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House of Commons

Monday 10 November 2014

The House met at half-past Two o’clock

Prayers

[Mr Speaker in the Chair]

Mr Speaker: I remind the House that tomorrow, Tuesday 11 November, is Armistice day. At 11 o’clock tomorrow, I regard it as appropriate that we, and staff working for us, should join the nation in observing the two-minute silence so that we might remember those who gave their lives for their country to help preserve our democratic freedoms. Instructions will be issued to the heads of House Departments so that those members of staff who wish to observe the two-minute silence may do so.

Oral Answers to Questions

Communities and Local Government

The Secretary of State was asked—

Localism

1. Laura Sandys (South Thanet) (Con): What steps his Department is taking to promote localism and give powers to local communities. [905948]

The Secretary of State for Communities and Local Government (Mr Eric Pickles): This Government have abolished Labour’s unelected regional assemblies and devolved power down to local people. We have given more power to councils over planning, housing, licensing and public health. Some 70% of all local authorities’ income is now raised locally.

Laura Sandys: Will my right hon. Friend the Secretary of State join me in congratulating Worth, a village in my constituency, which has just had 92% acceptance of its neighbourhood plan? Does he agree that the additional money that has been secured for neighbourhood planning will help other towns in my constituency to deliver that empowerment to the people on the ground?

Mr Pickles: I am happy to join my hon. Friend in congratulating the residents of Worth. She is absolutely right that the additional £23 million that has been announced will help and encourage many more communities across England to start neighbourhood planning and to take control of future developments in their area. Nearly 10% of the population of England is now covered by a neighbourhood plan.

Mr Geoffrey Robinson (Coventry North West) (Lab): Is the Secretary of State aware that localism is not much help when the most important project in Coventry, the Gateway project, is called in and then the decision is

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delayed? An answer was expected in December, but it has been delayed to January and then to the end of January. Will he tell us when he will make a decision?

Mr Pickles: As the hon. Gentleman knows, we do not call in many applications for consideration. Last year, we called in only about eight. The one he has mentioned has some degree of complexity, and he will understand that I cannot comment about the individual application until all the facts are before me.

Mr Mark Prisk (Hertford and Stortford) (Con): I strongly support the Minister’s excellent work in devolving powers to our city regions. Will he assure us that our counties and rural areas such as those in east Hertfordshire will have the same opportunity for these new responsibilities?

Mr Pickles: Such areas most certainly do have the same opportunity. The devolution of responsibilities and powers to cities has been an important step forward for localism. I should like to see counties, perhaps adjoining counties, and district councils coming together with a united case, because it was that unity of purpose, which was presented to us in various deliberations, that made it easier for us to take powers out of central Government. I am sure that my hon. Friend will be at the forefront in encouraging his local councils to do exactly that.

Keith Vaz (Leicester East) (Lab): Last Thursday, I held an Adjournment debate on works that had been carried out by Sainsbury’s in Belgrave and Leicester, which was efficiently answered by the Under-Secretary of State for Communities and Local Government, the hon. Member for Portsmouth North (Penny Mordaunt). When will local communities be given the powers to hold developers to account not just for planning applications but when works are being executed, because great delays are being caused by this company?

Mr Pickles: My hon. Friend the Member for Portsmouth North (Penny Mordaunt), who is very junior and new to the job, has just briefed me on the situation. As the right hon. Gentleman will understand, the local authority should exercise the powers that it already has in these matters. There is not much point in calling for new powers if the existing ones are not used.

Mr David Nuttall (Bury North) (Con): While I agree that the devolution of powers to local authorities can be a good thing, does my right hon. Friend agree that local people should always be consulted before there are any changes to their system of local government?

Mr Pickles: Certainly. When new things are to be brought in, I think that it is appropriate to have a consultation and, in some cases, a referendum. The most important thing about localism is that it is about passing powers not only to councils, but to local communities.

Kerry McCarthy (Bristol East) (Lab): In my constituency we are currently campaigning against a planning application for a new drive-through McDonald’s. I hope that it will be rejected on the normal planning grounds of noise, pollution and so on, but does the Minister think that the local community should also be able to reject such applications when they are very close to local schools?

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Mr Pickles: Of course, it is very important in that kind of discussion to have a local plan in place, and one would expect a local council to be helpful to the community, and to developers, by setting out clearly where particular developments should take place. I hope that the hon. Lady will forgive me; obviously we will consider that fairly and openly if it comes to us, because the applicant is entitled to justice.

Firefighters’ Pensions

2. Pat Glass (North West Durham) (Lab): What progress his Department has made on resolving the dispute over firefighters’ pensions. [905949]

11. Alex Cunningham (Stockton North) (Lab): What progress his Department has made on resolving the dispute over firefighters’ pensions. [905959]

14. Mr David Hanson (Delyn) (Lab): When he next plans to meet firefighters to discuss their pensions. [905963]

18. Mr Ronnie Campbell (Blyth Valley) (Lab): What progress his Department has made on resolving the dispute over firefighters’ pensions. [905969]

The Parliamentary Under-Secretary of State for Communities and Local Government (Penny Mordaunt): After extensive consultation and numerous changes, the Government laid the final regulations before Parliament on 28 October. They provide one of the best schemes in the public sector. I regularly meet firefighters and will continue to do so.

Pat Glass: We have just come through the longest firefighters’ strike in 38 years. When will the Government stop their politically motivated and disingenuous behaviour in this dispute and genuinely sit down with the Fire Brigades Union to settle this, as the Governments of Northern Ireland, Scotland and Wales are doing?

Penny Mordaunt: There has been extensive debate and consultation on these matters. I have dealt with any outstanding issues in the past few months, including those of the transition of armed forces pension schemes into the firefighters’ pension scheme and fitness protections. The regulations have now been laid, and it is evident from the questions coming from the Opposition that they do not understand the scheme. It is an excellent scheme, and to say otherwise would be to do firefighters a disservice.

Alex Cunningham: In a letter to the shadow fire Minister on 5 September, the Minister stated:

“I am conscious that we will only have the ideas for the service to meet future challenges and aspirations if firefighters are engaged and feel an ownership for the service. Trust and good morale are key to this.”

How does refusing to change a single word of the regulation improve morale, and how does refusing to negotiate improve trust?

Penny Mordaunt: The irony of the hon. Gentleman’s question might be lost on him, but I am sure that it will not be lost on many Members of the House. There have been several changes to the scheme since it was originally

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published, including improvements on the 2006 scheme—introduced by Labour—which introduced retirement age at 60, disproportionately penalised firefighters who want to retire early and offered no protections on fitness. We have addressed those issues in the new scheme.

Mr Hanson: Will the Minister explain to me why my constituents who work for Welsh local authority fire services have reached agreement on a fitness test and a pension plan, through a negotiated settlement and at no extra cost to the taxpayer, yet my constituents who work for the Merseyside or Cheshire fire services, on the English side of the border, are faced with a strike because of an intransigent Minister?

Penny Mordaunt: What the right hon. Gentleman says is not correct; Wales and Northern Ireland have made no announcements on fitness. We are currently consulting on doing what Scotland has done through a regulation, which would offer firefighters those protections —we have to do that through a statutory instrument because we do not have one single fire authority for England. In addition, we are the only nation that has set up a working group on fitness to ensure good practice among all our fire authorities.

Mr Ronnie Campbell: I worked down the coal mine for 29 years, and I watched old men of 60 struggling at the coal face. What must it be like for firemen of 60 trying to save lives from fire and flood?

Penny Mordaunt: As I said earlier, it was Labour that introduced the retirement age at 60, but this is an issue that I—[Interruption.] I have to say that I take great offence, particularly at some of the paid-for advertising that has been run in local newspapers, which has been incredibly patronising towards older workers. We need older workers to stay in the fire service because they have great expertise. By offering protections on pensions and jobs for older workers and good practice for fire authorities to follow, we will ensure that in future they have the protections that Labour did not introduce.

Catherine McKinnell (Newcastle upon Tyne North) (Lab): In her open letter of 24 October, the Minister thanks firefighters

“for your patience in letting me work through these issues”.

The regulations she has put forward were in place in June 2013, so what exactly have they been patient for, and why does not she treat them with the respect that they deserve?

Penny Mordaunt: As an incoming Minister, I could have immediately laid the regulations, but I chose not to do so because I felt there were some outstanding issues, one major recurring theme being the many firefighters who have previously been in the armed forces thinking that they have been disproportionately adversely affected by transferring in their pensions. That is one issue I looked at, among others. Most importantly, I also met a number of groups, including women’s groups, within the fire service. I have trained as a firefighter and I am a serving reservist, so I know the stresses that women go through in order to maintain strength, in particular, in their fitness tests. That formed the bulk of our negotiations

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with the FBU. I am very happy that on the day we laid the regulations we also started a six-week consultation on putting protections for firefighters on a statutory footing.

Andrew Bridgen (North West Leicestershire) (Con): What steps is the Minister taking to ensure that no firefighter over the age of 55 faces the prospect of having no job and that they still have a good pension?

Penny Mordaunt: As I said in previous answers, we are consulting on putting those protections on a statutory footing in the national framework. That will, through a single regulation, have the same effect as what Scotland has done.

Richard Fuller (Bedford) (Con): Given that the Minister has recognised that there remain severe reservations about the fitness test for firefighters, is she saying that she will pass regulations that will ensure that firefighters who fail the fitness test will not lose their jobs, because there are insufficient numbers of back-office jobs in the fire service to accommodate them?

Penny Mordaunt: Yes. In addition to the protections that we are consulting on, we are the only nation that has set up a working group to ensure that there is best practice for fire authorities to follow so that their firefighters can maintain fitness.

Lyn Brown (West Ham) (Lab): In negotiations with the FBU, the hon. Lady said that some firefighters might not be able to maintain operational fitness standards until the age of 60. She promised regulations to protect those firefighters, she promised to address the specific concerns of women firefighters, and she asked the FBU for detailed proposals. Now, she has torn up every promise, stopped negotiations, imposed her own regulations, and plunged the fire service into the longest and most avoidable strike in 36 years. Firefighters risk their lives on a daily basis. Do they not deserve better?

Penny Mordaunt: I have outlined in several previous answers the reason that we cannot use the regulation: we have more than one fire authority in England—we have 46. We must go through the national framework, but it will be on a statutory footing. I caution the hon. Lady on this: we want older firefighters and women to stay in the fire service, and she is not helping by spreading myths about the existing scheme.

