parliamentary debates - United Kingdom Parliament

0 downloads 225 Views 1MB Size Report
Jul 2, 2012 - such as e-mail exchanges and other background material. Will he ensure that .... the next Parliament and s
Monday 2 July 2012

Volume 547 No. 23

HOUSE OF COMMONS OFFICIAL REPORT

PARLIAMENTARY DEBATES (HANSARD) Monday 2 July 2012

£5·00

© Parliamentary Copyright House of Commons 2012 This publication may be reproduced under the terms of the Parliamentary Click-Use Licence, available online through The National Archives website at www.nationalarchives.gov.uk/information-management/our-services/parliamentary-licence-information.htm Enquiries to The National Archives, Kew, Richmond, Surrey TW9 4DU; e-mail: [email protected]

565

566

2 JULY 2012

House of Commons Monday 2 July 2012

Mr Pickles: My hon. Friend illustrates my point. I hope those families enjoy their new property and will come to see it as something that a different Government were able to deliver in a different way. Empty Shops

The House met at half-past Two o’clock PRAYERS [MR SPEAKER in the Chair]

Oral Answers to Questions COMMUNITIES AND LOCAL GOVERNMENT The Secretary of State was asked— Empty Homes 1. Stuart Andrew (Pudsey) (Con): What steps he is taking to promote refurbishment of empty and vacant [114385] homes. The Secretary of State for Communities and Local Government (Mr Eric Pickles): We have introduced a series of measures to get empty homes back into use, which are backed up by our commitment of £160 million of central Government funding. That is in contrast to the last Government’s pathfinder programme, which was more interested in bulldozing Victorian terraces than refurbishing empty homes. Stuart Andrew: I am grateful for that answer. Constituents of mine in Pudsey are extremely concerned about the deluge of recent planning applications on greenfield and protected area of search—PAS—sites, given that as of October 2011 the number of empty properties in Leeds stood at nearly 14,000. Does my right hon. Friend agree that it would be better to bring those homes back into use than to destroy our green spaces? Mr Pickles: I know my hon. Friend’s constituency well and am a frequent visitor there. He is right to point out the number of empty homes within the Leeds city boundaries, as it is one reason why we have been so keen to have the new homes bonus there, in order to bring long-term empty properties back into use. We would be doing well if we brought some of the fine architecture of Leeds—those wonderful terraced properties—back into use. Mr Philip Hollobone (Kettering) (Con): Will the Secretary of State congratulate Kettering borough council, of which I have the privilege to be a member, on its work with the Rockingham Forest Housing Association? They have recently spent about a third of a million pounds to bring three empty properties back into use, and now three families have homes that they did not have this time last year.

2. Andrew Gwynne (Denton and Reddish) (Lab): What steps he is taking to encourage use of empty shops not covered by the Portas pilot scheme or the high street innovation fund. [114386] 11. Bill Esterson (Sefton Central) (Lab): What steps he is taking to encourage use of empty shops not covered by the Portas pilot scheme or the high street [114397] innovation fund. The Minister for Housing and Local Government (Grant Shapps): Addressing the issue of empty shops is one of the priorities for the industry-led taskforce set up as a response to the Portas pilots. We are also encouraging landlords to make empty shops available for meanwhile use, and have introduced the community right to bid, to help local people sustain their vital community assets. Andrew Gwynne: The Portas pilot is a great boost for Stockport, and I have seen some of the good work done there, particularly during the recent “Love your local market” fortnight. However, there is a record number of empty shops in the town centres of this country—about 24,000. Just how many of those does the Minister expect to see filled as a result of the many initiatives that he has announced? Grant Shapps: As the hon. Gentleman will recognise, the Portas review suggested 28 different steps. We have accepted almost all those, and one of the things we added to the list was a £10 million fund that directly helped to bring empty shops back into use. That is £5 million more than was proposed by his party. Bill Esterson: Formby, Maghull and Crosby—three towns in my constituency—all bid unsuccessfully for the Portas cash. Sefton’s Labour council would like to help, but the scale of the cuts to local government make that almost impossible. What concrete support is the Minister going to give to revitalise our town centres, because the £10 million he mentions is not going to go far enough? Grant Shapps: Hon. Members know that active Members of Parliament are an extremely important asset in getting those town centres working again. A second round of Portas pilot bidding is to take place, which I will announce before the end of this month. That is still open to the hon. Gentleman’s three towns. In addition, I can report to the House that going forward we intend to support all the towns—more than 370—that have applied. Justin Tomlinson (North Swindon) (Con): What consideration has the Minister given to incentivise the take-up of empty shops by young entrepreneurs? Grant Shapps: I have been able to see some fantastic schemes in places such as Stockton, where the council has taken over a large double shop frontage, which entrepreneurs rent for just £10 a week. It then uses the

567

Oral Answers

2 JULY 2012

empty properties in the town centre to get these people into rentals after a few months when they have made their businesses a success. Those are the types of schemes that I have seen and that I am encouraging, and hon. Members can do an awful lot to persuade their local authorities to play ball. Ian Swales (Redcar) (LD): I am sure the Minister will join me in welcoming the big reduction in the number of empty shops on Redcar high street, but what can he do about the rigidity of the business rates system? In one case, business rates are five times the rent being sought by the landlord. Grant Shapps: Business rates are always a heavy cost and people like me who started our businesses in shops are familiar with that heavy burden. We have taken 300,000 of the smallest businesses out of paying any business rates at all and, in addition, we have spread the rise, which is only an inflation-level rise, for other businesses over up to three years. We will continue to look at ways to help businesses, and particularly the smaller shops, with their rates bills. Roberta Blackman-Woods (City of Durham) (Lab): What plans does the Minister have to assist areas with high shop vacancy rates, such as Grimsby, which has 28.3% vacant, West Bromwich, which also has 28.3% vacant, Stoke-on-Trent, which has 25% vacant, and Sunderland, which has 23% vacant? Those areas, so far overlooked for Government funding, have an average unemployment rate of more than 10%, which is way above average. Can we expect there to be more weighting towards disadvantaged areas in the next round of Portas pilots? Grant Shapps: One of the useful changes we have made through the Localism Act 2011 is to allow local authorities to vary the rates downwards, which means that local authorities can look at their high streets and try to help them. I rather brushed over a point earlier. Those on the Opposition Front Bench have previously called for £5 million to be spent on bringing those empty shops back into use—I remind the hon. Lady that those calls came from her own Front Benchers—and we have doubled that and spent £10 million to assist. Jane Ellison (Battersea) (Con): There would be fewer empty shops if small retailers in particular could spread their costs more evenly. I know that the Portas recommendation was that wherever possible people should move to monthly rather than quarterly rent. Will the Minister take this opportunity to encourage all landlords to look kindly at such an approach when it is suggested by their tenants? Grant Shapps: From my experience, as reflected in the 2007 leasing code, an awful lot of small things could make a big difference to smaller businesses. Finding the money to pay three months’ rent in a single go is enough to topple some businesses over, and smoother payments, fairer leases and not always having upwards-only rent reviews can all help. I am working with the industry, including the likes of the Royal Institution of Chartered Surveyors, to ensure that the leasing code is better implemented.

Oral Answers

568

Parish Polls 4. Charlie Elphicke (Dover) (Con): What discussions he has had with local authorities on reforming the electoral rules relating to parish polls; and if he will [114389] make a statement. TheParliamentaryUnder-Secretaryof StateforCommunities and Local Government (Robert Neill): I have regular conversations with local authorities on a wide range of issues, including electoral matters. Parish polls are the most local means of giving communities an opportunity to have their say by voting on a range of issues, from bus shelters and community centres to the installation of CCTV cameras. However, we recognise the current electoral rules are outdated and can be a barrier to local people’s participation in those polls. When an appropriate legislative opportunity arises, we will therefore reform the rules. Charlie Elphicke: I thank the Minister for that very positive answer. Such polls are not just used for bus shelters. We had a parish—or town—poll in Dover on the future of the port of Dover and 98% voted in favour of the people’s port community ownership model, which was the right way forward. The rules are that polls are open between 4 and 9 and there are no postal votes, no proxy votes and no poll cards. That discriminates against the elderly, the disabled and those who work. Does the Minister agree that we need change quite urgently? Robert Neill: I hope that I have shown that I am on the same side as my hon. Friend. I pay tribute to him for his work on the poll in Dover. He observes that some parish and town councils serve large populations. As the rules are set out in the schedule to primary legislation, we need a legislative means of reforming them, but we are looking for that. Community Assets 5. Guy Opperman (Hexham) (Con): What plans his Department has to offer support to communities seeking to purchase their local pubs or other assets of [114390] community value. TheParliamentaryUnder-Secretaryof StateforCommunities and Local Government (Robert Neill): The Government recently laid before the House the assets of community value regulations, which give communities a fairer chance to bid to take over local assets, including their local and valued pubs. We will also support communities that take up these rights, and details of a support package to achieve that end will be announced very shortly. Guy Opperman: Some of the finest pubs in the country are in Northumberland, including the one in Humshaugh in my constituency, which was saved by the local community. Does the Minister agree that it is a concern that soldiers were turned away from a pub down south last week? As Armed Forces day took place last weekend, including in my constituency of Hexham, does he also agree that pubs should be encouraged to accept soldiers at all times? Robert Neill: I congratulate my hon. Friend and his constituents on the initiative in Humshaugh. I have had the opportunity of visiting other community initiatives

569

Oral Answers

2 JULY 2012

in his area, including the Forum cinema, which has been very successful. On the point about the welcome to soldiers in our pubs, I, along with all other Members of this House, am horrified at such inappropriate and disgraceful treatment of men and women who, as we sadly learned again today, regularly put their lives on the line on behalf of our country. I note that the management of the premises in question have said that in the light of the public reaction, they will review their policy. I sincerely hope that they do; they ought to, and it ought to be changed. I hope that that is the message that all hon. Members present will send to them. Jonathan Edwards (Carmarthen East and Dinefwr) (PC): The continued decline of the local newspaper industry is of huge concern to Members on both sides of the House. Those publications are clearly community assets. What consideration has the Minister given to amending the Localism Act to protect those papers from the actions of predatory news groups? Robert Neill: Under the Localism Act, assets are defined in terms of property assets. However, the hon. Gentleman will know that one of the challenges to local newspapers sometimes comes from the use of taxpayer-funded propaganda sheets by local authorities. It is for that reason that the Government have strengthened the rules on transparency. I hope that he will join me in encouraging those overwhelmingly Labour-controlled councils that do not play by the rules on fair trading and transparency to come into line, because many of us think that they are deliberately trying to squeeze an independent voice of criticism out of those Labour-controlled areas. Greg Mulholland (Leeds North West) (LD): I welcome the community right to bid for pubs and other community assets, but does the Minister agree that unfortunately it will not be as successful as it should be while the loophole allowing the demolition of free-standing pubs remains, and while the right to bid allows pubs to be changed into things like betting shops and solicitors’ offices, with planning permission? Would it not be simpler to introduce a separate use class, so that the community always has a say when a pub is to be closed or demolished? Robert Neill: There are two points: first, the Government have indicated that they will look at the operation of the use classes order more generally; and secondly, the issue regarding demolition stems from a court definition of what counts as development, and that recently changed. Now a local authority has in its gift the ability to issue what is called an article 4 direction, removing deemed permissions in relation to various classes of development. That is an option that should be considered. So, too, is the option of neighbourhood plans, which could recognise the importance of local public houses and other community facilities. Indeed, the national planning policy framework strengthens the weight that can be given to such issues as material considerations. Social Housing 6. Gordon Henderson (Sittingbourne and Sheppey) (Con): What steps he is taking to increase the [114391] availability of social housing.

Oral Answers

570

TheParliamentaryUnder-Secretaryof StateforCommunities and Local Government (Andrew Stunell): The Government and the private sector are together investing £19.5 billion in an affordable homes programme that is set to exceed all original expectations. It will deliver up to 170,000 new homes for both rent and affordable home ownership. We are also spending £1.3 billion to get stalled developments back on track, and to build the infrastructure needed to unlock sites for housing. Gordon Henderson: I welcome the Minister’s comments, but in many coastal communities there is a surfeit of holiday accommodation in caravan and chalet park centres. If one of those sites closes down, it has to revert to agricultural use. Does he agree that it would make sense to redesignate caravan parks as brownfield sites to make it easier to develop them for affordable housing? Andrew Stunell: These are very much matters for the local plan, which is in the hands of my hon. Friend’s planning authority. I am sure that he will also be alert to the options in the neighbourhood planning system for local communities to seek a different designation, if that is appropriate. Mr Clive Betts (Sheffield South East) (Lab): I do not know whether the Minister is aware that according to figures from Shelter, in 2010-11 there were 104 new affordable home starts in Sheffield, including social rented housing starts. Assuming that he will put that down to the inadequate legacy of the previous Government, is he aware that in 2011-12, the number of new affordable starts fell to two, in a city of more than half a million people? Does he accept responsibility for that, and if so, what will he do about it? Andrew Stunell: The Homes and Communities Agency significantly exceeded its corporate plan target for last year. It delivered 51,665 new affordable homes, of which 33,000 were for social rent, and that is in very stark contrast with the Labour Government’s performance; they reduced the number of social homes available for rent by 421,000. Annette Brooke (Mid Dorset and North Poole) (LD): What steps is the Minister taking to ensure that houses sold under the right-to-buy legislation are replaced on a one-to-one basis? Andrew Stunell: My hon. Friend has been a lively campaigner for more social housing, and rightly so. It is an essential part of the coalition agreement on the right to buy that there will be a one-for-one replacement of every home sold, to provide a new social or affordable home. Mr Nick Raynsford (Greenwich and Woolwich) (Lab): I draw attention to my interest, as declared in the register. The House will have noticed that the Minister’s response to the question about the availability of social rented housing was to use a different term—affordable rented housing. Everyone knows that under this Government, social rented housing has virtually come to a halt. When will they recognise that affordable rented housing depends on very much higher rents, and when the Department for Work and Pensions is cutting housing benefit and the Prime Minister is encouraging

571

Oral Answers

2 JULY 2012

even deeper cuts in housing benefit, how can they possibly hope people on low incomes will be able to afford those rents, if social housing is not being provided? Andrew Stunell: The right hon. Gentleman once sat in my office and he will know that during his period of office he reduced the number of social homes available. In 2011-12 two thirds of homes completed—33,227—were social homes for rent. If he had paid more attention to getting a positive input of social homes during his period of office, we would not have such a deficit to fill now.

Oral Answers

572

Grant Shapps: I am grateful to my hon. Friend for giving me the opportunity to explain to the House that that new guidance makes it clear to his and every other local authority that this nonsense of people returning, often without a base back in this country because of the amount of time they have served overseas, and then not being able to apply for housing in their area because of some trumped-up allegation that they have no locality—in other words, that they do not have a residency requirement —is to end. That is what the guidance makes absolutely clear.

ChrisWilliamson(DerbyNorth)(Lab):ThisAdministration are presiding over the worst housing crisis in a generation. There has been a 97% collapse in new social housing starts and a 68% fall in affordable housing in the past 12 months. We have heard the Minister tell us that everything is fine and dandy, but nobody believes him. I cannot help wondering if he is modelling himself on Voltaire’s hopelessly optimistic Dr Pangloss or on one of George Orwell’s cynical apparatchiks, or is he just plain incompetent?

Andrew Bridgen: I have a constituent in the village of Belton, Mrs Kirsty Pett, who is a mother of four and has served in the armed forces, whose husband, a former Warrant Officer, was tragically killed in a motorcycle accident last year. She is currently on the council housing list and has been given medium priority, but she will lose her privately rented home in the very near future. Will my right hon. Friend confirm that Mrs Pett’s family, and indeed widows and children of all armed forces personnel, will benefit from the new changes to enable her to remain resident in her home village?

Andrew Stunell: The hon. Gentleman left off the correct response, which is that unlike him, I am supervising the development of more social and affordable homes. It was the Government whom he supported who cut the number of social and affordable homes by more than a quarter of a million. If his Government had performed properly in their period of office, we would not be facing that housing crisis now.

Grant Shapps: My hon. Friend raises an important point: when Army personnel return, that is one thing, but when they do not and their spouses are left to pick up the pieces, that is when this country owes them a real debt of gratitude. In the new statutory guidance, which was issued on Friday, I have ensured that the bereaved spouses of those who are serving and of reservists get top priority.

Armed Forces (Housing)

Karl McCartney: I thank my right hon. Friend for his reassuring earlier answer, which indicated that the Government are taking action to support veterans who have made sacrifices to defend our liberty. Many councils in the UK will be giving priority to former armed forces personnel who have urgent housing needs. Will he join me in calling on City of Lincoln council and North Kesteven district council in my constituency to follow suit?

7. Henry Smith (Crawley) (Con): What recent steps he has taken to support former members of the armed [114392] forces in respect of housing. 9. Andrew Bridgen (North West Leicestershire) (Con): What recent steps he has taken to support former members of the armed forces in respect of housing. [114395]

15. Karl McCartney (Lincoln) (Con): What recent steps he has taken to support former members of the armed forces in respect of housing. [114401] 19. Rebecca Harris (Castle Point) (Con): What recent steps he has taken to support former members of the [114405] armed forces in respect of housing. The Minister for Housing and Local Government (Grant Shapps): I am determined to help current and former members of the armed forces gain the housing they deserve. I have given service personnel priority for the Government’s affordable home ownership schemes, including Firstbuy, and on Friday last week I issued new statutory guidance to make it easier for service personnel to get access to affordable homes for rent. Henry Smith: I am pleased to hear that that guidance is coming forward because my local housing authority has up till now seemed to be confused about where it stands in relation to the military covenant and its obligations under it.

Grant Shapps: Yes, absolutely. In drawing up the criteria, we have made sure that councils need to provide that additional guarantee to those service personnel for some years after they leave the armed forces, so the residency criterion, for example, will not be placed against them for up to five years. Rebecca Harris: The whole House will welcome the new guidance to councils, particularly as it relates to social housing. The Minister alluded to support for those who wish to purchase their own home, and many people in my constituency of Castle Point would like to get on the housing ladder. Will he give me more information on what support there is for that? Grant Shapps: My hon. Friend is absolutely right. Of course, when many people come back from military service they want to start on the housing ladder by purchasing a home. I have extended the Firstbuy scheme by ensuring that a high preference is given to those people. In addition, we have sent personnel out to bases both in the UK and abroad to ensure that Army personnel know that they can apply to the Firstbuy scheme, for example, and hundreds have done so.

573

Oral Answers

2 JULY 2012

Affordable Housing Starts 8. Phil Wilson (Sedgefield) (Lab): What estimate he has made of the level of affordable house building starts in 2011-12. [114394] 18. Siobhain McDonagh (Mitcham and Morden) (Lab): What estimate he has made of the level of affordable [114404] house building starts in 2011-12. TheParliamentaryUnder-Secretaryof StateforCommunities and Local Government (Andrew Stunell): There were 15,698 affordable housing starts on site in 2011-12 delivered in England through programmes managed by the Homes and Communities Agency. Phil Wilson: If the Government’s record on affordable homes is so good, why has the number of households in bed and breakfast-style accommodation increased by 44%? Andrew Stunell: Many of these problems would have been a great deal easier if we had had an extra quarter of a million social and affordable homes, which is the reduction that the hon. Gentleman’s Administration produced. We have a social and affordable housing programme that will deliver 170,000 new affordable homes by 2015, and my right hon. Friend the Housing Minister has been very diligent in pursuing the point the hon. Gentleman raises. Siobhain McDonagh: There appears to be a discrepancy between the figures used by the Government and those used by the Homes and Communities Agency. Why does it suggest that there was a 68% drop in starts last year, and will the Minister be getting the chief executive of that august organisation in as soon as possible to clear it up? Andrew Stunell: The hon. Lady should not believe too much of what she reads on these matters—[Interruption.] Mr Speaker: Order. The Minister, as we always expect him to, is behaving like a gentleman, but the hon. Gentleman must be heard. Andrew Stunell: The fact of the matter is that the social and affordable housing programme is meeting an urgent need and we are pressing ahead with it vigorously. The issue that the hon. Lady raises must be seen in the context of the financial and housing situation we inherited from the previous Government. Robert Halfon (Harlow) (Con): Given what my hon. Friend said about right to buy and like for like in social housing, does he agree that the more people who take up the £75,000 discount, the more chance there will be for people to have affordable housing, and will he make every effort to encourage every council to offer that discount so that we can make affordable homes for the many, not for the few? Andrew Stunell: That is of course an important step, and the Minister for Housing and Local Government has also announced a consultation on “pay for stay” to ensure that those on very high incomes do not have the subsidised use of valuable social rented accommodation.

Oral Answers

574

Hilary Benn (Leeds Central) (Lab): I am not surprised that the Housing Minister has chosen not to answer these questions, given that the House knows he has a bit of a problem when it comes to statistics. Will the Under-Secretary explain how his right hon. Friend came to conclude that the huge decline in affordable housing starts this year—that is what the figures from his own Department show—were in his words “impressive” and “rapid and dramatic progress”? Andrew Stunell: It is certainly rapid and dramatic progress if someone inherits a situation in which they are going backwards. We are going forwards, and the Homes and Communities Agency housing delivery programme is on track and, in fact, in completion terms, ahead of its corporate plan. There is a cyclical financial profile, but the sector has risen to the challenge to deliver, and 146 providers will deliver 80,000 new homes for affordable rent and affordable home ownership, using Government funding of just under £1.8 billion. This means that we will be able to deliver even more homes for every pound of subsidy from the taxpayer. Hilary Benn: I am not surprised that the Minister is unable to answer the question, but the House should be keen to assist his right hon. Friend the Housing Minister in his difficulty. He has already had to be put straight by the UK Statistics Authority, and I suggest that he seeks the help of the Education Secretary and offers to take one of the new mathematics O-levels. I have a question: “If 49,363 affordable houses were started last year and only 15,698 affordable houses were started this year, should Grant describe this as: a) ‘a massive increase’; or b) ‘a 68% decline’? Please show your detailed workings.” Does the Under-Secretary not understand that every time his right hon. Friend does that, it is not just affordable house building that declines, but his credibility? When is the Secretary of State going to get a grip? Andrew Stunell: The right hon. Gentleman prays in aid the UK Statistics Authority, so if I may I shall very briefly quote this: “Official estimates of net change are available for social rented dwellings, but not for the wider stock of ‘affordable’ housing beyond this category. They show an overall reduction of 421,000 in the stock of homes rented from local authorities and housing associations over the period 1997 to 2010.”

That seems to me a horrific indictment of Opposition Front Benchers, and what Government Members are doing is repairing some of that damage. Park Homes 10. George Hollingbery (Meon Valley) (Con): What progress his Department has made in protecting the [114396] rights of people who live in park homes. The Minister of State, Department for Communities and Local Government (Greg Clark): The treatment of residents on many park homes sites is simply unacceptable, and I welcome the Select Committee on Communities and Local Government’s important report, which highlights widespread abuse. The Government will therefore offer their full support to the Mobile Homes Bill of my hon. Friend the Member for Waveney (Peter Aldous) in order to secure a better deal for residents.

575

Oral Answers

2 JULY 2012

George Hollingbery: I am grateful for the Minister’s reply. The inquiry took a good deal of evidence that criminal fraternities were making considerable inroads into the industry. Will he outline for the House what the proposed measures are going to do to rid that industry of such people? Greg Clark: I know my hon. Friend is a member of that Select Committee, and one of the most shocking things I found when I read the six volumes of written evidence that had been submitted was how many submissions had to be anonymous because the people giving evidence feared reprisals. It is completely unacceptable that bullies and thugs should intimidate some of the most vulnerable people in our society. The Housing Minister has published a consultation on the measures that are needed to deal properly with the problem and to drive out these rogues from the sector, including restricting their ability to block sales. Those measures will be reflected in our hon. Friend’s Bill, to which I hope the whole House will give its full support as it makes progress. Natascha Engel (North East Derbyshire) (Lab): I belong to the all-party mobile homes group, and we have been campaigning for years to strengthen the hand of local authorities to enforce properly the licences that protect people who live on park home sites. Will the Minister outline the specific powers that local authorities are being given to ensure that the powers that they do have are properly enforceable? Greg Clark: Now is not the time, because the Bill will be published, as well as the response to the consultation. However, the hon. Lady can have my reassurance that the Select Committee’s recommendations on strengthening the ability of local authorities to prevent the owners of park homes from denying the rights that every other home owner reasonably expects will be present in the Bill. Stephen Gilbert (St Austell and Newquay) (LD): I welcome the support that the Government will give to the private Member’s Bill promoted by my hon. Friend the Member for Waveney (Peter Aldous). However, does the Minister agree with me and the Select Committee that the Bill should include reserve powers for a fit and proper person test should the welcome steps that the Government are already going to take not deliver justice for residents? Greg Clark: As I said, the Government will respond to the Select Committee’s report. The Select Committee, of which my hon. Friend is a member, said that the measure would be a big change in the regulation of the sector and that the best thing would be to carry out a review in a couple of years to see whether the changes had had an effect. That approach seems sensible.

Oral Answers

576

The Minister for Housing and Local Government (Grant Shapps): The housing strategy outlines a range of initiatives designed to get the house building sector moving again and to provide opportunities for everyone. In particular, our NewBuy and FirstBuy initiatives are helping young people into home ownership and we are supporting that with institutional investment in the private rented sector. Mr Sheerman: Is the Minister sure that that will help 18 to 25-year-olds? There is a crisis out there of young people with nowhere to live. The issue is not just about housing benefit; I believe that all benefit should be linked to education and employment. But the fact is that there is a crisis and there does not seem to be much imagination on the Minister’s part. Grant Shapps: The hon. Gentleman is absolutely right to point out that the crisis is very real and we believe that it has been brewing over a long period. By the way, it is about a lot more than simply housing; if we look at the lives of people in chaos, we always find educational problems and family breakdown, and often financial crises are involved. A lot of work is going on across the Government, including the ministerial working group, which brings together eight different Departments. Our next report, which the hon. Gentleman can look forward to, will be published before the summer and will tackle that exact issue. Jack Dromey (Birmingham, Erdington) (Lab): Under Labour, homelessness fell by 70%. Under this Government, 1 million people are out of work; house building is falling; homelessness is rising rapidly; and now there is the proposal to punish young people who leave home to find a job or get an apprenticeship by making them lose their housing benefit and therefore the roof over their head. The measure was described as “absurd” by the YMCA because it will drive up homelessness and close the facilities that support those people. The Minister for Housing and Local Government has said that homelessness is what brought him into politics. Is it not becoming increasingly clear that his legacy will be rapidly rising homelessness and should he not concentrate on not making a bad situation worse, but on building homes, creating jobs and driving down homelessness? Grant Shapps: From the great passion with which the hon. Gentleman speaks, one would imagine that he had a long-term interest in this issue; in fact, he is the eighth Labour shadow housing Minister whom I have faced. During the time the Opposition have been in place, guess how many Opposition day debates there have been in the Chamber about this important subject? Zero, none—there has not been a single such Opposition day debate. That is because the hon. Gentleman has a very loose relationship with statistics himself. Homelessness is lower than it was in 28 of the last 30 years—and it is less than half the level it was in the 13 years of his Government.

Housing (Young People) Negative Equity (North of England) 12. Mr Barry Sheerman (Huddersfield) (Lab/Co-op): What steps he is taking to increase opportunities for young people between the ages of 18 and 25 to find [114398] suitable housing.

13. Graham Jones (Hyndburn) (Lab): What assessment he has made of the level of negative equity in the north [114399] of England.

577

Oral Answers

2 JULY 2012

TheParliamentaryUnder-Secretaryof StateforCommunities and Local Government (Andrew Stunell): A Council of Mortgage Lenders report in 2011 suggests that, as of the first quarter of that year, 827,000 UK households were in negative equity. That includes nearly 300,000 in the north of England. The organisation also reported that there were 36,200 repossessions that year—the lowest annual total since 2007. Graham Jones: In its report on home ownership, Standard & Poor’s says that rates of negative equity in the north-west and the north-east are four times higher than those in London. Obviously those areas were disproportionately hit by the Government’s cuts, and unemployment is rising. There are hard-pressed families in these regions struggling to pay their mortgages. What help is the Minister going to give them? Andrew Stunell: I remind the hon. Gentleman that negative equity becomes a problem if people cannot pay their mortgage. Mortgages are affordable at the moment because of the fiscal and financial policies that this coalition Government are pursuing. Interest payments on mortgages are at the lowest level as a proportion of total income since records began. I invite him to consider how many repossessions in the north of England would result if we had the bond rates of the Italians or the Spanish, and therefore how important it is for this Government to remain steadfast on their fiscal programme. Stephen Mosley (City of Chester) (Con): Does the Minister agree that the way to encourage a successful housing market in the north of England is to encourage the growth of sustainable, private sector-led jobs in that region? Andrew Stunell: Yes. Dame Joan Ruddock (Lewisham, Deptford) (Lab) rose— Mr Speaker: Lewisham, Deptford is some considerable distance from the north of England, to which nevertheless the observations of the right hon. Lady will certainly relate. Dame Joan Ruddock: I hope to be in order, Mr Speaker, by pointing out that despite what my hon. Friend the Member for Hyndburn (Graham Jones) said about the north of England, Lewisham has the fourth highest rate of repossessions in England. There are 17,000 homeless people on our housing waiting list. What advice would the Minister give to those of my constituents given the misery that they are facing through losing their homes— their most precious possession? Mr Speaker: I am a tolerant and obliging fellow and I wanted to hear the evidence, but there is nothing to which the Minister should respond on the Floor of the House, because the question relates to the north of England and he did not expand it. However, the right hon. Lady’s observations are on the record. Mr Barry Sheerman (Huddersfield) (Lab/Co-op): She is a dame!

Oral Answers

578

Mr Speaker: The hon. Gentleman says that she is a dame, but even dames must play by the rules, and that is not disputed. New-build Homes 14. Fiona Mactaggart (Slough) (Lab): What his most recent estimate is of the number of homes to be built in the south-east in the next five years and of the proportion of such homes that will be let at affordable [114400] rents. TheParliamentaryUnder-Secretaryof StateforCommunities and Local Government (Andrew Stunell): We do not forecast levels of future house building. However, taking into account delivery in the first term of this Government, up until March 2015 we expect to deliver 107,000 affordable homes in London and east and south-east England through the Homes and Communities Agency programme and the Greater London authority. Of those, over 37,000 are expected to be for affordable rents. Fiona Mactaggart: I am rather confused by that answer, because the Minister has just said that he does not forecast numbers of new homes but in an earlier answer he forecast 170,000 new homes. I do not know when a forecast is not a forecast. May I tell him what the housing situation is like on the ground, because his responses so far have not revealed it properly? In Slough, 43 affordable new homes have been started, down from 103. I have had more inquiries about housing this year than in any year since I was elected in 1997. We have nearly 300 people whose homes have been repossessed. [Interruption.] If I could come to the question— Mr Speaker: Order. I think that the hon. Lady wants to know what the Minister is going to do about the situation. Fiona Mactaggart: May I specifically ask the Minister what he can offer to people in a situation where there are more people on the housing waiting list in Slough than there are affordable homes? Andrew Stunell: The hon. Lady made up in volume what she lacked in common sense. Fiona Mactaggart: That is out of order. Mr Speaker: Order. There is no breach of order. [Interruption.] Order. I must say to the hon. Lady that the Minister is not out of order. I do not think she should take offence, as the Minister did not mean to be offensive in any way; he was being light-hearted and jocular, as we all seek to be. Andrew Stunell: If it assists in our proceedings, I am happy to withdraw the comment. I fully acknowledge that we need more social and affordable homes. That is why we have a programme that is adding to the stock of social and affordable homes. I say to the hon. Lady that Slough will end up with more social and affordable homes in 2015 than there were in 2010, unlike the period in which Labour ran this country and its housing policy. Mr Speaker: I want other Back Benchers to get in.

579

Oral Answers

2 JULY 2012

Council Tax 16. Mr Adam Holloway (Gravesham) (Con): What the percentage change was to average band D council tax bills in real terms in (a) England and (b) Gravesham constituency over financial years 2010-11 and 2011-12. [114402]

The Secretary of State for Communities and Local Government (Mr Eric Pickles): Thanks to the council tax freeze, over the last two years, council tax bills have fallen by 1.4% in Gravesham and 4.4% across England in real terms. That is real help for families and pensioners with the cost of living. Mr Holloway: I thank the Secretary of State for his answer. I will ask my question in a very calm manner. The majority of councils in Kent have frozen their council tax. Is he disappointed that in Gravesham it has risen by 3.48%, which is just below the 3.5% threshold for a referendum? Mr Pickles: Gravesham has joined the small, select list of council tax dodgers. If it was felt that the council tax should go up, it would have been sensible to put it to the people of Gravesham, who no doubt would have given it their consideration. Wind Turbines 17. George Freeman (Mid Norfolk) (Con): What steps his Department is taking to promote small wind [114403] turbines within the planning framework. The Minister of State, Department for Communities and Local Government (Greg Clark): Following the requirements of a private Member’s Bill in the last Parliament, the Government have introduced permitted development rights for domestic installations of small-scale renewable energy projects. George Freeman: Does the Minister agree that although not all communities are keen for large-scale wind generation in their area, many small businesses, families, households and neighbourhoods are keen on small wind-powered generating turbines, such as those supplied by the excellent Windcrop in my constituency, as part of the microgeneration revolution that the Government are promoting? What assurance will he give the House that the Government will continue to promote that popular brand of microgeneration from small, local wind projects? Greg Clark: I am aware that the firm to which my hon. Friend refers creates valuable jobs in his constituency. He will also know that Norfolk, like other places in the country, attracts tourists, so it is right to maintain the quality and character of the landscape. The new permitted development regulations give some latitude to householders, but not in a way that will destroy landscapes. Topical Questions T1. [114410] Teresa Pearce (Erith and Thamesmead) (Lab): If he will make a statement on his departmental responsibilities.

Oral Answers

580

The Secretary of State for Communities and Local Government (Mr Eric Pickles): On Thursday, I spoke to the Local Government Association annual conference. I announced our intention to make it easier for councils to abolish chief executive posts without having to hand out massive payouts, welcomed the £430 million in bids for the new weekly collection schemes, and noted the next stage of town hall transparency in which new rules will require councils to declare their trade union funding and their interests. In the interests of bipartisanship, I pay tribute to the hon. Member for Warrington North (Helen Jones), who courageously put down questions on council tax collection and exposed the inability of Labour councils to collect council tax. Teresa Pearce: Shelter has advised me that my borough of Bexley has one of the highest proportions of home owners at risk of repossession in England. What funding and advice does the Secretary of State intend to give Bexley so that it can cope with that risk? Mr Pickles: I am sure that the hon. Lady will recognise that repossessions are at their lowest since 2007. The most important thing that we can do to help people is to ensure that interest rates are kept at a reasonable level. That is what the Government have done. An increase of 1 percentage point would add £1,000 to the costs faced by her constituents and put more people at risk. T2. [114411] Priti Patel (Witham) (Con): The Minister will be aware of the excellent representations by the Witham town centre team to bring a Portas pilot to Witham. Will he congratulate that team on their vision and, importantly, support them in bringing that vision to Witham town centre? The Minister for Housing and Local Government (Grant Shapps): I am aware of the excellent Portas pilot bid by my hon. Friend’s town team. I wish it well, along with the other 350 or so bids that are still in the competition. As I mentioned, an announcement will be made before the end of this month. Helen Jones (Warrington North) (Lab): Properly targeted and funded family intervention works, so why have the Government introduced a half-baked scheme based on research that fails to distinguish between poor families and those involved in antisocial behaviour? Why do they refuse to give details of their cost estimates on the spurious grounds that the spending of public money is commercially sensitive? Is it not because they want to disguise the fact that they have slashed services such as Sure Start and youth intervention programmes, which really make a difference, and the fact that councils will get back only a tiny fraction of the millions that they have already lost? Mr Pickles: I would have thought the hon. Lady would have been a little bit more jolly, considering that I congratulated her on the great work that she has been doing on behalf of the Government. I am very surprised at the hon. Lady, because we would not have been able to help troubled families without the intensive help of Labour councils. The big difference between what we are doing now and what she suggests is that we are allowing councils to come up with their own schemes and methodologies. All that we

581

Oral Answers

2 JULY 2012

are interested in is the outputs. Frankly, she should congratulate all those who have worked hard, because we can now identify the correct families, three months ahead of when people expected us to be able to do so. T6. [114415] Andrew Bridgen (North West Leicestershire) (Con): Has the Minister had a response from the UK Statistics Authority to the letter from the shadow Housing Minister, the hon. Member for Birmingham, Erdington (Jack Dromey), about net losses in social housing? Grant Shapps: Yes, I can report to my hon. Friend and the House that I have had a response from the UKSA. The hon. Member for Birmingham, Erdington (Jack Dromey) pleaded in his letter for an answer on whether I was right to say that the reduction in affordable homes for rent under Labour was 45,000 or 200,000. I am pleased to say that the UKSA wrote back to both him and me and confirmed that the figures showed an overall reduction of 421,000 homes for social rent during Labour’s time in office—a disgrace, and in stark contrast to the 170,000 that we will be building over the next three years alone. T5. [114414] Kate Green (Stretford and Urmston) (Lab): There has been a 40% reduction in homelessness services for women between 2011 and 2012. As the number of homeless people increases and the services available to support homeless women reduces, what will the Minister do about it? Grant Shapps: As the hon. Lady will know, I bring together eight Departments in a working group on homelessness and its causes. Our next report is very likely to be on the precise issue of the women who make up a subsection of people who are homeless. It is worth bearing in mind that one of the first things the Government did was to change the disgraceful rules that prevented the number of homeless people from being properly registered under the previous system. It is also worth knowing that the level of homelessness is less than half the average under the previous Administration. T7. [114416] Sir Tony Baldry (Banbury) (Con): Will my right hon. Friend consider working with Cherwell district council, myself and others to make Bicester a garden city? The Minister of State, Department for Communities and Local Government (Greg Clark): First, I congratulate my hon. Friend on his knighthood, which is thoroughly deserved. We have heard that being a dame accords a Member no special privilege, but my hon. Friend commands the respect of the House uniformly. I am very happy to work with my hon. Friend. The difference between this Government and the previous Government is that such things are entirely up to the local authority, but we will do everything that we can to help that fragrant corner of Oxfordshire become a garden city. Simon Danczuk (Rochdale) (Lab): Rochdale is a hot spot for home repossessions and homelessness. Does the Minister accept that there is a link between the bankers’ LIBOR scandal and such problems?

Oral Answers

582

Grant Shapps: All the research into homelessness proves that there are a lot of different causes, and LIBOR may be a contributory factor if it transpires that mortgage rates have been adjusted as a result. The hon. Gentleman takes a considerable interest in the matter, and I am sure he will be pleased to note, as we are, that repossessions last year fell to their lowest level since 2007. Low interest rates have been a very important reason for that falling number. T8. [114417] Gordon Henderson (Sittingbourne and Sheppey) (Con): One of my constituents recently asked our local planning department whether he needed planning permission to erect a shed for his mobility scooter. The planning officers refused to answer his question and insisted that he had to submit a form and pay a £75 fee to determine whether the shed was covered by permitted development rights, which it was. Does my right hon. Friend agree that it is wrong for local authorities to charge for simply clarifying planning rules? Mr Pickles: Yes. The man should get his money back. Mr Nicholas Brown (Newcastle upon Tyne East) (Lab): The Minister will know that more rain fell on Newcastle upon Tyne and the surrounding areas in a few hours last Friday than would normally fall in the whole month of July. The resulting floods damaged businesses, people’s private homes and the transport infrastructure. Ministers will want to join me in thanking the local authority employees, who responded magnificently, and the emergency services more generally for their response. Will the Secretary of State look again at the Bellwin formula to see whether it works reasonably? It is an old formula, and possibly ripe for revision to deal with exceptional circumstances of that kind. Mr Pickles: The right hon. Gentleman will be very familiar with Bellwin and the formula and he is right to praise the emergency services and local people. I have spoken to friends in the area, and I know the events were traumatic. I recall the enormous damage and wreckage—both physical and psychological—caused by a flash flood in my constituency a few years ago. The Government have not yet received an application under the Bellwin rules, but I can assure him that when it comes, we will look at it most sympathetically in terms of the formula. T10. [114419] Amber Rudd (Hastings and Rye) (Con): A woefully inadequate number of new houses were built in Labour’s 13 years in government. What progress is being made on new houses in areas such as Hastings and Rye, so that young people have a chance of getting on the property ladder? Grant Shapps: The good news is that programmes such as NewBuy, which allows people to get a 95% mortgage once again, will help people in Hastings and across the country, as will programmes such as Firstbuy, which is on track to deliver more than 10,500 homes. The record low interest rates will also help people, as long as they continue and as long as we ensure that the deficit is not allowed to balloon. Mr George Howarth (Knowsley) (Lab): On social housing, does the Minister agree that it would make a lot of sense if priority were given to the building of

583

Oral Answers

2 JULY 2012

bungalows for rent, which would assist the elderly or those who have mobility problems and free up two and three-bedroom family social rented houses for those on the waiting lists? Grant Shapps: I absolutely agree with the right hon. Gentleman—that is a very sensible approach, as is ensuring that the right to buy is available. Right to buy frees up the home lived in by the occupant who has had the opportunity to reach the aspiration of purchasing their own home. The cash is then used to build another home to take somebody off the record waiting lists we were left by Labour. DuncanHames(Chippenham)(LD):CherishChippenham’s bid for a Portas pilot will be even more competitive in the second round, which I am delighted the Minister will announce later this month. We have heard that some places consider their high streets to be in a more dire situation, but does he agree that there is far more to the important criterion of potential for improvement than simply a statistical vacancy rate? Grant Shapps: My hon. Friend is absolutely right. A vibrant town centre requires all sorts of things to bring people in to shop there. He will be interested to know that not only will the second round be announced before the end of the month, but so will a £1 million prize for the most improved town centre. That does not have to be one of the Portas pilot—it can be any town centre. Every single one of the towns that apply will enjoy the support of the Government. Mr Andy Slaughter (Hammersmith) (Lab): Hammersmith and Fulham’s housing strategy involves plans for 22,000 new homes in three opportunity areas. That should be good news for the 10,000 local families waiting for social housing, but not one of those 22,000 homes will be a social home for rent. Is it the Government’s housing policy that my constituents have to move out of London if they want an affordable home? Grant Shapps: I know the hon. Gentleman has never quite got over his days as Hammersmith and Fulham housing lead, even though Hammersmith and Fulham is now doing a phenomenal job, delivering far more homes than were available under the Labour administration. I am sure those of the 170,000 homes for affordable rent that are in Hammersmith and Fulham will be enjoyed by the constituents there.

Oral Answers

584

Mr Aidan Burley (Cannock Chase) (Con): I welcome my right hon. Friend’s announcement last Thursday that he will change the law in order to require councillors to declare union support and donations as pecuniary and therefore prejudicial interests. Did he receive representations from the Labour Front-Bench team against these proposals when the statutory instrument came in this month? If not, would their union paymasters be justified in thinking them asleep on the job? Mr Pickles: This matter—not whether Labour has been asleep on the job but the amount of union involvement with councillors—is of enormous concern. We are taking the moderate and reasonable approach of saying, “We support unions and it is wonderful that they support the Labour party, but we would like to know and it should be a matter for public disclosure.” Given that it is so uncontroversial, I am sure it will receive support throughout the House. Jeremy Corbyn (Islington North) (Lab): Is the Minister aware of the housing crisis throughout central London in the private rented sector, with rents rising well above inflation, housing benefit being capped or cut, and many families being evicted and communities broken up? Is it not time that we lifted the housing benefit level and introduced strict regulation of the private rented sector to preserve families and communities in the inner-city parts of the country? Grant Shapps: It is absolutely the case that rents are not well served by caps at all, and when in place they enhanced neither rental levels nor the quality of properties. For example, the housing market shrank to 8% with rent caps. There is no advantage to introducing rent caps. Without them, the market has expanded again to 16%, serving people in London and elsewhere far better. Mr Speaker: Last but not least, I call Helen Grant. Mrs Helen Grant (Maidstone and The Weald) (Con): Are the Government’s excellent proposals for troubled families being embraced by local authorities throughout the country? Mr Pickles: I am delighted to report that all 152 principal local authorities signed up last month. I am also delighted at the amount of progress being made and delighted that at least some Opposition Members have been more than helpful. It is our first big chance to do something about this serious situation.

585

2 JULY 2012

EU Council 3.32 pm The Prime Minister (Mr David Cameron): I am sure that, like me, the whole House will be deeply saddened by the deaths of three British servicemen in Afghanistan yesterday. These brave soldiers were demonstrating great courage to prevent Afghanistan from once again becoming a haven for international terrorists and therefore to help keep us safe here in the UK. The suspected perpetrator is in custody, and we will do everything in our power, with the Afghan national security forces, to ensure that justice is done. This tragic incident again demonstrates the very real risks that our soldiers face every day, and we will learn all the lessons that arise from it. I know that everyone in the House will want to send their support to our brave troops and their families at this difficult time. Britain had three objectives at last week’s European Council: first, for eurozone members to take the urgent action needed to deal with the immediate crisis; secondly, to secure a comprehensive growth package firmly focused on Britain’s priorities; and thirdly to send a clear message to the rest of Europe about what we expect from the budget negotiations to come. I shall deal with each before turning to future policy and the Government’s response to the banking scandal. First, on the eurozone, Britain has been clear that in the short term we want urgent action by eurozone countries and authorities to defend their currency and deal with the instability. In the longer term, we recognise that the remorseless logic of a single currency means that the eurozone may need closer economic and fiscal integration. Britain is not in the euro, and we are not going to join the euro, so we should neither pay for short-term measures nor take part in longer-term integration. The summit made some progress. On shorterterm measures, eurozone members agreed to use the bail-out funds to support intervention in bond markets; to put eurozone money directly into struggling banks; and to ensure that official loans to Spanish banks would not be given preferential treatment over private sector loans. Under the last Government, we could have been liable for financial support for these measures, as members of the EU bail-out fund, but this Government have repatriated that power so that the British taxpayer is not involved. On longer-term issues, eurozone members agreed important steps towards closer integration following a discussion of a report by the President of the European Council and others. It is vital for Britain—and, we would argue, for the strength and prosperity of the whole European Union—that they do this in the right way. We therefore secured agreement that as this work goes ahead, the “unity and integrity of the single market” will be fully respected. On the specific proposal of a banking union, we ensured that Britain will not be part of any common deposit guarantees or under the jurisdiction of any single European financial supervisor. I am very clear that British taxpayers will not be guaranteeing any eurozone banks, and I am equally clear that, while we need proper supervision of our banks, British banks should be supervised by the Bank of England, not by the European Central Bank. The original draft of the growth compact included a whole section on economic and monetary union which implied that a banking union

EU Council

586

might apply to all 27 countries. A number of countries worked together to ensure that that whole section of the growth compact was removed. Our second objective involved growth. The growth programme includes commitments to deal with weak lending, including through an increase in funds for the European Investment Bank. Alongside this are clear commitments to complete the single market in areas such as services, energy and digital, in which Britain will be one of the prime beneficiaries. The agreed plan included dates and times by which those steps should be concluded. We also agreed to go ahead with the European patent court. Businesses have complained for decades that they needed 27 patents to protect their intellectual property. That problem will now be solved. In finalising the agreement, Britain had two objectives: that the new patent should be redrafted so that it did not get snarled up in the processes of the European Court of Justice, and that a significant part of the court, covering pharmaceutical and life science industries, would be based in London. I am pleased to say that we secured both those outcomes. That will mean millions of pounds and hundreds of jobs for Britain. Our third objective involved the EU budget for the next seven years. We want a budget that is focused on growth, not a focus on growth in the budget. EU members as a whole are ¤3.5 trillion more in debt now than when the last EU budget was negotiated. We have to face up to that tough reality. I made it clear that without the British rebate, we would have the largest net contribution in the EU as a share of our national income. Without our rebate, our net contribution would be double that of France and almost one and a half times bigger than that of Germany. So the British rebate is not up for renegotiation. It is fully justified. On foreign policy, the Council welcomed the EU oil embargo against Iran, which came into force yesterday. On Syria, we called for united action by the United Nations Security Council to place more robust and effective pressure on Assad’s regime, including the adoption of comprehensive sanctions. Europe is changing rapidly and fundamentally, and that presents real challenges for all countries. Those inside the eurozone have to face fundamental choices about whether to limit their national democracy and provide financial support to the weaker members. And like others outside the Eurozone, we in Britain also face big choices. As Europe changes to meet the challenges of the eurozone, so our relationship with Europe will change, too. There are those who argue for an in/out referendum now. I do not agree with that—[Interruption.] I do not agree with that because I do not believe that leaving the EU would be best for Britain. Nor, however, do I believe that voting to preserve the exact status quo would be right. As I wrote yesterday, I do not believe that the status quo is acceptable, but just as I believe it would be wrong to have an immediate in/out referendum, so it would also be wrong to rule out any type of referendum for the future. The right path for Britain is this. First— [Interruption.] Mr Speaker: Order. Members are a little over-excitable. They must calm themselves, and the Prime Minister’s statement must be heard.

587

EU Council

2 JULY 2012

The Prime Minister: First, we must recognise that, in the short term, the priority for Europe is to deal with the instability and chaos. Secondly, over time, we must take the opportunities for Britain to shape its relationship with Europe in ways that advance our national interest in free trade, open markets and co-operation. As I argued yesterday, that should mean less Europe not more Europe, less cost, less bureaucracy, and less meddling in the issues that belong to nation states. Thirdly, all party leaders will have to address the question. It follows from my argument that, far from ruling out a referendum for the future, as a fresh deal in Europe becomes clear, we should consider how best to get the fresh consent of the British people. Finally, as I have said, as the eurozone moves towards a banking union, we must ensure that Britain takes responsibility for sorting out its own banking sector. On the unfolding banking scandal here in the UK, we need to take action right across the board, including introducing the toughest and most transparent rules on pay and bonuses of any major financial centre in the world, increasing the taxes that banks must pay, ensuring tough civil and criminal penalties for those who break the law and, above all, clearing up the regulatory failure left by the last Labour Government. The British people want to see two things: they want to see bankers who acted improperly punished; and they want to know we will learn the broader lessons of what happened in this particular scandal. On the first, the Serious Fraud Office is looking at whether any criminal prosecutions can be brought, and at whether the full force of the law is being used in dealing with this. On the second, I want us to establish a full parliamentary committee of inquiry involving both Houses, chaired by the Chairman of the House of Commons Treasury Select Committee. This committee will be able to take evidence under oath; it will have full access to papers, officials and Ministers, including Ministers and special advisers from the last Government; and it will be given by the Government all the resources it needs to do its job properly. The Chancellor will be making a full statement, but this is the right approach, because it will be able to start immediately, it will be accountable to this House and it will get to the truth quickly, so we can make sure this never happens again. I commend this statement to the House. 3.40 pm Edward Miliband (Doncaster North) (Lab): I am grateful to the Prime Minister for his statement. On the tragic news from Afghanistan, all our thoughts are with the family and friends of the soldiers concerned. The news reminds us once again of the risks our troops face—day in, day out—and of our duty to do everything we can to protect them. Let me start with the Prime Minister’s announcement on the banking inquiry. It is right for him to reconsider the position of last week on the need for a full inquiry. I welcome that recognition. I have to say, however, that I am not convinced by his way forward because I do not believe it measures up to the scale of what is required. However able or distinguished they are, politicians investigating bankers will not command the consent of the British people. People are understandably angry about the way their banks let them down, and I do not

EU Council

588

believe that the proposed way forward is the way we can build the consensus required for real change. After all, there have already been a number of Select Committee reports into the banking crisis. I appreciate that the Leveson inquiry has been uncomfortable for politicians on all sides, but that is the way it should be. We will continue to argue for a full and open inquiry, independent of bankers and independent of politicians. That is the only way, in my view, that we can rebuild trust in the City of London and financial services. Turning to the European Council itself, let me associate myself with what the Prime Minister said on Syria. Agreement—but, in truth, little progress—was reached at Geneva on Saturday, and the divisions within the international community on this issue mean that too little is being done to bring the escalating violence to an end. In that context, will the Prime Minister update the House on the position of Russia, which is clearly imperative in this regard, on a future for Syria without President Assad. Turning to the main issues of the summit, it took place against a backdrop of the continuing crisis in the eurozone, a faltering global recovery and a double-dip recession here in the UK. The central challenge, then, was how we can have a Europe not of austerity and unemployment, but of jobs and growth. I am afraid to say that on that central issue, the Prime Minister cannot be part of the solution because he is part of the problem. On growth, the Prime Minister used an instructive phrase in his post-summit press conference, when he said: “Just as we have to tackle the euro crisis, so we have to tackle the growth crisis”.

Having at last admitted that there is a growth crisis, he added: “Britain has been driving this debate.”—[Laughter.]

I do not think it was meant as a joke, but it suggests someone quite out of touch with reality. As he was speaking, the figures were coming in, showing the doubledip recession, created by him in Downing street, was worse and deeper than we thought. The UK is one of only two countries in the G20 in double-dip recession. There can be no solution to the growth crisis unless we tackle the crisis of demand in the European economies and globally? Will he tell us whether he advocated at this summit any measures to tackle the crisis of demand in the European economy, as well as the long-term measures he mentioned? The Prime Minister talked about the banking regulator. How will he use his popularity and influence in Europe to secure specific legal safeguards between now and December’s final proposals to protect the very important British interest in the single market? He then talked about the patent court, and said, with his customary humility, that the outcome showed that he was succeeding. Only this Prime Minister could pretend, having argued that the court’s headquarters should be in London, that it was a diplomatic triumph that it had ended up being based in Paris. As for the eurozone and bank recapitalisations, it is welcome that direct help can be provided for eurozone banks, but does the Prime Minister really believe that the funds that eurozone countries are making available are adequate? There are many reasons to believe that that is not the case.

589

EU Council

2 JULY 2012

Finally, there is Europe and the Prime Minister’s position—or should I call it his weekend hokey-cokey? On Friday, he ruled out a referendum. He said: “‘I completely understand why some people want an in/out referendum… I do not think that is the right thing to do..”

Hours later—what a coincidence—100 Back Benchers and the former Defence Secretary called for an in/out referendum. Then, hey presto, on Sunday—[Interruption] —the Prime Minister hinted that he might rule one in. Then the Foreign Secretary—[Interruption.] Mr Speaker: Order. I said that Labour Back Benchers should not be yelling when the Prime Minister was speaking, and the same applies to Government Back Benchers. I do not care what they are exhorted or encouraged to do from any quarter; it is not proper behaviour, and however long we have to continue, it is not going to happen. That is the beginning and the end of the matter. Edward Miliband: Then the Foreign Secretary was sent out to say on television: “The Prime Minister… is not changing our position.”

Three days, three positions. First it was no, then it was yes, and then it was maybe. Can Members on both sides of the House have some clarity about the Prime Minister’s position? First, has there been a change in the Government’s position, yes or no? Secondly, the Prime Minister talked of a referendum being connected to the renegotiation of powers. To be fair to him, his position on renegotiation is long-standing, not least because he has got nowhere in negotiating it, but is he now saying that he may be in favour of withdrawal from the European Union if he does not get these powers? That would be a new position. It would be helpful—and I am sure that his Back Benchers would like it too—if we could have a “yes” or “no” answer to that question as well. Thirdly, can the Prime Minister explain this? Last October, he said in the House: “there is a danger that by raising the prospect of a referendum… we will miss the real opportunity to further our national interest.”— [Official Report, 24 October 2011; Vol. 534, c. 27.]

So why is he doing it now? We all know the answer to that question. It is not to sort out the crisis of growth, it is not to tackle youth unemployment, and it has nothing to do with the national interest. It is all about managing the divisions in the Prime Minister’s own party. But a nudge-nudge, wink-wink European policy is not good for the country, nor will it keep his party quiet. Five years ago, the Prime Minister said that his party should stop banging on about Europe, but now he is the man getting out the drum. As John Major could have told him, it is not going to work. We have a veto that never was, a referendum that the Prime Minister cannot explain, a party talking to itself, a Prime Minister who is managing his party rather than leading the country, and a Government who are letting Britain down. The Prime Minister: Let me start with the right hon. Gentleman’s questions about the inquiry into the banking scandal. I think that what he said was rather demeaning to Parliament, the House of Commons and the House of Lords. I see no reason why Parliament cannot get to

EU Council

590

the bottom of this if we take the best and brightest from both Houses and all parties, and there are few better people to do that than my hon. Friend the Member for Chichester (Mr Tyrie), who has considerable expertise. The key point, however, is that this needs to be done speedily. The Vickers Bill—the banking Bill—will be introduced in the House of Commons in January, and I want an inquiry to be completed by then so that we can take the best of that inquiry and put it in the Bill. I think that that is the right thing to do. Ed Balls (Morley and Outwood) (Lab/Co-op): It is what you tried to do on Leveson. The Prime Minister: The shadow Chancellor is intervening from a sedentary position. No one would like to see him in the dock of a courtroom more than me, but the job here is to get on with it, find the answers, and put them into law. Let me now deal with the questions that the Leader of the Opposition asked about the European Union. He asked some very specific questions, including one about Russia and Syria. At the weekend, following some very hard negotiation by my right hon. Friend the Foreign Secretary, all parties agreed on transition by mutual consent. We now need to implement the policy, and all the P5 members need to do that. The right hon. Gentleman talked about taking responsibility on the economy. When is Labour going to take responsibility for the twin crises: the crisis of the deficit and the crisis of failed banking regulation? He asked what we had done to protect the single market. If he looks at the summit conclusions, he will see that it says very specifically that the single market and its integrity must be protected. On whether the eurozone funds are sufficient, frankly, I think he is right to ask that question. We continually say it is very important that the firewall—the bazookas—are big enough. On the right hon. Gentleman’s description of recent events, I think he probably ought to give up the hokey-cokey and stick to the Rubik’s cube. But let me tell him this: I am not going to take any lectures from a group of people who gave up the rebate and got nothing in return, who gave up our social chapter opt-out and got nothing in return, and who took us into the bail-out funds when we were not even part of the euro. Those are the people who say that the European Union has not got too much power and that they would join the euro if they were in power for long enough. The right hon. Gentleman likes to tell us endlessly about standing up to vested interests, but the fact is that he will never stand up to two big vested interests: the trade unions and Brussels. Sir Malcolm Rifkind (Kensington) (Con): While there is wide agreement in Britain as to the need for reforms in our relationship with the EU, does the Prime Minister agree that the worst possible moment to try to start negotiating with 26 other countries is when all the member states are, quite rightly, preoccupied with the very future of the eurozone and its potential collapse? Does the Prime Minister also agree that as the UK is fully protected by the statutory requirement for a referendum if there are any further proposals for the transfer of powers to Brussels, it must be the right policy to establish a link between any negotiations we

591

EU Council

2 JULY 2012

[Sir Malcolm Rifkind] might wish to begin and any new treaty to achieve a fiscal and banking union, which would be required to have the unanimous consent of the eurozone’s 17? The Prime Minister: My right hon. and learned Friend has set out the situation very well. It is worth saying, as I said in my statement, that everyone has to recognise that the short-term firefighting is the EU’s urgent and immediate priority, but my point is that we are safeguarded through the referendum lock in respect of further powers being transferred. However, we must think about how Europe is developing, make sure we make the most of the opportunities, and then think about how to seek the consent of the British people. Mr Alistair Darling (Edinburgh South West) (Lab): Does the Prime Minister agree that the customary celebrations after last week’s euro summit were, yet again, premature? There is not nearly enough money in the European stability mechanism, as its £500 billion is not enough to deal with Spain, let alone other countries. Equally, the German Chancellor’s opposition to eurobonds means there must be a question mark hanging over the eurozone. On banking, if we are to have a truth and reconciliation committee—which is fine—we must just remember that some of the most strident calls for deregulation over the last 30 years came from the Government side of the House. The Prime Minister: I have great respect for the right hon. Gentleman, and what he says about the eurozone agreements at the weekend is absolutely worth listening to and having regard to. The point I would make is that for the first time in a long time there was a series of steps that countries such as Britain had been calling for about using the facilities to buy bonds and about direct recapitalisation of banks. They are hedged around with all sorts of ifs and buts, but that was progress. On the truth and reconciliation commission issue, I note that the right hon. Gentleman said that a full independent public inquiry is not the right way ahead. I think the way ahead we have suggested will be swift enough, but also strong enough to get to the answers—and to get to them quickly. Mr John Redwood (Wokingham) (Con): Given that there is practically no unpledged money left in the current bail-out fund and given that the new bail-out fund does not exist, did the member states assembled discuss how they are going to get hold of the £500 billion or more that they might need, and are they proposing to borrow it on the credit rating of countries such as Spain and Italy? The Prime Minister: As ever, my right hon. Friend is incisive at getting to some of the difficulties in what is being proposed. I think we should be pushing the eurozone members into taking the short-term steps to try to help with financial stability, which buying bonds, directly recapitalising banks and sorting out issues of seniority are all about. We have to recognise the great difficulties they are going through in trying to raise adequate amounts of finance, but none the less it is in our short-term interests that they do deal with the crisis at the heart of the eurozone, because the high interest rates in Italy and Spain are not only hurting Italy and Spain; they are hurting us, too.

EU Council

592

Mr Jack Straw (Blackburn) (Lab): The right hon. Gentleman failed to answer the question from my right hon. Friend the Member for Edinburgh South West (Mr Darling), the former Chancellor of the Exchequer, just a moment ago, in which he asked the Prime Minister to recognise that the pressure for deregulation and a very light touch in the City was coming very strongly from him and—[Interruption.] Oh yes it was. So if there is to be truth and reconciliation, will there be some acceptance by the Prime Minister and the Chancellor that they got it woefully wrong in putting the pressure on us? The Prime Minister: Everyone will have to account for what they have said and all the rest of it, but I have to ask: who was in charge for the last 13 years? Who was the City Minister who carried out this action? If the right hon. Member for Blackburn (Mr Straw) wants to go into the interstices of who said what and did what, I can tell him that the Conservative party—I do not think I was in Parliament at the time—actually voted against the tripartite arrangement that has so badly failed. Sir Menzies Campbell (North East Fife) (LD): May I welcome my right hon. Friend’s continuing, and occasionally warm, endorsements of Britain’s continued presence in Europe? Does he also agree that those who wish to take Britain out of Europe now have a duty to provide detail as to what the political and economic cost would be, rather than vague promises of the Elysian fields? The Prime Minister: My right hon. and learned Friend makes an important point, which is that we need to make sure that the whole debate about our engagement in Europe is properly informed. I do support our membership; I do think that the single market is vital for us and that determining the rules of that market matters for us. However, it is important that we air these facts and figures, and the balance of competences review that will be launched shortly will help all parties, all politicians and all parts of civic society in Britain to see some of the arguments and some of the facts and the figures. I think that that will help to inform the debate. David Miliband (South Shields) (Lab): Further to that question, I wonder whether there are any circumstances, further to the Prime Minister’s negotiations, in which he will recommend to the British people that they should leave the European Union. The Prime Minister: As I said, I want to stay in the European Union for the reasons I have given. But I will always stand up for the British national interest as I see it. That is the job of being Prime Minister. Mr Peter Lilley (Hitchin and Harpenden) (Con): My right hon. Friend will know that my opposition to excessive centralisation of power in Europe has never been in doubt. Indeed, the only doubt that my Euroscepticism has given rise to was that which John Major cast upon my paternity. Will the Prime Minister, none the less, agree that what we need is not a commitment to an in/out referendum, but a commitment to insisting that our partners give us back powers to govern ourselves if they want our agreement for them to subordinate themselves further to centralisation in Europe?

593

EU Council

2 JULY 2012

The Prime Minister: My right hon. Friend, whose parentage I have never questioned, nor would I ever do so, puts it very well. The fact is that Europe is changing very rapidly. The eurozone countries, in my view, are going to need to take some pretty bold integrationist steps. That will provide opportunities and openings for countries outside the eurozone, such as Britain, and we should maximise those opportunities to pursue our national interest. I firmly believe that that means remaining at the table for those things that really matter for us, but I think that is what we should do. Mr Peter Hain (Neath) (Lab): Is the Prime Minister concerned that on Europe and the referendum he sounds more like John Major by the day? The Prime Minister: What matters is doing the right thing. I think that there are two positions that do not make sense. First, unless you actually want to leave the European Union now, and some people do, an in/out referendum now is not the right answer. But ruling out, for ever and a day, any form of getting the consent of the British people for what I would call a fresh deal and a fresh settlement in Europe also does not make sense. This is a question that all party leaders are going to have to answer. We are providing the answer—the right hon. Gentleman’s party leadership will have to do the same thing.

EU Council

594

path on the issue of civil nuclear power, that would help unlock the problems of middle east peace rather than making them worse. Mr William Cash (Stone) (Con): I was heartened by my right hon. Friend’s interview on the referendum question, but given his negative answer to me on 23 May on that same question, will he take the advice of the London taxi driver to whom I have just spoken, who just said, “The British people are not stupid; they understand the position. Give them renegotiation, give them a referendum, get rid of the coalition agreement— then, he will be re-elected by a massive majority.” The Prime Minister: I can see that it must have been a particularly satisfying and heart-warming taxi ride for my hon. Friend. As I have said, I do not think that an immediate in/out referendum is the answer, but ruling out a referendum is not the answer either. There are opportunities to build the sort of settlement we want in Europe and the Government believe that we should take advantage of them. Helen Goodman (Bishop Auckland) (Lab): Will the Prime Minister tell the House what indications he has had from European colleagues that they would be likely to agree the repatriation to this country of the social chapter and other powers?

Andrea Leadsom (South Northamptonshire) (Con): Will my right hon. Friend agree to consider carefully that the Fresh Start project’s options for change paper, which is being launched next week by my right hon. Friend the Foreign Secretary and is the culmination of a year’s work by parliamentarians from all parties and external experts, might possibly offer some of the solutions to the type of reform we are looking for in the EU? Will he also agree to reconsider the issues of competition in the banking sector that, in my opinion, are one of the major reasons why we are in this appalling situation?

