mystery of the highly reclusive new towns and garden cities prospectus? Just to remind the House, two years ago, the Prime Minister announced that he would be publishing a consultation by the end of the year on garden cities—does everyone remember that?—but 2012 came to an end and it did not appear, and 2013 happened and it still did not materialise. We then read reports in the newspapers that the Prime Minister was suppressing a document and had gone cold on the whole idea. Then, in January, the Housing Minister said that he was not aware of a report that was supposed to have been published, but the Deputy Prime Minister said that there was a prospectus and that the Government should be honest about their

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intentions. Then the Secretary of State contradicted his Housing Minister and said that he had been told by his Department that there was a report, but not a report from the Department for Communities and Local Government—I do hope the House is keeping up.

Then, last week, the Chancellor announced that there would be a new garden city at Ebbsfleet with 15,000 homes. The only trouble is that that is 5,000 fewer homes than the 20,000-home development announced for Ebbsfleet in December 2012. Only this Chancellor could proclaim a smaller development as a triumph—backwards not forwards. We look forward to the publication of that prospectus, hopefully before Easter, and if the Secretary of State has not already seen a copy, I trust he will ask for it. After such a lengthy gestation, I hope that it does not disappoint him or the rest of us.

That episode shows that there has clearly been fighting within the Government—within the Cabinet—about what should be in it. We now know, thanks to the Yorkshire Post and the Under-Secretary of State for Communities and Local Government, the hon. Member for Bristol West (Stephen Williams), that the same thing is happening inside the Department for Communities and Local Government.

I feel very sorry for the Under-Secretary, whom I notice is not in his place today, because he does not always look entirely happy and that may be why he decided to unburden himself at the Lib Dem conference recently. He said that being compared to the Secretary of State—I think it was a joke—was

“the most grievous possible insult”

that anyone could deliver. I think that is unfair and unkind to his boss. He was complimentary about the Planning Minister but said that he was

“hated by many Tory MPs”.

That is possibly true, but I think it is also unfair, and since then, the hon. Gentleman seems to have been given all the pretty unpleasant jobs in the Department, defending the indefensible. I hope the fact that he is not here today does not mean that he is being held hostage in the Department by the Secretary of State and I hope that he retains his independent streak.

The most damning comments from the Under-Secretary were about a flagship policy of his own Department:

“The new homes bonus… I’m not a fan of. I don’t think it’s an incentive, necessarily, for local authorities to give planning permission. I don’t think it’s actually driving decision-making on the ground.”

He is in good company, because the National Audit Office agrees. As we are already aware, the Housing Minister does not seem to know what it is meant for either, because he has told the House:

“I am afraid the new homes bonus is not about encouraging people to build homes.”—[Official Report, 25 November 2013; Vol. 571, c. 11.]

We have now had it from two Ministers—it is not effective.

The new homes bonus is also profoundly unfair. It is given to councils according to the number of homes that happen to be built in their area and it is top-sliced from formula grant, which is distributed according to need. Therefore—surprise, surprise—the areas that are getting most of the money are those where the homes will probably be built anyway, which tend to be better off, while the areas that are losing funding are those where there is less demand for housing, which tend to

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be worse off. It is yet another example of this Government, in tough times, taking most from those who have least, and in so doing they fail that basic test of fairness.

The Government just do not get it. At a time when real wages are falling, as was confirmed by the Office for Budget Responsibility document published last week, they think that the most important thing to do is give millionaires a tax cut. They think that councils in the most deprived areas with the greatest need should face the biggest reductions, while some of the wealthiest councils get an increase in the money they have to spend.

There are 10 Members of Parliament lucky enough to have councils in their constituencies that will be better off in terms of spending power per household—the Secretary of State’s preferred measure—by 2015-16 than they were in 2010-11. Four of them are in the Cabinet. Two of them are Government Whips. Under this Secretary of State, the 25 most deprived local authorities in England will lose 10 times as much spending power per household as the 25 least deprived.

Not only are we seeing the biggest reductions in spending power in the areas with the highest need while there are increases in spending power in the wealthiest areas, but before long, the funding difference between those areas, having eroded, will in some cases be reversed. Within four years, under this Government, local spending power per household will be higher in Wokingham—I am sorry that the right hon. Member for Wokingham (Mr Redwood) is no longer in his place—than it will be in Leeds, Sheffield or Newcastle, even though those cities face far greater pressures.

Most people would say that that is extraordinary. Most people would regard it as unfair and impossible to justify. So why does the Secretary of State think that areas in greater need should actually receive less? We know what he thinks already, because in tough times for councils some services are becoming unviable, with entitlement to social care disappearing in some cases, and libraries, the arts, Sure Start centres and women’s refuges going. What does he say to councils? He says, “What’s your problem? These cuts are really quite modest. What are you complaining about?”

It is not just communities that are being hit; it is the people in the greatest need in those communities. What has the Secretary of State done? He has forced up council tax bills for people in work on the lowest incomes: carers, the disabled, injured veterans and war widows. Summonses have been issued and bailiffs are knocking on doors, because people are poor. That is why they are being affected.

The Government are forcing people to pay the hated and immoral bedroom tax, undermining community, neighbourliness and a sense of place. Once again, that hits people on the lowest incomes, most of whom are disabled. Let us consider for a moment a family receiving housing benefit, a mother and father with two children living in a three-bedroom council house. If one of the children leaves home to get a job, the Government are telling that family, “Move.” Two years later, the second child leaves home and gets a job elsewhere. What do the Government say to that family? They say, “Just move again”, leaving mum and dad in a one-bedroom property. Then, three years later, the father’s mother becomes ill and needs to come and live with them so that they can care for her. What do the Government say? “Oh, just move again.” I cannot think of a policy more calculated

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to undermine family life, and you know what? That family will not even have a spare bedroom so that their grandchildren can come and stay. That is why people are so angry about the bedroom tax and why, if we win in 2015, we will abolish it.

Alec Shelbrooke: Will the right hon. Gentleman give way?

Hilary Benn: The hon. Gentleman has had a go. I am going to bring my remarks to an end, because many people want to speak.

Only last week, when the Chancellor had the nerve to get up in the House and say, “Oh, well, we are all in this together”, and the OBR confirmed that real wages were falling, what did we discover? That some Cabinet Ministers had been giving hefty pay rises—to whom? Their special advisers. The architect of and chief apologist for the bedroom tax, the Secretary of State for Work and Pensions, gave his special adviser a 36% pay increase in one year alone. If that is not proof that this Government stand up for the wrong people, I do not know what is.

This is a Budget that provides too little, too late to deal with either the chronic shortage of houses or the cost of living crisis, and the Chancellor and the Secretary of State for Communities and Local Government have shown once again that they do not really understand, and are not prepared to take the action that we need to make life better for the British people.

Several hon. Members rose

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. There will be a six-minute limit on speeches—I have increased it by one minute.

5.41 pm

Nicholas Soames (Mid Sussex) (Con): May I join in the expression of condolence to the right hon. Member for Leeds Central (Hilary Benn) and say how sad I was to hear his news?

I want to welcome the Budget and reflect for a moment on the Chancellor’s considerable achievement. Fortified by a coalition and stronger for it, with the most appalling legacy left by the last Government, he has managed to turn things around so that our country is now well on the path to better days, with a growing economy, a remarkable number of new jobs emerging and an exciting future about which we can all be optimistic —in particular, I hope, our young people, many of whom are having a tough time of it.

I want especially to mention the Chancellor’s wise decision to freeze fuel duty, which is now 20p lower than it would have been under a Labour Government. Together with a well judged freeze in the council tax, on which I congratulate my right hon. Friend the Secretary of State for Communities and Local Government, that will make a real difference to hard-pressed families in Mid Sussex and elsewhere. I want particularly to congratulate the Chancellor on the welcome plans that have been set out for supporting exports, science and innovation, and of course on the game-changing package of support for savers and pensioners, which has undoubtedly commanded the broadest support possible, and rightly so.