Neighbourhood Planning (Community Rights)

3. Mark Menzies (Fylde) (Con): What assessment he has made of the level of the take-up of neighbourhood planning and community rights. [905950]

The Minister of State, Department for Communities and Local Government (Brandon Lewis): Over 1,500 assets of community value have now been identified and listed, and over 1,200 communities have taken their first steps towards producing a neighbourhood plan for their area. There has been overwhelming support in the 34 local referendums held so far, and that means that roughly 5.2 million people are now covered by a neighbourhood planning area.

Mark Menzies (Fylde) (Con): May I take this opportunity to praise the residents of Warton in my constituency who recently submitted a comprehensive neighbourhood

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plan in line with the Government’s aspiration for community engagement? Does my hon. Friend agree that neighbourhood plans should be given full consideration by local councils at the earliest opportunity?

Brandon Lewis: I congratulate my hon. Friend’s community on going forward with a neighbourhood plan. He is absolutely right. Local authorities should move forward to get them to the referendum stage as quickly as possible—the average at the moment is just two months. I hope that his community will benefit from that as well.

Mr Jim Cunningham (Coventry South) (Lab): The Government have made very much of localism, particularly community planning. Why, then, has the Minister held up the Gateway project in Coventry? Why cannot we have a decision?

Brandon Lewis: I am sure the hon. Gentleman appreciates that every planning decision that comes through the Department is taken on its own merits. Obviously I cannot comment on a particular application as it is going through its process.

Sir Bob Russell (Colchester) (LD): Neighbourhood planning and community rights are clearly welcome, so will the Minister give advice to a community that cannot exercise them because the people who are planning to build 3,000 houses on their doorstep are in the neighbouring local authority area?

Brandon Lewis: The hon. Gentleman highlights an issue for local authorities, and Labour’s plans, which would allow councils to build on other councils’ land, would create that very problem. That is why we have the duty to co-operate and planning inspectors look very carefully at how it is exercised. I would be very happy to meet the hon. Gentleman to discuss the issue.

Roberta Blackman-Woods (City of Durham) (Lab): Recent research by planning consultancy Turley shows that areas of below average income have so far been less involved in the neighbourhood planning process, with just nine plans published in areas categorised as most deprived. What do the Government intend to do to ensure that more disadvantaged communities can participate in this process and that it does not become the preserve of the affluent few?

Brandon Lewis: All communities should be looking to undertake neighbourhood planning. I visited Southwark last week to see the excellent work being done there. A wide range of more than 1,250 areas are undertaking neighbourhood planning. Obviously, a few are ahead of the others and there have been 34 referendums. We have put in more money and are funding local areas that undertake neighbourhood planning and the local authorities to support them. I encourage all areas and communities to consider undertaking a neighbourhood plan.

Bed-and-Breakfast Accommodation

5. Fiona Mactaggart (Slough) (Lab): What estimate he has made of the number of children living in bed- and-breakfast accommodation; and if he will make a statement. [905952]

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The Parliamentary Under-Secretary of State for Communities and Local Government (Kris Hopkins): We have invested more than £500 million to prevent and tackle homelessness. Homelessness statistics reported by local councils are published by the Department and they show that 3,670 children were in bed-and-breakfast accommodation on 30 June.

Fiona Mactaggart: Slough council made strenuous efforts to avoid the use of bed-and-breakfast accommodation for children, and before 2010 it had abolished it. However, I estimate that in the past two years some 60 children have been placed in bed-and-breakfast accommodation in this area of high housing need. Will the Minister meet the Under-Secretary of State for Education, the hon. Member for Crewe and Nantwich (Mr Timpson), who has responsibility for children, to discuss how we can avoid using bed-and-breakfast accommodation for children? They do not learn how to eat at a table and are often pushed out of their homes during the day and end up in expensive cafés. What is the Minister going to do to end this situation?

Kris Hopkins: First of all, we already do meet as a ministerial group. The number of homeless acceptances has dropped by 2% this year. There are eight people in bed-and-breakfast accommodation in Slough and nobody has been in those bed and breakfasts for more than six weeks.

Emma Reynolds (Wolverhampton North East) (Lab): Earlier this year the Minister told the House that the number of homeless families with children in bed-and-breakfast accommodation had dropped compared with the previous year and that that was

“a direct consequence of this Government’s intervention”.—[Official Report, 30 June 2014; Vol. 583, c. 588.]

Since then, however, the Government have released figures that show that the number has, in fact, increased to a 10-year high. Given that the Minister took credit for the fall in the numbers, will he now take responsibility for the increase? Crucially, what is he going to do to help those families with children?

Kris Hopkins: The number of families with children in bed-and-breakfast accommodation has dropped by a third since Labour was in power, the peak being in 2002. We have put in a significant amount of money where there are issues in councils, and we have reduced bed-and-breakfast acceptances by some 96% where we have intervened.

Community Pubs

6. Henry Smith (Crawley) (Con): What steps his Department is taking to support community pubs. [905953]

The Parliamentary Under-Secretary of State for Communities and Local Government (Kris Hopkins): In last year’s autumn statement we announced a £1 billion package of business rate support, which included a £1,000 discount for small businesses with rateable values above £50,000. That is benefiting three out of four pubs.

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Henry Smith: I am grateful to my hon. Friend for that answer and for the work the Government have done on reducing the burden of business rates. Will he consider further reform, such as standardised billings and an appeals process, to reduce yet more of the burden on small businesses and community pubs such as the Charcoal Burner in Furnace Green?

Kris Hopkins: I commend my hon. Friend on his work in supporting the pub industry. As well as the £1 billion package to help bills, we are considering ways in which the regime could be improved through a review of our business rates administration. We are also looking at ways to speed up the appeals process, to make it more transparent for businesses.

Clive Efford (Eltham) (Lab): The problem with pubs in inner-city areas such as London is that the land they sit on is so valuable that they fall prey to property developers who want to build houses, as has happened to the Dutch House public house in my constituency. Is it not about time that we told developers that they are not going to take away these assets, which are highly valued by local communities, just for their profits? Will the Minister take some action to ensure that we protect pubs in such a situation?

Kris Hopkins: We have already put in place a community right to bid process. As well as discounts for the associated business rates, councils can use article 4 directions if they want to shape their particular community and to shape how such businesses are established. The hon. Gentleman is right that the pub plays a really important role in the community. The good news is that beer is 8p cheaper as a consequence of this Government.

Sir Nicholas Soames (Mid Sussex) (Con): Is my hon. Friend aware of the serial bad behaviour by the Co-op in my constituency and others in the south, where it is taking over pubs and converting them into shops, often on very unsatisfactory sites? The Ship Inn in Cuckfield in my constituency is uniquely badly placed to serve as a Co-op. Will he look at what he can do to review the article 4 direction scheme, and to give general instructions about where such shops should be sited?

Mr Speaker: That was a splendidly detailed question. There was I thinking that the right hon. Gentleman was going to tell us about the champagne and oysters that he consumes in his community pub, but I was wrong.

Kris Hopkins: I commend my right hon. Friend for his support of the local pub. The article 4 direction scheme is strong, and it gives councils the opportunity to intervene. I know that there is a passionate campaign to support the Ship Inn. I would welcome the opportunity to meet the campaigners, and I will try to support them where I can.

Kevin Barron (Rother Valley) (Lab): Other things threatening public houses include not just the issue of business rates, but the cost of alcohol compared with the discounts that people get in their local shops and supermarkets. Has the Minister had any discussions with his colleagues about changing the price of alcohol in this country, as has been recommended, to protect not just people’s health but the local village pub?

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Kris Hopkins: All sellers of alcohol have a responsibility to make sure that they promote responsible alcohol consumption, which the Government are encouraging. There is a consultation on alcohol pricing, which is still under consideration.

Greg Mulholland (Leeds North West) (LD): No one wants this Government to be shown to be the most pro-pub Government ever more than me, but that is not going to happen while this ministerial team continue not to change the rules whereby a pub can become a supermarket without needing to go through the planning process. Will the new Minister with responsibility for community pubs tell us that he will finally stop this scandal, which is robbing communities of pubs up and down the country?

Kris Hopkins: I am afraid that I must disagree with the hon. Gentleman, because nobody in the House is more enthusiastic about supporting pubs than me. There are powers through an article 4 direction to protect a location, and there is an opportunity through the community right to bid to support a treasured local site. I suggest that he works with the local council to make sure that he secures such assets.

Sir Hugh Robertson (Faversham and Mid Kent) (Con): Will the Minister acknowledge the contribution made to many small community pubs by independent family brewers? Will he speak to his counterparts in the Department for Business, Innovation and Skills to ensure that the concession achieved for them during the passage of the Small Business, Enterprise and Employment Bill is carried through and that they are excluded from the regulations?

Kris Hopkins: Having several small brewers in my constituency, I know that they make a huge contribution to the local economy. I am more than willing to have the conversation for which my right hon. Friend has asked.

Business Rates (Small Businesses)

7. Sir Tony Baldry (Banbury) (Con): How many small firms and shops in (a) England and (b) Cherwell district council area have been affected by the reduction in business rates. [905954]

15. Charlie Elphicke (Dover) (Con): How many small firms and shops in (a) England and (b) Dover have been affected by the reduction in business rates. [905965]

The Parliamentary Under-Secretary of State for Communities and Local Government (Kris Hopkins): Our £1 billion business rates support package includes a £1,000 discount for smaller shops, pubs and restaurants. That will benefit more than 300,000 premises in England, including 430 in Cherwell and 580 in Dover. We are also doubling small business rate relief for a further year, which will benefit about 575,000 businesses, with 385,000 businesses paying no rates at all. That will help 1,100 small businesses in Cherwell, and 1,300 small businesses in Dover.

Sir Tony Baldry: Has not the introduction of the business rate retention scheme given local authorities the ability to offer business rate discounts to help attract

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firms, investment and jobs? Is not the fact that local authorities now directly and locally retain half the business rates a strong incentive for councils to encourage businesses and enterprises to set up in their areas?

Kris Hopkins: Councils have a huge responsibility to promote local businesses, whether that involves getting the skill set right or using the discretionary powers that we have given them. I know that businesses and councils, particularly Conservative councils across the country, are responding positively.

Charlie Elphicke: May I welcome all the Government have done to help high streets such as that of Deal, in my constituency? Will Ministers condemn the Local Government Association group leader who has been going up and down the land telling councils to hike taxes and business rates, which will devastate our high streets and increase the cost of food?

Kris Hopkins: I congratulate my hon. Friend on his work to promote Deal high street, which has been a tremendous success. Most recently, Deal topped the polls as Britain’s best coastal town as voted for by readers of The Daily Telegraph. The instinct of the Labour party is to tax businesses, ours is to encourage and grow local businesses by offering tax breaks.