The Prime Minister: We were able to renegotiate the bail-out power and get out of that part of the treaty, so we have had some small success on that agenda already. There is a big change coming in Europe. I cannot say how fast it is going to go and whether it will be a number of small treaties or a bigger treaty, but there will be opportunities. The eurozone countries will have to do more to integrate, which will give others opportunities to pursue their own agendas.

The Prime Minister: I shall certainly consider very carefully what my hon. Friend says. As I said, the Foreign Secretary will shortly set out the balance of competences review and how the process will work. I hope that that will inform debate; clearly, the piece of work undertaken by her and her colleagues will help. She mentions the banking sector and there are clearly rules for financial services at the level of the single market that are required and it is very important that we have a say over them. The fundamental elements of banking union, however, flow from the single currency, not the single market. That is why that union should be carried out at 17, not at 27.

Conor Burns (Bournemouth West) (Con): My right hon. Friend the Prime Minister will be aware that the British public are heartily sick of broken promises on European referendums, not least because of the decision of the Labour party to renege on a referendum on the Lisbon treaty. Can my right hon. Friend see the attraction of passing into law in this Parliament a binding commitment to a referendum in the following Parliament and that it might well strengthen his negotiating hand if he can look his fellow heads of Government in the eye and know that any deal that he negotiates will have to be put to the British people, whose government, after all, we are talking about?

Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC): What discussions were there of the likely effects of the oil embargo on Iran and were there any discussions on the knock-on effect on prospects for a sustainable peace in the middle east?

The Prime Minister: I take seriously my hon. Friend’s point and there is some merit in that argument. We have legislated in this Parliament for a referendum lock that we very much hope will apply to future Parliaments. The problem with the approach he suggests is that the change in the eurozone and in Europe is happening so rapidly that it is quite difficult to predict in legislation passed in this Parliament the exact nature of any referendum in a future Parliament, so I do not think that is the right way ahead. As I wrote in the article in The Sunday Telegraph, I think we need to show some tactical and strategic patience, knowing that we can safeguard our

The Prime Minister: There were brief discussions about Iran because the discussions about the single currency, the eurozone and the growth compact were so protracted. There is strong agreement in the European Union that the sanctions are right and necessary and I think that if we could get Iran to take a more sensible

595

EU Council

2 JULY 2012

[The Prime Minister] existing position with the referendum lock and make the most of the changes that are happening in Europe, as I have set out. Mr Denis MacShane (Rotherham) (Lab): Will the future referendum that the Prime Minister is now semipledging also cover treaty obligations relating to the European convention on human rights and the Council of Europe? The Prime Minister: As the right hon. Gentleman knows, the two issues are separate, in that there is the Council of Europe, and the European Union. There is, of course, the attempt to make the European Union a signatory to the European convention on human rights, which I have considerable difficulties with, but as things stand, the two things are separate. Sir Tony Baldry (Banbury) (Con): Britain is a trading nation. Does my right hon. Friend agree that, as a trading nation, it needs unfettered access to Europe’s single market, and also a clear voice and say in the rules of that market? The Prime Minister: My hon. Friend is absolutely right. That is at the heart of the case for remaining in the European Union. We export a large share of our gross domestic product; we need Europe’s markets to be open. I would not want to swap the status that we have, of having both access to the single market and a say over the rules of the single market, for the status of a country that only has access. It is very important, though, that as the eurozone develops and integrates, we make sure that there are safeguards to prevent caucusing at the eurozone level that could disadvantage us in the single market. There is a whole series of steps that we have to take, some of which are about safeguarding what we have, some of which are about making the most of the future, and all of which are achievable if we play our cards right in the years ahead. Kate Hoey (Vauxhall) (Lab): May I simply ask the Prime Minister to look at his terminology? In his statement, he mentioned Britain 12 times; he did not mention the United Kingdom once. Does he agree that if there is to be a referendum, which I think is inevitable, the people of Northern Ireland should have a very strong say? He must, in the European Council, refer to the United Kingdom, or the UK for short; saying “Britain” excludes Northern Ireland. The Prime Minister: As ever, the hon. Lady is right about almost everything, and I am rightly chastised. Mr Edward Leigh (Gainsborough) (Con): What I suspect the majority of British people want is what they were offered in the only referendum that they have ever been allowed on Europe, namely a say on whether there should be a common market—no more, no less. Given that our partners have the overwhelming balance of trade in their favour, why should they veto our negotiation for a free market area? The door is unlocked; why does the Prime Minister not walk through it and renegotiate?

EU Council

596

The Prime Minister: The point that I make to my hon. Friend, whom I respect hugely for his views, is that what we have in the single market is not just a free trade area, but a say in the rules about how that free trade area works. It does seem to me that absolutely central to Britain’s case for remaining in the European Union are those two key points. I think that there is a difference between a single market with rules and simply a free trade agreement. That is what I think we should continue to pursue. Keith Vaz (Leicester East) (Lab): May I welcome the continued support that has been given to Greece? It is not just a case of Greece repaying its debts; it is about the responsibilities that it has to the rest of the EU. Last year, as the Prime Minister knows, 100,000 people illegally entered Greece through Turkey. Will we ensure that those resources are directed towards protecting the borders of the EU? The Prime Minister: I know that the right hon. Gentleman has great expertise in this area. It seems to me important that we support organisations such as Frontex, and the means by which those countries can protect their borders, but in all these European negotiations we always have to be careful about the language of burden sharing, because of course when we look at where people actually end up, in terms of asylum claims, it is often countries such as Britain, Sweden, and Denmark that bear a very large share of the burden, and we always have to be alert to that argument. Philip Davies (Shipley) (Con): Will the Prime Minister remind his coalition partners that in their 2010 manifesto, they said: “The European Union has evolved significantly since the last public vote on membership over thirty years ago. Liberal Democrats therefore remain committed to an in/out referendum”?

Given that, and given that I know my right hon. Friend always likes me to remind him that he is in coalition with the Conservatives as well, may I remind him that an in/out referendum is now inevitable in this country at some stage, and that it would be to his advantage to be ahead of that curve, rather than being seen to be dragged into it later on? The Prime Minister: My hon. Friend makes a good point. He often rightly criticises me for not delivering every part of Conservative policy, and now he is having a go at me for not delivering Liberal Democrat policy as well. I do occasionally make that point to our coalition partners, but as I have said, I think the sensible position to take is not having an immediate in/out referendum, but not ruling out a referendum in the future. Europe is changing; there are opportunities for Britain, and I am determined that we should take them. Mr Dennis Skinner (Bolsover) (Lab): With all these mixed messages, unlike the Thatcher regime, can the Prime Minister tell us whether he came to his present opinion before or after he met Andy Coulson? The Prime Minister: Just to clear it up, I did not meet or speak with Andy Coulson at the weekend.

597

EU Council

2 JULY 2012

Mrs Anne Main (St Albans) (Con): I completely disagree with my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind). With the chaos in Europe, there has never been a better time for other EU members to mind their business, not ours, and now is the right time to try to have a debate with them about which powers we would like to bring back, before we have any form of referendum. The Prime Minister: My hon. Friend makes a powerful point. The argument that I would make is that although there may well be opportunities because of the needs that other EU members currently have, respecting the fact that they are fighting a fire in the eurozone, which is their urgent work that benefits us if they can deal with those bond spreads, deal with those banks, deal with those problems, the right time to consider institutional changes is as institutional reforms and treaties come through. Sir Stuart Bell (Middlesbrough) (Lab): The Prime Minister has referred several times to the national interest. He also referred to the brief discussion on the ban on oil imports from Iran. Is not that ban an example of how the European Union acting in concert can assist the British national interest? The Prime Minister: Yes, I think that it is, but the argument that I would make is that that was an agreement reached through unanimity. It shows that what is required often in Europe is not institutional structures, but political will to come together and do the right thing. That is what we have done in relation to Syria, Iran and eventually Libya, so I am all for co-operating and often leading the debate with our European partners about foreign policy priorities. That is what we have done about Burma and sanctions, but I do not think that means the endless passage of powers from Britain to Brussels—in fact, quite the opposite. Simon Hughes (Bermondsey and Old Southwark) (LD): May I associate the Prime Minister’s Liberal Democrat colleagues with his expressions of condolence and sympathy following the deaths of our servicemen in Afghanistan? Does the Prime Minister agree that, while it is of course right that at the last election his party had a set of manifesto commitments on Europe, as did the Liberal Democrats, the coalition agreement is clear? There is provision for a referendum if there is a handover of power from the UK to Brussels. There is no provision for any other referendum, and we are agreed that the priority, as evidenced last weekend, is that 27 European countries work together to deal with the imminent, urgent economic crisis across Europe. The Prime Minister: My right hon. Friend makes an important point. To be fair, in terms of coalition policy on Europe, we said clearly that there would be no further passage of power from Britain to Brussels. We have said that we should protect and defend the single market. Let us look at the achievements over the past couple of years. We have got out of that bail-out fund; we have promoted the single market in energy, digital and services; and we have written into conclusions after conclusions safeguards for the single market. That is all to the good, but all party leaders, whether Conservative, Liberal Democrat or Labour, must think of the future—

EU Council

598

how we evolve policy in a changing Europe, how we maximise the benefit for Britain, and how we take the British people with us. That is exactly what I am doing. Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): The Prime Minister suggests the setting up of a parliamentary committee of inquiry. Whenever we have such inquiries and when they are compared with judge-led inquiries, the big difference is access to information, such as e-mail exchanges and other background material. Will he ensure that in its terms of reference such a committee will have the same powers as a judge-led inquiry? The Prime Minister: The short answer to that is yes, I want it to have those powers. What Parliament has behind it is that, if people do not produce those policies, papers and people, they are in contempt of Parliament. We are seeing with the Culture, Media and Sport Committee inquiry that the whole concept of being in contempt of Parliament is being strengthened, and that is all to the good. The committee will have the powers that it needs and the expertise that it needs, but crucially it will be able to get on with the job straight away. David T. C. Davies (Monmouth) (Con): Does the Prime Minister agree that the last time we saw the current levels of interference in British domestic affairs, it led to the traumatic split with the Catholic Church? Does he agree that we would be better off having a second referendum than a second Reformation? ThePrimeMinister:ThepointIwouldmake—[Interruption.] Mr Speaker: Order. I want to hear the Prime Minister on the subject of reformations and other matters. The Prime Minister: As a rather wishy-washy member of the Church of England, I am finding answering this question rather difficult. The point I would make is that there are opportunities, but we should show patience because our colleagues in Europe are dealing with a fire-storm. We can pursue our interests and, I think, deliver on them over the medium term. Barry Gardiner (Brent North) (Lab): The EU decision on the oil embargo on Iran has caused great joy in the paint shops around the Arabian Gulf, as vessels have gone into dry dock to be repainted, renamed and reflagged. Can the Prime Minister set out for the House what practical steps are being taken to monitor Iranian vessels to ensure that there is an embargo in fact as well as in name? The Prime Minister: The hon. Gentleman raises an important point. I believe that the embargo will be robust and we will make sure that it is policed. I do not want to set out in public what all those measures will be, but we will make sure that the points he makes are taken on board. Mark Pritchard (The Wrekin) (Con): Far be it from me to correct the right hon. Member for Bermondsey and Old Southwark (Simon Hughes), but I understand that the Liberal Democrat manifesto referred to provision for a referendum if there is “fundamental change in the relationship between the UK and the EU.”

599

EU Council

2 JULY 2012

[Mark Pritchard] The Prime Minister said in his statement that “Europe is changing rapidly and fundamentally.” Is it not time we had an in-or-out referendum in this Parliament, rather than relying on the outcome of the next general election, which of course nobody can predict? The Prime Minister: I completely understand the view held by my hon. Friend and a number of other colleagues on our Back Benches either that we should want to get out straight away and so should have an in/out referendum straight away or, to be fair to him, that the change has been so fundamental that the referendum should be held sooner rather than later. I have set out my argument; I think it would be better not to do that immediately for the reasons I have given. I think that there is an opportunity for what I would call a fresh settlement and fresh consent that would be in the national interest of the whole United Kingdom. Pete Wishart (Perth and North Perthshire) (SNP): Well, it looks like we are going to have a referendum, maybe in two or three years’ time, and maybe there will be more than one question—a Euro-max option—and we do not know what the question will be, yet the Prime Minister has the gall and temerity to question our referendum process. Does he believe that all this delay for two or three years will create a great deal of business uncertainty across the United Kingdom? The Prime Minister: I have to say gently to the hon. Gentleman that there is a slight difference. As I understand it, his party has a very clear view that it wants to leave the United Kingdom, and fought an election in Scotland on having a referendum to do just that. What I am trying to do is help him to have that simple, single-question referendum so that the country can make a decision. I profoundly hope that Scotland will vote to stay in the United Kingdom, which I think would be in Scotland’s interests and in all our interests, but I have to say that we should not have to wait quite as long to get on with it as his First Minister wants. Mr John Baron (Basildon and Billericay) (Con): The Prime Minister has repeatedly said that now is not the time for an in/out referendum, so will he confirm that the letter I and 100 other colleagues sent to him urged him to legislate in this Parliament for a referendum in the next Parliament and so address the mass public distrust in politicians promising referendums on Europe, because they remember all too well the Labour party’s broken promises? The Prime Minister: I absolutely hear what my hon. Friend says. I do not want to misrepresent him, and if I have done so in any way I absolutely apologise. That was never my intention. I read very carefully the letter he sent to me. He is not suggesting an immediate in/out referendum. As I said in reply to my hon. Friend the Member for Bournemouth West (Conor Burns), although it is possible to legislate in one Parliament to bind the next, as we have done with the referendum lock, I do not think that it makes as much sense to do that with a referendum for the future, because we do not know the exact pace of developments in the eurozone or the exact changes that will take place in Europe; I do not think that that is the right answer.

EU Council

600

Chris Bryant (Rhondda) (Lab): The coalition agreement makes another commitment in relation to treaty change: that the Government will campaign to abolish the ludicrous caravanserai between Brussels and Strasbourg, which we would all agree should be abolished. I am absolutely certain that the Prime Minister has got absolutely nowhere with that and possibly has not yet even mentioned it to the new French President, so why should people trust him when he promises more renegotiation and has not even managed to secure the one thing he is committed to? The Prime Minister: I am still waiting for my apology, which I notice I have not yet got. Perhaps there will be a few more questions first. The hon. Gentleman will know that in order to deal with the problem of the two Parliaments we need a treaty change, so he should want to bring it on. Nicholas Soames (Mid Sussex) (Con): May I associate myself with the remarks of my hon. Friend the Member for Banbury (Sir Tony Baldry) about the importance of trade and the single market? Does the Prime Minister agree that if we are to see a return to prosperity in the European Union, the rules of the World Trade Organisation need to be vigorously enforced? To that end, it would be fatal were we not to be sitting at the table when those matters are discussed. The Prime Minister: My right hon. Friend makes an important point. One of the things that we have made progress on over the past two years is the EU free trade deals with fast-growing parts of the world, including Korea, and obviously negotiations are under way with Singapore, India and others, including possibly Japan. In recent weeks, we have also made some quite exciting progress with the idea of an EU-US trade deal, so there are things that European nations can do together for our mutual benefit. Trade and the single market are clearly absolutely up there, and I very much agree with my right hon. Friend on that point. Mr David Winnick (Walsall North) (Lab): After what has happened today and the responses from the Prime Minister’s side of the House, does he now have some sympathy for what John Major had to endure from his party during the 1992 to 1997 Parliament? The Prime Minister: I worked very closely with John Major and admire him very much. People now make a reassessment and see that he left this country an excellent economic record, which the Labour party completely squandered with a whole decade of debt. Mr Stewart Jackson (Peterborough) (Con): Irrespective of our personal views, why is it right that the people of Scotland will be given a potentially irreversible in/out referendum by 2014, yet the people of the United Kingdom will not be given a similar plebiscite on a matter of great import—this country’s relationship with the European Union? The Prime Minister: I have great respect for my hon. Friend, who takes a very clear view about which he feels very deeply. I think that there is a significant difference, which is that in Scotland, like it or not, the Scottish National party is committed to leaving the United

601

EU Council

2 JULY 2012

Kingdom and was elected with a mandate for a referendum to do just that, whereas in the case of the United Kingdom and the European Union, most people in our country want a fresh settlement with fresh consent, rather than the binary choice of leaving right now or, indeed as I said in my statement, voting to stay in right now and thereby almost confirming that status quo, which I am not satisfied with—and I do not think many people are. Paul Flynn (Newport West) (Lab): How many of the hundreds of new jobs that will come from setting up the patent court will be located in the city that has been the home of the brilliantly successful United Kingdom Patent Office, now the Intellectual Property Office, the city of Newport? The Prime Minister: I do not know the answer to that question; I will have to look very carefully and, perhaps, reply to the hon. Gentleman. The parts of the court that we will have will be pharmaceuticals and life sciences, an area of great national expertise, and it is a good deal for London and a good deal for the UK. Joseph Johnson (Orpington) (Con): Unemployment in the eurozone today hit a fresh record high of 11.1%, with youth unemployment reaching the terrible level of 22.6%. Whatever happens to the euro, what recognition is there in Brussels of the risk of creating a lost generation unless the EU as a whole takes seriously the need to do serious labour market deregulation and to push ahead with the completion of the single market? The Prime Minister: My hon. Friend makes a very important point. If we look at the different rates of youth unemployment throughout Europe, we find that we are certainly not one of the best, but certainly not one of the worst. We can look at countries such as Germany and Holland, which have very low rates of youth unemployment, different approaches to welfare from ours and different approaches to training, and we have a lot to learn from them, but overall what my hon. Friend says about opening up the single market—deregulating—is one of the key answers to getting young people back to work. Mr Nicholas Brown (Newcastle upon Tyne East) (Lab): Can the Prime Minister explain to the House why existing anti-fraud legislation does not work in the case of the LIBOR rate-setting scandal? The Prime Minister: As I have said, today we have asked the Serious Fraud Office to look specifically at the issue and to see whether there are criminal acts that it can address. It has the resources that it needs, and if it needs more resources it will be provided with them, but we have a Serious Fraud Office, which is the authority for both investigation and prosecution, to deal with just that question. Richard Harrington (Watford) (Con): I am sure that the Prime Minister remembers from his recent visit to Watford the several multinational companies, such as Medtronic and Hilton Worldwide, whose trade depends very much on their using the UK as a hub for their European operations. With that in mind, could he assure the thousands of my constituents who work for those companies that nothing that happened in the European

EU Council

602

Council will be detrimental to their interests—and, above all, that he will not be bounced into an in/out referendum that could put their jobs at terrible risk? The Prime Minister: My hon. Friend is absolutely right. Britain benefits from being in the single market and having a say over the single market rules. One of the things that has happened over the last two years has been that, because of investments by companies such as Nissan, Honda and Jaguar Land Rover, we in the United Kingdom are now a net exporter of cars again, for the first time since 1976. Access to the single market and our role in the single market play a key part in that investment. Seema Malhotra (Feltham and Heston) (Lab/Co-op): Businesses in my constituency are worried about jobs and growth. Given the size of our trade relationships with Europe, they want a Prime Minister who will show leadership in getting growth across Europe. What progress did the Prime Minister make on a growth package and how did he see that as being in the UK’s national interest? The Prime Minister: I am grateful for the hon. Lady’s question. There was good progress on the growth compact. I think people had expected that it was all going to be an agenda, important though that is—project bonds and European Investment Bank spending is part of it. But the hon. Lady will see that in the growth compact, copies of which will be available in the Library, there are very clear commitments to the services directive, energy liberalisation and the digital single market. That is very much the British, and also Italian, agenda, which we have driven into the growth compact, which will really help our country. Several hon. Members rose— Mr Speaker: Order. I am keen to accommodate more colleagues, but very large numbers of them are standing and I will not be able to accommodate them all. To maximise the number of participants, brevity will be of the essence. Richard Drax (South Dorset) (Con): The Prime Minister urges close integration as one solution to the problem in Europe. Closer integration, even among a smaller number of eurozone countries, is already leading to economic chaos and big civil disorder. Surely he should be advising everyone to go back to their currencies, except, perhaps, for the powerful countries in Europe, and then rebuild the economy, rebuild jobs and rebuild wealth. The Prime Minister: We cannot make choices on behalf of other European countries. The eurozone countries say that they want a single currency and that they want that single currency to work. If that is the case, I believe that it follows that they will have to integrate more deeply. It remains to be seen whether all of them will be able to do that. What we see in Europe, week after week, are the difficulties of taking those steps. None the less, we cannot instruct those countries not to do something. That is their choice. We have made our choice, which is to stay out of the eurozone. As I said, we are not going

603

EU Council

2 JULY 2012

[The Prime Minister] to be involved in that integration and we will not be paying those bills. I hope that my hon. Friend can be reassured on that basis. John Cryer (Leyton and Wanstead) (Lab): Can the Prime Minister confirm that he is prepared to see the sacrifice of sovereignty and democracy in Greece and other eurozone countries to defend the single currency? The Prime Minister: I would not put it like that. I cannot tell the Greek people what to do. My view is that the right answer for Britain is to be outside the single currency and not to be involved in this integration. People can go back to my election address in 1997, when I said that I opposed Britain’s joining the single currency. The reason why I opposed it was that I did not think it right to give up that sovereignty and level of democracy. That is a choice that those countries and those people must make; it is not for us to make it for them. George Eustice (Camborne and Redruth) (Con): I agree with the Prime Minister that the priority for this country should be to negotiate the return of powers from the EU and that any referendum should come at the end of that process, not the beginning. However, does he agree that we should reject the defeatism of the Leader of the Opposition and start to articulate the case for an alternative vision for the future of Europe? The Prime Minister: My hon. Friend makes a very important point. There has been a defeatism from the Labour party, including when it was in government. When confronted with difficult choices about the rebate, it gave it up; and when confronted with the issue of the European constitution, it promised a referendum and did not deliver it. In the end, it always went along with absolutely everything. The Labour party has not yet told us whether it would sign the treaty that I refused to sign back in December. When it comes to this, it is the status quo party. Mr Andrew Love (Edmonton) (Lab/Co-op): There are significant misgivings about the impact of a banking union on the financial services sector in this country; the Prime Minister commented on some of them earlier, during his statement. What reassurance can he give the House that the strategy that he is currently following will not lead to the long-term disadvantage of finance in this country? The Prime Minister: I do not believe that it will. We are trying to protect our interests in terms of the single market and our strong financial services industry. I believe that a banking union flows from the fact that there is a single currency rather than from the fact that there is a single market. That union should be at 17, and we will be able to protect our interests from outside it. Steve Baker (Wycombe) (Con): I welcome the progress that my right hon. Friend is making towards obtaining the full-hearted consent of the British people. Will he remind us, please, who denied the British people their say on the Lisbon treaty?

EU Council

604

The Prime Minister: My hon. Friend makes a good point. The fact is that a promise was made of a referendum on the European constitution, which changed into the Lisbon treaty. The previous Government had every opportunity to deliver that referendum as country after country went through passing that treaty into law, and they completely failed and let the country down. Nia Griffith (Llanelli) (Lab): Will the Prime Minister give us a little more detail about the evidence that he used to convince his EU counterparts that the UK Government are serious about increasing demand, particularly in the light of the latest disastrous UK growth figures? The Prime Minister: The point I would make to the hon. Lady is that there are parts of the growth compact that include expanding the role of the European Investment Bank, and we support that. We support the idea of project bonds—innovative finance—because part of the problem is the need for an active monetary policy required right across the European Union. However, we should not give up on the real wins for our economy of completing the single market in energy, digital and services, because real increases in both demand and supply could come about from that. Neil Carmichael (Stroud) (Con): No doubt there will be many more EU Councils to come, so does the Prime Minister think that he would be helped or hindered in his negotiations to protect Britain’s interests if there were an in/out referendum in the foreseeable future? The Prime Minister: I am sure that the first half of my hon. Friend’s question is right. I have been Prime Minister for only two years, but I feel that I have spent about half my life in the Justus Lipsius building in Brussels, and I am sure that other summits will be coming along. The point about having an in/out referendum now is that if your view is that Britain should leave the European Union, then of course that is the logical thing to do, but if you want to fight from the inside for a fresh settlement and then a fresh mandate, the approach that I am setting out is the right one. Graham Stringer (Blackley and Broughton) (Lab): The Prime Minister has claimed success with the bail-out funds, which, of course, were not part of any treaty. Most of the powers that have been transferred from this House are in treaties. If he fails to renegotiate those powers and return them to this House, will he then agree to an in/out referendum? The Prime Minister: On the bail-outs, I do not think that the hon. Gentleman is correct. The fact is that a treaty article was used for those bail-outs, and we have replaced what was called the EFSM, the European financial stabilisation mechanism, with the ESM, the European stability mechanism. I got it written into the preamble to the treaty that Britain would not be included in it and would not have to contribute to it. That is to our advantage, and it shows what you can achieve if you are prepared to negotiate hard and not just give in to whatever people want.

605

EU Council

2 JULY 2012

Matthew Hancock (West Suffolk) (Con): I warmly welcome the announcement of the review into banking to replace the failed regulation drafted by Labour Members, but will the Prime Minister ensure that, as a deterrent, criminal sanctions are available in future for those bankers who are wholly irresponsible? The Prime Minister: My hon. Friend makes an important point. The Chancellor will be going into more detail on this issue. We need to ensure that the regulators and the SFO have all the powers they need. People will not understand why crimes on the high street are punished in one way but crimes in the banks and elsewhere are punished in another way. That absolutely needs to be cleared up, and I am sure that this Government will do so. Wayne David (Caerphilly) (Lab): Given the Prime Minister’s support—in theory, at least—for a referendum on Europe, what is his position now with regard to a referendum on Lords reform? The Prime Minister: We have set out in the House of Lords Reform Bill a very clear pathway for the House of Lords. House of Lords reform was in the hon. Gentleman’s party’s manifesto, it was in our manifesto, and it was in the Liberal Democrat manifesto, so I do not think a referendum is really necessary. Mr Peter Bone (Wellingborough) (Con): I can report that the relationship between Mrs Bone and the Prime Minister is blooming. I have just discovered that the Prime Minister has invited Mrs Bone to Downing street next week. She is very excited about the renegotiation and the Prime Minister’s words on the referendum. Could he please her even more at next week’s meeting by promising legislation in this Parliament for an EU referendum in the next Parliament? The Prime Minister: As ever, I am looking forward to my meeting with Mrs Bone, but—how can I put this?—I do not want to get her too excited before the big day. I am afraid that I cannot satisfy my hon. Friend on that basis. We have in place the referendum lock, which I think should reassure Mrs Bone a lot.

EU Council

606

to take at least some of the steps that I have set out. If they do not, I think that the eurozone will have real difficulties. Mr James Clappison (Hertsmere) (Con): Does not the history of our membership of the European Union demonstrate that there is not just an issue with the single market, but that there is more of an issue with the ever closer union that is enshrined in EU treaties? Will my right hon. Friend assure us that to be meaningful, a referendum must encompass the question of ever closer union? The Prime Minister: That goes back to one of the problems with the referendum in the 1970s, when people did not receive a full explanation of all that was envisaged by the original treaty of Rome. I am clear that I do not support ever closer union. I do not want to see an ever greater transfer of powers from nation states to Brussels. However, I think that Britain and the European Union can work very well together to maximise the single market and our co-operation on matters such as foreign affairs, while ensuring that it is in our national interest. Mr David Anderson (Blaydon) (Lab): Was the financial transactions tax spoken about at the weekend, whether formally or informally? Does the Prime Minister not realise that the people of this country would welcome that as a way of showing that bankers are being made accountable for their appalling behaviour? The Prime Minister: The financial transactions tax was mentioned, because the growth compact says clearly that a number of eurozone members will go ahead with it. I do not support it and Britain will not take part, because unless there is agreement all over the world, the transactions will go to jurisdictions that do not have the tax. That would cut our jobs, our investment and our GDP. The people who would pay for such a tax would be not the bankers, but the pensioners, and I do not think that that is sensible. Nigel Adams (Selby and Ainsty) (Con): How bad does the Prime Minister think the financial damage to the UK would have been had we not got ourselves out of the euro bail-out mechanism?

Mark Hendrick (Preston) (Lab/Co-op): What game is the Prime Minister playing? He is encouraging eurozone members to integrate closer and at the same time encouraging his Back Benchers by saying that we will have a referendum that could bring us out of the European Union.

The Prime Minister: I am grateful for my hon. Friend’s question. We can start to count the cost, because with things such as the Spanish bank bail-out, we can work out what percentage we would have paid. We have saved Britain considerable amounts of money by ensuring that we are not involved in the bail-outs.

The Prime Minister: I do not really understand what lies behind the hon. Gentleman’s question. It is intellectually coherent to argue that if countries want to be in the eurozone and to have a working single currency, they must take at least some of the steps that other single currencies, such as the dollar and the pound sterling, have taken. That means that they have to stand behind weaker parts of the union and that they need things such as joint debt issuance and a single banking system. That is just a fact of economic life. I see no contradiction in arguing that Britain should be outside the eurozone with a looser relationship with the European Union and that those inside the eurozone will have

Mr William Bain (Glasgow North East) (Lab): Economic demand is continuing to fall across the eurozone, youth unemployment in Greece and Spain reached 52% today, and 5.5 million young people are unemployed across the EU. When will the Prime Minister finally acknowledge that the answer to such a chronic crisis of demand and jobs can never be harsher austerity? The Prime Minister: The point that I would make to the hon. Gentleman is that because we are outside the euro, as well as having tough fiscal targets, which frankly anyone in my position would have to deliver to deal with the debt and the deficit that we were left, we can

607

EU Council

2 JULY 2012

[The Prime Minister] have a very accommodating monetary policy, with ultra-low interest rates. Our monetary policy is our own to determine because we are outside the euro. That is the difference between the situation in Britain and the situation in countries that are inside the eurozone. Jacob Rees-Mogg (North East Somerset) (Con): I completely support the Prime Minister in saying that the answer is less Europe, rather than more Europe. I wonder if I may bring his attention to part (j) of the communiqué, which states that the Commission will work on proposals for a “common consolidated corporate tax base”.

Can I assume that Her Majesty’s Government will oppose those moves, as we are cutting corporation tax here, not trying to raise it to European levels? The Prime Minister: He can. Mark Lazarowicz (Edinburgh North and Leith) (Lab/ Co-op): It is clear that the type of referendum that the Prime Minister has in mind is one in which the choice is to vote in favour of whatever settlement we manage to extract or in favour of the status quo. Does he think such a referendum would satisfy the in/out zealots on his Back Benches? The Prime Minister: For people who want to leave the European Union—that is a perfectly honourable, respectable political tradition and Members on both sides of the House, probably even Liberal Democrats, have held that position—campaigning for an in/out referendum is a perfectly sensible thing to do. It is just not my view or the Government’s policy, and I do not think it is the hon. Gentleman’s, either. Mr Julian Brazier (Canterbury) (Con): I welcome the Prime Minister’s announcement of the progress in Russia’s views on Syria. Could we do more to persuade Russia that it is not in its interests to have a nuclear-armed Iran sitting on its border? The Prime Minister: My hon. Friend is entirely right to make that point, and the Foreign Secretary has spent a lot of time with his Russian counterpart having exactly those discussions. There are great connections between resolving the situation in Syria and trying to get a resolution to the Iranian situation. It is worth noting that the oil sanctions have come in. They are tough and represent concerted action by the European Union, and I think they can make a difference. Huw Irranca-Davies (Ogmore) (Lab): The Prime Minister’s position on an EU referendum seems to be summed up in that comedy catchphrase, “Yes but, no but, yes but, no but”. Is he likely to come to a decision and resolve his teenage dilemma before the next election? The Prime Minister: I think I would let Vicky Pollard stick to her own work and think of something different. As I have said, I think there are only two positions that do not make sense for Britain. One is an immediate in/out referendum, which I do not think would be right for us, and the other is somehow to rule out for ever and

EU Council

608

a day any way of forming a new consent with the British people. I want to see a new settlement, and I think we should then get a new consent. That seems to me an entirely sensible and logical position to take. Mr David Nuttall (Bury North) (Con): At a time when EU countries are more indebted than ever before, why should the UK pay more so that the European Investment Bank can make yet more loans when there is an increasing risk that some of those loans will never be repaid? How much of the ¤10 billion increase in funding for the EIB will this country have to pay? The Prime Minister: We account for about 14% of new loans made by the European Investment Bank. There is clearly weak lending by banks and there are problems in monetary policy right across the European Union, so the role of the EIB is helpful. It is important, though, that it maintains its very strong triple A credit rating. Several hon. Members rose— Mr Speaker: Order. I am now looking for questions consisting of a single, short sentence. I am sure the hon. Member for Eltham (Clive Efford) will lead us in that exercise. Clive Efford (Eltham) (Lab): With reference to the answer that the Prime Minister gave to the hon. Member for West Suffolk (Matthew Hancock), if he genuinely believes that some of the actions of Barclays bank bordered on the criminal, will he now call for the resignation of Mr Bob Diamond? The Prime Minister: I do not think it is for Prime Ministers to hire and fire bank chiefs. Mr Diamond will have to make himself accountable to his shareholders, and to this House when he answers questions on Wednesday. As I have said, I think he has some serious questions to answer. Dr Julian Lewis (New Forest East) (Con): Is it my right hon. Friend’s position that in any referendum on Europe while he is Prime Minister, the option of voting to leave the EU will not appear on the ballot paper? The Prime Minister: No, that is not what I have said. What I have said is that I do not support an immediate in/out referendum. I believe that we should show strategic and tactical patience, and then I want to see a fresh settlement for which we seek fresh consent. The right time to determine questions about referendums and the rest of it will be after we have that fresh settlement. That is what we should do. Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab): The Prime Minister has repeatedly endorsed the United Kingdom’s membership of the EU this afternoon. Will he say something about the circumstances in which he would endorse withdrawal from the European Union? The Prime Minister: What I have always said is that we should act in the interests of the whole United Kingdom, and I do not think our best interests would be served by leaving the European Union. That does

609

EU Council

2 JULY 2012

not mean that we meekly and lamely accept the status quo. We are not happy with the status quo, as the British public are not. I am not a defeatist who says that you have just got to take what you are given. We have already shown in a small way, by getting out of the bail-out fund, that we can do better, and I want Britain to do better. Ian Swales (Redcar) (LD): Is the Prime Minister aware of any significant City institutions that want this country to leave the EU? The Prime Minister: I am not aware of any City institutions that want that. On the whole, the City institutions want to ensure that our position in the single market is safeguarded. I am not a mercantilist, but it is worth noting that the one sector in which we have a massive current account surplus with Europe is financial services. It is therefore important that we ensure we safeguard the interests of that sector. Mr David Evennett (Bexleyheath and Crayford) (Con): I welcome my right hon. Friend’s statement. Does he agree that we must continue to battle for radical and substantial reform of the EU and not be deflected from our national interests of trade and the single market? The Prime Minister: My hon. Friend puts it extremely well. We should pursue the national interest. The key argument is membership of and influence over the single market. That lies at the heart of our case for being in the EU. Mr Sam Gyimah (East Surrey) (Con): Does my right hon. Friend agree that a referendum is only a means to an end and not the end in itself, and that it is therefore important for us to work out what Europe we want to emerge from this crisis and what it means for the UK national interest, so that we give voters a meaningful choice in the matter? The Prime Minister: My hon. Friend is absolutely right. Before we get to the referendum question, we must ask the prior questions of what exactly Britain wants in Europe, what we have at the moment, what we would like to change and how we can best change it. All those prior questions need to be asked before we get to the vital question of how to secure the full-hearted consent of the British people. Dr Thérèse Coffey (Suffolk Coastal) (Con): More Eurocrats work in education and culture than on the internal market and services. Will my right hon. Friend stand up for hard-pressed British taxpayers and ensure that our scarce resources are directed towards jobs and growth by completing the internal market?

EU Council

610

future relationship with the EU, we should focus on policies that target growth, particularly in important sectors for British business, such as energy and the digital market? The Prime Minister: My hon. Friend is entirely right. That is why our approach in Europe—the positive steps we have taken—is about building an alliance with other European countries to push forward the single market and free trade agenda. It has been heartening that in recent months, people such as Prime Monti of Italy and Prime Minister Rajoy of Spain have been involved in that. There is no longer a north-south divide in Europe: many countries are pushing for the growth agenda that has been championed by both parties in the coalition. Gavin Barwell (Croydon Central) (Con): I welcome the Prime Minister’s stress on the importance of the single market and his statement that, in other areas, the EU status quo is not acceptable. Does he agree that this issue will be solved in the long-term only by giving the British people their say? The Prime Minister: My hon. Friend is right that, in the end, as Europe changes and as we seek this fresh settlement, we will need to seek a fresh mandate. That is what the Conservative party at least has clearly recognised. Henry Smith (Crawley) (Con): At last week’s meeting, the European Council president said it could take up to a decade to implement EU treaty change. Does my right hon. Friend agree that it is therefore more important that the Government passed a referendum lock in legislation? The Prime Minister: My hon. Friend makes a very good point. Europe is changing rapidly and, as I have argued, quite fundamentally, but some of the institutional changes will take quite a long time to come through, because it is difficult for democratic states to achieve what the eurozone countries are engaged in. It will take time, which is why, as I have said, we need the tactical and strategic patience to maximise our national interest. Robert Halfon (Harlow) (Con): I welcome the fact that my right hon. Friend has opened the door to a referendum on substantial renegotiation. Will he resist EU regulations on biofuels, which are pushing up prices at the pumps for hard-pressed motorists? The Prime Minister: One question about biofuels is their sustainability—that might be what lies behind my hon. Friend’s question, but I will have a careful look at it.

The Prime Minister: The depressing statistic my hon. Friend gives is important as we go into the budget negotiations. We must ensure that the EU budget is focused on things that are likely to help with growth, such as the single market, rather than on regulation. She makes a very good point.

Charlie Elphicke (Dover) (Con): Although I welcome the Prime Minister’s setting up the banking review, does he agree that the real crime is that there is any doubt at all that interest rate rigging is a criminal offence? If we are to have truth and reconciliation, should we not see a bit more responsibility and a bit less of the buck-passing that we have seen from former Labour Cabinet Ministers today?

James Morris (Halesowen and Rowley Regis) (Con): There has been a lack of growth in Europe, but does the Prime Minister agree that, despite concerns about our

The Prime Minister: My hon. Friend makes an important point, but although there has been silence from the Labour party in this House, in the other place its Whip

611

EU Council

612

2 JULY 2012

[The Prime Minister] stood up and said, “Absolutely, this is squarely Labour’s fault.” It is a pity we do not hear a bit of that from the party here. Andrew Bridgen (North West Leicestershire) (Con): Given that the UK is running a large trade deficit with the rest—[Interruption.] Mr Speaker: Order. We must hear Mr Bridgen. Andrew Bridgen: Given that the UK is running a large trade deficit with the rest of the EU, does my right hon. Friend agree that our European partners would have much to lose from erecting trade barriers with this country, if the British people decided to leave the EU? The Prime Minister: My hon. Friend makes a good point. Britain is not only a huge market for other EU goods but a large net contributor to the EU budget. For that reason, as I often say, our membership entitles us to just as strong a view as those who have joined other parts of the EU, such as the single currency. We should never be frightened of making our voice heard. Jason McCartney (Colne Valley) (Con): Does the Prime Minister agree that the Leader of the Opposition is wrong to criticise those who bang on about Europe, because by doing so he is criticising my constituents who bang on about the EU directives, whether on fish discards, animal experiments on stray cats and dogs or the levying of VAT on aviation fuel for the Yorkshire air ambulance? The Prime Minister: As ever, my hon. Friend speaks up robustly for his constituents. Some of the issues that we face in our constituencies relate to the extra regulation, extra cost and extra bureaucracy coming from the EU, so he is absolutely right to make that point. Mr Speaker: Last but not least, we must hear the voice of Kettering, Mr Philip Hollobone. Mr Philip Hollobone (Kettering) (Con): Given that my right hon. Friend is now not ruling out a future referendum on our membership of the EU, is it not time for Her Majesty’s Government to commission an official, full-scale, independent, comprehensive audit of the costs and benefits of our membership in order better to inform that referendum when it comes? The Prime Minister: When my hon. Friend sees the balance of competences review, he will find that a lot of what he seeks is in it. The idea is to look through the competences exercised by the EU and nation states, and to work out the costs and benefits, so that we have a proper and informed debate. Where he and I will differ, I suspect, is here: I think we benefit from having access to, and a say over, these markets, and that is a powerful argument for remaining in the EU. Like him, however, I am not happy with the status quo, and I want us to seek to change it and then get consent for it. Mr Speaker: Order. I thank the Prime Minister, the Leader of the Opposition and the 74 Back Benchers who have questioned the Prime Minister in 62 minutes of exclusively Back-Bench time.

LIBOR (FSA Investigation) 4.52 pm The Chancellor of the Exchequer (Mr George Osborne): On Thursday I updated the House on the Financial Services Authority’s investigation into Barclays and the attempted manipulation of the LIBOR market in the years running up to and during the crisis. The House has just heard from the Prime Minister, and I would like to give more details of the steps we are taking. This morning I spoke to Marcus Agius, who confirmed that he was resigning as chairman of Barclays because of the unacceptable standards of behaviour within the bank. The Treasury Select Committee has called the chief executive of Barclays to account for himself and his bank on Wednesday, and I, like many people here, look forward to hearing his answers. As I also said last week, every avenue for the possible criminal investigation of individuals involved in the attempted manipulation of LIBOR is being explored, but in the view of its chairman, Lord Turner, the powers given to the FSA do not allow it to pursue criminal sanctions. People in the country rightly ask why it does not have the necessary powers, and those who set up the tripartite system can answer. People also ask whether the gaping holes in the existing law mean that no action at all is possible. After all, fraud is a crime in ordinary business, so why should it not be in banking? I agree with that sentiment, and I welcome the Serious Fraud Office’s confirmation that it is actively and urgently considering the evidence to see whether criminal charges can be brought, particularly in relation to the Fraud Act 2006 and false accounting. It expects to come to a conclusion by the end of the month, and we encourage it to use every legal option available. I should like to address three further issues today: what happens to the money we get from the fines; what urgent changes are needed in the regulation of LIBOR and other markets to prevent such abuse occurring again and to ensure that the UK authorities have the powers they need to hold those responsible to account; and the wider issue of what went so badly wrong in the culture of our banking system and the way it was regulated, allowing such fundamental failures of basic standards of conduct to go unchecked and unchallenged. Let me take each issue in turn. Last week, I said that we wanted to ensure that all future fines paid by the financial services industry should go to the taxpayer. Today, I can confirm that we will propose amendments to the Financial Services Bill in the autumn to make that happen. The new arrangement will apply to fines received from 1 April 2012, so the measure will include the Barclays penalty. From now on, the multi-million pound fines paid by banks and others who break the rules will go to the benefit of the public and not to other banks. That brings me to the urgent changes needed to the regulation of LIBOR to prevent this ever happening again and to ensure that in future the authorities have the appropriate powers to prosecute those who engage in market abuse and manipulation. I have today asked Martin Wheatley, the chief executive designate of the Financial Conduct Authority, to review what reforms are required to the current framework for setting and

613

LIBOR (FSA Investigation)

2 JULY 2012

governing LIBOR. This will include looking at whether participation in the setting of LIBOR should become a regulated activity, at the feasibility of using actual trade data to set the benchmark, and at making initial recommendations on the transparency of the processes surrounding the setting and governance of LIBOR. The review will also look at the adequacy of the UK’s current civil and criminal sanctioning powers, with respect to financial misconduct and market abuse with regard to LIBOR. It will also assess whether those considerations apply to other price-setting mechanisms in financial markets, to ensure that these kinds of abuses cannot occur elsewhere in our financial system. We need to get on with this, and not spend years navel-gazing when we know what has gone wrong. I am therefore pleased to tell the House that Mr Wheatley has agreed to report this summer so that the Financial Services Bill currently before Parliament—or, if necessary, the future legislation on banking reform—can be amended to give our regulators the powers they clearly need. The review is essential to ensuring that we mend the broken regulatory system—introduced by the last Government—that allowed these abuses to happen, but the manipulation of the most used benchmark interest rate reveals the broader issue of the professional standards and of the culture in some parts of the financial services industry that was allowed to grow up in the years before the crisis and which still needs to change. I do not think that a long, costly public inquiry is the right answer. It would take months to set up and years to report. We know what went wrong, and we cannot wait until 2015 or 2016 to fix it. In just six months’ time, we will bring forward the banking reform Bill, which will implement the recommendations of Sir John Vickers’ independent commission on banking. The Bill will bring far-reaching, lasting change to the structure of British banks by ring-fencing retail banks from their investment banking arms. Let us see whether we can use that Bill to make any further changes needed to the standards of the banking industry, and to the criminal and civil powers needed to regulate it and hold people to account for their behaviour. As the Prime Minister said, we propose that Parliament establish an enquiry into professional standards in the banking industry. The Government will in the coming days lay before both Houses a motion to establish a Joint Committee, drawn from the Commons and the Lords. It should be chaired by the Chair of the Treasury Select Committee, my hon. Friend the Member for Chichester (Mr Tyrie). He and his Committee have already been quick off the mark in investigating the issue, and we certainly want their hearings this week to proceed. I propose that the Joint Committee’s terms of reference should be as follows. Building on the Treasury Select Committee’s work and drawing on the conclusions of UK and international regulatory and competition investigations into the LIBOR rate-setting process, we should consider what lessons are to be learned from them in relation to transparency, conflicts of interest, culture and the professional standards of the banking industry. I propose that the Committee should be able to call witnesses under oath, including current Members of Parliament and of the House of Lords. I can confirm that we will provide the Committee with the resources that it needs to do the job.

LIBOR (FSA Investigation)

614

I would suggest to the House that we ask the Joint Committee to report by the end of this year. That is enough time to do the job—and do it well—but not so long that it drags on for years. It means, in very practical terms, that we can amend our banking Bill to take on board its recommendations at the beginning of next year. I hope all parties will reflect on this and support the motion we put forward. The failure to regulate the banks in the boom years cost this country billions of pounds. The behaviour of some in the financial services industry has damaged the reputation of an industry that employs hundreds of thousands of people and is vital to the economic prosperity of the country. We are changing the failed regulation and are reforming the banks; now it is time to deal with the culture that flourished in the age of irresponsibility and to hold those who allowed it to flourish to account. I commend this statement to the House. 5 pm Ed Balls (Morley and Outwood) (Lab/Co-op): The systematic lying—[Interruption.] Mr Speaker: Order. Everything will be slowed up, the more noise there is. I do not care what the exhortation is for people to create a wall of noise. That should not and must not happen in this Chamber. If we end up being much slower because people are mindlessly bawling their heads off from either side of the House, we will be slower. I do not think the public will be much impressed by that sort of behaviour from either side of the House. Ed Balls: The systematic lying, concealment and arrogant abuse of power revealed by the FSA report into LIBOR market fixing at Barclays bank is truly shocking. As one member of the Vickers Commission said this morning: “Today’s banks represent the incarnation of profit-seeking behaviour taken to its logical limits, in which the only question asked by senior staff is not what is their duty or their responsibility, but what they can get away with.”

Set against the depths of that malpractice, which has now been revealed, and the scale of the challenge we face in reforming and rebuilding trust in British banking, I am afraid that the Government’s decision to reject Labour’s call for an independent and judge-led public inquiry into the culture and practice of banking in our country just will not do. Just as in phone hacking or the Iraq war, so in banking: only with an independent, forensic and open public inquiry—not politicians investigating bankers—can we rebuild trust for the future. Banks play a vital role in our economy—they lend to businesses, small and large; they help people to save and borrow for mortgages; and many hundreds of thousands of jobs across the UK are dependent on our retail and our global wholesale banking industries—but banking is a profession that depends on trust, and that trust is currently in tatters. The public are rightly baffled and angry about what they learned was happening at Barclays. We have learned that senior bank executives knew about and covered up deliberate market fixing and manipulation of key interest rates. When ordinary people break the law and defraud the taxpayer or the benefit system, they face criminal penalties and jail sentences; the same should apply to bank executives. The public are now rightly asking who they can trust to clear up this mess and sort this industry out.

615

LIBOR (FSA Investigation)

2 JULY 2012

[Ed Balls] First, on the issue of criminal penalties, the Chancellor says he will bring forward amendments to the Bill in the House of Lords—amendments that he did not introduce in the House of Commons. Will he confirm that the powers he needs for an FSA investigation to be followed by a criminal investigation are actually on the statute book and that it is the job of the Serious Fraud Office to take forward those investigations, using the powers in the Fraud Act 2006? Will he confirm that section 2 of the 2006 Act already makes it a criminal offence to make “false representation” for personal gain and that it is an offence under section 4 to “abuse” a position of trust for financial gain? Will the Chancellor explain whether such investigations are already under way, and whether it is true that the Serious Fraud Office initially refused to act because of inadequate resources? There is now a real suspicion that the Chancellor’s new conversion to law making is just a smokescreen for the failure of prosecutors to get a grip. Secondly, on the LIBOR market, we welcome the limited investigation that the Chancellor rather belatedly announced at the weekend. Self-regulation of this market goes back to the 1980s, but will the Chancellor explain why in March, as this scandal started to emerge, the Financial Secretary denied there was an issue and dismissed our calls for investigation and tougher regulation? When he was asked in the Committee whether he had a view on what needed to be done, he replied with one word: “No.” Given how much the Chancellor is now placing his faith in the Bank of England as the leading financial regulator in the future, will he assure us that the Bank did not turn a blind eye to the manipulation of the Libor survey? However, the problems of culture and ethics that have now been uncovered are wider than the Libor market. The public are angry, and they rightly ask whether this generation of politicians, regulators and banks can put right the wrongs for which they are paying a heavy price. I say “this generation of politicians” because we must all admit that regulation should have been tougher, and we should all learn the lessons of an open and independent judicial inquiry. For my part—[Interruption.] For my part, I regret—[Interruption.] Mr Speaker: Order. What we cannot have are individual Members who feel that their contributions from a sedentary position are somehow in a different category from the sedentary interventions of other Members. We do not need them. What we need is a bit of respectful listening to what is said by the Chancellor and the shadow Chancellor. Ed Balls: For my part, I regret—as do Ministers and central bankers around the world—that we did not see the financial crisis building and take action, but let me ask the Chancellor this question: do he and the Prime Minister regret consistently attacking us in the Labour Government for being too tough in our approach to regulation, saying that it would undermine City effectiveness? That is what they said. As for the future of regulation more widely, let me ask the Chancellor another question. Having rightly commissioned the Vickers report, does he now regret coming to the House a few weeks ago and saying that he

LIBOR (FSA Investigation)

616

was watering down its recommendations and weakening leverage ratios, and arguing, shockingly in the light of recent events, that complex derivatives—the very derivatives that led to the appalling mis-selling of interest rate swaps to small firms—should be inside the retail bank ring fence, contrary to the recommendation of Sir John Vickers? Surely that is one U-turn that we need from the Chancellor. We all have a responsibility to do better in future, to reform our banking industry and to rebuild trust, but we do not believe that another parliamentary inquiry can do the job, just as we rejected that approach in relation to phone-hacking. The Chancellor said today that we did not need more “navel-gazing when we know what has gone wrong.”

How complacent is that? If the Chancellor and the Prime Minister are so confident that their approach is right, why do they not put two options to a vote, and let the House decide? Labour Members will vote for an independent and open public inquiry, not an inadequate and weak plan cobbled together over the course of this morning. The independent inquiry is what our constituents want, and it is the only way to achieve a lasting consensus on reforms for the future. Mr Osborne: There was one question that dared not speak its name: who was the City Minister when the LIBOR scandal happened? Who? Put your hand up if you were the City Minister when the LIBOR scandal happened. The shadow Chancellor was not here on Thursday, so he has had days to think about it, but there was not one word of apology for what happened when he was in charge of regulating the City. He blamed central bankers around the world and he blamed the Opposition of the day, but he did not take personal responsibility for the time he was regulating the City when the Libor scandal started, and that is why he will not be listened to seriously until he does. Indeed, we need to know whether he knew anything of what was going on. Did he express any concern about the LIBOR rate? When he was in the Cabinet and Gordon Brown, the right hon. Member for wherever it is, was Prime Minister, was he concerned about the LIBOR rate and Barclays? We shall find out in due course. Let me now deal with the specific questions asked by the shadow Chancellor. He said that the criminal penalties exist in legislation. As I said, the Serious Fraud Office— which is totally independent of politicians, and rightly so—is looking at the law and seeing what it can do, but Lord Turner himself has said that the Financial Services Authority does not have adequate criminal powers. [Interruption.] Opposition Members are shouting, but let me read to them something a member of their own Front-Bench team has said. Lord Tunnicliffe said this: “Criminal sanctions are extraordinarily difficult to bring about because of the burden of criminal law. It is fair to say though that you can’t find them in the current legislation. And, yes, OK, it’s our fault. I hope my leaders don’t hear me say that.”

That is a member of the Labour Front-Bench team clearly placing the blame on the late Labour Government, of which the shadow Chancellor was the principal economic adviser. That is the problem with the current law, and we are seeking an urgent review in order to amend it and make sure we can deal with the problem.

617

LIBOR (FSA Investigation)

2 JULY 2012

The shadow Chancellor talks about our acting belatedly in respect of regulation. He had 13 years in which to regulate properly, yet in the space of two years we are changing the entire system of regulation by getting rid of the FSA and introducing a change to the structure of banking. That is happening because of the recommendations from the committee that we set up under John Vickers, and we have still not heard from the shadow Chancellor whether he supports John Vickers’ proposals. He often gets up and says what is wrong with them—[Interruption.] Well, if he has just welcomed them for the first time, that is very welcome, but he goes out of his way not to do so on other occasions. The shadow Chancellor then said that, somehow, a parliamentary inquiry would be wrong and that I was complacent to say we knew what had gone wrong. This is what my predecessor, the right hon. Member for Edinburgh South West (Mr Darling), said at the weekend, however: “We know what went wrong and we don’t need a costly inquiry to tell us”,

so that is not just the view of the current Chancellor. I hope the shadow Chancellor reconsiders his position. We will have good people from both sides of this House and the House of Lords to consider the matter. We will put the motion to the House. Let us have a serious inquiry, but let us have an inquiry that comes to a conclusion within a measurably short period so that we can amend the law that will be going before the House next year. That is the sensible step to take. In the meantime, the shadow Chancellor should reflect on his role and his responsibility, as the City Minister who let Northern Rock sell those dodgy mortgages, as the City Minister who let RBS explode, and as the City Minister who presided when the LIBOR scandal began. Sir Peter Tapsell (Louth and Horncastle) (Con): Unlike the shadow Chancellor, I strongly opposed the tripartite regulation of the banks when that was brought forward by the then Labour Chancellor, as I said in a speech I made in the House in 1997. May I now revert to questions that I put to both the Prime Minister and the Attorney-General—who is still with us in the Chamber— suggesting we should urgently consider introducing the concept of the directing mind as defined in the Dodd-Frank Act in the United States, which would enable English commercial law to be strengthened so that the heads of banks can be held answerable for the actions of rogue subordinates? Mr Osborne: My right hon. Friend reminds us that he was absolutely right about the problems that would emerge with the creation of the tripartite regime, and, sadly, his predictions have been borne out by events. He also makes a specific proposal about legal changes and the introduction of the directing mind. We are aware of that idea, and we will look into it. The House can look at it, too, in the inquiry over the next few months. Mr Alistair Darling (Edinburgh South West) (Lab): The Chancellor referred to my quote in a newspaper yesterday. I should just tell him that I was asked specifically about the investigation of individuals, and I made the point that there are authorities, such as the Serious Fraud Office and the Financial Services Authority, who are supposed to be doing that.

LIBOR (FSA Investigation)

618

On the Chancellor’s broader point, let me say that this inquiry will work only if it is a genuine examination of what went wrong. As I have said before, it went wrong under successive Governments over quite a long period, as well as in the City itself. If the inquiry looks like a partisan exercise in settling scores between the political parties, it will not work. The public may not like bankers, but they do not care much for politicians either. I therefore hope the Chancellor can give us an assurance that this inquiry will not be that sort of exercise, and that it will instead be a genuine inquiry into what went wrong and what needs to be put right. Mr Osborne: First, the inquiry should be genuinely cross-party and it will, of course, be up to the Labour party to choose whom it would wish to be on the Committee, both in the Commons and in the Lords. So there will be a choice for the Labour leadership in that respect. Of course, I hope that they would consult my hon. Friend the Chair of the Treasury Committee, but it is ultimately their choice. Secondly, the Treasury Committee, under its previous Chair, Lord McFall, did some very good work on investigating what went wrong. So the idea that the Select Committee or a Joint Committee is unable to do this work is nonsense. “The run on the Rock” was a very good report, as I think the right hon. Gentleman would concede, and it provided the basis for some of the changes in the Financial Services Bill. I think we can draw also on the expertise in the House of Lords in this area and have a Joint Committee. As I say, I hope that once tempers have cooled today, we will be able to reflect on that and have a joint-party consensus on it. Mr Andrew Tyrie (Chichester) (Con): First, may I assure the House that I will not countenance a partisan inquiry and I would not be prepared to chair one either? I do believe that Parliament—both MPs and the other place—has something to contribute to clearing this mess up; they cannot do it all on their own. By any standards, the LIBOR scandal, for which 20 banks around the world are now being investigated, is shocking. It has corroded trust in the UK financial services industry and it is a shameful affair. I find it particularly sad that it will have unfairly damaged the reputations of hundreds of thousands of our constituents who work hard and honestly in the financial services industry. The UK’s reputation has been tarnished, but it can be restored and enhanced if we draw the right lessons. The Treasury Committee will continue with its inquiry into what exactly happened. We will be holding the inquiry on Wednesday with the chief executive of Barclays, and we will also probably call the British Bankers Association and the regulators to find out exactly how this all happened. None the less, the immediate task to be conducted by the Financial Services Authority must be to ensure that we have appropriate sanctions for wrongdoing and a regulator strong enough to give us confidence that wrongdoers will be caught. Does the Chancellor agree that another task, on which the Joint Committee will and should concentrate, must be to learn the lessons of the LIBOR scandal for corporate governance and standards in the banking industry?

619

LIBOR (FSA Investigation)

2 JULY 2012

Mr Osborne: I completely agree with all the sentiments exposed by my hon. Friend. He is right to say that this is an incredibly important industry. In many constituencies represented in this House, across the United Kingdom, financial services will be the largest private sector employer. We want to ensure that this industry has a high reputation that Britain can be very proud of. Of course these activities have damaged the credibility of the industry, and that is what the work that we have begun here, and which I hope he continues, will put right.

LIBOR (FSA Investigation)

620

crime, does not feel that it was given enough powers to undertake a criminal prosecution, as Lord Turner has said very clearly. That is why I want to give the regulators the powers they need. Instead of spending two or three years getting to that point—a long public inquiry would take a year or two, after which the Government would go away, consult, publish a White Paper and introduce legislation, and it would be 2015 or 2016 before we did anything—I propose that we use the Financial Services Bill that is already before the House and next year’s banking Bill to put things right.

Several hon. Members rose— Mr Speaker: Order. There is a lot of interest but not much time. I am keen to accommodate as many as possible, but extreme brevity is required. So questions, please, without preamble. Frank Dobson (Holborn and St Pancras) (Lab): Would the Chancellor of the Exchequer authorise Her Majesty’s Revenue and Customs to examine the personal taxation position of all the people involved in this scandal, because if they are willing to swindle everybody, the chances are that they are trying to swindle the Revenue? Mr Osborne: The Chancellor of the Exchequer, hon. Members will be glad to know, under any Government, cannot direct the Revenue towards any individual. It would be a very sorry state in this country if I could direct the Revenue to the tax affairs of individuals, so I am not proposing to do that. However, as I have said at this Dispatch Box, and as others have said, this Government are introducing a general anti-avoidance rule, we are clamping down on stamp duty evasion and we have increased the resources from the budget we inherited from Labour when it comes to tackling tax evasion, and the Revenue is therefore well resourced to do its work. Mr David Ruffley (Bury St Edmunds) (Con): Last year, the then director of the Serious Fraud Office, Mr Richard Alderman, declined to investigate possible breaches of the Fraud Act 2006 arising from allegations of LIBOR rigging. In the light of that, does the Chancellor of the Exchequer think that the SFO is still fit for purpose? Mr Osborne: Yes, I do. My understanding, although I have not spoken to him directly, is that the director of the Serious Fraud Office feels that he is well resourced to undertake the investigations he is undertaking. Mr Peter Hain (Neath) (Lab): Does the Chancellor accept that public confidence in his Government, the Crown Prosecution Service and the police will be totally destroyed if no prosecution results for the bankers who rigged the LIBOR rate? Whatever the specifics of banking legislation, an offence has been committed—conspiracy to defraud—and that is what the police should be investigating in a criminal investigation. Mr Osborne: The Serious Fraud Office is absolutely independent of Government, but it will be in no doubt that this House and the Government want to ensure that the law is properly enforced and that if there are legal avenues that it can explore, it should use them. We must accept that the Financial Services Authority, which is also a prosecuting authority in respect of financial

Stephen Williams (Bristol West) (LD): The Chancellor mentioned new legislation on the destination of fines on the banking industry and other financial services providers. I raised the issue with our hon. Friend the Financial Secretary in January and got the answer that in the past 10 years, £377,734,373 was levied in fines across the banking sector—a staggering amount. Does the Chancellor agree that a suitable destination for future fines might be the not-for-profit sector and the debt advice agencies that do such valuable work in all our constituencies? Mr Osborne: My hon. Friend is right to point out that under the current arrangements, these fines, including the one that Barclays is paying, will be used to reduce the levy that the rest of the banking industry pays to the Financial Services Authority, so the rest of the banking industry will be the beneficiary of the fines. I do not think that that is right and that is why we are making the changes. We are making them retrospective from the beginning of April to ensure that the fine paid by Barclays will be available to be used for the benefit for the public, and I am sure that we will have a lively debate about how that money should be spent. Glenda Jackson (Hampstead and Kilburn) (Lab): I welcome the Chancellor’s commitment to broad-ranging and hard regulation for the British banking system—a position eschewed like the plague by his colleagues when they were in opposition. Will he guarantee that the powers given to the FSA will ensure that it is genuinely what many of my constituents have campaigned for for some time: a banking watchdog, not a lapdog? Mr Osborne: I can certainly tell the hon. Lady what we want the new regulators to be. We want them to be tough, independent regulators who hold the banking industry to account. However, it is frankly pretty pathetic for Labour MPs, including former Ministers in the Labour Government, to get up and blame the then Conservative Opposition for what happened when they were in office. Why do they not take some responsibility for what they did? Several hon. Members rose— Mr Speaker: Order. I repeat that we need brief questions and although I know—[Interruption.] Order. Although I know that the Chancellor is seeking to assist the House, pithy replies would also help. Penny Mordaunt (Portsmouth North) (Con): Does the Chancellor find it odd that the Opposition are calling for Barclays to face a criminal investigation, given that when they were in office they set up a regime that did not make this abuse a criminal offence?

621

LIBOR (FSA Investigation)

2 JULY 2012

Mr Osborne: To give a pithy reply, I certainly do find it odd. Mr Andrew Love (Edmonton) (Lab/Co-op): Does the right hon. Gentleman regret diluting the Vickers proposals, under pressure from the banks? In the light of revelations in recent days, will he ensure that the ring fence is strengthened, so that this does not happen again? Mr Osborne: We are not diluting the Vickers proposals; we are putting them into law. The House will have the opportunity next year to ring-fence retail banking and separate it from banks’ investment banking arms. When I was the shadow Chancellor, I proposed changes to the structure of banking, and they were completely rejected by the former Prime Minister at this Dispatch Box. We now have an opportunity to change the structure of banking, and I hope that I will have the hon. Gentleman’s support when the law comes before us. Andrea Leadsom (South Northamptonshire) (Con): In the early 1990s, we had around 45 major banks; we now have about five. One of the key reasons why there is so little new competition is the lack of ability to switch. Does my right hon. Friend agree that now is the time to look again at the proposals that the Vickers commission made on switching, and to think again about moving to account portability? Mr Osborne: My hon. Friend will know, as we discussed this in the Treasury Committee, that the Vickers commission specifically recommended—indeed, insisted on—the ability to change bank account easily, and that from 2013, the banks should have in place a mechanism that enables people to do that within a week. As Vickers said—I agree with him—let us see that that happens; if it does not, we can take alternative measures, but we have in place plans to make it much easier to switch bank accounts from next year. Stewart Hosie (Dundee East) (SNP): I welcome what the Chancellor said about the Serious Fraud Office and the responsibility that he has given Martin Wheatley in relation to governance and the setting of LIBOR, and what he said about potentially putting criminal sanctions in the banking reform Bill. I am disappointed that he has not ordered a full public inquiry, but I wish the investigation that he has set up well. Will he confirm to the House that the hon. Member for Chichester (Mr Tyrie) will not be restricted in any way in calling for evidence, under oath, from witnesses from the commercial banks, the central Bank, the regulators, or Ministers at the Treasury at the time of the LIBOR rigging scandal? Mr Osborne: I can confirm to the hon. Gentleman that the Committee will not be restricted in any way. It will call whomever it wants. I suggested—but this, of course, will be a matter for the House—that it should call people to give evidence under oath. [Interruption.] As we are getting a question from an Opposition Front Bencher, let me say that the Committee will also be able to call former Government Ministers. Joseph Johnson (Orpington) (Con): The shadow Chancellor seemed to suggest that the Chancellor was passing the buck to the Bank of England, and that the Bank was somehow conniving in LIBOR lying. Will the

LIBOR (FSA Investigation)

622

Chancellor confirm that the Financial Services Authority, in its investigation, found no evidence to suggest that the Bank of England at any point encouraged banks to low-ball their LIBOR rate? Mr Osborne: The FSA’s report is very clear about the interaction between the Bank of England and Barclays. Paragraph 176 says: “No instruction for Barclays to lower its LIBOR submissions was given”

during the telephone conversation that caused the press interest. Mr George Mudie (Leeds East) (Lab): Will the Chancellor confirm that there will be no Government majority on the Joint Committee? Mr Osborne: The Committee will be set up in the normal way. Jason McCartney (Colne Valley) (Con): Will the Chancellor once again confirm that progress is being made towards a more responsible banking system, with the separation of high street domestic banking and banks’ so-called casino operations? Mr Osborne: My hon. Friend is right: we are proceeding with a change to the structure of British banking, in which we will ring-fence the retail banks from their investment banking arms. [Interruption.] There will be plenty of opportunity for Labour ex-Ministers such as the shadow Chancellor to appear before the Committee, if he is worried about that. We will introduce a Bill, which will go through Parliament next year. In answer to the point about a public inquiry, why spend three or four years before getting to legislation? Why do we not use the opportunity to get it right now, and amend the Bill that will be before Parliament? Mr Dennis Skinner (Bolsover) (Lab): With hedge funds providing up to 50% of all the money that goes into the Tory party political coffers, can we be sure that those criminal penalties that are referred to can extend to any or all of those Tory MPs mentioned in The Independent on Sunday yesterday? Mr Osborne: I do not think that that question deserves an answer. The inquiry will do its job, and I hope it will do so on a cross-party basis. Ian Swales (Redcar) (LD): With Friday’s FSA report into the inappropriate selling of base rate swap products, does the Chancellor believe that the culture behind that latest scandal should also be part of the inquiry? Mr Osborne: The Joint Committee will look more broadly at the culture in the banking industry, but the very specific point that my hon. Friend makes is about a mis-sold retail product. What I want to do, and what I am sure our constituents would want us to do, is make sure that the compensation is paid out as quickly as possible. I do not want any inquiry to delay that. We want to make sure that small businesses, in particular, which are having cash-flow problems because of the products that they were mis-sold, get the compensation they need. I do not want to impede that process.