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I hope that people now realise—I truly think that they do—the profound difference between the wilful, almost grotesque irresponsibility of the last Labour Government and the steely, genuine determination of the current Administration to get on top of the serious difficulties with a long-term economic plan whose success is now quite clear for all to see. However, the new networked world in which we in this country have to make our way, and for which it must be said we are ill prepared, is manifesting every day a global flow of ideas, innovations, new collaborative possibilities and new market opportunities, not only here but all over the world. To be frank, if we get it right, the world should be our oyster.

There are plenty of businesses and people who understand that. They understand that by tapping into the global flow of new ideas and opportunities, they can become the key to something that we badly need in this country: far greater productivity. It is nowhere near good enough here, and it is the key to growth and increasing prosperity.

All of that will inevitably, and sadly, involve seismic change. I congratulate the Government on the announcement in the Budget of £42 million for the new Alan Turing institute and £74 million for the cell therapy manufacturing centre and the graphene innovation centre, all of which will greatly increase our chances of helping to export our way out of financial difficulties by accessing the fastest-growing markets around the world, particularly in the life sciences, agricultural products, science, medicine, energy and of course services.

My great anxiety is how our country will cope as we try to respond to changes in technology, globalisation and markets that have, in a very short time, made the decently waged, medium-skilled job increasingly unavailable. That is very serious for an economic model such as that in our country, and it is my firm belief that in not too short a time, most of the decently paid jobs will inevitably be those where high skills are at a premium.

I applaud the work of my right hon. Friend the Education Secretary and the Department for Business, Innovation and Skills as they try to answer those challenges, but we must now acquire a new level of political imagination, a combination of further, large education reforms, and an unprecedented collaboration among schools, businesses, universities and the Government, to change fundamentally how people are trained, and enable them to keep on training and learning throughout their working life. That will require major tax reforms and for us to consider in a more careful manner—I say this very deliberately—some of the immigration changes that are under way, in the interests of our economic growth.

Those ideas need to come from across the political spectrum. They will not be the prerogative of any one party, and there will need to be a willingness to meet people half way. We need to attract and enable the kind of talent to come to this country that can constantly spin off new ideas and start-ups, which are undoubtedly already the cause of most new, good jobs. It makes perfect sense: if we are to have more employees, we need more employers. Although that huge transformation, driven by the networked world and all that it involves, takes place—

Mr Deputy Speaker (Mr Lindsay Hoyle): Order.

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5.47 pm

Mr John Denham (Southampton, Itchen) (Lab): The right hon. Member for Mid Sussex (Nicholas Soames) spoke of the importance of high skills, so let me consider the Government’s record on higher education. The Government’s approach to funding higher education is scandalously irresponsible. It is bad value for taxpayers, and wilfully makes graduates pay far too much for their degrees. By relying on unsustainable financial mechanisms, the Government threaten the long-term health of our universities.

Under their latest plans, each year the Government will borrow £14.6 billion to fund student loans, and each year they will write off, at taxpayers’ expense, £6.6 billion—a liability of £300 for every household in England, every year, and year after year. On every major judgment the Government have got their figures wrong. They said that fees above £6,000 would be exceptional, but most are at or near the maximum of £9,000. Last year the Government got their projection of student numbers in private colleges so expensively wrong that they had to step in to block recruitment. They said that debt cancellation rates would be 28%; last week they admitted that they are 45%. The public financing of higher education has been out of control since high fees were introduced for purely ideological reasons.

The immediate damage to public finances may be hidden by accounting conventions, but no public accounting convention should be allowed to disguise what is going on. As loans are not repaid in years to come, the cost of today’s higher education is put not just on graduates but on all future taxpayers, and this is from the Chancellor who said:

“We have always understood that the greatest unfairness was loading debts on to our children that our generation did not have the courage to tackle”.—[Official Report, 26 June 2013; Vol. 565, c. 303.]

A high-fee, high-debt cancellation policy forces up everyone’s fees and institutionalises waste. Of today’s public spending on higher education, £7.50 is spent on debt cancellation for every £1 spent on teaching students. If more were spent on teaching, fees would fall, as would the level of loans, the amount the Government had to borrow, the level and rate of debt cancellation, and the liability on the taxpayer. As a result of fees being lower, we would enjoy the virtuous outcome whereby all graduates would pay back less on their loans and more graduates would fully repay what they had borrowed.

There are many ways of modelling such a change. I set one out myself a few weeks ago at the Royal Society of Arts; it includes some wider changes to the delivery of higher education that are desirable. This is just an illustration of the scale of change that is possible. I am grateful to the House of Commons Library for modelling the figures that I am about to share with the House. With a different approach to higher education, whereby we spent money on teaching, not debt cancellation, Government borrowing would fall from £14.6 billion a year to £9.8 billion a year. Public sector net debt—that is, borrowing less the repayments made—would be about £10 billion lower after eight years and £30 billion lower after 20 years. The cost of debt cancellation each year would fall from £6.6 billion to £3.4 billion. The annual fees for a three-year degree could fall to £3,400 a year —pretty much the same as they were in 2010.

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Mr Pat McFadden (Wolverhampton South East) (Lab): I am very interested in the figures that my right hon. Friend is reading out. What does he think the implications are for the Government’s policy to sell the student loan book?

Mr Denham: If I may, I will come to the student loan book in a moment, because that is a serious point.

One final point from the model that I have outlined is that the average amount paid back by each graduate would fall by £5,000 in total. On this model, usable university income would rise by at least £650 million a year.

The current approach is astonishingly wasteful in terms of public money and private graduate contributions —and that is not the end of it. As he said in the autumn statement, the Chancellor wants to encourage an additional 90,000 students, funded by the sale of the income-contingent student loan book. I do not object to the principle of selling the loan book. I tried to do it myself for two years when I was a Minister, but I became convinced that value for money was impossible to achieve. Buyers face such unknown risks on future inflation, earnings and the level of evasion that either the loan book has to be sold at a massive mark-down on face value or the buyer’s income has to be guaranteed through taxpayer subsidies—the so-called synthetic hedge, which is not so much plastic privet as guaranteed private profit. Selling a capital asset to fund hypothecated revenue spending is a short-term fix that exposes higher education to unsustainable costs when the money runs out. The Public Accounts Committee has said that it has no confidence in the ability of the Department for Business, Innovation and Skills to work out what is value for money.

This cannot go on. Universities are pressing for higher fees, and Ministers have refused to rule out an increase, but the financial futility of that is now clear. Every time fees go up, the cost and rate of debt cancellation will increase. Graduate repayments will rise, yet fewer and fewer graduates will repay their debts. The Prime Minister’s former head of policy, Paul Kirby, recently suggested closing 25% to 40% of all university courses—all those where graduate incomes are not enough to repay fees. Higher education is not simply a private benefit; it is a public benefit and a private benefit. It is now clear that we can reset the system so that there is a fair partnership between the state and the student. As my modelling has shown, we could have lower fees, lower borrowing and lower debt cancellation, with higher usable incomes for universities, within the current envelope of public spending. Only the ideological dogma and blinkered embarrassment of this Government stands in the way of doing just what is needed.

5.54 pm

Mr Charles Kennedy (Ross, Skye and Lochaber) (LD): I wish to deliver a few remarks on the two broad themes that have been outlined for today’s Budget debate—families and communities.

May I add my condolences to those expressed to the right hon. Member for Leeds Central (Hilary Benn)? I first met his late father when I was at Glasgow university and on a train going to Bristol. He was with the late Eric Heffer. We were in the final of a debating tournament at Bristol, with Eric Heffer as the guest speaker on

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our side which was against proportional representation—and we won. David Steel, who was on the other side of the argument with the Bristol team, was none too happy about that. The right hon. Gentleman’s father was always very kind to me throughout the following 35 years of respect and, indeed, friendship that we enjoyed.

I have been critical of the welfare cap in the past, and I remain anxious about it. I have opposed the bedroom tax. I share the concerns expressed by the right hon. Member for Southampton, Itchen (Mr Denham) about student finance issues, and voted against such provisions earlier in this Parliament. Nevertheless, it would be churlish not to welcome the progress indicated in this Budget as regards families. Looking at the figures from my own constituency, this Budget represents an £800 tax cut for some 27,390 people—a significant achievement. The pensions overhaul is leaving pensioners £650 better off. Alongside the tax-free child care initiatives, that means that both ends of the age spectrum are being addressed. That is the mark of a society heading in the right direction. I think we would all agree that the emblem of a decent society is that it gives a sense of opportunity to people in their youth and a sense of security, dignity and comfort to people at the other end of their lifespan. All those measures are welcome.