Alison Seabeck (Plymouth, Moor View) (Lab): Will the Minister explain who sets the business rates?

Kris Hopkins: Local authorities have been given the opportunity to shape their tax base.

Affordable Housing

8. Caroline Lucas (Brighton, Pavilion) (Green): What recent assessment he has made of the availability of affordable housing in Brighton and Hove. [905955]

The Minister of State, Department for Communities and Local Government (Brandon Lewis): Local authorities are required to develop an evidence base locally. This ensures that their local plans meet the needs for their market and for affordable housing to be consistent with policies in the national planning policy framework. We have published new guidance to local authorities on assessing housing need in their area and 340 new affordable homes have been provided in Brighton and Hove since 2010.

Caroline Lucas: In spite of national constraints, the Green administration in Brighton has overseen the development of more than 500 affordable homes, with a further 230 in the pipeline, and has built the first council homes in a generation. Brighton council and councils around the country could do much more if the Government would provide direct capital grant funding. Will the Minister reconsider that and meet my constituents to discuss proposals we have put together in a local housing charter to promote fairer rents and more affordable homes?

Brandon Lewis: There is about £2.8 billion of headroom in the housing revenue account across local authorities. We have recognised this year that some authorities that have been building have come close to that headroom,

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so we made extra money available. We have already announced some bids and will announce some more shortly. I encourage local authorities to bid to take up this opportunity, along with the housing guarantee grants that we have been offering with housing associations to provide more affordable housing. I am proud that we have managed to deliver more than 200,000 such houses over the past couple of years.

Local Government Pension Scheme

9. Robert Neill (Bromley and Chislehurst) (Con): When his Department plans to issue a final response to the consultation entitled “Opportunities for collaboration, cost savings and efficiencies”; launched in May 2014, on the local government pension scheme. [905956]

The Parliamentary Under-Secretary of State for Communities and Local Government (Kris Hopkins): Our consultation outlined how £660 million a year could be saved if local government pension funds were invested more efficiently. We will publish a response in due course. Many funds have already started to take the messages from the consultation on board.

Robert Neill: I hope that “due course” will not be too long delayed, because my hon. Friend is absolutely right to recognise the significant savings that have been made to taxpayers and scheme members by the agglomeration of vehicles. When he takes on board the consequences of the consultation, will he particularly bear in mind the value that can be brought by collective investment vehicles, which can achieve some 90% of those savings without significant administrative upheaval and can provide useful vehicles for wider investment?

Kris Hopkins: The consultation considered how some £240 million could be saved by creating combined investment vehicles. It should be noted that London borough councils have already taken that on board and some 30 councils have come together after their council meetings and have agreed to bring those funds together.

Council Tax Freeze

10. Maria Miller (Basingstoke) (Con): What assessment he has made of the effect on council tax payers of freezing the rates of council tax. [905958]

The Secretary of State for Communities and Local Government (Mr Eric Pickles): Under Labour, council tax more than doubled. Under this Government, it has fallen by 11% in real terms. Our council tax freeze is saving the average band D householder in England up to £1,073 over the lifetime of this Parliament.

Maria Miller: Just like central Government, local government has had to take tough spending decisions. Does the Secretary of State agree that councils such as mine in Basingstoke, which have frozen council tax for five years, have protected front-line services such as the weekly bin collection and are now rated by their residents as providing even better value for money, have got those tough decisions right?

Mr Pickles: It is a pleasure to be associated with my right hon. Friend. I congratulate Basingstoke and Deane borough council on its excellent work. We must remember

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that we are doing all this to ensure that ordinary people on modest incomes are not forced to pay hundreds of pounds more for a mansion tax. That is why the Government will not introduce one. We want to reduce the cost of living, not increase it. That is why we are helping councils to freeze council tax.

Mr Philip Hollobone (Kettering) (Con): Would the Secretary of State like to congratulate Kettering borough council, of which I also have the privilege to be a member, on freezing its share of the council tax since 2010, maintaining all its front-line services, maintaining its grants to local community groups and cutting car parking charges?

Mr Pickles: Every time I travel close to Kettering, I find myself saying, “Thank God for Kettering borough council.” What a great, well-run council it is. It is my pleasure to say from this Dispatch Box—I think for the 10th time—that Kettering borough council is magnificent, as is its Member of Parliament.

Julie Hilling (Bolton West) (Lab): What is the additional cost to people on low incomes who now have to pay for basic services that they need and who have lost their council tax benefit?

Mr Pickles: I assume that the hon. Lady is making some kind of spending commitment on behalf of the Labour party—an unlimited one. Local schemes are put in place by local councils. We have offered them transitional relief to help them. It is a ludicrous argument to say that poor people and people who are struggling hard do not pay council tax. The problem with the hon. Lady is that she belongs to the political classes, who are out of touch with the needs of ordinary people.

Social Housing

12. Sir Andrew Stunell (Hazel Grove) (LD): What steps he is taking to increase the supply of social housing. [905961]

The Parliamentary Under-Secretary of State for Communities and Local Government (Stephen Williams): We are on course to deliver the Government’s programme of 170,000 affordable homes by March 2015. A further £23 billion of investment will deliver 165,000 affordable homes between 2015 and 2018. That will be the fastest rate of affordable house building for at least 20 years.

Sir Andrew Stunell: I thank the Minister for that positive report. Will he assure the House that the energy performance of new social and affordable homes will not be downgraded using any of the foolish loopholes in the Infrastructure Bill, and that we will get genuinely zero-carbon homes in the social and affordable sector?

Stephen Williams: The Government are determined that we will. We tightened up the energy efficiency standards for new house building in April and we have announced a commitment to zero-carbon homes from 2016. It is important, however, to get smaller house builders back into the market, which is why we are consulting on a modest exemption.

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Mr Clive Betts (Sheffield South East) (Lab): There is a chronic shortage of social housing in this country, not least in my constituency. Despite that and despite the cuts in the grants for building affordable homes, will the Minister confirm that £800 million of grants have not been bid for and are sitting, unused, in the coffers of the Homes and Communities Agency? Does he blame the providers for not putting in bids because they do not see the need for social housing, or does he blame Government policy, under which the amount of grant per unit has been cut to such a low level that providers no longer feel able to bid for the money?

Stephen Williams: In fact, the Homes and Communities Agency and the Greater London authority, which is responsible for this matter in London, have announced initial allocations of £1.3 billion under the next programme to deliver 62,000 new affordable homes from 2015 to 2018. We will open the bidding process for the next round soon.

Dr Sarah Wollaston (Totnes) (Con): Is the Minister aware of the concerns expressed by our national park authorities about the possible unintended consequences of introducing a threshold below which affordable housing would not be required under section 106 agreements? Is he aware that it could halve the ability of the authority for the national park that I represent, Dartmoor, to deliver affordable housing, including social housing?

Stephen Williams: Yes, I and my ministerial colleagues certainly are aware of the special concerns about providing affordable homes in national parks. That is why, in the consultation, we have proposed a different threshold for national parks and areas of outstanding natural beauty from that for urban areas.

Mr Nick Raynsford (Greenwich and Woolwich) (Lab): May I draw the House’s attention to my interests?

As the Minister will know from his own Department’s figures, just 100,000 new housing association and council homes have been built in the first four years of the life of this Government. Given that their record is an average of just 25,000 affordable homes being built over their four years to date, how will he miraculously deliver a further 75,000 in the Government’s last remaining year in office? It beggars belief that output will treble, as he suggests.

Stephen Williams: Some people may think that it beggars belief that a former Housing Minister can say that, given that in the 13 years for which his party was in office, with a rather different economic inheritance, the number of social and affordable homes fell by 420,000. This will be probably the first Government in my lifetime to leave more affordable homes in stock at the end of a five-year Parliament than there were before it.

Council Tax Benefit

13. Mr Stephen Hepburn (Jarrow) (Lab): What recent representations he has received on reform of council tax benefit; and if he will make a statement. [905962]

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The Parliamentary Under-Secretary of State for Communities and Local Government (Kris Hopkins): Local council tax support schemes are a matter for local authorities. An independent review of schemes will be carried out within three years, as set out in legislation.

Mr Hepburn: The changes to council tax benefit that the Government have brought in are every bit as cruel as the evil bedroom tax and Thatcher’s poll tax. My local citizens advice bureau tells me that its new referrals to food banks have gone up from two a month to 10 a week. When will the Government stop attacking the poor?

Kris Hopkins: One way in which we can get people to stop using food banks is to get them into a job, and this Government have delivered 1.8 million jobs for those individuals.

Andy Sawford (Corby) (Lab/Co-op): The New Policy Institute says that more than 200,000 families have been hit by both increases in council tax, due to the withdrawal of council tax support, and the bedroom tax. Will the Minister make a proper assessment of that tax double whammy on the least able to pay, and will he tell us why he is so keen to increase taxes on the poorest people?

Kris Hopkins: This Government have frozen council tax for some five years, and in real terms it is 11% less than it was, which equates to a saving of more than £1,000 for an individual household. That is the Government’s track record.

Departmental and Local Authority Budgets

16. Chi Onwurah (Newcastle upon Tyne Central) (Lab): What level of reduction there has been in (a) his Department’s budget and (b) centrally-funded local authority budgets since May 2010. [905966]

The Parliamentary Under-Secretary of State for Communities and Local Government (Kris Hopkins): We needed to make sensible savings to address Labour’s deficit. Local authority net current expenditure in England, excluding education, has risen from £74.7 billion in 2009-10 to £77.1 billion in 2013-14. At the time of the spending review, the budget for the core Department was reduced to £15.9 billion, reflecting an overall saving of 68%.

Chi Onwurah: Since this Government took office, Newcastle has had its budget cut by 41% in real terms—almost half. My constituents are losing £115 per dwelling, while more affluent areas such as Surrey and Wokingham are gaining up to £20 extra per dwelling despite having less pressure on services. Will the Minister make a commitment to come to Newcastle to see the effects that his budget cuts are having on local services, and to explain to the people of Newcastle how they are fair?

Kris Hopkins: I have had the pleasure of visiting the great city of Newcastle many times this year. It has the opportunity to invest money, support vulnerable individuals and spend further on public services by growing its business base. As a direct consequence of this Government’s interventions, 6,300 businesses have gained from our business tax discount.

