Pauline Latham (Mid Derbyshire) (Con): May I commend my right hon. Friend for her calm and factual statement on the situation of the Syrian refugees, which contrasted with the rather emotive statement by the shadow Secretary of State, who is trying to whip up emotion about these things? Does my right hon. Friend agree that, actually, we do need peace in the region, we do need to talk to Russia about what it is doing, and somebody needs to tackle Assad? We should also be looking at keeping as many people as possible in the area where they have been brought up, where their culture is correct and where they understand the lifestyle, rather than encouraging them, as the Labour party

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might choose to do, to come to this country, when we are putting so much money—taxpayers’ money—into helping these people to settle there.

Justine Greening: These are two related issues. One, as I have said, is that we are, of course, playing our role close to home—here in Europe—in helping refugees who have finally arrived on our shores. However, my hon. Friend is right to recognise that, overwhelmingly, refugees basically want to stay close to home. I met a lady on my last trip to Jordan whose family were still in Homs, and she had intermittent contact with them. For her, the prospect of even considering leaving Jordan was totally not what she was looking at; what she desperately needed was to be able to work legally to support herself while she tried to get on with the life she suddenly found herself living.

As I said, at the beginning of this crisis, none of the refugees thought that they were leaving Syria for anything more than a few weeks or months, and we should all think about how we would cope with such situations. It is incumbent on the international community, though, to make sure that we now go beyond providing just day-to-day support, so that people are not just alive but able to have some kind of life. That is in their interests, but it is also in the interests of the host communities, which are so generously accommodating them.

Patrick Grady (Glasgow North) (SNP): I thank the Secretary of State for her statement and for giving us early sight of it. The Scottish National party, too, welcomes the pledges and commitments made at the conference. We recognise the achievement of securing the biggest ever pledges made in one day and particularly the commitments on child education and jobs. However, I echo the concerns about the difference between making and fulfilling a pledge, and it would be helpful to hear what discussion there was at the conference about processes for monitoring and implementing the pledges, bearing in mind the gap between last year’s pledges and the actual assessed need.

There is a feeling in some quarters that civil society—especially local and national Syrian civil society organisations—was under-represented. However, it is those organisations that are often the front-line responders to the crisis and that have the access inside Syria that international counterparts do not. It would be useful to hear what role the Secretary of State sees civil society on the ground having in decision making and implementation as aid is disbursed.

While recognising the role the Government have played, I echo the concerns about the response to the refugee crisis in Europe. Analysis from Oxfam suggests that, rather than 20,000 refugees over four years, the UK’s fair share would be 24,000 this year alone. How will the commitments the UK made at the conference support those displaced by the conflict, especially those already in Europe?

Finally, the only viable long-term solution, as we have heard, must be a negotiated peace. What discussions is the Secretary of State continuing to have with her Cabinet colleagues about the impact of UK airstrikes, and does she believe that the UK’s involvement has helped or hindered its role as a peacemaker; and how can the Government be confident that their bombing is not adding to human misery, and that, while seeking to improve the humanitarian response on the one hand, they are not adding to the crisis on the other?

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Mr Speaker: The hon. Gentleman might win a prize, although it may not be one that he craves, for probably the longest sentence in the Parliament.

Justine Greening: Mr Speaker, I shall try to answer briefly the points that the hon. Gentleman raised, which were all important.

As I said, we will do our level best to make sure that the commitments made last Thursday are honoured. The hon. Gentleman is right to highlight the important role of civil society. In fact, we had a day dedicated to that last Wednesday. Seventeen Syrian civil society organisations were represented at that event, and 27 non-governmental organisations overall. The role they have been playing, and can continue to play, is in delivery on the ground. Many of these people put their lives on the line every single day of the week to get into communities who desperately need their help. We have to continue to assess needs, and the information that we get from civil society is often vital in making sure that we target our aid where it can have the biggest impact,.

Looking ahead, perhaps optimistically, but nevertheless importantly, when we finally get to a position where we can see Syria getting back on its feet and rebuilt, civil society will have a crucial role not only in understanding the needs and priorities of local people but in forming networks that can help on the ground to deliver on them. As I said, I believe that we are playing our role, not only, overwhelmingly of course, in the region, but closer to home here in the EU. A pound spent here in Europe does not go anywhere near as far in supporting refugees as a pound that can be delivered closer to home in the region to provide food, water and shelter, or get a child into school who is currently out of school. It is incredibly important that we do not lose sight of the need to tackle the root causes that underlie the refugee flows into Europe over recent months.

The hon. Gentleman will not be surprised to hear that I could not disagree with him more on UK airstrikes. One of the key challenges in ever reaching any kind of peaceful settlement in Syria is the presence of the barbaric Daesh, who, day by day, routinely commit acts of unspeakable brutality—particularly on women, but on people more generally—in the territories they control. These people are not simply going to get up and go home. That is why we need to take military action against them to force them out of those territories. This is already happening in Iraq. They are leaving a wasteland behind them, but at least it is a wasteland that we can start to rebuild in, and we are going to do the same in Syria.

Mark Field (Cities of London and Westminster) (Con): I wholeheartedly support what the Government are doing. A critical part of our strategy is to ensure that the two small nations nearby, Jordan and Lebanon, are able to cope. It must be incredibly difficult, given the huge number of refugees compared with their overall populations. Will the Secretary of State give some detail on the work we are doing to encourage those two nations, particularly in economic terms, through customs unions and the idea of economic co-operation—perhaps not just with the UK but within the EU as a whole—to try to ensure that they do their best in this regard? We must recognise that many hundreds of thousands of these Syrian refugees are likely to be in Jordan and Lebanon for many years to come.

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Justine Greening: I am pleased that my right hon. Friend has mentioned this historic step forward in getting agreement to start creating jobs for refugees. For many years, they had been unable to work legally, and that forced many into working illegally to try to support themselves. They might have left Syria with some assets, but over the weeks, months and years those assets were depleted, and reaching the end of them led many to decide that they had no alternative but to try find a life somewhere else. This therefore matters. In essence, countries such as Jordan and Lebanon decided to allow work permits so that greater numbers of Syrian refugees can work legally. These were big decisions for them to take, but they were right to do so as they cope, and indeed often struggle to cope, with the refugees who are temporarily, but in large numbers, within their countries.

What are we doing? On the Jordanian and Lebanese side, particularly with Jordan, we are setting up economic zones with advantageous tax rates to encourage investment. Some of this will be, in effect, the Syrian economy in exile. I have met business leaders who are re-establishing their Syrian companies, but in Jordan. That is not just good for Syrians who can get back into work; it is also providing work for local people who are unemployed. This is complemented by the investment coming from the World Bank and the European Investment Bank; and crucially, as my right hon. Friend mentioned, by reform at the European Union level and making our own trade barriers that much more flexible so that countries such as Jordan can more easily sell their goods into the huge market that is the European market.

We should be really proud of the work achieved with both Jordan and Lebanon at the conference. It was home-grown UK ideas that were put on the table and they got international support. Most importantly, they gave us the chance to work directly with the Governments of Jordan and Lebanon to help with the long-term provision of jobs and growth that will be there long after their generous hosting of refugees temporarily.

Mr Speaker: The lucidity and comprehensiveness of the Secretary of State’s replies cannot be disputed, but I would gently point out that we have got through two Back-Bench questions in seven minutes, so we shall now strive for improvement in productivity.

Yvette Cooper (Normanton, Pontefract and Castleford) (Lab): I strongly welcome the results of the London conference and the leadership shown by the Secretary of State and others in Government. That is immensely important. She said that Britain is also helping refugees in Europe, but the honest truth is that the help being provided to them is tiny. There are refugees in Greece and the Balkans, and close to home in Dunkirk and Calais, who are in worse humanitarian conditions than those in the region and who are being denied support by Governments, the United Nations and aid agencies because they are in Europe. Children are suffering from scabies, bronchitis and cold. How much of the London conference funding will go towards helping refugees in Europe? If the answer is none, what is the Secretary of State doing to hold a similar pledging conference to help the refugees in Europe?

Justine Greening: The conference was, indeed, about making sure that we are responding, in the region, to Syrian refugees and host communities affected by the crisis.

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The right hon. Lady asks about the response in Europe. We are talking about European countries that have the resources to respond to and help refugees who are currently in their own countries, but, as I have said, the UK has played its role in helping refugees who have arrived.

John Redwood (Wokingham) (Con): I strongly support the Government’s approach of giving maximum help to refugees near their homeland, as well as the Government’s participation in crucial initiatives for political progress and peace. What impact is the intensification of Russian-supported Assad military intervention having on British Government policy?

Justine Greening: The main impact, in the short term, has been the breakdown of any progress in peace talks. In the end, it is a peace settlement that will give people hope for the future and result in their wanting to go back and rebuild their country.

Mr Ben Bradshaw (Exeter) (Lab): I welcome the Secretary of State’s comments on the positive role already being played by the RAF in the coalition campaign to drive Daesh back from territory in Syria, following the recent vote in this House. Does she agree that the catastrophe, including the humanitarian and refugee catastrophe, will continue as long Daesh controls large areas of eastern Syria and as long as President Assad, supported by Putin, slaughters his own people?

Justine Greening: Yes, I agree entirely. As I said in response to the hon. Member for Glasgow North (Patrick Grady), it is critical that we maintain Syria’s integrity as a country, and that absolutely means regaining the territory that has been lost to Daesh. There can be no peace settlement in Syria until we have that territory back under control and it can form part of the peace talks.

Wendy Morton (Aldridge-Brownhills) (Con): I am grateful to the Secretary of State for coming to the House today. She has always been accommodating in updating us on the work of the Department for International Development in the region. Will she confirm that DFID will continue to focus its work and aid on the camps and the region, because ultimately this is about tackling the root cause of the problem, and a political solution is the only long-term solution?

Justine Greening: I strongly agree with my hon. Friend. The talks need to get back under way. Of course, UN Security Council resolution 2254, which was adopted at the end of last year, set out a road map for that to happen. It highlighted two key areas. The first was the need for a ceasefire, and the second was the need for free, unfettered access for humanitarian supplies to get through to people, but the lack of progress on them, combined with the intensification of attacks by Assad forces, supported by the Russians, is hindering the peace talks and undermining the process.

Ann Clwyd (Cynon Valley) (Lab): Words cannot convey the impotence and the anger that we, as politicians, feel at the lack of progress in the peace process. I understand the contribution made by the Government, but we are seeing an awful humanitarian crisis develop today at the border with Turkey. Mrs Angela Merkel has made quite clear what she feels about it. She says that the Russians

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are primarily responsible for the bombing and are the reason that people are fleeing in their droves from Syria. Has the Foreign Office called in the Russian ambassador today? Has the Prime Minister called in the Russian ambassador? He should be called in every day until the Russians stop barrel bombing the civilians in Syria.

Justine Greening: The right hon. Lady will be pleased to hear that the Foreign Secretary is part of the International Syria Support Group, which will meet in Munich this Thursday, hopefully with the Russians there. That is precisely the sort of message that we will be delivering to the Russians; they have a critical part to play in enabling the peace talks to move forward. At the moment, their actions are taking us further away from a peaceful settlement, because they are bombing the very moderate opposition around which it should be possible to form a transition Government.

Heidi Allen (South Cambridgeshire) (Con): The Secretary of State has every right to be exceptionally proud of what was achieved at the conference, but I fear that we need to do more locally in Europe. She will know, I am sure, that I and my hon. Friends the Members for Bury St Edmunds (Jo Churchill) and for Eastbourne (Caroline Ansell) were in Lesbos last weekend, and I can tell her that the Greeks are not coping. Britain needs to lead in Europe, as we have done on the global stage. There are refugees, including children, in Europe who need our help, and Greece is on its knees. Will the Secretary of State meet us to hear our first-hand emotional and factual account of what we saw?

Justine Greening: I am very happy to meet my hon. Friend, and I have read reports of her visit. I reassure her that we are playing as much of a role as we can in working with Greece. The UK has worked with the UNHCR, which has registered many of the refugees who have arrived in Greece. In the end, we have to accept that Greece has sovereign control, and it will want to organise how it deals with refugees. Yes, it needs resourcing. The European community is discussing how it can effectively do that, and the UK has been part of that. In the meantime, our focus has rightly been on dealing with the root causes of why those people lost any hope that there was a future for them in the region where they lived and had grown up. That surely has to be the main focus.