623

LIBOR (FSA Investigation)

2 JULY 2012

Mr Nicholas Brown (Newcastle upon Tyne East) (Lab): Does the Chancellor identify shortcomings in existing anti-fraud legislation, apart from the costs of pursuing an investigation and a prosecution? Will he confirm to the House that there will be no constraints on either investigation or prosecution costs? Mr Osborne: There will be no constraints because of cost. David Rutley (Macclesfield) (Con): Does my right hon. Friend agree with the view expressed a few years ago that “nothing should be done to put at risk a light-touch, risk-based regulatory regime”?

Is this not further evidence of the wishful thinking that is all too prevalent on the Opposition Benches? Mr Osborne: My hon. Friend is right. I remember sitting at the Mansion House listening to the former Chancellor, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), telling us in 2007 about the golden age of the City, just before the City imploded. Mark Durkan (Foyle) (SDLP): Does the Chancellor recognise that many of us observed for a number of years that the competition between the Front Benches in the House seemed to be based on saying, “Our touch is lighter than yours”? The public believe that Parliament and parties have indulged the banksterism that is now all too apparent. The failure and inadequacy of legislation were a failure by Parliament, not just of Government. Is an inquiry that will be a Whips’ stitch-up, with fairly narrow terms of reference, really an adequate response to the public concerns out there? Mr Osborne: In the end, the conclusion of the inquiry will command the confidence of the House only if it is a unanimous report. The Labour party will be able to choose its members. If it is a divided report along partisan lines, people will see that. I hope the joint inquiry comes forward with a unanimous report. As I say, that would be the way to proceed. A public inquiry would take months to establish and a year or two years to report; in Northern Ireland we have had inquiries that have gone on even longer. There would then be a Government response, a Government White Paper and Government legislation. We would be standing here in 2016 or 2017 dealing with a scandal that had happened a decade earlier. Conor Burns (Bournemouth West) (Con): As my right hon. Friend sets out the task of restoring trust and integrity to the banking system in the light of the appalling revelations at Barclays, he will be aware that we all have constituents who are decent people working in those institutions, who have been badly let down by some of the leaders in the sector, not least the 4,000 people who work for JP Morgan in Bournemouth. May I invite my right hon. Friend the Chancellor to use this opportunity at the Dispatch Box today to recommit the position of this Government—that we are committed to a vibrant banking sector that contributes so much to the economy of the United Kingdom? Mr Osborne: I can tell my hon. Friend that we are absolutely committed to a vibrant banking sector. I have gone out of my way in these exchanges to draw

LIBOR (FSA Investigation)

624

attention to the fact that this is an incredibly important sector to the British economy. The fact that an American bank employs 4,000 people in Bournemouth reminds us that this sector is not just in the square mile of the City of London or in Canary Wharf. This industry employs many hundreds of thousands of people around the country. It is the largest private sector employer in the country, and of course it has a huge impact on the rest of the economy, which is why it must now be properly regulated. Caroline Lucas (Brighton, Pavilion) (Green): The Chancellor keeps repeating his intention to follow the Vickers recommendation of ring-fencing retail and investment banking, but in the light of this scandal will he not accept that simple ring-fencing is not enough because any firewalls will soon be circumvented, which is why we need nothing less than the full legal separation of retail and investment banking? Mr George Osborne: There are people who share the hon. Lady’s view, but we specifically asked John Vickers and his commission, whose membership was drawn from people who had expertise in the consumer industry, banking and elsewhere, to consider whether we should physically separate the banks as she suggests. They explicitly addressed that issue and came to the conclusion that ring-fencing was a better approach, and one of the reasons why they did so is that ring-fencing might provide more stability for the retail arm, as it would be able to draw on the resources of the investment bank. They specifically looked at that and came to the conclusion that having a retail ring fence was better than separating the banks. Several hon. Members rose— Madam Deputy Speaker (Dawn Primarolo): Order. I inform hon. Members that there is very important business after this statement and I will therefore be unable to fit everyone in. I plan to let the statement run for another 10 minutes or so, so short questions and short, direct answers would help enormously. Mark Field (Cities of London and Westminster) (Con): For the reasons the Chancellor has set out, I very much agree that the long path back to trust in banking and financial services is served by a banking Bill, but will he take on board some of the concerns expressed just now by the hon. Member for Brighton, Pavilion (Caroline Lucas)? Many feel that the LIBOR scandal might be a turning point. In addition to looking at ring-fencing, is he open-minded enough at least to consider the prospect of a fully fledged separation of casino or investment banking from retail banking? Mr Osborne: I say to my hon. Friend, whose constituency expertise and personal expertise I have a great deal of time and respect for, that one of the purposes of asking John Vickers to do this work was to resolve the issue for our country. We brought together a commission with broad experience. It specifically looked at this issue and came to the conclusion that a ring fence was better than actual separation. I think that we should stick with its recommendations in order to give the industry some stability.

625

LIBOR (FSA Investigation)

2 JULY 2012

John Mann (Bassetlaw) (Lab): If tomorrow morning the elected Treasury Committee comes up with its own terms of reference, as it is appointed by Parliament to do, will the Chancellor accept them or ride roughshod over them? Mr Osborne: It is for the House of Commons and the House of Lords to pass a motion, so ultimately it is a matter for the House. John Thurso (Caithness, Sutherland and Easter Ross) (LD): At the heart of this matter is a culture that has seen bankers go from trusted advisers to salesmen and clients go from valued clients to marks. Given that culture, is it not right that the Committee be asked to interview the Vickers commission again to see whether, in its view, ring-fencing is adequate following these events? Mr Osborne: It would be entirely up to the Committee to call whomever it would want to call, and it might well want to speak to John Vickers, who has enormous expertise in this area. Mr Pat McFadden (Wolverhampton South East) (Lab): I think that the Chancellor has done his announcement a disservice by setting it up as a continuation of his obsession with placing every act of wrongdoing by every banker at the door of the previous Government. Does he not accept that what the public want is something that gets to the heart of the rotten culture exposed by the FSA report last week, rather than the partisan way in which he set out today’s announcement? Mr Osborne: I agree with the right hon. Gentleman that we want to get to the heart of the cultural problems, but when the shadow Chancellor responds to a statement and blames it all on the party that was in opposition at the time, it is perfectly reasonable for me to point out who was in government. That is a perfectly reasonable response in the cut and thrust of this House, but I completely agree with the sentiment he expresses, which is that we should try to proceed on a cross-party basis. I hope that his Front Benchers will think about supporting the joint inquiry—they will of course be able to choose its Labour members—because I think that that it is the correct way forward to give us answers for next year. Dr Phillip Lee (Bracknell) (Con): Does the Chancellor agree with me, and indeed with Plato, that good people do not need laws to tell them how to act responsibly, and that bad people will find a way around such laws? We really should bear that wisdom in mind when it comes to determining the outcome of the inquiry that has been announced. Mr Osborne: I am tempted to say that we should find an Aristotelian mean, where we do not completely destroy the industry with one inquiry after another, but instead have a sensible inquiry that gets to the right answer, amends the law appropriately and enables us to have a sensible financial services industry that avoids the scandals that we are dealing with today. Helen Goodman (Bishop Auckland) (Lab): One of the most controversial episodes in the recent history of the City was big bang in 1986. Notwithstanding the

LIBOR (FSA Investigation)

626

many good qualities and good intentions of the hon. Member for Chichester (Mr Tyrie), the fact is that in 1986 he was a special adviser to the then Chancellor of the Exchequer, who was overseeing big bang. Does the Chancellor agree that the hon. Gentleman will find it difficult to demonstrate the necessary independence? Mr Osborne: My hon. Friend the Member for Chichester (Mr Tyrie) is more than capable of demonstrating his independence, and I remind the House that thanks to the reforms of this Government he was elected to his post by the entire House of Commons. Dr Sarah Wollaston (Totnes) (Con): I have just received a heartbreaking letter from a 72-year-old pensioner who is being pursued through the courts for a disputed and modest tax claim. How can it be right that those telling lies for eye-popping sums are not ending up in court? Mr Osborne: The Serious Fraud Office is independent of the Government, but it is pursuing every avenue to see whether it can bring criminal prosecutions in this case. This is, however, a matter for the SFO, which is going to come back to us by the end of the month to tell us whether it can do so, and it will have heard what the House has said today. We also want to ensure that in future the regulators have the criminal sanctions that they need, and that is why we seek these investigations to change the law now, rather than waiting four or five years to do so. Clive Efford (Eltham) (Lab): How can it be right, and in line with the Government’s credibility on wanting to clean up the banking system, when those who were responsible and in management at the time of these criminal activities—both the Prime Minister and the Chancellor have today accepted that criminal activities were going on—remain in post, such as Mr Bob Diamond? Mr Osborne: As the Prime Minister said and I repeat, Mr Diamond has to account for himself before the Treasury Committee this week, and I congratulate the Committee on doing that. The chairman of Barclays has resigned, but it is not the job of the Chancellor of the Exchequer to hire and fire the bank chiefs at this Dispatch Box. I am not sure that we want to go down that path; it is much better for the shareholders to do it, the board to do it, and they will have the appearance before the Committee of Mr Diamond to go on. Steve Baker (Wycombe) (Con): Further to the question from my hon. Friend the Member for Bracknell (Dr Lee), will the Chancellor look again at my Financial Institutions (Reform) Bill, which would transfer commercial risk back to the banking sector and end the incentives that have created the culture of recklessness and rule-breaking that is ruining the City? Mr Osborne: I will certainly take a close look at my hon. Friend’s Bill and get back to him on it. Mr Tom Watson (West Bromwich East) (Lab): The Chancellor said in his statement that he had asked Mr Wheatley whether participation in the setting of LIBOR should become a regulated activity. Does the Chancellor accept that public confidence in the British

627

LIBOR (FSA Investigation)

2 JULY 2012

[Mr Tom Watson] Bankers’ Association has completely ruptured, and that for the public it is a question not of whether, but of when, we take that responsibility away from it? Mr Osborne: I completely agree with the hon. Gentleman that confidence in the process of setting LIBOR has been damaged—of course—by these revelations. That is precisely why, if I may say to him, I want to get on with it: that is why I have asked Mr Wheatley to do his report in the next couple of months, not even by the end of the year—so that we have the opportunity in October of amending, just before it becomes law, the Financial Services Bill. The hon. Gentleman is an expert on public inquiries, and I am sure he will agree that a public inquiry would take years to get to that point. Let us get to that point this autumn. Mark Pritchard (The Wrekin) (Con): I fully support greater transparency in banking and, in particular, punishing those who have done wrong, but can the Chancellor from the Dispatch Box today reassure my constituents who, as part of their pensions, hold shares in banks that the Government, or the inquiry, will take no action that unnecessarily undermines the value of those pensions? Mr Osborne: We would not want to take actions that unnecessarily undermined the value of anything, so my hon. Friend has that assurance. Mr Roger Godsiff (Birmingham, Hall Green) (Lab): After the nationwide disturbances last year, a student was given a six-month sentence for stealing a pack of water bottles. What punishment does the Chancellor believe would be appropriate for bankers who have stolen millions of pounds from investors through rigging interest rates? Mr Osborne: I completely understand and sympathise with the sentiment that the hon. Gentleman is expressing: people suffer criminal penalties for offences involving much, much smaller sums of money—a fraction of the sums that we are talking about. The Serious Fraud Office, which is independent of the Government, is looking at the matter. Let us wait to hear what it has to say. It is looking at what laws are available to let it do that. I am sure that he would not want the Government of the day to undertake the criminal prosecutions themselves. Stephen Mosley (City of Chester) (Con): What powers and sanctions will the parliamentary Committee of inquiry have should witnesses refuse to attend, refuse to answer questions or mislead the Committee? Mr Osborne: Parliamentary Committees have a whole set of powers available to them. Ultimately, as I understand it—the Parliamentary Secretary to the Treasury might correct me if I am wrong—the House itself can call witnesses to Parliament through a vote. That power is available to us—[Interruption.] That is absolutely the case. [Interruption.] What I find astonishing is Opposition Front Benchers’ lack of confidence in Parliament—in the House of Commons, in the House of Lords—to do this job. Looking at how they treated Parliament over

LIBOR (FSA Investigation)

628

13 years, perhaps that is not surprising. I have confidence in Members from both sides of the House to do the job being asked of them. Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): Interest rate swaps have been mis-sold. They are complex derivatives. Does the Chancellor still think it right that they are inside the retail banking ring fence? Mr Osborne: We are not proposing to put complex derivative products inside the retail ring fence; that is not part of our proposals. As I say, we are coming forward with plans to implement the Vickers reforms and I hope that the hon. Lady welcomes that. Mr Robin Walker (Worcester) (Con): We have had regrets but no apology from Opposition Front Benchers. What our constituents really want is action. May I commend the Chancellor for taking action to set up a swift parliamentary inquiry? Will he make sure that the proceeds from any fines go to the taxpayer, not the banks? Mr Osborne: I thank my hon. Friend. I say again that I came to the House just last Thursday and said that I would look to see what I could do on the fines. I have now come forward, a few days later, and said that we are going to take those fines—including the fines that Barclays will pay—and make sure that they are put to the public benefit, not to the benefit of the financial services industry. We are acting extremely swiftly on this. As I said, I would have thought that it was in everyone’s interests that we get on and deal with the matter in the coming months. Mr Michael Meacher (Oldham West and Royton) (Lab): Since there is clear evidence of a conspiracy, going on for years, to defraud over LIBOR, will the Chancellor now transfer responsibility for the interest rate market away from the incestuous control of the British Bankers Association to the Financial Services Authority or the Bank of England, including the power to bring criminal charges on evidence of market abuse? Mr Osborne: The right hon. Gentleman asks two very good questions, as did the hon. Member for West Bromwich East (Mr Watson), about who should oversee the setting of LIBOR and what criminal sanctions should exist for the manipulation of that market. That is precisely what we are going to investigate over the next couple of months in Mr Wheatley’s inquiry. That will enable us in September and October to change the law; the Bill has been going through Parliament and can become law this autumn. I hope that I have the right hon. Gentleman’s support for getting on with this and getting the powers on the statute book. Mr Rob Wilson (Reading East) (Con): If it is found, following the Joint Committee inquiry, that manipulation of interest rates damaged small businesses or mortgage holders, will my right hon. Friend consider forcing the banks to reimburse fully those individual small businesses and mortgage holders? Mr Osborne: Of course, if harm is proved to individuals or to businesses the whole question of compensation will arise, and we have the compensation regime to

629

LIBOR (FSA Investigation)

630

2 JULY 2012

address that. As I said in the House on Thursday, it is difficult to establish whether that is the case because people were trying to manipulate the rate up and down on different days to suit their derivative trading book, so there were times when the rate was too low and times when it was too high compared with the fair market rate, and so the question of how much people lost out will be difficult to establish. Several hon. Members rose— Madam Deputy Speaker (Dawn Primarolo): Order. I am sorry that I am going to have to end the statement there. We have taken questions from 39 Back Benchers in 47 minutes. I appreciate that it is a very important issue, but we have very pressing business that we need to move on to, and of course this matter will come back to the House again.

Points of Order 5.50 pm Jeremy Lefroy (Stafford) (Con): On a point of order, Madam Deputy Speaker. In asking a question of the Chancellor regarding London commodity markets and their impact on smallholder farmers around the world following his statement last Thursday, I inadvertently failed to draw Members’ attention to my entry in the Register of Members’ Interests. I wish to do so now and apologise for the oversight. Madam Deputy Speaker (Dawn Primarolo): I am grateful to the hon. Gentleman for putting that information on the record. He has been quite ingenious in using a point of order to do so. I am sure that the House is grateful for that correction. Chris Bryant (Rhondda) (Lab): You will know, Madam Deputy Speaker, that when there is an equality of voices in this House, that is the only time when the Chair of a Committee or the Speaker is able to vote. In the other House, it is quite the reverse: the Speaker or the Chairperson of a Committee is able to vote twice, both in their own right and then if there is an equality of votes. If the new Committee that is to be set up is set up as a Joint Committee, traditionally that has meant that the rules of the House of Lords apply rather than those of the House of Commons. That would mean that the Chairman of the Committee, who is a Member of this House, would have two votes. Is that correct? Madam Deputy Speaker: I am advised that the hon. Gentleman is correct in his analysis of the rules with regard to the requirements on voting and whether a situation would apply in the circumstances that he has described. I am grateful for his point of order. Perhaps I could ask him to leave it with me at this point so that I can take further advice from the Government and the Clerks as to whether that is the true intention of the Government. FINANCE BILL (WAYS AND MEANS) Resolved, That provision (including provision having retrospective effect) may be made in the Finance Bill about face-value vouchers.—(Mr Gauke.)

FINANCE BILL (WAYS AND MEANS) (NO. 2) Resolved, That provision may be made in the Finance Bill amending the descriptions of supplies which are zero-rated, exempt or subject to a reduced rate of value added tax.—(Mr Gauke.)

FINANCE BILL (WAYS AND MEANS) (NO. 3) Resolved, That provision (including provision having retrospective effect) may be made in the Finance Bill about the treatment of arrangements involving settled property.—(Mr Gauke.)

631

2 JULY 2012

Finance Bill (Programme) (No. 2) Motion made, and Question proposed, That the following provisions shall apply to the Finance Bill for the purpose of supplementing the Order of 16 April 2012 (Finance (No. 4) Bill (Programme)): 1. Proceedings on consideration shall be taken on the days shown in the following Table and in the order so shown. 2. Each part of the proceedings shall (so far as not previously concluded) be brought to a conclusion at the time specified in relation to it in the second column of the Table. TABLE

First day

Proceedings New Clauses, Amendments to Clauses, new Schedules and Amendments to Schedules relating to fuel duties. Amendments to Clauses 1 to 4 and new Clauses and new Schedules relating to income tax rates, rate limits and personal allowances New Clauses, Amendments to Clauses, new Schedules and Amendments to Schedules relating to child benefit Second day New Clauses, Amendments to Clauses, new Schedules and Amendments to Schedules relating to value added tax. New Clauses and new Schedules relating to the taxation of banks and employees of banks; remaining new Clauses and Amendments to Clauses; remaining new Schedules and Amendments to Schedules; remaining proceedings on Consideration

Time for conclusion of proceedings 7.00 pm

10.00 pm

11.30 pm

7.30 pm

10.00 pm

Finance Bill (Programme) (No. 2)

632

3. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at 11.00 pm on the second day.—(Mr Gauke.)

5.53 pm Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Coop): I will speak very briefly because I am conscious of the time, but it would be remiss of me not to put on record the fact that we have some concerns about the lack of time available to discuss what is a very big Finance Bill. There are a number of serious issues that many Members will want to discuss during the course of this evening. Although we will not vote against the programme motion, I want it to be on the record that we regard this as an exceptional circumstance and we do not wish it to be seen as the way in which things will be automatically dealt with in future. 5.54 pm The Exchequer Secretary to the Treasury (Mr David Gauke): Let me briefly respond to the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson). As hon. Members know, we have already scrutinised the Budget and the Finance Bill for eight weeks, including in Committee of the Whole House and in the Public Bill Committee, where our discussions were thorough and detailed. Indeed, the hon. Lady played a very large role in those discussions. Before that, in December 2011, the Government published over 400 pages of draft legislation and received about 450 comments on it. That demonstrates our commitment to improving the way in which policy is developed. In order to make progress with Government business in good time, we have agreed through the usual channels to programme this debate on Report. I commend the motion to the House. Question put and agreed to.

633

2 JULY 2012

Finance Bill [1ST ALLOCATED DAY] Consideration of Bill, as amended in the Public Bill Committee

Finance Bill

634

that, because of what the Government have done, fuel duty will be 10p lower than it would have been if we had followed Labour’s plans? Miss Smith: I shall certainly confirm that. It is testament to the repeated action that this Government have taken to support motorists that that is indeed the case.

New Clause 1 FUEL DUTIES: RATES OF DUTY AND REBATES FROM 1 AUGUST 2012 TO 31 DECEMBER 2012 ‘In relation to products charged with duty under HODA 1979 on or after 1 August 2012 but before 1 January 2013, that Act has effect as if the amendments made by section 20 of FA 2011 had never been made.’.—(Miss Chloe Smith.)

Sarah Newton (Truro and Falmouth) (Con): Does my hon. Friend agree that this reduction in fuel duty is vital not only for motorists but for small businesses such as those in Cornwall that have long distances to take their goods to market, and that it shows that this Government are listening and are on the side of hard-working families and small businesses?

Brought up, and read the First time. 5.55 pm The Economic Secretary to the Treasury (Miss Chloe Smith): I beg to move, That the clause be read a Second time.

Miss Smith: I am grateful to my hon. Friend. She is not only in fine fettle, as she is standing without crutches, but rightly points to the effect that we know this will have on households and businesses.

‘(1) With effect from 1 July 2012 the fuel duty payable under the Hydrocarbon Oil Duties Act 1979 on biodiesel produced from waste cooking oil shall be 10 pence per litre less than would be payable apart from this section.

Mr Alan Reid (Argyll and Bute) (LD): I, too, welcome the decision. This Government are certainly on the side of rural motorists. Will my hon. Friend confirm that as well as fuel duty on the mainland being 10p a litre lower than it would have been under Labour’s plans, on the islands it is 15p a litre a lower thanks to the Government’s adopting the island fuel discount—a policy that Labour refused to adopt?

(2) The Commissioners for Her Majesty’s Revenue and Customs may by order made by Statutory Instrument repeal subsection (1) on or after 1 January 2014 or when the Renewable Transport Fuel Obligation has come into effect, whichever is the earlier.’.

Miss Smith: I am pleased to confirm that. I am glad to hear my hon. Friend’s welcome for the scheme on behalf of his constituents and others in rural areas where we are piloting it.

Madam Deputy Speaker (Dawn Primarolo): With this it will be convenient to discuss the following: New clause 8—Biodiesel

New clause 9—Taxes on road fuel ‘The Chancellor of the Exchequer shall conduct a review into the relationship between fuel duty, other taxes charged on road fuel and the cost of road fuel, and lay a copy of the report before the House of Commons before 1 August 2012.’.

New clause 11—Fuel duties: rates ‘(1) The Hydrocarbon Oil Duties Act 1979 shall have effect as if the amendments made to it by section 20 of the Finance Act 2011 (Fuel duties: rates of duty and rebates from 1 January 2012) had not been enacted. (2) This section will have effect from 1 August 2012. (3) The Treasury may by order made by Statutory Instrument repeal subsection (1), and any such order shall be subject to annulment in pursuance of a resolution of the House of Commons.’.

Miss Smith: I share the concerns that many have raised about driving, the cost of living, and the challenges of running a business. Although the cost of fuelling a vehicle has recently eased as global oil prices have fallen, it is still a very important part of the overall cost of living. That is why the Government have announced that we will provide further support to motorists regarding the cost of fuel by deferring the 3p per litre duty increase that was planned for this August until January next year. That will mean that this Government will have kept fuel duty frozen for a total of 21 months since our decision in the Budget 2011 to cut fuel duty by 1p per litre. Robert Halfon (Harlow) (Con): I am grateful to the Government for moving on this issue, as will be many motorists across the country. Will my hon. Friend confirm

Julie Hilling (Bolton West) (Lab): Like other Members, I welcome the Government’s U-turn on petrol tax—another U-turn on the omnishambles of the Budget—but does the hon. Lady recognise that the increase in VAT means that the cost of petrol has increased during the time of this Government, and not decreased as one might imagine? Miss Smith: I shall say two things in response to that. First, as a result of all the actions that this Government have taken, including what we have had to do on VAT, the price of petrol and diesel at the pumps is still lower than it would have been under Labour—whose Members are, on the whole, absent today. Secondly, the decision that we are legislating for today combines our determination to help families with the necessity of keeping Britain safe in the global storm and with our credible plan to deal with the country’s debts. Robert Halfon: Does my hon. Friend agree that the Opposition’s support for a cut in VAT is rather a misnomer, because not only would it cost £12 billion, but the vast majority of businesses who need to get their petrol prices down do not pay VAT? 6 pm Miss Smith: My hon. Friend is an ardent voice on behalf of small businesses in his constituency and elsewhere. He is right to point to the nuances in the costs of running a business.

635

Finance Bill

2 JULY 2012

[Miss Chloe Smith] Deferring the August rise will cost about £550 million this year. We will finance that through greater than expected savings in Government spending. That will avoid increasing the national debt, which is vital to our country’s well-being. That is our tough but fair plan to deal with Britain’s debts. Our actions to reduce the deficit and to rebuild the economy have secured interest rates at near record lows, benefiting businesses and families and keeping mortgage rates low. Dr Thérèse Coffey (Suffolk Coastal) (Con): This morning, my hon. Friend and I were together on the train pressing the case for investment in rail. Are the Government, of whom she is a proud member, not showing the right example to the country by taking their foot off the accelerator and driving more economically? Will this measure bring the growth that the FairFuelUK campaign said it would? Miss Smith: This morning, I was indeed speaking in my constituency capacity about my wish that our regional economy will not be left in the sidings. The same is true of our national economy. We must ensure that Britain remains competitive. Our actions, which are part of a credible national plan, have kept Britain safe from the global turmoil around us. It is within that plan that we have listened and acted. New clause 1 will defer the fuel duty increase that was planned on 1 August this year to 1 January 2013. As the Chancellor said last week, and as my hon. Friend the Member for Harlow (Robert Halfon) has noted, this decision means that pump prices are 10p a litre cheaper than they would have been if we had not abolished the previous Government’s fuel duty escalator. It is a real help for families, businesses and motorists across the country. The AA has said that it is “great news for all motorists”.

The RAC Foundation has said that it is “good news for drivers and good news for the country.”

The Government have taken action upon action to support motorists and have done more than any other Government. We have avoided the two years’ worth of increases planned by the previous Government. More than that, last year we abolished Labour’s fuel duty escalator, which increased fuel duty by above inflation every year until 2013. We have successively cancelled and deferred duty to deliver the longest period of unchanged fuel duty for more than five years. As a result of that repeated action, average pump prices are now approximately 10p a litre lower than they would have been. To put that in context, a typical Ford Focus driver will be £159 better off and an average haulier £4,900 better off between 2011 and 2013 than they would have been under the plans left by the previous Government. This support for motorists is part of our broader plan of helping with the cost of living and promoting business growth, while reducing the deficit and rebalancing the economy. That has included freezing council tax and raising the personal allowance. Jonathan Edwards (Carmarthen East and Dinefwr) (PC): I, too, congratulate the Government on this decision, not least because it saves me from making a speech on an amendment that we had planned to table on this

Finance Bill

636

issue. Considering the gloating of the official Opposition last week, does the Minister recall the Labour party at any stage on Second Reading or in Committee making the case for this 3p cut? Miss Smith: The hon. Gentleman has given me the perfect opportunity to note that, regrettably, the official Opposition’s Benches are astoundingly empty. The stance that they took last week showed astounding political opportunism, given that they had 13 years to support the motorists but did not, and that they left behind a depth charge of increases. I regret that I shall not be able to hear him put the case in his own words. Perhaps I may explain to him more of the actions that we are taking to support the motorist and businesses. Businesses are seeing successive cuts in corporation tax, coupled with an extended business rates holiday for small businesses until April 2013. In passing, I should note that the high pump prices of recent years are causing real difficulties in ensuring that motoring remains affordable. However, pump prices have fallen by nearly 11p a litre since their peak in April. That said, at a time when money is tight, deferring the fuel duty increase from August to January will provide further support to motorists. This is a Government who not only have a credible plan to support motorists, but are dealing with the debts created by the previous Government. A responsible Government are able to listen to, consider and respond to the concerns of motorists. Compared with the plans that we inherited, we have cut fuel duty, cancelled the previous Government’s escalator and introduced a fair fuel stabiliser. I understand that we will also be discussing what the Opposition have planned for motorists, perhaps in some detail. I also look forward to hearing from my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) on biodiesels. I look forward to responding on those matters. This Government are on the side of motorists and our measures will support them when times are tight. Sheila Gilmore (Edinburgh East) (Lab): On Second Reading, we were given to understand that the fuel duty rise was essential to the Government’s proposals and a key piece of the jigsaw in resolving the deficit. For many weeks, that has been the clear message from the Government. I understand that Government Back Benchers were exhorted to write to their constituents to tell them why—regrettably, no doubt—the rise would have to happen and there was no alternative. It therefore comes as rather a surprise to hear that it is not quite so essential to the Government’s plans after all, but is a dispensable piece of the jigsaw. This is probably the most expensive of the U-turns that have been performed over the past few weeks. It dwarfs many of the others in terms of revenue forgone. It is all very well for the Minister to tell us that it has happened because we have a listening Government, but they must also listen to what they have been saying. On that basis, they must explain how they have come to this position. Lyn Brown (West Ham) (Lab): Does my hon. Friend have any idea how much the U-turns have cost collectively so far?

637

Finance Bill

2 JULY 2012

Sheila Gilmore: I understand that it is in the region of £725 million. That is quite a large hole in what was presented in March—it seems a long time ago now—as a balanced Budget. That was one of the Chancellor’s key themes in his Budget speech. We now appear to be faced with something of an unbalanced Budget. Mr Reid: Because the Government have made savings in other areas, the Budget is still balanced. The hon. Lady was elected on a manifesto that supported the fuel duty escalator. When did she change her mind? Sheila Gilmore: It is clear from the pattern of fuel duty rises under the last Government that such things were never set in stone and were not intended to be so. One has to look at the situation with which one is faced. Miss Chloe Smith: The hon. Lady has a touching faith in the previous Government’s ability to stick to a course. Does she support Opposition new clause 11, which has a price tag of about three times as much as the new clause that she is attacking? Sheila Gilmore: We have very different views about how to stimulate and boost the economy. The Government have run demand into the ground, for example by raising VAT to 20%, which has had an effect on fuel. Ministers are reluctant to talk about that in any detail. It has to be remembered that prior to the election, the Conservatives were going around telling us that there would be no increase in VAT, and their coalition partners liked to stand in front of huge billboards saying that they feared there would be a VAT bombshell but were completely against it. Mr Jim Cunningham (Coventry South) (Lab): Has my hon. Friend noticed that oil and petrol prices have dropped by 28% over the past three months? That is not reflected at the petrol pumps, and surely the Government should do something about that. Sheila Gilmore: My hon. Friend makes an important point. When the raw product goes up in price, the pump price goes up very quickly, but a downward turn seems to take a great deal longer to reach the consumer. We have made similar arguments about other energy price rises. The hon. Member for Argyll and Bute (Mr Reid) suggested that it was all right for the Government to make U-turns such as this, because they had found savings elsewhere. That is nice to know, but if such savings could be found so easily, maybe the Government could have avoided some of the other things they have done. After all, we spent a lot of time in the Budget debate and before talking about the plight of couples who were losing tax credits because they were deemed not to be working enough hours. That change affects a small number of people—from memory, I believe it is about 500,000. We were told that if it were not implemented, it would cost the Treasury £500 million. We were told that it was impossible to go back on that decision, because money was so tight. Like all Governments, the current Government are making choices. In the past two years, they have said that certain things have to be done and are not choices.

Finance Bill

638

They have said that they have been forced into them. However, all Governments make choices—that is part of governing. Julie Hilling: Does my hon. Friend recognise that the Government have chosen not to do a U-turn on the granny tax, which is aimed at the people who are least able to pay, but continue to reduce the top rate of tax? Sheila Gilmore: Indeed, and a lot of people would be glad to see the Government make U-turns in other areas, and in fact in their entire economic policy. It has been misguided, and the Opposition were clear from the start that it was the wrong way to reduce the deficit. Lyn Brown: Does my hon. Friend agree that one of the biggest problems last week was that we were not told where the new money had come from to fund the Government’s U-turns? Does that not show the Conservative party’s economic incompetence? It is very worrying. Sheila Gilmore: That is a very important point. We had a semi-answer from the Government saying that savings had been found, but they seem to be somewhat mysterious savings. We had not heard about them before, and we still do not really know where they have been found. Miss Chloe Smith: Has the hon. Lady not read the Office for Budget Responsibility’s forecasts or the reports identifying about £4 billion of underspend in each of the past four years? Sheila Gilmore: If the Economic Secretary is so clear that there is money to be used, I once again have to press her on some of the choices that the Government have chosen not to make. From what she has just said, it seems to me that there may be scope for her to reconsider some other matters. I have a constituent whose employer, a big national department store, recently told her that she had to go completely flexible with her working hours. That meant that her shifts could vary from day to day. When she said that that could be very difficult for her, because she had child care arrangements to make and could not simply change things at short notice, she was told that she could reduce her current 18-hour week to a 12-hour week. We are told that such people should easily be able to find more hours of work to get around the problem of having their tax credits removed. If there is so much underspend, perhaps the Government should think beyond their proposals on fuel duty. It does not give us a great deal of confidence when they are adamant that they are not going to change things, but then do so before thinking about where they are going to find the money. 6.15 pm Mr Iain McKenzie (Inverclyde) (Lab): My hon. Friend rightly identifies the fact that the Government have found additional money all of a sudden to fund their U-turns. Does she think that that money could have been used to create employment in areas with significant unemployment levels?

639

Finance Bill

2 JULY 2012

Sheila Gilmore: It could, and there could also have been significant investment in the building of affordable housing, which is dear to my heart. That would not just give people houses but create jobs and apprenticeships and boost the local economy. The Government could have done that if they had really wanted a Budget for growth. Our criticism of the Budget was that however balanced it may have seemed—it now turns out not to have been quite so carefully balanced as we were told—it was not a Budget for growth. Very little was put into building up jobs and growth. Perhaps it was only a practice Budget, although I always thought that was what the autumn statement, which used to be called the pre-Budget report, was for. David Rutley (Macclesfield) (Con): Fiscal responsibility is clearly an overriding priority, but does the hon. Lady agree with President Hollande, who recently said that “national debt is the enemy of the left and the enemy of France”?

It is also the enemy of the United Kingdom. Sheila Gilmore: National debt is sometimes essential. After all, I seem to recall that it was very much higher at the end of the second world war than it has been at any time since. There were reasons for that, and I believe we finished paying it down only a few years ago. Sometimes, we have debt because we have made essential or useful investment, and of course it is not the same as deficit. Mr McKenzie: My hon. Friend is making a very good point. We have heard one of the comments of the new President of France, but does she think the Government will agree with his opposition to the austerity measures that have been put in place across Europe? Sheila Gilmore: I do not dissent from my hon. Friend’s view. The new President’s general intention is indeed to break away from the fixation with austerity measures. That is not the same as saying that we do not want to deal with the deficit. The question is how to do that successfully and ultimately reduce borrowing. The last Government have been misrepresented as having constantly increased the national debt. That is simply wrong. It was substantially reduced under the Labour Government, but what caused that process to go into reverse—I am not going to say it did not—was the recession and the economic stimulus that was put in to get us out of it. Our view remains that had the policies that were in force between 2008 and 2010 been continued, rather than going into a double-dip recession we would have begun to climb out of the recession. Julie Hilling: Does my hon. Friend agree that we had growth in the British economy at the time of the general election, but we now have a recession made totally in Downing street? If the Government have such a big underspend, why on earth do we face a double-dip recession, and why are ordinary people suffering so much at their hands? Sheila Gilmore rose— Madam Deputy Speaker (Dawn Primarolo): Order. In replying to that intervention, I hope the hon. Lady returns to the subject of the debate, which is fuel duties.

Finance Bill

640

Sheila Gilmore: I do not want to dissociate those things—they are linked in lots of ways. Initially, we were told that there were constraints on the Budget, including not postponing the increase in fuel duty. What happens in a few months’ time? The measure is a deferral—we are not forgetting about it for ever—but what financial complexities will that create? It is heartening that the Government’s motivation seems to be their recognition that people are suffering from a general reduction in their standard of living. As many commentators have pointed out, many working families are experiencing real reductions in disposable incomes such that they have not experienced for many years. That is part of the serious position in which people find themselves. It is good that the Government have understood that and want to act on it, but I would like them to act on some of the other issues that Opposition Members have constantly raised. I want them to understand that people are suffering not just from fuel prices, but from a number of other measures. The Opposition’s five-point plan would have reduced VAT and enabled investment in job creation. Perhaps it is not too late even now for the Government to U-turn on that. Simon Hughes (Bermondsey and Old Southwark) (LD): I am happy to speak in the debate on new clause 1, which was moved by the Economic Secretary on behalf of the Government; on new clauses 9 and 11, which are in the name of the Labour Opposition team; and on new clause 8, which is in my name. I support new clause 1. I am not against responsive government—indeed, there is a duty to be responsive in government. I therefore welcome the fact that the Chancellor announced that the Government had heard the concerns of ordinary people, families and businesses that cost-ofliving pressures continue to be difficult on them. The cost of fuel at the pumps affects people in rural areas, but it also affects people in suburban and urban areas, and people running both small businesses and larger firms. For some people, there is an inescapable obligation to drive—they drive for their families and businesses, and in emergencies. Therefore, the price at the pump is a hugely important part of their weekly budget. People made the case, and the Government, including Treasury Ministers from both parties, first agreed to delay the increase scheduled for earlier in the year until August, and last week announced a further delay until the end of the year. That is welcome. It is fair to say that the announcement came slightly out of the blue and yellow last week—it took a few people by surprise—but it clearly has not been met with opposition from those on the Opposition Benches, because a grand total of six Labour Members, including the Whip, have been present in the Chamber for this debate. There is clearly no great furore at this concession to the needs of the consumers. Sheila Gilmore: Will the right hon. Gentleman give way? Simon Hughes: No, I will not give way. The hon. Lady spoke for a very long time, as she often does, and I will not concede. This is a short debate—it goes on only until 7 o’clock—and I want to allow other colleagues to speak.

641

Finance Bill

2 JULY 2012

I want to make a specific plea on biodiesel. I should declare my interest: as some colleagues know, I sometimes drive a London taxi, which has often been powered by biodiesel bought from Uptown Oil, a firm in my constituency that collects used cooking oil from local firms—a chain of good environmental practice ends up in my cab and other vehicles in south London. I have had discussions with the Economic Secretary and the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), and I asked colleagues—my hon. Friends the Members for Bristol West (Stephen Williams) and for Redcar (Ian Swales)—to argue the case in Committee last week. We have so far not persuaded the Government to change policy, but I wanted to put the case as to why the industry needs continuing Government attention and to ask that they do not turn their back on the industry, even if they are not willing to concede to my requests now. Charlie Elphicke (Dover) (Con): I remember a case reported in the papers some while ago. A gentleman in Wales was arrested by customs officials for not paying duty on the cooking oil in his car. He was traced by the smell. Can the right hon. Gentleman confirm that cooking oil fuel no longer smells, and that customs officials should not arrest people found with it in their cars? Simon Hughes: I confirm both. Biofuel is produced from waste vegetable oil and collected locally. This has been going on for a century or more—the first diesel engine ran on peanut oil. Colleagues may not know this, but the idea was that biodiesel vehicles would be used by farmers, who could use their crops effectively. The Department for Environment, Food and Rural Affairs is clear that the huge numbers of blockages caused by pouring oil down drains are not a good thing—it is better to put it somewhere else, which costs money for companies and local authorities. Biodiesel also means that such waste does not go into landfill sites, which produce 40% of our methane emissions and 3% of our country’s greenhouse gas emissions. The product therefore helps us to meet our renewable energy targets. We produced something like 35 million litres of biodiesel from used cooking oil sourced in the UK for road transport two years ago, which meant a carbon saving of 82 million kilograms of CO2. There are about 30 to 40 producers—not just Uptown Oil in my constituency, but companies all over the UK. They are generally small firms, employing about five to 20 employees. They are confronted by a severely difficult economic situation. We could lose them, which would mean a loss of employment, a loss of revenue to the Government because they pay their taxes, and a loss of the source of the product, which would be a very bad thing. In April 2012, following a decision by the previous Government, the differential fuel duty on biodiesel was taken away—it was put in place to support the industry—as the system of support across the EU changed to a new one. The derogation was originally meant to end in 2010, but it was extended by two years by the previous Government, because the implementation of the renewable energy directive was delayed—perfectly legally. There was therefore an attempt to ensure that the industry in the UK had continuing support on the basis that when

Finance Bill

642

such support ended—it was planned to end in spring 2012 —the new renewable transport fuel obligation certificate system would bring in the revenue. Sadly, that was delayed—it was due to be implemented in December 2010, but in the end, it was implemented in December 2011. The new system has therefore had only a few months to bed in. The problem—bluntly—is that the price of the certificates is nothing like what the industry expected. Let me give a couple of quotes from people on the front line. This is from a firm in Feltham: “I have found biodiesel road sales fall through the floor since the removal of the tax differential. 80% of my biodiesel sales now are for use as heating oil at a considerably reduced margin and overall volume of sales. I have had to lay-off my production manager and am working 7 days a week just to try to keep the business going.”

Edible Oil Direct Ltd of Rye, East Sussex says: “We had to keep our prices at the pre budget price. Our On-Road customers who most makeup ‘saves money’ as opposed to the ‘green impact’ stated that if the price was increased in line with mineral they will switch back to mineral.”

Convert2Green of Middlewich, Cheshire says: “″On average Convert2Green…received last year 20p tax differential and 17p Renewable Transport Fuel Certificate…revenue per certificate i.e. 37 pence per litre. With this, the company made an operating profit of £290k. Currently, the best offer we have for RTFCs up to April 2012 is 7 pence per litre and from April 2012 onwards 10 pence per certificate. At two certificates per litre”—

the new system— “we estimate we will get 9 pence per certificate or 18 pence per litre on average. This is a reduction of 19 pence per litre. We sell approximately 3.75 million litres of road fuel per annum. Our profit reduction is £712,500 per annum or £59k per month. This takes us into significant loss. We will have to consider our future.”

Finally, the firm from which I bought my biodiesel, Uptown Oil, just over the bridge in Southwark, says: “So far it has had a disastrous effect on our sales of Biodiesel for road use....Down 75%. Before the change we were receiving…around 17 pence…and 20p from the government. Now we receive 7p x 2 RTFC so 14 pence. So having increased our price we are worse off by 13 pence a litre. If we were to increase our price by 13 pence our fuel would be marginally more expensive than fossil fuel and sales would virtually cease.”

Those figures speak for themselves. 6.30 pm According to the Government, the problem is that the estimate of the industry—that the differential will cost the Treasury only about £10 million—is an underestimate, because it has been proved to be so in the past, and that it could be used to subsidise imports and so have an unpredictable outcome and not support business in this country. I hear what the Government say, but compared with the freezing of the general fuel duty this August, which will cost about £500 million, this plea is for a very small subsidy indeed. I am concerned that if the Government do not respond to the industry’s plight, by the end of the year we might lose it—or most of it—and the revenue from it; there might be a net loss to the Exchequer, because the differentials I want extended for one more period would be far less than the loss; green fuel will lose out; a good recycling product will lose out; and we will regret it. I ask the Minister and her colleagues in the Department for Transport not to let this happen. If it cannot be implemented in this Finance Bill, as I would like, something might need to be done quite soon in this financial year.

643

Finance Bill

2 JULY 2012

They will accept, I hope, that it would not be good for part of this valuable industry to be lost. We need green jobs, and the Government are promoting them, but they must continue to do so for the road industry. Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Coop): It is a pleasure to speak on this important issue. Notwithstanding the fact that few Opposition Members are present, I hope that Government Members will recognise the quality of the contributions, if not their weight in numbers. Neither should anyone believe that the fact that there are relatively few Labour Members in the Chamber suggests a lack of interest or concern about this issue, which matters to every one of our constituents. Two weeks ago, on 20 June, an article in The Daily Telegraph reported the Prime Minister as warning motorists that there was “no bottomless pit of money”

to fund a fuel duty cut. We were led to believe that this was dampening speculation that the Treasury would be able to afford the £1.5 billion needed to cancel the extra duty for one year. On 24 June, the Transport Secretary, also in an interview in The Daily Telegraph interestingly, indicated that she was not prepared to lobby the Treasury to delay or abandon the 3p increase in fuel duty due this August. She was also reported as saying that her focus was instead on “challenging” petrol firms to cut the cost of fuel at the pumps to reflect the falling cost of oil globally. We have no problem with that. Many people are concerned that prices at the pump do not change as the oil price drops, although we know that it is difficult for small independent petrol retailers who have to buy at a particular price and might not have the same volume going through as some of the large supermarkets. We have to understand that. However, the Transport Secretary’s comments chimed perfectly with the words of the Economic Secretary in a recent Westminster Hall debate: “Calls for the August increase to be scrapped raise an important question, because we would need to consider how to replace the £1.5 billion it would cost. That money would need to come from higher taxes or lower spending elsewhere.”—[Official Report, 23 May 2012; Vol. 545, c. 143WH.]

Every time the issue was raised, then, Ministers made it absolutely clear that if they were to do it, they would have to come up with a way of paying for it—stating the obvious, perhaps, but I shall return to that point later, if I have the opportunity. It might be a cliché to talk about a week being a long time in politics, but a week after the 20 June article, the shadow Chancellor, in an article for The Sun—that newspaper, like FairFuelUK, had campaigned on the issue—called for the August duty increase to be dropped, and made it clear that he wanted it to be dropped at least until next January. Government Members seemed to suggest that this was opportunistic and done on the spur of the moment or for purely political reasons. Nothing could be further from the truth. We have consistently made it clear that action needs to be taken, especially given that times are tough, with higher VAT generally and prices rising faster than wages. Everyone knows from their constituents—I am sure that Government Members receive the same representations as Labour Members—that filling up the car is now a big drag on family budgets. Indeed, a nurse in my constituency

Finance Bill

644

who was not on a high salary told me that filling up her car to get to work cost her so much that it was like having another mortgage. Charlie Elphicke: The hon. Lady is making heavy weather over who should take the credit and whose idea it was. Is it not great news, first, that prices at the pump are falling, and have been falling in recent weeks, and secondly that the Chancellor has been able to freeze fuel duty? Cathy Jamieson: I welcome the fact that it will make a difference for constituents, but once again, unfortunately, the way it was done did not suggest a Government who were organised or knew that they were going to make the announcement at that particular time. That is important in the context of how it will be paid for, but I shall come to that. At the time, we expressed concern that the Chancellor’s Budget plan would mean a 3p hike in fuel duty in just five weeks. Previously, we had called for the Government to cut VAT, which would have knocked 3p a litre off fuel prices, as well as helping hard-pressed household budgets in other ways. We called for the August rise to be dropped because we believed that increasing the fuel duty at this time would have sent the wrong signal to retailers, who would have had to pass every penny on to drivers and put prices up just when they should have been cutting them. We also made the point that with Britain now in a double-dip recession, the last thing our economy needed was another tax rise adding to the squeeze on household budgets and to the difficulties faced by many small businesses. The Government’s priority should have been to boost the economy, rather than to clobber families, businesses and pensioners just when they were feeling the squeeze the most. That is why we called on the Chancellor to stop the August fuel duty rise, at least until next January. We said that we would put that issue to a vote in Parliament, and that is why we tabled new clause 11. Mr Jim Cunningham: One question that has never been answered is why the fuel duty decision was not taken in the Budget. Does my hon. Friend agree that the Government rushed into this without thinking about the consequences? Cathy Jamieson: Indeed; my hon. Friend makes a good point. The way in which the decision was announced, and the aftermath of that announcement, does perhaps suggest that the Government were rushed into this. Also, many Government Back Benchers agreed that the fuel duty increase should be dropped. A number of them made that clear in a good Westminster Hall debate, and others publicly signed up to support the FairFuelUK campaign. We tried to be helpful. We suspected that Ministers might say—as, indeed, they did—that they could not afford to stop the increase, even though they had found the money to give a tax cut to millionaires. As has been suggested, if there is money available, it ought to go to those whose household budgets are being squeezed the most. It is still astonishing to me that the Government seem intent on punishing families—especially those with children—while at the same time giving a massive tax

645

Finance Bill

2 JULY 2012

cut to millionaires. [Interruption.] Government Back Benchers can shake their heads and look at the ceiling, but real people are being affected by this Government’s Budget, and those who are benefiting are the best off. We suggested some ways of raising the necessary funds. We said that the Government could perhaps consider closing the tax loopholes that the Prime Minister had been condemning, and stopping hundreds of millions of pounds being lost through offshore tax havens. We also suggested that they might want to reverse the pension tax relief boost that they have given to people who are already well off—namely, those earning more than £150,000—and that they might want to use the £500 million underspent in the Olympics budget. We were not being opportunistic. We understand that difficult decisions have to be made if we are to get the deficit down, and as a responsible Opposition we looked at the figures. We also recognised that, at difficult times in the past, Labour had put up fuel duty. On many occasions, however, we also delayed or cancelled planned fuel duty rises in the light of the circumstances at the time—including at the height of the global financial crisis —because it was the right thing to do to give assistance to the people who needed it most and to ensure that we balanced and grew the economy. We know—and more and more commentators are agreeing with us—that raising taxes and cutting spending too far and too fast have backfired. Britain has been pushed into a double-dip recession, more people are out of work, and the result is a bigger benefits bill and £150 billion of extra borrowing. That is why we need a fairer and more balanced plan for our economy that will get people back to work, and why we are calling again for the Government to change course and put their efforts into tackling youth unemployment, as well as using the skills of people who have been made redundant, and who have something to give back, to support young people into the jobs market. We agree with the Government that stopping August’s 3p rise in fuel duty is the right thing to do for British businesses and families. I do not know whether the Prime Minister and the Chancellor have ever had to worry about the cost of filling up their cars in the way that the nurse in my constituency does. She works night shifts, and she does not know whether she will have enough money left at the end of the month to fill up her car so that she can get to work. In response to the hon. Member for Dover (Charlie Elphicke), we are glad that the Government have at last started listening to those who face those difficulties, and we will therefore be supporting the Government tonight on this issue. As I said earlier, however, the manner in which the announcement was made raises a number of questions. It looked as though the issue had brought about the quickest U-turn in politics. The new benchmark for “a long time” in politics is no longer a week but overnight, with changes being made 24 hours after the initial announcement. 6.45 pm The Chancellor made the announcement to Parliament during Treasury questions. It was right and proper that he did it in the House; I have no complaint about that. However, the shambles of the aftermath made it abundantly clear that people on his own side had not been expecting it, especially those Back Benchers who had religiously stuck to the “lines to take” that had been circulated in

Finance Bill

646

advance. We actually felt a bit sorry for some of them, because they had not stuck their necks out and done what they knew in their heart of hearts to be the right thing—namely, sign up to the campaign and call on the Government to change course. Instead, they went out and defended the Government’s proposals, right up to the last minute. We heard that confirmed this evening by the right hon. Member for Bermondsey and Old Southwark (Simon Hughes), who said that the change had come as a surprise to him. It is not clear exactly how many people were surprised by the announcement. There was a strong suspicion that many of the Chancellor’s fellow Ministers, including perhaps the Transport Secretary, who gave that interview to The Daily Telegraph on 24 June, were caught on the hop. Of course, the Chancellor and his senior colleagues were posted missing, leaving the Economic Secretary to tour the television studios, even though she clearly did not have the information that she needed on how the measure would be paid for. That turned what the Government’s spin doctors were expecting to be a good news story into yet another shambles, and it was a shambles entirely of the Chancellor’s own making. Now, we are nearly a week down the line, which must count as an eternity in the light of that new benchmark— [Interruption.] I would be more than happy to take an intervention from the hon. Member for Beverley and Holderness (Mr Stuart), rather than listen to him commenting from a sedentary position. Mr Graham Stuart (Beverley and Holderness) (Con): I am delighted that the hon. Lady has given way. I wonder whether she could bring her speech to a close, so that we might hear from someone who really does have some authority on this subject and who has so ably led the campaign to bring about this change. Cathy Jamieson: I acknowledge that the hon. Member for Harlow (Robert Halfon), to whom the hon. Gentleman is referring, did a lot of work on the campaign. However, given the earlier suggestions that there was a lack of interest in this subject on the Opposition Benches because of the lack of numbers here tonight, I felt it important to lay out our case fully. I hear what the hon. Gentleman is saying, however, and I will bring my remarks to a conclusion. I want to ask the Minister some specific questions. Now that the Treasury has had a week or so in which to do the number crunching—if it had not already done so—what areas of departmental underspend have now been identified to ensure that the decision to delay the August 2012 increase in fuel duty will be met in a fiscally neutral way? Will the Minister also tell us which Departments have, through budget exchange, already surrendered an underspend in advance of the end of this financial year, and which Departments are expected to have greater than originally forecast savings in departmental spending in 2012-13? I do not have time to comment on the points that have been raised about biofuels. Perhaps I shall be able to do so in another debate. In conclusion, however, I should like to refer Members to new clause 9. We shall not be pressing it to a vote this evening, but it calls for a review of the relationship between fuel duty, other taxes charged on road fuels, and the cost of road fuel. It was made clear in the recent Westminster Hall

647

Finance Bill

2 JULY 2012

[Cathy Jamieson] debate that such a review might reflect the views not only of the Opposition but of many Government Members —I see some of them nodding—and I hope that the Government will be good enough to listen to that proposal, and to come forward with a plan to establish such a review. Robert Halfon: I am grateful to have the opportunity to speak, and I support the Government’s new clause. I hugely welcome the support of my colleagues, particularly that of the hon. Member for Dundee East (Stewart Hosie), who did so much work with FairFuelUK and attended the Westminster Hall debate to which the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) referred. The case for cheaper petrol is economic, social and moral. It is economic because the AA says that keeping 3p off fuel prices will pump £1.8 million into our economy every single day. That supports high street demand at a time when it is collapsing in Europe. It is social, because fuel duty is a tax on everything, and we should be honest about who is paying it. We talk about “motorists”, but they are not a special interest lobby group. As FairFuelUK and many hon. Members have shown, motorists are everyone: mums driving to school, children on the bus, pensioners hit by inflation. That is why this is an issue of social justice. The economy is important, but it is only half the argument. The case is moral, too, because as I have set out in other debates, fuel duty is regressive. The Office for National Statistics said last year that it hits the poorest twice as hard as the richest. Fuel prices are now, in essence, a poverty trap, adding to our dole queues. The average motorist in my Harlow constituency pays £1,700 a year to fill up the family car—that is a huge amount and clearly unsustainable. Opposition Members have spoken of a U-turn, but I would say that it is an L-turn, showing that the Government have listened, and I believe that the Government deserve huge credit for doing so. When I spoke to my constituents at the weekend, no one said that this was a U-turn or wondered when it was first mentioned or by what Minister when and why. Rather, they said thank you to the Government for listening to motorists. The Chancellor, the Economic Secretary and her predecessor, who is now the Transport Secretary, have done more to cut fuel taxes in two years than the Opposition did in a decade. The 2011 Budget saw Labour’s rise cancelled and fuel duty cut by 1p, while in last year’s autumn statement Labour’s January rise was scrapped after the campaign by FairFuelUK and MPs. Then, last week, the Government delayed Labour’s August rise. This is a radical tax-cutting agenda, targeted in a way that helps the poor. It shows that the Government are on the side of the little guy, supporting aspiration and hard work. I listened to the “Today” programme interview with the shadow Chancellor, and I say to the hon. Member for Kilmarnock and Loudoun that this is a not a decision made in a day. I and many others have been to see Treasury Ministers over many weeks and have led delegations to see relevant Ministers. I knew that the Government were considering this issue for a long time.

Finance Bill

648

Cathy Jamieson: I thank the hon. Gentleman for making those points. If those discussions were going on for that length of time, would he not have expected the Government to say how it was going to be paid for? Robert Halfon: In the Westminster Hall debate, which the hon. Lady mentioned, the Economic Secretary did not give a view either way on the issue and said that the Government were looking at it. Ministers then came to the House for Treasury questions. What better way of informing us that they were going to stop the August rise? Returning to the “Today” interview with the shadow Chancellor, he said that Labour had “acted” on petrol prices, but a House of Commons Library note says: “From 2000 the Labour Government increased road fuel duties...In its 2009 Budget the Labour Government announced that in future years fuel duties should rise by 1p a litre above inflation.”

In the next Budget, they “proposed that the escalator should apply at least until 2014/15”,

and that “the increase set for 2010/11 would be phased in over the coming tax year in 3 stages...fuel prices continued to rise strongly, driven by this increase in duty rates”.

That is the record we inherited, and which we are now having to unwind. Sarah Newton: Will my hon. Friend give way? Robert Halfon: I apologise, but I cannot, as I have to allow time for the Minister to respond. There are still problems: fuel is still at around £1.30 a litre, which is unsustainable. As the RAC has said, duty revenues are shrinking every year, as people are driven off the roads. We must stop seeing cars as a cash cow. I accept that the Government can only do so much. We are always held hostage by the international oil price. As has been noted, however, pump prices are quick to rise, but it feels as though we need a court order to get them down. Evidence shows that from May to August last year, oil prices fell by 5.5%, but petrol and diesel stayed high, falling by just 1.5%. The Office of Fair Trading has said it will not investigate the UK oil market. I am petitioning the Backbench Business Committee to table a motion so that Parliament can urge the OFT to investigate that market, which clearly looks uncompetitive and unfair to many people. Finally, there is the problem of local variation in petrol prices, especially in rural areas, but also in towns like Harlow. Harlow residents often write to me, saying that fuel is 5p cheaper only a couple of miles down the road, and there is no explanation for it, other than a lack of competitiveness. Germany, Austria and America have initiated fuel price regulation to limit price rises. We should be doing the same thing. In conclusion, the Chancellor and the Economic Secretary have given Harlow families and many millions of motorists across the country at least six months’ breathing room, and I welcome that. I urge the Government to look seriously at the long-term cost of fuel and petrol, and see what else they can do. I also urge them to put pressure on the OFT to do a market study. I will vote wholeheartedly for the Government’s new clause, and I urge the House to join me.

649

Finance Bill

2 JULY 2012

Miss Chloe Smith: With just a few minutes remaining, I would like to respond to a few points—in some detail, if I may, in relation to the Government new clause. I shall take up some of the themes raised by my hon. Friend the Member for Harlow (Robert Halfon), who has indeed campaigned assiduously on this issue to the benefit of his constituents and others, but first let me first tackle some of the points—frankly, mainly about process—raised by the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson). After our time in Committee, when we interacted very reasonably, I regret to say that the hon. Lady focuses on points that do not matter to constituents not only in Harlow but up and down the country. I know from conversations in my constituency and elsewhere that people soundly welcome the news that fuel duty will be frozen for the 21st month in a row. It is important that the Government are able to listen and respond in that way. Let me answer the hon. Lady’s specific question—I have done so already, but I am happy to repeat it. The funding for this measure has been found from within existing spending plans. We will set out the details in our autumn statement. I know that my constituents—and, I suspect, hers as well—welcome a Government who take every opportunity, when underspends are found, to make life easier for households and for businesses. That is what we are doing with this measure. I am glad that the hon. Lady welcomes the impact of this measure on households and businesses, and I hope she leads her colleagues, who appear rather thin on the ground, to join us in the Lobby tonight in favour of the Government new clause. Briefly, new clause 9 calls for, if I am not mistaken, the 29th report for which the Labour party has called during the course of Finance Bill 2012. I do not think such a report is necessary; it rather misses the point, which is that we are taking action to help motorists in businesses and in households. I wonder what the hon. Lady makes of new clause 11 and the costings implicit within it, as cancelling the 3p increase would cost around £1.4 billion next year. If I am not mistaken, that is just as unfunded from Labour’s point of view as is their five-point plan. I have already explained the action this Government are taking to support motorists and how we are going to fund it. New clause 8 was proposed by my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes). He has campaigned assiduously on this matter, and I recognise that. He and I have spoken about it in meetings in the past. He laid out what his new clause is designed to achieve—to introduce a 10p duty differential from 1 July for biodiesel derived from used cooking oil. This would carry on where the sunset relief of the previous Government left off. That was designed to end on 31 March this year. Let me make a few brief points to my right hon. Friend. The last Government’s differential was very costly. It cost £80 million in 2010-11, and the amount subsequently rose to £160 million. Most of the supply was imported, as international producers took advantage of the UK’s unlimited relief. Analysis by the Government indicates that if a 10p-per-litre duty differential were introduced, the cost could rise to £90 million in 2013-14. Rather than subsidising importers, that money could be spent on key public services. This Government believe that the renewable transport certificates—

Finance Bill

650

7 pm Debate interrupted (Programme Order, this day). The Deputy Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83E), That the clause be read a Second time. Question agreed to. New clause 1 accordingly read a Second time, and added to the Bill. Clause 1 CHARGE FOR 2012-13 AND RATES FOR 2012-13 AND SUBSEQUENT TAX YEARS

7 pm Cathy Jamieson: I beg to move amendment 1, page 2, line 6, leave out paragraph (c). Madam Deputy Speaker (Dawn Primarolo): With this it will be convenient to discuss the following: Amendment 2, page 2, line 7, leave out subsections (3) to (6). Amendment 23, page 2, line 36, leave out Clause 4. Cathy Jamieson: The amendment deals with an unfair situation that I mentioned earlier. People who are already earning considerable amounts, millionaires and others receiving the highest levels of pay, will benefit from the Government’s proposal to reduce their tax rate to 45%. We had a good debate on the subject on Second Reading, but were not able to discuss it in Committee. At that time we wanted the Government to reconsider, and not just because millionaires were set to receive something equivalent to a £40,000 per annum tax cut. Sheila Gilmore: My hon. Friend may be interested to learn something that I myself learnt from a television programme that had no direct connection with economics. It was part of a series about London streets. A banker who was talking about his home in Portland road said that prices there had risen considerably since the taxpayer had bailed out the banks, and that far from suffering from the current financial situation, people seemed to be benefiting. Madam Deputy Speaker (Dawn Primarolo): Order. I must inform the hon. Member for Harlow (Robert Halfon) that only one Member should be standing on the Floor of the House at any one time. Welcome to the Opposition Benches, Mr Halfon. Cathy Jamieson: I was not sure whether the fuel duty debate or the intervention from my hon. Friend the Member for Edinburgh East (Sheila Gilmore) had exercised the power of persuasion that led the hon. Member for Harlow (Robert Halfon) to cross the Floor and spend some time on the Opposition Benches, Madam Deputy Speaker, but I shall now return to the subject of the amendments, which are fairly simple and straightforward. Amendments 1 and 2 would remove the cut in the top tax rate for people earning more than £150,000 a year, and amendment 23 would prevent the abolition of the age-related allowance that would increase the tax on millions of older people—the so-called granny tax. As

651

Finance Bill

2 JULY 2012

[Cathy Jamieson] we said in the earlier debate, the amendments are based on the straightforward principle that when times are tough and there is less money around, we must ensure that the burden of deficit reduction is fairly shared. That theme of fairness will be a feature of the contributions of Labour Members this evening. As I said at the outset, however, the Government have chosen to cut taxes for the richest 1% of the population, and that tax cut is worth £40,000 to those who earn more than £1 million a year. At the same time, they are raising the taxes of 4.4 million pensioners by, in some instances, hundreds of pounds a year. Most of those pensioners are living on less than the average taxpayer. Mr Reid: Did not the Budget also raise the personal allowance for income tax by a record amount, thus cutting the tax for many people and taking many out of it altogether? Cathy Jamieson: I hear what the hon. Gentleman says, but many people will be about £511 a year worse off. Many, particularly those on the lowest incomes, will not benefit from the rise in the income tax threshold, and a large proportion will be part-time workers who cannot work for the extra hours that they have been told will enable them to continue to qualify for tax credits. Charlie Elphicke: Does the hon. Lady not welcome the fact that 2 million will be taken out of tax altogether, and that most basic rate taxpayers will be better off to the tune of, I believe, £220? Cathy Jamieson: The problem is that the Government are giving with one hand and taking away with another. According to the Institute for Fiscal Studies, many people will be £511 a year worse off. That may not seem a lot of money to one of the millionaires who will benefit from that £40,000, but it will make a big difference to a low-paid worker who is struggling to make ends meet and is feeling the pinch because of rising prices for food and other commodities. Julie Hilling: Not only have the Government cut the rate of tax at the top—admittedly there is a welcome relief for people near the bottom, although of course those at the very bottom will not benefit at all—but the squeezed middle are being hammered in all directions. Because the threshold at which people will start to pay the higher rate has fallen, more people will be dragged into it, and people are also being affected by the tax credit and child benefit measures. Cathy Jamieson: That is absolutely true. As I said earlier, that is exactly what happens to those who cannot work for the extra hours that would increase their working time to the 24 hours that would entitle them to maintain their working tax credit. These are people who want to work and pay their way—they want to do the right thing—but for some reason the Government have chosen to clobber them the hardest at the same time as giving millionaires a tax break. That makes no sense to me, although Government Members may say that it is a point of principle.