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Protection for Leaseholders

17. Mrs Emma Lewell-Buck (South Shields) (Lab): What steps he is taking to protect leaseholders from nuisance legal actions initiated by their landlords. [905967]

The Minister of State, Department for Communities and Local Government (Brandon Lewis): Existing legislation already provides leaseholders with rights and protections. Furthermore, the Government fund the Leasehold Advisory Service to give free advice to leaseholders who face a dispute with their landlord.

Mrs Lewell-Buck: I thank the Minister for his response, but not enough is being done. My constituent Emma Stewart is being pursued by her landlord over a leasehold dispute. A tribunal decision found that Ms Stewart had made every effort to comply with the terms of her lease, and that her landlord had not been disadvantaged in any way, yet they continue to demand payment from her. That is a clear case of nuisance action and has cost Ms Stewart the sale of her home. Will the Minister meet me to discuss the situation and say what on earth can be done?

Brandon Lewis: I wrote to the hon. Lady about this issue a couple of weeks ago, but I am happy to meet her if that letter did not cover everything she needs.

Storm Water Drainage (Local Authorities)

19. Duncan Hames (Chippenham) (LD): What recent guidance he has given local authorities on ensuring adequate storm water drainage in residential areas. [905970][Official Report, 18 November 2014, Vol. 588, c. 1-2MC.]

The Parliamentary Under-Secretary of State for Communities and Local Government (Stephen Williams): There are strict tests in national planning policy to protect people and property from flooding, including from storm water. We made clear in planning guidance that we published in March that where those tests are not met, new development should not be allowed.

Duncan Hames: Quite right. In the past year we have seen businesses and homes damaged by floods in Bradford on Avon, Corsham, Melksham, and villages, including Holt. What role does the Minister expect local authorities such as Wiltshire council to play in preventing flood damage with sufficient storm water drainage?

Stephen Williams: We obviously expect local authorities to deal with such issues through their local plan. Some 94 local authorities act as the lead local flood authority and are expected to have in place a flood risk management strategy. Of those 94, 36 local authorities have not yet published or consulted on their strategy and, according to my information, Wiltshire is one of them. Perhaps as a diligent constituency MP, my hon. Friend will join me in encouraging Wiltshire council to come forward with that plan.

Help to Buy Scheme

20. Steve Brine (Winchester) (Con): What the take-up of Help to Buy has been in (a) England and (b) Winchester constituency. [905971]

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The Minister of State, Department for Communities and Local Government (Brandon Lewis): The Government have already helped more than 54,000 families purchase a home in England with the support of Help to Buy since March 2012, helping people to achieve their ambition of owning their own home. In the Winchester local authority area, 65 families have already bought through Help to Buy.

Steve Brine: Like many Members, I have spent years listening to young people say that they can afford mortgage payments but never the deposit to get on the housing ladder. Help to Buy nails that issue, and it is one of the most positive things this Government have done. Will the Minister comment on the starter homes plan and say whether those two programmes will work together to give more young people a chance to live the dream?

Brandon Lewis: My hon. Friend has campaigned hard for people to aspire to own their own home, and the Government share that desire. The Conservatives have made clear that after the next election we want to deliver 100,000 extra starter homes at a 20% discount, giving more people the opportunity to get on the housing ladder for the first time.

Topical Questions

T1. [905938] Bill Esterson (Sefton Central) (Lab): If he will make a statement on his departmental responsibilities.

The Secretary of State for Communities and Local Government (Mr Eric Pickles): There is no place in British society for anti-Semitism, and we must stand united to resist all the pernicious ways in which it is manifested. Recently, there has been an increase in anti-Semitic graffiti on public property, private homes and in Jewish cemeteries, where gravestones have been desecrated and covered in offensive graffiti. That is appalling. Today, I am writing to councils, with the Community Security Trust, to stress the importance of using their range of legal powers to remove such graffiti quickly, including on private property, and to report all incidents to the police. That is part of a wider measure to tackle anti-Semitism and promote tolerance and respect in our society.

Bill Esterson: I welcome what the Secretary of State has said about tackling anti-Semitism.

Merseyside Fire and Rescue service has faced a 35% cut to its Government grant since the Government came to power, which means that it has lost two of the four whole-time fire appliances serving my constituency. What assurances can the Secretary of State give that we will not suffer further cuts in the next spending review, given that such cuts would inevitably lead to the loss of at least one of the fire stations in Sefton?

Mr Pickles: The project merges existing stations into three new efficient stations, while protecting front-line services with the introduction of an on-call arrangement on the three new sites. In addition, the new sites will be shared with police and ambulance services, enabling further efficiencies and service contribution. That seems a very sensible way of going forward.

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T4. [905941] David Mowat (Warrington South) (Con): Last month, the Secretary of State upheld the planning inspector’s decision to close the Arpley landfill in Warrington. This is of great benefit to the town and on behalf of the residents I thank him for that. Will he confirm that landfill remains at the bottom of the waste hierarchy and that in time it will be replaced everywhere by incineration and recycling?

The Minister of State, Department for Communities and Local Government (Brandon Lewis): My hon. Friend is absolutely right that landfill is at the bottom of the waste hierarchy, below incineration, energy recovery and recycling. Updated planning policy on waste from October this year continues the focus of moving waste up the hierarchy by moving away from traditional landfill towards more sustainable options.

Hilary Benn (Leeds Central) (Lab): I join the Secretary of State in condemning anti-Semitic abuse. I very much welcome the action he has taken today.

Last year, the Secretary of State decided to extend permitted development rights so that offices could be converted to residential use without requiring planning permission. What assessment has he made of the impact of his change on the availability of office space, in particular for small and start-up businesses that are so important to our economy?

Mr Pickles: First, may I express great sadness that the right hon. Gentleman was not on his feet yesterday to defend his leader? For him to be missing seems to me to be deeply shameful. [Interruption.] Well I’m here to defend Ed.

We did this because there was quite a lot of surplus office accommodation. It was a necessary thing to do and I think it has improved a number of town centres by getting people new homes. In terms of offering new and exciting ways for people to set up new businesses, the situation remains open.

Hilary Benn: It seems extraordinary that the Secretary of State has clearly made no effort at all to find out the impact of his decision, despite reports of small businesses being affected. As he will know, the Mayor of London is very unhappy about what he has done. The Business Secretary thinks it is a really bad idea, saying that

“in south-west London large swathes of commercial property are in the process of disappearing…there is nowhere for small firms to operate.”

A recent Local Government Association survey found in one case that 100 charities and small businesses had been given four to six weeks’ notice to quit. The right hon. Gentleman used to be a localist. He said earlier that he has given more power to local communities to take decisions on planning, so why did he decide that his view on this matter would prevail over the views of local people?

Mr Pickles: I note that the right hon. Gentleman has not taken the opportunity to defend the Leader of the Opposition, which again I am very shocked at. He should do his homework: local schemes exist and article 4 exists. It is possible to decide where they go and where they do not. People need housing, and where Labour failed to deliver houses, we have succeeded.

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T6. [905943] Stephen McPartland (Stevenage) (Con): Stevenage borough council has taken more than £3.5 million in car parking charges, preventing the regeneration of Stevenage town centre. Thousands of local people have joined my campaign for three hours free parking. Will the Minister agree to support my campaign and send a strong message to Stevenage borough council to stop ripping off local people?

The Parliamentary Under-Secretary of State for Communities and Local Government (Penny Mordaunt): I congratulate my hon. Friend on his campaign. He is quite right that this is an issue that restricts growth locally. We recognise that and have introduced restricting the use of CCTV to enforce parking, grace periods for on-street parking, and have made it possible for local people to require their local councils to review parking. I draw his attention to the Great British High Street portal, which demonstrates that if local authorities reduce their parking rates they receive greater revenue.

T2. [905939] Liz McInnes (Heywood and Middleton) (Lab): Responding to a Centrepoint report quoted in The Independent last week, the homelessness Minister said that the number of people sleeping rough was falling dramatically and claimed that it was a result of the Government’s action. Given that his Department’s own figures show that the level of rough sleeping has risen every year under this Government and is up 37% since 2010, will he repeat his claim to the House and take responsibility for this dramatic change in levels of rough sleeping?

The Parliamentary Under-Secretary of State for Communities and Local Government (Kris Hopkins): The Government take the plight of individuals who are homeless and rough sleeping extremely seriously, which is why we support the No Second Night Out project and have invested £1 billion through homeless services and welfare reform to address the problem. Levels of homelessness have dropped by 2%. Rough sleeping figures across the country are variable, but the Government take the issue extremely seriously and will continue to support those vulnerable individuals.

T9. [905946] Sir Oliver Heald (North East Hertfordshire) (Con): Has the Minister seen the disturbing reports from Tower Hamlets that £400,000 was given to organisations that did not meet minimum standards and that council land was sold off to friends of the administration? The mayor, Mr Rahman, says they have done nothing wrong, but surely this has to be tackled—a very serious situation has arisen.

Mr Pickles: As my hon. and learned Friend will recall, I made a statement to the House last week, and we are currently waiting to hear what the mayor has to say in response to the report. As the House will recall, I asked for two specific undertakings regarding the disposal of property. We have received those undertakings, and I hope to make an announcement very soon.

T5. [905942] Alison Seabeck (Plymouth, Moor View) (Lab): I draw the House’s attention to my indirect interest, which I frequently make public in this place. When will the Secretary of State act to save roughly £500 million of public money over 10 years by giving registered housing providers the same powers as local

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authorities to enter properties to carry out essential gas safety checks, as supported by the Association of Gas Safety Managers?

Brandon Lewis: I am discussing this matter with the industry, and I will continue to do so and inform the House once we have finished those conversations.

Mark Pritchard (The Wrekin) (Con): The concrete councillors of Labour-led Telford and Wrekin borough council seem to be building on every bit of greenfield and every green patch in the borough, despite its being a semi-rural borough. What more can the planning Minister do to encourage this out-of-touch council to build on brownfield sites?

Brandon Lewis: We have published further guidance to help councils to appreciate that green-belt development should be an absolute last resort and that brownfield sites should always be used first. This summer, we made available to councils an extra several hundred million pounds, and I encourage my hon. Friend’s council to bid for some of that and do what it can to protect its valuable green belt.

T7. [905944] John Healey (Wentworth and Dearne) (Lab): It is a disgrace that the Secretary of State has personally allowed the dispute over fire service pensions to drag on for three years. The Government’s own expert report says that two thirds of firefighters will not pass the current fitness standard at the age of 60, meaning they will be faced with no job and no pension after years of good service. Why has he turned his back on firefigters and now dragged his new junior Minister away from the negotiating table?