Mr Pat McFadden (Wolverhampton South East) (Lab): The Prime Minister accepted when the House voted to extend the military campaign against ISIS from Iraq to Syria in December that that would extend not only our involvement but our responsibility. May I ask the Secretary of State more about the political peace process that she has touched on? It would be easy to lose faith in it, given the events of recent days, but does she agree that although the aid efforts she talks about are commendable, the only long-term solution for the people of Syria is not aid but a country in which they can live? Is there anything more that she can say about how to get the political process back on track?

Justine Greening: The right hon. Gentleman knows that a key next step will be taken this Thursday, when the International Syria Support Group meets. That will build towards the resumption of peace talks, which are having what the UN special envoy Staffan de Mistura

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described as a “pause” until 25 February. There are two elements to this. One, of course, is the peace talks and the political dialogue that is under way. The second, as I said in response to an earlier question, is the military action that is needed to eradicate Daesh from the part of the country that it holds. Making progress on both of those is critical. The final step, the rebuilding of Syria, will be a chance to put into practice much of the planning that is there already but unable to be got on with.

Dr Andrew Murrison (South West Wiltshire) (Con): Tragically, whole generations of children have grown up in refugee camps, such as those in Tindouf in Algeria, with all that that means in terms of education and radicalisation. What can be done to prevent something similar from happening near Syria?

Justine Greening: The sort of step forward that we saw last Thursday—the commitment that no child will be lost to the Syrian crisis, and that all children will be back in school—is absolutely critical. If we want them ever to feel that they are in a position to rebuild their own country, they will need at least to be able to read and write, and to have had some sort of education. Too many children have already lost too many days in school, but after last Thursday we have a much better chance of getting them back into the classroom and back learning. That is precisely what we are hoping to do over the next few weeks and months.

Keith Vaz (Leicester East) (Lab): May I join other Members in commending the Secretary of State for the success of the donor conference but remind her that, as with the Yemen donor conference six years ago, it is not the pledges but the paying of the money that matters? In that case, only 10% has been paid so far. The key local country is Turkey, to which the EU has pledged €3 billion to deal with this crisis. Has that money been paid at least in part, and can she reassure the House that recent developments are not affecting the processing of the 19,000 Syrian refugees whom the Prime Minister has pledged will come to this county before the next election?

Justine Greening: The €3 billion deal was very much reached as part of the Syria conference last Thursday. Like the right hon. Gentleman, I will be very keen to make sure that all the commitments made last Thursday are delivered. That is vital if we are to achieve the results we have set ourselves, including the ambition to make sure that no Syrian refugee child is out of school by the end of the forthcoming academic year. More broadly, he should be reassured that the UK will continue to play a role in ensuring not only that we do a lot in our response to this crisis—we have already done so: we are the second biggest bilateral donor to date—but that we continue to shape the response.

Bob Stewart (Beckenham) (Con): Once people cease to be internally displaced persons and cross an international border, in their minds and in reality they become refugees or economic migrants and it is very difficult—much more difficult—for them to go back to their own country. It would be great if the international community, which has so far failed to stop the war, came to an agreement to set up safe areas close to or on the borders of other countries. We would be able to reach into those safe

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areas and look after people there so that when the time comes—and politics works—they can go home to their own country.

Justine Greening: Following last Thursday’s conference, the hope is that we can better help countries on the border with Syria that are safe for refugees to flee to and that are better able to cope with the refugees who are now there. We all hope that, in time, refugees will be able to go back to their countries. The reality, however, is that the typical time somebody spends as a refugee is now 17 years. That is why the work on getting children into school and on jobs is so important.

Tom Brake (Carshalton and Wallington) (LD): What concrete action did the conference agree to take in Aleppo, following the toxic intervention of the Russians and the likelihood that Assad will impose a blockade? Was the subject of either aid convoys or air drops discussed?

Justine Greening: The general point that the right hon. Gentleman raises about access and making sure, alongside generating the resources that UN agencies and NGOs need, that we have the ability to get those resources to people in need was a central part of the conference. That is why I set out in my statement how important it was for the international community to reiterate its support for free and unfettered humanitarian access. We should condemn all those who are daily preventing key supplies from reaching people who are often at death’s door and in need of such supplies.

Jason McCartney (Colne Valley) (Con): The easiest thing in politics is to say, “Do more”, but may I say how proud I am of the Secretary of State, the Prime Minister and the UK for our response to this humanitarian crisis? I agree with my right hon. Friend the Member for Wokingham (John Redwood), the right hon. Member for Cynon Valley (Ann Clwyd) and many other Members that we must now tackle the issue of indiscriminate bombing by Russian air forces. What can be done to get the UN special envoy back around the table with the Russians and to stop the bombing, which is making the crisis so much worse?

Justine Greening: The UK Parliament is playing its own role in highlighting this issue, which has led to the current pause in the peace talks. In Munich on Thursday, it is vital that the Russians take a long, hard look at their role in being able to make or break the peace talks. At the moment, the actions they are taking are preventing progress—it is as simple as that—on two fronts: one is the ceasefire, and the other is their failure to persuade the Assad regime to allow supplies into key areas under its control. Of the many requests that UN agencies have made to the Assad regime to allow access to such areas, just 10% have been agreed, which is a total disgrace. I hope the Russians will raise that with the Assad regime, which they are doing so much to support.

Peter Kyle (Hove) (Lab): I commend the Secretary of State for the resources that have been allocated to educating children and young people from Syria while they are displaced, which I understand are being channelled almost exclusively through UNICEF. Will she confirm that British aid agencies, which have a lot of experience

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in this area, are being included in the discussions and that the door to DFID is open so that their expertise can be used and harnessed?

Justine Greening: The No Lost Generation initiative was set up with UNICEF, which has done an amazing job in allowing us to scale up this work. Of course, it is now essentially owned by the Governments in Lebanon and Jordan. I have had the privilege to work alongside their Education Ministers to put together the plans that are enabling us to scale up this work to ensure that all children in those countries can get into school. The best suggestion I can make is that those NGOs get in touch with DFID to understand what role they can play in the plans that the Governments of Jordan and Lebanon have to get children back into school.

Henry Smith (Crawley) (Con): I commend my right hon. Friend and the Government not only for convening the Syria donor conference but for the significant in-region humanitarian support we are providing. In recent times, Saudi Arabia and the United Arab Emirates have contemplated military action in Syria. Will she say what those countries and similar countries in the region are doing with regard to humanitarian aid?

Justine Greening: One big step forward at the conference was the stepping up of the region to provide the resourcing for humanitarian supplies to get through to people. Of course, the last three donor conferences were in the region, in Kuwait. We chose to host the conference this year, but it had substantial and significant support from the region. That is one reason we were able to reach such a record-breaking pledge.

Andrew Gwynne (Denton and Reddish) (Lab): I echo the concerns of my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper) about the squalid conditions of some of the refugee camps not just in Syria and the region but in Europe. What assessment has the Department made of the health risks, particularly the public health risks, arising from those squalid conditions? What more can be done to alleviate the conditions in which refugees are living?

Justine Greening: As I said earlier, we have provided key support to refugees arriving in Europe. Most recently, we announced a £10 million fund that will enable us to provide very practical support to refugees who are having to cope with the difficult conditions the hon. Gentleman describes.

Mr Philip Hollobone (Kettering) (Con): I commend my right hon. Friend for ensuring that Britain is the second largest western donor of aid to the region. What are the Turks meant to deliver in return for the €3 billion that the EU is giving them, especially with regard to the latest wave of refugees from the crisis in Aleppo?

Justine Greening: My hon. Friend will be aware that there is already a substantial number of refugees in Turkey—

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2 million in total. The plan is really about helping Turkey to continue to provide the food, water, shelter, education and, more latterly, jobs programmes that enable refugees to cope with the circumstances they find themselves in.

Diana Johnson (Kingston upon Hull North) (Lab): If Syria is to have a stable and peaceful future, women and girls will have a part to play in it. Will the Secretary of State say why there was no mention of the role of women in the Syrian stabilisation paper that was published last week?

Justine Greening: I fully agree with the hon. Lady that women have a key role to play not only in the rebuilding of Syria in time, but in the peace talks that need to happen in advance. She will know that, alongside all the work we have done to help children affected by this crisis, we have focused on women as well. We know that in humanitarian emergencies, women and girls—adolescent girls, in particular—are often the most vulnerable people, so we have worked very hard to make sure that the risks they face are managed. I would be happy to write to her about some of our plans to make sure that women stay at the centre of our thoughts in the international response to the Syria crisis.

Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP): The Secretary of State appropriately highlights the work that is done with people immediately on their arrival into Europe, but the key question remains about what happens after that. What do the Government think should happen with the 1 million people who arrived in 2015, and who should do it?

Justine Greening: The UK is obviously not part of the Schengen area, but it has played its own role in helping Syrian refugees who need to be resettled out of the region—the Prime Minister has pledged to resettle Syrians over the course of this Parliament, and I pay tribute to the work of the Under-Secretary of State for Refugees, who has overseen that process to date. We met our first timeline of resettling 1,000 Syrian refugees prior to Christmas, and I think we should be proud of that.

Hywel Williams (Arfon) (PC): Today, up to 70,000 refugees from Aleppo are caught between the al-Assad regime’s advancing forces and Russian airstrikes, and are unable to cross to Turkey. What is being done to offer immediate help to those poor people?

Justine Greening: That flow of people is happening because action by the Syrian regime is driving them out of their homes, and we have seen that persistently over the past few years. We have talked directly with our partners on the ground to ensure that humanitarian support is getting through to those Syrian refugees, and more broadly we understand that the Turkish authorities are putting in place the necessary measures to ensure that people are able to cross the border.

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Local Government Finance

5.11 pm

The Secretary of State for Communities and Local Government (Greg Clark): With permission, Mr Speaker, I am pleased to report to the House my response to the consultation on the provisional local government financial settlement for the next financial year. I have considered all 278 responses to the consultation, and my Ministers and I have met local government leaders of all types of authority and from all parts of the country, as well as many colleagues in this House. I have listened carefully to each of them. Colleagues who have worked with me before know that I always take the views of Members of this House seriously, and I always respond when I can to practical and sensible suggestions. I am grateful to everyone who has taken the trouble to make such suggestions.

The provisional settlement contained a number of important innovations. First, although the statutory settlement is for 2016-17, I set out indicative figures to allow councils to apply for a four-year budget extending to the end of the Parliament. Such a change permits councils to plan with greater certainty. That offer was widely appreciated in the consultation, which is not surprising as local government has been requesting it for years. I want to give councils time to consider this offer and to formulate ways to translate that greater certainty into efficiency savings. I will therefore give them until Friday 14 October to respond to the offer, although many have done so positively already.

Secondly, in the provisional settlement I responded to the clear call from all tiers of local government, and many colleagues across the House, to recognise the important priority—and growing costs—of caring for our elderly population. In advance of the spending review, the Local Government Association and the Association of Directors of Adult Social Services wrote to me requesting that an additional £2.9 billion a year be made available by 2019-20. Through a dedicated social care precept of 2% a year—equivalent to £23 per year on an average band D home— and a better care fund of £1.5 billion a year by 2019-20, we will seek to address those pressures on care. The provisional settlement made up to £3.5 billion available by 2019-20.

Thirdly, recognising that council services in rural areas face extra costs, I proposed in the provisional settlement that the rural services delivery grant be increased from £15.5 million this year to £20 million in 2016-17—the year of this settlement—and provisionally to £65 million in 2019-20. Councils and colleagues who represent rural areas welcomed that, but some asked that the gap in central Government funding between rural and urban councils should not widen, especially in the year for which this statutory settlement is intended.

Fourthly, this year’s provisional settlement marked the turning point from our over-centralised past. At the start of the 2010 Parliament, almost 80% of local councils’ expenditure was financed by central Government grant. By next year, revenue support grant will account for only 16% of spending power, and by 2019-20 only 5%. Ultimately, revenue support grant will disappear altogether as we move to 100% business rates retention. Local finance through council tax and business rates, rather than central Government grant, has been a big

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objective of councils for decades. However, many authorities and many hon. Members, especially those from counties such as Dorset, Leicestershire, Hampshire, Worcestershire, Lancashire, and several London boroughs including Kingston and Havering, have argued for transitional help during the first two years when central Government grant declines most sharply. They have argued that other local resources would not have had the time by then to build up fully.