I also welcome the measures on fuel duty, which are particularly important in my area of the highlands and islands of Scotland, which, geographically, is the largest constituency in the UK. The cost of fuel permeates everything in an area where the motor vehicle is not a luxury but an absolute necessity, and where, in days gone by, we have seen punitive increases. Fuel prices remain pitched at punitive levels in many parts of the highlands, particularly in the more remote—and therefore, by definition, more vulnerable—communities for whom access to fuel and transport is absolutely fundamental. The fuel duty freeze confirmed by the Chancellor is welcome, although, as he would expect, many of us would argue instead for a real-terms cut, which we would see as social fairness on a UK-wide basis.

When I first started out 31 years ago, the state of the Scotch whisky industry was dire. Distilleries were being mothballed and people were being made unemployed. The industry did not have a long-term, viable global future; it was losing out to the white spirits industry, in particular. An amazing turnaround has taken place, to the extent that there are now plans in progress, in my constituency alone, for the building of two new distilleries —one on the Isle of Skye and one on the Ardnamurchan peninsula. That is a remarkable development. The freezing of the duty on whisky is welcome for this industry, which is vitally important for the well-being of the whole UK economy.

My next point is about start-up support for regional airports. Transport links, and the communications arising from them, are vital to an area such as the highlands and islands. Dalcross, Inverness’s airport, is located in the constituency of my right hon. Friend the Chief Secretary to the Treasury, but it serves as the hub for us all. He has worked hard on achieving the start-up support that has been announced, which removes red tape on new routes and develops the social and commercial arteries that regional airports are. That must be welcomed,

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although I would go one step further and give Treasury Ministers a nudge about the developments afoot to reopen the airstrip at Broadford on the Isle of Skye, as we have gone backwards in one respect. Thirty-plus years ago, I could leave central London on a Friday morning, take the British Airways shuttle, as it then was, to Glasgow, connect to a Loganair flight, and be in Portree on the Isle of Skye ready to hold a surgery by Friday lunchtime. Thirty years later, I can no longer do that. Things have gone back in that respect, so if the Government are thinking imaginatively about our airports, I hope they will not just look at existing airports, but consider revitalising some of the airstrips and airports that previously existed and served such a good purpose.

In general I welcome the Budget. Scotland should welcome the Budget. That is a message that those of us who want to keep the United Kingdom better together will convey not just in the House, but across the whole country.

6 pm

Robert Flello (Stoke-on-Trent South) (Lab): I am grateful to the right hon. Member for Ross, Skye and Lochaber (Mr Kennedy) for his comments on fuel, to which I, too, shall refer.

What we have seen is a Budget from a failed Chancellor reaping a growing economic reward that he did not sow—an economy that is improving despite what the Chancellor has done over the past four years. The Chancellor said that the deficit would be gone by the next general election, but there has been a reduction of only a third so far, with a year left. There was talk about pulling rabbits out of a hat, but that is quite a rabbit to pull out, with one year to go and two thirds of the deficit still to reduce. Debt has risen, and the growth that there is in the economy is based on delicate consumer spending—consumers spending their savings or money that they might have saved. Growth was stronger back in May 2010.

In the time available to me, I turn to some of the things that should have been in the Budget. As the right hon. Member for Ross, Skye and Lochaber said, what was needed was a fuel cut. FairFuelUK is one of many organisations suggesting that a 3p cut in fuel duty would kick-start businesses. Hauliers and others throughout the country were relying on some sort of cut because for them that is the difference between making a profit or a loss.

Four years on, we have heard many times, and will no doubt continue to hear, Members on the Government Benches referring to what the position would have been if Labour were still in government. What nonsense! What about the fuel duty escalator introduced by the present Minister without Portfolio, the right hon. and learned Member for Rushcliffe (Mr Clarke)? What would it have been if we had kept that going?

My right hon. Friend the Member for Leeds Central (Hilary Benn) referred to councils’ ability to assemble land. That should indeed have been possible. In my constituency, in the rest of Stoke-on-Trent and in the rest of north Staffordshire I frequently see pieces of land that have been held by one developer sold to another developer, then sold to a third and to a fourth. I think of one piece of land in particular where basic infrastructure—drainage and cabling—was put in, but

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that was it. Nothing moved after the economic tsunami hit, and the land has been changing hands ever since at higher and higher prices. Now the economy would have to be racing away for there to be any possibility of that land being developed. I can think of example after example where a small number of wealthy developers are sitting on land until they get their own way.

Other points should have been dealt with in the Budget. Businesses, especially in the haulage sector, have been calling for a stable view, six or seven years out, of the duty on biofuel, and ideally a reduction in that duty, so that they can make the investment and put the infrastructure in place for heavy goods vehicles that run far more efficiently on our roads.

Energy-intensive manufacturers such as the ceramic industry in Stoke-on-Trent are losing out as a result of energy speculators trading on the price of gas and speculating that what is happening in Crimea might have a negative impact on prices. Who pays? It is the manufacturers who have to buy their energy, not the speculators buying and selling.

Another of the things not in the Budget was the massive cuts to the finances of Stoke-on-Trent city council, which has been the third hardest hit for three years running. That is likely to continue for a fourth year because of the hit to our local authority, which means that services for real people are being taken away.

Of the things that were in the Budget, I shall concentrate on pensions and the removal of the annuity obligation. Giving people more choice in respect of the money they have worked hard to put aside for their pension is, on the face of it, a good thing, but around 80% of people who already do not shop around for the best annuity are losing out. People who need to buy annuities will find them far more expensive. As for the free and impartial guidance, it is advice that is needed, and who will pay for that advice or guidance? It is another mis-selling scandal being lined up to hit in a few years’ time, and, mark my words, it will come back and hit whichever Government happen to be in office at the time.

Who wins? The financial advisers might win, the Treasury will certainly win in the first few years, and insurance companies will bring out complex new products. Or, as the Pensions Minister suggested, is it Lamborghini salesmen who will benefit from the changes?

Let me end by referring to the economic hit on places such as Stoke-on-Trent from HS2. KPMG accountants identified an £80 million potential loss for Stoke-on-Trent as a result of HS2 if it happens as predicted. No Budget could make up for such massive damage to our economy.

6.6 pm

John Howell (Henley) (Con): I shall not follow the hon. Member for Stoke-on-Trent South (Robert Flello) in his comments about the Chancellor. Instead, I congratulate the Chancellor on a first-class Budget, for the reasons given and expounded on by my right hon. and hon. Friends in earlier debates. For reasons of time, I shall not repeat them.

I would like to comment on the new garden city planned for Ebbsfleet. That is not in my constituency, but it holds an attraction for all those who see a new garden city as a way of meeting expectations to provide the number of houses required by tomorrow’s inhabitants.

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It represents a good way of bridging the gap or squaring the circle between making planning and development local and providing for the future. As part of the Budget, as we have heard, the Chancellor set out an ambitious plan and up to £200 million of public investment for a major new development around the high-speed rail station in Ebbsfleet in Kent. That is only 19 minutes from central London, and the 15,000 new homes it will provide are to be welcomed.

The excellent transport links to London will make Ebbsfleet a very attractive commuter location, but development at Ebbsfleet will also provide tens of thousands of new jobs, many of which, it is expected, will be taken up by local residents. I make two points about this. The first is the involvement of local people. The Royal Town Planning Institute commented:

“The Government’s announcement of a ‘new Garden City’ in Ebbsfleet is a welcome, if limited initiative.”

The word “limited” is misguided. It fails to recognise the new localist age we are in. This is not a case of central Government imposing a solution. It must be driven by local councils.

In this context I was pleased to see the right hon. Member for Leeds Central (Hilary Benn) comment on neighbourhood plans, and particularly the neighbourhood plan in Thame in my constituency. The most important thing about that is that in the referendum that was held on the same day as the county council elections, one in 10 people went into the polling booth and voted for the neighbourhood plan, but did not vote for their county councillor. One in 10 people did that because the neighbourhood plan is a crucial way of determining the future of their town. The Government want local people to be involved in towns such as Ebbsfleet. That is crucial as part of the consultation, to make sure that it is going to be a good place for people to live, and for us to make the necessary investment to turn derelict sites that are currently local eyesores into green places to live.