Penny Mordaunt: As I have stated before, we have introduced protections for firefighters on a statutory footing and set up a working group to ensure best practice to enable people to maintain their fitness. We have gone further still, however, and are looking at the future shape of the work force to ensure that people who want to stay operational but cannot maintain those fitness standards have jobs to go to.

Andrew Jones (Harrogate and Knaresborough) (Con): Will my right hon. Friend consider strengthening guidelines to prevent a council from unilaterally removing heritage assets, including a presumption of like-for-like replacement if assets need renewal? In particular, I am thinking about popular items of street furniture.

Mr Pickles: Obviously, if my hon. Friend has something specific in mind, I would be most interested to hear what he has to say, and perhaps we could have a discussion about it today.

T8. [905945] Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): This Government have taken away 58% of Liverpool city council’s funding, hitting Liverpool harder than anywhere else, yet Liverpool is still finding innovative new ways of maintaining services, including the announcement today that all our libraries will be kept open. Will the Secretary of State finally travel to visit Liverpool for himself to see what difference the city could make if its funding cuts were at the national average?

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Mr Pickles: Liverpool is one of the highest-funded councils in the country, but it has one problem—it does not collect its council tax. If it were to do so, an enormous burden would be taken off the shoulders of taxpayers in Liverpool.

Mr David Heath (Somerton and Frome) (LD): Given the Prime Minister’s commitments earlier in the year, why is it proving so difficult for the Department for Communities and Local Government and the Department for Environment, Food and Rural Affairs to find a sustainable funding formula for the proposed Somerset river authority? Frankly, I do not care about precedent—13,000 acres under water is a pretty compelling precedent in itself.

Mr Pickles: We have, of course, honoured our obligations to the people of Somerset with £20 million having already gone in and an additional £13.1 million for looking at the possibility of a barrier at Bridgwater. It simply comes down to this: what we are doing is trying to find something sustainable. The hon. Gentleman seems to be urging me to tax people who were flooded. What we are looking at is trying to get something sustainable without over-burdening the people of Somerset. That seems a much more sensible course to pursue.

T10. [905947] Jim Fitzpatrick (Poplar and Limehouse) (Lab): Further to the Secretary of State’s statement last week on the PricewaterhouseCoopers report on Tower Hamlets and the criticism on grants and disposal of assets in particular, it was reported at column 669 that the right hon. Gentleman would “send a copy” of the report “to the police”. Will he confirm that a copy will be sent to the Crown Prosecution Service, too?

Mr Pickles: It appears on our website, but I will certainly bring the attention of the Crown Prosecution Service to it. I express no view on whether or not these matters are criminal. I am certainly unhappy with them, but it is for the police and the Crown Prosecution to make the appropriate decision. I am determined to ensure that Tower Hamlets has the best possible council so that public confidence can be re-established in it.

Mr Andrew Robathan (South Leicestershire) (Con): I understand that the Secretary of State is calling in almost all onshore wind farm applications and turning most of them down, including those already approved by the planning authorities. Given the majority of the people of this country say, when polled, that they are broadly in favour of onshore wind projects, will the right hon. Gentleman explain his Department’s policy on this matter?

Kris Hopkins: If my right hon. Friend will forgive me, I need to correct him. There have been just over 800 applications for solar and wind farms, of which some 40 have been recovered and only four have ever been called in.

Sammy Wilson (East Antrim) (DUP): The continuing firefighters’ dispute in England is both damaging and avoidable. Will the Minister look at what has happened in Northern Ireland, where the Northern Ireland Executive have come to an agreement with the firefighters that is

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neither costly nor damaging? Will he adopt the same common-sense approach here as has been adopted in Northern Ireland, Scotland and Wales?

Penny Mordaunt: In summary, all the schemes except that of Northern Ireland have a retirement age of 60, while England and Scotland have the same faster accrual

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rate and England, Wales and Northern Ireland have the same transitional protections. Wales and Northern Ireland have not yet made any announcements on fitness. The scheme in England is marginally different from that of the other nations and, in many respects, it is better. The regulations have been laid. We must get the message across to firefighters to remain part of that scheme.

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EU Budget (Surcharge)

3.34 pm

Ed Balls (Morley and Outwood) (Lab/Co-op)(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement to clarify his agreement on the European Union budget surcharge.

The Chancellor of the Exchequer (Mr George Osborne): Last month the previous European Commission presented Britain with a bill for £1.7 billion, which it insisted must be paid by 1 December. The Prime Minister spoke for British taxpayers when he said that that was completely unacceptable, and we set about getting a better deal. Following intensive discussions with the new Commission and at the ECOFIN meeting last week, we have achieved such a deal. I can tell the House that we have halved the Bill, have delayed the Bill, will pay no interest on the Bill, and have changed the rules of the European Union so that such unacceptable behaviour never happens again.

Let me briefly give the House the details. At the European Council last month, the Prime Minister made it clear to the Barroso Commission that while annual adjustments to contributions were a regular part of EU membership, a sudden and unprecedented demand for a £1.7 billion payment on 1 December was unacceptable. He secured the agreement of all 28 Heads of Government that it should be discussed by the Finance Ministers as a matter of urgency. That meeting took place last Friday, and followed two weeks of intensive and constructive discussions with the new Budget Commissioner, Vice-President Georgieva, and other member states.

As a result of those discussions, we achieved unanimous agreement that, first, expecting payment on 1 December was indeed unacceptable. The budget rules will therefore be rewritten to allow for a delay in any payment. In Britain’s case, that means that we will pay nothing this year, and will instead make payments in two instalments in July and September, in the second half of next year. Secondly, the suggestion that we might have to pay interest charges was rejected, and it was agreed unanimously that no interest would be charged on the delayed payments. Thirdly, in our discussion with the new European Commission, it was agreed that a full rebate would apply to the British payment, that the rebate would be specific, that it would be in addition to any other rebate that we might expect next year, and that, for the first time ever, it would be paid at the same time as any money owed.

It had not been clear that we would receive a rebate, let alone such a large one. No one in the House had suggested that we would. Only my right hon. Friend the Member for South Cambridgeshire (Mr Lansley) had even asked a question about it. Indeed, it was only confirmed that we would receive a rebate, and a large one, by Vice-President Georgieva on 6 November, last Thursday evening. This means that Britain’s payments have been halved, from £1.7 billion to about £850 million.

Finally, all member states agreed with us that the entire episode had been unacceptable, and a deal was therefore reached to make a permanent change in European law so that this would never happen again.

In the face of this budget challenge, we have far exceeded the expectations and predictions that preceded Friday’s meeting. We have achieved a real result for

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Britain. The whole episode reminds us of the reform that we need in Europe—reform that Government Members believe should be put to a vote of the people of Britain.

Ed Balls: If this is such a good deal, why did the Chancellor not offer to make a statement? Why was he dragged to the House this afternoon? Talk about smoke and mirrors, Mr Speaker—I can barely see you through the Chancellor’s fog and bluster!

Is not the truth that the Chancellor failed to reduce our contribution by a single penny? All he is doing is simply counting the rebate that was due anyway—a rebate that was never in doubt—in an attempt to fool people into thinking that the bill has been halved. His so-called victory is nothing more than a con trick.

The Chancellor claims that the rebate was somehow in doubt, but that claim has been contradicted by everyone else. The EU Budget Commissioner was very clear when he said, on 27 October, in a statement on the backdated gross national income revisions,

“the UK will benefit from the UK rebate for the additional payments”.

On Friday, having been asked whether the rebate was in doubt, the Vice-President of the Commission replied, “No, absolutely not.”

On Friday, the Treasury was telling journalists that the Government had legal advice that the UK rebate somehow might not apply. If the legal advice exists, the Chancellor should publish it. Mr Barroso’s spokesperson, Mr Mark Gray, has directly contradicted the Treasury’s claims, saying:

“Commission position on this clear at European Council—rebate was never in doubt”.

The Conservative MEP Daniel Hannan agrees. He said—[Interruption.]

Mr Speaker: Order. There is far too much noise in the Chamber. I wish to hear the views of Mr Daniel Hannan. Let us hear them.

Ed Balls: I’ll tell you what Mr Hannan said. He said:

“it’s not credible to claim that it was ever in doubt”.

The Dutch Finance Minister said that of course this

“mechanism of the rebate will also apply”

on the new contribution:

“So it’s not as if the British have been given a discount today.”

The Austrian Finance Minister said that

“the amount cannot be put in question”,

and the Irish Finance Minister confirmed

“the UK will pay the whole amount.”

They are queuing up to contradict the Chancellor.

Let me ask the Chancellor this: can he name a single Finance Minister who is willing to go along with his desperate attempts to pull the wool over people’s eyes? And it is worse. The Financial Times reported:

“Officials involved in the closed-door negotiations between finance ministers said Mr Osborne did not complain about the overall bill.”

He didn’t even complain about the overall bill, Mr Speaker! I have here the minutes of Friday’s ECOFIN meeting: 21 pages, and not a single reference in those 21 pages to the UK rebate or the amount Britain owes being reduced.

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Is it not now clear that the Chancellor totally failed to get a better deal for the taxpayer? He did not reduce Britain’s backdated bill by a single penny. The British people don’t like being taken for fools, and his attempts to fool them have totally unravelled.

Mr Osborne: No, the British people do not like being taken for fools which is why the shadow Chancellor is in opposition. The shadow Chancellor is one of those people who is wise neither after the event nor before the event. How do we know that? He wrote an article in The Guardian last Friday. It appeared alongside another article called “Labour is doomed” by one of his colleagues, and in his article he set out four tests that I had to pass. The first test, he said, was that we needed a coalition of support, and he asked me about that again today. We had unanimous support around the ECOFIN table for the deal that was agreed. The second test he set me before the ECOFIN council was that we needed the support of Germany. Well, we went to Berlin and the German Finance Minister was central to the deal that we did. Thirdly, in this article, he said:

“The Prime Minister should be clear about whether he intends to take the EU Commission to the European Court of Justice if they insist on the deadline of 1 December.”

Well, we do not have a deadline of 1 December any more, because we did not challenge the law; we changed the law.

So three tests passed, and here is the fourth and final test the shadow Chancellor set us: he said that the interest rates on any delayed payments should be fair. Well, I disagree. I do not think we should pay any interest at all, and we are not, but what is revealing about this fourth test is the number he himself gave for the fines Britain might face. He said:

“Britain could face a…fine of £114,000 a day.”

Does he confirm that that is what he said in the article: £114,000 a day? [Interruption.] Well, he has given himself away because £114,000 a day happens to be the EU penal interest on £1.7 billion, so the shadow Chancellor, who stands before us today and says he always knew the rebate would apply, is the same shadow Chancellor who on Friday said we would paying £1.7 billion.