Much in the provisional settlement was welcomed, but specific points were raised about the sharpness of changes in Government grant in the early years of this Parliament and there were concerns about the cost of service delivery in rural areas. Another very important point was made: many colleagues and councils felt that too much time has passed since the last substantial revision of the formula that assesses a council’s needs and the cost it can expect in meeting those needs. These responses to the consultation seemed to me to be reasonable and ought to be accommodated if at all possible.

Everyone will appreciate that the need to reduce the budget deficit means that meeting the recommendations is extraordinarily difficult, but I am pleased to be able to meet all of the most significant of them. I can confirm that every council will have, for the financial year ahead, at least the resources allocated by the provisional settlement. I have agreed to the responses to the consultation, which recommended an ease in the pace of reductions during the most difficult first two years of the settlement for councils that experience the sharpest reductions in revenue support grant. I will make additional resources available in the form of a transitional grant, as proposed in the response to the consultation by colleagues in local government. The grant will be worth £150 million a year, paid over the first two years.

On the needs formula itself, it is nearly 10 years since the current formula was looked at thoroughly. There is good reason to believe that the demographic pressures affecting particular areas, such as the growth in the elderly population, have affected different areas in different ways, as has the cost of providing services. I can announce that we will conduct a thorough review of what the needs assessment formula should be in a world in which all local government spending is funded by local resources, not central grant. We will use it to determine the transition to 100% business rates retention.

Pending that review, and having listened to colleagues representing rural parts of the country, including Cornwall, Lincolnshire, Devon, Cumbria and Northumberland—

Mr James Gray (North Wiltshire) (Con): And Wiltshire.

Greg Clark: And indeed Wiltshire. I suspect I may have the opportunity to respond to colleagues. In fact, distinguished local authority leaders are with us today.

I propose to increase more than fivefold the rural services delivery grant from £15.5 million this year to £80.5 million in 2016-17. With an extra £32.7 million available to rural councils through the transitional grant I have described, this £93.2 million of increased funding compared with the provisional settlement is available to rural areas. Very significantly, this proposal ensures there is no deterioration in Government funding for rural areas compared with urban areas for the year of this statutory settlement.

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At the request of rural councils, I have also helped the most economical authorities by allowing them to charge a de minimis £5 a year more in council tax without triggering a referendum. I will also consult on allowing well-performing planning departments the possibility to increase their fees in line with inflation at the most, provided that the revenue reduces the cross-subsidy the planning function currently gets from other council tax payers.

A final point from the consultation: although the figures for future years are indicative, a small number of councils were concerned that, as their revenue support grant declined, they would have to make a contribution to other councils in 2017-18 or 2018-19. I can confirm that no council will have to make such payments.

These are important times for local government. The devolution of power and resources from Whitehall is gathering momentum, yet I am aware that there is serious work for councils to do to continue to provide excellent services for residents at the lowest cost possible over the years ahead. I acknowledge the important role of Members in representing to me the recommendation of councils that deliver the services on which all our constituents depend. I am grateful for all their contributions.

My response to the consultation has been positive in respect of very sensible recommendations and as fair as possible, while holding firm to our commitment to free our constituents from the dangers inherent in the national deficit. I commend the statement to the House.

5.20 pm

Jon Trickett (Hemsworth) (Lab): I thank the Secretary of State for his courtesy in providing me with an advance copy of his statement. We welcome some of the announcements made this afternoon. It is clearly a good thing that more money is being provided to rural communities that are particularly hard hit, but will he explain exactly where the additional funding is coming from? It sounded like a sum of just over £200 million, but that obviously represents a massive shortfall in relation to the billions required to meet all the spending pressures. Nevertheless, where is this additional funding coming from? Has he had to cut other areas of local government expenditure to deliver the additional money? Above all, will he confirm that all this is purely transitional? It reminds me of someone speeding along the road into a disaster who then says he will take his foot off the accelerator without changing the destination. Local government is facing a disaster.

The Secretary of State’s provisional announcement the other week seems to have added some unusual recruits to Labour’s Anti Austerity Alliance. I wonder whether the right hon. Gentleman knows the identity of the anonymous Tory MP who told “ConservativeHome”, which is essential reading—[Interruption.] It certainly is true. This anonymous MP said:

“Councillors have done the right thing, and done it well, in saving vast amounts of money in the last few years. But now all the fat is gone, all the meat is gone and government wants to gnaw on the bone. I’m not having my local swimming pools and libraries closed down”—

and I say hear, hear to that! Is the Secretary of State really gnawing on the bone of local government, as many people feel—in his party and elsewhere? Does he acknowledge that, according to the Tory-controlled Local Government Association, even if every council in England

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increased council tax by the maximum allowed by the Government for the next four years and even if every penny of that increase went only on supporting the elderly, that would still leave a funding gap of over £1 billion on social care alone?

Only last March, the then Minister responsible for social care promised that the Government would end the infamous 15-minute flying visits. Is that still the Secretary of State’s policy, and if so, how will it be funded, given the £1 billion shortfall? When does the right hon. Gentleman envisage the Government achieving this target?

On how the Government distribute funding between councils, how does the right hon. Gentleman explain the manifest injustice that the most deprived areas have been cut the most? As things stand, the 10 most deprived areas in England will be 18 times worse off than the 10 least deprived areas. How will he explain to hard-pressed families that their services will be cut at the same time as he is engineering council tax increases—up to about 20%, we estimate, by the end of this Parliament?

It is clear from the Secretary of State’s statement that he has studied carefully the representations made by the Rural Services Network, as well as by some anonymous Tory MPs. Perhaps some of them were not anonymous. The Rural Services Network is also Conservative-led, and it said that his provisional statement would

“make life for hundreds of thousands of people across all areas of rural England totally insufferable.”

That is what the Tory rural network said. Can the right hon. Gentleman guarantee that the relatively small increase in the rural services delivery grant announced today will mean that no county councils will have to cut home helps or children’s homes or public transport? Is he really recommending to rural districts that they increase council tax by a precept of at least 2% or by £5—not by whichever is the lower, but by whichever is the higher? Does he acknowledge that more than £20 billion has been cut from local government since 2010? Is not the truth that during the Government’s first term, the impact of these cuts was felt primarily in the more urban northern and London boroughs, and is now spreading far and wide throughout the English countryside?

I represent 20 rural villages. There is no doubt that the provisional settlement was devastating for rural England—how could the Secretary of State make such an announcement? —and that the settlement he has announced today is far from adequate. Will he confirm, as it is transitional, that he intends all the cuts that he announced at the time of the provisional settlement to be imposed on rural areas in due course, during the present Parliament? When will he give the House details of any equalisation measures that he intends to introduce in relation to business rates?

Does the Secretary of State accept that all these cuts are, in essence, a political choice rather than an economic necessity? Should the Government not learn lessons from other members of the European Union that are raising hundreds of millions of pounds more than we are in tax from Google and other multinationals—money that could be used to support public services? Is it not time that the Chancellor showed some guts and stood up to the multinationals, rather than attacking the purses, and the services, of the poorest?

Greg Clark: I am delighted to hear about the hon. Gentleman’s reading material and to learn that it is through “ConservativeHome” that he seeks to educate

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himself these days. That makes a change from the red book that is the preferred choice of the shadow Chancellor. I encourage him to continue. He will know from looking at that very good website that there is constant praise for the efficiency of Conservative councils, which have a record of economy and good service for their residents.

As for increases in council tax, the hon. Gentleman will know all about that, because the Labour Government doubled council tax. According to projections from the Office for Budget Responsibility, at the end of this Parliament, it will be lower in real terms than it was at the beginning of the last Parliament, so we will take no lessons from the hon. Gentleman about council tax.

I detected a half-hearted welcome for the transitional funding, which is just as well, because some Labour council leaders called for precisely that, and I think they might have been disappointed if the hon. Gentleman had not supported them. He asked where the money would come from. I can confirm that it will not come from the local government financial settlement. We have been able to find resources outside the settlement, and, thanks to the generosity of the Chancellor, we are able to add them to it. I can also confirm that the social care precept was requested by local councils, which recognised, in a cross-party consensus, that as the population grows more elderly, there are more elderly people to be looked after in each council area. That is not a reflection on the efficiency or otherwise of councils; it is a demographic fact of life. It is right for us to provide for our elderly people in their retirement.

The hon. Gentleman mentions anonymous people and important figures in Conservative local government. My experience of my colleagues in every part of the House is that they are not anonymous, and they are not shrinking. They know that they can come and talk to me any time and that I will listen and respond when they make a good case. As for our leaders in local government, including the head of the Local Government Association, I could not help noticing the presence in the Chamber today of the gentleman concerned, and he seemed to have a happy smile on his face. I do not know whether that says anything to the hon. Gentleman.

Several hon. Members rose

Mr Speaker: Order. I remind the House that Members who came into the Chamber after the statement began cannot expect to be called. Our convention on that matter is very clear and people need to abide by it.

Robert Neill (Bromley and Chislehurst) (Con): The Secretary of State is to be congratulated on having negotiated a difficult minefield with considerable skill. I particularly thank him for his thoughtful approach and for the time that he gave to me, my fellow MPs and my council leader from Bromley when we came to see him. I welcome the fact that he has picked up on the importance of transitional relief in so far as it affects the London boroughs, given the risk that outer London’s particular circumstances can sometimes be lost in the equation. Can he give me details of the timeframe for the operation of the transitional relief? Can he also tell me more about the review of the needs element, which many of us welcome? I regret that we were unable to do that in coalition, but there were many other pressing matters at

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that time. It is important that the comparatively low unit costs incurred by historically efficient local authorities should be picked up when setting the baseline for retained business rates.

Greg Clark: I am grateful to my hon. Friend. I recall spending a very pleasant evening with the Cabinet of his council in Bromley and having a more recent meeting there. It is right to think of the demographic pressures in the outer London boroughs. Those boroughs, and many other places across the country, have made the case that the population has aged and more people tend to retire to those places than to others. They also contend that the formula, which has not changed for 10 years, has not kept up with that. I can confirm that the transitional funding will be available immediately, from the next financial year, so that my hon. Friend’s council and others will be able to apply those extra funds straight away.

Alison Thewliss (Glasgow Central) (SNP): I thank the Secretary of State for giving me slightly advance notice of his statement. It comes against a background of cuts to local government in England; I understand that the figures are 27% over the past years and 8% for the years ahead. I am glad that he has at least given local councils a bit of time to think about this, and I hope that they will get back to him with their views on the settlement. I note what has been said about the pressures on rural service delivery, but the breakdown of the core spending power appears to show that areas that are already very wealthy are going to get more. He also mentioned that the percentage of council expenditure financed by central Government grant was going down from 80% to 5%, but I wonder how much of that is just cuts rather than changes to the expenditure.

There does not seem to be enough time for councils to respond to the proposals. The Secretary of State has talked about giving them two years to respond, but that does not acknowledge the difficulties that some councils will have in raising funds from business rates and council tax. Some will be starting from a relatively low base in that regard, and I am not convinced that two years will be enough transition time for them. Also, the statement does not seem to mention any recognition of needs. It talks about demographic pressures, but age is not the only such pressure that communities face. There needs to be greater acknowledgement of that fact in these plans. Other demographic pressures exist, and areas of multiple deprivation will require additional support and transitional relief. I would like to see greater recognition of that in the proposals.

Greg Clark: I am grateful to the hon. Lady for her contribution. She will know from her colleagues in Scotland that setting the local government financial framework is a delicate matter. It involves a lot of decisions that affect people in different ways, and I hope she will acknowledge that I have done this in a fair way. She talks about the transitional relief lasting for two years. This will happen because the shape of the settlement will see resources increasing towards the end of the period, as the social care precept and the Better Care Fund take effect. However, colleagues across the House felt that the first two years would be the most severe time, and I therefore felt it right to focus the transitional relief on that period. The hon. Lady mentioned an assessment of needs, and I completely agree with her.

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The review to which I have committed will look at all the needs, and it will consider not only the demographic pressures but the cost of delivering services, because that is a fair way to proceed.