The relevant local councils usually sit on the boards of development corporations. It is vital that urban development corporations are democratically accountable. It is therefore necessary to ensure that local councils are represented, including the county council, which will be crucial in providing much of the infrastructure.

Urban development corporations are designed to be time-limited local vehicles that drive major development forward, especially when the scale of change is significant. The experience since the 1980s suggests that UDCs work best when they channel their efforts into the development of specific major sites, where extensive capacity and resources are required. The Government are determined that this UDC will learn the lessons from previous ones. Therefore, it will have a clear focus on the accelerated delivery of large, strategic sites; there will be significant local buy-in, with members of the relevant local authorities playing an important role on its board; and there will be strong transparency about costs to ensure that taxpayers’ money is used effectively.

A key element of Ebbsfleet must be an emphasis on design. It is essential that it is an attractive place where people want to live. Design must play a key role because of the importance that the project will have in the minds of other people who are thinking about having a garden city. We do not just want rabbit hutches and boxes to be built. All eyes will be on this city in determining whether communities are willing to participate.

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In my last few minutes, I will say a few words about the planning reforms. I encourage the Government to take a good look at the general permitted development order. The simplification of the planning system is essential, not just to support the case for development now, but for the future. It is not in anyone’s interests to have a complex system, except for the socialist antecedents of the planning system. I am glad that the Government have set out their three-tier approach to general permitted development, with permitted development for small-scale changes, prior approval rights for larger changes and planning permission when the scale is even larger. The changes that we have made to residential planning are being followed through with the proposals on warehouses and light industry. Such things are already happening in some places, which is very much to be welcomed. This is a great extension of the changes.

6.12 pm

Mr Ronnie Campbell (Blyth Valley) (Lab): Sometimes I get a bit sick of hearing about the mess that the last Labour Government supposedly left. [Interruption.] Wait a minute. Perhaps it is America that should apologise to my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), because when Lehman Brothers crashed, it brought down the American economy. Northern Rock and all the other banks were investing in the sub-prime market to get a fast buck, and that brought down the banks here. I looked the other day at how much that cost the British taxpayer. It cost our economy £70 billion. When Members talk about the last Labour Government—

Kwasi Kwarteng (Spelthorne) (Con): Spend, spend, spend.

Mr Campbell: No, we did not. When Members talk about the last Labour Government bringing down the economy, they are wrong. Let us have some truth and honesty about what happened to the economy at that time.

Robert Flello: My hon. Friend will remember as well as I do that when we were on the Government Benches, Conservative Members used to stand up and say, “Can we have a new this? Can we have a new that? Spend, spend, spend.”

Mr Campbell: According to the Conservatives, we should have wrapped the banks in red tape and nailed them to the floor. Would they have done that? Of course not. They would have done exactly what we did.

I want to get to the meat of the problem, so I will start with pensions. I am not a believer in a nanny state and never have been. If Members look at my record, they will see that I have voted against many such proposals. I looked at the pensions proposal carefully. I know a lot of pensioners who are not getting what they should be getting out of their pensions after they have bought an annuity.

The proposal reminds me of when I was a coal miner. When all the coal mines were closing, the Government decided that the miners could pull their pension out of the National Union of Mineworkers pension fund and put it into something else if they got a better deal. Of

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course, all the Scrooges came around, knocking at the doors of the miners. They said, “Will you organise a meeting?” Would I hell! They were there to grab the miners’ money. I am pleased that the Secretary of State for Transport is here, because he knows what I am talking about.

A lot of the men were bought. They pulled their money out of the miners’ pension scheme and put it into all sorts of finance companies that offered them a better deal. That did not last two years. Before long, they were all trying to get back into the scheme. The other schemes were a disaster. There was mis-selling on a big scale. The miners’ pension scheme had to be opened again so that the men could put their pensions back into it. They were given two years to do it. If they did not do it in that time, they were left with the company that they had gone with.

We have to be careful that that sort of mis-selling does not happen. I understand the problem. It is good that people can have control of their own money. I have no problem with that, but we might be stirring up a hornets’ nest. I do not trust the institutions one little bit.

On wages, we all know—it is a fact that is on record—that people who are working have lost out by £1,600 a year. People in two or three industries—especially those who work in local government, which we are talking about tonight—have not had a rise for three or four years. According to the latest figures that I have, £39 billion has been taken out of the economy since the austerity programme started because people have not got wage rises. It is no wonder that the economy is sluggish. If money is taken out of the economy, it will be sluggish. All that some workers have to look forward to is zero-hours contracts and food banks.

People do not realise what the welfare cap means or what it includes. Child benefit is capped. Incapacity benefit is capped. Winter fuel allowance is capped. Income support is capped. People do not realise what the cap means. There is a big figure, but people do not realise what is under it and what it means for them.

Alec Shelbrooke: Will the hon. Gentleman give way?

Mr Campbell: No, I do not have time.

I got hold of a letter from the Department for Work and Pensions. It says that before the austerity measures were brought in, an average of 12,530 people on jobseeker’s allowance were sanctioned each month in north-east England. Under the new arrangements brought in by this Government, that has gone up to an average of 29,000 people a month. People are being sanctioned and do not have any money. That is why the food banks are increasing. People have no money and do not know where they will get their next meal, so they have to be sent to the food bank.

Some people are sanctioned fairly and some are rightly sanctioned. Like other Members, I have had many people come to my office who have never looked for a job. I tell them that they have to go out and look for a job—that even if it is a job as a brain surgeon, they should apply for it. A lot of people are not doing that, but a lot of people are and they are being sanctioned unfairly.

The borrowing requirements are a bit of a joke. In this year alone, the Government will borrow £50 billion. Perhaps that is where all the money is going. That will

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leave us £111 billion in debt. That is the situation that this country is in. If that is the economy getting better and if that is the country reducing the deficit, I will eat my hat. Quite honestly, I think that we are heading for the rocks or for a car crash—one or the other.

6.19 pm

Paul Uppal (Wolverhampton South West) (Con): It is always a pleasure to follow the hon. Member for Blyth Valley (Mr Campbell). I was not going to make some of these points, but I cannot resist.

In 1997, some 17 years ago, many of us were not yet Members of Parliament. I remember the Labour party coming into office to the theme tune “Things Can Only Get Better”. The electorate will judge that claim in times to come. Labour likes to talk about the Conservatives’ 26 tax rises, but the inconvenient truth is that under all Labour Governments the burden of taxation increases dramatically. The sun rises in the east and sets in the west; Labour will always raise taxes and spend our money. Those are the truisms of life, and they always will be.

An increase from 10% to 11% in employees’ national insurance may not sound like much, but it amounts to an increase of 10%; in the case of the employer, the rise was a shocking 28%. No wonder Conservatives recognise national insurance contributions as a tax on jobs. Labour can talk all it wants about tax rises, but the people of Britain have long memories and will remember 13 years of a Labour Government during which the Treasury regularly raided people’s pay packets, and created a system in which businesses faced increased pressures and costs when creating jobs.

Alec Shelbrooke: Can my hon. Friend explain why some people think the banks caused all the borrowing, when Labour borrowed £80 billion in 2006?

Paul Uppal: My hon. Friend makes a reasonable point. Labour took its eye off the ball when it came to borrowing, and no one can deny that.

Thankfully, today things are different. Taxes on business were too high under Labour and corporation tax was 28% when this Government came to power. As the new tax year approaches, businesses will feel the impact of several important tax cuts. Corporation tax will fall to 21%, help on business rates will come in, and the landmark employment allowance will take up to £2,000 off employers’ national insurance bills.

Politics is always about being local, and in my constituency the Government’s changes are translating into new jobs and opportunities for my city. I have spoken regularly in the House about the positive impact that the arrival of Jaguar Land Rover will have on the city, but I have not so far spoken about the impact of the new Sainsbury’s store on Raglan street, which will create nearly 200 jobs. The sprawling Raglan street site stood empty for 10 years; it was a blight on the city and a sad symbol of our lack of progress. One of my first priorities was for that to change and, thankfully, ground was finally broken at the site last October.