Finance Bill

652

A commentator—I think that it was Fraser Nelson of The Spectator—recently suggested that the best definition of “Osbornism”, if there can be such a definition, had been provided by Groucho Marx: “These are my principles. And if you don’t like them—well, I have others.”

I hope that the Government have received the message loud and clear from the Opposition and from the British public. We do not like the principles that are at the heart of the Government’s economic policy. We do not like, or accept, the principle of asking millions to pay more so that millionaires can pay less. That is why we are giving the Government the opportunity to put their well-practised U-turning skills to good use once again. Mr Jim Cunningham: Should they not go further than that? Should we not deal with the amendment to existing legislation allowing the use of foreign countries as tax havens to avoid paying the debts of the developing countries, which can cost £4 billion a year? Cathy Jamieson: My hon. Friend has made a good point. We will have an opportunity to discuss that subject in more detail tomorrow. The Government once made much of their commitment to fiscal responsibility. Deficit reduction was to be their defining mission. Today, however, that task has been made even harder by the failure of their own economic plans, which involve £150 billion of extra borrowing. Their pledge to clear the deficit by the end of this Parliament has been blown to pieces, yet they still find the money for a tax giveaway to the top 1%. Nigel Mills (Amber Valley) (Con) rose— Cathy Jamieson: Perhaps the hon. Gentleman would like to comment on that in his intervention. Nigel Mills: Am I right in thinking that the impact of amendment 1 would be to take away the 45p rate and leave the highest rate at 40p, thus in effect giving a double tax cut? Can the hon. Lady explain the technicalities of how her amendment works? Cathy Jamieson: I am a relative newcomer to this place, and I sometimes find its procedures and conventions bemusing. I have learned from my time in the parliamentary process, however, to take advice from the Clerks and others who know about drafting legislation, and that is what we did in respect of these amendments. The Minister will no doubt protest that the higher rate was not raising any money, but the Government’s attempts at justification have not withstood the scrutiny that has been undertaken. The Office for Budget Responsibility, for example, says that Her Majesty’s Revenue and Customs’ estimates of the reduced tax avoidance that would result from the reduced rate are “highly uncertain”. They are based only on the first year’s yield from the new top rate, which was always expected to be artificially depressed by people’s ability to bring forward their income. No real basis is therefore offered for estimating the revenue-raising potential of the 50p rate. It is for that reason that the Institute for Fiscal Studies said that it is “too soon to form a robust judgement.”

653

Finance Bill

2 JULY 2012

The claims that new funds would flood into the Treasury as a result of people relaxing or reversing their efforts to avoid paying the top rate have been shown to be notoriously speculative. Again, as the IFS explained, “you’re first giving out £3bn to well off people who are paying 50p tax...you’re banking on a very, very uncertain amount of people changing their behaviour and paying more tax as a result of the fact that you’re taxing them less...there is a lot of uncertainty, a lot of risk with this estimate.”

A written answer provided by the Exchequer Secretary to my hon. Friend the Member for Leeds West (Rachel Reeves), the shadow Chief Secretary, on 19 June shows that in 2010-11 more than 73% of people earning over £250,000 were paying more than the top rate, as were more than 80% of people earning between £500,000 and £10 million, implying that many tens of thousands of people were paying the 50p tax rate of last year and are now in line for a very large tax cut if this measure comes into effect. Charlie Elphicke rose— Cathy Jamieson: I will give way to the hon. Gentleman, if he would like to answer that point. Charlie Elphicke: I read the impact statement and the detailed IFS discussion of the so-called “uncertainty”. Its premise was that the avoidance would end because people would pay themselves out, regardless of how they had parked and deferred the revenue, and would therefore pay the tax at 50p. The problem is that people who have a personal service company—as so many Labour MPs and Labour supporters, including Ken Livingstone, seem to have—can defer for a very long time. They can pay themselves a beneficial loan and almost avoid tax altogether. That has also been a scandal in recent days. It is therefore not true to say people cannot continue deferring. Cathy Jamieson: I will answer that point in more detail later. I am a little disappointed, however, as I thought the hon. Gentleman was going to make a different point. He seems to be suggesting that only people with a connection to Labour had been avoiding or evading tax, which is, of course, absolutely not the case. I hope Members across the House will ensure that at every stage those who are due to pay their taxes should pay them and should do so willingly and properly. Sheila Gilmore: What does my hon. Friend think about the fact that in Committee a Conservative MP, the hon. Member for North East Somerset (Jacob ReesMogg), said that in his opinion the actions of a certain Ken Livingstone were in fact very sensible? Cathy Jamieson: I do not wish to return to the lengthy debate that took place in Committee, but we did at various times have discussions about people doing things that were perfectly legal—and which, if they were so advised, might make perfect sense—but the question then arises as to whether they are morally or ethically the right things to do. 7.15 pm Julie Hilling: Was my hon. Friend as surprised as I was when the Government refused to release the tax details of their Front-Bench Members?

Finance Bill

654

Cathy Jamieson: Again, I do not want to focus on such issues at this time. I am sure that Government Front Benchers will want to take responsibility for their own actions. I now want to address some points that Ministers may make about the Bill’s measures to reduce tax avoidance. The IFS has again been very busy and has made some extremely helpful and interesting points. It says this Budget compared poorly with Labour Budgets, which cut tax avoidance by more than £12 billion between 2002 and 2009—an average of more than £1.3 billion each year. This Budget, however, is estimated to have cut tax avoidance by just £800 million. Closing loopholes to prevent avoidance should be something that every Budget does, and we should not be required to compensate the very rich for the inconvenience. The Government’s last line of defence will no doubt be that cutting tax for those who already have the most will unlock investment and kick-start economic growth, but that is pure ideology, with no evidence to back it up. The OBR documents accompanying the Budget show a continued pattern of the promised recovery of business investment being postponed. An 8% increase was promised for 2011, but the amount actually fell by 2%. A further 10% increase had been projected for this year, but the forecast is now less than 1%. The role of such investment in driving growth for future years has been significantly written down. As for growth, again the OBR is clear. It states in box 3.1 on page 46 of its latest economic and fiscal outlook, which is headed “The economic effects of policy measures”, that the only policy with a measurable effect is the cut in corporation tax. It says that that will lead to an increase in GDP of “0.1 per cent by the end of the forecast period.”

Beyond that, it says in the policy costings document: “We have made no other material adjustments to the economy forecast as a result of Budget 2012 policy announcements.”

Therefore, according to the best evidence and the advice of independent experts, this is a tax change that will have no discernible impact on our economic prospects and, at a time of tight public finances and tough decisions on deficit reduction, it could cost billions of pounds, making it harder to deal with the deficit and necessitating harsher sacrifices for others in society. The granny tax is addressed in another of our amendments, which would reverse the Chancellor’s shameful raid on pensioners’ incomes. We must give the Government a chance to make amends for what is essentially a broken promise, and for their shabby attempts to sneak this past Parliament and the public. We call on the Government to cancel this unfair measure for a number of reasons. First, the Government made a commitment as recently as last year that the age-related allowance would be uprated each year of this Parliament in line with the retail prices index. It is there in black and white on page 35 of the 2011 Red Book. Recently it has been reported that the Prime Minister is resistant to suggestions from the Secretary of State for Work and Pensions that he break pre-election promises on benefits for older people. Yet here is a promise made only last year that the Government have consigned to the dustbin. Instead of acknowledging this most disreputable of U-turns, the Chancellor actually sought to conceal it, dressing a crude tax grab up as a “simplification”.

655

Finance Bill

2 JULY 2012

[Cathy Jamieson] According to the House of Commons Library, by far the majority of those being asked to pay more live on incomes that put them in the bottom half of taxpayers. The crucial point—again, I am sure that Government Members will have heard this—is that having a small personal or occupational pension of just £67 a week, or little more than £3,000 a year, would be enough to put someone in line to lose under this measure. We are talking about the people who did not earn big salaries in their working lifetimes but managed to save so that they could provide for themselves. These are more people doing the right thing; they avoided the means-tested benefits. So yet again I say: why are the Government so keen on policies that penalise the people who are doing the right thing? Why do they penalise the people who are trying to work—the low-paid, part-time workers who lose their tax credits—and the pensioners who have tried to avoid the means-tested benefits and have saved for their retirement and done the right thing? There is no doubt that pensioners have been hit hard by this Government’s decisions: winter fuel allowance has been cut; pensions have been indexed to a lower measure of inflation; the increase in the state pension age for women has been brought forward; last year’s VAT rise added £275 to the cost faced by an average pensioner couple; and cuts have been made to services such as the NHS, social care and local transport—all the things that matter on a day-to-day basis for pensioners. So pensioners have been hit hard by this Government’s decisions and policies, yet with this Finance Bill the Government are coming back for more. They are not content with all those things and are coming back for more. In total, this measure will raise more than £3 billion pounds over the next five years. Ian Lavery (Wansbeck) (Lab): Is it a coincidence that the tax cut to the rich costs £3 billion, which is exactly the same as the tax increase for elderly people in society? Cathy Jamieson: My hon. Friend makes a very valid point. That must be purely coincidental, because surely no Government would want to take that amount of money from pensioners simply to give it to the richest. Perhaps this Government would though; perhaps we have the same old Tories with the same old policies, yet again. The pensioners who have been hit hardest by this Government’s decisions are seeing them coming back for more. That £3 billion raised over the next five years is the biggest revenue raiser in the whole Budget, and it is coming from the pockets of pensioners with modest incomes. And it is all going towards what? Is it going to paying down the deficit? No. Is it going to help young people get back to work? No. Is it going to help the poorer pensioners? No. Instead, this money is being taken from millions of older people living on modest pensions and redistributed to a few thousand individuals with incomes of more than £150,000 a year. What an absolute disgrace: taking from the pensioners to give to those already on those high earnings. The Government were said to be surprised by the anger this tax change has aroused. If that is the case—if they were surprised—that shows just how out of touch they are with the values, principles and priorities of the British people. At the time, the response of Age UK was very clear. It said that it was disappointing that the Budget

Finance Bill

656

“offered a tax break of at least £10,000 to the very wealthy while penalising many pensioners on fairly modest incomes, who are already being squeezed”.

We could not have put it better ourselves. The chief executive of Saga said: “Over the next five years, pensioners with an income of between £10,500 and £24,000 will be paying an extra £3 billion in tax while richer pensioners are left unaffected.”

The National Pensioners Convention said: “We have been inundated by pensioners who are disgusted that those on around £11,000 a year will no longer get additional reductions in their tax—whilst those earning £150,000 or more will see their tax bills reduced. This is seen by many as the last straw...Pensioners feel they are being asked to bail out the super rich—and it’s simply not fair.”

Pensioners are absolutely right to feel that way. These amendments are a chance for the Government to rectify one of the most blatant injustices in this Budget. It simply cannot be right to ask millions of pensioners on modest incomes to pay more while finding a way for a few thousand millionaires to pay less. It is extremely hard to comprehend how the Government could ever have thought that this was fair, or that it would be acceptable to pensioners and to others who care about pensioners, but now they have an opportunity to put it right, and Members from all parts of the House have a chance to show where they stand. They can support these amendments and do the right thing by the people who did the right thing for themselves. Charlie Elphicke: It is a pleasure to follow the shadow Minister, who has set out such a partial view from the Labour party’s perspective on this Budget. I think there is a better approach: the more people we take out of tax, the better, as the administration cost is less and there is less hassle for people, particularly the least well-off. I want to see the personal allowance increased to £10,000 as soon as possible. Good progress was made in the last Budget, but the sooner we take the number to £10,000, by far and away the better. Nevertheless, I welcome the fact that most basic rate taxpayers will see an annual cash gain of £220, and I welcome the fact that this Budget takes 2 million people out of tax altogether. That is particularly important, particularly given that we all remember the fiasco over the 10p tax rate. The more we can look after the least well-off and take them out of the tax system, by far and away the better. I was fascinated by the whole discussion about the 50p rate. We can see from Treasury figures that we are talking about £100 million. That figure is rubbished by the Labour party, which thinks the figure is completely wrong and cites an IFS report. Let me quote the relevant passage from the IFS report, which is where I think the Labour party draws its approach from. The IFS states: “The worry for the Chancellor is that the estimate that cutting the top rate to 45% will only cost £100 million is particularly uncertain. It assumes a ‘no behaviour change’ cost of £3 billion offset by a behavioural change of £2.9 billion. The first number we know reasonably accurately; the second number is estimated with great uncertainty. Even if we knew the effect of introducing the 50p rate—which we don’t with any precision—responses may not be symmetric. Those who have got a taste for avoiding the 50p rate may continue to avoid the 45p rate (even if they wouldn’t have done so had the 50p rate never existed). The experiment with the 50p rate does not appear to have gone well.”

657

Finance Bill

2 JULY 2012

My first conclusion is that the IFS is saying that making the rate 50p in the first place was a complete and utter disaster. The second issue raised is the uncertainty over behavioural change. On that, I say that we have empirical evidence on what happens when the rate is reduced. I do not know whether everyone recalls this, but we used to have an income tax rate of about 80%. When that was reduced, first to 60%, there were great cries from the Labour party that it would cause a collapse in the revenues, but instead the revenues rose. Why was that? It was because fewer people avoided tax. The Government of the day then reduced the rate to 40p. Again there were great cries from the Labour party that that would let the rich off the hook, but what happened? The revenues rose. Why was that? It was because fewer people were as interested in avoiding tax and they paid up a fair share. Sheila Gilmore: There are other explanations for the increased tax take during the period in question. One was the general growth in the economy, which generated more income, whereas another was the greater degree of inequalities, which meant that although people were paying a lower rate of tax, the cash take was higher because their income had risen so much. People on very high incomes are still paying a relatively low rate of tax, however. If tax avoidance did not take place previously, why have there been so many examples of it? 7.30 pm Charlie Elphicke: I absolutely agree. The 1980s were a time of great economic expansion; a great time of liberalising markets, sound money and sound economic policies that saw that massive expansion. It was also good that the ’80s saw a massive reduction in the rate of taxation, which spurred on growth. What happened in the last decade was all built on debt. It was all a bubble and it ended in a massive shambles and a massive bust that has brought our country to its knees. We need growth. How will we get it? By reducing the rate. If we cut the rate, we will increase the take and encourage people to invest in UK plc. That is where we need to go. Hywel Williams (Arfon) (PC): Proponents of the Laffer curve, which is what the hon. Gentleman is talking about, often say that paying a higher rate of taxation is a matter of personal choice. Does he agree? Charlie Elphicke: As I said, I think the Laffer curve is an interesting principle, but I prefer empirical curves and empirical results from experiments. We know from the ’80s that if the rate is cut, it increases the take. For me, the uncertainty is not about whether reducing the rate from 50p to 45p will cost the Exchequer £100 million, but about whether it will add £100 million or £200 million to the Exchequer as fewer people seek to avoid tax. Jacob Rees-Mogg (North East Somerset) (Con): Does my hon. Friend think that cutting the rate to 40p or even 35p might have raised even more money? Would not that be a very good thing for the Government to do? Charlie Elphicke: My hon. Friend tempts me, as ever. He knows that my view is that one should reduce the rate and clamp down heavily on tax avoidance. I respect

Finance Bill

658

the fact that he does not always share my views on tackling tax avoidance—I recall that in Committee he said that I was going to paint the cliffs of Dover red, so passionate was I that people should pay their fair share—but I do think that if we have lower, simpler taxes and a simple tax system, it will incentivise investment and encourage more economic growth. The argument for reducing the higher rate of tax, which was only a temporary increase in the first place—the Labour party seems to have forgotten that—was to get more investment in our economy and to encourage the entrepreneurs and wealth creators. Jonathan Edwards: Does the hon. Gentleman agree that the major problem we have at the moment is that it is socially acceptable to avoid paying tax and that our job as politicians is to create a social climate where it is unacceptable not to pay what you are due? Charlie Elphicke: I agree. There has been a climate in which it is somehow acceptable to avoid taxation and I made many speeches in Committee about how that culture is unacceptable and needs to change. It is up to us to send a clear message, as Members of all parties, that tax avoidance is wrong. That was why I intervened on the shadow Minister earlier to say that the message sent by politicians who use personal service companies is deeply corrosive. They should all pay a fair share of taxation and should not try to avoid it in that way, because it sends the wrong message. In all fairness, I say that to members of my own party as much as to Labour members. It is not acceptable in the current age. Ian Lavery: The hon. Gentleman and I had some good discussions in Committee—I would not call them enjoyable, but they were good. Does he think it is fair to hit the grannies—to hit elderly people—with a £3 billion loss and at the same time to cut taxes for the richest people in the UK? Charlie Elphicke: I think it is fair to say that we are not cutting taxes yet, because the change would not come through to the next financial year. Hon. Members will correct me if I am wrong, but I believe that that is the case. We must consider the Exchequer numbers, which show that the cost of the cut is very low. I think those numbers are wrong, as they have not taken into account the dynamic effects of the change, which will probably be tax accretive to the Exchequer when all is taken into account. As for the issue of age-related allowances, the Government’s triple-lock guarantee will mean that the overwhelming majority of older people—in fact, all of them, I think—will be better off and there are no cash losers. Secondly, we are talking about the very richest of the oldest. We are not talking about the oppressed pensioner with no savings but about the richest of the oldest and, as I say, there will be no cash losers. Although it is uncomfortable for many people and has been uncomfortable for all of us, the Government have been doing the right thing by the elderly and have been looking after the least well-off elderly first of all. It is really important to protect them from the difficult economic times we have had.

659

Finance Bill

2 JULY 2012

Sheila Gilmore: I ask the hon. Gentleman to correct the impression he gave. The age-related tax allowance does not go to the very richest pensioners; it is the group in the middle who are being squeezed by the proposal. Charlie Elphicke: The age-related tax allowances only kick in to benefit those pensioners who have a substantial income, or a more substantial income, in retirement. We are not talking about the very least well-off pensioners who are affected by grinding poverty, but about pensioners who are better off and who have savings and income. As I said, there are no cash losers and they have had a massive benefit from the pensions triple lock.

Finance Bill

660

There is an issue and we need to tackle it. Overall, I want the allowances for the least well-off to be higher so that we take more of them out of tax. I think the Government have taken the right Budget decision on the higher rate numbers and have take a difficult but principled decision on age-related allowances. The Government have struck the right Budget balance.

Charlie Elphicke: That is my understanding, yes. Pensioners will not lose out, there will be no cash losers and no pensioners will be worse off in cash terms, As the hon. Gentleman well knows, we can have the argument about future rates of inflation and future rates of RPI, but one must also take into account the other side of the equation, as pensions and benefits for elderly people will rise in the same way and at the same time. Overall, we are not talking about a great difference; we are certainly looking after the least well-off of the elderly, and we have done so very well indeed. That is an important achievement of this Government. Pensioners have been better off under the Government and have been shielded from the austerity measures. Let us look across the piece at what the Government have done. We have done the right thing to reduce taxation at the top level, which was meant to be temporary, to encourage investment in our economy and to encourage entrepreneurs. The Government need to take further action to deal with people who abuse personal service companies and other tax wheezes and to ensure that we have stronger measures against avoidance by individuals. We have seen enough of it in the newspapers, so I shall not go into individual cases because, as we know, that ends up in a spat about whether one likes Take That or late-night comedy shows. Nevertheless, it is right that we should ensure that individuals cannot play the system and that the law should be changed. It is all very well for the Labour party to take the moral high ground on the issue of tax allowances, but Labour was asleep at the wheel for about a decade and failed to deal with tax avoidance in the individual and corporate spheres. That was completely wrong.

Barry Gardiner (Brent North) (Lab): “No cash losers”: I must say that I think that those are the most disingenuous words that I have heard in this Chamber for a great many years. I remember that in the Budget the Chancellor was not particularly keen to draw the House’s attention to this change. In the Budget, the Chancellor glossed over the whole issue of the granny tax very quickly indeed, yet only a year before, he came to the Dispatch Box on Budget day and said that he would not hide anything—he would tell it like it was. He would tell the bad with the good. That was just a year before, but in this year’s Budget, he glossed over the granny tax altogether. “No net losers”—how accurate is that if we look at the total picture for pensioners? For existing pensioners, the age-related allowance will be frozen. It is interesting that the year before, it was not the Chancellor, but the Prime Minister, no less, who promised that the allowance would increase in line with the retail prices index. “No net losers”—those who believed the Prime Minister’s promise to pensioners might be excused for feeling that that they were losers under the change. That is what happens. People listen to what the Prime Minister says, and make their financial plans on the basis of it: “The Prime Minister promised me, so of course I can expect to have that.” Well, it did not happen, and I think that is disingenuous. We heard in this Chamber that there are no net losers, but what about people who are about to become pensioners? Are they net losers? They certainly expected an age-related allowance, but they find that, for them, it is not frozen, but cut. We can stand here and call black white, but it is incumbent on us not to take the public for fools, and I am afraid that the speech from the hon. Member for Dover (Charlie Elphicke) did that. I regret that, because he is not a disingenuous character—he is quite a lovable character in this House—but to say what he did is to treat people with contempt. It is treating them as though they do not understand their own affairs, when it is their own affairs—their own pennies, in many cases—that we are talking about. That hits hard.

Kevin Brennan (Cardiff West) (Lab): I would be more prepared to take that from the hon. Gentleman if I had not sat through Finance Bills when we were in government only to see that, time after time, his party tried to stop us closing loopholes that would stop tax avoidance.

Ian Lavery: Is it not a fact that 4.4 million pensioners will lose roughly £83 a year from next year, and that people who turn 65 next year could lose up to £322 a year? That implies that it is disingenuous to suggest that people are not losing out—

Ian Lavery: When the hon. Gentleman says that there are no cash losers, does that mean that pensioners will not lose out?

Charlie Elphicke: I was not there at those times, I did not sit through those Bills and I cannot comment. I am only a newish Member, elected in the 2010 general election, and I have personally been pretty consistent in making the case that we should not have tax avoidance and should be far more vigorous in tackling tax avoidance by individuals and by corporates. Corporate tax avoidance is particularly important, but it is not on the subject of this debate, so I shall move on quickly before you call me to order, Mr Deputy Speaker.

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. “Disingenuous” is not a word that we should use. I know that it is meant to be an appropriate term, but it is not the sort of parliamentary language that we accept. I am sure that we will not be using it again. Barry Gardiner: I apologise to you, Mr Deputy Speaker, and to the hon. Member for Dover, if that is unparliamentary language.

661

Finance Bill

2 JULY 2012

Mr Deputy Speaker: Order. In fairness, Mr Gardiner, you said that you did not think that the hon. Member for Dover (Charlie Elphicke)was disingenuous. We were all right up to that point. Barry Gardiner: Thank you, Mr Deputy Speaker. I absolutely recognise the figures that my hon. Friend the Member for Wansbeck (Ian Lavery) laid before the House, and of course I think that they are accurate. He is right to say that we are talking about a cut—a cut in what people were, with legitimacy, expecting. That is the point. It was legitimate for somebody coming up to pensionable age to expect that their retirement could be based on the figures that they were using. They had a promise from the Prime Minister that that would be the case. That promise was not honoured, and they have experienced real hardship as a result. I want to focus on one other aspect of the debate: people’s behaviour at different rates of taxation. Let me be clear that I do not, in principle, want a 50p rate of tax to continue in place in perpetuity. Indeed, the Labour party does not want that, as was made very clear when my right hon. Friend the Member for Edinburgh South West (Mr Darling), as Chancellor, introduced the tax before the 2010 election. He made it quite clear that we felt it was necessary in the short term, but would ultimately wish to get rid of it. There is no desire on the Labour Benches to see a 50p tax rate imposed for ever more. 7.45 pm However, as for the idea that one year was a sufficient period in which to be able to assess the revenue take for the Treasury, we know that, always, in the first year of a new rate of tax, people adjust. They adjust where, in tax years, they put their income. They can carry over, and use the degree of arbitrage between tax years to make sure that the full impact of the new tax level does not hit them. To have used the figures for that one year as the basis for any assertion of what the tax take would be in the long run was clearly—I will not say “disingenuous”, because that would not be appropriate—mistaken. It was a mistake, because it was only a partial view. That is clearly the point. A shift in policy is being justified on the basis of imperfect information. Let us look more carefully at the argument that if we reduce the percentage of tax, the net revenue to the Exchequer will rise. The hon. Member for Dover spoke about days gone by, when there was a drop in taxation levels from 80% to 60%, and from 60% to 40%. He said that we then saw net revenue to the Exchequer increase. Of course, he did not talk about the growth in national wealth and in the economy at the time, or say what part of the revenue take for the Exchequer was a result of that growth. Those are figures that he was not prepared to give the House, or perhaps he did not know them. I do not know them either, but a significant element of the increase in revenue would be covered by growth in the economy, if one included that in the calculation. Let us follow the logic of the argument made by the hon. Member for Dover. He was ably supported by the hon. Member for North East Somerset (Jacob Rees-Mogg), his colleague on the far, far end of the Benches, who said, “Why stop at 40%? Why not go to 30% or 20%?” Jacob Rees-Mogg: Hear, hear!

Finance Bill

662

Barry Gardiner: From a more-than-sedentary, almost recumbent position, he says, “Hear, hear! Let’s go to 20%!” Does he really think that there is not a limiting point at which the argument tips? Does he really think that there is not a point below which, instead of more revenue coming into the Exchequer, there is a dramatic loss of revenue? Of course there is. Jacob Rees-Mogg: I do indeed think that there is a point at which revenue would drop off, if rates got low, and the Laffer curve shows such a point. However, as a general point, I think that the lower the rates are, consistent with raising the revenue that is needed, the better, and that we have not tested the argument properly to see how low we could go. Barry Gardiner: Well, there we are: the Great British public are being treated to an experiment. “We want to test how far the Laffer curve theory can go.” Is that really the Government’s policy? Is it really their policy to see how low they can get tax before the economy collapses? Jacob Rees-Mogg: I am grateful to the hon. Gentleman for giving way once again. Sadly, I am not Her Majesty’s Government. He must address his comments to those on the Treasury Bench, rather than to me. Barry Gardiner: I am sure that it is only a matter of time. In so far as the hon. Gentleman seeks to speak for his party— Mr Graham Stuart: Does he? Barry Gardiner: I do not want to see dissent break out on the Government Benches. No fighting amongst yourselves, please, gentlemen. These are serious matters. They cannot be treated as an experiment because people suffer. Charlie Elphicke: I thank the hon. Gentleman for giving way. He is a courteous and jolly fellow. Let me help him by digging him out of the hole that he is rapidly getting himself into in his exchanges with my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg). The point that we are making is simple: reducing the top rate will not change the income and revenue numbers significantly, but it sends a message to wealth creators that their investment is encouraged and will help to grow the economy. Barry Gardiner: The hon. Gentleman has already said once in the debate that he does not believe the Treasury’s figures. He has now reinforced that. The Treasury has made the calculations. He can choose to say, on a personal level, “I think the Red Book is a load of tosh,” but he cannot say that that is the Government’s position. The Government’s position is that the measure will cost £3 billion a year. [HON. MEMBERS: “No, it is not.”] The Government cannot get out of this one. They say that it will cost money. That money will be taken away from some of the poorest people in our society to pay for it. That is what people find so distasteful about the way the Government are behaving. They are taking away from some of the poorest in our society, yet feel that it is so important to send that signal out to some of the

663

Finance Bill

2 JULY 2012

[Barry Gardiner] wealthiest. The people who are being excoriated in the public conversations around the country for what they have done and what they continue to do to our economy— those are the people who will benefit, and it is the poor in our constituencies who will suffer. Sheila Gilmore: Did my hon. Friend spot the illogicality in the position of the hon. Member for Dover (Charlie Elphicke), who made an impassioned claim to be a scourge of tax avoiders, but is in effect endorsing tax avoidance by arguing that we have to reduce the rate of tax because so many people are trying to avoid it? Would it not be better to look at ways of preventing people from avoiding tax? Barry Gardiner: My hon. Friend, yet again, makes an excellent point. There is an implicit acceptance that people will try to avoid tax, and that therefore it is better to reduce the level of taxation so that there is not the same level of avoidance. Most of my constituents listening to this debate and to the debate that has been going on since the Budget think the Government do not understand what people are going through, what they are feeling and just how difficult it is for some of them to make ends meet. They do not understand that precisely because of the sort of signals the hon. Member for Dover just mentioned. The Government consider it more important to make those signals to the wealthy. They think it is more important to focus on what they understand about their involvement in society, and they do not give the same attention to getting those messages to the poor in society. What the Government have done in the Budget is to say, “If you are poor, we know that the best thing for you is to cut your benefits to make sure that you work harder, and if you are rich, we know that the best thing for you is to cut your tax so that you work harder.” People look at that and say, “This doesn’t make sense. It’s one law for the rich and another law for the poor.” Charlie Elphicke: Yes, we do understand, and I in particular understand because my constituency is one of the most deprived in the south-east. The economic numbers are much more like those of a constituency much further to the north of England than the hon. Gentleman’s constituency. We do understand, and we also understand that wages have stagnated since about 2004, on the hon. Gentleman’s Government’s watch. This is not a new problem. We understand that, which is why we need to reduce the top rate of tax to encourage the job creators to create the jobs and the money that will give my constituents more prosperity. Barry Gardiner: The hon. Gentleman talks about the way in which wages have broadly stagnated. We are now seeing wages going down and jobs being lost, and we are back in recession. He should look at the promises of his Government in that first Budget. The promises, commitments and assertions were that the measures in it would pull us out of the problems that we were in and get the economy back on track. They would deliver growth and prosperity, but they have not. He will remember, because he is an honest fellow, to use his word, that at the time, on the Opposition Benches, people were saying,

Finance Bill

664

“No, this will lead to a double-dip recession.” All those on the Government Benches told us in unison that we were wrong and that the Budget would pull us through the problems. The electorate look at that, see the analysis, see what steps were taken and ask, “Who was right?” They know, because we are back in double-dip recession, that the Government got it wrong. We are at a point where there is £150 billion extra borrowing, the largest single increase year on year in the UK’s history. Mr Deputy Speaker (Mr Lindsay Hoyle): Order. I know the hon. Gentleman is painting the big picture, but we need to come back to the relevance of income tax. We have discussed personal allowances. I know he will come back to the point. Barry Gardiner: I accept your ruling, of course, Mr Deputy Speaker, and you are right. We have strayed wide of the initial focus of the amendment. It was not my intention. All I can say in mitigation is that I was led down the path by the interventions that I took. Mr Robert Syms (Poole) (Con): I welcome this debate because the decisions that we take on tax rates are critical. We have had a slightly more general debate than I expected. Opposition Front Benchers particularly presume that the Government can somehow control events. However, there is a big wide world out there and anybody watching television or watching what had happened in the eurozone knows that there is a limit to what any Government can do in the present circumstances, when confidence is low, countries are being bailed out and businesses, even those with money, are not investing as rapidly as one would like. All the Government can do within the global context is try to make the best decisions they can on the information that they have. We have a plan, which I think is a good plan, and by and large we are sticking to it. The deficit has come down by 25%. That is a start and we need to do more. On the subject of income tax rates, I think we tax people at far too small a salary. We do not increase incentives to work. A key point of the coalition programme is to up the basic allowances to make work pay. We all know—I am sure even the hon. Member for Brent North (Barry Gardiner) knows—that the benefits system can be a big disincentive to people taking jobs. People act rationally, and if they are not going to be much better off or if they are going to lose money, they will not take work. A reform of benefits is needed, with the universal credit coming in, and we have to up the income tax allowances for those at a lower pay level in order to increase incentives for people to take jobs. Hopefully that will get more people into work over a period of time. All the evidence suggests that work is good for people. It is better for their health, including their mental health, and it is a better way to bring up a family, and of course those in work have a better chance of gaining skills, reskilling and getting on in life. That is the key point about what the coalition Government are trying to do. Therefore, I commend them for what they have done to take many millions of people out of income tax and hope that they continue to make progress in that area so that incentives to work increase over the next few years.

665

Finance Bill

2 JULY 2012

8 pm We have always had an age-related allowance for pensioners that is somewhat different from those for ordinary taxpayers, but one has to ask why that is the case. It is easy for politicians to go along with a system that has been in place for several years, but in an environment in which the Government are pushing up allowances, hopefully to £10,000 and beyond, at some point soon the basic allowance will overtake the age-related allowance. From a tax simplification point of view, that is sensible. People talk about pensioners, but they are not one homogenous group; they include poor people and rich people. In fact, many of my constituents have benefited from buying their homes and the post-war inflation, and the evidence from surveys suggests that the people struggling the most are actually young families with children.

Finance Bill

666

Ian Lavery: I am surprised to hear that only three or four of the hon. Gentleman’s constituents have contacted him on that point—I wish him good luck on that. Various figures have been bandied about and I wonder whether he disputes them. It has been suggested that 4.4 million pensioners will lose up to £83 a year and those turning 65 next year could lose up to £322. Does he support that?

Let me turn to the top rate of tax. We all know that there is a lot of politics in this. The rate was 40p under the previous Government, except for the last 37 days they were in office, so the 50p rate was one of the wonderful inheritances from them. Clearly, if we want to stop people looking to avoid paying tax, we have to keep a competitive rate. At 40p we have a rate that was competitive with many western European countries, but at 50p we do not. If we have a country without exchange controls, a very mobile population, as we do, and people with highly tradable skills, there is a danger that if we start to put up the rates we will lose revenue and people will go abroad. As my hon. Friend the Member for Dover (Charlie Elphicke) said, having had a 50p rate which meant people started looking at how to avoid taxation, that might stay in the system for some time. I welcome what the Government have done by reducing the higher tax rate to 45p. I think that it is a pity they delayed it, because I suspect that the impact will be to reduce income tax take for the current year, but when the rate drops to 45p for the year after, we will see an increase in the income tax yield. It is important to give a message. I was in this House when the previous Government put up income tax. In one of his last speeches from the Government Back Benches, Stephen Byers said that he very much regretted that the Labour party had decided to do that. If all the evidence suggests that that has not raised very much this year, it seems to me that it is being done for ideological reasons, rather than practical, economic ones. If nothing else we ought to be practical in how we do things. Therefore, the Government’s reducing the top rate, as a start, is the right thing to do which will have a beneficial effect in the long term. But let us not forget that the allowances for the lower paid have gone up this year. The top rate of tax will come down next year, by which time we will have had another Budget in which I hope the Government will have made more progress on assisting some of those on lower pay and taking more people out of the tax net. The one thing that can be said about the Government is that their thinking is joined up. We have welfare reform, we are pushing up the tax allowances to increase work incentives, and we are dealing with a whole range of tax rates, including trying to make corporation tax more competitive, and I think that that will make us a much more competitive country in the world. We look like an island of stability, certainly compared with the eurozone countries. Let us hope that they sort out their problems so that we can start selling them our excellent goods, but let us face the fact that we live in a competitive world and unless our taxes are competitive we will not be able to generate the wealth to pay for all the things we want: health, schools, foreign aid, defence and all the things we need to do. I think that the Government are on the right track. Clearly, it is a very bumpy economic environment, certainly rather bumpier than we might have thought it would be when we came into office, but provided we have leadership and vision, we will get through.

Mr Syms: I am not sure that that is a massive loss of income. The most recent issue we debated was the 3p cut on fuel, which will make more of a difference to pensioners in my constituency than this minor change in tax allowances. I think that the Government’s policy towards pensioners is fine.

Jonathan Edwards: It is a pleasure to contribute to the debate. It has been very interesting listening to the debate on income tax for the 2013-14 financial year. Hon. Members already know the position of the PlaidSNP-Green group; we were among the handful of Members who voted against the inclusion of the new 45% additional

Ian Lavery: The hon. Gentleman is very kind to give way. Does he agree with hitting pensioners hard with the £3 billion tax increase? Mr Syms: About a quarter of my constituents are pensioners, but I have received only three or four e-mails on this subject. It is not a major issue in Poole, where most of my constituents pay tax. I do not think that it is the big issue that Opposition Members claim it is. It depends on how fast the basic allowance for all taxpayers overtakes the age-related allowance, which I presume is logically what the Government want it to do. Of course, it also depends on the level of inflation. If we freeze the allowance and have higher inflation, it will be eroded more quickly than if we have lower inflation. Thankfully, one of the good points about the past few months is that inflation is starting to crash back down towards 2%, and the sooner we reach that rate, the better. If we look at what the Government have promised in their triple lock for pensioners—the increase in the basic state pension of over 5%—along with the winter fuel allowance, which we continue to pay, and free bus travel, we will see that their priority has been to support pensioners. We have been criticised over the reduction in the winter fuel allowance, but I point out that the previous Government put it up for the election year but made no budget provision for the year after, and we are faced with some very difficult problems. Unfortunately, it is an expensive item and the Government have been unable to keep it at the level it was for one year, but on the whole we have kept it at the level it was for most years at the end of the previous Government’s time in office, and that is a boon to many pensioners. I think that what the Government are doing on the age-related allowance is probably the right thing to do.

667

Finance Bill

2 JULY 2012

[Jonathan Edwards] rate in the founding principles of the Bill at the conclusion of the Budget debate earlier this year. Indeed, the official Opposition seemed to miss that debate, with the exception of two Labour Members, the hon. Members for Newport West (Paul Flynn) and for Bolsover (Mr Skinner). I also tabled amendments in Committee, which were supported at the time by the official Opposition, including some that they have chosen to table for this evening’s debate, which naturally I will support if they decide to push them to a vote later. Much of the debate on Second Reading and in Committee focused on differing interpretations of, and often selective quotations from, a series of reports. Hon. Members attempted to argue that their party’s interpretation of the statistics was most valid, and we heard some of that again this evening. They were essentially making economic arguments about taxation—about the Government’s claim that the loss of tax revenue from shifting the 50% additional tax rate to 45% would be compensated for by the stimulus it would provide to the wider economy, and that given the amount of forestalling and income shifting that the 50% rate has apparently generated, we would be better off in future and, ultimately, more tax would be paid. That is the thrust of the argument. I simply do not buy the idea that a tax cut will make those avoiding the 50% rate choose to contribute to society by paying at the 45% rate. What the Treasury should be doing, rather than giving a tax cut to those earning in excess of £3,000 a week, which is almost twice the average income in two months for most of my constituents, is closing down all the clearly aggressive tax avoidance schemes, some of which have been highlighted in recent weeks, and ending the tax havens that provide a nice bolthole for those who wish to hide their income. For my party, however, the issue of taxation is one of principle. We believe that people should be proud to pay taxes and contribute to society. It should not be a game in which those who can afford to pay an accountant pay less and then consider it a triumph or a success. As I said during a debate in Committee, the Scandinavian model of taxation and social security is in my party’s DNA. Some might say that that is the difference between ourselves and the Labour party, which announced the introduction of the additional rate as a temporary measure, bringing it in literally weeks before the party left government. Where we believe that the additional rate is part and parcel of contributions to society, Labour remains unclear how long the now official Opposition intended to continue the additional rate. This tax cut for the mega-rich leaves a bitter taste in the mouth. Public sector workers in my constituency face pension changes, meaning that they have to pay more in, that they get less out and that they work longer—that is, those who still have their jobs after spending several years with pay freezes and the threat of regional pay dangling over them. Living standards for private sector workers in my constituency are being squeezed, and many families struggling to make ends meet are being stigmatised by the Government, while the disabled and the vulnerable face tribunals to decide whether their pain is real. It is not acceptable that we are in a society which tells those at the bottom that they have a culture of entitlement, while those at the top get huge and unnecessary tax cuts. Why do we think that

Finance Bill

668

we can cut the poor’s income to make them work harder, but incentivise the rich through tax cuts? That is perverse thinking. We support the aim of amendment 3, which would give those public sector workers earning less than £21,000 who have had their pay frozen a £250 tax rebate. They deserve it, as do many private sector workers who have lost out because of the Treasury’s austerity economics. We support also amendment 1, tabled by the official Opposition, despite its effect of wiping out the additional rate altogether for 2013-14. Given their failure to vote on the inclusion of the 2013-14 rate in the Bill at the time of the Budget, we recognise that their intent is to show their belated support for maintaining current income tax rates. If the amendment is successful, we expect the Government to reinstate the top rate at 50%. With last week’s figures confirming that the double-dip recession is deeper than first thought, and with the cuts now beginning to feed their way through the system, giving a tax cut to the mega-rich is a funny way of showing that we are all in this together. Nigel Mills: It is a pleasure to follow the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards). I shall make a few brief remarks on various subjects in the Bill, starting with the granny tax, which I also spoke about on either Second Reading or during the Budget debate—we seem to have been debating it for a long time, particularly those of us who have done a few weeks in Committee on some of these topics. I was one of those who heard the Budget, heard the Chancellor briefly mention what became known as the granny tax and did realise what it was likely to mean. I was not one of those, like the hon. Member for Leeds West (Rachel Reeves), who claimed that the Chancellor had hidden it in his speech; it was clearly there. Those of us who, in our short time as Members, have argued that we need to simplify our tax regime face a problem when one way suggested by the Office of Tax Simplification is this very idea. To be fair to the OTS, it did not envisage its idea being introduced quite so quickly. I suspect that generally it would be quite keen to have its ideas legislated on in a matter of weeks, but on this one it intended there to be further consultation and deliberation. It was, nevertheless, one idea that it came up with as a way of removing one of the regime’s complexities, whereby an additional allowance has to be claimed, the policy justification for which was determined a long time ago. It is perfectly reasonable for the Government to revisit it and to wonder whether, of all the groups in society who need such extra help, pensioners earning more than the state pension are one of them. Those people who have done the right thing and saved, and who now have a little private pension on top of their state pension, are generally the ones in whom we want to encourage pension-saving behaviour, but the basic personal allowance is rapidly heading towards the £10,000 target in the coalition agreement, and the benefit of that higher personal allowance has to be clawed back. We are seeing a complexity with a reducing benefit, and we are perfectly entitled to want to understand the policy justification for it when we spend the limited amount of money that we have. It is not, therefore, an unreasonable or illogical proposal for the Government to bring forward; there was a year’s notice, and there is a chance for consultation to consider its impact.

669

Finance Bill

2 JULY 2012

8.15 pm We might prefer consultation then legislation, rather than legislation then consultation, but we still have time to consider the issue. We are struggling for money to balance the budget. We heard in the previous debate about a balanced budget and the Opposition being concerned that the U-turns on VAT and on fuel duty are somehow unbalancing it, but they now seem to want us to do a U-turn that would seriously unbalance next year’s budget. I am not sure where the term “balancing” comes from. In my years as an accountant, we used to think that a balanced budget was one in which someone’s income equalled their expenditure, not one in which their expenditure exceeded their income by about £90 billion, which is what this year’s Budget shows. When we talk of a balanced budget, what we really mean is that we have a borrowing number that makes the other two numbers agree. On that basis, I will vote for the tax measure, although it is very difficult to sell and we all know the perils of upsetting people of that generation in our constituencies, but we have to go out there and say, “We have to take tough measures”; we cannot please everybody. Ian Lavery: The hon. Gentleman recognises that we cannot please everybody, but does he agree that cutting taxes for the rich pleases the rich, while the ones who will be less pleased are pensioners, having £83 a week off taken off them, and people who turn 65 next year, losing £322? Nigel Mills: I am sure that people who benefit from a tax cut will be pleased and those who lose out from a tax change will not be, so I guess I can agree with most of that, but it will be interesting to see in the Lobby later whether the hon. Gentleman votes for his party’s amendment, which would mean the House passing the Bill after abolishing the 45p rate completely and reducing it to a 40p rate. It is all right saying, “Perhaps we can do that and perhaps the Government will do something different in future,” but we are legislating in Parliament, and if we were to vote for the amendment and remove the 45p rate, it would not actually exist, and I am not sure that those Members who would rather the provision read “50p” than “45p” could in all conscience vote for that. I clearly will not vote for the amendment, because it would be the wrong measure at this time; I will vote for there to be a 45p rate in next year’s tax regime. When I debate these things, I could take a narrow constituency view. I suspect that very few of my constituents pay the 50p tax rate, as I have many pensioners who are not that well-off and will be adversely impacted by the granny tax, so from a political and personal view I could happily oppose the tax cut and the granny tax, too, but we have to get our economy into sensible working order. Meg Hillier (Hackney South and Shoreditch) (Lab/ Co-op): The hon. Gentleman talks about the over-65s, saying that this is all very fair and things will balance out over time. Does he not understand that someone over 65 is likely to be on a fixed income and £323 is therefore considerably more important, whereas if someone earns higher amounts and is taxed at 50%, 45%, 40% or anything in between, whatever it may be, they have the

Finance Bill

670

capacity to earn more? Once they retire, it is the fixed nature of their income that makes the Chancellor’s decision so invidious. Nigel Mills: I am grateful for the intervention, and of course understand that pensioners living off their savings have suffered terribly during the recession, starting with the raid on private pensions when Labour first came into office, all the way through to the terrible impact of the loss of interest income on savings. I totally accept that that is clearly an issue, but to return to the 45p or 50p rates we ought to be completely accurate. With the 2p national insurance charge, which comes in when someone normally starts paying NI, and which will remain, those rates are 52p or 47p. We should be careful on a matter of principle. I am not sure how many people out there would want to work if the money for more than half an hour of every hour that they worked was not for them but for the taxman. That is what that effective 52p rate does; it means that a person is probably not working for themselves for 31 minutes of every hour. I am not sure that that is a real incentive for those who have a lot of money. They do not need to carry on working; they could retire to their yachts and sail around the Mediterranean. We want them to come back, invest in another business, have another go and employ some more people. We want that investment to come into the country. If a person is keeping less than half the money they earn, there is a real psychological impact. That is why it is right to bring the rate down. We are having a long political debate about what was meant to be a temporary tax. The previous Government never had it in place when they were in power; it was set up as a political stunt for the election. It was not expected to raise significant amounts of money. It was there not for an economic purpose, but a political one. It was right for us to say that at a time when we need to get activity going and to attract investment into the country, we need to encourage those who have a choice whether they carry on working and generating wealth or not, to carry on working. It is right for us to bring the tax rate down. I would have thought that it was better just to do it rather than wait a year, but there are many good economic reasons why we had to wait for that length of time. The fact is that if tax rates are too high, people get much more keen on avoiding tax. When I was relatively new in my accountancy career, the then Chancellor in effect reduced the capital gains tax rate to 10% tax on the sale of a business asset. The place where I worked then had made lots of money advising people on how to reduce their capital gains tax liabilities when they retired from their businesses. When the rate went down at a stroke overnight from 40% to 10%, that meant that no one was interested in that kind of tax planning; they were perfectly happy to pay what they thought was a reasonable tax bill. But the reverse effect also applies—if the rates go up to a level that people are not happy to pay, they will start to use ingenious methods to avoid the taxes. Gloria De Piero (Ashfield) (Lab): The hon. Gentleman is speaking as though his party had always supported the abolition of the 50p tax. However, a couple of months before the Budget, the former Energy Secretary,

671

Finance Bill

2 JULY 2012

[Gloria De Piero] the right hon. Member for Eastleigh (Chris Huhne), was saying that the 50p tax was here to stay. He told the BBC: “I think we’ve won that argument.”

What happened? Nigel Mills: I guess it is not for me to explain the right hon. Gentleman’s comments. He was clearly misinformed. However, we have seen that drift towards tax avoidance. I was saying that there was an easy way to avoid paying UK tax—not to be working in the UK at all. People can choose whether to come here or stay here; no complicated avoidance is necessary if they are not here at all. We want to attract the most skilled and able here to earn their money. My hon. Friend the Member for Dover (Charlie Elphicke) was generous in not having a go at some of the high-profile individuals who have been caught avoiding their taxes. People earning very good livings in this country should pay the tax that Parliament tells them they have to pay—there is no excuse for using complicated routes through Isle of Man or Channel Islands trusts. If they are taking money from hard-working people who go to their concerts, comedy shows or football matches, it is outrageous for them to route it through the Isle of Man. I am not sure that I would choose to listen to their concerts or their jokes. We should send a strong message that such behaviour is unacceptable. If those people are now feeling a little guilty and think that they have made a terrible error of judgment, it is quite simple—they can re-file their tax returns from recent years, declare all that income and pay tax on it. As Gary Barlow might think, “It only takes a minute” to do that—[Interruption.] We had to get some in. Then that money would be “Back for good”, wouldn’t it? It would certainly be one of our “Greatest day”s. I only “Pray” that he would do that—it would certainly be magic if he did. Those are all the Take That songs that I can remember, so I will not carry on. The important point is that if we push tax rates up too high, revenues will start to go down and people will start engaging in the behaviour we want to crack down on. The Government are cracking down on it and doing everything they can, but there is a limit to how far ahead they can stay. New things will always come along. Fundamentally, we cannot stop people leaving the country. Labour Members generally think that Conservative Members cite the Laffer curve; we have heard mention of calculations on fag packets and so on. The theory that revenue falls if tax rates are too high is a lot older than the Laffer curve. I had the pleasure of studying Mr Ibn Khaldun, a Muslim philosopher from the 14th century, who wrote an extensive commentary on what happens with tax rates. When they start low, they generate lots of economic activity. Gradually the Government like the idea of spending money, taxes go up and then the economy fails. If our debate was not programmed tonight, I could read out pages of those quotes, to prove that Mr Laffer’s theories are not new, but I shall resist. The theory is not new; it is an entirely understandable and accurate theory: if tax rates are too high, we end up losing revenue.

Finance Bill

672

Another amendment under discussion would give a £250 tax cut to a public sector worker who had not had their £250 pay rise for the last two years. I am not convinced by that. It would be very generous; presumably, if they had had the pay rise, they would have to have paid tax on it, so they would not have had the full benefit of the £250. The idea is probably tempting, but I will not be able to vote for it. Meg Hillier: I do not want to broaden the debate too much, but I say at the outset that we should get back to the basics. Why is it important that people pay tax? I strongly believe that it is important for people to have a stake in society and that paying tax is a big part of that. I may be out of step with a number of Members— including, possibly, my party’s Front Benchers—in believing that the rush to increase the personal allowance and take lots of people out of tax is not necessarily, on its own, a good move. Taking people out of the tax system altogether denies them responsibility for a number of issues to do with public spending and takes away the accountability that we, as elected Members, should have in helping to set those policies. Nigel Mills: I agree with the hon. Lady, but does she note that we are not taking people out of national insurance? All those people are still paying the tax most closely associated with the main public spending items. Meg Hillier: It is interesting that the hon. Gentleman has managed to conflate tax and national insurance; perhaps he has given away what the Government’s thinking really is. I am a member of the Public Accounts Committee which has been looking closely at the sometimes interesting tax arrangements of some individuals. We recently went on a study visit and discussed some of the international issues to do with how tax is dealt with. The UK’s is a complicated system and we are not alone in that. This means that, in the corporate world, corporate lawyers can run rings around HMRC and that highly paid lawyers can find ways for some high-worth individuals to work in a more tax-efficient way, to put it politely, and actively to avoid tax—sometimes worse. To a degree, New Zealand has simplified its tax system, although it is difficult to know from a distance how successful that is for people. If the increase in allowance were genuinely linked to a simplification of the system, I would be much more supportive of it, but it has the feeling of being rather piecemeal, a bit joined together. It is like a dodgy second-hand car—the front bit is welded to the back bit. The coalition feels a bit like that; sometimes I am not entirely sure whether the Deputy Prime Minister or the Prime Minister is at the front or back at any particular time. There is a danger that we are seeing the increase in the personal allowance as a sticking plaster for one element of the coalition, while the cut in the 50p tax rate, which, as my hon. Friend the Member for Ashfield (Gloria De Piero) pointed out, was opposed by the Liberal Democrat half of the coalition—she quoted the former Energy Secretary—is a sop to the other side. We almost have two unjoined-up bits of the system.The hon. Member for Amber Valley (Nigel Mills) talked about tax simplification. If that is the mission, then let

673

Finance Bill

2 JULY 2012

us see the overall plan for it, but all we hear about is the increase in personal allowances. I do not sense that there is a big idea, and that is a real worry. Let me turn to the 50p tax rate cut. Some 300,000 taxpayers will gain £10,000 a year as a result of that policy. These are individuals who earn more than £150,000 a year. The Treasury says that it should do this because £2.9 billion will supposedly come back from the people who are currently avoiding tax. I am not sure that that stacks up. Government Members try to suggest that these earners are all wealth creators, but we need to look a bit closer to home in the public sector. Perhaps the Government of whom I was a part, and the party that I represent, should have been a bit sharper in this regard. Public sector salaries have increased exponentially over the past decade. With the best will in the world, and much as I admire many of the people in my own constituency, and those I have met over the years, who work in the public sector because they genuinely believe in public service, they are not wealth creators, and I do not think they would consider themselves to be so. They may be safeguarding the health of my constituents or enabling the council to deliver excellent services; there are myriad ways that they can help, but wealth creation is not one of them. 8.30 pm The notion that this measure has the benefit of encouraging wealth creators to stay in this country and create wealth is false. It may be true of a few, but for someone who is very wealthy it will not make the biggest difference. In fact, corporation tax will probably have a bigger effect on why people choose to invest. That is why there was a battle royal in the Republic of Ireland about keeping its corporation tax down to the lowest level in Europe to make sure that businesses were attracted to Ireland and wanted to stay there when it was going through very difficult economic times. If we are to have a grand plan for simplification, this does not seem to be part of it. We should look at what the Office for Budget Responsibility and the Institute for Fiscal Studies have said about the supposed £2.9 billion that the Treasury expects to get back from people who are currently avoiding tax. The OBR said: “The results of this evaluation are highly uncertain.”

The IFS said: “If the future of the 50p rate is to be determined on the basis of evidence about its impact then Budget 2012 will be too soon to form a robust judgement.”

We lack robust judgments in this debate. This policy has become a shibboleth for one half of the coalition, while the higher rate of personal allowance that takes people out of tax is very important to the other half, and the two halves do not properly join up. Many of my constituents are among the poorest in the country, and when everything is taken into account, they will not gain from either measure because the increased rate of personal allowance does nothing to improve the public services that many of them are now losing out on as cuts begin to bite. As my hon. Friend the Member for Brent North (Barry Gardiner) said, the big question about this tax take is how much revenue will be brought in from so-called missed tax avoidance in future years given that people will front-load their tax benefits in the early years. Overall, there is an inherent unfairness throughout

Finance Bill

674

the Budget decisions and announcements that the Chancellor made, and I hope that this measure will bite the dust. It is as much about the signal that it sends as the reality of it. For me, that is very important, because my constituents, many of whom are working hard and just trying to hold body and soul together, do not see the fairness in this and do not see why the very richest should pay much less tax as a result. Indeed, these people are supposedly saving £10,000 in a single year, and that is as much as many of my constituents earn in a year. Ian Lavery: I totally agree with my hon. Friend. Ten thousand pounds a year equates to £833 a month, and it is more than hundreds of thousands of people in my constituency make on an annual basis. Meg Hillier: Absolutely. If we have a duty in this House, it is constantly to remind ourselves of what life is like for our constituents. We can get lulled into a sense of safety and snugness on these green Benches and enjoy intellectual repartee and debate, but we are here to represent the people who elected us. It is incumbent on us to remember that many people are living on £10,000 a year or less, and it is important that we reflect their concerns in this House. For me, that is a burning issue. I want my constituents to earn more than £10,000 a year, but they will not be able to do so unless we get the economy moving. Locally, we have real poverty and high unemployment. Youth unemployment has risen to about a quarter of the total number of my constituents aged under 24, as roughly a third of them are, and we are seeing an increase in over-50s unemployment. These are the people who are not gaining but seeing those earning over £150,000 gain considerably. There is a lot that we need to do. We must look at the unfairness of the cut overall and at the needs of the people who are earning less. I do not think that the money that is supposed to come back will be used to reverse the cuts to further education, to make the banks lend or restore the overdraft facilities of small businesses in my area, or to restore the education maintenance allowance, which had a big impact in helping those in my constituency who wanted to skill themselves up to earn more money—the end of EMA put those people on the back foot. Those matters all impact on the lives of people in Hackney South and Shoreditch today. A year ago, the Chancellor promised that the measures in the Budget, some of which we are debating today, would boost the economy. What have we seen in the past year? The economy has not just stalled, but shrunk. Again, who suffers the most? It is not the people who have gained from the reduction in the 50p rate of tax, but ordinary men and women up and down the country who are working hard and paying tax. The Chancellor has also had to borrow £150 billion more than planned. I have mentioned the freezing of the personal allowance overall, but the decision to take away the pensioner element has the biggest impact on those who earn between £10,000 and £29,000 a year. There are not many pensioners in my constituency who earn more than that, although it does have an interesting mix. Being on the edge of a city, there are people of greater wealth in my constituency, but they are not many in number.

675

Finance Bill

2 JULY 2012

[Meg Hillier] Somebody who is due to retire in 2013-14 aged 65 will lose £323 a year, which other Members have talked about at length. It is worth reiterating the point that I made to the hon. Member for Amber Valley: somebody who is on a fixed income or who will be on a fixed income in a year’s time will have to adjust their affairs overall, including their savings if they are lucky enough to have any. That £323 may not seem much to us on our comfortable salaries as Members of Parliament, but for people on low-level fixed incomes of just above the amount where they would get help other than the basic state pension, that will have a real impact on their household income. I reiterate that we must think about the message that that sends out: pensioners are the victims; those earning £150,000 a year or more are the victors. That is unfair. Graeme Morrice (Livingston) (Lab): Thank you, Mr Deputy Speaker, for giving me the opportunity to contribute to this debate in support of the Labour Opposition amendments. I was a member of the Finance Bill Committee and attended each of the 18 sittings over the past several weeks; obviously I must have been bad in a former life. It was clear to me that the more the Bill was scrutinised in Committee, the more it was revealed that the Bill, and the Budget that it will enshrine into statute, is the omnishambles that many commentators have described it as. Once again, the Tories are showing their true colours. It was a classic Tory Budget, with millions paying more so that millionaires can pay less. That is evidenced by the fact that, as we have heard throughout the debate, 14,000 millionaires will receive a tax cut of more than £40,000 a year, while 4.4 million pensioners will lose an average of £83 a year. It is a classic Tory Budget, but with the difference that it was possible only thanks to the support of the Liberal Democrats—the Lib Dems who continued publicly to oppose any change to the 50p rate of income tax immediately prior to the Budget statement but then voted for it; the Lib Dems who, before the last election, repeatedly stated their opposition to immediate public spending cuts, only to support a Budget reduction of more than £6 billion within two weeks of forming the coalition; and, lest we forget, the Lib Dems who promised not to raise VAT and then raised it. The 50p rate raised about £1 billion in its first year and could have raised £3 billion a year over the lifetime of this Parliament and beyond. Its continuation could have been used to cut fuel duty, not just freeze it, as we agreed in the previous debate. Many of my constituents have written to me about that. It could have been used to reverse the Government’s damaging cuts to tax credits or help reduce the deficit. Instead, the Chancellor chose to give the richest 1% of earners a huge payout. People on middle and low incomes are already being squeezed by rising fuel, energy and food prices. Now, their tax credits and child benefit are being cut. Yet again, the Government have made the wrong choice and proved how totally out of touch they are. The aspect of the Budget that has undoubtedly caused the most anger among my constituents is the decision to freeze the personal allowance for pensioners, which will

Finance Bill

676

help subsidise the Chancellor’s bumper tax cut for the rich. That was buried in the Budget’s small print, and the Government tried to make out that it was a tidying-up exercise. However, nobody was fooled by that. It was clear that it was actually a £3 billion tax raid on pensioners. No wonder that was the only aspect of the Budget that was not leaked in advance. How will the Chancellor’s tough talk about cracking down on tax evasion and aggressive tax avoidance, which he says is “morally repugnant”, be put into action if the resources of Her Majesty’s Revenue and Customs continue to be cut? Some 10,000 jobs will go by 2015, including 240 processing posts at Pentland House in my constituency. Labour’s five-point plan for growth offers an alternative vision. If the Government followed our advice and implemented a £2 billion tax on bank bonuses to fund 100,000 jobs for young people, we would begin to see some progress on tackling the scourge of youth unemployment. Instead, millions are left to pay for a Budget for millionaires—a classic Tory Budget, but this time supported by the discredited Liberal Democrats. Thomas Docherty (Dunfermline and West Fife) (Lab): I should, in the interests of probity, place on record the fact that my wife works for Age Scotland. I declare that interest. The contrast between the two sums of money that we are debating has been mentioned several times. There is the £3 billion of tax cuts for millionaires’ row, versus the £3 billion by which our pensioners will be worse off as a result of the punitive measures employed by Liberal Democrat and Conservative Members. Personal allowances for the over-65s, our golden generation, are to be cut in real terms in the coming year. As several hon. Members have mentioned, that will mean that a pensioner who turns 65 in the next year will be up to £323 a year worse off. In these hard-pressed times, with the rising cost of living, rising energy and water prices and the flatlining of their savings, they can ill afford to pay that tax. It is worth contrasting their situation with that of the people who will be the greatest beneficiaries of the Government’s decisions. I know that many Members are fans of a popular US television programme called “The West Wing”. For hon. Members who do not own a television, let me explain that it is about a wonderful Democrat politician, whom Members of all parties might aspire to be, who is pitted against a mad, right-wing Republican Congress that pursues more and more absurd policies. Even “The West Wing” could not countenance the idea that in a time of austerity, when deficits have to be reduced, a right-wing party—or the two right-wing Government parties—would call for tax cuts for the very wealthiest. Even Speaker Haffley in “The West Wing” would not support such ludicrous so-called economics. 8.45 pm Much has been made of how the Conservatives and Liberal Democrats get along. We have heard many stories of the infamous quad—the Prime Minister, the Chancellor, the Chief Secretary to the Treasury and their servant, the Deputy Prime Minister—drinking whisky late at night to celebrate putting the Budget to bed. Perhaps if they had spent a little less time on the drams and a little more on the details, they would not have ended up in this absurd situation. We have heard

677

Finance Bill

2 JULY 2012

allegations that Prime Ministers of previous Governments were not always aware of the detail of a Budget, but I do not recall a Chancellor who was not aware of it. We have seen time after time in debates on this Bill, and in U-turn after U-turn, that this Chancellor is unaware of that detail. As my hon. Friend the Member for Wallasey (Ms Eagle) said last week at business questions, perhaps next year’s Budget should be written in pencil so we can save time by simply rubbing out the changes. In that spirit, I hope the Minister sees sense, having heard eloquent arguments from Opposition Members and the lack of arguments offered by Government Members. Ian Mearns (Gateshead) (Lab): Would my hon. Friend care to speculate on how many of the 14,000 millionaires who will be super-beneficiaries of the measures will stop moving the mountains of cash that they currently move to avoid paying tax when the top rate is reduced from 50p to 45p? Surely if they move mountains of cash to avoid paying 50p, they will not move any less to avoid paying 45p. Thomas Docherty: I suspect the best and fastest way to answer my hon. Friend’s question would be to attend the next Conservative party fundraising drinks event, where I am sure many of those millionaires will be buying the Minister a rather hearty round. Much has been made of the quad’s all-night drinking session. I am sure they were drinking fine Scotch malts— indeed, no fine malts are made outside Scotland—but they should have spent more time looking at the detail of those two decisions. In direct contrast to the hon. Member for Dover (Charlie Elphicke), I would argue that pensioners on an income of £10,000 a year are not among the wealthiest pensioners in the country. If Conservative Members believe pensioner households struggling to get by on £10,000 are wealthy, it goes to show how staggeringly out of touch they are. Jacob Rees-Mogg: I am extremely grateful to the hon. Gentleman for giving way and am enjoying his wanderings through the drinking habits of certain Members of the House, which I am not sure are directly relevant. Why is it fair that pensioners should have this benefit but not families who have a £10,000 allowance who are struggling with children? What is it fair that the benefit should be age-related? Thomas Docherty: I always give way to the hon. Gentleman, who knows more about age than anyone in the House. He needs no history lesson, but the measure goes back to the end of the second world war, and the concept of the greatest generations—those who have given a lifetime of sacrifice. It is worth noting that, just last week, we unveiled a long-overdue memorial to some of that greatest generation. I am sure he would recognise their sacrifice. Jacob Rees-Mogg: The measure was introduced earlier, I believe by Winston Churchill; indeed, an hon. Member asked earlier how we could overturn what the great man had done. The wartime generation are having the benefit frozen; they are not losing it. The people who are not getting it were not born when the war was going on.