John Redwood (Wokingham) (Con): Will the Secretary of State give me any more detail on how the welcome transitional relief will abate the severe cuts in his original plans for both Wokingham and West Berkshire?

Greg Clark: I will indeed. I was grateful to my right hon. Friend for his meeting with me and the representations he made. Again, both of his local authorities felt that the early years were the most pressing, so I can confirm that there will be transitional funding for West Berkshire of £1.4 million and for Wokingham of £2.1 million in the year ahead. I think that will be welcomed by his authority, following my having carefully studied its representations to me.

Mr David Winnick (Walsall North) (Lab): May I again tell the Secretary of State about the ongoing cuts in my borough because of the lack of funding? Would he be willing to meet the Tory leader of the council to discuss what is happening on the ground and the adverse impact on my constituents and others in the borough of the continuing cuts? Will he come to the borough to see for himself what is happening and to see that I am in no way exaggerating the position?

Greg Clark: I regularly meet that local leader. The west midlands is a very important area where we are negotiating a very important devolution deal at the moment. The hon. Gentleman will know that his local authority has benefited from the settlement, so that over the four years its spending power will increase by 1.5%, which I know will be welcomed locally.

Sir Nicholas Soames (Mid Sussex) (Con): I thank my right hon. Friend for the careful and diligent way in which he has approached this matter. Does he agree that what seems to be so difficult for local government, particularly in rural areas, is that some counties and authorities, such as my local Mid Sussex District Council, run their affairs in an exemplary and very orderly fashion, but the more efficient and effective they are, the less money they get? That seems to be a completely idiotic way of proceeding.

Greg Clark: Indeed it is, which is exactly why we are making the transition to business rate retention, where it is not the representations that councils make to central Government for grants, but their ability to attract businesses and to grow those businesses that will be the determinant of the resources they have available. Councils and Conservatives have long wanted that, and I am confident that both my right hon. Friend’s county council in West Sussex and his excellent district council, the membership of which I know very well, will respond with great alacrity to the opportunities available to them.

Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op): The crisis in social care in Liverpool will not be resolved by either the new precepts suggested or the Minister’s statement today, as it is the result of the 58% cumulative cut in funds by central Government on the poorest area in the country. Will he take another look at this very critical situation?

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Greg Clark: The introduction of the precept and of the Better Care Fund will be very important for Liverpool; by the end of the period it will deliver about £30 million a year to spend, quite appropriately, on the care of elderly people in Liverpool. I would have thought the hon. Lady would welcome that. Conservative county council leaders proposed that there should be a social care precept, but it would benefit her city as much as it does them.

Jo Churchill (Bury St Edmunds) (Con): I thank the Secretary of State for the meeting he held with me and other Suffolk Members to discuss local funding. I know he has worked hard on our behalf, and I cautiously welcome his announcements today, particularly those on additional funding to ease the pace of reduction during those first two years. However, will he inform the House as to when final figures will be given to councils?

Greg Clark: I will indeed. I was grateful for the meeting I had with my hon. Friend, and I am looking forward to the discussions of further devolution to Suffolk for the East Anglian powerhouse or motor—we will coin an apt description for that very high-performing part of the country. The funds will be available right from the beginning of the next financial year and, in the usual way, they will be confirmed to councils following this statement.

Derek Twigg (Halton) (Lab): I can see the Parliamentary Private Secretaries working hard to get the figures to the Secretary of State.

To put the announcement in context, Halton has had a cut of more than 50%—£52 million—since 2010, while 68% of properties there are in bands A or B. The precept will not raise anywhere near enough to fund the shortfall in social care. Will the Secretary of State reconsider this and meet me urgently to talk about the problems in Halton?

Greg Clark: I am always happy to meet the hon. Gentleman. He will know that the funding allocation took into account the different resources of different areas—and Halton was a beneficiary of that—but I am happy to meet him to take him through the figures so that he can better understand.

Sir Edward Garnier (Harborough) (Con): Like others, I thank my right hon. Friend for the meetings he has had, particularly with my right hon. and hon. Friends from Leicestershire. As he will know, our county historically has been one of the worst funded from central Government, and we are hopeful that the new deal will benefit not only central Government but Leicestershire. Will he tell the House when we are likely to get the numbers, which the county council can deal with, and what they will be?

Greg Clark: I certainly will. I am grateful to my right hon. and learned Friend for his advice on this matter. I think Leicestershire will make a particularly strong case for a review of the match between needs and resources. Rather than keeping him hanging on, I can tell him that the transitional funding for Leicestershire will be £3.3 million.

Mr Kevan Jones (North Durham) (Lab): For the benefit of the PPSs, my local authority is County Durham. It is a bit off, Mr Speaker, that the Secretary of State has all the figures, but they have not been released to councils, which means we have no way of scrutinising his answers.

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I wish to raise the point also raised by my hon. Friend the Member for Halton (Derek Twigg) about the Better Care Fund. I agree with the Secretary of State that this issue affects all councils, but County Durham has a low council tax base, as most of its properties are in bands A or B. He just said this will be taken care of in the formula. Will he meet me and north-east MPs whose councils are disadvantaged by not being able to raise the cash that larger authorities, such as Westminster, can?

Mr Speaker: Usually the complaint is that others are told first. In this case, I fear some people are complaining that the House is being told first. I cannot see what is wrong with that. It seems a highly desirable state of affairs. I might have misunderstood, but I think I have understood.

Greg Clark: I am grateful, Mr Speaker.

I had conversations with the hon. Gentleman’s local authority, and it made some very positive comments and suggestions for the settlement, but I am always pleased to meet him to discuss the important devolution taking place in the north-east of England, of which we are very proud.

Jesse Norman (Hereford and South Herefordshire) (Con): I warmly congratulate the Secretary of State on his announcement. As he will be aware from our representations, Herefordshire was looking at a 34% reduction in the rural services grant next year, against a uniform reduction of 25%. Any support will be much appreciated. Is there not a danger that low-economic-activity areas—I am afraid that my own county has historically been such an area—might be penalised by the transition to council tax being supplemented by rural rates, unless there is a transitional fund to stimulate economic growth alongside it?

Greg Clark: My hon. Friend makes a good point. I think that Herefordshire has great potential in terms of attracting and growing businesses. For example, he has been a doughty campaigner for a university in Hereford. He is right that the transition to a world in which local resources fund councils has to take account of the needs of each area and its potential to raise revenue. That is why I announced the review today. Several colleagues from across the Chamber have contributed to, and have great expertise in, this matter, and I hope, in the spirit of this statement, that they will contribute personally to that review.

Ann Coffey (Stockport) (Lab): I, too, am concerned about the future stability of funding for local services. While council tax provides a solid base of revenue, moving to more reliance on business rates means more unpredictability in the level of revenue available to local councils. What consideration has the Secretary of State given to future mitigation of the impact on local services of a fall in revenue from business rates—for example from a downturn in the economy, which is beyond the control of any local council?

Greg Clark: The great advantages of the devolution deals that we are striking, including with Greater Manchester—[Interruption.] The hon. Lady raises her

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eyes, but the elected leaders of Greater Manchester have proposed a means of taking on the 100% retention of business rates and making sure that they can manage the ups and downs of that across the years. This is a proposal that they have made, so that, in attracting more businesses to Greater Manchester, the whole of that great city will benefit.

Sir Alan Haselhurst (Saffron Walden) (Con): Can my right hon. Friend assure me that his final settlement reflects the accurate level of reserves that are truly available to Essex County Council?

Greg Clark: I have made no assumption of reserves. In advance of the spending review, several commentators suggested that we should take account of councils’ known reserves. I resisted those calls, and it seems that it is reasonable for councils to have reserves, just as, as a nation, we are looking to create a surplus as a buffer against the ups and downs of the economy in the years ahead, which is something that the Labour party failed to do. The great advantage of a four-year settlement is that it gives that certainty to councils, so that part of the reserves that they keep against the uncertainty of year-to-year settlements is available to them, but I have made no assumptions that they will use them.

Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op): At my surgery on Friday, I met a woman who cared, on her own, for her severely disabled daughter 24 hours a day, seven days a week. She is not able even to get a decent night’s sleep. She used to receive six nights of respite care a month, but now she has been told that she will get nothing. That is the reality of the Conservative party’s treatment of local government since 2010. In Tameside, there are no more back-office functions to merge and no more staff to be made redundant. There is nothing left to cut, except the services for the people who need them most, and for them the outlook is bleak. No amount of devolution to Greater Manchester, as good as that is, can compensate for a lack of basic provision.

Greg Clark: May I suggest to the hon. Gentleman that he goes next door and has a cup of tea with the leader of Trafford council, which runs its services extremely efficiently? I dare say that it would be sensible of Tameside to take up any advice that the council leader is able to give.

Mr Laurence Robertson (Tewkesbury) (Con): May I thank the Minister for revisiting this issue? Does he accept that what all Members who represent rural areas want to see is fairness in the funding system? Although Gloucestershire may seem to be a leafy, wealthy county, there are areas of deprivation. We have flooding problems and a higher percentage of older people who, regardless of where they live, still need social care. May I ask him to ensure that the final settlement reflects the problems in rural areas as well as in other areas?

Greg Clark: I completely agree with my hon. Friend. I was grateful to my colleagues from Gloucestershire for the representations that they made. He will be pleased to hear that the pressure on them will ease for the first two years—it will be to the tune of about £2.5 million

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next year—which, knowing the pressures on the council for exactly the reasons that he said, will be welcomed locally.

Jack Dromey (Birmingham, Erdington) (Lab): At £0.75 billion, no council has ever suffered the same level of cuts in local government history as Birmingham. No city has ever been treated so unfairly. Does the Secretary of State begin to understand the dismay that there will be over today’s announcements, which will put at risk school crossing patrols, deepen the growing crisis of health and social care in the city and threaten dozens of community groups supporting the most vulnerable in Birmingham? There will be utter dismay in Britain’s second city.

Greg Clark: The figures that I have published today include an extra £800,000 from the new homes bonus for Birmingham that was not included in the provisional settlement. I should have thought that that was a cause of some pleasure in Birmingham, rather than the opposite.

Dr Andrew Murrison (South West Wiltshire) (Con): Really well done to the Secretary of State on the statement, the uplift in the rural services delivery grant and the review that he has announced. However, what assumptions has he made about the uplift in parish and town council precepts, given the assertion he made a few moments ago about the proportion of local government spend that would be consumed by the revenue support grant by the end of the decade? He will know that those precepts have gone up as the RSG has gone down, as in many places the council tax has been frozen.

Greg Clark: My hon. Friend makes an important point. There have been representations in the past to include parish and town councils in the referendum principles. We have not done that, but we keep it under review so that there is economy in those councils, which is important, because their residents are also council tax payers who pay council tax to his county council.

Diana Johnson (Kingston upon Hull North) (Lab): Hull is the 10th most deprived area in the country, and over the next year it faces spending cuts on average nearly 50% greater than those faced by county councils, so will the Secretary of State explain to my constituents why county councils are getting additional moneys, but not areas such as Hull?

Greg Clark: County councils and other authorities in the first two years experienced sharper reductions in the revenue support grant, and representations across local government, including Labour authorities, suggested that we should ease the transition. I would say to the hon. Lady’s constituents in Hull that much attention has been paid to that important city through the growth deal that we established, which invested substantially in the area. The prospect of further devolution offers more important opportunities for that city.

Rishi Sunak (Richmond (Yorks)) (Con): I thank my right hon. Friend for meeting colleagues and me, and for listening to rural communities. I warmly welcome the statement. An ageing population is a key driver of cost, so will my right hon. Friend ensure that future funding formulae, instead of using out-of-date figures, will keep up with the changing demographics in areas such as North Yorkshire?

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Greg Clark: Indeed. That is one of the points that my hon. Friend and other colleagues have made, which is why I have responded by saying that we should look again at that funding formula. It was also a point made by Carl Les who, as my hon. Friend knows, is the excellent leader of North Yorkshire County Council, and I am pleased that we have been able to meet his request.

Steve McCabe (Birmingham, Selly Oak) (Lab): Did the Secretary of State consider including the Chancellor’s social care tax in the calculation of overall council tax income for the core funding settlement, which would make the changes fairer and mitigate the late introduction of the better care fund for low council-tax base authorities such as Birmingham?