This morning, it was a pleasure to welcome my right hon. Friend the Chancellor of the Exchequer to Marston’s, a valued employer and brewery in my constituency. The company, which employs around

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1,000 people at its brewery and headquarters, invests in opening dozens of new pub-restaurants every year, creating hundreds of jobs nationwide. I met the chief executives of three breweries, all of whom concurred with the view that the Budget was good news for jobs and growth.

The third and final piece of good news for the city came two weeks ago, when I visited the Woodthorne development by David Wilson Homes on Wergs road in Wolverhampton. Local jobs have been created to provide new homes in the city. The Woodthorne development will provide 58 new homes over the coming months, underpinning nearly 120 jobs for local people. It is great news that new homes are being built in the city and that a local work force is being used to build them. Support for small and medium-sized developers to access development finance through the builders finance fund will provide more than £500 million for two years from 2015-16 to deliver up to 15,000 homes.

The Help to Buy loan scheme has already helped 25,000 people to buy their own homes when they could not previously afford the deposit, and it has helped to build more houses. Owning one’s own home should always be one of life’s biggest aspirations, and the Government will help even more people to achieve that dream.

People who have worked hard and saved hard all their lives will now be trusted with their own finances. The Government will completely change the tax treatment of defined contribution pensions to bring it into line with the modern world. From March 2017, the Government will cut the income requirement for flexible draw-down from £20,000 to £12,000, raise the capped draw-down limit from 120% to 150%, and almost double the total pension savings people can take as a lump sum to £30,000. I am really heartened by that initiative because it constitutes a clear blue line and political divide: we trust people with their own money.

I have been poor in my life—to be honest, I have been dirt poor. What got me and my family out of poverty was taking responsibility for myself, making my own choices and taking my own risks—not a Government body or quango. The Government will empower people by trusting them with their own money, and the changes on annuities encapsulate that sentiment.

The Budget also shows that we are on the side of manufacturers, creating a Britain that makes things again. We are cutting the cost of manufacturing by cutting the cost of energy bills for manufacturers. We are doubling the annual investment allowance to £500,000 and delivering the most competitive export finance in Europe by doubling the Government lending available to exporters to £3 billion, and cutting the typical interest rate on it by more than a third.

Boosting savings, putting the public finances on a stable footing and making it easier for companies to invest were the key themes of this year’s Budget, and I support wholeheartedly the Government’s efforts to continue to rebuild our once broken economy. It is interesting to reflect on those key themes and what we remember from 1997 onwards—golden economic rules, prudence and, more recently, “cutting too far, too fast”. We do not hear those words any more. At least this Budget will build an economic inheritance that we can pass on to our children.

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6.26 pm

Ann McKechin (Glasgow North) (Lab): I welcome the comments made by my hon. Friend the Member for Blyth Valley (Mr Campbell), who recommended a precautionary approach to the proposed changes to pensions. They are huge changes with many unanswered questions. At the weekend, the Chief Secretary to the Treasury was quoted in the papers as saying that intuitively he did not foresee undue harm to the public purse. Rather than his personal rose-tinted view, we need hard facts and well researched analysis to allow Parliament to make an informed decision about the proposals.

Many questions arise, in particular about the level and quality of the financial advice that will be available to people to enable them to make proper decisions. How will pensioners be protected from the scams that my hon. Friend mentioned? If people choose not to take the annuity route, they will require active management of their investment over a prolonged period, at a time when many of them will experience increasing incapacity. It is vital that we have full consultation on the changes, and that any legislation is considered in draft format by the Work and Pensions Committee before it is presented to the House.

Jonathan Evans: As the hon. Lady will know, on Thursday the Government published a consultation paper and said that the consultation would be open until June. No doubt she will make her proposal as part of the consultation.

Ann McKechin: I welcome the fact that we will have a proper consultation. The depth of it, and the analysis that will be required before people can provide their opinion, will also be vital. I also expect draft legislation to be put before the Work and Pensions Committee to be considered line by line in close detail.

While the Budget focused on pensions, many significant challenges were either ignored completely or—at best—addressed only superficially. To name just a few, they include stagnating incomes; the lack of business investment compared with our international competitors, a matter addressed by the Civitas report published today; high personal debt levels; and a distorted housing market.

The Resolution Foundation’s annual report on living standards, “The State of Living Standards 2014”, points out that

“it has become harder to live a comfortable life on a modest or even typical income in modern Britain”.

The biggest increase in poverty is now among those already in work, trying to make ends meet with average wages consistently falling over the last five years. Before Conservative Members claim that the latest Office for Budget Responsibility figures show that we are coming to the end of that fall in income growth—even though the timeline keeps moving backwards—I should say that the situation is not as positive for a huge swathe of our population. The wage growth figures are based on the CPI index, which excludes housing costs. When the figures are recalibrated on an RPI-adjusted formula, as the Resolution Foundation report shows, the picture is much gloomier. For those on median earnings, there will have been barely any wage growth for more than a decade up to 2018.

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Currently, the bounce we are witnessing is based primarily on increased consumer spending and greater levels of personal debt. Scottish Widows reported only last week that there are now 1 million more people than last year who have no savings at all—9 million people. Given the slow to negligible wage growth, that level of spending cannot continue forever. We risk returning to the problems that were at the root of the global collapse in 2008. Putting an extra 17p on the minimum wage rate and having approximately 1 million workers stuck on zero-hours contracts is not the way to increase incomes. That will simply push more people into a debt that will become increasingly unaffordable when interest rates start rising again.

The biggest omission in the Budget is the complete failure to tackle the causes of the housing crisis. Land prices are still far too high in comparison with average incomes and they take money away from our productive economy, yet the Government are perfectly happy to advertise in the Red Book, on page 107, that they forecast house prices to increase by 8.6% in the next year against an inflation rate of 1.8%. You would never guess, Madam Deputy Speaker, that an election was due.

Week after week, I hear from desperate young people, often with young children, about their fruitless search for stable and affordable housing. Last month, I met a young mother with two children who was looking for her fourth private tenancy in as many years. It was not that she wanted to move—either the landlords wanted their houses back to live in or to sell on, or, in the latest case, they had failed to pay their own mortgage. She is currently in overcrowded housing simply to ensure that her eldest child can remain in the same school. She faces a sector with perverse incentives, such as Help to Buy, which in its latest format is not even linked to house building. No attention has been given to reconstructing a rapidly growing but highly fragmented private rental market that could provide greater security of tenure and better service levels. The stubborn failure to boost house building, which is now at pre-war levels, is made worse by the slashing of investment in social housing, with the result that prices are kept high.

The right hon. Member for Mid Sussex (Nicholas Soames) made some very good comments on the rapid changes occurring in the manufacturing sector. If we make the right choices now, we can benefit from the revolution in manufacturing; I agree entirely with his comments. We need to invest in skills, not just for young people but for the existing work force. In too many factories across the land, we will find Jimmy and Johnny aged 69 or 70-plus, because companies have no one younger with the right skill sets. The Government continue to be complacent about the rise in inequality and about wasting talent.

6.33 pm

Mary Macleod (Brentford and Isleworth) (Con): It is a pleasure to follow the hon. Member for Glasgow North (Ann McKechin). Glasgow has been a European city of culture and I spent many happy years there as a student. She was much more negative than I plan to be. She forgot to mention the £63 million that Scotland will get out of the Budget, although I think we agree that Scotland is better together with the United Kingdom given the forthcoming referendum in September.

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The Secretary of State laid out very clearly how the Budget will help hard-working people and put Britain on a platform to a secure future. In my few remarks, I want to concentrate on how the Budget will impact on families and local communities in London and in my constituency of Brentford and Isleworth.

I thank the Chancellor for his support for London air ambulance. In his statement, he said:

“I will also relieve VAT on fuel for our air ambulances…and provide a new air ambulance for London, all in response to huge and heartfelt public demand and the campaigns of my hon. Friends the Members for Hexham (Guy Opperman), for Brentford and Isleworth (Mary Macleod) and for Argyll and Bute (Mr Reid).” —[Official Report, 19 March 2014; Vol. 577, c. 786.]