Finance Bill

678

Thomas Docherty: I cannot believe the hon. Gentleman’s hearing is going. I began by saying that a cash freeze is a real-terms cut. I am sure he would agree with that. Jacob Rees-Mogg: The Government’s wonderful policies are very successfully bringing down inflation; there has been a substantial fall. In addition, oil prices are coming down and there is a cut in fuel duty. That amazing combination means everything is working very well. Thomas Docherty: With an intervention like that, it will not be long before the hon. Gentleman is sitting on the Front Bench speaking for the Government on Treasury matters. Perhaps I can help him on another matter, though, because several references were made to Take That. For his benefit, let me say that they are a popular beat combo who can often be found on the wireless. He might enjoy listening to them. Jacob Rees-Mogg rose— Mr Deputy Speaker (Mr Lindsay Hoyle): Order. We do not need to worry about Take That and radios for today. I think that the circus has carried on long enough. Thomas Docherty: I am most grateful, Mr Deputy Speaker. Ian Mearns: Would my hon. Friend care to reflect that we have just heard from the hon. Member for North East Somerset (Jacob Rees-Mogg) a celebration of stagflation? Thomas Docherty: My hon. Friend is correct. This is not a time for celebration, as the cost of living continues to rise and the cost of energy and other precious commodities heads in the wrong direction. The real-terms cut faced by pensioners this year will make their lives much harder. It is also worth reflecting on who will benefit from the proposals outlined by Ministers. We are talking about footballers, pop stars and “Big Brother” contestants. We talk about wealth generation and the value of people. With the greatest respect, I would argue that those three categories should not be given priority over our greatest generation. I know that the Minister is a courageous soul and, for his sins, an Ipswich Town supporter—such as that can be—but I wonder whether he truly believes that the value given by Ipswich Town players last year or this year was greater than the value given by the greatest generation in our nation. Surely, he must reflect on whether Middlesbrough, Ipswich Town, Sunderland, Leicester City or Crystal Palace players should really be prioritised over our pensioners. Gloria De Piero: Did my hon. Friend notice the inconsistency of the Liberal Democrats on this matter? In January, they said it would be very wrong to reduce the 50p tax, but by March they were briefing that they were not ideologically wedded to the tax. Has this episode not demonstrated their powerlessness in government? Thomas Docherty: I often think that the Business Secretary would make an excellent contestant on “Strictly Come Dancing”, such is his fleetness of foot. In fact, I am sure that tomorrow morning there will be leaflets out in Brent and elsewhere condemning and disowning

679

Finance Bill

2 JULY 2012

[Thomas Docherty] this Government policy, as if Liberal Democrat votes had not yet again carried the argument, leaving Ipswich Town footballers and others better off and our greatest generation worse off. This is a poverty of policy. It is the worst example of what happens when the quad sits up drinking and it will leave the country with a dreadful hangover. Sheila Gilmore: The policy on the higher tax rate is, in effect, an endorsement of tax avoidance, which worries me greatly. Some of us sat through the Finance Bill Committee and heard Government Back-Bench Members say how much they disapproved of tax avoidance, but throughout this episode we have heard people argue that because some people have taken steps to avoid tax, we should reduce it. That is highly unsatisfactory to the many people who, on pay-as-you-earn, have little ability to avoid tax. They are gobsmacked by all this. If part of the problem was due to people forestalling, which is the technical term, in the first year of the new tax, perhaps—and this is a thought for the future too—we should have introduced it with immediate effect, as happens with some other taxes. For example, tobacco duty is generally increased on the day of a Budget, so that people do not rush out to fill their shopping bags—or whatever they do. Perhaps that would have been a way around it. I know it is not traditionally done with increases in tax rates, but if that is how people respond to these things, perhaps we should treat higher earners like we treat people we think will fill their bags with cheap booze or cigarettes, and forestall them, rather than letting them forestall the rest of us—because that is what they are doing to the communities in which they live. Unfortunately, in a year’s time, we are likely to hear Government Members saying “We told you so” even more. The reduction has been postponed for a year, but it will still happen, and a lot of people will no doubt do the same thing in reverse when it does. It has become something of a mantra to say that no money was ever raised from the 50p rate of tax, but that is not true: £1 billion was raised, even in the year in which people were apparently forestalling. If we had let it run for somewhat longer, the situation could have been even more different. However, as the Institute for Fiscal Studies pointed out, to rush to judgment on this matter so quickly, because that suited the way in which the Government wanted to go, was not justified. We are, in effect, saying to people that it is all right to avoid tax. I started to tell a little story earlier, and I hope that it will be seen to be relevant. I am fascinated by history, and particularly by housing, and—unusually, for me—I watched a television programme last night. It was entitled “The Secret History of Our Streets”, and last night’s episode was about Portland road, in London. It had been made long before the current debate on the Budget. A young, brash banker got up and said that the value of the property on that street had gone up even further since the taxpayers had bailed out the banks. Did we really think, he asked, that the banks were going to start lending to small businesses? No, they were going to give people like him an increase in income so that they could pay even more for those houses. He might have been one of those boastful types, but that was nevertheless an insight into the mindset of the kind of people in our

Finance Bill

680

community who think that tax avoidance is absolutely legitimate. There is a great deal of wealth in this country, as that example showed, and many ordinary people find this whole debate offensive and difficult to swallow. At the other end of the tax issue, we have the question of raising the tax-free allowances. The Government keep saying how kind they are being to people on low incomes, but we should remember that once those people have had their tax allowance raised, they will get no further advantage in subsequent years because they are already out of the income tax regime. Other people, however, have gained considerable advantages from the raising of the basic tax threshold. Many people on considerably higher earnings—although not necessarily paying higher rates of tax—have gained from the measure. It has been easy—for the Liberal Democrats in particular, as this is one of their favourite lines—to say that raising the tax threshold is all about helping the very poorest. However, the very poorest were already outside the income tax regime, and people on considerably higher earnings—particularly two-earner families without children—have benefited substantially from the raising of the threshold. We must also take into account what people on the margins who have been taken out of tax have lost. When we look at the details, we see that as a result of the measure, they could lose tax credits and, in some cases, housing benefit. Their gain is therefore very much less than has been suggested. Mr Kevan Jones (North Durham) (Lab): A lot of the people my hon. Friend is describing are actually in work, and the Government seem to forget that a lot of low-paid workers get housing benefit and other benefits. Does she agree that it is those individuals who will be hit the hardest? Sheila Gilmore: Indeed, people who are working and who are, or were, paying tax stand to lose considerable amounts, particularly in the light of the way in which the tax credit system has been eroded as part of this process. There are those who say—again, this is one of those things that keeps getting repeated as if it were true—that the Labour Government were not bothered about getting people into work or making work pay, but the whole thrust of tax credits, including child care tax credits, was indeed to make work pay. What this Government have done, by reducing the amount that can be claimed for child care, by taking away tax credits and, most inappropriately in my opinion, by taking away tax credits from some of the lowest-paid couples because they are deemed not to be working enough hours, more than detracts from the gains made by raising the tax threshold. Being realistic, these poor people whom the Liberal Democrats think they are standing up for have, particularly if they have children, lost out because of the combined effect of the Government’s measures. 9 pm I do not think there is any proof for the idea that if we lower tax rates, people will somehow invest. Let us look at what the Office for Budget Responsibility said about investment. It is predicting that the amount of investment going into business in the coming years will be much less than was previously thought. Despite what Government Members believe, if the people apparently

681

Finance Bill

2 JULY 2012

not even paying this tax are not investing in the economy, is it clear where they are putting their money? Yes, they are clearly putting it into very expensive properties, but that does nothing to improve job prospects for young people. Mr Jones: I suggest that those people are also putting their money into the Conservative party, whose largest donors are often hedge fund managers or financial services companies. Sheila Gilmore: That may well be the case. What we need to do is to find ways to invest in our economy that will genuinely benefit not just those who are unemployed, but those who are under-employed. The Government like to suggest that the rate of growth in the private sector has increased slightly in the last few months, but most of the jobs created over the last couple of years are part-time jobs. As a result of that, these very people are simultaneously losing tax credits and have to claim other benefits. The housing benefit bill has risen substantially in the last year, despite the Government’s changes, and that is because many people in part-time jobs are having to claim. What we saw in May, for example, was that the tax take had dropped and expenditure had risen, particularly on various kinds of welfare benefits. Taken as a whole, this policy is simply not working. I would have greater respect for the Government if they were now saying, “We must look at why it is that some people are seeking to avoid the additional rate of tax. We must find ways—perhaps it is nudge, perhaps it is enforcement—to make them pay.” As others have said in this and previous debates, we seem to say to one group of people that if we take their benefits away they will work harder, while we say to another group of people that we have to give them more money through tax breaks so that they will work harder. It does not make a great deal of sense, and it is profoundly unfair. Some of the differentials in our society now are huge. If the proportion—not necessarily the amount—of tax being paid by the top 1% of earners has risen, it might well be because their incomes have risen so much further than those of the rest of the community. The gap between the top earners and the rest has widened hugely over the last few years, which creates a profoundly unequal society. Stephen Williams (Bristol West) (LD): I have listened to a good deal of what the hon. Lady has said during our debates, and I have been trying to decide whether or not she supports the raising of the tax allowance. However, I want to ask her about the specific point that she made about the gap between the rich and the poor, which she said had widened over a “few years”. Surely she meant “over the last 13 years”. Sheila Gilmore: As I think the hon. Gentleman knows fairly well, the increase in inequality began far earlier than that. The point in the history of the post-war United Kingdom when the equality gap was narrowest was 1979, which, interestingly, marked the end of a 20-year period during which Labour Governments had predominated. After 1979, the widening of the gap began and accelerated.

Finance Bill

682

I would not suggest for a moment that the party of which I am a member did as much as I should have liked it to do when it was in government, but we did a great deal for pensioners and the least well-off workers in society by, for instance, getting single parents back to work and introducing the minimum wage. It is simply not true that we were not aware of the issues, or that we did nothing to tackle them. The hon. Gentleman may want to return to the heady days of 1979, and perhaps we should all want to do that. Now, however, inequality is breeding a society that poses many dangers, and we want to reduce that inequality, but I do not believe that the Budget does anything to reduce it. We know that the Budget will increase child poverty, and I believe that in three or four years the inequality gap will have widened even more. Jacob Rees-Mogg: It is a real pleasure to follow the hon. Member for Edinburgh East (Sheila Gilmore), who made such an enormous contribution to the Public Bill Committee. She enlivened it regularly with her thoughts, with which I have almost invariably disagreed— and today is no exception. We are now dealing with the best part of the Budget: the heart, soul and even the guts of it. We are doing some big and bold and important things, with which I shall deal in turn. One of them is tough and brave and noble. It is the proper aim of Government to take on difficult things which, although difficult, are right. But I shall start, instead— Ian Lavery: Will the hon. Gentleman give way? Jacob Rees-Mogg: Of course I will. Ian Lavery: Is it bold and tough to rob the pensioners of £3 billion and give the millionaires a £3 billion tax cut? Jacob Rees-Mogg: The pensioners are not being robbed. The pensioners have been extraordinarily well looked after by this Government, and rightly so. I agree in many respects with the hon. Member for Dunfermline and West Fife (Thomas Docherty), who talked earlier about how important the elderly were to our society. He called them the golden generation. I thought that, out of respect to Her Majesty, we ought to call them the diamond generation, as they are all over 60. Of course we owe a great deal to the elderly. That is why it is right that they have kept their bus passes—which they are pleased to have, although there are not many buses in North East Somerset—and their winter fuel allowances. If they are over 75, they will also retain their free television licences so they can watch the BBC free of charge. I think that many of them prefer Sky nowadays, but that is a separate issue. The Conservative party, in alliance with our Liberal Democrat friends, has looked after the pensioners. As for the thresholds, it is absolutely right that they should be evened out. Let us consider the people who are paying tax across the country. How is it fair for those who have retired to be given an automatic tax break, rather than those who are working hard and perhaps bringing up children? They need the income just as much as the pensioners, and in some cases more. That, I think, was bold and brave of the Government, and right.

683

Finance Bill

2 JULY 2012

[Jacob Rees-Mogg] I want to begin, however, by discussing the easiest step to defend—the one that was so startlingly obvious that it is surprising that the Government did not take it earlier and go further. I am talking about the reduction in the 50p tax rate to 45p. We know well that high taxes drive out enterprise and people, and drive down tax revenues. That is not because of evil schemes of tax avoidance; it is because people simply decide that if they are not going to get paid, they will not work. They remove their labour. Our socialist friends— Thomas Docherty rose— Jacob Rees-Mogg: I give way to my socialist friend. Thomas Docherty: Does the hon. Gentleman really believe our society is enhanced by these pop stars and Premiership footballers? Jacob Rees-Mogg: It has to be said that I am not the world’s greatest expert on pop stars and footballers, but none the less I think they bring a richness to our national life that enlivens many people in my constituency, and even in Scotland. They want to watch the highest quality football being played. This is relevant, Mr Deputy Speaker, in case you think I am going off on a tangent. I have thought that it would be a good idea to remove the limit on overseas players in cricket, because that limit has been removed in association football and it has led to our having in this country the highest quality league football, and in English cricket— Mr Deputy Speaker (Mr Lindsay Hoyle): Order. We are drifting away from the topic under discussion—and as somebody who follows cricket and feels that it is to the benefit of the England team that there are not too many overseas players in the county game, I do not want to go any further into this debate. Jacob Rees-Mogg: Thank you, Mr Deputy Speaker, but the reduction of tax is what encourages them to be here and why they do not decide to work in other countries instead. Thomas Docherty: I am pretty sure, Mr Deputy Speaker, that the England cricket team is very good and the England football team is not very good. Jacob Rees-Mogg: But my concern was about Somerset county cricket club. Football teams such as Manchester United do very well through having more foreign players. Somerset, however, has yet to win the county championship, but this lower level of tax and greater freedom in employing overseas players may lead to its achieving that. Returning to the question of the 45p tax rate, we have had a discussion about avoidance in that context, and I want to defend tax avoidance. I know this is not the most popular cause to espouse, but I do so because I believe in the rule of law, and I do not believe the rule of law is best maintained by Parliament being arbitrary in its taxation.

Finance Bill

684

We have the power, through our votes this evening, to set rates of tax as we choose—to set schemes that allow people to be charged tax, or not to be charged tax, as we choose. If we in this House are too incompetent to draw up the tax law properly, is it reasonable to say to the taxpayer, “You must work out what Parliament may have wanted. This is not what is said, but Parliament may have wanted you to pay this extra amount on top”? Should we then also say that to people who put money into their individual savings accounts? Should we retrospectively say that they ought to have paid more tax on their ISA sums, or on their pension funds? Ian Lavery: Does the hon. Gentleman agree that there is a moral obligation on people to pay taxes, as well as a legal obligation? Jacob Rees-Mogg: No, I do not. I do not believe that taxation is a matter of morality. I believe the law is a matter of morality and it is immoral to break the law, and therefore I divide very firmly between tax evasion and tax avoidance, which is the historical position of this Parliament—and, indeed, of English law. Tax evasion is criminal and should be prosecuted to the full extent of the law. I think the scheme used by a comedian, whose name momentarily escapes me but who is quite famous, was almost certainly unlawful, and that scheme should be prosecuted. Mr Kevan Jones: I know the hon. Gentleman lives in a rarefied world, but does he not understand the anger felt not only by low-paid workers, but middle-earners, who pay their tax through pay-as-you-earn and have no opportunity to avoid tax, unlike the footballers to whom he referred? This situation cannot be fair in any society. Jacob Rees-Mogg: It is very important, once again, to differentiate between avoidance and evasion. If we have passed laws that allow people, for example footballers, to sell the rights to their name and corporatise that, we can change the law, and the fact that this Parliament has not changed the law means that people are entitled to do it. 9.15 pm Mr Jones: Does the hon. Gentleman get it? Does he not understand the anger of even middle-income earners, who pay their taxes, work hard and cannot use any schemes such as those he has been suggesting are open to those on ludicrous sums of £250,000 a week? Many people in Somerset must be in this category? Chris Heaton-Harris (Daventry) (Con) rose— Jacob Rees-Mogg: I give way to my hon. Friend. Mr Deputy Speaker (Mr Lindsay Hoyle): Order. It is worth answering that one first. Jacob Rees-Mogg: I am getting so many interventions, and I am always happy to take them all; all comers are welcome. I do not think that there is this anger; I think that people are very supportive of high earners who earn their money.

685

Finance Bill

2 JULY 2012

Chris Heaton-Harris: Does that not make the point? If there was this anger, thousands of people would not queue in lines to get their season ticket for Manchester United at the beginning of each season and millions of people would not be watching on television, because the strength of anger that Labour Members seem to want to articulate would mean that people would boycott these disgraceful sports and pursuits. Jacob Rees-Mogg: My hon. Friend is absolutely right and he has hit the nail on the head. Ian Mearns: The hon. Gentlemen have got it quite wrong. The tribal nature of football is that people idolise their own team’s players and despise the activities of the players from other teams. The bottom line is that the hon. Member for North East Somerset (Jacob ReesMogg) would prefer that there was no tax at all. Jacob Rees-Mogg: The hon. Gentleman is wrong on that last point; I recognise that there is a need for taxation, though slightly beyond the clauses we are immediately discussing. However, I will answer the important point that he has raised on the tribal nature of football and why people are willing to see these high salaries paid. It is because they recognise that those salaries get them the best quality players and they want to see the best quality players playing for the team that they so ardently and passionately support—it is an ardent passion that I do not have, but I understand that many people do have it. That requires low taxes, because otherwise these players take their talent abroad. I come back to Professor Laffer, because his argument is one that is so obvious as to be self-evident: if the tax rate is zero, nothing will be raised and if it is 100%, no sane person will pay it either as there is no point in working or in earning. There is some point along that curve where the least legal avoidance takes place—I emphasise that avoidance is legal—the most amount of working is done and the highest amount of revenue is received. We have seen this. I know that some Conservative Members, myself included, think that there was a golden age when Baroness Thatcher was in charge— Ian Lavery rose—

Finance Bill

686

In 1979, the top tax rate was 98%—83p in the pound on income tax and a 15p surcharge. [Interruption.] I hear Labour Members saying that that was excellent and a jolly good thing. It is rather splendid to know that I am not the only one with dinosaur-style views in this House; there are even greater dinosaurs on the Labour Benches. When those tax rates were reduced they came down first to 60% and then to 40%, to fury from hon. Members. I believe that the House was suspended when the noble Lord Lawson introduced the rate of 40p in the pound; I think the Scottish nationalists got up in a passion of anger, wishing for higher taxation to spread across the realm of the United Kingdom. What did that reduction do? It raised more money for Her Majesty’s Government, which meant that the Government could spend money on their priorities and pay down their debt. We had a golden economic scenario when the noble Lord Lawson was at the helm, because we believed in low tax rates and had the courage of our convictions. Kelvin Hopkins (Luton North) (Lab): I remember the noble Lord Lawson’s time as Chancellor and the real reason we boomed in that time was that he depreciated our currency by 35%. Jacob Rees-Mogg: Without going anything other than briefly through a history of sterling in the 1980s, I seem to remember that it bottomed in 1985 at $1.10 and then started rising again. So, that was not the case throughout the noble Lord’s period in office. I shall come back to the subject of the Laffer curve, but I must first take an intervention from the hon. Member for Clwyd South (Susan Elan Jones). Susan Elan Jones (Clwyd South) (Lab): I must confess that I was rather enjoying the sporting analogies and wondering, if the rules were different, what rates of taxation would be required for England rugby players to be able to beat the Welsh—but let me move on. The hon. Gentleman says that there is no morality in tax, but how does he feel about indirect taxation? There were many concerns about the effect on petrol prices, for example, when VAT was raised. Does he think that that should be reduced, too?

Jacob Rees-Mogg: I give way to another supporter of the golden age.

Jacob Rees-Mogg: I am grateful to the hon. Lady—

Ian Lavery: I intervened just too early, because he mentioned Margaret Thatcher—another issue. Is there anywhere on this curve that the hon. Gentleman continues to mention where morality comes into play?

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. We are in danger of moving off the topic. We are discussing personal allowances and we need to get back to them. We have had a good lesson in the Jurassic history from those on both sides of the Chamber.

Jacob Rees-Mogg: This argument is not a moral one. We are not the House of Bishops. I am all in favour of the Lords Spiritual having a view on this, but I am not one of them. I did not go into the Church; I went into politics. Politics is about raising the revenue that is needed for the country to carry out its business, and it is not an issue of morality in terms of how we phrase the laws. That those laws are then obeyed is a matter of morality. I can probably quote paragraphs of the Catholic catechism on this, but you are looking fretful at that thought, Mr Deputy Speaker, so I shall move back to the golden age of the noble Baroness Thatcher, Lady of the Garter, Order of Merit.

Jacob Rees-Mogg: Thank you, Mr Deputy Speaker. One always feels ashamed not to answer a question directly, so I apologise to the hon. Lady for the fact that I shall have to give a later answer on that knotty point of value added tax. I will stick with the Laffer curve and its history of increased revenue. We heard from the Opposition that when rates went down, the economy boomed and so, therefore, did the revenues raised. There are two answers to that. One reason that the economy boomed was that there was lower tax, so people had more of their own money in their pockets to spend on goods and services,

687

Finance Bill

2 JULY 2012

[Jacob Rees-Mogg] leading to overall economic growth. Secondly, the amount paid by top taxpayers grew much faster than the rate of the economy overall. We are now in a situation where 27% of income tax is now paid by the top 1% of income tax payers— Kelvin Hopkins: Not enough. Jacob Rees-Mogg: In 1979, when the hon. Gentleman had a real socialist Government, that figure was about 8%. One can see that massive expansion in the burden of tax falling on the richest in society—the ones who can bear that burden—comes when the rate is lower. That is an excellent part of this Budget; perhaps the best part. Chris Heaton-Harris: I thank my hon. Friend for being so generous in giving way. If one could possibly take the politics out of tax, surely one would want to hit the tax rate that brings in the most revenue, in order to pay for hospitals and everything else. If that tax rate was proved to be lower than the higher tax rate, one would like to think that common sense would prevail and that Ministers would choose the tax rate that would bring in the money. Jacob Rees-Mogg: I agree with my hon. Friend. I believe that there are studies that show that that rate would be 36p in the pound. I hope that the Minister is listening and that we can look forward in the next Budget to the rate being lower still. We have heard discussion about the morality of tax rates, and I dispute that there is morality to tax rates, but there is a perniciousness about taxing for the sake of it and about taxing for the sake of envy, because people do not like the rich or because they wish to crush the income earners in society. That is not the type of envy that we have on these Benches. Even our Liberal Democrat friends do not suffer from that type of envy; they recovered from it after their experience in 1909. We Conservative Members have never had that type of envy. We recognise that if the maximum amount of revenue is raised, it is better for everybody. We heard our Prime Minister giving an invitation to our friends in France, saying, “Come and join us. The weather here may be rainy, but the tax rate is only 45p in the pound, compared with the 75p that you may have to pay.” Ian Lavery: Will the hon. Gentleman enlighten the House on what personal tax allowances he would put in place at different levels, if he were the Chancellor and had the power? Jacob Rees-Mogg: It would be an impertinence for someone who entered the House in only the past two years to aspire, even hypothetically, to the height of Chancellor of the Exchequer. I leave that question to my hon. Friends on the Government Front Bench, who, having listened carefully to all that is said in this debate, will no doubt advise the Chancellor. They may consider the figure of 36p in the pound to be perfectly suitable—or they may go further and advocate a flat tax, which is a very attractive proposition. Perhaps people could have tabled an amendment to that effect, but sadly they did

Finance Bill

688

not. As I understand from my hon. Friend the Member for Amber Valley (Nigel Mills), who is no longer in his place— Gavin Williamson (South Staffordshire) (Con): He’s behind you. Jacob Rees-Mogg: Oh, he is behind me. My hon. Friend the Member for Amber Valley said that the effect of the amendment from our Labour friends would be to bring the tax rate down to 40p. I am not sure that it was wise of him to say that, because those of us who were listening may be tempted to go into the same Lobby as the Opposition later, to help them achieve that objective. I want to talk about the other great aspect of the Budget, and to give full credit to our Liberal Democrat friends for twisting Conservatives’ arms to get them to do something that they have always wanted to do anyway: get as many people out of taxation as possible by raising the thresholds. As the thresholds are raised, so the incentive to work becomes greater. The hon. Member for Edinburgh East (Sheila Gilmore) said that we wanted to make the out-of-work work harder by cutting their benefits, and the in-work work harder by cutting their taxes, and thought that was illogical. Of course it is not, because a person does not get unemployment benefit for working; if a person works, they lose their benefit, and if we encourage people to work, they have more money. Likewise, if we cut people’s taxes, they have more money, so they are likely to work harder. When we raise the threshold, we find that many millions of people are able to work more easily. They will be taken out, to some degree, of the poverty trap, which is one of the most crushing and pernicious taxation and benefit traps that anyone has to face. The move, in stages, to a £10,000 threshold is a very bold thing to do in a time of economic difficulty, but it may have some of the greatest social benefits of any of the policies that the Government are following. It really is a noble approach to taxation—an objective that is fundamentally worthy. Mr Kevan Jones: I have listened carefully to the hon. Gentleman, but I am not sure that he realises that a large number of my constituents, and possibly his, who are in low-paid jobs claim council tax benefit, housing benefit and tax credits. However, all of those have been cut by the Government, and that counters the encouragement to work, in terms of the increase in the threshold. Jacob Rees-Mogg: I am always grateful for the hon. Gentleman’s thoughtful interventions, but one of the greatest mistakes that Governments make is to have this merry-go-round of taxation and benefits, whereby we tax people and then pay them back their own money in benefits, with a cut taken for administration in between. It is much more sensible to take people out of tax altogether. I would like the threshold to be raised considerably higher, basically towards average earnings, so that the bulk of people do not pay tax at all on what they earn, but do, of course, pay in other ways, through other taxes—through indirect taxation. That takes away the major disincentive to go into employment, and lets people benefit from the fruits of their labour. That is an

689

Finance Bill

2 JULY 2012

important proposal that has come forward, and it is popular throughout the country, though I would not say that there was literally cheering in the streets. Chris Heaton-Harris: My hon. Friend talked about the recycling of money through the system. In May 2010, nine out of 10 families were able to claim some sort of tax credit. Surely it is completely wrong if everybody —or 90% of people—is relying on the state to give them money back in some grandiose scheme. Surely taking people out of tax is the right way to get rid of that problem. Jacob Rees-Mogg: I am in entire agreement with my hon. Friend. We want to get people out of the tax and benefits system as much as possible so that they can stand on their own two feet. That is what people want. Sheila Gilmore: Will the hon. Gentleman give way? Jacob Rees-Mogg: It will be an honour to give way. 9.30 pm Sheila Gilmore: The problem with the hon. Gentleman’s argument is that, even if the tax threshold is raised towards the median income, as he suggested, unless the minimum wage is raised substantially, many people’s earnings will be so low that they will still live in great poverty. That was why benefits such as tax credits were created. The other route might be to raise the minimum wage. Jacob Rees-Mogg: Mr Deputy Speaker, you will rule me out of order if I argue that raising the minimum wage would be extremely unwise, so I would not dare to say it. However, on the point of benefits for the worst off, I am all in favour of those. It is a thoroughly good thing to help people who are just in the earning bracket, but not to give benefits to people earning £70,000 a year, paid for out of their extraordinarily high taxes. Kelvin Hopkins: Surely the biggest disincentive to less well-off people earning or trying to get work—many are trying to get work that is not available because there is mass unemployment—is the fact that all the benefits are means-tested. If we reduced the level of means-testing and had many more universal benefits paid for out of a much more progressive form of taxation, we would avoid that problem. Jacob Rees-Mogg: There are enormously exciting benefit changes coming through and I look forward to speaking on those with enthusiasm, because I think they will make a substantial change to the welfare of the people of this country. But that is for another day. We must make sure that the tax system encourages work, gets people off benefits and helps them to be prosperous. Universal benefits have the grave disadvantage of wasting money on people who do not need it. In the limited time that remains to me, I wish to deal with the issue that has caused most controversy: the freezing of the age-related allowance. This was a bold decision for the Government to take, but undoubtedly the right one. The ordinary threshold has been so raised that the age-related allowance, which used to be almost double the ordinary allowance, is now only marginally

Finance Bill

690

higher. The change is being made in the most sensible and calm way, by freezing the allowance so that nobody loses in cash terms. There will not be a cash loss to any existing pensioner. Over time the basic threshold will be raised so that everybody is better off. It is a policy that has of course been momentarily unpopular. It has received a little publicity that is adverse, but as somebody once said, to govern is to choose. Government are at their best when they make tough choices and stick to them. We know that the economic situation of this country is deeply unsatisfactory. We know that we have a deficit that is out of control and a level of debt unseen out of wartime. In getting it right, the Government cannot throw money about like confetti. They must take the tough and bold decisions and yes, there may be consequences in the newspapers, but— Kelvin Hopkins: The hon. Gentleman talks about the deficit. Things are getting worse, rather than better, because of the squeeze on the economy. If we made serious efforts to reduce the tax gap, which is estimated at £120 billion a year, we could solve that problem overnight. It is just a question of changing the law to make sure that people pay the taxes that they should pay. Jacob Rees-Mogg: We have already discussed this. By and large people pay the taxes that they are supposed to pay, as Parliament has laid down. If they evade tax, the full force and might of the law can and should come down upon them. I conclude on the crucial point of defending the Government on a decision that, though it has not been immediately well received, will be welcomed by the electorate, because the electorate admire Governments who govern effectively through the tough times. They do not admire Governments who are loose and lazy with their money. They admire ones who are willing to take the tough decisions. We should oppose all the amendments in the group and stick with the Budget as it was—a very fine and good Budget, in which the right decisions were made. The Exchequer Secretary to the Treasury (Mr David Gauke): We have had an interesting debate that has addressed what are perhaps two of the most controversial issues in the Budget: the change to age-related allowances and the reduction in the 50p rate of income tax. The debate has lasted three hours, but at one stage I thought we might finish early, until we heard the tour de force from my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg). I hope that I will have time to respond to the various comments that have been made. We heard the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) quote Groucho Marx, which I suppose is an improvement on other Marxes who might have been quoted, although I was reminded of the other Groucho Marx line: “I’ve had a perfectly wonderful evening, but this wasn’t it”,

at least until I heard the speech from my hon. Friend the Member for North East Somerset. The changes the Government have made to the rates and thresholds of income tax will provide a competitive platform for our tax system while also ensuring fairness. The measures in the Bill will reduce the additional rate of income tax in 2013-14 to 45p, increase the personal

691

Finance Bill

2 JULY 2012

[Mr David Gauke] allowance to £8,105 and simplify the working of age-related allowances. I will discuss each of the amendments in turn, but it is important first to set out why the Government have taken this approach. The fact is that the 50p rate of income tax has not raised the revenue it was intended to raise. It is currently the highest statutory income tax rate in the G20. When we came to power we inherited an economy that the previous Government had driven into a parlous state, with regard to not only the state of the public finances but our overall competitiveness. The fact is that the 50p rate came in only at the fag end of the Labour Government, who for 13 years had kept the 40p rate, and when they brought in the 50p rate they declared that it was temporary. There was a reason for that: they recognised that the 50p rate would damage our competitiveness. The hard evidence backs up that claim. The report by HMRC sets out that the 50p rate is distortive, damaging to international competitiveness and an economically inefficient way of raising revenue. In short, the 50p rate is a failed policy. We were told that it would raise over £2 billion and, given the crippling deficit we were left, that was not something we could just wave away as if it did not matter. However, higher taxes are worthwhile only if they raise more revenue, and the analysis by HMRC shows that at best the yield would be £1 billion, and at worst it may raise nothing at all. That is because the behavioural response has been substantially larger than expected. Chris Heaton-Harris: One part of HMRC’s gaming for this actually did not look at how much extra money would come in as a result of the incentive to pay the lower level of tax. Surely it would have been worthwhile doing that so that we could prove to some of those who do not understand simple economics that it would be worthwhile. Mr Gauke: HMRC’s analysis, which is a good piece of work, showed through two different mechanisms that the reality was that the amount being raised was somewhat less than had been predicted. The fact is that the behavioural response was much greater. Let me say a word or two about that. To start with, HMRC estimates that as much as £18 billion worth of forestalling took place in 2009-10, of which about two thirds, up to £11.3 billion, has been estimated to unwind in 2010-11, but this forestalling was not factored into the original revenue calculations. Furthermore, HMRC estimates that between one third and one half of the behavioural effect comes from genuine reductions in income. We have heard this evening that this is all about tax avoidance, that tax avoidance increases when we increase the rate and that we can be sure we will get the benefit of it as we unwind, but the reality is that between one third and one half of this was simply the result of less economic activity, because people reduced their hours and participation in the UK labour market and moved elsewhere. Kelvin Hopkins: The Minister has said it: the amount raised from the increase in tax declined because the economy went into relative decline as a result of the Government’s policies. The fact is, however, that all this

Finance Bill

692

is about the feebleness of our tax-collecting system—the laws governing it and HMRC, which has been shown to be soft on big companies, in particular, and soft on the rich when it comes to tax collection. Light-touch regulation: that is the poison. Mr Gauke: I strongly disagree, but before I turn to tax avoidance let us remember that between one third and one half of the reduction is because of less participation in the labour market. It is not because of the decline in the economy; we are talking about people moving elsewhere, people retiring earlier and people working fewer hours because it is not worth their while, in their opinion, to work as hard as they would otherwise do. Let us not forget that when someone moves from this country to Switzerland, we miss not just the difference between 45p and 50p, but everything, the whole 50p, and not just that bit above £150,000, but the first £150,000. That is the consequence of a tax rate that drives people out of the country and does not attract them here. Thomas Docherty: Can the Minister tell me two premiership footballers who have left the country because of this tax rate? Mr Gauke: No I cannot, but I know that, for example, the Arsenal manager remarked that the 50p rate put him at a disadvantage. Earlier, the hon. Gentleman mentioned Ipswich Town and whether its players deserved a tax cut or pensioners did, and I have to say that on last season’s performance one or two looked as if they could qualify for the age-related allowance, but that is not at the heart of my argument. The point is that we have to be competitive, and we want to attract talent to the UK, but having a higher rate than France, Italy and Germany is not competitive. Sheila Gilmore: Generally, when changes are made and we want to assess their impact, we carry out properly independent research. On the changes to housing benefit, for example, the university of Sheffield has been commissioned to produce reports, but what research into our short experience of the 50p tax rate was carried out that gives rise to the conclusions mentioned? Do we have some research that we can look at, or is there just speculation that people might have retired or might have gone to Switzerland? Mr Gauke: The hon. Lady asks what research we have. I am holding it in my hand: the document produced by HMRC, which sets out a thorough analysis. I urge her to read it and to see that it is far from speculative; it is a thorough piece of work, which shows that as a result of the 50p rate total income fell by between £2.9 billion and £4.4 billion and GDP was between 0.2% and 0.3% lower. There has been not just a loss of tax revenue, but a loss to the whole economy through lower productivity and lower economic activity. Justin Tomlinson (North Swindon) (Con): If Labour Members felt that the 50p rate was so good, why did they introduce it as only a temporary measure? Mr Gauke: My hon. Friend is absolutely right to make that point. As I asked earlier, why did they wait 13 years to introduce it?

693

Finance Bill

2 JULY 2012

Chris Ruane (Vale of Clwyd) (Lab): If it is such a sensible, logical and scientifically researched conclusion that reducing the tax rate from 50% to 45% is such a good thing, why do the great British public not believe it? Mr Gauke: I do not know whether the great British public have reached that conclusion. Perhaps some of them believe some of the arguments put by the Labour party, but if they do I have to point out some of the weaknesses. In the Committee of the whole House, the hon. Member for Pontypridd (Owen Smith), who previously spoke for the Opposition on this issue, said that he considered the taxable income elasticity calculations in the report to be “smoke and mirrors”. We would call them analysis and economics. 9.45 pm Part of the reason for the lower than expected revenue from the 50p rate is that expectations were simply set too high by the previous Government. A more moderate view allows us better to predict the revenues from a 45p rate, and the analysis undertaken by HMRC states that the cost to the Exchequer of a reduction to 45p is about £100 million. The 50p rate has been criticised by business. It has risked lasting damage to the UK economy and has raised considerably less than expected for the Exchequer, potentially even costing rather than raising revenue. Change is needed, but it must build on the evidence. We now have a more informed view of the behavioural impact of the additional rate—one fully endorsed and accepted by the Office for Budget Responsibility as central and reasonable. Ian Mearns: I am grateful to the Minister and Ipswich Town supporter for giving way. Does he agree with the general thrust of the argument put forward by his colleague, the hon. Member for North East Somerset (Jacob Rees-Mogg)? It was that tax avoidance is not at all morally repugnant and it should be encouraged as long as it is legal. Mr Gauke: To be fair, that is not what my hon. Friend said, although I did not agree with everything that he did say on that issue. I shall take this opportunity to say a word or so about avoidance, because the Government are keen to address that. John Hemming (Birmingham, Yardley) (LD) rose— Mr Gauke: Before I do that, I give way to my hon. Friend. John Hemming: I am a Government Back Bencher who is not massively enthusiastic about the reduction in the top rate; I think that the Laffer curve peak would be at a higher rate than is thought. However, will the Minister comment on the fact that the Labour party seems to have forgotten that it did nothing to close the transparent fiddles, which are so resented, when people have paid 1% or 2% in tax? Those transparent fiddles have been around for years and Labour did nothing to close those gaps.

Finance Bill

694

Mr Gauke: My hon. Friend makes an important point. If we are talking about unfairness in the tax system as far as rates are concerned, I should say that the much greater unfairness is when wealthy individuals are paying very low rates of income tax—lower rates than are paid by the vast majority of people working in this country. Let me say a word or two about avoidance. In the Budget, we announced a package of measures that will yield more than £1 billion and protect more than £10 billion in revenues over the next five years. Our approach to tackling stamp duty land tax avoidance and the banking scheme closed down in February demonstrate that we are prepared to move quickly and take radical action where necessary. We are introducing strategic changes to address the underlying loopholes in the tax system, as can be seen in clause 22, which is about the treatment of manufactured overseas dividends. More generally, the Government have been active in their response to tax avoidance schemes and can and do act as soon as they become aware of abusive schemes. We have provided HMRC with additional financial support and we remain absolutely committed to tackling tax avoidance. Amendment 1 asks us to leave out the additional rate for 2013-14. It is exactly the same amendment as was tabled in the Committee of the whole House. I will not repeat every point that I made then, but as my hon. Friend the Member for Amber Valley (Nigel Mills) said, that might well leave us with just a 40p rate rather than a 45p rate. There is an alternative interpretation, which would mean that no income tax was charged for earnings above £150,000. I say that with some nervousness. I hope that I have not overexcited my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg); I think that even he would accept that that was below the revenue maximising point. When the 50p rate was introduced, the right hon. Member for Edinburgh South West (Mr Darling), the then Chancellor, explicitly stated that it was a temporary measure. We are announcing the cut to 45p now to provide stability for investment decisions and certainty for employees and the self-employed. That is why my right hon. Friend the Chancellor set out the rate for 2013-14 this year. It is right that we take these measures to improve competitiveness, and our doing so has been widely welcomed. This matter must be viewed in the context of the personal allowance increase, which shows that we are committed to a fairer tax system that provides greater reward for work while supporting the public finances. This year there is a £630 increase in the personal allowance, as introduced by clause 3. That represents the second step in our commitment to increase the personal allowance to £10,000 on top of last year’s increase of £1,000. We have also announced a further increase of £1,100 next year—the largest ever increase in cash terms. The Government are taking 2 million people out of income tax, we are providing a tax cut to 24 million people, and we are well on course to meeting our target of a personal allowance of £10,000. Let me turn to the second subject that we have debated—age-related allowances. Amendment 23 seeks to leave out clause 4, which introduces a phased withdrawal of age-related income tax personal allowances. Those will remain in place until the income tax personal

695

Finance Bill

2 JULY 2012

[Mr Gauke] allowance for those born after 5 April 1948 aligns with or overtakes these levels. At that point, the clause guarantees that older people will receive the higher allowance. Amendment 23, like others tabled by Opposition Front Benchers, is a repeat of an amendment tabled in the Committee of the whole House. The Government have committed to increasing the personal allowance above the rate of inflation. Next year, the personal allowance will increase by £1,100—£840 above inflation— and so from 2013-14 everyone born after 5 April 1948 will receive the same personal allowance of £9,205. This will take a further 880,000 people out of tax altogether. Similarly, everyone born after 5 April 1938 will continue to receive the age-related allowance that they currently receive instead of moving on to the higher age-related allowance, which will be maintained for those born on or before this date. There will be no new recipients of age-related allowances from next April. One of the Government’s key objectives for the tax system is to make it simple and straightforward for people to understand. Clause 4 helps to provide for a simpler system while ensuring that nobody will lose out in cash terms as a result. It will help to make sure that people get the allowances to which they are entitled and pay the right amount of tax, and make the system simpler for Government to administer, thereby minimising costs to the taxpayer. Ian Lavery: It has been mentioned a hundred times tonight that no one will lose out in cash terms. Will there be any losers in this? Mr Gauke: Nobody will lose out in cash terms; that is the point. Age-related allowances are complex and hard for older people to understand, as the Public Accounts Committee confirmed in a 2009 report. The same report also stated that too much emphasis is placed on older people having to prove their eligibility, resulting in erroneous claims and potential overpayments of tax. Furthermore, in March this year the Office of Tax Simplification published its interim report on its review of pensioner taxation in which it highlighted no fewer than nine complexities with the age-related personal allowance. Half the people aged over 65 in 2013-14 will pay no income tax at all and are therefore unaffected by these changes. Those who will now not receive an age-related allowance will benefit from a £1,100 increase in the personal allowance, which represents the largest cash increase ever. At the same time, those who are affected by the withdrawal of age-related allowances will still see the total deductions they pay reduce significantly because we have retained the exemption from national insurance contributions for those of state pension age. It is important to consider these changes to age-related allowances in the context of the wider support that the Government offer to pensioners. Only 40% of pensioners benefit from age-related allowances, about 50% are unaffected by the changes made by the clause because they pay no tax and will continue to pay no tax, and the remaining 10% have incomes above the taper limit for age-related allowances and are therefore unaffected by these measures.

Finance Bill

696

Let us also remember that the triple lock ensures that each year, the basic state pension will be uprated by the highest of these: inflation, earnings or 2.5%. This April, the basic state pension increased by the consumer prices index inflation rate of 5.2%. That meant that there was an increase of £5.30 a week in the full basic state pension—the largest ever cash increase in the basic state pension. Under the previous Government’s plans, the basic state pension would have increased by only 2.8% from this April—an increase of only £2.85 per week. That means that the full basic state pension is £127 a year higher in 2012 than it would have been under the previous Government’s plans. Next year, a full basic state pension is forecast to be £130 a year higher than under the previous Government’s plans, and the year after that, it is forecast to be £133 higher. Each year, more than 11 million pensioners will benefit from the introduction of the triple lock. An existing pensioner with a full basic state pension will gain more from the triple lock in each of the next three years than they will lose from the freeze in age-related allowances. The Institute for Fiscal Studies has said: “Our analysis shows that they have lost considerably less from recent tax and benefit changes than any other demographic group. And over the past decade and more pensioner incomes have risen faster than those of the working age population.”

To conclude, the Government are making changes to ensure that there is a fair and competitive tax system. Some of them are controversial, but we should look at the evidence, not the Opposition’s rhetoric. The 50p rate is not sustainable. The introduction of the triple lock on state pensions means pensioners continue to be better off. These changes are good for our long-term tax revenues, good for our economy and good for the UK as a whole. I ask the Opposition to seek leave to withdraw the amendment. Rachel Reeves (Leeds West) (Lab): It is good to have plenty of time to wind up for the Opposition. We will press for a vote on amendments 1 and 23 this evening, because as today’s debate has confirmed for anyone who was still in any doubt, this is not only an omnishambles of a Budget, as my hon. Friend the Member for Livingston (Graeme Morrice) said, but a flawed and unfair Budget. We have heard contributions about the hardships that the Government’s economic failure and unfair austerity measures are causing for our constituents. My hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) talked about the cuts beginning to bite. She rightly said that pensioners are the victims and millionaires are the victors from the Budget. My hon. Friend the Member for Wansbeck (Ian Lavery) said that the tax cut for millionaires is worth more than the money that most of our constituents take home in a year. The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) spoke about a tax cut for the mega-rich that leaves a bad taste in the mouth. Instead of taking serious steps that might repair the damage that has been done, the Chancellor and his Ministers have turned from their failed experiment in expansionary fiscal contraction and resorted to the notorious Laffer curve. As my hon. Friend the Member for Brent North (Barry Gardiner) said, they are testing that economic philosophy to its limits. It is their latest excuse for an economic policy that rewards those

697

Finance Bill

2 JULY 2012

who are already very wealthy and is the last refuge of a Government who have lost any sense of purpose beyond the protection of privilege. The argument that cutting tax for the very richest is the only way of improving the economic prospects for the rest of us was made by the hon. Members for Amber Valley (Nigel Mills) and for Dover (Charlie Elphicke). They were suggesting that cutting taxes for the rich is what makes them work harder, but that cutting benefits for the poor is what gets them out of bed in the morning. They were saying that although these policies will hurt their constituents, they will vote for them anyway. I am sure that their constituents will sit up and take notice. It is the same old Tories dusting down the same old trickle-down theories. They did not work in the 1980s and they will not work today. As my hon. Friend the Member for Edinburgh East (Sheila Gilmore) said, the Government seem to think that if they cut taxes for the richest, somehow the rest of us will be the beneficiaries. Nothing could more clearly demonstrate the Government’s perverse priorities than the fact that, when ordinary families are going through the toughest times in living memory, clause 1 of chapter 1 of part 1 of this Finance Bill gives a £3 billion tax cut to the richest 1% of the population, and the rest of the Bill is peppered with dubious means of making other, far less fortunate people in society pay for it. Among those means, the largest and most flagrant is the abolition of the age-related allowance. The Government call it a tax simplification; we call it a tax grab from pensioners with occupational pensions of little more than £5,000 a year. As my hon. Friend the Member for Wansbeck said, it will cost pensioners £83 and people coming up to retirement £323. May I just say how disappointing it was— 10 pm Debate interrupted (Programme Orders, 16 April and this day). The Deputy Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83E), That the amendment be made. The House divided: Ayes 233, Noes 315. Division No. 35]

[10 pm

AYES Abbott, Ms Diane Abrahams, Debbie Ainsworth, rh Mr Bob Alexander, rh Mr Douglas Alexander, Heidi Ali, Rushanara Allen, Mr Graham Anderson, Mr David Ashworth, Jonathan Austin, Ian Bailey, Mr Adrian Bain, Mr William Balls, rh Ed Banks, Gordon Barron, rh Mr Kevin Bayley, Hugh Beckett, rh Margaret Bell, Sir Stuart Benn, rh Hilary

Benton, Mr Joe Berger, Luciana Betts, Mr Clive Blackman-Woods, Roberta Blenkinsop, Tom Blomfield, Paul Blunkett, rh Mr David Bradshaw, rh Mr Ben Brennan, Kevin Brown, Lyn Brown, rh Mr Nicholas Bryant, Chris Buck, Ms Karen Burden, Richard Burnham, rh Andy Byrne, rh Mr Liam Campbell, Mr Alan Campbell, Mr Ronnie Caton, Martin

Chapman, Jenny Clark, Katy Clarke, rh Mr Tom Clwyd, rh Ann Coaker, Vernon Coffey, Ann Connarty, Michael Cooper, Rosie Cooper, rh Yvette Corbyn, Jeremy Crausby, Mr David Creagh, Mary Creasy, Stella Cruddas, Jon Cryer, John Cunningham, Alex Cunningham, Mr Jim Cunningham, Sir Tony Curran, Margaret Dakin, Nic Danczuk, Simon David, Wayne Davidson, Mr Ian Davies, Geraint De Piero, Gloria Dobbin, Jim Dobson, rh Frank Docherty, Thomas Doran, Mr Frank Dowd, Jim Doyle, Gemma Dromey, Jack Dugher, Michael Durkan, Mark Eagle, Ms Angela Eagle, Maria Edwards, Jonathan Efford, Clive Elliott, Julie Ellman, Mrs Louise Engel, Natascha Esterson, Bill Evans, Chris Field, rh Mr Frank Fitzpatrick, Jim Flello, Robert Flint, rh Caroline Flynn, Paul Fovargue, Yvonne Francis, Dr Hywel Gapes, Mike Gardiner, Barry Gilmore, Sheila Glass, Pat Glindon, Mrs Mary Godsiff, Mr Roger Goggins, rh Paul Goodman, Helen Greatrex, Tom Green, Kate Greenwood, Lilian Griffith, Nia Gwynne, Andrew Hain, rh Mr Peter Hamilton, Mr David Hamilton, Fabian Hanson, rh Mr David Harman, rh Ms Harriet Havard, Mr Dai Healey, rh John Hendrick, Mark Hepburn, Mr Stephen

Finance Bill

698

Heyes, David Hillier, Meg Hilling, Julie Hodge, rh Margaret Hodgson, Mrs Sharon Hoey, Kate Hopkins, Kelvin Hosie, Stewart Howarth, rh Mr George Hunt, Tristram Irranca-Davies, Huw Jamieson, Cathy Jarvis, Dan Johnson, rh Alan Johnson, Diana Jones, Graham Jones, Helen Jones, Mr Kevan Jones, Susan Elan Jowell, rh Dame Tessa Kaufman, rh Sir Gerald Keeley, Barbara Khan, rh Sadiq Lavery, Ian Lazarowicz, Mark Lewis, Mr Ivan Lloyd, Tony Llwyd, rh Mr Elfyn Love, Mr Andrew Lucas, Caroline Lucas, Ian MacNeil, Mr Angus Brendan Mactaggart, Fiona Mahmood, Shabana Malhotra, Seema Mann, John Marsden, Mr Gordon McCann, Mr Michael McClymont, Gregg McDonagh, Siobhain McDonnell, John McFadden, rh Mr Pat McGuire, rh Mrs Anne McKenzie, Mr Iain McKinnell, Catherine Meacher, rh Mr Michael Meale, Sir Alan Mearns, Ian Michael, rh Alun Miliband, rh David Miliband, rh Edward Miller, Andrew Moon, Mrs Madeleine Morden, Jessica Morrice, Graeme (Livingston) Morris, Grahame M. (Easington) Mudie, Mr George Munn, Meg Murphy, rh Mr Jim Murray, Ian Nandy, Lisa Nash, Pamela O’Donnell, Fiona Onwurah, Chi Osborne, Sandra Owen, Albert Pearce, Teresa Perkins, Toby Phillipson, Bridget Raynsford, rh Mr Nick Reed, Mr Jamie

699 Reeves, Rachel Reynolds, Emma Reynolds, Jonathan Riordan, Mrs Linda Ritchie, Ms Margaret Robertson, Angus Robertson, John Robinson, Mr Geoffrey Rotheram, Steve Roy, Mr Frank Roy, Lindsay Ruddock, rh Dame Joan Sarwar, Anas Seabeck, Alison Sharma, Mr Virendra Shuker, Gavin Skinner, Mr Dennis Slaughter, Mr Andy Smith, rh Mr Andrew Smith, Angela Smith, Nick Smith, Owen Spellar, rh Mr John Straw, rh Mr Jack Stringer, Graham Stuart, Ms Gisela Sutcliffe, Mr Gerry Tami, Mark

Finance Bill Thomas, Mr Gareth Thornberry, Emily Timms, rh Stephen Trickett, Jon Turner, Karl Twigg, Derek Twigg, Stephen Umunna, Mr Chuka Vaz, rh Keith Vaz, Valerie Walley, Joan Watson, Mr Tom Watts, Mr Dave Weir, Mr Mike Whiteford, Dr Eilidh Whitehead, Dr Alan Williams, Hywel Williamson, Chris Winnick, Mr David Winterton, rh Ms Rosie Wishart, Pete Woodcock, John Wright, David Wright, Mr Iain

Tellers for the Ayes: Phil Wilson and Chris Ruane

NOES Adams, Nigel Afriyie, Adam Aldous, Peter Alexander, rh Danny Andrew, Stuart Arbuthnot, rh Mr James Bacon, Mr Richard Baker, Norman Baker, Steve Baldry, Sir Tony Baldwin, Harriett Barclay, Stephen Barker, Gregory Baron, Mr John Barwell, Gavin Bebb, Guto Beith, rh Sir Alan Beresford, Sir Paul Berry, Jake Bingham, Andrew Binley, Mr Brian Birtwistle, Gordon Blackman, Bob Blackwood, Nicola Blunt, Mr Crispin Boles, Nick Bottomley, Sir Peter Bradley, Karen Brady, Mr Graham Brake, rh Tom Bray, Angie Brazier, Mr Julian Bridgen, Andrew Brine, Steve Brokenshire, James Bruce, Fiona Bruce, rh Sir Malcolm Buckland, Mr Robert Burley, Mr Aidan Burns, Conor Burns, rh Mr Simon

Burstow, Paul Burt, Lorely Byles, Dan Cable, rh Vince Cairns, Alun Campbell, rh Sir Menzies Carmichael, rh Mr Alistair Carmichael, Neil Carswell, Mr Douglas Cash, Mr William Chope, Mr Christopher Clappison, Mr James Clark, rh Greg Clegg, rh Mr Nick Clifton-Brown, Geoffrey Coffey, Dr Thérèse Collins, Damian Colvile, Oliver Crabb, Stephen Crouch, Tracey Davey, rh Mr Edward Davies, David T. C. (Monmouth) Davies, Glyn Davies, Philip Davis, rh Mr David de Bois, Nick Dinenage, Caroline Djanogly, Mr Jonathan Dorries, Nadine Doyle-Price, Jackie Drax, Richard Duddridge, James Duncan, rh Mr Alan Duncan Smith, rh Mr Iain Ellis, Michael Ellison, Jane Ellwood, Mr Tobias Elphicke, Charlie Eustice, George Evans, Graham

2 JULY 2012 Evans, Jonathan Evennett, Mr David Fabricant, Michael Fallon, Michael Farron, Tim Featherstone, Lynne Field, Mark Foster, rh Mr Don Fox, rh Dr Liam Francois, rh Mr Mark Freeman, George Freer, Mike Fullbrook, Lorraine Fuller, Richard Garnier, Mr Edward Garnier, Mark Gauke, Mr David George, Andrew Gibb, Mr Nick Gilbert, Stephen Gillan, rh Mrs Cheryl Glen, John Goldsmith, Zac Goodwill, Mr Robert Gove, rh Michael Graham, Richard Grant, Mrs Helen Gray, Mr James Grayling, rh Chris Green, Damian Greening, rh Justine Grieve, rh Mr Dominic Griffiths, Andrew Gummer, Ben Gyimah, Mr Sam Halfon, Robert Hames, Duncan Hammond, rh Mr Philip Hammond, Stephen Hancock, Matthew Hands, Greg Harper, Mr Mark Harrington, Richard Harris, Rebecca Hart, Simon Harvey, Nick Hayes, Mr John Heald, Oliver Heath, Mr David Heaton-Harris, Chris Hemming, John Henderson, Gordon Hendry, Charles Hinds, Damian Hollingbery, George Hollobone, Mr Philip Holloway, Mr Adam Hopkins, Kris Howarth, Mr Gerald Howell, John Hughes, rh Simon Huhne, rh Chris Hunt, rh Mr Jeremy Hunter, Mark Hurd, Mr Nick Jackson, Mr Stewart James, Margot Javid, Sajid Jenkin, Mr Bernard Johnson, Gareth Johnson, Joseph Jones, Andrew

Finance Bill Jones, Mr David Kawczynski, Daniel Kelly, Chris Kennedy, rh Mr Charles Kirby, Simon Knight, rh Mr Greg Kwarteng, Kwasi Lamb, Norman Lancaster, Mark Laws, rh Mr David Leadsom, Andrea Lee, Jessica Lee, Dr Phillip Lefroy, Jeremy Leigh, Mr Edward Leslie, Charlotte Letwin, rh Mr Oliver Lewis, Brandon Liddell-Grainger, Mr Ian Lidington, rh Mr David Lilley, rh Mr Peter Lloyd, Stephen Lopresti, Jack Lord, Jonathan Loughton, Tim Luff, Peter Lumley, Karen Macleod, Mary Main, Mrs Anne Maude, rh Mr Francis May, rh Mrs Theresa Maynard, Paul McCartney, Jason McCartney, Karl McCrea, Dr William McIntosh, Miss Anne McLoughlin, rh Mr Patrick McPartland, Stephen McVey, Esther Mensch, Louise Menzies, Mark Mercer, Patrick Metcalfe, Stephen Miller, Maria Mills, Nigel Milton, Anne Mordaunt, Penny Morgan, Nicky Morris, Anne Marie Morris, David Morris, James Mosley, Stephen Mowat, David Mundell, rh David Munt, Tessa Murray, Sheryll Murrison, Dr Andrew Neill, Robert Newmark, Mr Brooks Newton, Sarah Nokes, Caroline Norman, Jesse Nuttall, Mr David Offord, Dr Matthew Ollerenshaw, Eric Opperman, Guy Osborne, rh Mr George Ottaway, Richard Paice, rh Mr James Parish, Neil Patel, Priti Pawsey, Mark

700

701

Finance Bill

Percy, Andrew Perry, Claire Phillips, Stephen Pincher, Christopher Poulter, Dr Daniel Prisk, Mr Mark Pritchard, Mark Pugh, John Raab, Mr Dominic Randall, rh Mr John Reckless, Mark Redwood, rh Mr John Rees-Mogg, Jacob Reid, Mr Alan Robathan, rh Mr Andrew Robertson, Hugh Robertson, Mr Laurence Rogerson, Dan Rosindell, Andrew Rudd, Amber Ruffley, Mr David Russell, Sir Bob Rutley, David Sanders, Mr Adrian Sandys, Laura Scott, Mr Lee Selous, Andrew Shapps, rh Grant Sharma, Alok Shelbrooke, Alec Simmonds, Mark Simpson, David Simpson, Mr Keith Skidmore, Chris Smith, Miss Chloe Smith, Henry Smith, Julian Smith, Sir Robert Soames, rh Nicholas Soubry, Anna Spencer, Mr Mark Stephenson, Andrew Stevenson, John Stewart, Bob Stewart, Iain Stewart, Rory Stuart, Mr Graham

2 JULY 2012

Stunell, Andrew Sturdy, Julian Swales, Ian Swayne, rh Mr Desmond Swinson, Jo Swire, rh Mr Hugo Syms, Mr Robert Teather, Sarah Thurso, John Timpson, Mr Edward Tomlinson, Justin Tredinnick, David Truss, Elizabeth Turner, Mr Andrew Tyrie, Mr Andrew Uppal, Paul Vaizey, Mr Edward Vara, Mr Shailesh Vickers, Martin Villiers, rh Mrs Theresa Walker, Mr Charles Walker, Mr Robin Wallace, Mr Ben Weatherley, Mike Webb, Steve Wharton, James Wheeler, Heather White, Chris Whittaker, Craig Whittingdale, Mr John Wiggin, Bill Willetts, rh Mr David Williams, Mr Mark Williams, Roger Williams, Stephen Williamson, Gavin Wilson, Mr Rob Wollaston, Dr Sarah Wright, Jeremy Wright, Simon Yeo, Mr Tim Young, rh Sir George Zahawi, Nadhim

Tellers for the Noes: Mr Philip Dunne and Jenny Willott

Question accordingly negatived. The Deputy Speaker then put forthwith the Question necessary for the disposal of the business to be concluded at that time (Standing Order No. 83E). Clause 4 PERSONAL ALLOWANCES FROM 2013 Amendment proposed: 23, page 2, line 36, leave out clause 4.—(Rachel Reeves.) Question put, That the amendment be made. The House divided: Ayes 236, Noes 312. Division No. 36] [10.14 pm AYES Abbott, Ms Diane Abrahams, Debbie Ainsworth, rh Mr Bob Alexander, rh Mr Douglas Alexander, Heidi

Ali, Rushanara Allen, Mr Graham Anderson, Mr David Ashworth, Jonathan Austin, Ian

Finance Bill

Bailey, Mr Adrian Bain, Mr William Balls, rh Ed Banks, Gordon Barron, rh Mr Kevin Bayley, Hugh Beckett, rh Margaret Bell, Sir Stuart Benn, rh Hilary Benton, Mr Joe Berger, Luciana Betts, Mr Clive Blackman-Woods, Roberta Blenkinsop, Tom Blomfield, Paul Blunkett, rh Mr David Bradshaw, rh Mr Ben Brennan, Kevin Brown, Lyn Brown, rh Mr Nicholas Bryant, Chris Buck, Ms Karen Burden, Richard Burnham, rh Andy Byrne, rh Mr Liam Campbell, Mr Alan Campbell, Mr Ronnie Caton, Martin Chapman, Jenny Clark, Katy Clarke, rh Mr Tom Clwyd, rh Ann Coaker, Vernon Coffey, Ann Connarty, Michael Cooper, Rosie Cooper, rh Yvette Corbyn, Jeremy Crausby, Mr David Creagh, Mary Creasy, Stella Cruddas, Jon Cryer, John Cunningham, Alex Cunningham, Mr Jim Cunningham, Sir Tony Curran, Margaret Dakin, Nic Danczuk, Simon David, Wayne Davidson, Mr Ian Davies, Geraint De Piero, Gloria Dobbin, Jim Dobson, rh Frank Docherty, Thomas Doran, Mr Frank Dowd, Jim Doyle, Gemma Dromey, Jack Dugher, Michael Durkan, Mark Eagle, Ms Angela Eagle, Maria Edwards, Jonathan Efford, Clive Elliott, Julie Ellman, Mrs Louise Engel, Natascha Esterson, Bill Evans, Chris Field, rh Mr Frank

702

Fitzpatrick, Jim Flello, Robert Flint, rh Caroline Flynn, Paul Fovargue, Yvonne Francis, Dr Hywel Gapes, Mike Gardiner, Barry Gilmore, Sheila Glass, Pat Glindon, Mrs Mary Godsiff, Mr Roger Goggins, rh Paul Goodman, Helen Greatrex, Tom Green, Kate Greenwood, Lilian Griffith, Nia Gwynne, Andrew Hain, rh Mr Peter Hamilton, Mr David Hamilton, Fabian Hanson, rh Mr David Harman, rh Ms Harriet Havard, Mr Dai Healey, rh John Hendrick, Mark Hepburn, Mr Stephen Heyes, David Hillier, Meg Hilling, Julie Hodge, rh Margaret Hodgson, Mrs Sharon Hoey, Kate Hollobone, Mr Philip Hopkins, Kelvin Hosie, Stewart Howarth, rh Mr George Hunt, Tristram Irranca-Davies, Huw Jamieson, Cathy Jarvis, Dan Johnson, rh Alan Johnson, Diana Jones, Graham Jones, Helen Jones, Mr Kevan Jones, Susan Elan Jowell, rh Dame Tessa Kaufman, rh Sir Gerald Keeley, Barbara Khan, rh Sadiq Lavery, Ian Lazarowicz, Mark Lewis, Mr Ivan Lloyd, Tony Llwyd, rh Mr Elfyn Love, Mr Andrew Lucas, Caroline Lucas, Ian MacNeil, Mr Angus Brendan Mactaggart, Fiona Mahmood, Shabana Malhotra, Seema Mann, John Marsden, Mr Gordon McCann, Mr Michael McClymont, Gregg McCrea, Dr William McDonagh, Siobhain McDonnell, John McFadden, rh Mr Pat

703

Finance Bill

McGuire, rh Mrs Anne McKenzie, Mr Iain McKinnell, Catherine Meacher, rh Mr Michael Meale, Sir Alan Mearns, Ian Michael, rh Alun Miliband, rh David Miliband, rh Edward Miller, Andrew Moon, Mrs Madeleine Morden, Jessica Morrice, Graeme (Livingston) Morris, Grahame M. (Easington) Mudie, Mr George Munn, Meg Murphy, rh Mr Jim Murray, Ian Nandy, Lisa Nash, Pamela O’Donnell, Fiona Onwurah, Chi Osborne, Sandra Owen, Albert Pearce, Teresa Perkins, Toby Phillipson, Bridget Raynsford, rh Mr Nick Reed, Mr Jamie Reeves, Rachel Reynolds, Emma Reynolds, Jonathan Riordan, Mrs Linda Ritchie, Ms Margaret Robertson, Angus Robertson, John Robinson, Mr Geoffrey Rotheram, Steve Roy, Mr Frank Roy, Lindsay Ruddock, rh Dame Joan Sarwar, Anas Seabeck, Alison

Sharma, Mr Virendra Shuker, Gavin Simpson, David Skinner, Mr Dennis Slaughter, Mr Andy Smith, rh Mr Andrew Smith, Angela Smith, Nick Smith, Owen Spellar, rh Mr John Straw, rh Mr Jack Stringer, Graham Stuart, Ms Gisela Sutcliffe, Mr Gerry Tami, Mark Thomas, Mr Gareth Thornberry, Emily Timms, rh Stephen Trickett, Jon Turner, Karl Twigg, Derek Twigg, Stephen Umunna, Mr Chuka Vaz, rh Keith Vaz, Valerie Walley, Joan Watson, Mr Tom Watts, Mr Dave Weir, Mr Mike Whiteford, Dr Eilidh Whitehead, Dr Alan Williams, Hywel Williamson, Chris Winnick, Mr David Winterton, rh Ms Rosie Wishart, Pete Woodcock, John Wright, David Wright, Mr Iain

Tellers for the Ayes: Phil Wilson and Chris Ruane

NOES Adams, Nigel Afriyie, Adam Aldous, Peter Alexander, rh Danny Andrew, Stuart Arbuthnot, rh Mr James Bacon, Mr Richard Baker, Norman Baker, Steve Baldry, Sir Tony Baldwin, Harriett Barclay, Stephen Barker, Gregory Baron, Mr John Barwell, Gavin Bebb, Guto Beith, rh Sir Alan Beresford, Sir Paul Berry, Jake Bingham, Andrew Binley, Mr Brian Birtwistle, Gordon Blackman, Bob Blackwood, Nicola Blunt, Mr Crispin

Boles, Nick Bottomley, Sir Peter Bradley, Karen Brady, Mr Graham Brake, rh Tom Bray, Angie Brazier, Mr Julian Bridgen, Andrew Brine, Steve Brokenshire, James Bruce, Fiona Bruce, rh Sir Malcolm Buckland, Mr Robert Burley, Mr Aidan Burns, Conor Burns, rh Mr Simon Burstow, Paul Burt, Lorely Byles, Dan Cable, rh Vince Cairns, Alun Campbell, rh Sir Menzies Carmichael, rh Mr Alistair Carmichael, Neil Carswell, Mr Douglas

2 JULY 2012

Finance Bill

Cash, Mr William Clappison, Mr James Clark, rh Greg Clegg, rh Mr Nick Clifton-Brown, Geoffrey Coffey, Dr Thérèse Collins, Damian Colvile, Oliver Crabb, Stephen Crouch, Tracey Davey, rh Mr Edward Davies, David T. C. (Monmouth) Davies, Glyn Davies, Philip Davis, rh Mr David de Bois, Nick Dinenage, Caroline Djanogly, Mr Jonathan Dorries, Nadine Doyle-Price, Jackie Drax, Richard Duddridge, James Duncan, rh Mr Alan Duncan Smith, rh Mr Iain Dunne, Mr Philip Ellis, Michael Ellison, Jane Ellwood, Mr Tobias Elphicke, Charlie Eustice, George Evans, Graham Evans, Jonathan Evennett, Mr David Fabricant, Michael Fallon, Michael Farron, Tim Featherstone, Lynne Field, Mark Foster, rh Mr Don Fox, rh Dr Liam Francois, rh Mr Mark Freeman, George Freer, Mike Fullbrook, Lorraine Fuller, Richard Garnier, Mr Edward Garnier, Mark Gauke, Mr David George, Andrew Gibb, Mr Nick Gilbert, Stephen Gillan, rh Mrs Cheryl Glen, John Goldsmith, Zac Goodwill, Mr Robert Gove, rh Michael Graham, Richard Grant, Mrs Helen Gray, Mr James Grayling, rh Chris Green, Damian Greening, rh Justine Grieve, rh Mr Dominic Griffiths, Andrew Gummer, Ben Gyimah, Mr Sam Halfon, Robert Hames, Duncan Hammond, rh Mr Philip Hammond, Stephen Hancock, Matthew

Harper, Mr Mark Harrington, Richard Harris, Rebecca Hart, Simon Harvey, Nick Hayes, Mr John Heald, Oliver Heath, Mr David Heaton-Harris, Chris Hemming, John Henderson, Gordon Hendry, Charles Hinds, Damian Hollingbery, George Holloway, Mr Adam Hopkins, Kris Howarth, Mr Gerald Howell, John Hughes, rh Simon Huhne, rh Chris Hunt, rh Mr Jeremy Hunter, Mark Hurd, Mr Nick Jackson, Mr Stewart James, Margot Javid, Sajid Jenkin, Mr Bernard Johnson, Gareth Johnson, Joseph Jones, Andrew Jones, Mr David Kawczynski, Daniel Kelly, Chris Kennedy, rh Mr Charles Kirby, Simon Knight, rh Mr Greg Kwarteng, Kwasi Lamb, Norman Lancaster, Mark Laws, rh Mr David Leadsom, Andrea Lee, Jessica Lee, Dr Phillip Leech, Mr John Lefroy, Jeremy Leigh, Mr Edward Leslie, Charlotte Letwin, rh Mr Oliver Lewis, Brandon Liddell-Grainger, Mr Ian Lidington, rh Mr David Lilley, rh Mr Peter Lloyd, Stephen Lopresti, Jack Lord, Jonathan Loughton, Tim Luff, Peter Lumley, Karen Macleod, Mary Main, Mrs Anne Maude, rh Mr Francis May, rh Mrs Theresa Maynard, Paul McCartney, Jason McCartney, Karl McIntosh, Miss Anne McLoughlin, rh Mr Patrick McPartland, Stephen McVey, Esther Mensch, Louise Menzies, Mark Mercer, Patrick

704

705

Finance Bill

Metcalfe, Stephen Miller, Maria Mills, Nigel Milton, Anne Mordaunt, Penny Morgan, Nicky Morris, Anne Marie Morris, David Morris, James Mosley, Stephen Mowat, David Mulholland, Greg Mundell, rh David Munt, Tessa Murray, Sheryll Murrison, Dr Andrew Neill, Robert Newmark, Mr Brooks Newton, Sarah Nokes, Caroline Norman, Jesse Nuttall, Mr David Offord, Dr Matthew Ollerenshaw, Eric Opperman, Guy Osborne, rh Mr George Ottaway, Richard Paice, rh Mr James Parish, Neil Patel, Priti Pawsey, Mark Percy, Andrew Perry, Claire Phillips, Stephen Pincher, Christopher Poulter, Dr Daniel Prisk, Mr Mark Pritchard, Mark Pugh, John Raab, Mr Dominic Randall, rh Mr John Reckless, Mark Redwood, rh Mr John Rees-Mogg, Jacob Reid, Mr Alan Robathan, rh Mr Andrew Robertson, Hugh Robertson, Mr Laurence Rogerson, Dan Rosindell, Andrew Rudd, Amber Ruffley, Mr David Russell, Sir Bob Rutley, David Sanders, Mr Adrian Sandys, Laura Scott, Mr Lee Selous, Andrew Shapps, rh Grant Sharma, Alok Shelbrooke, Alec Simmonds, Mark

2 JULY 2012

Simpson, Mr Keith Skidmore, Chris Smith, Miss Chloe Smith, Henry Smith, Julian Smith, Sir Robert Soames, rh Nicholas Soubry, Anna Spencer, Mr Mark Stephenson, Andrew Stevenson, John Stewart, Bob Stewart, Iain Stewart, Rory Stuart, Mr Graham Stunell, Andrew Sturdy, Julian Swales, Ian Swayne, rh Mr Desmond Swinson, Jo Swire, rh Mr Hugo Syms, Mr Robert Teather, Sarah Timpson, Mr Edward Tomlinson, Justin Truss, Elizabeth Turner, Mr Andrew Tyrie, Mr Andrew Uppal, Paul Vaizey, Mr Edward Vara, Mr Shailesh Vickers, Martin Villiers, rh Mrs Theresa Walker, Mr Charles Walker, Mr Robin Wallace, Mr Ben Ward, Mr David Weatherley, Mike Webb, Steve Wharton, James Wheeler, Heather White, Chris Whittaker, Craig Whittingdale, Mr John Wiggin, Bill Willetts, rh Mr David Williams, Mr Mark Williams, Roger Williams, Stephen Williamson, Gavin Wilson, Mr Rob Wollaston, Dr Sarah Wright, Jeremy Wright, Simon Yeo, Mr Tim Young, rh Sir George Zahawi, Nadhim

Tellers for the Noes: Greg Hands and Jenny Willott

Question accordingly negatived. Clause 8 HIGH INCOME CHILD BENEFIT CHARGE Cathy Jamieson: I beg to move amendment 24, page 5, line 4, leave out clause 8.