Greg Clark: The social care precept is recognised across all parties and different types of authorities, even those, including district councils, that do not receive it. Their residents are residents of counties and of metropolitan boroughs, and it is important that funding is there. The combination of the precept and the better care fund provides up to £3.5 billion. I repeat what I have said: the representations that I received before the spending review from the Local Government Association and directors of social services was that they needed £2.9 billion. We have provided £3.5 billion.

Simon Hoare (North Dorset) (Con): May I thank my right hon. Friend for his patience and courtesy, and ministerial colleagues and indeed officials at the Department for Communities and Local Government for theirs in their dealings with colleagues from Dorset, including the leader of the county council and me? It is appreciated, and I welcome wholeheartedly today’s announcement from my right hon. Friend. If it was parliamentary, I am sure that rural local government would plant a big, wet kiss on the cheek of the Secretary of State—but I am not entirely sure that that is parliamentary.

Will my right hon. Friend give further details of the transitional funding for Dorset that he has announced? The devil is in the detail, as always, so will he set out further information on the timing of the welcome review of the assessment of needs? The sooner we can get that sorted out, the better for rural local government.

Mr Speaker: Before the Secretary of State provides a comprehensive and, I am sure, scintillating reply to his hon. Friend, I take this opportunity to say what a delight it is to see our new Serjeant at Arms in the chair.

Greg Clark: May I add my welcome to the new Serjeant at Arms?

Given what my hon. Friend the Member for North Dorset (Simon Hoare) said, I am grateful that he is sitting far away from the Dispatch Box. I am grateful, however, for his good wishes. Dorset is a well-run county council, and it has important costs as a result of being a beautiful rural county. The extra funding that it will receive from April this year will be £4.10 million which I know, having spoken to the leader of the council, will make a big difference in managing the transition that was a great concern for the authority.

Fiona Mactaggart (Slough) (Lab): Slough is the smallest unitary authority in the country. In response to questions, the Secretary of State announced that fellow Berkshire

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unitary authorities, West Berkshire and Wokingham, will receive £1.4 million transitional funding. Slough faces particular pressures, as it is on the border of London and has a changing, high-needs population. What are we going to get?

Greg Clark: It sounds as though the right hon. Lady wants to participate in the review of needs and of the cost of delivering those needs, so I am surprised that she has not welcomed the announcement that I have just made.

Mrs Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con): I welcome the additional funding that my right hon. Friend has announced to ease the pace of reductions during two the most difficult years, which in Northumberland seemed to be a really frightening challenge. Will he confirm that the revised settlement means that the position in Northumberland, which continues to have one of the highest populations of elderly people, will be secure?

Greg Clark: The benefit for Northumberland is twofold. First, there is additional funding from the rural services delivery grant and the transitional grant that I mentioned, both of which are important and will be welcomed by people in Northumberland. Secondly, the review of the cost of delivering services in rural areas and the increased demands there is something for which my hon. Friend’s constituents and councillors called, so it is right that we should get on with that straightaway.

Peter Kyle (Hove) (Lab): The recent report by ResPublica said that 37,000 elderly people who were dependent on statutory funding for residential care were at risk of losing their places and becoming homeless because of the rise in the minimum wage and cuts to local council funding. Areas such as mine which, for the benefit of the Parliamentary Private Secretary to the Secretary of State is Hove in Sussex, will do reasonably out of the precept because of the high tax base, but other areas with a low tax base, such as the north-east, will suffer very badly, and they have the highest rates of dependency on statutory funding for adult social care. Will the Secretary of State look again at the funding formula and make sure that areas that most need funding get it?

Greg Clark: I have just said to the House that I intend to look again at the funding formula to make sure that areas with the highest costs and pressure are funded accordingly.

Richard Benyon (Newbury) (Con): The well-run West Berkshire Council faces a cut in the RSG of 44%, so I am grateful that my right hon. Friend and his ministerial team have listened to the many entreaties from my right hon. Friend the Member for Wokingham (John Redwood) and me.

Will the Secretary of State do two things? First, will he say whether it is possible to envisage a speeding-up of work on the retention of business rates, because that would resolve many problems for local authorities such as West Berkshire? Secondly, would he have a word with his colleagues in the Department of Health and tell them to pull their finger out, as they have agreed a deal to return funding under the Care Act 2014? They promised to do that, and it would make a massive difference to settling this year’s budget.

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Greg Clark: My hon. Friend is right: he has a well-run council, and representations from him, our colleague and the council led me to make the changes that I have made. On the early retention of business rates, I am glad that he has given me the opportunity to say to all Members that, through the devolution deals, we are keen to get on with the devolution of business rates. I encourage all areas to introduce proposals on that. The Chancellor has made a commitment that that should be in place by 2019-20, but that is “by” rather than “in”, and I should have thought that West Berkshire and its neighbours were well placed to put together a good case for that.

Andrew Gwynne (Denton and Reddish) (Lab): I always had the Secretary of State down as a fairly bright chap, but this would be a fair settlement only if it were predicated on every area having an equal council tax base and equal levels of need. Representing as I do a cross-borough constituency—for the PPSs, that is Tameside and Stockport—I know that those two local authorities are very different in their ability to raise income. Tameside, for example, this year has a £16 million deficit in adult social care. The levy on council tax—the 2% precept—will raise £1.4 million only. How does the Secretary of State plan to fill that gap?

Greg Clark: I have given some advice to the hon. Gentleman’s neighbour, the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), on this issue. If the hon. Gentleman would like me to arrange for him to meet Sean Anstee, the leader of Trafford council, I think he would find it a very constructive conversation. In a world of devolution, Trafford may be able to provide some advice and assistance to the hon. Gentleman’s borough council on running an efficient set of services.

David Tredinnick (Bosworth) (Con): I welcome the £3.3 million transitional relief for Leicestershire which, as my right hon. Friend knows, has been at the bottom of the funding pile. The transitional relief will be widely welcomed in my constituency. Will my right hon. Friend say a word about the discussions he has had on the funding of adult social care, which very much affects our county?

Greg Clark: I will indeed. The provisional settlement, as I said in my statement, made a particular response to the acknowledged pressures on adult social care across the country. All tiers of local government cited this as the important priority. The decision to establish the social care precept and the addition to the better care fund were an extremely important step in recognising what has been building up for many years as particular pressures on authorities, and Leicestershire, well run though it is, feels those pressures particularly acutely.

Heather Wheeler (South Derbyshire) (Con): I congratulate my right hon. Friend on listening, with all his Ministers, to the pleas from Derbyshire and South Derbyshire in particular. We are very grateful for the amelioration of the arrangements, but will my right hon. Friend go a little further and think about the changes to the new homes bonus and to business rates, so that although fast-growing districts will get more money in the future, they are not penalised in the short term ?

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Greg Clark: Indeed. The consultation on the new homes bonus is open until March and it is important that my hon. Friend and her councillors contribute to that. That will be the opportunity to consider those views. As I have made clear today, the important step of 100% business rate retention by local government needs to be accompanied by a fundamental look at the methodology, and I hope my hon. Friend will bring her considerable expertise to bear on this matter.

Dame Angela Watkinson (Hornchurch and Upminster) (Con): I thank the Secretary of State for his announcement about transitional relief, which I very much hope the London borough of Havering will benefit from, not just because of its ageing population but because of the increasing demand for children’s services. My right hon. Friend will already know, I am sure, that the 12 inner-London boroughs have more reserves collectively than the 20 outer-London boroughs. Will he reflect further on whether that might be taken into consideration?

Greg Clark: I am grateful for my hon. Friend’s suggestion. Havering is a well-run council and it will benefit from the transitional relief. I think it will want to make a good case for the review of the demographic and other pressures it is facing. My hon. Friend invites me to do what I said I would not do—require councils to dispose of their reserves. If I did that, I would incur the displeasure of some of the colleagues who spoke earlier. I have not done that. It is a matter for local government, but a four-year settlement gives every council the ability to plan ahead and make sure it has the right level of reserves for the circumstances it faces.

Graham Stuart (Beverley and Holderness) (Con): I join colleagues in thanking the Secretary of State for the manner in which he carried out the consultation. Further to the remarks of the Scottish National party representative, the hon. Member for Glasgow Central (Alison Thewliss), who suggested that rural areas were richer than urban areas, the opposite is true: average earnings are higher in urban than in rural areas, and council tax is much higher. If we allow percentage rises to continue on a much higher base for much poorer people, there is a danger that we will reinforce the inequities in our system. So in a world of business rate retention and council tax, what can the Secretary of State do to ensure that our poorer, older, harder-to-service citizens are not unfairly impacted by ever greater council tax, while the lower council tax areas—often richer people—pay less and continue to be subsidised by us?

Greg Clark: My hon. Friend makes an excellent point. I pay tribute to him for conducting a well-reasoned and forensic argument that has been persuasive, and I am grateful for the manner in which he has done that. He is right. It is a false assumption that because an area is rural, it is wealthy and prosperous. Some of the most challenging circumstances are in the most rural areas. That is why, after more than a decade, it is long overdue that we should look at the costs of delivering services in rural areas. We should look at the pressures that they face and set the retention of business rates accordingly, so that they can be recognised in a way that they have not been over recent years.

Dr Sarah Wollaston (Totnes) (Con): I warmly welcome the Secretary of State’s statement today and thank him for listening to the concerns of rural areas. He will know,

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however, that the demographic pressures in places such as Devon are severe, and that the precept, welcome as it is, will quite meet the cost of the rise in the national living wage. During his review, will he set out whether he will listen to other proposals to create a sustainable long-term settlement for social care, which has been described as unfinished business in the “Five Year Forward View”?

Greg Clark: I certainly will. I am grateful for my hon. Friend’s words. One knows that more people choose to retire to places such as Devon than to other parts of the country, and it is important that that is recognised in the funds that are available. As everyone knows, my hon. Friend chairs a very important Committee of this House, and one of the essential tasks of this Government over the years ahead will be to make sure that health and social care come together. They are two sides of the same coin. The same people are being looked after, whether by councils or by the NHS. One of the things I am determined to do is to make sure that we have a much better connection between the NHS and social care, and I would be grateful for her advice and that of her Committee in how we do that.

Mr Philip Hollobone (Kettering) (Con): I declare my interest as a member of Kettering Borough Council. The different councils in Northamptonshire will be affected by the settlement in different ways. Perhaps Northamptonshire County Council, which charges the lowest county council tax in the whole country, will be the most vulnerable. The long-term answer to ensuring proper local service delivery in the county might be a restructuring of local government. Will my right hon. Friend confirm that he is open to innovative solutions that could involve a restructuring to ensure that local public services are delivered more efficiently under a different organisation?

Greg Clark: It is in the interests of us all that councils are effective and efficient. I have always said that I do not believe in a top-down reorganisation of local government. When that has been attempted in the past, it has not ended well, if I may put it that way. But of course the commitment I have to devolution carries with it the idea that if local people want to do things differently, they should be able to do that, so if there are proposals from Northamptonshire that enjoy the support of local people, they should come forward and have those discussions.

John Howell (Henley) (Con): I congratulate my right hon. Friend on his pragmatic approach to these issues. He rightly points out that demographic pressures affect different areas in different ways. When does he expect the needs review to be completed, and what role will the figures obtained from that play in any closer integration of social care with the NHS?

Greg Clark: I am grateful to my hon. Friend, who was of considerable assistance to me when we consulted on the national planning policy framework, and we were able to make sensible responses to that consultation too. I am keen to get the review under way as soon as possible so that it can inform not only business rates retention but other decisions the Government have to take from time to time about rural areas and the different needs of different areas. The sooner it is done, the better, and I will set out in the coming weeks the process involved, so that colleagues across the House can contribute.

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Richard Drax (South Dorset) (Con): May I thank my right hon. Friend for the courteous way in which he has dealt with me and Dorset colleagues—it really has been exemplary—and for the £4 million or more for Dorset County Council? Will he confirm—I did not quite hear this, and local leaders are watching the debate—whether the tariff adjustment will stay or go? In 2019-20, Weymouth and Portland Borough Council, for example, will end up paying the Government £500,000 but taking only £123,000 in council tax. I do not think that is fair, and I very much hope that the review will take such things into account.