And of course the word “rebate” never appeared once in that article or, indeed, in any intervention from the Labour party on this issue. This whole question from the shadow Chancellor today is based on the absurd charade that he would stand up for Britain’s interests in Europe, but he gave away billions of pounds of the rebate, he signed us up to billions of pounds of eurozone bail-out, and he still refuses to give the British people a say on our future in Europe. May I suggest to him that he should leave the strong leadership in Europe to us, and he should get on with throwing over the weak leadership in the Labour party?

Hon. Members: More!

Mr Andrew Tyrie (Chichester) (Con): This is almost like Budget day. Was it not crass insensitivity on the part of the Commission to make such a demand on several countries in this way? The Government have negotiated an interest-free deferment and a reduction in the sum outstanding, and exactly what those are worth is something that the Treasury Committee will want to examine with the Chancellor in public session in due

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course. In the meantime, will he give us further details to assure us that such demands will not be made on us or any other country again?

Mr Osborne: I welcome my hon. Friend’s support for what has been announced. There was agreement around the table that we should permanently change the EU budget rules. We shall have to consult the European Parliament on that, but it does not have a veto. We should change those rules so that if there is an exceptionally large payment or adjustment in future, as there was this time, member states cannot be bounced with a bill like this. There was strong support around the table for that change.

Mr Frank Roy (Motherwell and Wishaw) (Lab): On the UK rebate, will the Chancellor give us the name of just one European Finance Minister who changed their mind after listening to him?

Mr Osborne: As the hon. Gentleman should know, the rebate involves a discussion between member states and the European Commission, which is why we were discussing with the Commission, in parallel, the size of the British rebate. Frankly, any question from Labour Members about the rebate is a bit rich, given that they gave up half of it.

Sir William Cash (Stone) (Con): My right hon. Friend is to be congratulated on getting rid of these punitive interest rates. I hope that he will refer the new rules that were decided at ECOFIN last Friday to my Committee so that we can scrutinise them properly. Is there any sound reason for our making any payment at all if those rules do not deal with the problem of other member states including their black economy in the statistical base that they use when putting forward their proposals? That greatly affects the whole basis on which the calculations are made.

Mr Osborne: My hon. Friend raises an important point about the quality of the statistics. It was raised by the European Court of Auditors last week; it was also made forcefully by the Dutch Finance Minister at ECOFIN. The key point is that we can examine the numbers, and if there are errors we will get money repaid to us at the end of next year.

Mr Geoffrey Robinson (Coventry North West) (Lab): Can the Chancellor explain why the EU Commissioner said on 27 October that the UK would benefit in any event from the rebate that was due? Also—this is at the heart of the problem—what evidence does the right hon. Gentleman have to suggest to the House, other than in a gross act of deception worthy more of Goebbels than of the British Chancellor of the Exchequer—

Hon. Members: Withdraw!

Mr Speaker: Order. I am sure that the hon. Gentleman is not accusing any member of the Government of engaging in deception. If he is, he must withdraw that term.

Mr Robinson: I am happy to withdraw it, Mr Speaker; it was meant in a light-hearted manner.

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Mr Speaker: We are grateful.

Mr Osborne: I always knew that the hon. Gentleman asked questions that had been prepared by the shadow Chancellor, but I have never before seen those questions being handed over in the Chamber. Nor do I think his embellishment of the question added much to it. If the rebate was always going to apply, and to such an extent, why did neither he nor any other Labour Member raise the matter? Why was it not mentioned in the shadow Chancellor’s article in The Guardian? The shadow Chancellor says that the outcome was obvious, but the estimate of a £114,000 fine was based on a number of—

Ed Balls indicated dissent.

Mr Osborne: He says no, but the penal rate is 2% above base, and 2% above base per day on a £1.7 billion charge is £114,000. Is that just an amazing coincidence?

Mr Andrew Lansley (South Cambridgeshire) (Con): I congratulate my right hon. Friend on securing the deal last Friday. He was good enough to recall that, two weeks ago in the Chamber, I said that the rebate should apply to the additional demand on the UK’s contributions. Despite the shadow Chancellor’s assertions just now, the Leader of the Opposition said nothing about the rebate two weeks ago; he said nothing until my right hon. Friend actually secured it. Will my right hon. Friend confirm that the rebate will still apply to UK net contributions in future years, as it would have done before? [Interruption.]

Mr Osborne: I am sorry that the hon. Member for Stoke-on-Trent Central (Tristram Hunt) wants to leave, because we were just talking about the presence of the Labour leader. As the hon. Gentleman said at the weekend:

“‘I never believed the answer to Labour’s problems was to show people more of Ed Miliband.”

My right hon. Friend the Member for South Cambridgeshire (Mr Lansley) is right; on 27 October, he asked my right hon. Friend the Prime Minister about the position of the rebate. The Prime Minister said it was:

“One of the important questions that needs to be asked and properly answered”.—[Official Report, 27 October 2014; Vol. 587, c. 30.]

He said that that is what we are seeking to do. So my right hon. Friend the Member for South Cambridgeshire is right to have asked the question—of course nobody from the Labour party did—and that is why we were engaged in the intensive discussions to nail down the rebate.

Kate Hoey (Vauxhall) (Lab): Does the Chancellor not agree that this whole fiasco just shows that we are paying far, far too much to the European Union, that we should be seeking ways of getting back control of our country, our own borders and our own system of justice, and that the sooner we get a referendum, the better?

Mr Osborne: I completely agree with the hon. Lady, which is why I made the point at the end of my remarks that the whole episode demonstrated why we needed reform

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in Europe. She, of course, is one of a growing number of Labour MPs who join us in wanting to see that referendum—I hope she can persuade the Labour Front-Bench team.

Mr Kenneth Clarke (Rushcliffe) (Con): Does the Chancellor agree that whatever deal he had obtained last Friday—even if he had come back bearing sackfuls of tribute in gold—it was wholly predictable that hard-line Eurosceptics would immediately say that this was robbery by Brussels and that the shadow Chancellor would immediately claim that, in some mysterious way, he could have produced some superior outcome for this country? Would the Chancellor accept my congratulations on a surprisingly good result that he achieved at that meeting, which I strongly suspect was a friendly discussion between 28 Finance Ministers and a Commissioner on a technical subject, and did not resemble the gunfight at the O. K. Corral, which is how everybody has to present European Council meetings and the debates we have on these subjects in this House?

Mr Osborne: I thank my right hon. and learned Friend for his support; he is not always fulsome in his support of our European policies, so that is particularly appreciated. He is right that around the table were other members states that had been hit by this very large payment—the Dutch, the Italians, the Greeks and others—and therefore there was a lot of sympathy for trying to change the rules. In parallel, as he would know, there is a discussion with the Commission about the British rebate, which is properly a matter for the discussion with the Commission rather than ECOFIN.

Mr Nigel Dodds (Belfast North) (DUP): Does the Chancellor accept that, whatever is said about the rebate, this substantial bill for the United Kingdom still represents an EU penalty for stronger economic performance? Does he not think that there are better ways to spend £850 million than handing it over, albeit next year, to the European Union?

Mr Osborne: I agree with the right hon. Gentleman that the European Union could spend the money far better than it does through reform—that is the reform we are seeking to achieve. Of course membership of the European Union does mean adjustments to the payments each year, and sometimes Britain has been a beneficiary of them—indeed, when the shadow Chancellor put the country into recession we received a tiny bit of money back from the EU. That is one of the regular features of membership but, as the right hon. Gentleman says, it demonstrates why we need further reform in Europe.

Martin Horwood (Cheltenham) (LD): The last time the shadow Chancellor mentioned the EU rebate in this House appears to have been in 2005. Does the Chancellor agree that, if the shadow Chancellor really thought the bill we were being presented with by the Commission was £800 million out, it is curious that he did not find time to mention it before this week?

Mr Osborne: My hon. Friend is absolutely right about that. Of course the only involvement the shadow Chancellor has ever had with the rebate is giving away half of it.

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Stewart Hosie (Dundee East) (SNP): The rules that determined this payment were agreed in May, without discussion. The UK participated fully in those discussions, and had two formal opportunities to respond but did not do so—indeed, there was not a single signal from the UK that there was a problem until late October. Is the truth not that this performance by the UK Government has less to do with payments to Europe and more about pandering to the open wound of anti-Europeanism from the Members who sit behind the Chancellor?

Mr Osborne: If the separatists had had their way, Scotland would not be in the European Union. But I make this point: Commission Vice-President Georgieva confirmed in the press conference afterwards that there was no way that member states could have known the net figure until 17 October, which was when the official meeting took place in Brussels. That has also been confirmed by the Dutch Prime Minister and the President of the European Commission. Again, this is one of those examples in which the shadow Chancellor says that he knew better than the rest of us, but those Heads of Government confirm that Britain could have known only in late October.

Heather Wheeler (South Derbyshire) (Con): Does my right hon. Friend agree that not only is this a superb deal for the UK, but if the people vote for a Conservative Government in May 2015, the people will have a vote in a referendum about it?

Mr Osborne: As my hon. Friend says, the key point is that we are offering the people of Britain a vote on the membership of the European Union, which we will then seek to reform. Interestingly, it is not only the hon. Member for Vauxhall (Kate Hoey) who has made her point on Europe, but the last Labour Chancellor, who says he now supports a referendum on Europe. It would be interesting to see what the shadow Chancellor really thinks.

Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): I am still trying to find a serious commentator who did not think that the rebate would apply to the British contribution. All this banter covers the fact that the Chancellor has not made any progress in reforming the system that led to this completely absurd demand, which made Britain pay and France and Germany receive money.

Mr Osborne: I agree that this was a totally unacceptable approach from the previous European Commission. To be fair to the new budget Commissioner, she has engaged constructively and got the rules changed so that it does not happen again. On the hon. Lady’s comment about finding a serious commentator who thought the rebate might not apply, I know the shadow Chancellor is not a serious commentator but he did not at any point raise this issue. The calculation on interest payments that he used in The Guardian on Friday was based on the assumption that we would pay £1.7 billion—that is how he came up with the number that he used to make his point. As a result, he did not expect the rebate to be applied or to be applied at this rate.

Sir Edward Leigh (Gainsborough) (Con): The shadow Chancellor says that this reduction is entirely down to the rebate. So, if Tony Blair had not given away half the rebate, would we have got a 100% reduction?

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Mr Osborne: Sadly not is the short answer to my hon. Friend’s question. The Prime Minister we should credit for the rebate is Margaret Thatcher.