Finance Bill

706

Mr Deputy Speaker (Mr Nigel Evans): With this it will be convenient to discuss the following: Amendment 25, page 134, line 2, leave out schedule 1. Amendment 21, in schedule 1, page 138, line 10, leave out ‘in relation to the payments’

and insert ‘equal to 100 per cent of any amounts in relation to which one or both of conditions A and B are met under section 681B of ITEPA 2003’.

Amendment 22, in schedule 1, page 139, line 10, leave out ‘in relation to the payments’

and insert ‘equal to 100 per cent of any amounts in relation to which one or both of conditions A and B are met under section 681B of ITEPA 2003’.

Cathy Jamieson: It is a pleasure to open the debate on these important amendments. I intend to pursue a theme that emerged earlier this evening—that of fairness to children, families and people who are feeling the squeeze as a result of the Government’s current policies— and also to discuss feedback from people who are concerned about the practicalities of the Government’s proposals on child benefit for higher-rate taxpayers, along with points that were raised by Members during that part of the Committee stage that took place on the Floor of the House. When I spoke about this issue in Committee, I reminded Members that child benefit involved a number of important principles, not least the principle of universality, which Labour of course supports. Because I spoke at some length on that occasion, I do not intend to rehearse all the arguments again now, but I think it worth repeating that child benefit is supposed to benefit—literally—children and families. That fact has been lost at various points, but I hope that we shall be able to keep it in our minds tonight as we consider what the Government are proposing. As I pointed out in the earlier debate, child benefit was designed to ensure that mothers—at that time, specifically mothers—had money paid into their purses regularly, so that they had a stable income that could be used for their families. 10.30 pm Mr Edward Leigh (Gainsborough) (Con): Does the hon. Lady agree that child benefit as we have traditionally understood it has had one great advantage, in that not only does it recognise the role of women in bringing up children, but its universality has ensured that there is virtually no fraud or error, and nor does it in any way add to the unemployment or poverty trap? Cathy Jamieson: I thank the hon. Gentleman for making that point. It is important to understand that the fact that this was a universal benefit ensured that everyone who ought to have had it and who needed it was able to get it. When we debated this topic in the House previously, some Members tried to characterise our concerns about these proposals as Labour trying to protect a universal benefit paid to high earners, rather than looking at the overall principled position, and some may try to do so again this evening. I should repeat what I said both earlier this evening and in that

707

Finance Bill

2 JULY 2012

[Cathy Jamieson] earlier debate: that kind of argument does not wash at all in terms of fairness from a Government who have given a tax cut to millionaires while millions of ordinary families are feeling the pinch. During the earlier debate, I also reminded Members of article 27 of the United Nations convention on the rights of the child, which the UK has signed up to. It outlines the obligations on states to assist parents to meet the needs of their children, and I pointed out that a number of organisations—as well as a number of Members—had highlighted the importance of those obligations. Sadly, that exhortation to make this debate about fairness to children and families seems to have gone largely unheeded, apart from some honourable exceptions. There have been Westminster Hall debates looking at this issue in more detail, in which a number of Members highlighted both the unfairness of the proposals and their practical difficulties. Gordon Birtwistle (Burnley) (LD): Does the hon. Lady agree that it is unfair to expect a family in my constituency where the parents might work in manufacturing industry for about £8 an hour to be contributing from their taxes to pay benefits to people who earn over £50,000 a year? Cathy Jamieson: Well, there were some robust exchanges on that issue in previous debates. If the hon. Gentleman feels that is a difficult point, I cannot understand why he does not also feel that it is unfair that people on the very top earnings—those earning millions of pounds each year—are to get a tax cut of £40,000 per year, instead of focusing on the needs of children. I find that extremely odd, and I shall say a little more about the unfairness of the proposals later. Mr Frank Field (Birkenhead) (Lab): Does my hon. Friend agree that the hon. Member for Burnley (Gordon Birtwistle) is mistaken? We are not talking about redistribution from poorer to richer people. When child benefit was introduced, it took over the function of child tax allowances. Its purpose was to maintain tax equity. That is why there was the element of free income regardless of whether people were on £8,000 a year or £80,000 a year. It made a distinction between those who were responsible for children at any given level of income, and those who were not. Cathy Jamieson: I thank my right hon. Friend for that intervention, which explains the history extremely well. That is why I have focused so much on reminding us that this is supposed to be about children and doing the right thing by people who have the responsibility for caring for them, whether parents, or grandparents or other family members who may be entitled to claim the benefits. I hope to have enough time to be able to say a few words about that towards the end of my contribution. The Government did revise the original proposal, but that revision has not gone far enough to deal with the inherent unfairness. The revised proposal will affect about 1.2 million families, of whom it is estimated that some 70%—790,000 couples and 30,000 lone parents in 2013-14—will lose the full amount of their child benefit. A further 330,000 couples and 20,000 lone parents affected by the charge in 2013-14 will lose a proportion

Finance Bill

708

of their child benefit. The average loss for those who are going to lose out is estimated at about £1,300 a year. In a previous debate, I highlighted the difficulty for families who are going to lose about £500 a year because of other changes that have been made. That £1,300 is a very significant amount for anyone caring for children in today’s economic climate. Andrew Gwynne (Denton and Reddish) (Lab): Of course my hon. Friend is absolutely right about the unfairness of this proposal. We hear statements from the Government about the complexity of the tax system, so does she not find it surprising that they have come up with a proposal that increases complexity in the taxation system, as well as unfairness? Cathy Jamieson: Again, my hon. Friend makes a valid point, and I shall deal with it in detail in a moment or two. Strangely, given everything else that the Government have supposedly wrapped up to try to make anomalies disappear, we know that sometimes even more anomalies have been created as well as unfairness. In trying to simplify things, they have actually made them more complicated. In the Committee of the whole House, I raised issues about the principle and about the costs. It is important to have those firmly stated on the record, because the Government have estimated that the additional cost to Her Majesty’s Revenue and Customs over the first five years will between £8 million and £13 million for the computer system—the development and running costs— about £100 million for staff resources and £5 million for customer information. I asked the Minister in that debate for some further information on that. Some further parliamentary questions since then elicited more information, particularly on how much would be spent on marketing the new system. However, having looked at all this again in great detail, I must say that in my opinion and in that of Labour Members, it is not marketing that is needed at this point in time to make a bad policy and an incoherent change to the taxation system palatable to people, but a change of policy to make sure that whatever is done is fair and workable, and will not cause any further problems. Despite exhortations from Government Members for further changes, those with incomes above £50,000 will have their child benefit withdrawn at 1% for each £100 of income from January 2013. That means that there will be no child benefit entitlement for families where any earner has an income of more than £60,000. As I said in Committee, although the changes that the Government have made are a small step forward, they do not deal with that inherent and fundamental unfairness. That is because they still leave the scenario where a couple with children where one earner is on £60,000 and the other is on £10,000 lose all their benefit, whereas a dual-earner couple on £49,000 each keeps it all. We still do not see how that is fair. It is not just Labour Members who are saying that there is a problem. Irrespective of someone’s views on whether this is a fair system or whether they support the principle of what the Government are trying to do, which I do not, there remain a number of issues that others have raised. These points will not be new to the Minister, but I am outlining them once again because they have not been adequately addressed during the

709

Finance Bill

2 JULY 2012

Finance Bill

710

consideration of the Bill. The most recent information that has come from the Institute of Chartered Accountants in England and Wales makes things clear. It states:

I do not think that the public have yet caught up with what they will be required to do. The system is also

“While this Bill makes some steps in the direction of tax simplification, many of the measures introduce yet more complexity and taken overall the Bill does little to simplify the UK’s complicated tax system. The child benefit reforms…create considerable cost, confusion and complexity.”

“unlikely to cope efficiently if families change or break up”

It is also concerned about the Bill in general and states that “the valuable lessons in drafting style produced by the Tax Law Rewrite project have been lost.”

I mentioned that earlier in our consideration of the Bill. As so much of the Bill is made up of complicated schedules and guidance and as it is the longest finance Bill ever, we must question whether we have had the opportunity to carry out all of the scrutiny, even though we did our best in Committee. People who have to operate the provisions are concerned that they might need to be amended in the light of experience to ensure that they all work properly together and do not end up having further unintended consequences. Essentially, we are using the amendments to ask for clause 8 and schedule 1 to be withdrawn because we believe that the changes are flawed and unfair. That has also been pointed out by the ICAEW, which was straightforward and blunt in its language, stating that there could be a “reputational and operational disaster” for the Government and for HMRC. Those criticisms were largely reported and we have had the opportunity to listen to them in our debates. We share the ICAEW’s disappointment that the Government have not tabled more workable proposals in time for our final consideration of the Bill. I would hope that even at this stage the Government will at least be able to give us some answers to the criticisms that have been raised or to accept that their plan is not only unfair but risks being unworkable. The criticisms highlight the fact that “the phased withdrawal for those earning between £50-60,0000 will be difficult to implement, open to error and potentially costly for HMRC to administer and for taxpayers to comply with.”

As those critics have said: “The trouble is that an income tax system based on taxation of individuals, does not work properly if it has to cope with benefits that apply to a household”

such as tax credits “or potentially to another person”

such as child benefit. The real concern is that: “The phased withdrawal will not work well with the PAYE system.”

A considerable amount of concern has been expressed that the “‘sliding scale’ approach to tapering down the benefit makes the system much more complicated.”

It has been described as “perverse” that such an approach is being removed for higher personal tax allowances for those aged over 65 on the grounds that this will help to simplify the system at the same time as a form of it is being re-introduced for the withdrawal of child benefit. That does not seem to be a consistent policy approach. A further criticism is that the implementation timing is odd, with a start date of January 2013 that does not align with the start of the income tax year on 6 April. Concern has been raised that that “could trigger many unexpected tax bills at the end of the tax year, as many more taxpayers will be brought into self-assessment.”

and we had a considerable amount of discussion on that question during the previous debate. As we all know, family formations change over time. Couples form, the people involved might have children from previous relationships and so on. There is real concern that “The confusion caused by the new system could hit tax compliance, and undermine confidence in the tax system at a time when the employers are also having to implement the Real Time Information scheme for PAYE.”

On top of the criticisms set out by the ICAEW, the Chartered Institute of Taxation has raised a number of concerns. I hope that the Minister will be able to give an answer to some of these points about the complexity of the scheme. The institute’s concern is that “ a high degree of complexity—for both HMRC and taxpayers—into what has hitherto been a straightforward benefit with practically universal take-up”

is now being introduced. It also believes: “If the legislation is to be implemented, there are many issues that need to be resolved”

and that that should happen well before the new charges go live. Given the timing of the implementation of these provisions, there is not a huge amount of time to sort out any of the anomalies. I hope that the Minister can say something on that point. [Interruption.] I heard someone say “six months”. If it is believed that all this can be sorted out in that time, I would like to hear it from the Minister, because many of us have experienced cases where, with the best of intentions, and with support on all sides, fairly complicated systems—new computer programmes and so on—let alone systems of this complexity, have not worked. 10.45 pm The administrative burden that the new charge places on Her Majesty’s Revenue and Customs is not to be underestimated. We also have concerns about staffing levels, and about the support that will be in place to ensure that the new system, if it goes ahead, is communicated to taxpayers, and that people are helped not only to understand the theory but to work their way through the system in practice. A number of people will have serious concerns about that. In Committee of the whole House, I questioned the Minister on points that have been raised about the definition of “partner”; I understand that it is the first time that the term has been used in this type of legislation, rather than the terms “spouse” or “civil partner”. We had a bit of debate about when relationships start and end. It is, of course, inherently difficult to define the exact point at which a household comes together or ceases, especially where it has evolved over time. Some people will be unmarried but “living together as husband and wife”,

which is described in the Bill as condition B, or “as if they were civil partners”,

which is condition D. Will HMRC use data from third parties to gather information on living arrangements, as is done for tax credits? Those are serious points that people raised when the proposals were first put forward.

711

Finance Bill

2 JULY 2012

Further concerns have been raised about the determination of income and the timely determination of the liability to pay the charges. It may seem that we have moved away a bit from the impact of the benefit on children and on to what will happen to families more widely, but these are concerns that have been raised by people who will have to give advice about, and look at the operation of, the scheme. It is important to mention the concerns, because that is why we have tabled a number of technical amendments. A charge is to be levied on households in receipt of child benefit in which there is a taxpayer whose income in the tax year exceeds £50,000, as we have heard. Taxpayers are required to notify HMRC of their liability to the charge by 6 October following the tax year in question. However, self-assessment taxpayers are not required to submit their tax returns until the following January. The January deadline is set so late because those with complex or multiple sources of earnings may not know their earnings for the previous tax year until that point; that is an anomaly. How reasonable is it to require someone to declare their liability to pay the charge when that is dependent on their income, which they are not required to calculate for a further three months? That was one of the arguments for trying better to align the two systems, if the change goes ahead. Helen Goodman (Bishop Auckland) (Lab): Is my hon. Friend saying that if a person’s income fluctuates during the year, but they do not know that it is fluctuating, and do not know the full amount of their income until the end of the year, the child benefit will be treated by one set of rules, whereas if they know how their income is fluctuating and whether they are moving in and out of the zone in which the charge applies, they will be treated in another way? Cathy Jamieson: Yes, my hon. Friend has got the situation exactly right; that is the problem as it has been described. As for people who may elect not to receive the benefit, the Government’s proposals make it difficult for people who do not know what their earnings will be over a particular time to make that judgment. A number of issues have been raised to do with how one would determine the higher-income person in a relationship. The measure raises a number of complex issues to do with independent taxation and taxpayer confidentiality. I know the subject has been raised with the Minister. My understanding is that HMRC will tell the couple which person had the higher income and is therefore subject to the new charge. As I outlined previously, I can see some difficulties associated with this. Not only does an individual need to know about their partner’s income, but they would need to know whether their partner has claimed child benefit and whether the partner has elected not to receive the benefit. This will be particularly important where a couple are not on speaking terms. That does happen. It may not seem like it when everything is cosy in the coalition, but there are relationships in which people are not on speaking terms or where they have separated. In those circumstances, we need to be clear about what HMRC intends to do to inform a partner whether the other has made an election not to receive child benefit. Will they be advised, should the partner subsequently revoke that election?

Finance Bill

712

There are potentially Catch-22 situations, particularly in relation to self-assessment and submitting the returns. Far from simplifying the system, which was straightforward and understood by everyone and which made it easy for people to claim, we seem to be making it far more complicated. I want to raise, briefly, the issue of extended families. There are concerns that there may be contentious cases where different people claim entitlement to child benefit— for example, where parents are unable to look after the children and perhaps grandparents take over that role. We know the valuable role that grandparents can play in those circumstances, often at considerable cost to themselves. There could be situations where a parent continues to receive child benefit, although the child lives with the grandparents. If one or both grandparents have adjusted net income over £50,000, under the relevant provisions of the Bill, the higher-earning one would be liable for the higher child benefit payment, even though the grandparents are not necessarily at that point receiving the child benefit and could even be in dispute with the recipients. These are some of the practical problems that come into play when we look at how people live their lives. I have mentioned the issue of timing. Perhaps the Minister can answer that. The issue of national insurance credits was raised in the Committee of the whole House. Although the Minister went some way towards explaining the situation and giving reassurance, it would be helpful to hear that stated here this evening. I shall spend a moment on the problem of electing not to receive child benefit and revoking the election. Where one party to a relationship has an income in excess of £60,000, it seems that HMRC would like to encourage the child benefit claimant to claim the child benefit but to elect not to receive it, because that somehow makes everything neater. HMRC would stop paying out the child benefit, which would reduce the need for the higher earner to join self-assessment and to pay their tax. Those who expect their income to be more than £60,000, apply for child benefit and elect not to receive it, yet subsequently realise that their income for the year is likely to be between £50,000 and £60,000, could lose out unless there are some changes to the legislation. It is important to place on the record that it is not only the Labour Opposition who oppose what the Government are doing. People who understand the tax system and want to see it improved, such as the Chartered Institute of Taxation, say that ideally the clause and the schedule should be withdrawn and a fresh consultation launched, with a view to coming up with a more workable alternative to the current proposals. We have tabled a couple of amendments to test the Minister’s view on whether that is needed. It has been suggested that these are needed to assist in the situation where people elect whether or not to receive child benefit. The amendments would put all claimants not subject to 100% high income child benefit charge on the same footing as other claimants able to make a revocation, so this might be easier, it is argued, for HMRC staff to understand and implement. There is a clear distinction between people who elect not to have payments and then find that their income is under £50,000, and those who elect not to have payments and find that their income was between £50,000 and £60,000. The Bill copes with the former, but not with the latter.

713

Finance Bill

2 JULY 2012

I can see people’s eyes beginning to glaze over at these technicalities. Hon. Members in all parts of the House no doubt want me to bring my remarks to a close. [Interruption.] It is good that we all agree on something. These points are very important. To return to what I said at the outset, if we make the situation more complicated, cause more confusion and make it less likely that people will know whether they qualify for the benefit, that will not be helpful for families, it will certainly not be helpful for children and, I would argue, it will not be helpful for Ministers, because it is they who will have to come back to fix the problem later. Several hon. Members rose— Mr Deputy Speaker (Mr Nigel Evans): Order. As hon. Members can see, a number of Members are standing and wish to contribute in what is a relatively short space of time, and the Minister still needs to respond, so please be mindful of other Members when making contributions. Mark Field (Cities of London and Westminster) (Con): I must confess that I support the principle behind the clause but share many of the concerns expressed by the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) about its practicality. However, I accept that there is an overriding need to reduce the vast fiscal deficit, and all of us who feel that way must look at the provisions, whether in the Budget or elsewhere, and support what is being done to try to get the deficit down. Apart from everything else, it is a moral case: we cannot pass these huge debts on to the next generation. Even now, in an era that the Opposition have identified as one of austerity and savage cuts, the Government are borrowing £1 in every £5 they spend. There is an absolute crisis in the welfare state and we must wean ourselves off this huge amount of public expenditure at the earliest opportunity. One of the most important areas to look at is that of universal benefits, particularly universal middle class benefits, which must be up for consideration. Housing benefit, which has been discussed, and child benefit are certainly important. I believe that wealthy pensioners should not get free TV licences, bus passes or winter fuel allowances, although I accept the political difficulty of that, given the promises made just before the general election. The Minister is an intelligent man and must realise that the practicalities of the system will make it an absolute nightmare. The hon. Member for Kilmarnock and Loudoun has made quite clear how she feels about it, but let us for once in politics be wise before the event, rather than after it. Nadine Dorries (Mid Bedfordshire) (Con): My hon. Friend talks about the practicalities of the system, but is he aware that there is no practical mechanism by which wealthy parents can opt out of the system if they do not want to claim child benefit? Mark Field: There will be by next January, because they will not qualify for it. The broader issue is that there is a risk that the proposal is potentially a penalty on aspiration for those who earn roughly between £50,000 and £60,000 a year. It is a disincentive for families with one parent who stays at home to look after children. What of the broader tax

Finance Bill

714

incentives? One of the reasons I am so keen on reducing the higher rate of tax to 45% is that I think there is a mass incentive in having lower rates of tax, yet the concern for those earning between £50,000 and £60,000 who have three children is that they will be paying a marginal rate, often of over 60%, which does not seem to be a sensible way forward. Those are the theoretical issues. There are a number of major practical issues that the Minister will have to look at. This system will be incredibly difficult to implement. The reality is that many people now earn consulting income and do not know nine months into a year, let alone at the beginning, whether they will earn between £50,000 and £60,000. We will see some strange disincentives that will encourage people to arrange for invoices to go out just after the financial year, so that one year they earn £49,000 and the next they earn £80,000 or £90,000. It strikes me that much of this will rely on IT systems, which have been a reputational nightmare for both HMRC and the Treasury. I think that this system will be very tough to administer. As has been mentioned, the implementation will be in January, rather than, as normal, at the beginning of the tax year, which will make for additional difficulty. I want this to work. I think that all of us who want to see the deficit reduced want to see Budget measures working well for the Treasury and HMRC. My biggest concern is that we will end up returning to the House, perhaps in January or slightly later next year, at the beginning of the next tax year, recognising a system that is going to be discredited, not least because huge amounts of money will be uncollected and, if the schemes goes ahead, because large amounts will have to be repaid. 11 pm We know—we can see—that there are huge practical difficulties, and, although I fully support the idea of getting the deficit down, I wonder why we cannot look at a simpler system that, for example, limits child benefit only to two or, perhaps, to three children. I am the father of two children, and I know the Minister is the father of three, but there is no particular self-interest here. We need a more straightforward and simple system; one that is easy to calculate and to understand. Helen Goodman: One reason for not taking up the proposal is that one group in society which is most likely to be in child poverty is children in families with lots of children. Mark Field: I accept that, but we are looking for a simple system—[Interruption.] No, the issue at stake is trying to find a straightforward and simple system that bears down on the idea of universality, which we should try to do if our welfare system is to retain any credit. I hope that even at this late stage the Minister will give some thought to the matter. I work on the basis that I want the measure to work, but nothing would undermine our tax system more than the benefit before us being undermined, as many of us fear, through the practical difficulties that are almost inevitable. Let us for once, as I say, be wise before the event. Helen Goodman: Normally, one begins a speech by saying what a pleasure it is to speak, but it is not a pleasure to speak in this debate; it is a great disappointment.

715

Finance Bill

2 JULY 2012

[Helen Goodman] This is the third time that I have spoken about the problem with the child benefit proposals in the Budget that the Chancellor of the Exchequer announced. The first time I spoke I thought that there were four arguments against the Government’s proposals; I now discover that there are 14. First, there is the impact on distribution and horizontal equity, the point well expressed by my right hon. Friend the Member for Birkenhead (Mr Field). The Institute for Fiscal Studies’ independent analysis of the impact of changes made by the Budget looked at households with and without children, and households with children are losing most. From all the changes in the current year, households with children will lose 1.3% of their annual net income compared with 0.5% for those without children. On the changes implemented so far, the loss is 3.5% for households with children and 2.1% only for working-age households without children. By 2014 there will still be inequity between households with children and households without. By then, even assuming that universal credit is as good as the Government say it will be, which I doubt, households with children will have lost 3.7% of their income—£1,411 on average—whereas those without children will have lost 2%, or £646 a year. How it can be fair to take more money from families with children than from those without, I do not know. There is clearly also unfairness among those people who are just above and just below the thresholds, and among families in which one person earns £50,000 and those in which two people earn £40,000. We have discussed all that before. New problems have emerged since we debated the issue. There is the possibility of people planning their tax to avoid the charge; administrative problems have been referred to; and we have repeatedly asked the Minister how he will preserve independent taxation, given the implications for it. That point has been raised to a significant extent by the professions; the Chartered Institute of Taxation and the Office of Tax Simplification are very concerned about the issue. One thing that is not at all clear is how Ministers intend to implement the measure, given that, as far as I can see—the Minister can correct me if he wants—in schedule 1 there is no obligation on people to share information about their incomes, so it will be extremely difficult for people to know what is going on. The Minister is calm about that, but given that families’ incomes and circumstances change over time, the measure is highly likely to lead to a large number of practical difficulties. Another thing that is odd from a Government who claim to be in favour of the family is that they are introducing a charge that is, in effect, a couple penalty. At one stroke of a pen, they have achieved both a penalty for couples and the destruction of the independent taxation of women. It is a masterstroke of its kind. Nadine Dorries: Does the hon. Lady agree that many couples with no children object hugely to their taxation going towards families who decide to have large numbers of children? The proposal made by my hon. Friend the Member for Cities of London and Westminster (Mark Field)—that the cap should be at two or three children— strikes a fair and moral balance.

Finance Bill

716

Helen Goodman: As I explained to her hon. Friend, I do not think it strikes a good balance because the children who live in families with lots of siblings are the children who live in poverty. I know that Conservative Members are not as committed to addressing child poverty as were the last Labour Government, and we will see the results of that as we go through this Parliament. I regret that. I am surprised that the hon. Lady, who is in general a practical, well-rooted person, does not see the power of that point. Another issue is the fiddly definitions of partnerships and the difficulty that Ministers will have in establishing what those are for the purposes of the measure. The measure is both administratively fiddly and extraordinarily mean. It will affect more than 1 million families; about 1 million people are going to lose £1,300 a year. That is a significant sum and I wish that the Government would take more seriously both the practical and the fairness arguments that we are making. The Minister has still not addressed one final issue: people who at the moment get national insurance credits by claiming child benefit. They will lose their national insurance credits, which will impact on their pension entitlements for many years to come. I hope that the Minister, even at this last stage, will have a last-minute conversion. Mr Stewart Jackson (Peterborough) (Con): I say gently to the hon. Member for Bishop Auckland (Helen Goodman) that it is incumbent on her party to offer suggestions for alternative sources of funding, rather than the endless criticism. I speak as someone who is generally extremely sceptical of the policy, but alternatives came there none from the Opposition. Even the alternative offered by my hon. Friend the Member for Cities of London and Westminster (Mark Field) was cursorily rejected by the hon. Lady. I have been consistent on the issue since it first arose at the end of 2010, following the Chancellor of the Exchequer’s announcement. It would be churlish and unfair of me not to concede that he took on board the issue of the cliff-edge effect. He sought to ameliorate that perverse issue with the taper system, which was broadly supported on the Government Benches. Apart from administrative issues, there are a number of other criticisms that were comprehensively covered by the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson). For example, the Government are not abiding by their own tax consultation policy. My hon. Friend the Exchequer Secretary, who is proud to have been the tax personality of 2010, launched a document called “Tax policy making: a new approach” in June 2010. He also responded to the public consultation of December 2010, which called for thorough consultation and cost-benefit analysis and impact assessments for key stakeholders. That has not happened in the case of this change, which will affect 790,000 couples and 30,000 lone parents who will lose the entirety of their child benefit allocation, and 330,000 couples and 20,000 lone parents who will lose some of it. That is a major problem. Apart from the lack of consultation, we still have the unfair situation that a single-earner couple earning just above the threshold rate, which was then £42,475, will lose child benefit, but a two-earner couple earning just under that amount will receive it in full. That has not been properly addressed.

717

Finance Bill

2 JULY 2012

As my hon. Friend said, we have a moral responsibility to focus on clearing up the deficit left to us by the previous Administration, but this proposal, in particular, fails on the grounds of fairness. How can it be right? It will send the message that ambition is wrong, that the basic tenets of fairness will be disregarded, and that there will be a perverse anti-marriage and anti-home maker bias and an attack on hard work, ambition and family responsibilities. The policy means that a two-earner couple with two children on a combined income of £100,000 will keep their child benefit while a one-earner family with two children on just over £50,000 begin to lose it and, if their income rises to £60,000, lose it completely. The former household is already far higher up the income distribution yet keeps its child benefit, while the latter household, which is lower down the income distribution, loses it. Let us remember that this proposal was predicated on clobbering the top 15% of the income distribution, but it does nothing of the sort. Only if the family has one child will they be in the eighth decile of the income distribution; if they have two, three, four or more children, they will, largely speaking, be skewed towards the middle. We are not clobbering the richest in society; we are clobbering people who want to do well and are ambitious and aspirational. Unfortunately, that will have perverse consequences that will backfire on this Government politically and in terms of what is needed to make sure that the administration of the system works properly. This issue is inextricably linked to the popular commitment that we made in the 2010 general election to give a tax break for marriage and families, which we have not yet carried through. We need to keep faith with that, particularly as the coalition agreement guaranteed the Liberal Democrats, who had some ideological problems with it, the chance to abstain. If the Government want to keep the faith with the people who elected us as Conservative Members of Parliament, they should make sure that that is in the pipeline now, because after April 2013 administrative difficulties with IT systems might preclude its coming to fruition. In terms of cash in the pocket and real tax bills, a one-earner, two-child family earning £60,000 currently pays £13,950 in tax per annum while a two-earner, two-child household with each person earning £30,000 pays just £8,768. That difference will increase substantially as a result of these tax changes. The first family will see their bill rise to £15,667, meaning that there will be a substantial difference of 59% between the tax paid by the two families. 11.15 pm Nadine Dorries: To go back to the point made by the hon. Member for Bishop Auckland (Helen Goodman), there are more financially astute means of dealing with child poverty and with large numbers of children than a universal benefit in the form of child benefit. Mr Jackson: My hon. Friend makes an important and astute point, which is that the Rolls-Royce minds at the Treasury, of whom the hon. Member for Bishop Auckland (Helen Goodman) was one, can surely find alternative methods to collect income. We know that the deficit is a problem that the Government have to grapple with, mainly because of the splurge of public expenditure under the last Government and the debt

Finance Bill

718

millstone that they left. We must look at all the alternatives, including putting a cap on the number of children, such as two or three. Incidentally, that policy is hugely popular with the public, according to polls taken in the past few weeks. The higher income child benefit charge fails on at least two bases. First, it is transparently unfair, because it treats families on lower incomes more harshly than those on higher incomes, merely because of the way in which the incomes come to them. Secondly, in the distinctions that it makes, it discriminates between different types of families in a way that is profoundly unenlightened and completely unacceptable. I urge Treasury Ministers to think carefully about the alternatives. This is a potential disaster in the making. It is unfair. I ask them to think again. Several hon. Members rose— Mr Deputy Speaker (Mr Lindsay Hoyle): I will have to bring the Back-Bench speeches to an end at 19 minutes past, so there are three minutes left. Kelvin Hopkins: I strongly support the brilliant speeches of my hon. Friends the Members for Kilmarnock and Loudoun (Cathy Jamieson) and for Bishop Auckland (Helen Goodman). There are clearly qualms on the Conservative Benches about this disastrous policy. I had the privilege of being at the TUC general council 37 years ago as a staff member when the original policy was approved by the TUC general council. At that time, we had the social contract between the TUC and the Labour Government, which I think was a brilliant success. Harry Urwin, the deputy general secretary of the Transport and General Workers Union, argued the case against some trade unionists who were concerned about a tax allowance, which would tend to go to male workers, being given through a universal benefit largely to women for their children. It was a massively progressive policy and was the right thing to do. It was in line with the principles of universality established by Beveridge and many brilliant social scientists and theorists later on, such as Richard Titmuss. It was of enormous benefit to families and children. The hon. Member for Mid Bedfordshire (Nadine Dorries), my next door neighbour, talked about punishing children for the sins of their parents. If their parents, by accident or design, have large families, it is not the fault of the children. The money goes to the children, not to the parents. To punish the children for what their parents have done, by accident or design, is completely wrong. The principle of universality is rightly carried through in the basic state pension, the winter fuel allowance and a number of other things. If we want to redistribute income, we do it through the taxation system, not with means-tested benefits. We talk about trying to get people back into work. If they receive means-tested benefits, they lose them when they get back into work. Sometimes it is cheaper to stay at home and claim benefits than to go to work. Universal benefits do not have that problem, because everything else comes as extra. My hon. Friend the Member for Kilmarnock and Loudoun is right, our amendments are right and I hope that the House will carry them.

719

Finance Bill

2 JULY 2012

Mr Gauke: Clause 8 introduces a new income tax charge that will be used to withdraw child benefit from a claimant or their partner who receives income of more than £50,000. The charge will reduce the cost of child benefit to the Exchequer while protecting those on low incomes. This measure, like so many others, is a consequence of the previous Government’s profligacy. We are having to make these decisions because of the budget deficit that we inherited—the largest in peacetime history. Unfortunately, it is the British people who have to pay for the debt left by the last Administration. Without addressing the deficit we will face sterner economic conditions, so we are having to ask for more. However, we will do that in a way that is both fair and reasonable, and this measure will ensure that those on low incomes will remain unaffected and those with the broadest shoulders will bear the greatest burden. Although reconsidering the universality of child benefit was never our first choice, it is the position we have been left. I recognise that many people are concerned about the change and believe that child benefit must somehow be sacrosanct. However, it simply is not fair that an individual who earns £15,000, £20,000 or £25,000 should pay for benefits for those earning £80,000, £90,000 or £100,000. When a Government need to raise revenue, it makes sense to turn to a measure with a broad base and significant numbers of recipients who do not rely on the additional payment that they receive. Child benefit is just such a payment. The steps that we are taking will raise £1.8 billion for the Exchequer by 2014-15. Mr Leigh: What conceivable political point is there in a Conservative Government attacking 1 million of our own people—hard-working people on middle incomes and families in which someone, usually a woman, wants to stay at home to look after a child? What are a Conservative Government doing? Mr Gauke: Speaking as a Conservative, I consider that all the British people are our people. By raising £1.8 billion by 2014-15, we will ensure that those with the broadest shoulders bear the greatest burden. That was why my right hon. Friend the Chancellor announced that we would seek to withdraw child benefit from higher rate taxpayers. We always said that we would consider ways to implement the measure, but we have been clear that a complicated new means-testing system, which is what would happen if we extended the tax credits system in the way that some have proposed, would not be a sensible way forward. Instead, we should look to existing systems and processes to ensure that we can achieve our goal. Clause 8 withdraws financial gain from child benefit from families in which one partner has an income of more than £60,000, and reduces the gain if one partner has an income of more than £50,000. It does so in the most efficient and pragmatic way possible, applying a tax charge on those high earners using existing processes. That charge will apply to an individual in receipt of child benefit, or to their partner if they are married or in a civil partnership or living as if they were married or in a civil partnership—a point that the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) made. That is an existing definition of partners within social security legislation and means that other adults living in the household will not affect the liability.

Finance Bill

720

The changes will not affect those receiving child benefit who have income under £50,000, or whose partner does. Some 85% of families receiving child benefit, or 7 million families, need not be troubled by the changes. If an individual or their partner has income of more than £50,000, the charge will be tapered depending on their income. The equivalent of 1% of the child benefit award will be charged for every £100 increase over £50,000 in adjusted net income. Child benefit will be withdrawn in full only at an income of £60,000. Furthermore, the thresholds between which the taper will operate will not depend on the number of children. The changes will take effect from 7 January 2013, and the individuals affected will include information relating to the charge on their self-assessment returns for the first time for the tax year 2012-13. The first payments of the charge will be due by 31 January 2014 if a taxpayer chooses to pay in a lump sum. Those affected will be able to opt out of child benefit payments—that answers a question that my hon. Friend the Member for Mid Bedfordshire (Nadine Dorries) asked. Some may wish to do so, although Her Majesty’s Revenue and Customs will set out clearly the options and implications. For example, if an individual’s income were to fall below £60,000, they may revoke their election not to receive child benefit, and payments would be resumed. Mr Stewart Jackson: If my hon. Friend is going to consider the efficacy of different policies, will the Treasury undertake to consider alternative sources of funding as a corollary to this change, such as a cap on the number of eligible children? Mr Gauke: My hon. Friend and other hon. Members have made the case for a cap on the number of children receiving child benefit. I hear his point about an alternative policy, but we must ensure that the child benefit regime provides support for those who need it most. The policy for which we are legislating maintains that principle—those on the lowest income will retain support. The Government strongly discourage anyone from not registering for child benefit on the birth of their child, even if they decide to opt out of receiving payments. The child benefit system does not process only child benefit, and failing to register can affect state pension entitlement and make it less straightforward for the child to receive a national insurance number when they turn 16. It is therefore important that children remain registered. Amendments 21 and 22 would allow those on the taper who have opted out of child benefit retrospectively to receive the payment. I am pleased to confirm that HMRC will apply the legislation as it is to enable such a claim to be made. I can therefore reassure the hon. Member for Kilmarnock and Loudoun that the amendments are not necessary. As I have said, the legislation provides a claimant whose income, or whose partner’s income, is more than £50,000 with the opportunity to elect not to be paid child benefit, so they are not liable for the high income child benefit tax charge. A claimant who has elected not to be paid child benefit can subsequently revoke that election and ask HMRC to reinstate payment of child benefit. The payment of child benefit would then normally be made from the first pay day after the revocation has been received by HMRC, and not from the date

721

Finance Bill

2 JULY 2012

when child benefit was first stopped. That is because it would make no sense to pay arrears of child benefit to those whose income, or whose partner’s income, is more than £60,000. However, the legislation provides for retrospective revocation when a claimant discovers that, contrary to their original expectations, they do not have an income of £50,000 or above. That retrospection will be limited to two years after the end of the tax year to which the original election applies. That means that child benefit can be paid for up to that two-year period. When a child benefit claimant or their partner has income of between £50,000 and £60,000, the decision whether to elect to receive child benefit is not so clear cut, because the amount of the tax charge is dependent on their income. HMRC recognises that a couple might be nervous about making an election if a later decision to revoke the election would apply only to future payments, leaving them worse off. The legislation provides HMRC with the power to issue directions as to how the election process will be administered. I hope I have cleared up that point. Let me try to deal with the few remaining points. Draft guidance is being prepared over the summer, during which time HMRC will consult external representatives, including the Social Security Advisory Committee and the HMRC benefits and credits consultation group. The directions will confirm that an election that has been made by a claimant whose income or whose partner’s income is between £50,000 and £60,000 can be revoked retrospectively, to the point at which the child benefit ceased. I have dealt with this point on the state pension, but it is possible to be registered even if people are not receiving cash. I have also dealt with the point on the definition of partners used in the Bill. As for the argument that the measure is complicated, we have looked at alternatives, but we think the measure is the best available to us. On the principle of individual taxation, HMRC is committed to protecting confidentiality. For taxpayers who are unable to discuss their incomes with each other, HMRC will develop a process with appropriate security checks so that they can answer yes or no to simple questions about the income of their partner. As I have said, the Government have had to make difficult decisions. The measure means we can continue to provide child benefit, and so, in a sustainable manner, protect those who need it the most. We accept that this is not an ideal situation, but the budget deficit left by the previous Administration is the challenge we must overcome if we are to avoid a far worse predicament. I urge the Opposition to withdraw their amendment. Cathy Jamieson: In the very short time available, I want to say that we will press amendment 24 to a Division, although I accept what the Exchequer Secretary said about amendments 21 and 22 not being necessary. The only other point I would make is that it seems odd for him to say that he did not want a more complicated means-test system and then to introduce an extremely complex taxation system. It does not make any sense, and does not pass the test of competence or the test of fairness. Question put, That the amendment be made. The House divided: Ayes 234, Noes 300.

Finance Bill

Division No. 37]

722 [11.29 pm

AYES Abbott, Ms Diane Abrahams, Debbie Alexander, rh Mr Douglas Alexander, Heidi Ali, Rushanara Allen, Mr Graham Anderson, Mr David Ashworth, Jonathan Austin, Ian Bailey, Mr Adrian Bain, Mr William Balls, rh Ed Banks, Gordon Barron, rh Mr Kevin Bayley, Hugh Beckett, rh Margaret Bell, Sir Stuart Benn, rh Hilary Benton, Mr Joe Berger, Luciana Betts, Mr Clive Blackman-Woods, Roberta Blomfield, Paul Bradshaw, rh Mr Ben Brennan, Kevin Brown, Lyn Brown, rh Mr Nicholas Bryant, Chris Buck, Ms Karen Burden, Richard Burnham, rh Andy Byrne, rh Mr Liam Campbell, Mr Alan Campbell, Mr Ronnie Caton, Martin Chapman, Jenny Chope, Mr Christopher Clark, Katy Clwyd, rh Ann Coaker, Vernon Connarty, Michael Cooper, Rosie Cooper, rh Yvette Corbyn, Jeremy Crausby, Mr David Creagh, Mary Creasy, Stella Cruddas, Jon Cryer, John Cunningham, Alex Cunningham, Mr Jim Cunningham, Sir Tony Curran, Margaret Danczuk, Simon David, Wayne Davidson, Mr Ian Davies, Geraint Davies, Philip Davis, rh Mr David De Piero, Gloria Dobbin, Jim Dobson, rh Frank Docherty, Thomas Doran, Mr Frank Dorries, Nadine Dowd, Jim Doyle, Gemma Dromey, Jack Dugher, Michael

Durkan, Mark Eagle, Ms Angela Eagle, Maria Edwards, Jonathan Efford, Clive Elliott, Julie Ellman, Mrs Louise Engel, Natascha Esterson, Bill Evans, Chris Field, rh Mr Frank Fitzpatrick, Jim Flello, Robert Flint, rh Caroline Flynn, Paul Fovargue, Yvonne Francis, Dr Hywel Gapes, Mike Gardiner, Barry Gilmore, Sheila Glass, Pat Glindon, Mrs Mary Godsiff, Mr Roger Goggins, rh Paul Goodman, Helen Greatrex, Tom Green, Kate Greenwood, Lilian Griffith, Nia Gwynne, Andrew Hain, rh Mr Peter Hamilton, Mr David Hamilton, Fabian Hanson, rh Mr David Harman, rh Ms Harriet Havard, Mr Dai Healey, rh John Hendrick, Mark Hepburn, Mr Stephen Heyes, David Hillier, Meg Hilling, Julie Hodge, rh Margaret Hodgson, Mrs Sharon Hoey, Kate Hollobone, Mr Philip Hopkins, Kelvin Hosie, Stewart Howarth, rh Mr George Hunt, Tristram Irranca-Davies, Huw Jackson, Mr Stewart Jamieson, Cathy Jarvis, Dan Johnson, rh Alan Johnson, Diana Jones, Graham Jones, Helen Jones, Mr Kevan Jones, Susan Elan Keeley, Barbara Khan, rh Sadiq Lavery, Ian Lazarowicz, Mark Leigh, Mr Edward Lewis, Mr Ivan Lloyd, Tony Love, Mr Andrew Lucas, Caroline

723

Finance Bill

Lucas, Ian MacNeil, Mr Angus Brendan Mactaggart, Fiona Mahmood, Shabana Malhotra, Seema Mann, John Marsden, Mr Gordon McCann, Mr Michael McClymont, Gregg McCrea, Dr William McDonagh, Siobhain McDonnell, John McFadden, rh Mr Pat McGuire, rh Mrs Anne McKenzie, Mr Iain McKinnell, Catherine Meacher, rh Mr Michael Meale, Sir Alan Mearns, Ian Michael, rh Alun Miliband, rh David Miliband, rh Edward Miller, Andrew Moon, Mrs Madeleine Morden, Jessica Morrice, Graeme (Livingston) Morris, Grahame M. (Easington) Mudie, Mr George Munn, Meg Murphy, rh Mr Jim Murray, Ian Nandy, Lisa Nash, Pamela O’Donnell, Fiona Onwurah, Chi Osborne, Sandra Owen, Albert Pearce, Teresa Perkins, Toby Phillipson, Bridget Raynsford, rh Mr Nick Reckless, Mark Reed, Mr Jamie Reeves, Rachel Reynolds, Emma Reynolds, Jonathan Riordan, Mrs Linda Ritchie, Ms Margaret Robertson, Angus Robertson, John

Robinson, Mr Geoffrey Rotheram, Steve Roy, Mr Frank Roy, Lindsay Ruane, Chris Ruddock, rh Dame Joan Sarwar, Anas Seabeck, Alison Sharma, Mr Virendra Shuker, Gavin Simpson, David Skinner, Mr Dennis Slaughter, Mr Andy Smith, rh Mr Andrew Smith, Angela Smith, Nick Smith, Owen Spellar, rh Mr John Straw, rh Mr Jack Stringer, Graham Stuart, Ms Gisela Sutcliffe, Mr Gerry Tami, Mark Thomas, Mr Gareth Thornberry, Emily Timms, rh Stephen Trickett, Jon Turner, Karl Twigg, Derek Twigg, Stephen Umunna, Mr Chuka Vaz, rh Keith Vaz, Valerie Watson, Mr Tom Watts, Mr Dave Weir, Mr Mike Whiteford, Dr Eilidh Whitehead, Dr Alan Williamson, Chris Wilson, Phil Winnick, Mr David Winterton, rh Ms Rosie Wishart, Pete Woodcock, John Wright, David Wright, Mr Iain

Tellers for the Ayes: Nic Dakin and Tom Blenkinsop

NOES Adams, Nigel Afriyie, Adam Aldous, Peter Alexander, rh Danny Andrew, Stuart Arbuthnot, rh Mr James Bacon, Mr Richard Baker, Norman Baker, Steve Baldry, Sir Tony Baldwin, Harriett Barclay, Stephen Barker, Gregory Barwell, Gavin Bebb, Guto Beith, rh Sir Alan Beresford, Sir Paul Berry, Jake

Bingham, Andrew Binley, Mr Brian Birtwistle, Gordon Blackman, Bob Blackwood, Nicola Blunt, Mr Crispin Boles, Nick Bradley, Karen Brady, Mr Graham Brake, rh Tom Bray, Angie Brazier, Mr Julian Bridgen, Andrew Brine, Steve Brokenshire, James Bruce, Fiona Bruce, rh Sir Malcolm Buckland, Mr Robert

2 JULY 2012 Burley, Mr Aidan Burns, Conor Burns, rh Mr Simon Burstow, Paul Burt, Lorely Byles, Dan Cable, rh Vince Cairns, Alun Campbell, rh Sir Menzies Carmichael, rh Mr Alistair Carmichael, Neil Carswell, Mr Douglas Cash, Mr William Clappison, Mr James Clark, rh Greg Clegg, rh Mr Nick Clifton-Brown, Geoffrey Coffey, Dr Thérèse Collins, Damian Colvile, Oliver Crabb, Stephen Crouch, Tracey Davey, rh Mr Edward Davies, David T. C. (Monmouth) Davies, Glyn de Bois, Nick Dinenage, Caroline Djanogly, Mr Jonathan Dorrell, rh Mr Stephen Doyle-Price, Jackie Drax, Richard Duddridge, James Duncan, rh Mr Alan Duncan Smith, rh Mr Iain Dunne, Mr Philip Ellis, Michael Ellison, Jane Ellwood, Mr Tobias Elphicke, Charlie Eustice, George Evans, Graham Evans, Jonathan Evennett, Mr David Fabricant, Michael Fallon, Michael Farron, Tim Featherstone, Lynne Field, Mark Foster, rh Mr Don Francois, rh Mr Mark Freer, Mike Fullbrook, Lorraine Fuller, Richard Garnier, Mr Edward Garnier, Mark Gauke, Mr David George, Andrew Gibb, Mr Nick Gilbert, Stephen Gillan, rh Mrs Cheryl Glen, John Goldsmith, Zac Goodwill, Mr Robert Gove, rh Michael Graham, Richard Grant, Mrs Helen Gray, Mr James Grayling, rh Chris Green, Damian Greening, rh Justine Grieve, rh Mr Dominic

Finance Bill Griffiths, Andrew Gummer, Ben Gyimah, Mr Sam Halfon, Robert Hames, Duncan Hammond, rh Mr Philip Hammond, Stephen Hancock, Matthew Harper, Mr Mark Harrington, Richard Harris, Rebecca Hart, Simon Harvey, Nick Hayes, Mr John Heald, Oliver Heath, Mr David Heaton-Harris, Chris Hemming, John Henderson, Gordon Hendry, Charles Hinds, Damian Hollingbery, George Holloway, Mr Adam Hopkins, Kris Howarth, Mr Gerald Howell, John Hughes, rh Simon Huhne, rh Chris Hunt, rh Mr Jeremy Hunter, Mark Hurd, Mr Nick James, Margot Javid, Sajid Jenkin, Mr Bernard Johnson, Gareth Johnson, Joseph Jones, Andrew Jones, Mr David Kawczynski, Daniel Kelly, Chris Kennedy, rh Mr Charles Kirby, Simon Kwarteng, Kwasi Laing, Mrs Eleanor Lamb, Norman Lancaster, Mark Laws, rh Mr David Leadsom, Andrea Lee, Jessica Lee, Dr Phillip Leech, Mr John Lefroy, Jeremy Leslie, Charlotte Letwin, rh Mr Oliver Lewis, Brandon Liddell-Grainger, Mr Ian Lidington, rh Mr David Lilley, rh Mr Peter Lloyd, Stephen Lopresti, Jack Lord, Jonathan Loughton, Tim Luff, Peter Lumley, Karen Macleod, Mary Main, Mrs Anne Maude, rh Mr Francis Maynard, Paul McCartney, Jason McCartney, Karl McIntosh, Miss Anne McLoughlin, rh Mr Patrick

724

725 McPartland, Stephen McVey, Esther Mensch, Louise Menzies, Mark Mercer, Patrick Metcalfe, Stephen Miller, Maria Mills, Nigel Milton, Anne Mordaunt, Penny Morris, Anne Marie Morris, David Morris, James Mosley, Stephen Mowat, David Mulholland, Greg Mundell, rh David Munt, Tessa Murray, Sheryll Murrison, Dr Andrew Neill, Robert Newmark, Mr Brooks Newton, Sarah Nokes, Caroline Norman, Jesse Nuttall, Mr David Offord, Dr Matthew Ollerenshaw, Eric Opperman, Guy Ottaway, Richard Paice, rh Mr James Parish, Neil Patel, Priti Pawsey, Mark Percy, Andrew Perry, Claire Phillips, Stephen Pickles, rh Mr Eric Pincher, Christopher Poulter, Dr Daniel Prisk, Mr Mark Pritchard, Mark Pugh, John Raab, Mr Dominic Randall, rh Mr John Redwood, rh Mr John Rees-Mogg, Jacob Reid, Mr Alan Robathan, rh Mr Andrew Robertson, Hugh Rogerson, Dan Rosindell, Andrew Rudd, Amber Ruffley, Mr David Russell, Sir Bob Rutley, David Sanders, Mr Adrian Sandys, Laura Scott, Mr Lee Selous, Andrew Shapps, rh Grant Sharma, Alok Shelbrooke, Alec

Finance Bill Simmonds, Mark Simpson, Mr Keith Skidmore, Chris Smith, Miss Chloe Smith, Henry Smith, Julian Smith, Sir Robert Soubry, Anna Spelman, rh Mrs Caroline Spencer, Mr Mark Stephenson, Andrew Stevenson, John Stewart, Bob Stewart, Iain Stewart, Rory Stride, Mel Stuart, Mr Graham Stunell, Andrew Sturdy, Julian Swales, Ian Swayne, rh Mr Desmond Swinson, Jo Swire, rh Mr Hugo Syms, Mr Robert Teather, Sarah Thurso, John Timpson, Mr Edward Tomlinson, Justin Truss, Elizabeth Turner, Mr Andrew Uppal, Paul Vaizey, Mr Edward Vara, Mr Shailesh Vickers, Martin Villiers, rh Mrs Theresa Walker, Mr Charles Walker, Mr Robin Wallace, Mr Ben Ward, Mr David Webb, Steve Wharton, James Wheeler, Heather White, Chris Whittaker, Craig Whittingdale, Mr John Wiggin, Bill Willetts, rh Mr David Williams, Mr Mark Williams, Roger Williams, Stephen Williamson, Gavin Wilson, Mr Rob Wollaston, Dr Sarah Wright, Jeremy Wright, Simon Yeo, Mr Tim Young, rh Sir George Zahawi, Nadhim

Tellers for the Noes: Jenny Willott and Greg Hands

Question accordingly negatived. Bill to be further considered tomorrow.

726

2 JULY 2012

Business without Debate DELEGATED LEGISLATION Motion made, and Question put forthwith (Standing Order No. 118(6)), PUBLIC BODIES That the draft Advisory Committee on Hazardous Substances (Abolition) Order 2012, which was laid before this House on 27 February 2012, in the previous Session of Parliament, be approved.—(Mr. Dunne.)

Question agreed to. Motion made, and Question put forthwith (Standing Order No. 118(6)), EDUCATION That the draft Office of Qualifications and Examination Regulation (Determination of Turnover for Monetary Penalties) Order 2012, which was laid before this House on 15 May, be approved.— (Mr. Dunne.)

Question agreed to. DELEGATED LEGISLATION (COMMITTEES) Ordered, That the Motion in the name of Secretary Jeremy Hunt relating to Financial Assistance to Industry shall be treated as if it related to an instrument subject to the provisions of Standing Order No. 118 (Delegated Legislation Committees) in respect of which notice has been given that the instrument be approved.— (Mr. Newmark.)

727

2 JULY 2012

Beer Duty Escalator Motion made, and Question proposed, That this House do now adjourn.—(Mr Newmark.) 11.42 pm Gavin Williamson (South Staffordshire) (Con): It is a great privilege to have secured this debate this evening. It is an even greater pleasure to see so many hon. Members in their places as we start this Adjournment debate at this late hour. One could say that an Adjournment debate is akin to an after-hours lock-in, but probably without so much pleasure or enjoyment. We are all here because we care passionately about both the brewing industry and, of course, our pubs right across our constituencies and across the nation. We care about them because we know they are part of the fabric of our nation. We all have concerns about the beer duty escalator and the impact it is having on the many pubs and breweries across the land. We have to go back to 2008 to see the introduction by the last Labour Government introduced of the beer duty escalator, which saw beer duty rise by inflation plus 2% each year. This, sadly, has been carried on, and it is having a detrimental impact on our pubs and breweries. James Wharton (Stockton South) (Con): My hon. Friend makes a very good point, and I congratulate him on securing this important debate. He will be aware that it has been predicted by the British Beer and Pub Association that the escalator could cost as many as 5,000 jobs. When he talks about a detrimental impact, does he think it important for the House to recognise just how significant that detrimental impact could be on such an important industry? Gavin Williamson: My hon. Friend makes a valid point about the impact on jobs in the industry of the beer duty escalator, which I was coming on to. In my constituency of South Staffordshire, 1,286 people are employed in breweries and pubs—whether in the fantastic brewery of Enville, the brewery of Kinver, the Morton brewery in Essington, the Marston’s brewery in neighbouring Wolverhampton, or in the 86 pubs scattered across the constituency. Unfortunately, however, these pubs have declined in the last few years, and I am afraid that the beer duty escalator has had an impact in that respect. Alec Shelbrooke (Elmet and Rothwell) (Con): Does my hon. Friend agree that a sensible way of helping pubs might be to lower the duty on draught beer but raise it on canned beer? Gavin Williamson: My hon. Friend is not known as a visionary—I believe that his new wife often refers to him thus—for nothing. I hope that the Minister is noting his ideas eagerly, and will recommend them to the Treasury as a host of examples of radical new thinking that could improve and support our breweries and pubs. Greg Mulholland (Leeds North West) (LD): I congratulate my hon. Friend on securing this debate, and assure him that his cause has the full support of the all-party parliamentary Save the Pub group.

Beer Duty Escalator

728

Pubs pay even more tax per pint because of the other forms of tax to which they are subject. I fully support my hon. Friend’s proposal—indeed, I think that a separate duty should apply to real ale, which requires an increased cost of production and increased cellarmanship—but there is also a problem with European legislation. Rather than saying that we should not challenge that legislation, should not Ministers convey to Europe the message that it could do something important that would greatly help not only our brewing industry but our pubs? Gavin Williamson: It is always welcome when a Liberal Democrat speaks so vociferously against the European Union. I thank the hon. Gentleman, who has fought so hard for pubs not just in his constituency but throughout the country. Almost 1 million jobs in the United Kingdom are generated by the UK beer and pub industry, which affects all our constituencies, including that of the Economic Secretary to the Treasury, my hon. Friend the Member for Norwich North (Miss Smith). Some 550 people work in the industry there, and I am sure that, like the rest of us, my hon. Friend wants the number to increase. Mr Andy Slaughter (Hammersmith) (Lab): I am trying to extend the debate to the Opposition Benches. Although my local brewer, Fuller, Smith and Turner, is internationally famous, it is still a family firm, but last year it paid 37% of its turnover—not its profit—in tax, and beer duty will rise by 27% during the current Parliament. Should not the Government take notice of that? Gavin Williamson: The hon. Gentleman has made an important point about how difficult it is for many pub and brewing companies to invest more money in generating new jobs and products in a sector in which we are world leaders. We in the United Kingdom are clearly paying far more duty than the European average. Although we consume only 13% of the beer consumed in the European Union, we pay 40% of the tax bill. I do not often talk about the need for European harmonisation, but I should like us to harmonise with the Germans, who only pay a tenth as much beer duty on their pints. Perhaps we should explore that idea further. Mr Robin Walker (Worcester) (Con): My hon. Friend mentioned new products a moment ago. The Firefly, a pub in Worcester, recently embarked on the first new brewing venture in the city for 16 years. I am sure that the pub, and Worcestershire, would support my hon. Friend’s campaign. Gavin Williamson: My hon. Friend has made a valid point. Not only is everyone in South Staffordshire rooting for the ending of the beer duty escalator, but so are those in the great county town of Worcester. Obviously their pubs are not as fantastic as those in South Staffordshire, but we all have our crosses to bear in life. We recognise that the Government face a great challenge. It is not easy to do what they are doing, and Treasury Ministers carry a burden on their shoulders that I am sure none of us on the Back Benches would wish to carry. Andrew Griffiths (Burton) (Con): As chairman of the all-party group on beer, I congratulate my hon. Friend on securing this debate. I am sure he agrees with me that

729

Beer Duty Escalator

2 JULY 2012

the packed Benches at almost midnight show the strength of feeling in this House in support of Britain’s brewing industry. Does he share my shock that British brewers are paying half their income in tax to the Treasury, yet the future of the industry is at a critical point? Does he agree we can save jobs and pubs if we cut the duty on beer? Gavin Williamson: As always, my hon. Friend and fellow Staffordshire Member of Parliament makes an excellent point. We want to encourage investment by our brewers into this vital industry and into our pubs. Neil Carmichael (Stroud) (Con) rose— Gavin Williamson: Over the last eight years there has been a 50% increase in beer duty but only a 10% increase in revenues from that duty. That is a great concern. Neil Carmichael rose— Gavin Williamson: My hon. Friend is bobbing up and down, so I had best give way to him. Neil Carmichael: We are talking here about small and medium-sized businesses—businesses that employ some 1,600 people in my constituency. My four breweries are very successful small businesses, but they could do with some help in respect of this policy. Gavin Williamson: All the Members who have intervened have made the most wonderful points, and my hon. Friend certainly has not disappointed in that regard. I am a little disappointed, however, that he did not mention his four breweries for a potential future press release. Richard Fuller (Bedford) (Con): I, too, congratulate my hon. Friend on securing this important debate. As the Member for Bedford, the home of the largest familyowned brewery, Wells and Young’s, may I ask him whether he agrees that it is also a timely debate? The Treasury recently took action to reduce the fuel duty escalator, and it would be a welcome addition if we were also to eliminate the beer duty escalator and its impact on our economy. Gavin Williamson: I would never dream of supposing that I knew more than Treasury Ministers, but that would certainly be a good idea to bear in mind for future Budgets. We must look at the economics involved. As I mentioned, there has been a 50% increase in the rate of duty, but only a 10% increase in the amount of revenue. I have had the great privilege over the past few months of serving on the Finance Bill Committee, where I heard many emotive and brilliant arguments from my hon. Friend the Economic Secretary about the need to get the balance right between the rate of tax and the money it brings in. Heather Wheeler (South Derbyshire) (Con): I must declare an interest: for 25 or 26 years, I have been married to a brewery man—and thank goodness for Bass and for Young’s. Many pubs in South Derbyshire are still under threat or are going to close, even though the Shardlow brewery, the John Thompson brewery

Beer Duty Escalator

730

and in particular the Burton Bridge brewery, which has just opened, are fantastic. I should also mention the Brickmakers in Newton Solney. We are trying to do our best, but the yoke of taxation is too high. Does my hon. Friend agree? Gavin Williamson: I entirely agree. I think we have gone too far, and it is having a detrimental effect on the amount of tax revenue the Treasury can get in from this important potential source. The Exchequer already brings in £8 billion in tax revenue from the beer and pub industry, but my concern is that that amount will go into slow decline. Already, the Office for Budget Responsibility and Her Majesty’s Revenue and Customs have made it clear that the money coming in from the increase in beer duty is not going to increase. It has not done so in the past year and it is not expected to do so in the next year. We therefore need to look at different ideas. One of them is not to keep taxing. We have had many debates about the Laffer curve and its benefits, but the simple reality is that beer duty is getting to the point where it is too high and it is pricing people out of the market. Nigel Mills (Amber Valley) (Con): Does my hon. Friend agree that one of the problems of getting the duty rate too high is that it gives a boost to the illicit trade, which now makes up about 10% of the off-sale market? The higher the duty is pushed, the higher the illicit sales go and so no duty at all is received. Gavin Williamson: The worst thing we could possibly see is the growth of the illicit trade and the Chancellor of the Exchequer getting none of the money whatsoever. We want to make sure that people are paying their taxes and their duty, but we do not want to tax people out of the market. Richard Drax (South Dorset) (Con): May I add a slightly solemn note to what has been a light-hearted debate? I had a great friend, David Woodhouse, the chairman of Hall and Woodhouse in Blandford, who died aged 49 of a heart attack, running his company. He said to me on many occasions that he could not understand why Governments, and ours in particular, were proposing this tax every year, given that it is a tax on jobs at a time when we are trying to increase jobs. Surely that must be a point for the Government to take away from this debate. Gavin Williamson: My hon. Friend touches on an important point: this is not only about jobs, but about British jobs. Some 68% of the drinks that our pubs sell are beers, so this duty is having a detrimental impact on every one of our pubs. Furthermore, 86% of all that beer that is consumed is produced in this country, which compares with a figure of 0.2% for wine. Julian Sturdy (York Outer) (Con): I congratulate my hon. Friend on securing this very important debate. He is absolutely right in what he says about the jobs in the pub and brewing industry, but let us also not forget the malting industry, which has a great tradition, especially in Yorkshire. I must declare an interest, because there is also an impact on the farming industry. The job creation that is affected by the beer duty escalator goes right from the grain to the glass.