Greg Clark: Indeed. I am grateful to my hon. Friend for his kind words. Not only Dorset County Council but the districts he represents will find the transitional relief and the rural grant important. I have said that we will remove what has been called the negative grant entirely for 2017, 2018 and 2019. By the time we get to the end year of the settlement, 100% business rate retention will come in anyway, so the figures will be influenced by that. My hon. Friend can therefore look forward with confidence to the review, to which his council and, I dare say, he himself will want to contribute.

Mark Pawsey (Rugby) (Con): The funding of adult social care has been one of the biggest pressures on our local authorities given that we have an increasingly ageing population. I therefore thank the Secretary of State for listening to the concerns of council leaders such as Councillor Izzi Seccombe, of Warwickshire County Council, who has spoken regularly on this matter. I also thank him for making sure that more money is available through the better care fund to attend to the needs of these particularly important residents.

Greg Clark: I am grateful to my hon. Friend. He is absolutely right: Izzi Seccombe does an excellent job not only in leading Warwickshire County Council but in her national responsibilities in the Local Government Association. She has been very persuasive in making the case for extra funding, recognising the costs of social care. She is one of the most influential and respected council leaders in the country, and my hon. Friend is lucky to have her.

Andrew Bridgen (North West Leicestershire) (Con): I thank the Secretary of State for his earlier answers to my right hon. and learned Friend the Member for Harborough (Sir Edward Garnier) and my hon. Friend the Member for Bosworth (David Tredinnick), and indeed for accommodating a meeting with all the Leicestershire and Rutland MPs, at which we had a very frank exchange of views about local funding. Will he go a little further and explain what opportunities exist for North West Leicestershire and Leicestershire under the increases to the rural services delivery grant?

Greg Clark: I am grateful to my hon. Friend for coming back after questions earlier to consider these matters. There are opportunities for Leicestershire; it and North West Leicestershire will gain in transitional funding. One thing we will need to do in the review is look at areas such as North West Leicestershire to see whether their resources and needs are adequately recognised not only in business rates retention but in calculations for things such as the rural services delivery grant.

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Chris White (Warwick and Leamington) (Con): Both local authorities operating in my constituency have expressed serious concerns about the draft settlement. What assurances can the Secretary of State give regarding his consideration of those concerns?

Greg Clark: As I said earlier, we have listened carefully. The leaders of my hon. Friend’s authorities have made representations, which we have listened to very seriously. I think they will be pleased with the response we have made through the settlement.

Mark Spencer (Sherwood) (Con): The Secretary of State will be aware of the challenge faced by Nottinghamshire, which has been particularly compounded by the issues faced by former coalfield communities. Will he outline the improvements to the funding Nottinghamshire may receive? Will he also meet me to discuss plans for an enterprise zone at Thoresby colliery to enable the county council to find its own way in generating business rates in the future?

Greg Clark: My hon. Friend makes an excellent point. Attracting businesses to locate in an area is a sure-fire way of making sure that the resources available to councils continue to grow. I am grateful to him for his question, and I can confirm that Nottinghamshire will receive transitional grant funding of around £2 million next year, which I think will be welcomed across the county.

Bob Stewart (Beckenham) (Con): It was not me who had a cosy little chat with “ConservativeHome” this morning—if, indeed, it was a Conservative MP who did so. However, the idea of some councils having to gnaw on the bone is absolutely accurate, and I refer, of course, to my own council of Bromley, which has been gnawing on the bone, because of its efficiency and competence in providing services. Therefore, I am grateful to the wonderful Secretary of State for visiting Bromley and for agreeing to transitional arrangements for it. Could I ask what they are, sir?

Greg Clark: It is always a pleasure to come to Bromley, and I hope I will be able to do so again with my hon. Friend in the future. We will make sure that Bromley benefits from around £2 million in transitional grants for each of the next two years. I know from looking at the representations that have been made by London boroughs that that will be a big help in helping them to manage the more difficult first two years of the settlement.

Matt Warman (Boston and Skegness) (Con): May I thank the Secretary of State for listening to the vocal representations from across Lincolnshire, including from my neighbour, my hon. Friend the Member for Louth and Horncastle (Victoria Atkins)? At those meetings, he heard that it is not just rurality but sparsity of population that is important. Will he confirm that the new, revised settlement takes those conditions into account and tell us what it means for Lincolnshire?

Greg Clark: I will indeed. Lincolnshire is in a particularly ambitious phase of its history, and it is looking to negotiate a substantial devolution deal. As a rural and sparsely populated county, as he said, it faces particular pressures, so the additional funding it will receive is in the order of £5 million during the year ahead, and that will be widely welcomed across the county.

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Peter Heaton-Jones (North Devon) (Con): As it apparently falls to me to do the finale, I say well done and thank you to my right hon. Friend the Secretary of State. I and many colleagues from across the south-west and from rural constituencies lobbied pretty hard, and we thank him very much for listening. We await the final figures. He might well be able to provide the figure for North Devon shortly—if I speak slowly enough. [Interruption.] Marvellous. However, does he agree that it is important that we never again find ourselves in a position where rural areas face discrepancies and unfairness compared with urban areas?

Greg Clark: I am very grateful to my hon. Friend. He may be last, but Devon is certainly not least—it is a very important part of the country. His patience is rewarded: the funding that Devon will receive from the Government next year is £8.4 million, which will make a big difference to his area. North Devon will receive around £250,000 for its district council services. The opportunity to take a long, hard look at the resources that areas have, the costs they incur and the demands they have on their services is long overdue. I know that my hon. Friend’s county and his district will play a full part in that review, and I dare say he will too.

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Social Security

6.18 pm

The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara): I beg to move,

That the draft Social Security Benefits Up-rating Order 2016, which was laid before this House on 25 January, be approved.

Madam Deputy Speaker (Natascha Engel): With this we shall take the following motion:

That the draft State Pension (Amendment) Regulations 2016, which were laid before this House on 18 January, be approved.

Mr Vara: The order and regulations before us have been laid previously in the House. It is my understanding that there is general agreement on both sides of the House on their contents. I do not, therefore, propose to detain the House any longer than is necessary.

6.19 pm

Angela Rayner (Ashton-under-Lyne) (Lab): This is the first time I have debated with the Minister at the Dispatch Box, so I welcome him to his place and thank him for his—very brief—explanation of the draft proposals.

I want to use this opportunity to debate, clarify and scrutinise aspects of these important measures. As the Minister has outlined previously, the coalition Government legislated in the Pensions Act 2014 to introduce a new single-tier state pension for persons reaching state pension age on or after 6 April 2016.

A central principle of this legislation has been to maintain the earnings link, which was restored in the Pensions Act 2007, passed by a Labour Government. The coalition Government committed to increasing the basic state pension through the triple guarantee of earnings, prices or 2.5%, whichever is highest, from April 2011. The triple lock is a policy approach that Labour Members support—a position that was confirmed in our manifesto at last year’s general election.

Today, we are considering statutory instruments to implement and update key features of that settlement. For existing pensioners on the current state pension age scheme, the proposed 2.9% increase, which matches earnings as the highest rise of the three measures for this year, is a step in the right direction. A full basic state pension will therefore rise to £119.30 a week—an increase of £3.35.

Andrew Gwynne (Denton and Reddish) (Lab): I welcome my hon. Friend to her Front-Bench position. The triple lock is all fine and well if one is in receipt of the state pension, but she will know that there is a group of women who have been deprived of their state pension, the WASPI—Women Against State Pension Inequality—women who were born in the 1950s. Does she agree that a triple lock on nothing is still nothing and that we need from this Government fair transitional arrangements for those women?

Angela Rayner: I thank my hon. Friend; I hope to touch on that later. I commend him and my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) for their campaigning on this issue for those women who feel that they have been let down by this Government.

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The increased starting rate of £155.65 for the new flat-rate pension, to be introduced in April this year, is also broadly welcomed by Labour Members, although it is of course an increase of only 5p on the previous minimum guarantee of £155.60. Less welcome are the lack of communication, escalated timescales, poor management and utter confusion caused by what the former Pensions Minister, Steve Webb, said was meant to be “a simplified system”. Several aspects of the new legislation will have significant implications for current and future pensioners.

Under the new single-tier state pension, the Government intend that individuals qualifying for the new state pension will receive it on the basis of their own contributory record. The qualifying period to receive the full flat-rate pension goes up from the former 30 years of national insurance contributions to 35 years. There is therefore some concern about reports over the weekend suggesting that up to 4 million people retiring under the new scheme from April could receive an incorrect amount because their incomes are being calculated using data riddled with errors.

The Government are quick to jump on individuals or families who make errors in relation to tax credit or benefit claims, so it is, equally, incumbent on them to ensure that their own calculations are correct. The Minister has been prepared to set debt collectors on families who have received extra tax credit income because of the Department’s errors, so there will be understandable fear of the consequences where pensioners are overpaid due to any errors. Of course, if they are underpaid, the injustice will be obvious. It would therefore be helpful if the Minister gave us his assessment of the scale of these problems and said whether he believes that the press reports over the weekend are accurate. If the Government are encountering such problems, how does he plan to deal with them? What reassurances can he give to the millions of taxpayers potentially affected that they will get the correct amount that they were promised and are entitled to?

On a matter of equal importance, unlike the current state pension, under the new single-tier state pension an individual will no longer derive entitlement based on the national insurance record of their former spouse or civil partner. Though some transitional protection has been provided, the details are not at all clear. I am sure that Members in all parts of the House have constituents in rather desperate circumstances, trying to knit through the fog. A constituent recently contacted me. Her husband is terminally ill and on his deathbed, and he has expressed fears about what would happen to her under these transitional arrangements when he dies. They have no children, and his wife had stayed at home for many years while her husband provided for them both. She called the pensions helpline, but it was unable to offer any clarity or reassurance.

I have asked this question before, but I have yet to receive a satisfactory answer: can the Minister confirm that, in an extreme scenario, a woman with no entitlement in her own right who is widowed could end up with no state pension at all, as compared with the expected £119.95 she would have received under the current system? What are the Government doing to ensure that pensioners do not unfairly lose out and that people are given the correct information, so that they know the position they will be in? When asked how the Department was planning to communicate with those affected, the

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Minister for Welfare Reform, who of course sits in the other place and so is not here today, said, “You can’t foresee who is going to become widowed in future.” I think it is fair to say that that was not exactly a helpful reply. So perhaps the Minister who is with us today could provide some clarity on what action the Government are taking to communicate these changes, particularly to those with gaps in their record who are likely to be directly impacted.

Andrew Gwynne: My hon. Friend is making an important point about the need to communicate any changes to social security and particularly to the state pension rules. She will know that one of the complaints of the WASPI women is that they have not been adequately notified or given proper transitional arrangements. Does she think that the Government ought to be doing a lot more to communicate the changes to the new state pension arrangements because some people will not benefit from this scheme?

Angela Rayner: My hon. Friend is absolutely right: the Government do need to get their act together on communicating these changes. The general population out there expect nothing less than honesty and the frank information that the Government should be providing for them, so that they can make informed decisions about their future.

Will the Minister give a more specific estimate of who will be covered by transitional protection and how many people will lose out from these changes in future years? Once again, the Government’s track record on communicating pension changes falls well short of the standard that the public would hope and expect. When I met members of the National Pensioners Convention last week, they pointed out that many pensioners are now waking up to the fact that only a minority of those who reach the state pension age under the new system will receive the full flat rate of £155.65 proposed today, as confirmed by recent analysis published by the Minister’s Department. It estimates that only 37% of people reaching state pension age in 2016-17 will receive the full amount of the new state pension directly from the state. Millions of people will receive a significantly lower state pension in future, and some of them will be more than £500 a year worse off. The gloss from spinning the top-line full flat rate without the detail is rapidly starting to fade. Indeed, the Minister for Pensions herself has now admitted that the new state pension has been “oversold”.

It is clear that the Government should be doing far more to inform those affected, especially those who are nearing retirement and therefore have the least notice or time to consider the impact. In its interim report on the new state pension published in January, the Work and Pensions Committee reported:

“We heard evidence of a widespread lack of awareness among individuals about what they will receive and when. We were concerned to be told that the statements intended to rectify this were confusing and lacked necessary information.”