London air ambulance is an incredibly important cause. Because of the hard work of Dr Julian Thompson, Graham Hodgkin and the team at London air ambulance, it is saving lives around London. A new helicopter was needed because there was only one helicopter in London for 10 million people. Across the rest of the country, there is one helicopter for every 1.5 million people. The service in London has treated more than 30,000 high trauma cases and it saves lives across London. The Budget will help it to save more lives.

The Budget will help brewers, such as Fuller, Smith & Turner. Its Griffin brewery is in Chiswick in my constituency. It is London’s last remaining traditional family brewer—a great brewer it is, too. The 1p duty cut on beer and the scrapping of the escalator rise in alcohol duty will benefit 4,200 pubs and the more than 50,000 people the industry employs across the country, as well, of course, as its customers. That is another benefit of the Budget.

We have not heard much mention of the increase in the personal tax allowance. The right hon. Member for Leeds Central (Hilary Benn) said that the Government were standing up for the wrong people. How wrong can he be? I believe that increasing the personal tax allowance is standing up for the right people. Increasing the personal tax allowance to £10,500 in April 2015 will lift 31,000 hard-working people across London out of income tax altogether, and 3.3 million people will see an average real-terms gain. That is what is meant by standing up for the right people and hard-working people.

Tax-free child care is helping families and hard-working people across London and elsewhere. The scheme will be extended to up to £2,000 per child and extended up to 12-year-old children more quickly. The scheme will benefit more than 500,000 London children in working families.

Housing is a big issue in London and we have already heard much about it today. I welcome the extension to 2020 of the Help to Buy scheme, which will create stability for families. It was good to see that 85% of those on the Help to Buy scheme are first-time buyers. That, too, helps hard-working people and is standing up for the right people across London and the United Kingdom.

There is a strong hub of creative industries in west London—television, film, IT and so on—and I am very proud of it. The changes to film tax relief from 1 April will make it easier for these industries to export further around the world, creating more jobs and growth for the future.

Locally, the Government are making a real difference, with record numbers of people in work, including record numbers of women in work. Some of the local achievements

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I have seen in my constituency include being in the top 10 for business growth, lots of new companies moving into the area, current businesses expanding and growing, the creative industries hub becoming even stronger, and a record number of apprenticeship starts. That is what this Government have done as a result of the measures we have taken. Unemployment in my constituency is at a record low of 2.6%, down by 21.3% since May 2010. Youth unemployment is down by 29.5%, which is something to be proud of. For those who are unemployed, I invite them to Aspire, the jobs and apprenticeships world skills fair at West Thames college, which, with the support of Heathrow and others, is there to help people to get work.

This is a Government who are helping hard-working families—the people who need it most. This is a Government who believe in aspiration. This is a Government who are turning the country around to growth and prosperity for the future.

6.39 pm

Phil Wilson (Sedgefield) (Lab): I will first touch on the housing market and the role of housing benefit, and then move on to the Government’s proposals for pension reform, because they are linked.

According to the Office for Budget Responsibility report, the largest driver in the growth of housing benefit has been a growing case load in the private rented sector. The share of housing benefit spend in the sector is projected to increase to 40% by 2018. The trend towards renting from private landlords and away from owner-occupation is accelerating. The increase in the proportion of the private renting population who claim housing benefit is a consequence of low wages and a rise in rent inflation. The recent rise in housing benefit in the private rented sector has been accounted for by people in work, and the fall in owner occupation since the recession has been particularly marked among young people. I ask Members to bear that in mind when they hear what I am about to say about the Government’s pension proposals.

I agree with the Chancellor that we should trust the people. I do not have a problem with trusting the people; I have a problem with trusting the financial services industry. I understand why the Chancellor made his announcement on Wednesday, but I feel that his proposals are treating the symptoms and not curing the disease. The Government say that they trust the people, as they rightly should, but what are they doing to ensure that the people can trust the financial services industry? What are they doing to ensure that 40% of the retirement or savings pot will not be lost in hidden fees in the future? Some savers can lose as much as £230,000 in the value of their pensions when a 1.5% fee is charged over their working lives. What are the Government going to do to ensure that those fees are transparent, and what are they going to do to ensure that the financial services industry does not come up with mis-sold financial products, as it has in the past? I say all this because we should not forget that the insurance companies that are selling annuities now will start to present what they will call “innovative and creative products” to fill the chasm left by the collapse of annuities.

There are three measurements by which these proposals should be gauged. First, when is “advice” advice, and not guidance? The Chancellor said that £20 million was

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to be set aside over the next two years for the right to advice, but the Treasury consultation document calls it a right to financial guidance. There is a big difference between the two: advice means telling people what is in their best interests, whereas guidance means informing them of their options and then sending them on their way. Secondly, there should be a test to ensure that those with low and middle incomes are not disadvantaged but are offered the certainty that they need in retirement, especially at a time when the average pension pot is about £36,000. Thirdly, the Government should ensure that reforms do not result in extra costs to the state as a result of, for instance, higher social care bills, and force pensioners to fall back on benefits. We should not set up a system that socialises the risk and ensures that only the private sector reaps the benefits.

The Chancellor said in his speech:

“People who have worked hard and saved hard all their lives, and done the right thing, should be trusted with their own finances”.—[Official Report, 19 March 2014; Vol. 577, c. 793.]

I agree that we should trust the people, but we should also be able to trust the financial services industry. For many people, their pension investments are not just about trust, but about faith. They want to have faith in those who look after investments, and to know that they are doing right by them.

The mis-selling of future financial products must be a big worry. It has happened time and again in the industry, which is why I have demanded, in the House, that a fiduciary duty be placed on those in the financial services industry who look after the trillions of pounds in the existing pension funds. Every practitioner must be able to put his hand on his heart and say that he acted in the best interests of those whose funds he has invested. That should be at the core of the Government’s proposals. I believe in “trust in the people”, but, in this instance, trust must be earned by the Chancellor and the financial services industry.

That brings me back to my original point. As a result of the Government’s reforms, we will see an explosion in the number of buy-to-let properties, inflating house prices and further diminishing the opportunities for young people to own their homes. The challenge for all of us is not the abandonment of the pension system, but the building of a system that actually works, under which money is given to someone who can be trusted to use those savings wisely to generate a retirement income. Holland and Denmark have private pension systems that are collectivist and large, so that risk is shared and fees are low. If a typical Briton and a typical Dutch person save the same amount, have the same life expectancy and retire on the same day, the Dutch saver’s pension will be 50% higher than that of the Briton. There is much to be said for the collectivist approach to pension provision, and it should not be deserted.

The question is not “Should we trust the people?” Of course we should. The question is “Can the people trust the Government and the industry to get this right?” Given the long history of mis-selling by the industry, I believe that the jury is still out.

6.44 pm

Jonathan Evans (Cardiff North) (Con): Let me begin by saying to the hon. Member for Sedgefield (Phil Wilson) that I wish to draw attention to my entry in the

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Register of Members’ Financial Interests, and my specific interests in the life insurance industry, because later I shall say a few words about the annuity market changes. Before that, I want to talk about the impact of the Budget on my constituency. The House will be delighted to know that I do not intend to trawl through all the provisions; I shall merely mention three specific headline issues that my constituents raised with me after the Budget, and were very pleased to raise with me.

The first of those issues, which has already been mentioned, is the increase in the personal tax allowance. That increase is significant, and I think it a mistake for any Opposition Member to talk it down. The allowance used to be £6,500, and next year it will be £10,500. That is a measure that will help the lowest paid: it will take 3 million people out of tax altogether. I am amazed that some Opposition Members are still shaking their heads over that proposition.

Secondly, my constituents were delighted by the announcement about child care costs that was made the day before the Budget. It will mean real help for people who want to get back to work. Thirdly, although this too will not be popular with Opposition Members, my constituents have told me how pleased they are that there is now petrol price stability—a stability that will be underpinned by the continual fuel duty freezes that we have seen.

Let me say something about the impact on the business community in my constituency. When I went to my constituency business club on Thursday evening, three items were mentioned specifically. The doubling of the investment allowance to £500,000 a year has been warmly welcomed, and there has been a widespread welcome in Wales for the announcement of a package for heavy users of energy. The right hon. Member for Neath (Mr Hain), who is present, will know how strongly Tata argued for that, and Celsa in Cardiff is delighted as well. There has been a universally positive response to the Government’s determination to lower corporation tax to 20% from the Welsh chambers of commerce, the Institute of Directors and the Federation of Small Businesses and others.