Paul Flynn (Newport West) (Lab): May I try to help the Chancellor? He is in danger of becoming illiterate as well as innumerate. The word “result”, which he used once today and three times last week, can mean a win, a loss or a draw or, as in this case, a confidence trick.

Mr Osborne: I take it as a win for Britain. Again, I do not want to follow lessons from Labour MPs about how to negotiate in Europe when they gave up much of the rebate, signed us into the eurozone bail-outs, gave up many of our vetoes over many years and refused to give the British people a say in referendums in key treaties.

Mr David Nuttall (Bury North) (Con): Does my right hon. Friend know who my constituents believe is most in need of this money, the UK or the EU?

Mr Osborne: At a time when budgets are tough, I completely understand why people want the maximum amount of money possible to be spent at home, but the truth is that we have been able to get a reduction in the EU budget because of the tough negotiations of the British Prime Minister. That is what we are able to achieve by standing up for Britain’s interests in Europe.

Mark Durkan (Foyle) (SDLP): Will the Chancellor help us better to understand what he is presenting as a masterful feat by telling us: what he did not know; when and for how long he did not know it; and why he did not know it?

Mr Osborne: It was not clear that this exceptional demand for a payment would have the British rebate applied or indeed to what extent the rebate would be applied. The amount was confirmed to us only last Thursday evening.

Chris Heaton-Harris (Daventry) (Con): Is the Chancellor surprised by the number of EU budget experts who now seem to be appearing on the Opposition Benches? Does he, like me, wonder where they all were when former Chancellors were happily signing off flawed EU accounts or giving away our rebate?

Mr Osborne: My hon. Friend is absolutely right; they gave into all Europe’s demands and handed over more and more British taxpayers’ money. They were neither wise before this event, nor particularly wise after it.

Barry Gardiner (Brent North) (Lab): Can the Chancellor confirm that when the EU budget is reconciled, it will show that the surcharge to the UK was paid in full, that it will show quite separately that there was a rebate that was applied, and that therefore his attempts to link the two are simply nonsense?

Mr Osborne: What we achieved was the simultaneous application of the rebate, so we will pay only £850 million.

Mr Robin Walker (Worcester) (Con): I congratulate my right hon. Friend on maintaining the application of the UK rebate in a way that the Opposition utterly

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failed to do when they were in power. Would he have been strengthened in that position had he maintained a euro preparations unit in the Treasury?

Mr Osborne: The first and kindest cut of all was closing down the euro preparations unit, which I discovered in the Treasury on coming to office.

Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): I know that the Chancellor did not want to answer the question from my hon. Friend the Member for Motherwell and Wishaw (Mr Roy), but I will try again. Can he please name one EU Finance Minister who supports his version of events?

Mr Osborne: All 28 countries, and therefore 27 other Finance Ministers, agreed to our plan, and the plan put forward by other member states, to change the rules so that we do not have to pay on 1 December, to enable us to delay payment, to ensure that no interest will be paid during that delay, to ensure that any errors in the accounts will be rectified and that we will be compensated for them next year, and to ensure that this never happens again. We got that coalition of support around the table. The discussions on the rebate, as I am sure the hon. Lady knows, happen between the UK and the European Commission.

Duncan Hames (Chippenham) (LD): After all the to-ing and fro-ing over who should pay what, would not the best way to thank our European friends be to show them how to make savings in the cost of Brussels so that the costs paid by each country becomes more affordable, both for us and for their shrinking economies?

Mr Osborne: We want to achieve reform in Europe. The hon. Gentleman mentions Brussels, and I suggest that they could make a start by staying there and not going to Strasbourg.

Graham Stringer (Blackley and Broughton) (Lab): Some €1 billion is still an exceptional surcharge on this country’s finances. Will the Chancellor put his deal to a binding vote in this House?

Mr Osborne: We have the normal scrutiny methods. Indeed, the Chair of the Treasury Committee and I have already discussed my happily answering questions from members of the Committee, and of course my hon. Friend the Member for Stone (Sir William Cash) has his Committee as well.

Sir Oliver Heald (North East Hertfordshire) (Con): Does my right hon. Friend agree that it is worrying that the shadow Chancellor forgot to mention the rebate before today? Has my right hon. Friend had a chance to make a detailed calculation of exactly how much less Britain would have to pay had Labour not given away the rebate in the first place?

Mr Osborne: Of course, giving away the rebate cost Britain billions a year. My hon. and learned Friend is right to draw attention to the pattern of forgetfulness on the Opposition Front Bench. They forget about the

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deficit and about immigration, and now they forget about the rebate. It reminds everyone why the British public are quite clear that they are unfit for government.

Sammy Wilson (East Antrim) (DUP): Regardless of whether the bill has been rebated, does the Chancellor not recognise that for many UK citizens facing cuts in public services, £850 million extra going to a body which has not had its accounts signed off for 19 years, wastes billions through fraud and spends money on vanity projects, is not good value and that they object to it?

Mr Osborne: I completely understand the anger and frustration felt by all our constituents at the way money is spent by the European Union. That is why we are seeking reform and why both the hon. Gentleman and I would like to see the British people asked for their consent in a referendum.

Sir Tony Baldry (Banbury) (Con): Was my right hon. Friend surprised to see the shadow Chancellor in his place here today? My reading of the Daily Mirror was that the shadow Chancellor was going to make a speech in support of the Leader of the Opposition—I apologise to the House; I misread that. The shadow Chancellor is going to be making a speech in support of the Leader of the Opposition in the next fortnight.

Mr Speaker: Order. We are grateful, but the question suffered from the disadvantage of being irrelevant to the matter under discussion, so we will move on to someone who has a relevant question to ask.

Mr Philip Hollobone (Kettering) (Con): Confirmation that the rebate will be applied is clearly to be welcomed, but the blunt truth is that this country faces a bill £850 million larger than it faced two weeks previously. Given that we now pay more than £10 billion a year as our membership fee for this organisation, my constituents in Kettering feel that the bill is too large. Will the Chancellor confirm that a majority Conservative Government will renegotiate the membership fee after the next election?

Mr Osborne: As I say, I understand the frustration that many people feel about the way their money—hard-earned taxpayers’ money—is spent in Europe. That is why we are seeking a reform of Britain’s relationship with Europe and a reform of the way Europe works for all its citizens, and why we are seeking to put that to the British people in a referendum. With reference to my right hon. Friend the Member for Banbury (Sir Tony Baldry), it is good to see the shadow Chancellor here, breaking off from the Balls family pastime of undermining the Leader of the Opposition.

Nia Griffith (Llanelli) (Lab): The Chancellor read out to us the Prime Minister’s response to the right hon. Member for South Cambridgeshire (Mr Lansley) about the rebate, but can he explain why, in all that feigned anger, the Prime Minister did not explain about the rebate? Was it because the Chancellor had not shared that knowledge with the Prime Minister, or was it because the pair of them were in it together, ready to pull out a white rabbit last Friday?

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Mr Osborne: I am not sure what a white rabbit has to do with it, but it was not clear that the rebate would apply. That is precisely why we were engaged in intensive discussions with the European Commission, and it is why, universally in this House and in the media, people were talking about a figure of £1.7 billion. It was not clear, but we achieved the application of the rebate, and as a result the bill is £850 million.

Mr James Arbuthnot (North East Hampshire) (Con): I think I am missing something here. Can my right hon. Friend confirm that the only reason we are discussing the payment of an EU surcharge at all is because of the stunningly impressive handling of the economy by my right hon. Friend?

Mr Osborne: My right hon. Friend is very kind. One of the reasons why this surcharge, as he puts it, has arisen is because of the strong UK economic performance relative to the continent of Europe. We should not be happy about the poor performance of the European continent. We want the European continent to be performing better.

Mr David Crausby (Bolton North East) (Lab): Has not Britain had the rebate for a very long time? Can someone therefore tell me why the Chancellor has only just found out how it works? He was taken by surprise by the £1.7 billion bill in the first place, and now he belatedly discovers the rebate. How can the House have any confidence that the Chancellor knows what is going on?

Mr Osborne: The House can have confidence that this Government fight for Britain’s interests in Europe, because we have cut the EU budget, got us out of those disastrous eurozone bail-outs that the Labour Government put us into, and had the rebate applied—a rebate which, of course, the hon. Gentleman’s party wanted to get rid of.

Ben Gummer (Ipswich) (Con): Given the fact that the shadow Chancellor and almost everyone on the Opposition Front Bench with him has been completely absent from the airwaves in the past few days in support of their leader, one would have thought that they had ample opportunity to proffer advice on the rebate. I did not hear it. Did my right hon. Friend hear it privately from them?

Mr Osborne: I do not want to discourage members of the Opposition Front-Bench team from taking to the airwaves and criticising their leader, because it is very good. It is only after the event that we hear that they think he is useless. They did not tell us that beforehand. My hon. Friend is right. The Opposition did not raise the issue—[Interruption.] The shadow Chancellor calls me to the House of Commons, he has nothing to say for himself and he has no answer to the fact that his own article reveals that he thought we were going to be paying £1.7 billion. It just confirms that he is not up to the job.

Clive Efford (Eltham) (Lab): I think the Chancellor should calm down when it comes to leadership and loyalty. Why did we have a by-election last month that his party lost to the UK Independence party and why do we have another one this month? Will he confirm that the ECOFIN Ministers he discussed the rebate

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with are of the opinion that we will pay no less than we would have done if we had paid the full £1.7 billion on 1 December and then received our rebate?

Mr Osborne: As I have already said, it was not clear that the rebate would apply, which is why the shadow Chancellor, in his article in The Guardian, uses a number that assumes that we are going to pay £1.7 billion. That is what he thought we were going to pay, but we negotiated hard and had intensive discussions, and as a result we have got this result for Britain.

Mrs Cheryl Gillan (Chesham and Amersham) (Con): Will my right hon. Friend confirm that it was the UK’s leadership in Europe that resulted in the deal being struck that has enabled all nine countries that were being surcharged by the EU to delay their payment until 1 September next year? Does he agree that such leadership in Europe bodes well for our renegotiations next year, after the Conservative party has won the next general election?

Mr Osborne: My right hon. Friend is absolutely right. Of course, we needed the agreement of all the member states for this budget deal. Any one of them could have blocked the deal, but we got the support of all the other 27 member states, not just to delay the payment and have no interest applied but permanently to change the rules.

Mr Andrew Love (Edmonton) (Lab/Co-op): For the fourth time, I think, in this House, may I press the Chancellor to tell us which Foreign Minister or which Commission official agrees with his interpretation of the rebate?