731

Beer Duty Escalator

2 JULY 2012

Gavin Williamson: I would never expect anything other than an intervention from a great colleague of mine, who also is a farmer, to enable us to understand the whole process of the brewing industry and to put it into perspective for us. Julie Hilling (Bolton West) (Lab): I congratulate the hon. Gentleman on securing this debate, and he is being extremely generous with his time. Does he agree that it is also ironic that we are increasing the tax on beer, which drives people to drink much more harmful substances—drinks with a much stronger alcoholic volume—so raising the duty all the time is not good for the nation’s health either? Gavin Williamson: The hon. Lady makes a very valid point. One of the consequences of having a Scotsman as Chancellor for quite a period of time is that the duty on Scotch whisky seemed to be frozen. Perhaps now that we have an English Chancellor what we need is to freeze the duty on English beer. There is so much that we need to be doing. We need to be reviving our pubs. We need to be seeing that vigour and sense of community returning to all our pubs across the country. Andrew Bingham (High Peak) (Con): I congratulate my hon. Friend on securing this debate; the number of Members here at this late hour shows its importance. Does he agree that pubs not only sell beer, but provide a great community centre in small and rural communities? So many charity collections and fundraising exercises begin in pubs, where people meet and talk. Gavin Williamson: My hon. Friend makes a valid point. In addition, pubs are an important part of the economy and employ young people. In my constituency, 50% of those employed in the beer and pub industry are under the age of 25. We all talk about the beer duty escalator. Just the other day, I was in a department store. I went up an escalator, and then I noticed that I went down one. So I say to the Minister that we could keep a beer duty escalator, but perhaps put it in reverse. Andrew Jones (Harrogate and Knaresborough) (Con): My hon. Friend is being very generous and possibly setting a world record in taking interventions. A suggestion that might meet the requirement from the Treasury Bench to raise revenue and which builds on the points made by colleagues about supporting the industry and supporting pubs is to remove the escalator just from cask ales. Those ales are available only in pubs. British pubs are of course part of our heritage and we are talking about a British product with a British supply chain, as my hon. Friend the Member for York Outer (Julian Sturdy) said. We have great pubs, particularly in the Yorkshire area. Gavin Williamson: Unfortunately, they are not as good as those in the county of Staffordshire—although I am sure the pubs in Yorkshire are not bad. I would love the Minister to stand at the Dispatch Box and announce to the whole Chamber that the beer duty escalator will be frozen or reversed. I know that she carries many burdens on her shoulders and may not be able to give us that promise, so I ask her to meet me

Beer Duty Escalator

732

and other colleagues who have such concerns in order to listen to the arguments put forward by the industry and by people who feel passionately not just about our pubs but about our beer and our great breweries—a part of our industrial heritage that is living and breathing today. I am quite sure that if the Minister can take the arguments to the Chancellor and to all those in the Treasury and convince them that we need either to freeze beer duty or to let it rise only in line with inflation rather than at inflation plus 2%, she will be able to provide an enormous boost not just to British breweries and British beer but to the great British pub. I am quite sure that, if my hon. Friend can achieve that, when she next enters the pub every punter will be raising their glass to the Boadicea of British beer. 12.1 am The Economic Secretary to the Treasury (Miss Chloe Smith): I must take the opportunity, after that last reference, to invite hon. Members to drink at the Iceni brewery in Norfolk, at which I am sure they would be extremely welcome. I congratulate my hon. Friend the Member for South Staffordshire (Gavin Williamson) on securing the debate. It has been interesting and I thank him and all hon. Members who have contributed tonight. It will not be a surprise, as I have the rather thankless task of being the final speaker tonight at this late hour, if I suggest that he can buy us all a drink when we have finished. I am sure he can do that. In all seriousness, I want to compliment my very fine brewing and drinking city of Norwich. I regularly go into pubs—indeed, I drink the odd beer—I run politics in the pub surgeries and my local newspaper also runs a very fine “Love your local” campaign, so I am very much in tune with the spirit of what we are discussing tonight. I regret to say that I must turn to the burdens about which my hon. Friend spoke and do my duty in providing some background on my hon. Friend’s proposal to end the beer duty escalator. As hon. Members will be aware, the inflation plus 2% annual increases were first announced in the 2008 Budget by the previous Government and were extended in the March 2010 Budget. Those preannounced increases applied to all alcohol types, not only beer, and the additional revenue from the increases was included in the public finance projections at that time. Let me put some numbers on that for your edification, Mr Deputy Speaker. The value of removing the escalator would be £35 million for 2013-14 and £70 million after that. Greg Mulholland: Does the Minister not accept that beer has been treated particularly unfairly when compared with spirits and cider? Ludicrously, the global cider producers who knock out mass-produced products, often not using British apples, pay half the duty even of the smallest micro-brewers on the lowest small breweries’ relief rate. That is simply not fair. Miss Smith: I hear the hon. Gentleman’s argument and pay tribute to him for his work with his all-party group. Let me answer his question with the main question posed at the end of the speech made by my hon. Friend

733

Beer Duty Escalator

2 JULY 2012

the Member for South Staffordshire: I would of course be happy to meet hon. Members who are present tonight to discuss these matters further. There are many points to go into—more, I regret to say, than I have time for. The key point that I must make first is that the duty increases that we are talking about—the increases through to 2014-15—form a vital part of the Government’s plan to tackle the debt left by the previous Government. It would be worse for everybody if we did not tackle that debt. When I say “everybody”, I mean beer drinkers, cider drinkers, spirit drinkers, wine drinkers, brewers, publicans and, of course, all those who never touch a drop. The high interest rates that would result if we abandoned our credible plan to tackle the deficit would not help anybody. Dan Rogerson (North Cornwall) (LD): The Minister will no doubt have seen in the business section of The Times today the piece on the Sharp’s brewery in Rock. Doom Bar is now a famous brand around the country, and is enjoyed, the article tells us, by the Prime Minister. The Minister has rightly set out the situation facing the country. However, the brewing industry is very keen to take on young people, train them up, and give them a career. That is what Sharp’s is doing. Does she agree that being more sympathetic on beer duty might allow companies to invest in taking on more employees? Miss Smith: Again, a fine point is made. I am the first to support the notion of encouraging young people into work and work experience, but we have to be realistic. The Treasury and the Government face a number of proposals from different industries that say, “Ours is the industry that holds the key,” and I am sympathetic to those arguments. There is, of course, much evidence to go into for all such proposals, but it is important to proceed as a responsible Government, and to try to take into account the revenue that is required to fund vital public services and that, as I say, helps everybody. Alec Shelbrooke: To expand on my intervention on my hon. Friend the Member for South Staffordshire (Gavin Williamson), perhaps we can look at a tax-neutral way of getting more people into pubs, which create so many jobs. As there is an onus on landlords to ensure that people drink sensibly on their premises, that, rather than minimum pricing for alcohol, may help to tackle alcohol abuse. Miss Smith: On that note, let me come on to some of the factors affecting the state of the industry. It is important to be clear that duty is not the only thing affecting the state of the pub industry. We have all, I am sure, been in good pubs and terrible pubs, and the price of the beer is not the only factor involved. On the price of a beer, I point out that the pre-announced alcohol duty increases in question added only 3p to a pint of average-strength beer, including VAT. The total duty on a pint of beer is now 47p. I think that hon. Members will agree that, especially as alcohol consumption does, after all, carry its own costs and concerns, that addition in the Budget this year is not an overwhelming or unreasonable amount. It is something that we can consider in the context of the public finances and the challenges relating to them that have to be met.

Beer Duty Escalator

734

As I say, alcohol duty is only one of a wide range of factors that determine the final price paid by the customer. Let us be clear about the position of the industry. The decline in the beer and pub industry that some talk of is influenced by a number of factors. Lifestyles are changing. People’s choices when they walk into pubs and other establishments are changing. People have more choice about whether they go to a pub or somewhere else. Removing the escalator, which is what has been asked for tonight, and the pre-announced duty increases would not solve those problems. There is very much a wider context. My right hon. Friend the Member for Putney (Justine Greening)—my predecessor as Economic Secretary to the Treasury with responsibility for alcohol duty—and I have met a wide range of representatives from industry. As I said, I am happy to continue doing so. I recognise the important contribution that pubs and breweries make to local communities and to the wider economy. Many groups that have been prayed in aid tonight, such as the Campaign for Real Ale and the British Beer and Pub Association, have welcomed the work that we have done to date, such as the review of alcohol taxation in November 2010. We continue to keep all taxes under review. Andrew Griffiths: Will my hon. Friend give way? Miss Smith: I am sorry. I must complete my remarks within a few minutes, but as I said, I am happy to continue the conversation, whether in the bar or elsewhere. CAMRA’s figures show that the net rate of pub closures has slowed dramatically over the past two years. I believe the BBPA’s figures support this. I support pubs as places where people can drink sensibly in a supervised environment and enjoy themselves responsibly. I want to reverse the trend towards pre-loading on cheap alcohol at home. I was out with Norfolk constabulary in my neighbouring constituency, Norwich South, on Saturday night, observing some of the problems in action in places that are not as friendly as the community pubs that have been spoken about tonight. In my view, minimum unit pricing will help tackle the issue of excessive alcohol consumption and heavily discounted alcohol sold in supermarkets and off-licences. I strongly believe that that will benefit pubs and the responsible on-trade once we can tackle the demand for cheap alcohol in supermarkets. It is of interest to hon. Members here tonight that we have introduced a 50% reduction in alcohol duty for low-strength beers. That may be a growing sector in the industry. In brief response to my hon. Friend the Member for Amber Valley (Nigel Mills), the Government are committed to tackling alcohol fraud and avoidance, and have been working in collaboration with the industry to address that. There are a number of measures that we wish to take to act on that. At the Budget, this Government knew that it would be unfair to place further burdens on the alcohol industry, on pubs and on responsible drinkers. This is why we did not go further than the pre-announced duty increases. But I return to my main point. There is an important question of the public finances. The revenue from these increases was included in the public finance projections at that time. It would now require the raising of other taxes to pay for removing them. That is the question

735

Beer Duty Escalator

2 JULY 2012

[Miss Chloe Smith] that I ask hon. Members to consider. I am sure that many pub conversations come up with the best answers to that, which hon. Members may like to go on to discuss. This year’s duty increase and those to 2014-15 form part of our vital plan to reduce Britain’s debt, which is

Beer Duty Escalator

736

required to ensure low interest rates and a stable platform for growth for everybody—drinkers, businesses and households. We will continue to keep all taxes under review and monitor the impact of alcohol duty— 12.12 am House adjourned without Question put (Standing Order No. 9(7)).

29WS

Written Ministerial Statements

2 JULY 2012

Written Ministerial Statements Monday 2 July 2012 BUSINESS, INNOVATION AND SKILLS Copyright Reform The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Norman Lamb): My noble Friend the Parliamentary Under-Secretary of State for Business, Innovation and Skills, Baroness Wilcox, has today made the following statement: Today the Government are announcing part of their response (“the Response”) to the recent Copyright Consultation (“the Consultation”). These are Government proposals to take powers to authorise orphan works and voluntary extended collective licensing schemes, and put in place statutory codes for collecting societies that do not adhere to voluntary ones. The Government have considered the responses to the consultation carefully, and intend to legislate as soon as possible. The Enterprise and Regulatory Reform Bill currently going through Parliament provides such an opportunity and the Government plan to lay amendments to introduce these measures in the Committee Stage of the Bill. The response document sets out the broad parameters that the Government intend to set for these measures, and further information about their intentions regarding the regulation of collecting societies. Subject to parliamentary approval once the necessary legislation is in place, there will be further consideration of the regulations for the authorisation of orphan works and extended collective licensing schemes, generally through consultation. Similarly, there will be further consultation on the regulations for statutory codes of conduct. The response will be published on the Business, Innovation and Skills, and Intellectual Property Office websites, at: http://www.ipo.gov.uk/response-2011-copyright.pdf and a copy will be placed in the House Libraries. Responses on other issues covered by the Copyright consultation—including the Government’s plans to modernise copyright through changes to the UK’s copyright exceptions and the proposed copyright notices scheme—will be set out in a subsequent document later this year. The Government have welcomed the views of the Business, Innovation and Skills Committee on this area of work, and is considering the recommendations, from its recent report “The Hargreaves Review of Intellectual Property: Where Next?”. In addition, the Government will be introducing an amendment which will take the form of a power to amend the Copyright Designs and Patents Act 1988 by regulations in order to implement EU directive 2011/77/EU on the term of protection for sound recordings. This power will allow the Government to implement the EU directive while maintaining the current level and scale of criminal penalties for infringement activity applicable under UK law.

TREASURY ECOFIN The Chancellor of the Exchequer (Mr George Osborne): The Economic and Financial Affairs Council was held in Luxembourg on 22 June 2012. Ministers discussed the following items:

Written Ministerial Statements

30WS

Contributions to the European Council Meeting on 28-29 June 2012—European Semester Following a ministerial discussion the Council approved the fiscal and economic elements of the draft countryspecific recommendations under this year’s European semester for the 27 member states. The Council also approved draft recommendations on the economic policies of the member states of the euro area as a whole. Ministers also discussed the process by which the countryspecific recommendations had been arrived at. The recommendations were taken forward for political endorsement at the European Council and are due to be formally adopted by the Economics and Financial Affairs Council in July. Implementation of the Stability and Growth Pact The Council adopted decisions closing excessive deficit procedures for Germany and Bulgaria, thus confirming that they have reduced their deficits below the EU’s 3% of GDP reference value. The Council also adopted a decision lifting the future suspension of commitments for Hungary from the EU’s cohesion fund. Convergence Report from the Commission and the European Central Bank (ECB) The Commission and the ECB provided an update on their assessment of the readiness for euro membership of the eight euro outs committed to joining the single currency (Bulgaria, Czech Republic, Latvia, Lithuania, Hungary, Poland, Romania and Sweden). This was followed by a brief discussion among Ministers. The assessment showed that none of these member states fulfils the convergence criteria at this stage. Follow up to the G20 Summit (Mexico, 18-19 June 2012) The Council was briefed by the presidency and the Commission on the outcome of the G20 summit in Los Cabos (Mexico) on 18 and 19 June. The summit focused on instability in the euro area, as well as on ways to strengthen international financial architecture and regulation; reduce food price volatility; promote “green” growth and greater investment in scientific and agricultural technology and research. The presidency also looked ahead to the G20 Finance Minister’s meeting on 4 and 5 November in Mexico City, noting the implementation of the 2010 IMF quota and governance reforms, which will be discussed by the IMF executive board. Financial Transactions Tax Following a presentation by the presidency, Ministers debated the future direction of this dossier. A number of member states expressed concerns and stated their opposition to an FTT and I intervened to reiterate UK opposition to the Commission’s proposals in this area, given the negative impacts on jobs, growth and on financial activity across the EU at a time when we should be doing all we could to attract business and drive growth. I also underlined that any new proposal put forward for consideration under enhanced co-operation must provide clarity on the scope of the tax and what the revenues would be used for. The presidency concluded that support for an FTT as proposed by the Commission was not unanimous, but that some member states wished to further consider enhanced co-operation on this dossier. The presidency noted that formal requirements for enhanced co-operation would have to be met, and that next steps will be handled by the incoming Cyprus presidency.

31WS

Written Ministerial Statements

2 JULY 2012

Energy Taxation Directive The Council discussed progress on this directive and the presidency concluded that while there was agreement amongst member states that minimum tax levels should be laid down in the directive, member states should retain maximum flexibility to determine the structure of their national energy taxes. Any Other Business The presidency provided the Council with an update on progress on four financial services directives: the capital requirements directive (CRD4); the credit ratings agencies directive (CRA3); the EU mortgages directive and the directive on the harmonisation of transparency requirements for listed companies. ECOFIN Breakfast Over breakfast Ministers were debriefed on the previous evening’s Eurogroup meeting. Ministers discussed the economic situation, as well as bank recapitalisation and developments in sovereign debt markets. They also discussed the possibility of a capital increase for the European Investment Bank. ECOFIN Lunch Over lunch Ministers discussed the multi-annual financial framework for the 2014 to 2020 period.

Equitable Life Payment Scheme The Financial Secretary to the Treasury (Mr Mark Hoban): The Treasury can confirm that the Equitable Life payment scheme has written to approximately 90% of all eligible individual policyholders to inform them of their status within the scheme, and that payments have been made to 288,823 policyholders. In addition, the scheme has today published a further progress report, which can be found at: http://equitablelifepaymentscheme. independent.gov.uk/ and I have arranged for a copy to be placed in the Libraries of both Houses. In the coalition agreement published in May 2010, the Government pledged to “implement the parliamentary and health ombudsman’s recommendation to make fair and transparent payments to Equitable Life policy holders, through an independent payment scheme, for their relative loss as a consequence of regulatory failure”.

To honour that pledge the Government announced in October 2010 as part of the spending review that £1.5 billion would be made available to the scheme for distribution to up to 1 million eligible policyholders, and passed the Equitable Life (Payments) Act to establish the scheme. The Government met their commitment to start making payments by June 2011 and high volumes of automated payments were being made by December 2011. In order to lessen the burden on policyholders, the scheme contacts policyholders directly with payment and there is no requirement to “make a claim” to receive a payment from the scheme. Therefore, the scheme committed to contact all the individual (i.e. non group) policyholders it could by June 2012 so that they knew their status within the scheme. This letter would either: make payment;

Written Ministerial Statements

32WS

inform of a nil payment; inform them that they would be paid by April 2014 and the amount of any payment due.

In the previous progress report, published in January 2012, the scheme reported that 95,000 policyholders had received payments totalling £77 million. The scheme can confirm today that 288,823 policyholders have received payments from the scheme totalling £277,727,668. This means that nearly two-thirds of all individual policyholders due a payment from the scheme have received it. Additionally, around 75% (27,671) of with-profits annuitants have now been contacted by the scheme about their first year payment, 25,215 of whom have received payment. As of 30 June the scheme can confirm that it has written to 495,823 (circa 90%) individual policyholders to either: make payment; inform of nil payment; request further address verification in advance of making payment; inform of eligibility within the scheme.

There is a group of individual (i.e. non group) policyholders for whom the data processing work to determine the payment status of their policies is ongoing. This means that while the scheme cannot confirm the amount of any payment due at this stage, the scheme can confirm their eligibility for the scheme. The scheme has written to these policyholders to confirm their eligibility, that the data processing work is ongoing, and that any payment due should be made no later than April 2013. These policyholders need take no further action as the scheme has all the data it requires to confirm their payment status within the scheme and will be writing to them again in due course. Following receipt of payment, the scheme has continued to receive low levels of response from policyholders—less than 0.25% of eligible policyholders have complained to the scheme. In addition, the scheme has established an independent process to assist those policyholders who are dissatisfied with any complaint response from the scheme. As stated in June 2011, there are additional complexities in retrieving the contact details of those policyholders who bought their policy through a group (i.e. company) scheme. The scheme can confirm that it has begun the process of contacting group scheme trustees to obtain policyholder’s address details. Payment to these policyholders will start in the coming months. The scheme can also confirm that hundreds of payments have already been made to the estates of deceased policyholders, and the process of identifying, tracing and contacting the estates of deceased policyholders continues. As this is an understandably complex area with some cases going back many years, this verification work will continue during 2012 and throughout the duration of the scheme. Payments to the estates of deceased policyholders are being made on completion of this tracing process. Over the coming months the scheme will continue to make payments to policyholders and to contact the trustees of group schemes so that their eligible members can be paid.

33WS

Written Ministerial Statements

2 JULY 2012

The end of the first year of the scheme marks a significant milestone in the life of the scheme, and bringing closure to the Equitable Life issue. Eligible policyholders who have not yet heard from the scheme should contact the scheme via its call centre on: 0300 0200 150. The scheme will then be able to advise of the next steps a policyholder should take to receive further details on their status within the scheme.

Written Ministerial Statements

34WS

2013 and will have the option to bring these elements into force if and when they are needed. The duties on young people, local authorities and learning providers will be brought into force as planned in 2013 (and 2015). Sixteen and 17-year-olds in work will be required to participate in education or training and local authorities will have a duty to support them to do so. A copy of this statement and the report of the recent consultation will be placed in the House Libraries.

EDUCATION Reforming Young People’s Education Education for Young People The Secretary of State for Education (Michael Gove): We are committed to raising the age of compulsory participation in education or training to 17 in 2013 and 18 in 2015. This will ensure that every young person has the opportunity to continue their studies and go on to skilled employment or higher education. The raising the participation age (RPA) legislation makes it clear that education and training does not necessarily mean full-time study in a school or college. Employment with training is, for many young people, an excellent option, either through an apprenticeship or through full-time work with part-time training alongside. We want to do all we can to support employers who want to hire young people. The legislation introduced by the previous Government included duties on employers to check evidence of young employees’ enrolment in education or training and, where necessary, to agree working hours to fit around those courses. It also introduced powers for local authorities to take enforcement action against young people who are not participating and their parents, which could ultimately have led to a fine. Ministers stated during the passage of the 2011 Education Bill (now Act) that the Government’s intention was to commence all of the provisions of the RPA legislation, except the enforcement against young people and parents, to the original timetable. However, our recent consultation suggested that the introduction of the employers’ duties, together with associated potential fines, could act as a powerful disincentive to firms hiring 16 and17-year-olds, particularly at a time when the labour market for young people is extremely difficult. This would be damaging both for the economy and for the prospects of young people. We have decided that we must not at this point put in place barriers that may deter businesses from employing young people. We have therefore decided that we will not commence the two duties on employers within the RPA legislation (in chapter 3 of the Education and Skills Act 2008) in 2013. As a result, we will not require employers to check that a young person is enrolled on a course before employing them, nor arrange work to fit round training as would previously have been the case. Nor will we subject employers to fines for failure to discharge one or more of these duties. The duties on employers, together with the enforcement process against young people and parents, will remain in statute. We will review implementation regularly after

The Secretary of State for Education (Michael Gove): We need to reform the education system for young people aged over 16, particularly for students who want to pursue vocational courses. Around 1.6 million 16 to 19-year-olds are in education each year, but as Professor Alison Wolf stated in her review of vocational education, as many as 350,000 are on courses which do not benefit them. This year’s annual skills survey from the CBI found that more than two-fifths of employers were not satisfied with the basic literacy of school and college leavers, and more than a third were unhappy with levels of numeracy. Reform is vital if we are to ensure that all young people are given the best chance of getting good jobs, succeeding in life and continuing their education. To ensure a better experience for all young people a number of changes need to take place. One of the principal barriers to improving vocational education has been the system for funding education for young people aged over 16. At present schools and colleges are funded per qualification and so the more qualifications students take and pass, the more money schools and colleges receive. This means that the most rational course of action for schools and colleges is to enter students for easier qualifications—whether vocational or academic. Furthermore, the funding system is not geared towards activity that does not lead to qualifications, such as work experience, even though evidence shows its high value in securing future employment. We are therefore introducing reforms to programmes of study and funding so that schools and colleges are freed to improve vocational education. Rather than funding per qualification, we will fund institutions “per student” allowing sufficient income for each student to undertake a full programme of study, whether vocational or academic. As a result of these changes, every 16 to 19-year-old will have the opportunity to undertake high quality study which will help students move on to skilled work or further or higher education. Young people will be able to take up valuable work experience opportunities. Students without a good pass at 16 in English and maths—the subjects most valued by employers—will have to continue to study those subjects to age 18. We will publish data for each institution showing whether students progressed into work and further or higher education. This will enable students and their parents to make informed choices about programmes of study and institutions. It will also encourage schools and colleges to offer the courses and qualifications employers and higher education institutions value.

35WS

Written Ministerial Statements

2 JULY 2012

Young parents in particular can face barriers to participating in post-16 education and so I am today also publishing the results of the consultation on the Care to Learn childcare support scheme. This confirms that we will continue the scheme in its current form and the support it offers to this group of young people. We are committed to raising the age of compulsory participation in education or training to 17 in 2013 and 18 in 2015. Young people will either study full or part-time at a school or college, or be in work but released for training opportunities. The Government want to do all they can to support employers who want to hire young people. We are today making a separate statement that explains why we have decided not to commence the duties placed on employers by the raising the participation age legislation in 2013. The Government have decided that we must not at this point put in place barriers that may deter employers from employing young people. I realise that these changes may cause concern for institutions which offer a primarily academic programme of study. I very much value the commitment of schools, colleges and students to achieving academic excellence and entry to top universities. To protect institutions while discussions about academic qualifications take place, I am guaranteeing that no institution will see its funding per student fall as a result of these changes for at least three years. I am establishing a ministerial working group to assist us in ensuring that these reforms work in the best interests of all young people. I will be inviting representatives from further education colleges, sixth form colleges, schools (including grammar schools) and other providers of post-16 education to consider the best way to implement the reforms to the programmes of study and associated funding changes. Taken together, the reforms I am announcing today will set us on a clear path to giving young people greater choice and higher quality provision. It will mean that, whatever their ambitions or aspirations, they will reach adulthood with the rigorous qualifications, experience and skills that higher education and employers require. Copies of the documents we are publishing today will be placed in the House Libraries.

JUSTICE Victim and Witness Strategy The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke): The Government will, today, publish their response to the consultation “Getting it right for Victims and Witnesses”which began on 30 January and ended on 22 April 2012. When I published the consultation document I observed that victims too often feel themselves to be an afterthought for the criminal justice system. Despite improvements over the last two decades, the system has continued to fall short—whether in relation to helping victims recover in the aftermath of a crime, supporting them through the stresses of investigation and trial, or providing the right services, funded as far as possible by offenders rather than the taxpayer.

Written Ministerial Statements

36WS

That is why I set out a package of proposals to remedy these weaknesses, and deliver a more intelligent and coherent service for victims. My plans included increasing spending on victims’ services, with extra money coming from offenders themselves; reforming the criminal injuries compensation scheme so that it is focused on seriously injured victims of serious crime, and strengthening victims, rights so that victims feel less like accessories to the system, kept in the dark about their case, or expected to sit next to families of perpetrators in court. The consultation elicited over 350 written responses, which we have carefully considered. They have helped us refine our proposals. We are taking forward a package of reforms that will, I believe, meet the whole range of ambitions I set out in the consultation document. The response I am publishing today includes summaries of the comments received on our proposals and it sets out the policies we will now take forward. The reforms are wide ranging. First, I intend to proceed with plans to make improvements to the support available for victims, raising up to an additional £50 million from the perpetrators of crime through the victim surcharge and other financial impositions. The way in which support for victims is purchased will also be subject to reform. We will move to a mixed model of national and local commissioning. The budget for the bulk of services will be devolved at local level to police and crime commissioners who will decide which services are needed in their communities. For some specialist support services, including rape support centres and support to those bereaved by homicide, my Department will continue to commission services nationally. Police and crime commissioner (PCC) elections will be taking place this November. The decision on when funding for victims services will transfer to PCCs will be made in due course but we would not envisage this happening any later than April 2015. Secondly, our system of criminal injuries compensation will be reformed so it is properly focused on victims of the most serious crimes. The revised scheme will, for the first time, be placed on a sustainable footing. There will be an end to payments for minor injuries, and to those with serious criminal convictions. There will be a revised victims’ code, setting out more clearly what victims can expect from the criminal justice system and ensuring that victims are treated always with dignity and respect. We will consult on a new draft code next year. These reforms will also, among other things, aim to increase the use of restorative justice and of the victim personal statement. Both can help victims to cope and recover, both have a valuable role to play in the criminal justice process. We will also put in place the first statutory compensation scheme for British victims of terrorist atrocities abroad. It will see Britons who are targeted in future terrorist attacks overseas compensated in the same way as domestic victims of terrorism. In the light of the major reforms that the Government are announcing today to improve services for victims and introduce greater local accountability, the Government will consider how best to ensure that victims’ interests are well represented and review the role of the victims’ commissioner while the new framework for victims is established.

37WS

Written Ministerial Statements

2 JULY 2012

I will lay the following secondary legislation before Parliament today: The draft Criminal Injuries Compensation Scheme 2012. This replaces the 2008 scheme. It provides compensation to victims of violent crime in Great Britain, including bereaved relatives. The draft Victims of Overseas Terrorism Compensation Scheme 2012. This is a new scheme to compensate British, EU and EEA nationals resident in the UK who may be injured or have a relative killed in a future act of overseas terrorism designated as such by the Foreign Secretary for the purposes of the scheme. The Criminal Justice Act 2003 (Surcharge) Order 2012. This will increase the victim surcharge payable by an adult on a fine and extend the surcharge to conditional discharges, community sentences and custodial sentences including suspended sentences. Similar provision will be made in respect of juveniles. Copies of the draft schemes and their associated documents will be deposited in the Libraries of both Houses. Copies are available in the vote office and the printed paper office. The response to the consultation can be found on the Ministry of Justice website at: www.justice.gov.uk.

WORK AND PENSIONS

Child Support Maintenance Calculation Regulations 2012

The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller): Later today I will be publishing the Government’s response to the consultation on the regulations governing the calculation methodology for the new statutory child maintenance scheme. The consultation was held between 1 December 2011 and 23 February 2012. The Government want to encourage and support parents to make their own family-based arrangements, but are committed to also providing a statutory service for those separated parents for whom this is not possible. As part of the Government’s child maintenance reform programme, the existing two failing Child Support Agency statutory schemes will be replaced with a new, single scheme from October 2012 using a pathfinder approach. The aim of the new scheme is to produce a faster, more accurate and transparent process for assessing child maintenance payments. This will be achieved with a new administrative framework which will include a single set of calculation rules, a single computer system and a link to information from HM Revenue and Customs (HMRC) tax systems. We intend to lay the Child Support Maintenance Calculation Regulations 2012 later today, they complement existing primary legislation by establishing the amended statutory framework the new scheme will operate within. They cover the calculation of maintenance, including how income is determined and the circumstances in which calculations may be varied.

Written Ministerial Statements

38WS

There were 36 responses to the consultation, all of which have been carefully considered. I maintain that the proposals outlined in the consultation provide a stable footing on which the new scheme can operate. The Government consulted on increasing the flat rate paid by non-resident parents on certain prescribed benefits, or whose income is £100 or less, further than the £7 proposed by the previous Government. I am announcing today that we will increase the flat rate to £10 when we open the new scheme to all new applicants, in order better to reflect the costs of bringing up a child and reduce the gap between child maintenance paid by employed and unemployed non-resident parents. The Government also consulted on reducing the percentage reduction from the non-resident parent’s income for those children who live in their household. This is to get closer to equalising the treatment in the calculation of those children living with and those living apart from the non-resident parent. I can confirm today that we will do that by changing these reductions to 11% for one child, 14% for two children and 16% for three or more.1 I believe that these changes will help provide a fairer system for all of those parents who use the statutory child maintenance service in the future. I will place copies of the consultation response and impact assessments in the House Library later today. The consultation response, impact assessments, regulations and explanatory memorandum will also be available on the Child Maintenance and Enforcement Commission (CMEC) and Department for Work and Pensions websites later today. See: http://www.childmaintenance.org/en/publications/ consultations.html. 1 A non-resident parent usually pays less maintenance if they are supporting a child living as a member of their household. The statutory calculation does this by reducing the amount of income used to set maintenance by one of three specified percentages.

Workplace Pension Reform (Qualifying Schemes) The Minister of State, Department for Work and Pensions (Steve Webb): Later today the Government will publish the following documents: “Automatic enrolment: Guidance for employers on certifying defined benefit and hybrid pension schemes”; “Automatic enrolment: Guidance for actuaries on certifying defined benefit and hybrid pension schemes”; The Hybrid Schemes Quality Requirements Rules 2012; and The Government response to the consultation on “Automatic enrolment: career average schemes as qualifying schemes”.

We will also be publishing an updated version of: “Automatic enrolment: Guidance on certifying money purchase pension schemes”.

The guidance and rules were the subject of consultation in 2011 and we are grateful to all of those individuals and organisations who provided responses on these as well as those who responded to the career average scheme consultation. The guidance will help employers who are already providing good workplace pension schemes to continue to do so under the reforms. Our response to the consultation on career average schemes confirms that we intend to lay an amended draft regulation before Parliament. The changes that this introduces will give career average schemes greater

39WS

Written Ministerial Statements

2 JULY 2012

flexibility over the way in which they can provide for the revaluation of benefits that is required for them to be used as qualifying schemes. I will place a copy of these documents in the House Library. They will also be available later today on the Department’s website at:

Written Ministerial Statements

40WS

www.dwp.gov.uk/policy/pensions-reform/workplacepension-reforms/guidance/ and www.dwp.gov.uk/ consultations/2012/auto-enrol-career-ave-qualsch.shtml. The hybrid schemes rules were signed on 29 June 2012 and took effect on 1 July 2012.

7P

Petitions

2 JULY 2012

Petition

Petitions

8P

And the Petitioners remain, etc.—[Presented, 10 May 2012; Official Report, Vol. 545, c. 5P.] [P001026]

Monday 2 July 2012

OBSERVATIONS

TRANSPORT Means Testing of Free Bus Passes for Pensioners The Petition of Judith Brown and others, Declares that the Petitioners believe that free bus passes for pensioners and disabled people enable people to take part in their community by getting out of the house, shopping, seeing friends and family, and taking part in voluntary activities in the “Big Society”, and that losing this benefit would mean more isolation, more depression and more use of NHS services and would contradict the Government’s aim of encouraging pensioners and disabled people to lead more active and stimulating lives. The Petitioners therefore request that the House of Commons urges the Government to ensure that free bus passes remain non means-tested.

Observations from the Secretary of State for Transport: There are no plans to introduce means testing to assess eligibility for concessionary bus travel in England. The right to free bus travel for both older and disabled people is enshrined in Primary Legislation and, in the 2010 Spending Review, the Chancellor of the Exchequer confirmed the Government’s commitment to protect such key benefits for older people. Local buses are the most commonly used mode of public transport, particularly for older people and the purpose of providing free local bus travel England-wide is to ensure that no older or disabled person in England need be prevented from bus travel by cost alone. The Government are focusing their efforts on finding efficiencies in delivering the bus travel concession, rather than by cutting back on the entitlement offered to older and disabled people. A number of reforms have been introduced which should assist local authorities to find efficiencies in delivering the concession. These include the raising of the age of eligibility, revised reimbursement guidance to assist authorities in agreeing more accurate levels of reimbursement with their bus operators and changes to administrative responsibilities, all of which should lead to economies of scale.

397W

Written Answers

Written Answers

2 JULY 2012

Written Answers to

398W

Miss Chloe Smith: HM Treasury has published details of spend on Government procurement cards over £500 on the following dates:

Questions

Date set

Date published

March 2012 February 2012 January 2012 December 2011 November 2011 October 2011 September 2011

Monday 2 July 2012

TREASURY Corporation Tax: Northern Ireland Ms Ritchie: To ask the Chancellor of the Exchequer what recent progress the ministerial sub-group on devolving the rate of corporation tax to Northern Ireland has [114552] made; and if he will make a statement. Mr Gauke: Ministers from the UK Government and the Northern Ireland Executive held the third meeting of the Ministerial Working Group on Rebalancing the Northern Ireland Economy in Belfast on 25 June. While good progress has been made on some aspects of the work, including the potential shape of a devolved corporation tax regime, there remain some crucial areas where significant differences of opinion still exist, including on the potential costs to the Northern Ireland block grant. Officials will continue to work over the summer to understand these differences and the Ministerial Working Group have agreed to meet again in September.

19 June 2012 29 May 2012 11 May 2012 15 March 2012 9 February 2012 16 January 2012 2 December 2011

April to August 2011 data were published on 19 November 2011. This was the first publication of the Department’s spending on Government Procurement Card over £500, in line with the Government’s transparency commitment. Data relating to spend from 2008 to 2011 were published on 5 May 2011, in response to a Freedom of Information request. Minimum Wage Ian Murray: To ask the Chancellor of the Exchequer how many cases managed through the national minimum wage enforcement regime had an element related to [114640] holiday pay in each year since 2007. Mr Gauke: HMRC does not record that information.

Excise Duties: Fuels Miss McIntosh: To ask the Chancellor of the Exchequer what recent representations he has received on a rural fuel duty discount for North Yorkshire; and [114365] if he will make a statement. Miss Chloe Smith: The Chancellor of the Exchequer routinely receives a range of representations from stakeholders, Members of Parliament, and the general public on current and future rates of excise duty as well as other issues such as fuel prices. The UK’s derogation from the EU energy tax directive, unanimously agreed to by other EU member states, is for a rural fuel rebate pilot scheme for remote islands only. Pump prices in these areas are particularly high when compared with the mainland. Beyond this pilot scheme nothing has been ruled in or out. Government Procurement Card Rachel Reeves: To ask the Chancellor of the Exchequer on which dates his Department has published Government procurement card spending over £500 since May 2010. [113366]

Tax Havens George Galloway: To ask the Chancellor of the Exchequer if he will seek international agreement on [114115] the closure of offshore tax havens. Mr Gauke: The G20 is committed to tackling tax havens and has initiated a programme of peer reviews conducted by the Global Forum on Transparency and Exchange of Information for Tax Purposes to ensure that all jurisdictions comply with international standards. Taxation: Environment Protection Dan Byles: To ask the Chancellor of the Exchequer what estimate he has made of the total revenue accruing to the Exchequer from the carbon floor price in each of [113976] the first five years of its operation. Miss Chloe Smith: The carbon price floor policy begins on 1 April 2013. Budget 2012 updated forecasts of Exchequer revenues from the carbon price floor (CPF). The following table summarises this information: £ million 2013-14

2014-15

2015-16

2016-17

Budget 2012forecast based on policy announced at Budget 2011 (table 2.2)

615

1,085

1,330

1,585

Additional measures announced at Budget 2012 (table 2.1)

-45

-90

-115

-145

Revised forecast of CPF revenues

570

995

1,215

1,440

399W

Written Answers

Written Answers

2 JULY 2012

The additional measures announced at Budget 2012 included the introduction of an exemption from the carbon price floor for fossil fuels used in the production of heat in a good quality combined heat and power station. Revenue forecasts are only available for the forecast horizon, up to 2016-17, and therefore only cover the first four years of the carbon price floor’s operation. VAT Mr Meacher: To ask the Chancellor of the Exchequer if he will withdraw his proposal to end VAT relief from alterations to listed buildings and retain the zero rate for approved alterations to listed buildings [114801] irrespective of building type or ownership. Mr Gauke: The Government remains committed to removing the anomaly whereby approved alterations to certain listed buildings are zero-rated for VAT purposes but alterations to other types of building and the repair and maintenance of all buildings are standard-rated, and will make the necessary changes by a Report Stage amendment to Finance Bill 2012. On 28 June HM Revenue and Customs published on its website a Summary of Responses to its consultation ″VAT; Addressing VAT borderline anomalies″. Having specifically invited comments on the transitional arrangements for the listed buildings measure as part of the consultation, this document sets out the Government’s plans for the arrangements to provide relief to more projects already underway at Budget by specifying an earlier trigger point and an extended transitional period. Details can be found at paragraphs 2.6.14 and 2.6.15 of the document Summary of Responses: VAT—Addressing borderline anomalies

Working Tax Credit Tom Greatrex: To ask the Chancellor of the Exchequer (1) what the total cost was of working tax credit paid to households whilst the employed householder was taking industrial action in (a) 2007, (b) 2008, (c) 2009, (d) [114333] 2010, (e) 2011 and (f) 2012 to date; (2) how many households in (a) the UK, (b) Scotland, (c) England, (d) Wales and (e) Northern Ireland were in receipt of working tax credit when taking industrial action in (i) 2007, (ii) 2008, (iii) 2009, (iv) 2010, (v) 2011 [114334] and (vi) to date. Mr Gauke: HMRC does not hold information on participation in industrial action by working tax credit claimants.

HOME DEPARTMENT Air Displays: Farnborough Caroline Lucas: To ask the Secretary of State for the Home Department pursuant to the answer of 26 June 2012, Official Report, column 202W, on air displays: Farnborough, if she will refuse entry visas to anyone working for or representing Rosoboronexport intending to exhibit at the July 2012 Farnborough Air Show; and [114811] if she will make a statement.

400W

Damian Green: The UK Border Agency does not routinely comment on individual cases. All applications for entry clearance to the UK are assessed on their individual merits and in accordance with the Immigration Rules. Asylum Cathy Jamieson: To ask the Secretary of State for the Home Department how many legacy asylum cases for each country of origin remain unresolved; and when [113672] she expects these cases to be resolved. Damian Green: The UK Border Agency provides regular updates to the Home Affairs Committee on the cases in its Case Assurance and Audit Committee. The latest update was sent to the Committee in May 2012. The additional information you have requested about legacy asylum cases for each country of origin is not readily available or quality assured. However, the top 10 nationalities have been sourced from local management information; this is not a national statistic: 1. China 2. India 3. Pakistan 4. Afghanistan 5. Sri Lanka 6. Iraq 7. Nigeria 8. Turkey 9. Zimbabwe 10. Iran.

The Casework and Assurance Audit Unit will resolve these legacy cases as barriers are lifted. British Nationals Abroad: EU Countries Lorely Burt: To ask the Secretary of State for the Home Department how many UK nationals (a) lived and (b) worked for part or all of the year in each other EU member state in each of the last 10 years; and if she [114092] will make a statement. Mr Hurd: I have been asked to reply on behalf of the Cabinet Office. The information requested falls within the responsibility of the UK Statistics Authority. I have asked the authority to reply. Letter from Stephen Penneck, dated June 2012: As Director General for the Office for National Statistics (ONS), I have been asked to respond to your question to ask the Secretary of State for the Home Department, how many UK nationals (a) lived and (b) worked for part or all of the year in each EU member state in each of the last 10 years; and if she will make a statement (114092). The Office for National Statistics (ONS) does not collect information regarding UK nationals resident or working outside the UK. However, Eurostat publishes figures on population by citizenship for EU countries, these are available at: http://epp.eurostat.ec.europa.eu/portal/page/portal/ population/data/database

401W

Written Answers

Written Answers

2 JULY 2012

402W

Children: Protection

Crime: North Yorkshire

Mr Buckland: To ask the Secretary of State for the Home Department what guidance she has issued to police on cases where a parent is cautioned in respect of offences under section 1 of the Children and Young Person’s Act 1933; and what assessment she has made of the effectiveness of such guidance in preventing [111134] child neglect.

Hugh Bayley: To ask the Secretary of State for the Home Department how many crimes were (a) reported to the police and (b) identified by the British crime survey in (i) York and (ii) north Yorkshire and York in (A) 1992 and (B) each year since 1992; and how many and what proportion of these crimes in each year resulted in a conviction. [111426]

Mr Blunt: I have been asked to reply on behalf of the Ministry of Justice. The Ministry of Justice has responsibility for the policy on simple cautions. There is no specific guidance for cautioning offenders who have committed an offence under section 1 of the Children and Young Person’s Act 1933. General guidance on simple cautions for adult offenders is contained in the Home Office Circular 016/2008. It does not stipulate the use of simple cautions in particular cases because it depends on the individual circumstances in each case. Instead it provides guidance to the police and Crown Prosecution Service on the use of simple cautions and explains the practical process of administering a caution. We are developing a clearer national framework to deal with offending out of court which includes consolidating and simplifying the current raft of guidance including for simple cautions.

James Brokenshire: The Home Office is responsible for the police recorded crime statistics. The available information relates to offences recorded by the police and is given in the following table. Data for north Yorkshire are available for the period requested but figures for total crime in York are only available from 2000-01. The sample size of the Crime Survey for England and Wales (CSEW), formerly known as the British crime survey, is not large enough to provide a robust estimate of the number of incidents of crime covered by the survey at local authority or police force area level. However, CSEW estimates of crime at a police force area level are published as a percentage of respondents who have been a victim of crime once or more in the last year, and these data are available going back to 2004-05. Estimates have been provided on this basis by the Office for National Statistics for north Yorkshire police force area for all years since 2004-05. Year on year changes in estimates of CSEW crime at police force area level should be treated with caution as, being based on a relatively small sample, they are liable to fluctuation. It should be noted that the only statistically significant change in CSEW estimates is between 2008-09 and 2009-10 for household crime. From the data held centrally in the Home Office, it is not possible to follow a recorded offence through to any conclusion at court and data is therefore not available on the percentage of these crimes which result in a conviction for these years.

Crime: EU Nationals Lorely Burt: To ask the Secretary of State for the Home Department how many non-British EU citizens were (a) arrested, (b) charged and (c) convicted for an offence committed in the UK in each of the last 10 years, by member state and offence; and if she will [114197] make a statement. Lynne Featherstone: The nationality of those arrested, those charged and those convicted is not collected centrally.

Crime in north Yorkshire and York North Yorkshire

York

Statistically significant change from previous year2

Percentage victim of household crime at least once based on the Crime Survey for England and Wales1

Statistically significant change from previous year2

Offences recorded by the police

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

62,153

n/a

n/a

n/a

n/a

n/a

1995

63,539

n/a

n/a

n/a

n/a

n/a

1996

56,919

n/a

n/a

n/a

n/a

n/a

1997

50,252

n/a

n/a

n/a

n/a

n/a

1998-993

55,309

n/a

n/a

n/a

n/a

n/a

1999-00

53,554

n/a

n/a

n/a

n/a

n/a

2000-01

51,532

n/a

n/a

n/a

n/a

19,291

Offences recorded by the police

Percentage victim of personal crime at least once based on the Crime Survey for England and Wales1

1992

54,816

1993

57,967

1994

2001-02

59,125

n/a

n/a

n/a

n/a

22,890

2002-034

67,239

n/a







25,630

2003-04

71,473

n/a







29,347

2004-05

61,615

6



17



23,080

2005-06

58,850

5



15



22,784

2006-07

54,526

4



11



20,935

2007-08

49,944

4



11



18,901

2008-09

48,563

4



8



17,886

2009-10

42,197

5



12

**+

14,480

403W

Written Answers

Written Answers

2 JULY 2012

404W

Crime in north Yorkshire and York North Yorkshire

Offences recorded by the police

Percentage victim of personal crime at least once based on the Crime Survey for England and Wales1

42,464

4

2010-11

York

Statistically significant change from previous year2

Percentage victim of household crime at least once based on the Crime Survey for England and Wales1

Statistically significant change from previous year2

Offences recorded by the police



14



15,199

n/a = Not available. 1 Known as the British crime survey prior to 1 April 2012. 2 **+/**— denotes statistically significant change from previous year. 3 The police recorded crime coverage was extended and the counting rules changed in 1998-99. Data before and after that date are not directly comparable. 4 The National Crime Recording Standard was introduced nationally in 2002-03 and police recorded crime figures before and after that date are not directly comparable.

Criminal Proceedings: EU Action

Databases: Telecommunications

Mr Raab: To ask the Secretary of State for the Home Department on how many occasions in each year since 2010 a competent authority in the UK has (a) contacted and (b) been contacted by the competent authority in another EU member state regarding the belief that a parallel set of criminal proceedings is being conducted under Article 5 of EU Council Framework Decision 2009/948/JHA; and on how many occasions in each year it was necessary to refer the matter to Eurojust [114857] under Article 12(2) of the Decision.

Mr Raab: To ask the Secretary of State for the Home Department whether data stored under the proposed Communications Capabilities Development Programme will be subject to the European Investigation Order.

Mr Kenneth Clarke: I have been asked to reply on behalf of the Ministry of Justice. None. The Framework Decision has not yet been implemented. Criminal Records: EU Action Lorely Burt: To ask the Secretary of State for the Home Department how many times the European Criminal Records Information System has been used by UK authorities to exchange criminal conviction information since it was introduced; and if she will make a statement. [114112]

Lynne Featherstone: The European Criminal Records Information System (ECRIS) started operation on 27 April 2012. The UK is currently operational with eight other member states. The number of transactions between the UK and these member states are set out in the following table. For notifications in and notifications out, it is not possible to separate the number of new convictions from the number of updates to old convictions. ECRIS Notifications out

Notifications in

81

4

13

0

22

0

102

114

132

963

Germany

107

228

62

171

Lithuania

292

4

763

1

Poland

587

54

1128

25

Romania

349

6

844

1

Spain

111

8

52

516

Total

1,581

495

3,007

1,690

Country

Requests out

Requests in

Austria

19

Estonia

14

France

Notes: 1. ‘Notifications in’ concern Britons who have been convicted abroad, or updates to previous convictions. 2. ‘Notifications out’ concern EU nationals who have been convicted in the UK, or updates to previous convictions. 3. ‘Requests in’ concern an EU country which is seeking the previous convictions of a UK national who is being prosecuted their jurisdiction. 4. ‘Requests out’ concern the UK seeking the previous convictions of an EU national who is being prosecuted in the UK.

[113904]

James Brokenshire [holding answer 26 June 2012]: Communications data can be provided under existing arrangements for mutual legal assistance within the EU. The European Investigation Order currently under negotiation does not envisage any change to that situation. Entry Clearances: Overseas Students Nicholas Soames: To ask the Secretary of State for the Home Department how many non-EU students were reported to her Department by educational institutions due to (a) poor attendance and (b) other [114868] concerns about their genuineness. Damian Green: Tier 4 sponsors use the online Sponsor Management System to report on student activity. Sponsors select one of a number of categories when reporting. The number of reports by sponsors using the category which most closely equates to poor attendance, ″Student has missed 10 expected contacts without permission″, in each year from March 2010 to March 2012 are as follows: Number 2010

3,100

2011

17,100

2012

3,700

Total

23,900

These figures are taken from Management Information and sponsors may have reported any individual student on multiple occasions. The Sponsor Management System does not include a specific reporting category for concerns about genuineness. Equality and Human Rights Commission Sandra Osborne: To ask the Secretary of State for the Home Department how many of the respondents to her consultation entitled Building a Fairer Britain: Reform of the Equality and Human Rights Commission published in March 2011 agreed with the proposal to remove (a) Section 3, (b) Sections 10 and 19 and (c) Section 27 of [114274] the Equality Act 2006.

405W

Written Answers

2 JULY 2012

Lynne Featherstone: A summary of responses to the Government’s consultation on reform of the Equality and Human Rights Commission, including a breakdown of the number of respondents agreeing with each proposal, was published on 15 May 2012. It is available in the House Libraries and on the Home Office website, at: www.homeoffice.gov.uk (a) 53 respondents agreed with the proposal to remove section 3 of the Equality Act 2006. (b) 45 respondents agreed with the proposal to remove section 10 and section 19 of the Equality Act 2006. (c) 61 respondents agreed with the proposal to remove section 27 of the Equality Act 2006.

Sandra Osborne: To ask the Secretary of State for the Home Department how many of the respondents to her consultation entitled Building a Fairer Britain: Reform of the Equality and Human Rights Commission published in March 2011 agreed with the proposal to amend Section 12 of the Equality Act 2006 which would change the requirement for it to report on Section 3 to Sections 8 and 9 of the Equality Act 2006; and what assessment she has made of the compatibility with the Paris Principles. [114275]

Lynne Featherstone: A summary of responses to the Government’s consultation on reform of the Equality and Human Rights Commission, including a breakdown of the number of respondents agreeing with each proposal, was published on 15 May 2012. It is available in the House Libraries and on the Home Office website at: www.homeoffice.gov.uk/

50 respondents to the consultation expressed support for the proposal to amend section 12 of the Equality Act 2006. None of the reforms impact on the compatibility of the legislation governing the establishment of the Equality and Human Rights Commission, the Equality Act 2006, or with the Paris Principles. Sandra Osborne: To ask the Secretary of State for the Home Department how many of the respondents to her consultation entitled Building a Fairer Britain: Reform of the Equality and Human Rights Commission published in March 2011 agreed with the proposal to amend section 12 of the Equality Act 2006 to change the requirementfortheEqualityandHumanRightsCommission to report every three years to every five years. [114276] Lynne Featherstone: A summary of responses to the Government’s consultation on reform of the Equality and Human Rights Commission, including a breakdown of the number of respondents agreeing with each proposal, was published on 15 May 2012. It is available in the House Libraries and on the Home Office website, at www.homeoffice.gov.uk

50 respondents to the consultation expressed support for the proposal to amend section 12 of the Equality Act 2006. Extradition: EU Action Mr Raab: To ask the Secretary of State for the Home Department what assessment her Department has made of the effect of the decision to extend the scope of EU

Written Answers

406W

Council Decision 2009/933/CFSP to cover the Netherlands Antilles and Aruba. [114858] Damian Green: The Home Office has made no assessment of this Council Decision, which merely extends the Agreement on Extradition between the European Union and the United States of America to the Netherland Antilles and Aruba. This Council Decision has no effect on extradition between the UK and the US. Forensic Science: EU Action Mr Raab: To ask the Secretary of State for the Home Department what steps the Government has taken to ensure compliance with EU Council Framework Decision 2009/905/JHA in advance of the implementation deadline of 30 November 2012; and what the associated costs of [114330] such steps have been. James Brokenshire [holding answer 28 June 2012]: Framework decision 2009/905/JHA requires accreditation in relation to DNA profiles by 30 November 2013 and accreditation in relation to fingerprint data by 30 November 2015. Forensic suppliers who process DNA samples to produce DNA profiles which are added to the National DNA Database are all already compliant with ISO 17025 and EU Council Framework Decision 2009/905/JHA. As a matter of practice, the standards required by Framework Decision 2009/905/JHA are also inserted into all commercial contracts awarded by police services in this area. A Forensic Quality Standards Project has been set up within the National Policing Improvement Agency’s (NPIA) Forensics 21 portfolio to assist police forces with the accreditation process mandated by this Framework Decision. Police forces are working towards accreditation: 22 forces have submitted their applications to the UK Accreditation Service (UKAS): 12 have undertaken a UKAS pre assessment; and two have been recommended for accreditation in the mandated areas. This approach has received the endorsement and backing of the Association of Chief Police Officers (ACPO) and the Forensic Science Regulator. The UK takes a comprehensive approach to the regulation of services in this field, including the publication of Codes of Practice and Conduct by the Forensic Science Regulator. It is not possible to disaggregate the costs relating to implementation of the Framework Decision from the wider costs of related work. Immigration Nicholas Soames: To ask the Secretary of State for the Home Department whether she has any plans to make changes to her Department’s IT systems in order to be able to report the number of migrants with leave [114869] to remain under each immigration category. Damian Green: The UK Border Agency is in the process of modernising the IT that supports immigration casework. The new IT system will hold details of applicants’ status for those people who have had their application processed through this system.

407W

Written Answers

Written Answers

2 JULY 2012

Immigration Controls Cathy Jamieson: To ask the Secretary of State for the Home Department how many family migration cases transferred to Sheffield when the UK Border Agency offices in Croydon closed (a) remain under active consideration and (b) have yet to be allocated to a [113568] caseworker. Damian Green: The data requested are not held in a format compatible with National Statistics protocols, or produced as part of the UK Border Agency’s standard reports. However the UK Border Agency publishes immigration statistics in relation to family migration on a quarterly and annual basis, a copy of which can be found at: http://www.homeoffice.gov.uk/publications/science-researchstatistics/research-statistics/immigration-asylum-research/ immigration-q1-2012/family-q1-2012

Cathy Jamieson: To ask the Secretary of State for the Home Department what the longest period is for which any of the family migration cases transferred to Sheffield when the UK Border Agency offices in [113569] Croydon closed has been open.

408W

Olympic and Paralympic Games 2012: Security Keith Vaz: To ask the Secretary of State for the Home Department (1) how many police officers she expects to work on security for the London 2012 Olympics and Paralympics; [114318] (2) what recent estimate she has made of the cost to the public purse of providing security during the [114316] London 2012 Olympics and Paralympics; (3) how many private security personnel she expects to work on security for the London 2012 Olympics and [114317] Paralympics. James Brokenshire: Government expenditure on venue security is forecast to be £553 million. This budget provides for a pool of 23,700 people to carry out venue security duties. The total number of private security personnel used throughout the Olympic and Paralympic period will not be known until after the games, as this is dependent on workforce shift patterns. The peak number deployed on the busiest days is forecast to be around 18,500. The majority of security personnel will be provided by G4S, with up to 7,500 military personnel performing venue security roles and up to 3,000 London 2012 Organising Committee (LOCOG) volunteers supporting the security operation. We are confident that venue security costs are within budget. Police

Damian Green: The longest period for which any of the 2,078 family migration cases transferred to Sheffield has been open is 14 months. Cathy Jamieson: To ask the Secretary of State for the Home Department how many of the family migration cases transferred to Sheffield when the UK Border Agency offices in Croydon closed are still under active consideration for each country of origin; and when she [113570] expects all these cases to be completed. Damian Green: The data requested are not held in a format compatible with National Statistics protocols, or produced as part of the UK Border Agency’s standard reports. However the UK Border Agency publishes immigration statistics in relation to family migration on a quarterly and annual basis, a copy of which can be found at: http://www.homeoffice.gov.uk/publications/science-researchstatistics/research-statistics/immigration-asylum-research/ immigration-q1-2012/family-q1-2012

It is expected that all the cases transferred to Sheffield will be completed by December 2012. Cathy Jamieson: To ask the Secretary of State for the Home Department what the ratio was of cases to caseworkers dealing with (a) family migration cases and (b) legacy cases in each of the last five years for [113706] which figures are available. Damian Green: The ratio of caseworkers dealing with family migration cases and legacy cases in each of the last five years is not available in the format requested and could be obtained only at disproportionate cost.

Dan Jarvis: To ask the Secretary of State for the Home Department what recent assessment she has made of the recruitment criteria for the police; and [114101] whether she has any plans to change them. Nick Herbert [holding answer 28 June 2012]: Tom Winsor’s recommendations on entry requirements for the police have been referred to the Police Advisory Board for England and Wales. The Secretary of State for the Home Department, my right hon. Friend the Member for Maidenhead (Mrs May), will give careful consideration to the advice offered by the board on this matter before taking any final decision. Police: Civilians Helen Jones: To ask the Secretary of State for the Home Department how many civilian staff have been made redundant in each police force since 2010. [114301]

Nick Herbert: Separate figures for staff made redundant are not collected centrally. The available data provided in the table shows the number of civilian staff dismissed for 2009-10 and 2010-11 by police force area. Dismissals include members of staff required to resign, staff that have been made redundant or staff whose contract has been terminated. These figures exclude voluntary resignations. Civilian staff that have been dismissed for 2009-10 and 2010-11, by police force area1,2,3 2009-10 2010-11 Avon and Somerset Bedfordshire Cambridgeshire Cheshire

7 12 6 5

44 20 65 8

409W

Written Answers

Civilian staff that have been dismissed for 2009-10 and 2010-11, by police force area1,2,3 2009-10 2010-11 Cleveland Cumbria Derbyshire Devon and Cornwall Dorset Durham Dyfed-Powys Essex Gloucestershire Greater Manchester Gwent Hampshire Hertfordshire Humberside Kent Lancashire Leicestershire Lincolnshire London, City of Merseyside Metropolitan police Norfolk Northamptonshire Northumbria North Wales North Yorkshire Nottinghamshire South Wales South Yorkshire Staffordshire Suffolk Surrey Sussex Thames Valley Warwickshire West Mercia

Written Answers

2 JULY 2012

3 21 6 6 0 4 1 14 2 7 1 7 28 8 12 18 8 2 0 5 38 32 12 4 5 14 15 4 1 49 4 56 2 26 0 6

5 12 26 0 9 36 1 62 5 39 6 119 18 44 15 29 75 39 2 5 313 36 38 5 60 17 30 4 5 55 18 44 9 39 6 2

410W

Civilian staff that have been dismissed for 2009-10 and 2010-11, by police force area1,2,3 2009-10 2010-11 West Midlands 6 305 West Yorkshire 23 90 Wiltshire 3 23 1 This table contains full-time equivalent figures that have been rounded to the nearest whole number. 2 Dismissals include members of staff required to resign, staff who have been made redundant or staff whose contract has been terminated. 3 These figures are provisional and have not been confirmed by forces.

Helen Jones: To ask the Secretary of State for the Home Department what estimate she has made of the number of police officers in roles previously undertaken by civilian support staff; and if she will make a statement. [114302]

Nick Herbert: The deployment of police officers to roles within a force is a matter for individual chief constables, working with their police authorities or police and crime commissioner. Police: Sick Leave Helen Jones: To ask the Secretary of State for the Home Department how many officers in each police force are on sick leave; how many and what proportion of such officers have been absent for more than a year; and how many and what proportion have been injured [114303] on duty. Nick Herbert: The available data provided within the tables show the number of police officers on short and medium-term sick absence (28 calendar days or less) as well as long-term (more than 28 calendar days) certified sickness absence (assault and non-assault) as at 31 March 2010 and 2011 by police force area. Also provided is the number of assaults on police officers by degree of injury while carrying out duty as at 31 March 2010 and 2011 by police force area. The number and proportion of officers that have been absent for more than a year is not collected centrally by the Home Office.

The number of police officers on short and medium term absence as well as long term certified sickness absence, assault and non assault as at 31 March 2010 and 2011, by police force area1, 2, 3, 45 As at 31 March 2010 As at 31 March 2011 Long term absence Long term absence Short and Certified Short and Certified medium term Certified sickness—non medium term Certified sickness—non absence sickness—assault assault absence sickness—assault assault Avon & Somerset Bedfordshire Cambridgeshire Cheshire Cleveland Cumbria Derbyshire Devon & Cornwall Dorset Durham Dyfed-Powys Essex Gloucestershire Greater Manchester Gwent Hampshire

57 29 21 17 531 17 40 60 40 15 13 55 28 112 5 — 80

0 — 0 1 0 2 1 1 0 0 0 1 0 4 0 0

5

21 — 22 21 48 66 27 68 0 27 11 46 12 136 32 51 5

53 28 16 33 47 17 40 36 37 26 19 1,978 19 120 5 — 79

0 1 0 0 1 0 3 0 0 1 1 0 0 0 0 0

28 16 12 24 159 21 27 5 22 22 26 7 17 118 33 72

411W

Written Answers

2 JULY 2012

Written Answers

412W

The number of police officers on short and medium term absence as well as long term certified sickness absence, assault and non assault as at 31 March 2010 and 2011, by police force area1, 2, 3, 45 As at 31 March 2010 As at 31 March 2011 Long term absence Long term absence Short and Certified Short and Certified medium term Certified sickness—non medium term Certified sickness—non absence sickness—assault assault absence sickness—assault assault Hertfordshire 44 0 45 51 0 25 Humberside 27 0 10 23 0 18 Kent 76 2 19 57 1 17 Lancashire 79 1 40 70 0 54 Leicestershire 32 1 14 48 1 20 Lincolnshire 21 0 28 16 0 15 London, City of 8 0 9 10 0 6 Merseyside 65 0 67 69 0 63 Metropolitan Police 518 9 358 570 3 358 Norfolk 38 0 17 29 0 17 Northamptonshire 47 0 0 23 0 0 Northumbria 75 0 19 72 4 50 North Wales 13 0 3 395 0 7 North Yorkshire 8 0 7 23 0 8 Nottinghamshire 48 0 29 48 2 60 South Wales 41 1 61 24 0 71 South Yorkshire 18 0 0 10 0 0 Staffordshire 67 0 44 57 0 32 Suffolk 21 0 38 29 0 19 Surrey 29 0 40 41 0 22 Sussex 51 0 36 57 0 24 Thames Valley 52 0 66 69 0 39 Warwickshire 39 0 26 18 1 16 5 5 — — 44 0 23 West Mercia 24 West Midlands 144 1 116 208 3 123 West Yorkshire 91 0 50 75 0 41 Wiltshire 24 0 6 22 0 19 1 This table contains full-time equivalent figures that have been rounded to the nearest whole number. 2 These data are provisional. They have not undergone usual quality assurance practises (including validation with individual police forces), and are therefore supplied for information purposes only. 3 Figures for staff that are on short or medium term absence are absent for 28 calendar days or less. 4 Figures for staff that are on long term absence are absent for more than 28 calendar days. 5 Data unavailable. Source: Home Office using data received from police forces via the Annual Data Requirement.

Proceeds of Crime: EU Action Mr Raab: To ask the Secretary of State for the Home Department how many requests for bank information the UK (a) issued to and (b) received from the US under Article 4 of the Agreement on mutual legal assistance between the EU and the US which entered into force on 1 February 2010 in each year since 2010; [114485] and how many such requests were granted. James Brokenshire: The Home Office does not record this information. Mr Raab: To ask the Secretary of State for the Home Department how many joint investigation teams involving the US and UK authorities operated in the (a) UK and (b) US under Article 5 of the Agreement on mutual legal assistance between the European Union and the United States which entered into force [114486] on 1 February 2010 in each year since 2010. James Brokenshire: The Home Office does not collate data centrally on the operations of joint investigation

teams involving the UK and US authorities in the UK. We have no records of operations in the US. Redundancy Pay Mr Hanson: To ask the Secretary of State for the Home Department how much was spent on redundancy payments at (a) the National Policing Improvement Agency and (b) her Department in (i) 2010, (ii) 2011 and (iii) 2012. [113380] Nick Herbert: The following table sets out the amount spent on redundancies by the National Policing Improvement Agency and the Home Office in 2010, 2011 and 2012:

(i) 2010 (ii) 2011 (iii) 2012

(a) NPIA

£ (b) Dept.