Let me now say something about the pension changes. The pensions landscape has changed dramatically since the 1990s. The shadow Secretary of State, the right hon. Member for Leeds Central (Hilary Benn), told us that he was very proud of the last Labour Government—the Government who scrapped dividend tax credit, which cost pensioners £5 billion each and every year from 1997 onwards. Subsequently, we have seen Government policy pursue low interest rates and quantitative easing, which have driven down the value of our pensions. No one has mentioned that so far. Annuities are on the floor in comparison with their level in the 1990s: they are down to a third of that level. The fact is that those on both Front Benches are responsible for that. Between 2009 and 2012, the Bank of England and members of the Monetary Policy Committee claimed that £375 billion of quantitative easing would have a neutral effect on annuity holders. However, in a report published two weeks ago, Ros Altmann made it clear that it was monetary policy that had driven down annuity rates.

One of the strengths of the Government’s announcement is the positive response not just from those approaching retirement, but from savers more generally. Along with the announcements of an increase in the amount that can be held in individual savings account and the National

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Savings & Investments pensioner bonds, it has lifted interest among savers. However, I think that we need to concentrate on two other issues. First, the Government’s changes apply only in relation to direct contribution pension schemes. They have no relevance to, for instance, direct benefit schemes in the public sector, including those applying to Members of Parliament. Currently, however, it is possible to convert one to the other, and the Government have already signalled that they intend to block that conversion. If we want pensioners to be trusted with their own money, how can we easily restrict that principle to people who have direct contribution rather than direct benefit pensions?

Secondly, there is the potential negative impact on infrastructure investment. On Thursday, the Government signalled that they were aware of it. Insurers will undoubtedly be less interested in purchasing long-dated Government gilts if the long-term liabilities of those companies are cut to the extent that has been estimated by Barclays, which has said that in 18 months’ time the annuities market in the United Kingdom will be down to a third of its present level, and by investment advisers Panmure Gordon and accountants Grant Thornton, which have predicted that it will fall to a fifth of that level. Whichever may be true, that is a significant reduction in the demand on the part of the industry for those long-term infrastructure projects that back so many of the demands that are made by Members on both sides of this House. We all want to see that public sector investment, but the reality is that the pensions landscape is being changed. It is crucial that the Government consider the impact of this in order to ensure that this reform does not produce unexpected or unanalysed impacts.

6.50 pm

Mr Peter Hain (Neath) (Lab): I agree with the hon. Member for Cardiff North (Jonathan Evans) over Tata, but the one thing that cannot be said about the economy under this Chancellor is that it has recovered quickly from the shock of the global financial crisis. Total output still has not reached pre-crisis 2008 levels, quite unlike in the USA and Germany, both of which passed their 2008 peak back in 2011. What took them three years to achieve is taking the British economy under this Chancellor six years, and the reason is the savage cuts since 2010, a far tighter squeeze than in the USA or the eurozone. Under Labour, recovery was already well under way in the first half of 2010 when the Chancellor came into office. It was his policies that choked it off and the British people have been paying a heavy price ever since.

Today we have an unsustainable, out-of-balance recovery. The Chancellor acknowledged that neither investment nor exports are high enough. We already knew that higher consumer spending has come out of reduced savings, not out of higher incomes, because real incomes have been stagnating for years. It is a short-term recovery that cannot last. The ex-chair of the Financial Services Authority and ex-director general of the CBI, Adair Turner, said so in January at Davos when he warned:

“We have spent the last few years talking about the need to rebalance the economy away from a focus on property and financial services and towards investment and exports. We are now back to growth without any rebalancing at all…If you chuck enough monetary stimulus at an economy something happens. It is as if we have had a cracking great hangover, had a stiff drink and off we go again.”

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A second factor making the situation unsustainable is that UK productivity has been flat for years. This pushes up unit costs and keeps our export prices higher. Our export predicament is dire. On top of that, we are witnessing a housing bubble again, with property prices rocketing in London in particular. In short, nothing fundamental has changed to avoid a rerun of a financial crisis brought on by a debt-financed consumer boom and a Government-backed housing bubble that sooner or later will burst, because bubbles always do burst.

Yes, the economy is recovering faster than forecast last year, but growth is forecast to be slower next year than this. The Chancellor expects the economy to run out of steam almost as soon as it starts to grow again, yet there is plenty of scope for much faster growth, and faster growth would mean less need for spending cuts and a quicker reduction in the Budget deficit.

The austerity programme, which this Budget continues to drive forward is based upon what I call the big deceit of British politics: that Labour “overspending” left the country with the mountainous levels of debt and borrowing which the Tory-Lib Dem Government inherited after the 2010 election. [Interruption.] The idea that the global credit crunch was caused by Labour’s public investment in Britain is risible. [Interruption.] The proposition that by building new hospitals and new schools, and by recruiting tens of thousands of extra nurses, doctors, teachers and police officers in Britain, Labour caused the sub-prime mortgage defaults in the US that ricocheted throughout the world’s financial institutions is preposterous. [Interruption.]

Robert Flello: It is amazing to hear the laughter from the Government Benches. Does my right hon. Friend recall, as I do, Conservatives standing up time and again saying there was far too much regulation of the banks and that they needed to reduce it?

Mr Hain: Absolutely.

It was not Labour’s public spending that triggered Britain’s or the world’s economic crisis; it was the global inter-dependency of reckless banking that the Conservatives wanted to be less regulated that in 2008 triggered an economic meltdown in Britain and right across the globe. [Interruption.] Labour responded by boosting public spending and borrowing to offset the catastrophic collapse in private sector spending, and the £90 billion spent on bank bail-outs plunged the public sector into record annual deficits, but these were deficits that stopped a shocking slide into a fatal slump and laid the basis for recovery from the biggest shock to hit the world economy in peacetime since the 1930s great depression. [Hon. Members: “Give way.”] If I have time at the end, I will.

Contrary to right-wing free market mantras and Tory-Lib Dem history rewrites, it was the banking crisis that caused debt to rocket, the deficit to rise and borrowing to rise as well. The low yields on UK Government bonds before, during and after the credit crunch under Labour bore eloquent testimony to the fact that the international markets had full confidence in its policies, and that they were not clamouring for the right-wing dogma subsequently visited upon Britain. Indeed, so desperate was the right hon. Member for Witney (Mr Cameron) to identify with Labour’s success on spending, investment, jobs and growth that he pledged to match Labour’s spending plans for three further years in September 2007

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up to 2010.


Members on the Government Benches shake their heads, but that is what he did. If we had spent too much—if all the charges made by the Conservatives were true—why on earth would the current Prime Minister have backed our spending plans for three years ahead? It would help the quality of this debate and the quality of assessment of the Chancellor’s Budget if the Conservatives and the Liberal Democrats had the decency to acknowledge that essential fact, including this Prime Minister’s support for our spending programmes, instead of ploughing on regardless, with no end to austerity in sight.

Mr Redwood: Why did the new and very expensive and complicated regulators the Labour Government introduced fail to control the banks when people like me were telling them they did not have enough cash for capital?

Mr Hain: I agree with the right hon. Gentleman to this extent: we did not regulate the banks well enough or carefully enough, but his party—not necessarily he, but his leadership—was saying that there should be less regulation of the banks at that time, yet now they have the temerity to attack our spending plans when we brought borrowing down. [Interruption.]

Madam Deputy Speaker (Mrs Eleanor Laing): Order. All other speakers have been heard in silence. The right hon. Gentleman has livened up the debate, but he also ought to be heard.

Mr Hain: It is interesting how those on the Government Benches do not like to hear the truth, Madam Deputy Speaker. The level of debt under the Labour Government before the banking crisis was lower than we inherited from the Conservatives in 1997. We brought borrowing down and we brought the deficit down compared with what we inherited, and yes we invested in repairing the desperate state of our public services—people dying on trolleys in hospitals, schools crumbling, the railways decaying. We repaired all of that and then the banking crisis came along and blew it out of the water. There was a failure by every Government right across the world to recognise the seeds of that banking crisis, but it was not caused by Labour overspending, and not caused by Labour high borrowing or high debt, because none of those things was going on prior to the banking crisis. If we had not dealt with the banking crisis in the way that we did, the whole of the economic and banking system in Britain would have collapsed. We need decency and honesty from Government Members and acknowledgement of that central fact.