Age UK, among others, has called on the Government to do far more to contact people who are likely to be affected. It says:

“There are DWP materials highlighting credits and ways to increase the State Pension, but people need to know they may be affected. We believe the DWP should contact people with gaps in their record individually to highlight the changes and explain options.”

What are the Government doing to properly communicate the impact of the changes?

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Andrew Gwynne: My hon. Friend is being generous in giving way. We also need to have confidence that the information being communicated by the DWP is correct. She will remember from last week’s Westminster Hall debate that, as recently as last week—I have not checked whether this has been changed yet—the DWP was still communicating that the state pension age for women is 60.

Angela Rayner: I thank my hon. Friend for making that point, which is central to what the WASPI campaigners have been arguing for some time and with which I have sympathy. The Government are failing to give adequate information and it is not readily available when people require it.

The DWP has produced analysis showing that the majority of people will be better off over the next 15 years, but what about after that? A close look at the figures reveals that, for those aged under 43 now—like me and many others in the House—the probability is that they will receive thousands of pounds less in state pension by the time they retire.

We do not hear much about the impact of the new state pension on the retirement income of future generations, and it is becoming increasingly clear why the Government are keen to keep quiet about it. Analysis that the shadow Secretary of State for Work and Pensions, my hon. Friend the Member for Pontypridd (Owen Smith), has commissioned from the Library shows that those in their 40s now are likely to be £13,000 worse off over their retirement. Men in their 30s now are likely to be nearly £17,000 worse off, while women will lose more than £18,000. For the generation in their 20s now, the loss is likely to be more than £19,000 for men and £20,500 for women. Future generations will clearly be worse off.

By 2060, when today’s 20-year-olds are nearing retirement, the Government will be spending £28 billion a year less on state pension provision. That is a huge cut, and one that has not been given proper acknowledgement by the Government or, consequently, been properly scrutinised and debated in the House or more widely.

Kevin Foster (Torbay) (Con): It is interesting to hear the hon. Lady’s comments. She mentions the reduced state pension for those who are currently in their 20s, but how much of that reduction is based on the fact that the Pensions Act 2007 increased the retirement age for those who are my age and younger to 68?

Angela Rayner: I remind the hon. Gentleman of the coalition Government’s provisions. We had a proposal that worked for pensioners—we had a long-term plan—but the coalition Government speeded it up without any regard for the people affected by it, so I will not take any lessons from Conservative Members.

As I was saying, the £28 billion a year less that will be spent on state pension provision is a huge cut that has not been given proper acknowledgement by the Government. I hope we will debate it further in the House. Will the Minister confirm that the Government’s so-called long-term economic plan involves cutting £28 billion from pensions? What assurances can he give to today’s younger generations—who face higher housing costs, the largest fall in real wages and greater insecurity in the workplace—that they will have sufficient income in retirement?

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Labour will continue to ask the Government to be far more transparent about the long-term winners and losers from the new state pension. Withholding that information may be politically advantageous in the short term, but in the long term it serves only to undermine public trust in saving for retirement, which Members on both sides of the House agree is the right course for all our population and is in the national interest.

Members on both sides of the House showed enormous interest in a related debate in Westminster Hall last week, which was triggered by more than 140,000 signatures on the petition by WASPI. There was standing room only, not, I suspect, because it was my first outing on the Front Bench, but because of the significance and importance of the issue to many Members and 2.5 million of our female constituents. Indeed, the Minister might wish to note that they include more than 4,000 women in his own constituency. I therefore hope that he will expand on the Government’s consideration of transitional protections for those women, too many of whom were not given proper notification of the acceleration in their state pension age.

The Government have failed to respond to a number of proposals, including specific solutions for the 1951 to ’53 cohort of women, who will not have access to the new state pension that we are agreeing today; for those born between 6 October 1953 and 5 April 1955, who face a delay of more than a year; and for the women born later in 1953, who have had a double whammy of changes in 1995 and 2011. What assessment have the Government carried out of those options?

Alternatively, it was suggested during the passage of the Pensions Act 2011 that maintaining the qualifying age for pension credit according to the 1995 timetable would protect some of the most vulnerable people. Have the Government reconsidered the issue since then?

Turning to another element of the regulations, I note the proposal to freeze the saving credit element of pension credit, as announced in the autumn statement. For the 438,000 pension credit recipients who receive only the saving credit element of the pension credit, their losses will not be offset by the rise in guaranteed credit. Their pension credit reward will, therefore, be reduced.

Unfortunately, the Government have so far refused to come clean about the impact on some of Britain’s poorest pensioners. According to analysis by the Institute for Fiscal Studies, 1.2 million recipients of pension credit will lose an average of £112 a year from the next financial year. That figure will be significantly higher for many people, including those in the poorest fifth of pensioner households. Will the Minister confirm that some of Britain’s poorest pensioners will be worse off as a result of the measure, and will he commit to publishing a more detailed impact assessment than that produced to date? Will he tell us exactly how many people will be worse off and by how much?

Knowledge is power, and people need to be empowered by knowledge when it comes to their retirement. I hope the Minister can provide some answers today, because that is the least that this and future generations of pensioners deserve.

6.38 pm

Dr Eilidh Whiteford (Banff and Buchan) (SNP): May I start by welcoming the hon. Member for Ashton-under-Lyne (Angela Rayner) to the Front Bench? I was surprised

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that the Minister chose to move the regulations formally and that there is so little interest in debating them, not because there are deep-seated, fundamental disagreements about them, but because, given the significant changes that are about to take effect with the introduction and implementation of a brand new pension system in just a few weeks’ time, I would have thought there would be an appetite in the House to debate the issues and, indeed, to raise awareness among the public, who are still very much in the dark about the changes and their significance to their lives.

I will confine my remarks to a few of the key issues, some of which have already been touched on. I will start by addressing the State Pension (Amending) Regulations 2016. Although the new state pension will be set at £155.65 a week, very few people will actually get that amount. Indeed, even though the single-tier pension will be higher than the basic state pension, the net amount that some people will receive may be less than they would have got under the old system, because of the loss of means-tested benefits. Only 22% of women and 50% of men who reach state pension age in 2016-17 will get the new state pension in full. According to the National Pensioners Convention, almost six out of 10 new women pensioners and nearly half of new male pensioners—around 1 million people—will get less than the full amount.

Andrew Gwynne: The hon. Lady is making an important point, which is rather pertinent to some of my earlier interventions. Is it not incumbent on the Government and on Ministers to communicate those changes properly? Do we not run the risk of repeating some of the mistakes that have impacted on the WASPI women, because those people will be bitterly disappointed when they realise that they are not entitled to what they expected?

Dr Whiteford: The hon. Gentleman makes an important point. It is worth saying that successive Governments have failed to communicate adequately with pensioners about a system that is, undoubtedly, very complex. The hon. Gentleman alluded to the WASPI women, and they are the best example of the problem at the moment. They have seen the goalposts shifted several times. Many of them are still not entirely sure what they are going to get and when, and they have had contradictory information, even in very recent times, from the Government.

I come back to the new state pension. We are calling it a single-tier pension and making much of that flat rate, but, in reality, there will be many different rates depending on an individual’s personal circumstances. In other words, it is not going to be so simple. Inevitably, the introduction of the new system means that two systems will operate concurrently for several decades. The danger is that the state pension could be seen as a two-tier system, because some existing pensioners would be better off if they were included in the new state pension. I am fairly confident that all MPs will be inundated with approaches from constituents after April once those people work out that they have been short-changed in comparison with their friends, relatives and spouses who are on the new state pension.

We all understand that there will, inevitably, be a cliff-edge with the introduction of a new system, and that it is impossible to predict accurately whether someone will lose or gain from the new pension without a crystal ball to tell us how long they will live in retirement.

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Given all the inevitable anomalies, which will cause a huge sense of injustice, it is incumbent on the Government to introduce some flexibility in the system by letting people take a bit more responsibility for whether they are in the old or new system, so that at least it is their choice to take that gamble with their own life expectancy.

We need to acknowledge that, over time, the new system will be less generous for most people. Those born from 1970 onwards will mostly be worse off under the new arrangements. Those who have contributed to the system for longer—for example, those who moved into work at an early age and worked continuously—will also lose out significantly. On the other hand, there will be benefits for the self-employed and for those who, under universal credit, start to receive credits to the state pension for the first time. There will be winners and losers, but there will be more losers over time.

The new state pension is being introduced on a cost-neutral basis, but the reforms are eventually expected to reduce expenditure compared with cost projections for the existing system. We must also note that the different indexation arrangements for the two systems have the potential to lead to accusations that the Government are building inequality into the system. After April 2016, the new state pension will be uprated annually at least in line with earnings, as per the triple lock, and we all support that. However, my understanding is that an existing pensioner will have a triple lock on only the first £119.30 of their basic state pension, with a consumer prices index link on any state second pension above that level. If CPI inflation is lower than earnings growth, as it is now, the value of the state second pension will fall in real terms. That gap is likely to widen.

Around 7 million pensioners get some kind of state second pension payment, and the average payment is around £28 a week. Applying the same indexation arrangements to old and new state pensions to the same level would cost a modest sum relative to pension spending, but it would mean that both the basic and state second pension were linked to the triple lock. That would help the Government to avoid some of the disparities that are likely to develop in the coming years, and it would help to create a system that is more likely to be perceived to be fair.

I want to express disappointment about the fact that the Government are not uprating savings credit. Instead, it will fall in April from £14.82 to £13.07 for a single person, and from £17.43 to £14.75 for a couple, and it will no longer be available to new pensioners. The Government announced in November last year that savings credit would be further reduced for current recipients, but that reduction is not included in the order. I would be interested to hear whether Ministers have decided not to reduce the amount of savings credit, or when they intend to introduce regulations for that measure.

Savings credit supports pensioners on low incomes who have managed to save a small amount towards their retirement. The vast majority—around 80%—of those who receive it are women, many of whom will have spent their working lives in very low-paid jobs. They have had limited opportunity to save, but they have done so nevertheless. It seems to me that reducing savings credit, and abolishing it for new pensioners, sends exactly the wrong signal to people in low-paid jobs who feel as though they should be trying to save but who have little incentive to do so.

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Before I conclude, I want to devote some attention to the part of the statutory instruments relating to the uprating—or rather, the non-uprating—of state pensions paid to those living overseas; this is the issue of so-called frozen pensions. Such state pensions are paid to people who have spent their working lives in the UK paying contributions towards the state pension, but who, for whatever reason, spend their retirement domiciled in countries that do not have a reciprocal arrangement with the UK for the uprating of state pensions. Those UK pensioners find that every year, while UK-domiciled pensioners and those living in other parts of the EU or countries with reciprocal arrangements receive an uprating, their pension remains frozen in cash terms at the amount it was when they retired. The value of their pension therefore falls every year in real terms, causing real hardship to those affected.

According to the explanatory memorandum attached to the order, more than 500,000 people are in that position. Most—more than 90%—live in Commonwealth countries such Australia, Canada, New Zealand and South Africa, and also in India, Pakistan, parts of the Caribbean and Africa. In other words, they live in countries that have deep cultural and familial ties to the UK. Some have dual citizenship and others are UK citizens who have retired overseas to be close to family, but they all paid their contributions in good faith. The International Consortium of British Pensioners points out that a pensioner aged 90 who has lived in, say, Canada or Australia throughout their retirement will get a basic state pension of just £43.60 a week. If they had stayed in the UK, they would be receiving £115.95, which is due to go up as per this uprating. I just do not think that that is right. We are doing very badly by those people.

Those who are affected by frozen pensions had no choice about whether to pay national insurance contributions —doing so was mandatory. We must remember that many of them lived and worked in a rapidly changing and globalising world in the post-war era, when few would have paid much attention to the small-print of their state pension arrangements. It seems to me wholly unfair that a pensioner who retires to the USA will get their full uprated pension, whereas a pensioner in Canada will continue to receive their pension at its original level. Clearly, there would be a cost attached to uprating, but the Government must offset that against the costs that would have been incurred if those individuals had chosen to remain in the UK. The Government estimate that every pensioner who lives abroad saves the public purse on average around £3,800 each year in health and social care costs alone.