Mr Osborne: As I say, it required the agreement of all 28 member states to get the budget deal at ECOFIN. The discussion on the British rebate was a discussion had with the Commission. The Commission confirmed that the rebate would apply, and apply in the amount it did, only on Thursday night. The hon. Gentleman also serves on the Treasury Committee. If he, like every other Labour Member, was so wise about the number, why were they not saying this beforehand? Not a single Labour MP, either in the Chamber of the House of Commons or on the media, said anything other than that we would be paying £1.7 billion. They are trying to be wise after the event, and they have been found out.

Mark Pritchard (The Wrekin) (Con): Does the Chancellor agree that one additional way to help the EU budget would be to clamp down on corporate tax evasion in places such as Luxembourg?

Mr Osborne: My hon. Friend is right that we need fair tax arrangements. The European Commission is looking at that through some of its state aid action on particular tax deals done in some member states. However, we do not want to move to a common tax policy across Europe whereby there is a single corporation tax rate and the like. I am in favour of competitive business taxes, but competitive business taxes that are fairly paid. That is the policy that we pursue in the UK and that we are seeking international agreement on and making a lot of progress on.

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Mr William Bain (Glasgow North East) (Lab): Since the Council meeting on Friday, the Finance Ministers of Ireland, Austria and the Netherlands have all said that the UK will still pay the full amount. Is the Chancellor seriously arguing that they are wrong, and if so, can he point to a single measure that will cut the overall bill for the UK taxpayer over the next two years?

Mr Osborne: We were presented with a bill for £1.7 billion and we are going to pay about £850 million, so in my book that is a cut.

Mary Macleod (Brentford and Isleworth) (Con): May I congratulate the Chancellor on the excellent deal that he has achieved in Europe? As a better woman than me once said, there is no such thing as Government money, only taxpayers’ money. Does he agree that the people who benefit from this negotiation are hard-working British taxpayers?

Mr Osborne: My hon. Friend is right. Of course, this is not the Government’s money: it is the people’s money—taxpayers’ money. People work very hard to earn money and then they pay taxes on it, and it is the policy of the Conservative party to keep taxes as low as possible.

Gavin Shuker (Luton South) (Lab/Co-op): Given that the relationship between GDP and the European Union budget was understood before this series of events, and yet the Government appeared to be asleep at the wheel, what was the reason for their reluctance in getting their act together properly in the first place? Was it the Chancellor’s unwillingness to fess up to the Prime Minister or to stand up to his Back Benchers?

Mr Osborne: I am not sure it was worth waiting 45 minutes for that question. The Prime Minister of the Netherlands, the President of the European Commission and the vice-president of the European Commission with responsibility for the budget all said that it was not clear until late October what the amount would be. That is why, the moment we found out, we got it on the European Council agenda, and the European Council agreed that it would be discussed at ECOFIN.

Paul Uppal (Wolverhampton South West) (Con): This weekend marked the 19th year in which the European Union has failed to sign off its accounts. Does that not make the case for a referendum and reform compelling? The harsh binary truth is that during this parliamentary Session the only Members who have pushed that agenda are sitting on this side of the House.

Mr Osborne: My hon. Friend is absolutely right. We are pushing the case for reform in Europe while the Opposition want no reform in Europe. The people of Wolverhampton and elsewhere in the country have a very clear choice at the election. If they vote Labour, they will pay more to Europe; there will be no reform in Europe; Europe will continue to hold back the British economy because it is unreformed; and, of course, they will have no say. If they vote for the Conservative party, they will get a say on Britain’s future in Europe.

Wayne David (Caerphilly) (Lab): The Irish Finance Minister has said:

“My understanding is that the UK will pay the whole amount”.

Is the Chancellor seriously saying that the Irish Finance Minister is wrong?

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Mr Osborne: As I have already explained, the negotiation and discussion on the rebate are had with the European Commission. The full amount, which was universally discussed in this House beforehand and by the shadow Chancellor in The Guardian, was £1.7 billion. As a result of our negotiation and intensive discussion, we will be paying £850 million.

David Rutley (Macclesfield) (Con): I am pleased that my right hon. Friend has secured a change in the way that the surcharge formulas are calculated. Can he confirm that the UK will never be penalised in this way again for a strong economic performance?

Mr Osborne: We will never face such a large payment or such an unexpected period of time in which to pay, which is why we are getting permanent changes to the budget rules. That requires the consent of all member states, and we have that.

Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab): The UK’s deficit at the moment is the worst in the European Union. Will the Chancellor be selling that as a result as well?

Mr Osborne: Some of us remember inheriting a budget deficit of 11.5% from the previous Labour Government. It has fallen by more than a third. We will get the forecasts from the Office for Budget Responsibility in December.

Ed Balls: It’s going up!

Mr Osborne: Let us get it on the record that the shadow Chancellor says that the budget deficit is going up. We will wait for the forecasts at the beginning of December and see who is right.

Mr Marcus Jones (Nuneaton) (Con): I congratulate my right hon. Friend on this deal, but the situation adds to the frustration that many of my constituents have with the EU. Does that not show that we need to renegotiate such matters and then give people in my constituency, my right hon. Friend’s constituency and constituencies across the country an in/out referendum so that they can decide whether they want to stay in the EU?

Mr Osborne: My hon. Friend is absolutely right. People in Nuneaton and across the country will have their chance to vote on whether Britain stays in the European Union. I want to see reform in Europe and I want to put that reform to the British people. The only way the British people will have that say is if they vote for my hon. Friend and other Conservative Members.

Kerry McCarthy (Bristol East) (Lab): My constituents would have expected the Chancellor to negotiate the best possible deal on a rebate. They would also have expected him to negotiate down the surcharge. Is it not the case that he has not done the latter at all? It is not a penny less than it would have been and the accounts will show that the figure is still £1.7 billion.

Heather Wheeler: You would have paid the whole lot!

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Mr Osborne: My hon. Friend makes a good point that the hon. Lady would have paid the whole lot. We are paying £850 million because of the application of the rebate.

Andrew Bridgen (North West Leicestershire) (Con): I congratulate the Chancellor on halving the recent EU demand in record time. I wish he had just continued a little longer, because with his skills he might have got us a net refund. Does he agree that for those for whom this result is not enough, nothing would ever have been enough? Does he also agree that, however distasteful we might find it, while we are in a club we have to abide by the rules, and that only a future Conservative Government will give the people a say—and a chance to leave the club—in a referendum in 2017?

Mr Osborne: My hon. Friend is right. Part of the reform we seek in Europe is reform to make sure that the money that British taxpayers pay is well spent. Indeed, we want to make sure that the money of all European citizens is well spent in Europe. He is absolutely right that the only way to get that reform is with a Conservative Government, and then the British people can decide in a referendum.

Ian Lucas (Wrexham) (Lab): Will the Chancellor name one European Commission official who asserted to him, or will he release correspondence from the European Commission indicating, that the rebate did not apply in this case?

Mr Osborne: As I have already said, the rebate and its size were only confirmed to us by the European Commission—by the vice-president for the budget—last Thursday night.

David Mowat (Warrington South) (Con): Roughly speaking, the previous Government gave away 20% of our rebate. Based on that logic, they have just cost us a further 20% of £1.7 billion. Does the Chancellor agree that they have just cost us another £340 million?

Mr Osborne: My hon. Friend underestimates what the previous Labour Government cost us. They actually cost us billions of pounds a year in the rebate that they gave away. That is yet another reason why the idea that they could fight for our interests in Europe is obviously false: we saw what they did when they were in office.

Bill Esterson (Sefton Central) (Lab): My constituents want a Chancellor who will work with our European partners to create well-paid jobs for ordinary people to

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reverse the decline in living standards over which he has presided. What they do not want is a Chancellor who tries to pull the wool over their eyes after failing to negotiate with our partners, while making false promises and claims about a budget rebate that was always going to happen.

Mr Osborne: As I have said, we worked with the other member states to achieve the deal at ECOFIN. We needed the agreement of the other member states on the delay, paying no interest and the permanent change in the rules. It is always good to get lectures from Labour Members about working with and supporting colleagues, so we look forward to the shadow Chancellor’s speech supporting his leader in the next couple of weeks. [Interruption.] The right hon. Gentleman nods, and I know that he is a man true to his word.

Mark Garnier (Wyre Forest) (Con): Much of this discussion has centred on the rebate, but has my right hon. Friend done any calculations of the value of the forgone interest that would be paid as a result of the extension of the date for this payment from 1 December to the middle of next year?

Mr Osborne: Of course, the shadow Chancellor estimated that it would cost £114,000 a year, which is the EU penal rate on £1.7 billion. If interest had been charged even on the rebateable amount, it would of course have been about half that figure.

Richard Drax (South Dorset) (Con): May I congratulate my right hon. Friend on getting half the money back? That is certainly a step in the right direction. However, does it not show that one economic cap does not fit all in the EU, and never ever will?

Mr Osborne: My hon. Friend is right. That is why previous Conservative Governments achieved things such as the opt-out from the single currency, even though the previous Labour Government toyed with the idea of joining the single currency, which reveals—

The Treasurer of Her Majesty’s Household (Greg Hands): It is still their policy.

Mr Osborne: The Government Deputy Chief Whip reminds us that it is still official Labour policy to join the single currency. My hon. Friend the Member for South Dorset (Richard Drax) is right that different economic models and different economic policies are appropriate for different countries, but I would make the broad point that freer markets and lower taxes seem to help most countries.

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Speaker’s Statement

4.24 pm

Mr Speaker: Before we come to the main business, I have a statement to make on the handling of it. Several hon. and right hon. Members have asked me to rule on the scope of each of the two motions today relating to the protocol 36 opt-in regulations. It might be of assistance to Members intending to take part in the debates if I do so now. On the business of the House motion, any debate should focus on the time to be allocated to the subsequent debate and the putting of the question at its conclusion. Members will have to exercise some ingenuity if they wish to raise other matters, such as the absence of an opportunity for the House to express an opinion or to vote on all or any of the related matters not contained in the regulations. Such remarks must demonstrate a reasonable connection with the business of the House proposition before the House.

On the substantive motion to approve the regulations, which I understand transpose into UK law 10 of the 35 measures the Government have decided that the UK should rejoin, I will be prepared to offer some latitude in permitting reference to the merits or otherwise of rejoining those related measures not requiring transposition and therefore not in the regulations, as listed in the Government’s explanatory memorandum on the regulations. I ask hon. and right hon. Members to lighten the burden on the Chair by holding in their minds the actual question before the House. The Chair and the House can deal only with what is on the Order Paper.