6.58 pm

Iain Stewart (Milton Keynes South) (Con): I am very glad to contribute to the Budget debate and in particular to be following the right hon. Member for Neath (Mr Hain) because I want to pick up on a couple of the themes he introduced. Before I get on to that, however, I would just remind him that the Office for National Statistics revised downwards the depth of the recession that happened under the Government of which he was a member, which perhaps explains why it has taken us a little longer than we thought to get our economy back on track: the scale of the damage was that severe.

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I want to start by welcoming a Budget measure that I hope will be applauded across the House: the Chancellor’s announcement to set up an Alan Turing institute. Thankfully, Alan Turing finally had his name cleared just before Christmas and justice was finally done. I am very proud that Bletchley Park, where he did much of his outstanding work, is in my constituency. Now that we have been able to draw a line under that injustice, it is absolutely right that we concentrate on celebrating his enormous achievements. The establishment of an institute that will further research into cyber-security, algorithms and a whole load of things I will not even pretend to begin to understand will be a wonderfully fitting tribute and legacy. If I may, I will make a gentle bid for Milton Keynes to be the host of that institute. I am sure there will be competition from Manchester, Cambridge and elsewhere, but we would make a very fitting home.

I also welcome the announcement of a new garden city at Ebbsfleet, and I invite the good people of Ebbsfleet and Kent to look at how we in Milton Keynes planned our city. I am sure they could draw many lessons from the design of Milton Keynes and the understanding that went into its creation, inspiring designs of new cities as far afield as China. We would be delighted to advise the good people of Kent.

I welcome the measure in the Budget to extend Help to Buy, a very welcome initiative that has helped many people in my constituency to get on to the housing ladder who would not otherwise have been able to do so. Reference has been made to the housing supply, and I can assure Members that in my constituency, it is growing. The number of letterboxes and doorsteps I have to campaign on is growing at a far faster rate than I am able to cope with. There has rightly been a long-established cross-party agreement in Milton Keynes that such expansion—20,000 new houses over the next couple of decades—should be balanced development consisting not just of owner-occupied houses but of affordable housing in all its forms: some council housing, some housing association properties, some shared ownership properties, some key worker housing.

However, it is not just the numbers and the tenure of housing that is important, but the type. Under previous housing targets, the only thing that was important was the number of houses or flats built, and too many of the wrong type were constructed. There was a glut of apartments, which are fine, but the balance was out of kilter; we did not build enough family-sized dwellings. I am delighted to see some of the planning reforms introduced by this Government, backed up by the neighbourhood planning process. The Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Grantham and Stamford (Nick Boles), who is in his place, has been to Milton Keynes a number of times to see the strength of the neighbourhood planning process locally. That will underpin a more balanced and sustainable approach to housing development.

Housing has to be underpinned by good infrastructure, and this Government’s investment in projects such as East West Rail will ensure that these new houses are. Most of all, housing expansion must have a solid business base. I am delighted to report that Milton Keynes is leading the country in its economic development. New business start-ups are up by 20% over the past few years. Survey after survey from independent bodies

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such as Experian, Centre for Cities and the

Financial Times

place us at or near the top of the national growth league.

Our economic growth is also balanced: it is not just in the service sector, but in high-tech research and development. Last week, I had the great privilege of visiting Red Bull Racing, the Formula 1 team, where the level of engineering research and development is enormous. Budget measures such as the investment allowance, R&D tax credits and the seed enterprise investment scheme all underpin that growth, as do the extra grants for apprenticeships. Without a strong skills base, the economic recovery will not be permanent.

The economic recovery must be soundly based, but so must our long-term financial future. That is why the measures in the Budget on savings and investment were, for me, the most welcome. For too long we have had a culture of instant gratification: if we want something, just borrow and get it. That is not sustainable, and encouraging savings and pensions will help us get back to a secure future in the long term.

7.4 pm

Mr Pat McFadden (Wolverhampton South East) (Lab): The Chancellor told the House last week that his policies had been vindicated. His basic case is that austerity is working so well that we need it for two Parliaments rather than one, as was planned. Of course, it is welcome that we have economic growth after so many lean years, but the inescapable fact is that the targets in the growth and spending plans set out at the beginning of this Parliament have been missed by huge margins. The cumulative effect is that cuts will last years longer than planned, and an extra £190 billion is being borrowed, compared with the figure in the plans set out after the election. If Labour had borrowed £190 billion more than was planned, I am not sure how Government Members would describe it, but I doubt whether they would be reaching for the term “success”. The return of growth cannot hide the fact that the outcome of the strategy pursued in the past four years is that one of the Government’s fiscal targets has been missed, and the other—the five-year rolling target—continues to be pushed into the future.

The increases in investment allowances are welcome, but let us be in no doubt: this is a U-turn from the Conservative manifesto and from the 2010 post-election Budget. At that time, when the Chancellor was talking about the “march of the makers”, he cut support for investment in manufacturing by £3 billion a year, and called it getting rid of complex allowances and reliefs. Rhetoric and policy were pulling in entirely different directions. I therefore welcome the U-turn, and on this point at least, rhetoric and policy are now pulling in the same direction, although needless barriers were placed in the way of investment by the policy previously pursued.

Frank Dobson (Holborn and St Pancras) (Lab): Does my right hon. Friend agree that when the investment allowance was reduced, corporation tax was reduced, which did not benefit manufacturing but benefited the banks?

Mr McFadden: That is absolutely right: a cut in support for manufacturing was used for business as a whole.

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Although it makes sense to support investment decisions through the tax system, we should not kid ourselves that investment allowances alone will be enough. The UK’s export performance has been routinely described as disappointing in report after report by the Office for Budget Responsibility. Speak to any manufacturer and they will most likely say that their key challenge is skills. If companies cannot get the right people with the right skills, they cannot innovate, they cannot meet orders in time and they cannot operate as efficiently as they want.

If the Government are really serious about supporting UK manufacturing, they should heed the call coming from their own Back Benches today to stop chasing UKIP and putting in place policies that stop the brightest students and workers from around the world coming to the UK. The Government’s arbitrary net immigration target is a barrier to our accessing the best talent in the world, and the exclusion of such talent is not in the interests of UK businesses or the economy; nor is the threat of withdrawal from our biggest export market, the EU. It is no good supporting investment decisions through the tax system with one hand, and threatening to pull away from our biggest market with the other. The stance the Government have adopted on this is a complete failure of leadership: it is party management first, and the interests of the country second. No amount of support through investment allowances would undo the damage that pulling out of our biggest market would do. I am glad that my right hon. Friend the Leader of the Opposition made the announcement he made a couple of weeks ago, exercising leadership on this issue and rejecting the option of following the Government down this path.

Perhaps enough has been said about beer and bingo in recent days. As someone whose father was a labourer and whose mother worked in a local authority children’s home, the only thing I would add is that a more serious working-class aspiration is an education system that opens up opportunity to all; social mobility that is not based on but challenges closed elites; and a path to rising living standards that has been sadly absent in recent years. I suggest to the Government that a poster based on those things might have been truer to the heart of working-class aspiration than the one that was produced.

I echo some of the sentiments expressed by my hon. Friend the Member for Sedgefield (Phil Wilson) on the pension changes. There has been an attempt to reduce this proposal to the question of whether people can be trusted with their own money. Of course people can be trusted in that way, and empowering them to make their own decisions is a good thing. It is something that we should support in politics. Choice in public services empowers people. It has worked well in the area of personal payments for social care, for example. As my hon. Friend said, however, what is in question is not trusting people but trusting the financial services sector that sells people these often complex financial products. I serve on the Treasury Select Committee, and we have seen many mis-selling scandals in recent years, ranging from endowment mortgages to payment protection insurance. We should have learned the lesson that there is often a serious information mismatch between those selling those financial products and those buying them, and that customers are not well served when things go wrong.