It is hard to measure the deterrent effect of frozen pensions. Pensioners who would like to retire close to their children and grandchildren in other parts of the Commonwealth are prevented from doing so by the knowledge that a key component of their retirement income would not keep pace with the cost of living. A partial uprating such as that advocated by the all-party parliamentary group on frozen British pensions would cost around £30 million and represent a tiny 0.03% of pension spending, but it would signal that those pensioners were not forgotten.

We all want fair and sustainable pensions that provide enough support for our elderly population to enjoy a dignified and comfortable old age, but the arrangements must be fair, and must be seen to be fair, if we are to

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maintain confidence in the system for future generations. I hope that the Minister will consider and respond fully to the points that I have raised.

6.49 pm

Mr Vara: May I take this opportunity to welcome the hon. Member for Ashton-under-Lyne (Angela Rayner) to her new position? I look forward to discussing and debating various issues with her over the coming months. I thank her and the hon. Member for Banff and Buchan (Dr Whiteford) for their contributions. In the short time that we have, I will try to address as many of their questions as possible. I also thank the hon. Member for Denton and Reddish (Andrew Gwynne) for his one or two interventions. I am grateful to the hon. Member for Ashton-under-Lyne for welcoming the triple lock and to her party for its support for that initiative.

The issue of communication has come up repeatedly. I just want to say that there is an awareness campaign, which is particularly targeted at those aged 55 and above. They will receive a letter—their addresses will be obtained from payroll and benefits data—providing details of their own state pension. The first phase of our communications campaign aims to build awareness among those in that age group, who will be the first to reach pension age after April 2016, and we are encouraging them to get a personalised statement. Between September 2014 and October 2015, we issued nearly 500,000 personal statements. We have factsheets, infographics, videos, calculators, YouTube videos, toolkits for stakeholders and weekly stakeholder bulletins. We will continue to do whatever is necessary and whatever we can to ensure that people are made aware of what is coming. I urge all colleagues on both sides of the House to do their bit, as Members of Parliament with access to media and to local communities, to make sure that people are aware of this very important change.

It is our intention, and it will be the case, that the new state pension will be a lot simpler and clearer for people than the previous situation, when there were opt-outs in relation to the state earnings-related pension scheme and additional pensions, as well as private pensions, occupational pensions and so on. The hon. Member for Ashton-under-Lyne said that not everyone will qualify for the new rate of £155.65, and she is absolutely right, because the new state pension is based on people’s national insurance contributions. In recent years, some people have not paid full national insurance contributions to the state because they have opted out or contracted out. Some of those people contracted out into a second, additional pension, and that has to be factored in. Alternatively, the national insurance contributions that they had contracted out of were used for an occupational pension or a private pension. If the two pensions are added together, the total will in many cases be more than £155.65.

I hope that the hon. Lady and her colleagues appreciate that if we have a system in which people’s pensions are based on national insurance contributions, they cannot, if they have not paid such contributions, be expected to get the full payment due notwithstanding the fact that some of their national insurance contributions have gone to another pension. I hope she will reflect on that point.

Angela Rayner: I gave the Minister a specific example of someone who had not contracted out because of a second pension. Will he address that point and the fact

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that some people have not been given adequate notice of the changes? I appreciate the point he makes about contracted-out contributions, but some people have not been given such information. I am asking for people to be given that information so that they can make alternative provision.

Mr Vara: The hon. Lady will appreciate that I cannot give advice on individual cases at the Dispatch Box. As for communication, I have read out a whole list of measures we are putting in place to make sure that people are communicated with. If we were not doing our job properly, we would not have issued nearly 500,000 personal statements between September 2014 and October 2015. We continue to make sure that people are aware of the change. As I have said, she has a role to play, as do others. I am sorry that she expresses such disappointment, given that in the forthcoming year the Government will spend an additional £2.1 billion more than we are spending at present. There is also the pension credit standard minimum guarantee, which will ensure that the minimum threshold must be met. The state is there to assist people.

The hon. Member for Banff and Buchan mentioned frozen pensions. It has been the policy of successive Governments for the past 70 or so years not to uprate pensions for everyone. The issue is complex, but she will be aware that uprates are made in some countries where there is a legal obligation to do so. It should be remembered, however, that the pensions people get in some countries are based on a means test: if we gave everyone from Britain who is now resident in another country an

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uprate, our contribution to that uprated pension would be taken into account by their new home country and they would therefore be given less by the new home country.

Neil Gray (Airdrie and Shotts) (SNP) indicated dissent.

Mr Vara: The hon. Gentleman is shaking his head, but I assure him that some countries make pension payments on the basis of means.

This Government take the rights of pensioners very seriously, and we are doing all we can to protect them. From April, the rate of the basic state pension for a single person will go up by the biggest real terms increase since 2001. We will continue to protect the poorest pensioners. The means-tested threshold below which pensioner income need not fall—the pension credit standard minimum guarantee—will also have the biggest real terms increase since its introduction. The full basic state pension will be more than £1,100 per year higher in 2016-17 than at the start of the last Parliament. Our triple lock, our protections for the poorest pensioners and our new state pension reforms mean that we can provide pensioners with the dignity and security that they deserve in retirement. I commend the order and the regulations to the House.

Question put and agreed to.

Social Security


That the draft State Pension (Amendment) Regulations 2016, which were laid before this House on 18 January, be approved.—(Mr Vara.)

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Backbench Business

Great Western Railway Routes

6.56 pm

Kevin Foster (Torbay) (Con): I beg to move,

That this House believes that the routes of the Great Western railway are not just a transport system, but the heart of the regions they serve; and calls on the Government to ensure that plans for further electrification and improved resilience of the Great Western railway routes are progressed urgently.

I thank hon. Members from both sides of the House who supported the application for this debate at the Backbench Business Committee. I also thank my colleagues on the Committee for agreeing to allocate the debate to this slot in the Chamber, rather than Westminster Hall, where it would have ended up. We have three hours for this debate, and it is encouraging that we are starting almost bang on time, given that we are discussing trains and railways.

It must be said that this is an apt day for such a debate, as Storm Imogen has hit Devon and Cornwall. One hon. Member, who I hope will join us later, texted me earlier to say he was hoping to get to Westminster but that there was a tree on the line at Bodmin, which sums up the issue of resilience.

Oliver Colvile (Plymouth, Sutton and Devonport) (Con): Is my hon. Friend aware that three trees have come down on the line?

Kevin Foster: I thank my hon. Friend for sharing with the House his superb knowledge of the vegetation on the Great Western main line in Devon and Cornwall. His point absolutely rams home the message that a tree falling over, a cow breaking out of a field, or a small amount of earth moving at a critical point can close huge parts of the network. That is why it is so important to hold this debate about resilience. In addition, the cross-country services have been cancelled at Dawlish again today. I must say that that is not due to the line but to a fault with the trains, but that again brings home to us the vulnerability of some key routes and networks on which many people depend.

I hope that this debate will not be about being negative and having a moan. We could all spend the next few hours whingeing and sharing our stories about various poor train journeys. One that sticks in my mind was when I and my hon. Friend the Member for Taunton Deane (Rebecca Pow) got on a train that had what was charmingly described as a “toilet spill”, which was particularly interesting. Being negative will not achieve anything: it may make us feel a bit better to get a dreadful journey off our chests, but it will not actually make a difference.

Mr James Gray (North Wiltshire) (Con): I am sorry to bring a disagreeable note into what has, so far, been an extremely agreeable debate. Of course we all love to moan and groan about our rail journeys, but I have travelled with First Great Western twice a week for 20 years and I find it extraordinarily good. We have criticisms of some things—the catering, the toilets and one or two other matters need to be sorted out—but overall, the punctuality and the service are extremely good.

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Kevin Foster: My hon. Friend is right that there are many positive stories to be told. Let us be blunt that a key one is the amazing legacy of innovative engineering we have been left by the Victorians. The Royal Albert bridge was built using innovative techniques and was a feat of engineering at the time. It created the link between Plymouth and Cornwall that exists to this day and carries trains far heavier than it was ever designed for. Box tunnel is now one of the most well-used tunnels. It was so innovative when it was built that there had to be a station at both ends, because some Victorian travellers were rather frightened of going through a tunnel, so there was the option of getting off the train, taking a horse and carriage ride around it and getting back on a train at the other end.

Mr Gray rose

Johnny Mercer (Plymouth, Moor View) (Con): I think my hon. Friend was there.

Kevin Foster: That is very ungentlemanly of my hon. Friend the Member for Plymouth, Moor View (Johnny Mercer). I give way to my hon. Friend the Member for North Wiltshire (Mr Gray) again.

Mr Gray: My hon. Friend is being very generous. Box tunnel is, of course, in my constituency. He will know that the only time one can see from one end of the tunnel to the other is once a year on Brunel’s birthday. [Interruption.] The Minister says that it is not true, but we believe it is true—I have seen it myself. More importantly, we think that we are close to reopening an important station at Corsham, which is at one end of Box tunnel. I hope my hon. Friend will agree that opening such stations along the route is extremely important.

Kevin Foster: Absolutely. I do not want to get involved in a cross-Wiltshire debate about tunnel openings and people’s birthdays, but it is important to think about the communities along the route. One reason why the theme of resilience is so important is that having a station is great, but if a train does not run at certain times, people do not have the service they want.

Let us be candid: this is the positive story of a network that stretches from London to Swansea, that runs through Cheltenham and Bristol, and that goes down to Penzance. It revolutionised a whole region that had been fairly isolated until the trains went through.

Over the past few years, we have seen huge growth in rail travel across our region, with many branch lines, particularly in Cornwall, seeing passenger levels that have not been seen for decades. All that is being delivered with the well-known limitations of the network in the area: the relatively old rolling stock, some of which has seen better days, and issues with the network in terms of resilience, signalling and other things that I will come to in a minute.

The point of this debate is not to share jokes or reminisce about poor train journeys, but to say that there could be an even more positive story in the future that would boost productivity and deliver more jobs and investment.

Scott Mann (North Cornwall) (Con): My hon. Friend’s constituency is very similar to mine in that it is very tourism-based. Does he agree that the more trains and branch lines we have in such areas, the better it will be for the tourism economy of the south-west?

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Kevin Foster: Absolutely. As I am sure my hon. Friend is aware, the early figures for the Borders railway that is being built in Scotland show higher than expected levels of usage. In St Ives, good park-and-ride services are crucial to the tourism industry. Having good trains makes for good tourism.

Mrs Sheryll Murray (South East Cornwall) (Con): Will my hon. Friend give way?

Kevin Foster: I will give way once more, but then I must make some progress so that I do not hog the time.

Mrs Murray: Does my hon. Friend agree that we should expand the existing park-and-ride services? In my constituency, there could be another park-and-ride station to the east of Bodmin Parkway to allow people from areas that do not have access to a railway station to commute and travel to places such as the city of Plymouth?

Kevin Foster: My hon. Friend is absolutely right that park and ride can play a huge part in giving rural communities in particular access to rail services via parkway-style stations. Looking at north-west Devon and north Cornwall, it might be an interesting project in years to come to provide parkway stations near the A30 as it comes into Devon, using the spur that heads towards Okehampton. That could provide a service to the area without competing with the Great Western main line in south Devon.

We must ask what investment can deliver. It is estimated that even a relatively modest improvement of 15 minutes in journey times between the south-west peninsula and London would deliver £300 million in increased productivity. However, this debate is not just about economics; it is about communities along the line and their needs for travel and growth.

I will not look to play our region off against another. Just as investment in Crossrail and new rail capacity in other parts of the UK will deliver for those communities over the next 10 to 15 years, delivering on the issues we are discussing can deliver for ours. It is worth bearing in mind the fact that investment in the Great Western railway supports other key projects across the UK. For example, the expansion of Heathrow as the UK’s hub will be supported by the western rail access. I hope the Minister sees the urgency of that.

Fiona Mactaggart (Slough) (Lab): Does the hon. Gentleman share my profound disappointment over the delays in the western rail access to Heathrow, which the Hendy review announced would be put back a further two years? This access will bring the biggest inward investment to the UK, as well as helping travellers from all over the west of England—

Huw Irranca-Davies (Ogmore) (Lab): And Wales.

Fiona Mactaggart: Indeed, and Wales. It will help those travellers to get to Heathrow—our premier hub airport. Will the hon. Gentleman press the Minister to ensure that, as a result of this debate, someone in her Department puts their foot on the accelerator of western rail access to Heathrow?