195,000.00 550,000.00 0.00

0.00 5,237,568.47 255,273.44

413W

Written Answers

2 JULY 2012

Written Answers

414W

Telephone Services

Children in Care

Graeme Morrice: To ask the Secretary of State for the Home Department how many private sector call centre staff were used by her Department and its agencies in each of the last three financial years; and at [114436] what cost to the public purse.

Simon Danczuk: To ask the Secretary of State for Communities and Local Government if he will take steps to support the recommendations of the National Care Advisory Service’s report on young people leaving care, Access All Areas. [114335]

Damian Green: The number of private sector call centre staff used by the Home Office and its agencies is not held centrally. The deployment of staff is a matter for each company contracted to provide call centre services to agreed service levels and price. Each month, since April 2010, the Department publishes detail of supplier spend on its website,

Andrew Stunell: The Department welcomes the direction of the proposals highlighted in the Access All Areas report. The Department for Education is represented on the cross-government Ministerial Working Group on Homelessness. We will continue to work closely with them on what more we can do to promote the support needs of young people leaving care.

www.homeoffice.gov.uk

Prior to April 2010 the cost of call centre services was not held centrally.

COMMUNITIES AND LOCAL GOVERNMENT Affordable Housing 20. Sheila Gilmore: To ask the Secretary of State for Communities and Local Government what estimate he has made of the level of affordable house building [114406] starts in 2011-12. Andrew Stunell: There were 15,698 affordable housing starts on site in 2011-12 delivered in England through the programmes managed by the Homes and Communities Agency. High Streets 22. Priti Patel: To ask the Secretary of State for Communities and Local Government what steps his Department is taking to support local high streets. [114408]

Robert Neill: As described in our response to the Portas review, we are supporting 27 Portas pilots; have distributed a £10 million High Street Innovation Fund to local authorities for tackling empty properties; and are launching a £1 million Future High Streets Challenge X Fund, rewarding local schemes that best revitalise their high streets. Wind Turbines Mr Andrew Turner: To ask the Secretary of State for Communities and Local Government how many planning approvals and rejections there were for wind turbines in (a) Isle of Wight constituency and (b) England in the most recent year for which figures are [114409] available. Greg Clark: My Department does not collect this information, but the Isle of Wight council advises that in the 12 months from 1 June 2011 a roof mounted micro wind turbine was approved. In the same period an application for three turbines was dismissed following a planning appeal. For England, for the same period, DECC’s Renewable Energy Planning Database recorded 36 approvals and 37 refusals but this does not record applications for small scale microgeneration.

Community Development Mr Burley: To ask the Secretary of State for Communities and Local Government what support his Department plans to make available to communities seeking to purchase their local pub or other assets of [114526] community value. Robert Neill: The Government has recently laid the Assets of Community Value Regulations. Once in force, these will give communities a fairer chance to bid to take over local assets of community value, including pubs. We will also make available a support package to help communities taking up these rights, details of which will be announced shortly. Council Housing: Sales Hilary Benn: To ask the Secretary of State for Communities and Local Government how many council houses were sold in each year from 1979 to [112453] 1997. Grant Shapps [holding answer 18 June 2012]: Statistics on the number of sales of local authority owned properties are available on the Department’s website at: http://www.communities.gov.uk/housing/housingresearch/ housingstatistics/housingstatisticsby/socialhousingsales/ livetables/

Live table 648 shows local authority sales and transfers by district and table 670 shows local authority sales under right to buy from 1980. Under this Administration, the additional properties that are sold under the revamped right to buy scheme will be replaced by new affordable homes. Council Tax Benefits: Universal Credit Stephen Timms: To ask the Secretary of State for Communities and Local Government whether he plans to require local authorities to include or exclude income from universal credit in the means test for [114803] localised council tax benefit. Robert Neill: Local authorities will be free to design their own scheme for localised support for working age people in their area. This includes being able to design any means test they wish to include, and deciding on what that test should and should not take account of.

415W

Written Answers

2 JULY 2012

Where a local authority fails to agree a scheme by 31 January, the default scheme will come into operation. The regulations defining the default scheme will prescribe the calculation of awards, including how recipients of universal credit are to be treated. Government will publish draft regulations relating to the default scheme in mid-July. Energy Caroline Flint: To ask the Secretary of State for Communities and Local Government whether his Department switched its (a) gas or (b) electricity supplier [113457] in any of the last 10 years. Robert Neill: The Department for Communities and Local Government was formed in May 2006 and uses the Government Procurement Service’s (formerly Buying Solutions) framework agreement for energy supplies. It has not switched its gas or electricity supplier during this period. The Government Procurement Service’s framework agreement delivers pan-Government energy supplies through the Official Journal of the European Union competitive tender process. The utility contracts are typically four years in duration with the option to extend by one year. The Department is in the first year of a four-year agreement. The Department has made significant year-on-year reductions in energy consumption. In 2011-12, electricity and gas consumption were reduced by 9% and 45% respectively, compared to the previous year. Under the last Administration, the Department’s main building (Eland House, Victoria) was one of the least energy-efficient buildings in Whitehall, despite it being the lead Department on energy efficiency standards in buildings. In June 2011, the building was awarded a ‘D’ grade display energy certificate, having improved from ‘G’ grade in 2006-07. Green Belt John Mann: To ask the Secretary of State for Communities and Local Government what research the Government has (a) commissioned and (b) evaluated on the effectiveness of its green belt policy in (i) meeting its primary purposes and (ii) delivering other benefits. [113539]

Greg Clark: This Administration has not commissioned any specific research into the effectiveness of the green belt. However, the National Planning Policy Framework states that green belt: checks the unrestricted sprawl of large built-up areas; prevents neighbouring towns merging into one another; assists in safeguarding the countryside from encroachment; preserves the setting and special character of historic towns; and assists in urban regeneration, by encouraging the recycling of derelict and other urban land.

Mr Anderson: To ask the Secretary of State for Communities and Local Government pursuant to the answer of 11 June 2012, Official Report, column 8W, on planning permission: green belt (1) if he will provide

Written Answers

416W

examples of the considerations which may outweigh harm to the green belt and allow planning approval of new residential development on such land; [114574] (2) how many new residential applications on protected green belt have been approved under the provisions of (a) Planning Policy Statement 7: Sustainable Development in Rural Areas, paragraph 11 and Planning Policy Guidance 2: Green Belts, section 3 and (b) National Planning Policy Framework paragraphs 87 to 91 and 55; and what the circumstances and considerations were that outweighed the harm done to the green belt caused by the new developments which resulted in planning approval [114575] being given in each case. Greg Clark: Planning policy on the green belt is outlined in Section 9 of the National Planning Policy Framework. Each planning application should be determined on its own facts and merits by a local planning authority in light of its local plan, the framework and other material considerations. The information requested on individual decisions is not centrally held. Homelessness: Veterans Mr Jim Murphy: To ask the Secretary of State for Communities and Local Government what steps his Department has taken to prevent homelessness among [114579] veterans. Grant Shapps: This Government are committed to preventing and tackling homelessness and protecting the most vulnerable, including among veterans. That is why in 2011-12 we announced an additional £70 million homelessness investment package of £20 million Homelessness Transition Fund; £20 million Preventing Repossessions Fund; £20 million Single Homelessness Prevention Fund; £5 million boost to the Homelessness Change Programme (bringing the total investment to £42.5 million) and a £5 million Social Impact Bond to help rough sleepers in London using a payment by results model. This is on top of the £400 million investment over four years (2011-12 to 2014-15) to prevent homelessness, and the Supporting People investment at £6.5 billion over the same period will protect the preventative services that will help the most vulnerable live independently and retain their tenancies. The Ministerial Working Group on Homelessness will shortly publish its second report on preventing homelessness which will include veterans. The latest figures from CHAIN highlight that only 4% of rough sleepers from the UK have experience of the armed forces. I am determined to ensure that current and former members of the armed forces gain the housing they deserve, recognising the sacrifices they have made for the country. I have therefore introduced measures to place members of the armed forces at the top of the priority list for home ownership schemes, including FirstBuy and instructing special agents to visit military bases to promote such schemes. We are also working with credit reference agencies and Royal Mail to standardise forces’ post office addresses so personnel are not disadvantaged when applying for mortgages.

417W

Written Answers

2 JULY 2012

We have also recently finished consulting on proposals to change the law to make it easier for service personnel to access social housing so that former personnel with urgent housing needs are always given high priority on waiting lists, and that personnel who move from base to base do not lose their qualification rights. Under Part 7 of the Housing Act 1996 priority need is granted to a person who is vulnerable as a result of having been a member of Her Majesty’s regular naval, military or air forces. Housing: Armed Forces Mr Jim Murphy: To ask the Secretary of State for Communities and Local Government how much additional funding his Department has allocated for adaptations to homes for wounded service personnel and veterans in each of the years between 2012-13 and [114208] 2016-17. Grant Shapps [holding answer 28 June 2012]: My Department has signed up to the Ministry of Defence Covenant that aims to assist the nation’s service personnel when they return from active service. In each financial year of the current spending round, £1.7million— approximately 10% of the main national disabled facilities grant annual allocation that supports housing adaptations —is set aside for wounded ex-service personnel. Housing: Regeneration Hilary Benn: To ask the Secretary of State for Communities and Local Government pursuant to the answer of 25 June 2012, Official Report, column 11W, on housing: regeneration, if he will estimate the number of homes (a) refurbished and (b) built under the Housing Market Pathfinder renewal programme [114711] between 1997 and 2010. Grant Shapps: I refer the right hon. Member to my answer of 25 June 2012, Official Report, column 10W and the associated links to the programme reviews. Local Government Finance

Written Answers

418W

2009-10 http://www.communities.gov.uk/documents/statistics/xls/ 2031728.xls

2008-09 http://www.communities.gov.uk/documents/statistics/xls/ 1718972.xls

Non-domestic Rates: Pendle Andrew Stephenson: To ask the Secretary of State for Communities and Local Government how many businesses in Pendle constituency received business rate [114762] hardship relief in 2011. Robert Neill: This information is not collected centrally. Planning Permission John Mann: To ask the Secretary of State for Communities and Local Government with reference to the National Planning Policy Framework, paragraphs 82 and 157, where the objectives of the National Planning [113541] Policy Framework are set out. Greg Clark: The National Planning Policy Framework, at paragraph 6, is clear that the purpose of the planning system is to contribute to the achievement of sustainable development. To do this, the planning system needs to perform a number of mutually dependent roles: environmental, social and economic. Within these roles, paragraph 17 sets out a set or core land-use planning principles that should underpin plan-making and decisiontaking. Publications Jonathan Ashworth: To ask the Secretary of State for Communities and Local Government what consultation documents have been issued by his Department since [114166] May 2010. Robert Neill: The Department has published on its website 85 consultation documents since May 2010. Consultations

Louise Mensch: To ask the Secretary of State for Communities and Local Government how much was collected by each local authority in England in national non-domestic rates in each of the last three years; and how much was received in Revenue Support Grant by [113972] each local authority in each such year. Robert Neill: Information on the amount of national non-domestic rates collected by each local authority in England in each of the last three years can be found at the following address: http://www.communities.gov.uk/localgovernment/ localregional/localgovernmentfinance/statistics/ nondomesticrates/outturn/outturndatalocallevel/

Information on the amounts received in Revenue Support Grant by each local authority in England in the last three years can be found in row 851 of the Revenue Outturn Summary forms, which have been published as follows: 2010-11 http://www.communities.gov.uk/documents/statistics/xls/ 21237421.xls

2012 (to date) 2011 2010 (May to end of 2010) Total

23 44 18 85

To place these figures in context, 66 consultation documents were published in 2009 alone. Social Rented Housing Jonathan Reynolds: To ask the Secretary of State for Communities and Local Government what estimate he has made of the number of people with household earnings over £100,000 who are living in council or social housing; and on what evidential basis this estimate [114580] was reached. Grant Shapps: The estimated number of social tenants with incomes over £100,000 is based on two surveys, the English Housing Survey (data for 2008-09 and 2009-10) and the Department for Work and Pensions’ Family Resources Survey 2008-09. Almost 10,000 households

419W

Written Answers

2 JULY 2012

living in the social rented sector were sampled in total. Incomes over £100,000 are relatively uncommon in the social sector so comparatively few respondents met these criteria. The range of households with incomes above this level, between 1,000 and 6,000, is therefore our best estimate of the actual number of high income tenants. Datasets from both surveys are deposited at the UK Data Archive and are available to external users. Wind Power: Planning Permission

Written Answers

420W

(b) 17 were answered between 20 and 40 working days and nine of these were subject to an extension as permitted in legislation; (c) 4 were answered between 40 and 60 working days and all were subject to an extension as permitted in legislation; (d) 0 were answered between 60 and 80 working days; (e) 0 were answered between 80 and 100 working days; (f) 5 were answered after 100 working days and all were subject to an extension as permitted in legislation; (g) 1 remains unanswered after more than 100 working days and is subject to an extension as permitted in legislation.

Publications Chris Heaton-Harris: To ask the Secretary of State for Communities and Local Government what consideration he has given to introducing a minimum average wind speed requirement as part of the planning system and subsidy eligibility process in relation to [111663] wind turbine developments. Robert Neill: The planning policies for renewable energy set out in the National Planning Policy Framework do not include any requirements relating to average wind speed or the subsidy eligibility process for wind turbines. The framework’s policies were finalised in the light of extensive public consultation. Chris Heaton-Harris: To ask the Secretary of State for Communities and Local Government if he will consider introducing guidelines for wind farm developers for the purposes of preventing unsuitable speculative [111781] sites from being considered. Greg Clark: Communities should be protected from unacceptable impacts from new development, including wind farms. We are reforming the planning system to restore democratic and local control over planning. We want local decisions to be plan-led; our planning reforms make it clear that local councils can identify suitable areas for wind farms. Outside the areas identified in the plan, developers would be expected to show how the site meets the same suitability criteria contained in the Local plan. We have also underlined that meeting our energy goals is not an excuse for building wind farms in the wrong places.

Jonathan Ashworth: To ask the Secretary of State for Scotland how many (a) publications, (b) consultation documents and (c) circulars have been issued by his Department since May 2010; and what the title was of each such publication, consultation document or [114176] circular. David Mundell: Since May 2010, the Scotland Office has issued (a) three publications (other than consultation documents), (b) two consultations documents, and (c) no circulars. The title of each publication and consultation document is listed as follows: Scotland Bill Command Paper: Strengthening Scotland’s Future; Annual Report of the Scotland Office and the Office for the Advocate-General 2011; Scotland’s constitutional future: A consultation on facilitating a legal, fair and decisive referendum on whether Scotland should leave the United Kingdom; Scotland’s constitutional future: Responses to the consultation; Consultation on reforming the law on Scottish unincorporated associations and criminal liability of Scottish partnerships.

WALES Publications Jonathan Ashworth: To ask the Secretary of State for Wales how many (a) publications, (b) consultation documents and (c) circulars have been issued by her Department since May 2010; and what the title was of each such publication, consultation document or circular. [114172]

SCOTLAND Freedom of Information Tom Greatrex: To ask the Secretary of State for Scotland how many requests under the Freedom of Information Act 2000 his Department received between 10 May 2010 and 31 May 2012; how many requests (a) were answered within 20 working days, (b) were answered between 20 and 40 working days, (c) were answered between 40 and 60 working days, (d) were answered between 60 and 80 working days, (e) were answered between 80and100workingdays,(f)wereansweredafter100working days and (g) remained unanswered after more than [114332] 100 working days. David Mundell: The Scotland Office received 324 requests under the Freedom of Information Act 2000 between 10 May 2010 and 31 May 2012: (a) 294 were answered within 20 working days;

Mr David Jones: Since May 2010, my Department has published one consultation document—‘A Green Paper on future electoral arrangements for the National Assembly for Wales’, which was published on 21 May 2012.

NORTHERN IRELAND Corporation Tax Ms Ritchie: To ask the Secretary of State for Northern Ireland what progress has been made in the ministerial sub-group on devolving the rate of corporation tax to Northern Ireland; and if he will make a statement. [114368]

Mr Paterson: The Ministerial Working Group met in Belfast on 25 June. The meeting was productive, but there remain some crucial areas of difference between

421W

Written Answers

members. As a result, the group announced that further work would be necessary. It agreed to meet again in September. Economic Growth

422W

Written Answers

2 JULY 2012

Ms Ritchie: To ask the Secretary of State for Northern Ireland (1) what recent discussions he has had with the European Commission on the moratorium on the use of desinewed meat; and if he will make a statement; [114553]

Ms Ritchie: To ask the Secretary of State for Northern Ireland what recent discussions he has had with the Northern Ireland Executive on encouraging and developing economic growth; and if he will make a statement. [114551]

Mr Paterson: These were matters that I discussed with the First Minister and deputy First Minister, the Minister for Finance and Personnel and the Minister for Enterprise, Trade and Investment when I last met them on 25 June in Belfast along with the Minister of State, Northern Ireland Office, my right hon. Friend the Member for East Devon (Mr Swire), and my hon. Friend the Exchequer Secretary. Meat Ms Ritchie: To ask the Secretary of State for Northern Ireland what recent discussions he has had with the Northern Ireland Executive regarding the moratorium on the use of desinewed meat; and if he [114369] will make a statement. Mr Paterson: Neither I, nor the Minister of State, Northern Ireland Office, my right hon. Friend the Member for East Devon (Mr Swire), have had any discussions on this subject with Northern Ireland Executive Ministers. My right hon. Friend met the Minister for Agriculture and Rural Development on 18 June to discuss agriculture issues but the matter was not raised by the DARD Minister.

(2) what discussions he has had with the Secretary of State for (a) Health and (b) Environment, Food and Rural Affairs on the unilateral nature of the ban on desinewed ruminant meat products in April 2012; and [114554] if he will make a statement. Mr Paterson: These are matters primarily for the Secretary of State for Health, my right hon. Friend the Member for South Cambridgeshire (Mr Lansley), the Secretary of State for Environment, Food and Rural Affairs, my right hon. Friend the Member for Meriden (Mrs Spelman), and in Northern Ireland for the Minister of Health, Social Services and Public Safety and the Minister for Agriculture and Rural Development. I have not been asked by Northern Ireland Ministers to discuss the issue with ministerial colleagues or the European Commission but I stand ready to do so if asked. Public Expenditure Vernon Coaker: To ask the Secretary of State for Northern Ireland what the level of block grant to Northern Ireland was in (a) 2008-09, (b) 2009-10, (c) 2010-11, (d) 2011-12 and (e) 2012-13; and what estimate he has made of the likely level of block grant in (i) [113932] 2013-14 and (ii) 2014-15. Mr Paterson: The information requested is shown in the following table:

Northern Ireland Executive DEL £ billion Outturn 2009-10

2010-11

Provisional outturn 2011-12

NI block grant 10.5 10.9 Note: The figures include depreciation and impairments.

11.2

10.8

2008-09

ENERGY AND CLIMATE CHANGE Combined Heat and Power Cathy Jamieson: To ask the Secretary of State for Energy and Climate Change what assessment he has made of the effect on carbon dioxide emissions of changes in the support available for electricity generation [114124] from combined heat and power. Gregory Barker: The Department has not made a specific assessment of the impact on carbon dioxide emissions of changes in support for electricity generated by fossil fuel fired combined heat and power. The impacts of the changes announced in Budget 2011, and confirmed in Budget 2012, are summarised in the Tax Information and Impact Note published alongside Budget 2012. This can be found on the HMRC website at: http://www.hmrc.gov.uk/budget2012/tiin-0700.pdf

Plans 2012-13

2013-14

2014-15

10.8

10.8

10.9

We are currently carrying out further analysis of the potential costs and impacts, including carbon impacts, of changing the support regime for fossil fuel combined heat and power jointly with stakeholders through a ministerial contact group.

Energy: Finance Zac Goldsmith: To ask the Secretary of State for Energy and Climate Change what agreements were reached on energy subsidy reform at the UN Rio+20 [114464] conference on Sustainable Development. Gregory Barker: The Rio+20 conference endorsed the G20 commitment to phase out inefficient fossil fuel subsidies and invited other countries to take similar action.

423W

Written Answers

2 JULY 2012

Energy: Prices Mr Crausby: To ask the Secretary of State for Energy and Climate Change how many households there are in (a) England, (b) Bolton Metropolitan Borough and (c) Bolton North East constituency who spend more than 10 per cent of their income on fuel bills. [114428] Gregory Barker: The following table shows the number of households living in fuel poverty by parliamentary constituency, local authority and for England, for the latest available year 2010. Area Bolton North East, constituency Bolton, local authority England

Fuel poor households (thousand)

Percentage living in fuel poverty (%)

8

20.4

23

19.7

3,536

16.4

Luciana Berger: To ask the Secretary of State for Energy and Climate Change what estimate he has made of the number of non-domestic energy users whose contracts are rolled over at the point of renewal. [114894]

Charles Hendry: DECC does not hold the information requested. Ofgem is responsible for the regulation of gas and electricity supply, including supply to the non-domestic sector. If a non-domestic customer does not notify their existing supplier that they wish to agree a new contract or switch to another supplier within the time limit set out in the terms of the contract, the supplier will roll over the contract for a further 12 months. This ensures that the non-domestic customer continues to receive their energy supply. Luciana Berger: To ask the Secretary of State for Energy and Climate Change what steps his Department is taking to ensure that more business customers are made aware of (a) the contract end dates for their energy contracts and (b) the difference in price between [114895] their current and proposed renewal rates. Charles Hendry: Ofgem is responsible for the regulation of gas and electricity supply, including supply to the non-domestic sector. Existing rules, which protect micro-business customers, require suppliers to provide clear and transparent contract terms and conditions, including sending the customer a reminder at least 30 calendar days before their existing contract is due to end and details of renewal prices. Earlier this year, Ofgem consulted on proposals to extend the existing protection on contractual terms and conditions to larger small business customers. Ofgem is considering consultation responses and plans to bring forward further proposals early next year.

Written Answers

424W

ensure that it will allow Green Deal Finance to be attached to a property, rather than be treated as a loan attached to an individual; and if he will place in the Library a copy of any correspondence on this issue. [114634]

Gregory Barker: This is not a matter for the Office of Fair Trading and there have been no discussions or correspondence with the Office of Fair Trading on this issue. The Energy Act 2011 made provisions for Green Deal repayments to be made by the electricity bill payer for the property and collected through electricity bills. These powers will allow the charge to transfer automatically from bill payer to bill payer. Luciana Berger: To ask the Secretary of State for Energy and Climate Change whether there will be a cost to the public purse of the Minister for Climate Change’s Green Deal road show in summer 2012; and if so what [114896] it will be. Gregory Barker: This series of roadshows is designed to raise awareness of the Green Deal and the opportunities for new business that it presents, particularly to smaller companies around Great Britain. Over 1,600 companies will have attended the 11 events by the time they end on 20 July. The total cost to DECC is expected to be around £35,000, which equates to around £25 per delegate. Luciana Berger: To ask the Secretary of State for Energy and Climate Change whether Green Deal assessments will be able to combine Green Deal finance with funding from the renewable heat incentive and [114897] feed-in tariffs. Gregory Barker: The Green Deal Assessment will set out those measures expected to be eligible for Green Deal finance and the likely savings the household or business can expect to make. This is intended to provide the consumer with information to help them make an informed decision about the most appropriate financing route. Where the assessment shows that Green Deal finance will only cover part of the cost of the measure, the consumer may wish to access other available sources of finance as appropriate to cover the remaining cost. Our ambition is that in future it should be possible for somebody installing Microgeneration measures to receive both Green Deal loans and Renewable Heat Incentive (RHI) or Feed-in-tariff (FIT) payments. However, this cannot be confirmed until current state aid discussions with the European Commission have concluded. Luciana Berger: To ask the Secretary of State for Energy and Climate Change how much energy suppliers would be required to spend each year in order to meet their obligations under the carbon reduction element of the Energy Company Obligation if no household chooses [114898] to take out a Green Deal package.

Green Deal Scheme

Gregory Barker: The final Green Deal and Energy Company Obligation impact assessment:

Luciana Berger: To ask the Secretary of State for Energy and Climate Change what discussions his Department has had with the Office of Fair Trading to

http://www.decc.gov.uk/assets/decc/11/consultation/greendeal/5533-final-stage-impact-assessment-for-the-green-deala.pdf

425W

Written Answers

2 JULY 2012

Written Answers

426W

models a range of scenarios for the costs of delivering the Energy Company Obligation. One of these scenarios specifically considers the impact of low customer demand for Green Deal packages. However, we estimate that delivery of the final Energy Company Obligation targets should cost suppliers no more than £1.3 billion on average a year and, unlike previous energy efficiency schemes, we have the legislative powers to gather much better real time data on the actual costs of delivery.

There are no current plans for seeking wider legal consent data sharing powers for ECO and the Green Deal.

Renewable Energy

Caroline Lucas: To ask the Secretary of State for Work and Pensions what information his Department holds on the average length of time for Atos to process applications for employment and support allowance; what targets his Department has set for processing applications; whether sanctions and penalties apply when timescales are not met; what timescale his Department sets for Atos to complete an application when his Department instructs Atos to expedite an application; and if he will make a statement. [114344]

Nigel Adams: To ask the Secretary of State for Energy and Climate Change by what means the contribution of bio-mass co-firing to renewable energy capacity targets [114794] is measured. Charles Hendry: The UK’s renewable energy targets are for generation and consumption; it does not have any renewable energy capacity targets. The contribution of biomass co-firing to renewable generation/consumption targets is measured by summing the number of renewables obligation certificates (ROCs) issued (by Ofgem) to generators for co-firing, and converting to a generation equivalent (using the number of ROCs per MWh). Biomass co-firing capacity is not included in the UK’s total for renewable energy capacity, since it is not dedicated renewable capacity. However, it is estimated by dividing the annual generation from co-firing by the number of hours in the year (8,760). Warm Home Discount Scheme Zac Goldsmith: To ask the Secretary of State for Energy and Climate Change whether he plans to extend the Warm Homes Discount data-sharing scheme in order to identify and target households to be assisted by the Green Deal and energy company obligation. [114201] Gregory Barker: The State Pension Credit (Warm Home Discount) Regulations 2011 allow participating energy supply companies to use the information they receive through the Warm Home Discount scheme for the primary purpose of providing a discount on energy bills to pensioners whose data are matched. The Regulations also allow participating energy supply companies to use the information for other limited reasons, including providing people with measures, advice and assistance on energy and thermal efficiency. As such, participating companies could use this information to target the support they are required to deliver under the Energy Company Obligation (ECO) from October 2012. Energy suppliers are also able to use the information they hold on additional Warm Home discount beneficiaries, beyond those pensioners found, through data matching, to target measures to a wider group of low income and vulnerable households. In addition the Government is working with energy supply companies to put in place a referrals mechanism through the Energy Saving Advice Service to help target ECO towards eligible households. This formed part of the consultation on the ECO held last year. In addition we are exploring whether Government data could be used to confirm a customer’s eligibility, where the customer consents to this, before-the referral is passed on to an obligated energy supply company.

WORK AND PENSIONS Atos

Chris Grayling: Atos Healthcare are not contracted to process applications for ESA. DWP will send a referral to Atos Healthcare as part of a customer’s claim for ESA and they complete the work capability assessment process. The contracted service level is to clear medical assessments within an actual average clearance target (AACT) of 35 working days. There is no formal fast-track process to expedite individual referrals. Atos Healthcare report on performance against that target on a month-by-month basis. The Atos Healthcare average clearance (November 2011 to May 2012 ) against a target of 35 days is 62.8 days. The DWP contractual agreement with Atos Healthcare contains performance service levels (including customer service targets) which also contain financial remedies where there is service level failure, based on pre estimate of loss to the Department. The contractual performance of Atos Healthcare is monitored closely by DWP. Caroline Lucas: To ask the Secretary of State for Work and Pensions what assessment he has made of the Atos complaints process; what the name and remit is of the body to which complaints are directed when they cannot or have not been resolved by Atos; to whom the body is accountable; and if he will make a [114345] statement. Chris Grayling: 10% of Atos Healthcare complaint responses are routinely validated by DWP Medical Services Division through monthly audits. Atos Healthcare have a two tier complaints process, their 2nd tier addresses customer dissatisfaction with their response to the complaint. In such cases customers can request that their complaint is investigated by the independent tier. The independent tier is made up of two bodies, an independent assessor and a doctor. The independent assessor is a person from a private company and offers the DWP benefit claimant an independent review of the way their complaint has been handled by Atos Healthcare Medical services. An independent doctor will conduct medical quality reviews when there are issues within the complaint that relate to the quality of the medical report in question. DWP complaint resolution managers may also escalate complaints for a chief operating officer investigation or for review by the independent case examiner (ICE).

427W

Written Answers

2 JULY 2012

Employment Schemes Stephen Timms: To ask the Secretary of State for Work and Pensions whether he plans to collect data for the Work programme on the number of different jobs taken by participants in order to achieve the weeks in employment required for job outcome payments or [114500] sustainment payments. Chris Grayling: The Department requires providers to record job titles as part of the claim process and payment validation regime. The information is collected in free text and not suitable for management information collation. Stephen Timms: To ask the Secretary of State for Work and Pensions whether he will publish job outcome data for the Work programme in autumn 2012 as (a) time-series cohorts and (b) percentages of total [114501] attachments. Chris Grayling: The release plan for statistics on job outcomes and sustainment payments is dependent on the availability, reliability, quality and accuracy of the data. The details of what we will publish are still to be finalised. When details are finalised we will make an announcement. Ann McKechin: To ask the Secretary of State for Work and Pensions what steps his Department is taking to ensure that primary contractors under the Work programme are engaging with third sector organisations with specialist experience of handling vulnerable groups. [114863]

Chris Grayling: The Department took steps to ensure that the level of community involvement was commensurate with the needs of Work programme customers during the procurement process. The specification stated that a key factor in the tender assessment process would be the supply chain and it was therefore in the interest of potential prime providers to engage with such organisations to enhance the support available. All subsequent changes to the supply chain are subject to scrutiny and agreement by departmental officials to ensure they are justified and that the service available through the Work programme is not reduced or compromised. Employment Schemes: Ethnic Groups Stephen Timms: To ask the Secretary of State for Work and Pensions what steps he plans to take to ensure that the Work Programme achieves equitable outcomes for black and minority ethnic participants. [114806]

Chris Grayling: Work Programme providers deliver personalised support, tailored to the individual needs of participants. The Department monitors the characteristics, including ethnicity, of participants referred to the Work Programme on an ongoing basis, and Work Programme providers are bound through the terms of their contract to prevent unlawful discrimination and promote equality of opportunity in respect of ethnicity.

Written Answers

428W

Furthermore DWP has commissioned a consortium led by the Institute for Employment Studies (IES) to undertake an independent evaluation of the Work Programme. Evaluation work started in autumn 2011 and will conclude in 2014. This evaluation will consider the effectiveness of the programme for different types of participants, including black and minority ethnic participants. Employment Schemes: Scotland Ann McKechin: To ask the Secretary of State for Work and Pensions what proportion of contracts under the Work programme in Scotland has been awarded to voluntary organisations since the inception of the programme. [114864] Chris Grayling: The Department only contracts with prime providers of the Work programme. Neither of the two prime providers operating in Scotland are from the voluntary and community sector (VCS). However, a stock take of the Work programme supply chain undertaken in January 2012 showed that in Scotland 57 of the 84 organisations in tier 1 (subcontractors delivering a specific element of the service, such as job-broking) and tier 2 (subcontractors working on a call-off basis, with no guarantee of volumes) are from the VCS, which equates to 68% of the supply chain. Health and Safety Executive: Finance Kerry McCarthy: To ask the Secretary of State for Work and Pensions what assessment he has made of the potential effect of funding changes for the Health and Safety Executive on the number of workplace inspections it is able to carry out in (a) areas of comparatively high risk, (b) areas of concern and (c) lower risk areas. [114627]

Chris Grayling: The number of workplace inspections the Health and Safety Executive undertakes to (a) areas of comparatively high risk, (b) areas of concern and (c) lower risk areas is primarily a matter of policy rather than directly related to its funding settlement to 2014-15. Housing Benefit Jonathan Reynolds: To ask the Secretary of State for Work and Pensions how many households claiming housing benefit have at least one person in employment. [114535]

Steve Webb: The information requested is not available. The economic status of all housing benefit (HB) recipients is not available. Information is only available for those HB recipients whose claim is not passported: that is for those who do not receive either income support, jobseeker’s allowance (income-based), employment and support allowance (income-based), or pension credit (guaranteed credit). A small proportion of the passported cases will be in part-time employment. The available information is shown in the following table.

429W

Written Answers

2 JULY 2012

Housing benefit recipients, non-passported, in employment, Great Britain—March 2012 All employed Total 882,890 Notes: 1. The data refers to benefit units, which may be a single person or a couple. 2. Recipients are as at second Thursday of the month. 3. SHBE is a monthly electronic scan of claimant level data direct from local authority computer systems. It replaces quarterly aggregate clerical returns. The data is available monthly from November 2008 and March 2012 is the most recent available. 4. Passported status does not include recipients with unknown passported status. This data refers to people receiving housing benefit not in receipt of a passported benefit and are recorded as being in employment if their local authority has recorded employment income from either the main claimant, or partner of claimant (if applicable), in calculating the housing benefit award. People receiving passported benefits who are working part-time cannot be identified and are therefore not included in this analysis. 5. Case load is rounded to the nearest 10; Proportion to one decimal place. Source: Single Housing Benefit Extract (SHBE).

Written Answers

430W

I am advised by the Industrial Injuries Advisory Council on which diseases and related occupations should be included (‘prescribed’) in the list of diseases for which industrial injuries disablement benefit (IIDB) can be paid. The council examines any existing or new scientific evidence on conditions where a link with a particular occupation is suggested. The Industrial Injuries Advisory Council is not aware of any published scientific evidence with regard to occupational causation involving mitochondrial dysfunction in relation to industrial diseases. This does not prevent people who feel their health has been affected by their work from seeking advice as to the possibility of taking civil action on the grounds of negligence. Hywel Williams: To ask the Secretary of State for Work and Pensions what support his Department provides to former workers with medium density fibreboard who go on to develop (a) mitochondrial dysfunction and (b) other industrial diseases. [114633]

Housing Benefit: Warrington Helen Jones: To ask the Secretary of State for Work and Pensions how many people in Warrington who are [114880] in receipt of housing benefit are carers. Steve Webb: Information on the number of housing benefit recipients who are carers is not readily available and could be provided only at disproportionate cost. Industrial Diseases: Lupus Hywel Williams: To ask the Secretary of State for Work and Pensions what discussions he has had on the inclusion of lupus within the Social Security (Industrial Injuries) (Prescribed Diseases) Regulations [114630] 1985. Chris Grayling: Lupus is not one of the prescribed diseases covered by the Industrial Injuries Scheme. I am advised by the Industrial Injuries Advisory Council on which diseases and related occupations should be included (’prescribed’) in the list of diseases for which Industrial Injuries Disablement Benefit (IIDB) can be paid. The Council examines any existing or new scientific evidence on conditions where a link with a particular occupation is suggested. The Industrial Injuries Advisory Council is not aware of any published scientific evidence with regard to occupational causation and lupus. Industrial Diseases: Mitochondrial Dysfunction Hywel Williams: To ask the Secretary of State for Work and Pensions what recourse is open to employees who have developed mitochondrial dysfunction as a result of industrial employment carried out prior to the introduction of the Control of Substances Hazardous [114632] to Health Regulations 2002. Chris Grayling: This condition is not one of the prescribed diseases covered by the Industrial Injuries Scheme.

Chris Grayling: Mitochondrial dysfunction is not one of the prescribed diseases covered by the Industrial Injuries Scheme. I am advised by the Industrial Injuries Advisory Council on which diseases and related occupations should be included (‘prescribed’) in the list of diseases for which industrial injuries disablement benefit (IIDB) can be paid. The council examines any existing or new scientific evidence on conditions where a link with a particular occupation is suggested. The Industrial Injuries Advisory Council is not aware of any published scientific evidence with regard to occupational causation involving medium density fibreboard and industrial diseases. New Enterprise Allowance: Ethnic Groups Toby Perkins: To ask the Secretary of State for Work and Pensions what steps he has taken to ensure that the new enterprise allowance attracts black or minority ethnic participants; and how he plans to monitor the [114861] success of those steps. Chris Grayling: The new enterprise allowance is a voluntary scheme which is open to all jobseeker’s allowance claimants from 26-weeks unemployment. All eligible claimants are informed about the scheme by Jobcentre Plus and, therefore, steps to attract specific groups are not required. Participants are self selecting and all claimants that express an interest are referred to a local mentoring partnership to have their business idea assessed. Take up of the scheme is reported each quarter via the official statistics published here: http://statistics.dwp.gov.uk/asd/asd1/pwp/ pwp_gbw_may12.pdf

Toby Perkins: To ask the Secretary of State for Work and Pensions how many of the successful applicants for the new enterprise allowance are of black or minority [114862] ethnic origin.

431W

Written Answers

Written Answers

2 JULY 2012

Chris Grayling: These statistics are published and are available on the Department’s website: http://statistics.dwp.gov.uk/asd/asd1/pwp/ pwp_gbw_may12.pdf

Pensioners: Females Matthew Hancock: To ask the Secretary of State for Work and Pensions how many female pensioners there are in each (a) region, (b) county and (c) parliamentary [114206] constituency. Steve Webb: Statistics on the number of females in receipt of state pension by region, county and parliamentary constituency are available from 100% data and are published on the Office for National Statistic’s website at: https://www.nomisweb.co.uk/ Notes: 1. The information does not include all females over state pension age. For example, those who have not claimed their state pension. 2. To access the data use the Wizard query; select ‘all datasets by theme’; ‘DWP benefits’; ‘benefit claimants—state pension’; and select the categories of information required.

Pensioners: Social Security Benefits Eric Ollerenshaw: To ask the Secretary of State for Work and Pensions what steps his Department is taking to inform pensioners of the support and benefits available [114125] to them; and if he will make a statement. Steve Webb: The Department automatically writes to people four months before their state pension age and provides them with information on how to claim state pension. When a customer claims state pension, or reports a change in their circumstances, a customer adviser will discuss a pension credit application with those who may appear eligible. For winter fuel, over 95% of payments are made automatically without the customer having to make a claim. Pensioners claiming pension credit can also claim housing benefit and council tax benefit in a single free phone call. The Department provides the unique opportunity to join up local community services by providing access to a range of non benefit-related services in support of well-being, independence and the later life agenda. Also, DWP is actively involved with around 4,000 local community partnerships across England, Scotland and Wales which provide a wide range of advice and support for pensioners. We have also developed a free pension credit toolkit for local organisations working with older people to use. The toolkit provides a range of resources to help advise workers and volunteers to understand more about who may be eligible for pension credit, how to identify potential customers and guide them through the application process. As more and more people go online, the Government’s website: www.direct.gov.uk

is an increasingly significant method for providing information to pensioners, on the support and benefits available to them. This is supplemented by information in leaflets, letters and a local visiting service for more vulnerable customers.

432W

Personal Independence Payment Heidi Alexander: To ask the Secretary of State for Work and Pensions what assessment he has made of the economic effect of reducing access to Motability vehicles through the rollout of personal independence payments. [114643] Maria Miller: Personal independence payment will continue to provide access to the Motability Scheme. Anyone in receipt of the enhanced mobility component of personal independence payment will be able to join the scheme if they wish to do so. Publications Jonathan Ashworth: To ask the Secretary of State for Work and Pensions how many (a) publications, (b) consultation documents and (c) circulars have been issued by his Department since May 2010; and what the title was of each such publication, consultation document [114174] or circular. Chris Grayling: Regarding the Department’s consultation documents, they are listed and published via the Department’s website at: www.dwp.gov.uk

There is not a centrally held list of all publications and circulars issued by this Department so it is not possible to provide the details requested as it would be at a disproportionate cost to request and collate the information required. Social Security Benefits Nicholas Soames: To ask the Secretary of State for Work and Pensions what estimate he has made of the saving to his Department of preventing the payment of non-contributory benefits to people not resident in the [114538] UK. Chris Grayling: EU rules require us to pay the noncontributory winter fuel payment, carer’s allowance, attendance allowance and the care component of disability living allowance to people who are resident in the EEA or Switzerland. In the 2010-11 financial year, the latest year for which outturn data are available, total spending by this Department on non-contributory benefits to those not resident in the UK was around £32 million. This expenditure is broken down by benefit in the following table: Non-contributory benefit expenditure for people domiciled outside the UK, £ million, nominal, figures rounded to the nearest £ million 2010-11 £ million Winter fuel payments 16 Attendance allowance 3 Carer’s allowance 0 Disability living allowance 11 Severe disablement allowance 2 Sources: 1. DWP benefit expenditure tables, available at http://research.dwp.gov.uk/asd/asd4/index.php?page=expenditure 2. Winter fuel payments information taken from DWP Statistical and Accounting Data. 3. Figures may include a very small amount of expenditure where the claimant’s residence is not known.

433W

Written Answers

2 JULY 2012

However, as future migration patterns and benefit take-up rates are uncertain, we cannot be sure that future expenditure will be similar to past expenditure. Social Security Benefits: Internet Dr Huppert: To ask the Secretary of State for Work and Pensions for what reason his Department’s Services and Benefits Online service is only accessible using proprietary Microsoft software and not using Macintosh [114488] or Unix systems. Chris Grayling: The Department for Work and Pensions has introduced a number of major online services over the last few years. These include Benefit Adviser, Jobseeker’s Allowance Online, State Pension Online and Real Time Pension Forecasting, which are accessible from multiple platforms and browsers, including Macintosh and Unix systems. A small number of the Department’s oldest online services are accessible only through Microsoft platforms. These include Attendance Allowance, Disability Living Allowance and Child Maintenance, which signpost customers/claimants to alternative telephony channels if required and are being replaced. All new and replacement systems will be compatible with Macintosh, Unix and Microsoft platforms including popular browsers such as Internet Explorer, Firefox, Safari, Opera and Chrome. This is part of the Government’s ’digital by default’ strategy. Social Security Benefits: School Leaving Nicholas Soames: To ask the Secretary of State for Work and Pensions what the annual cost of school leavers going straight on to benefits was in each of the [114537] last five years. Chris Grayling: The information requested is not available. Timber: Health Hazards Hywel Williams: To ask the Secretary of State for Work and Pensions what assessment his Department has made of any relationship between intensive occupational work with medium density fibreboard and mitochondrial [114631] dysfunction. Chris Grayling: This condition is not one of the prescribed diseases covered by the Industrial Injuries Scheme. I am advised by the Industrial Injuries Advisory Council on which diseases and related occupations should be included (’prescribed’) in the list of diseases for which Industrial Injuries Disablement Benefit (IIDB) can be paid. The Council examines any existing or new scientific evidence on conditions where a link with a particular occupation is suggested. The Industrial Injuries Advisory Council is not aware of any published scientific evidence with regard to occupational causation involving medium density fibreboard and industrial diseases.

Written Answers

434W

Unemployment: Bradford George Galloway: To ask the Secretary of State for Work and Pensions what steps he plans to take to reduce unemployment in Bradford West constituency. [114117] Chris Grayling: The Department is aware of the challenges facing jobseekers in the labour market and has put in place a substantial menu of support to help them move into work. Jobcentre Plus currently offers claimants a comprehensive menu of help including skills provision and job search support. All jobseeker’s allowance claimants have access to the Flexible Support Fund which is targeted to help claimants overcome barriers to employment. This is bolstered by a number of Get Britain Working measures including: work experience; work clubs; and support for those looking to start their own business known as the new enterprise allowance.

The Work programme provides tailored support to those claimants furthest from the labour market. Claimants with more challenging barriers to work can be referred early. Providers are paid on the results they achieve, and are paid more for supporting the hardest to help into sustained work. The Youth Contract, launched on 2 April, will provide nearly half a million new opportunities for young people including: wage incentives for employers taking on a claimant from the Work programme; incentives to take on apprentices; and extra work experience places.

Extra funding is being made available to support the most vulnerable 16 and 17-year-olds not in education, employment or training, into learning, an apprenticeship or a job with training. Unemployment: Ethnic Groups Stephen Timms: To ask the Secretary of State for Work and Pensions what assessment he has made of the reasons for the high level of unemployment among young black men; and what steps he proposes to take [114805] to tackle this problem. Chris Grayling: This Government is moving beyond defining people simply because they have ticked a box on a form. Our approach is to support people according to their individual needs and circumstances rather than segregate people according to ethnicity. That is why we have introduced personalised support, through the Work Programme, the Youth Contract and Get Britain Working Measures. The significantly increased flexibility that we have given to providers and Jobcentre Plus means that interventions can be tailored to address an individual’s specific needs. Stephen Timms: To ask the Secretary of State for Work and Pensions what assessment he has made of the reasons for the high level of unemployment among women of Bangladeshi and Pakistani background; and what steps he plans to take to tackle this problem. [114807]

435W

Written Answers

2 JULY 2012

Chris Grayling: This Government is moving beyond defining people simply because they have ticked a box on a form. Our approach is to support people according to their individual needs and circumstances rather than segregate people according to ethnicity. That is why we have introduced personalised support, through the Work Programme, the Youth Contract and Get Britain Working Measures. The significantly increased flexibility that we have given to providers and Jobcentre Plus means that interventions can be tailored to address an individual’s specific needs. Universal Credit Stephen Timms: To ask the Secretary of State for Work and Pensions whether the business case for universal credit contains an estimate of the effect on [114499] total hours worked. Chris Grayling: Universal credit is designed to help people into work. The impact assessment published alongside the Welfare Reform Bill set out an estimate of how universal credit will increase the number of people in work. The business case is an internal document which sets out the costs and benefits of universal credit, this also includes estimates of the positive employment impacts of universal credit.

Steve Webb: From October 2013, the Department for Work and Pensions will have the capability, where a need is identified, to make payments from a universal credit award directly to the landlord as well as to-the claimant. Stephen Timms: To ask the Secretary of State for Work and Pensions pursuant to the answer of 24 April 2012, Official Report, column 794W, on universal credit, what options he is considering to ensure that universal credit is payable to people without a bank account.

436W

account and has been designed specifically for those people who are unable to make use of mainstream bank accounts. Work Capability Assessment Tom Greatrex: To ask the Secretary of State for Work and Pensions who is responsible for carrying out the mystery shopper visits to Atos medical assessment centres. [114026] Chris Grayling: The Atos Healthcare area service delivery manager is responsible for carrying out the mystery shopper visits to Atos medical assessment centres. Tom Greatrex: To ask the Secretary of State for Work and Pensions how many mystery shopper visits were undertaken at Atos Medical Assessment Centres in (a) 2010, (b) 2011 and (c) 2012 to date; and at what [114027] locations. Chris Grayling: Mystery shopping visits were undertaken at medical assessment centres (MAC) for specific contractual years from September to August. 143 were completed in 2010-11 and 57 for 2011-12 (to date). Locations

Stephen Timms: To ask the Secretary of State for Work and Pensions whether direct payment of the housing element of universal credit to (a) social or council tenants and (b) private sector tenants will be operational in time for the rollout of universal credit in [114502] October 2013.

Written Answers

Birmingham Bootle Bristol Cardiff Croydon Leeds Manchester Newcastle Nottingham Scotland Wembley Total

2010-11

Number 2011-12

7 12 14 19 12 13 6 6 17 29 8 143

0 0 2 9 0 14 3 5 4 15 5 57

ATTORNEY-GENERAL Crown Prosecution Service: York

[114576]

Chris Grayling: Wherever possible, universal credit will be paid directly into a claimant’s bank or building society account. Facilities such as direct debits and standing orders are important tools for helping claimants to managing their benefit payments and for gaining access to discounts for household bills which are especially important for those on low incomes. We are working with a range of banking and financial product providers to encourage more claimants to use a bank account for managing their earnings and benefit income. For those claimants who cannot access any form of bank account the Department has signed a seven year contract with Citibank, working in partnership with PayPoint to provide a new Simple Payment service as an alternative to cheque payments. The Simple Payment service is based on the electronic transfer of funds in the same way that the Bacs system works for direct payment into a bank/building society

Hugh Bayley: To ask the Attorney-General pursuant to the answer of 18 June 2012, Official Report, columns 624-5W on Crown Prosecution Service: York, if he will place in the Library a copy of the business case prepared to estimate the cost and benefits of co-locating the Crown Prosecution Service and police staff at Athena House, York. [114253] The Solicitor-General: A copy of the business case referred to in my answer of 18 June 2012, Official Report, columns 624-25W, has been placed in the Library of the House. Drugs: East Midlands Gloria De Piero: To ask the Attorney-General how many residents of (a) Ashfield, (b) Nottinghamshire and (c) the East Midlands were prosecuted by the Crown Prosecution Service for (i) possession of, (ii) possession with intent to supply, (iii) supplying and (iv)

437W

Written Answers

2 JULY 2012

producing (A) class A, (B) class B and (C) class C drugs in each of the last five years for which figures are [114893] available. The Attorney-General: The Crown Prosecution Service (CPS) does not maintain a central record of the place of residence of the defendants they prosecute. This data could only be obtained by examining all of the CPS’s files, which would incur a disproportionate cost.

Written Answers

438W

Mr Vaizey: The allocations for each project area have been published on the Department’s website and can be found at the following link: https://docs.google.com/spreadsheet/ccc?key=0Ah3sVRjT 82KKdE9UUjl2VEJDaWZHV1BldXgzUDdxcWc#gid=0 https://docs.google.com/spreadsheet/ ccc?key=0Ah3sVRjT82KKdE 9UUjl2VEJDaWZHV1BldXgzUDdxcWc

Broadband: North West

Regulation Gordon Banks: To ask the Attorney-General what regulations the Law Officers’ Departments introduced between 1 February 2012 and 31 May 2012; and at [114813] what cost to the public purse in each case. The Attorney-General: None. RSPB: Prosecutions Nicholas Soames: To ask the Attorney-General how many prosecutions brought by the RSPB were taken over by the Crown Prosecution Service (CPS) in each of the last three years; how many such prosecutions were successful; how many were lost; and how many [114536] the CPS decided not to proceed with. The Attorney-General: The Crown Prosecution Service (CPS) does not hold any central data on the number of requests for private prosecutions to be taken over by the CPS prior to February 2011. Since this date, CPS areas have been required to notify any such requests to the Director of Public Prosecutions’ (DPP) Principal Legal Advisor (PLA). The PLA has to date received no notifications that the CPS has taken over any prosecutions brought by the Royal Society for the Protection of Birds (RSPB). RSPCA: Prosecutions Simon Hart: To ask the Attorney-General how many prosecutions brought by the RSPCA have been taken over by the Crown Prosecution Service in the last three years; and how many of those were (a) successfully prosecuted, (b) lost and (c) not proceeded with. [114007]

The Attorney-General: The Crown Prosecution Service (CPS) does not hold any central data on the number of requests for private prosecutions to be taken over by the CPS prior to February 2011. Since this date, CPS areas have been required to notify any such requests to the Director of Public Prosecutions’ (DPP) Principal Legal Advisor (PLA). The PLA has to date received no notifications that the CPS has taken over any prosecutions brought by the RSPCA.

CULTURE, MEDIA AND SPORT Broadband Helen Jones: To ask the Secretary of State for Culture, Olympics, Media and Sport how much of the £680 million allocated to improve broadband speeds is [114298] being spent in each region.

Helen Jones: To ask the Secretary of State for Culture, Olympics, Media and Sport what steps he is taking to implement superfast broadband in (a) the [114304] north-west and (b) Warrington. Mr Vaizey: All the local broadband plans for the north-west have been approved by Broadband Delivery UK (BDUK), including the one covering Warrington. BDUK is also supporting the project teams to prepare for procurement and will continue to support them throughout the process. Internet: Children Stephen Phillips: To ask the Secretary of State for Culture, Olympics, Media and Sport what steps his Department is taking to improve the safety of children [114515] using the internet. Mr Vaizey: The Department for Culture, Media and Sport (DCMS) has worked, and continues to work, closely with the UK Council for Child Internet Safety (UKCCIS) on a number of activities. UKCCIS is co-chaired by the Under-Secretary of State for Children and Families, Department for Education, my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton), and the Minister for Equalities and Under-Secretary of State for Criminal Information, my hon. Friend the Member for Hornsey and Wood Green (Lynne Featherstone). I am a UKCCIS Executive Board Member. DCMS has worked closely with UKCCIS on a number of recent activities including the launch of their guidance for industry, which ensures parents and children are provided with consistent advice when using internet services and activities; and the Safer Internet Day in February and the recent UKCCIS summit (28 June 2012) which saw the launch of UKCCIS’s discussion paper on parental controls and active choice. Mobile Phones Ann Coffey: To ask the Secretary of State for Culture, Olympics, Media and Sport when he expects Ofcom to publish the rules which will govern the [114696] auction of 4G licences. Mr Vaizey: This is a matter for Ofcom, the independent regulator. Ofcom are currently considering the responses received as a result of their recent consultation which closed on 22 March and are expected to make a statement, setting out the auction rules, in the summer. Ofcom remain on schedule for the UK auction process to start by the end of 2012. This is compatible with the spectrum becoming available to allow successful bidders to start rolling out 4G services in these bands in 2013.

439W

Written Answers Olympic Games 2012

Hywel Williams: To ask the Secretary of State for Culture, Olympics, Media and Sport if he will assess the compliance of London 2012 Olympic signage with the International Olympic Committee’s requirements [114810] for French/English bilingualism. Hugh Robertson: The London 2012 Organising Committee (LOCOG) is responsible for meeting the requirements set out by the International Olympic Committee on the use of the English and French languages. Signage within Games Venues will be in English and in French, where appropriate. Sports: Grants Clive Efford: To ask the Secretary of State for Culture, Olympics, Media and Sport (1) what estimate he has made of how much each sport governing body will invest in grass roots sport as a result of the agreement on contributions from their broadcasting income; and if [114683] he will make a statement; (2) what estimate he has made of how much the Premier League will invest in grass roots sport as a result of the agreement on contributions from their broadcasting income; and if he will make a statement. [114684]

Hugh Robertson: Sports bodies that are signatories to the Sport and Recreation Alliance voluntary code on sports broadcasting commit to reinvest at least 30% of their net UK television broadcasting revenues in grassroots sport Although individual contributions are kept in confidence, the sports broadcasting monitoring committee have verified that they do meet this benchmark and estimate the yearly sum from all signatories to be in excess of £250 million. The Premier League is a signatory to the Alliance’s voluntary code on sports broadcasting and we are confident they will continue to fund in excess of 30% of their net UK broadcasting revenues to support grassroots football.

TRANSPORT Aviation: Compensation Lorely Burt: To ask the Secretary of State for Transport how many British nationals successfully claimed compensation under EU regulations for flights to and from EU member states that were cancelled or delayed in each year since the coming into force of those regulations; [114229] and if she will make a statement. Mrs Villiers: This information is not available. Complaints about cancellations and delays under Regulation EC261/2004 are handled by the relevant National Enforcement Bodies (NEBs) in the country where the cancellation or delay occurred. Therefore a British national will be in contact with the appropriate NEB rather than the UK Civil Aviation Authority (CAA) if their flight was cancelled or delayed outside the UK. The CAA will handle complaints from British nationals and non British nationals if the cancellation or delay occurred in the UK. The CAA does not record the nationality or residency in all cases.

440W

Written Answers

2 JULY 2012

In addition the CAA will only handle complaints where a passenger has been unable to reach a resolution with an airline and therefore does not have figures for successful cases where the CAA has not been involved. Aviation: Fares Lorely Burt: To ask the Secretary of State for Transport what information her Department holds on the average cost of flights from London airports to other EU member state capitals in each of the last 20 years; and if she will make a statement. [114587] Mrs Villiers: The following table gives estimates of the average one-way fare between airports in London and in the state capitals of other EU-27 countries. These estimates are based on data collected via the International Passenger Survey. There was a change in methodology in 2007, which may partly explain the increase in fares in this year. It is also worth noting that the sample sizes for some destinations are very small and the distribution of destinations has changed over time, as the number of flights to different destinations have changed at different rates. These figures should therefore be interpreted with caution. Estimated one-way air fare between London airports and other EU member state capitals, 2000-10 Average single fare1 (£)

Unweighted sample size

2000

141

7,263

2001

130

7,445

2002

118

6,931

2003

104

6,781

2004

93

6,823

2005

91

7,400

2006

90

7,491

2007

95

3,918

2008

92

3,623

2009

94

5,163

2010

90

5,052

1

Real 2010 prices.

Cycling Mr Foster: To ask the Secretary of State for Transport if she will consider the proposals made by the Cycling Stakeholder Forum for a cross-departmental action plan to increase cycle use and improve the safety of cyclists. [114036] Norman Baker [holding answer 28 June 2012]: I have seen the proposals from the Cycling Stakeholder Forum and discussed them with the group. Driver and Vehicle Licensing Agency Chi Onwurah: To ask the Secretary of State for Transport whether Driver and Vehicle Licensing Agency call centres are set targets in respect of average waiting times. [113797] Mike Penning: There are no set targets specifically for average waiting times. There is a customer service measure to answer 95% of all calls connected to the contact centre. This is a Secretary of State target. There is also an internal target to answer 70% of all calls queued to an adviser within 30 seconds. In 2011-12 the contact centre achieved 98% against the 95% target and 78% against the internal target of 70%. The average speed of answer for 2011-12 was 28 seconds.

441W

Written Answers

2 JULY 2012

Karl McCartney: To ask the Secretary of State for Transport what recent discussions her Department has had with the Driver and Vehicle Licensing Agency on the sale of driver information to private companies; and if she will estimate the proportion of such sales that were related to the pursuit of motorists for parking and speeding fines incurred in other EU [114582] member states in each of the last five years. Mike Penning: Department for Transport and Driver Vehicle and Licensing Agency (DVLA) officials liaise closely on matters relating to the release of data from the DVLA’s records. The following table shows the percentage of requests for registered keeper details to pursue parking and speeding contraventions incurred in other EU member states as a proportion of all fee paying requests for keeper details. Percentage of requests 2007-08

0.3

2008-09

0.82

2009-10

1.57

2010-11

1.38

2011-12

1.14

Driving Offences Karl McCartney: To ask the Secretary of State for Transport what recent discussions her Department has had with local authorities on the resolution of outstanding motoring offences committed by foreign drivers visiting the UK; and if she will estimate the financial value of unpaid fixed penalty notices issued to foreign drivers visiting the UK in each of the last five years. [114581] Mike Penning: Fixed penalty notices are criminal sanctions, usually issued by the police. My Department has not had recent discussions with local authorities specifically about these offences in relation to foreign drivers. The Department does not hold information on the value of unpaid fixed penalties for each of the last five years. Under the graduated fixed penalty and deposit scheme enforcement agencies can stop drivers who commit motoring offences on UK roads and take a deposit from those that are unable to provide an address in the UK. Since its introduction in May 2009, £5.6 million has been paid in deposits. Heathrow Airport Zac Goldsmith: To ask the Secretary of State for Transport what information she holds on the average seat occupancy rate on flights (a) departing from and (b) arriving at Heathrow in the latest period for which [114111] such figures are available.

442W

Holidays: Compensation

Lorely Burt: To ask the Secretary of State for Transport how many British nationals, whose holiday provider had gone bankrupt, received compensation under EU Regulations in (a) total and (b) each year since the coming into force of such regulations; and if she will make a statement. [114227]

Mrs Villiers: The EU Package Travel Directive, implemented in the UK through the Package Travel, Package Holidays and Package Tours Regulations 1992 (the PTRs), requires organizers of package holidays, amongst other obligations, to provide sufficient evidence of security for the refund of money paid over and for the repatriation of the consumer in the event of insolvency. For package holidays including a flight, package holiday organisers meet this obligation by holding and complying with the requirements of a licence issued under the Air Travel Organisers’ Licensing (ATOL) scheme. Between 23 December 1992, the date the PTRs came into effect, and 31 March 2011, 202,216 passengers were repatriated and 933,624 passengers received a refund under the ATOL scheme. Details of the number of passengers that received refunds and repatriation assistance under the ATOL scheme for the years between 23 December 1992 and 31 March 2011 are in table 1 as follows. Package holiday organisers for package holidays that do not include a flight cannot be part of the ATOL scheme but have a choice of other ways to provide insolvency protection for consumers. The Government do not hold figures for the number of passengers that have received refunds or been repatriated under these arrangements. Table 1: Number of consumers repatriated or refunded during each year ending 31 March (unless otherwise specified) under the Air Travel Organisers’ Licensing (ATOL) scheme

1

Repatriations

Refunds

Total 66,134

1993

1,476

64,658

1994

10,560

22,269

32,829

1995

11,417

124,641

136,058

1996

13,816

20,814

34,630

1997

19,343

61,824

81,167

1998

7,439

25,049

32,488

1999

11,559

24,459

36,018

2000

668

9,934

10,602

2001

187

4,775

4,962

2002

6,567

13,144

19,711

2003

516

3,849

4,365

2004

1,984

11,880

13,864

2005

11,634

21,969

33,603

2006

1,754

21,858

23,612

2007

4,706

54,116

58,822

2008

1,650

20,771

22,421

2009

47,482

236,691

284,173

2010

2,445

45,114

47,559

2011

47,013

145,809

192,822

Total

202,216

933,624

1,135,840

1

Mrs Villiers: In 2011, the average seat occupancy rate on flights at Heathrow was estimated to be 73% on both departing and arriving flights.

Written Answers

23 December 1992-31 March 1993. Source: Air Travel Trust Report and Accounts 1993-2010 and Air Travel Trust Report and Financial Statements 2011

443W

Written Answers

2 JULY 2012

Motor Vehicles: Testing Mr George Howarth: To ask the Secretary of State for Transport what estimate she has made of the average additional travel (a) cost and (b) distance for hauliers arising from closure of authorised testing facilities. [113618]

Mike Penning: There are no plans to close any authorised testing facilities (ATFs) and to date no ATFs have closed. With 217 ATFs now available it is likely that the distance to a test site for hauliers has decreased. Portland Harbour Mr Swayne: To ask the Secretary of State for Transport what plans she has to close Portland Harbour; and if [114876] she will make a statement. Mike Penning: There are no plans to close Portland Harbour. There are however restrictions to the use of Portland Harbour during the period of the Olympics and Paralympics. During certain competition times the harbour will be closed to marine traffic. These restrictions and closures do not extend beyond the duration of the games. Publications Jonathan Ashworth: To ask the Secretary of State for Transport what (a) consultation documents and (b) publications have been issued by her Department since [114171] May 2010. Norman Baker: The Department for Transport and its seven executive agencies are required to publish information about their respective publications and consultations on their corporate websites. Details of individual publications published since May 2010 can be found using the standard search enquiry on each site. A list of publication web addresses for each DfT organisation is as follows: DfT and DSA 1. DfT and DSA publications 2010: http://www.dft.gov.uk/publications?year=2010 2. DfT and DSA publications 2011: http://www.dft.gov.uk/publications?year=2011 3. DfT and DSA publications 2012: http://www.dft.gov.uk/publications?year=2012 4. DfT and DSA consultations 2010: http://www.dft.gov.uk/consultations?year=2010 5. DfT and DSA consultations 2011: http://www.dft.gov.uk/consultations?year=2011 6. DfT and DSA consultations 2012: http://www.dft.gov.uk/consultations?year=2012

VCA 7. VCA downloads: http://www.dft.gov.uk/vca/downloads/index.asp

HA 8. HA publications: http://www.highways.gov.uk/aboutus/136.aspx 9. HA consultations: http://www.highways.gov.uk/roads/133.aspx

MCA 10. MCA publications: http://www.dft.gov.uk/mca/mcga07-home/ newsandpublications/mcga-publications.htm

Written Answers

444W

11. MCA consultations: http://www.dft.gov.uk/mca/mcga07-home/shipsandcargoes/ consultations.htm

GCDA 12. GCDA publications: http://www.dft.gov.uk/gcda/about/documents.php

DVLA 13. DVLA publications: http://www.dft.gov.uk/dvla/publications.aspx 14. DVLA consultations: http://www.dft.gov.uk/dvla/consultations.aspx

VOSA 15. VOSA consultations: http://www.dft.gov.uk/vosa/publications/publications.htm 16. VOSA publications: http://www.dft.gov.uk/vosa/publications/ consultationsandresearch/consultationsandresearch.htm

Railways: Franchises Mr Evennett: To ask the Secretary of State for Transport what plans she has to include (a) Transport for London, (b) Kent county council and (c) other local authorities in the decision-making process for the [113613] new Integrated Kent Franchise. Mrs Villiers: Transport for London, Kent county council and other local authorities (particularly East Sussex county council) will be key stakeholders in developing the new South Eastern franchise. They are formal consultees in the public consultation launched by DFT on 21 June. They are invited to purchase enhancements to the services in their area. Alternatively, they have the option to propose ways in which funding could be reallocated in their area by reductions on some routes in order to fund new priorities for rail service expansion elsewhere in their local area. Separately, the Department has consulted on ideas for decentralising more decisions on rail franchising. This consultation ended on 28 June. Railways: Tickets Robert Halfon: To ask the Secretary of State for Transport what funds her Department has allocated to support the extension of the Oyster card fare payment system; by what means train operating companies can bid for such funding; what criteria such bids must meet to be successful; and if she will make a statement. [114085]

Mrs Villiers: As part of the November Growth Review, the Government allocated £45 million to support the installation of smart ticketing equipment in a large number of stations in the South East. This will allow train operators to offer flexible ticketing products on their networks more quickly than would have been possible if we had waited for the start of new franchises to make progress. This equipment will enable ITSO compliant smart tickets to be used on these routes. By January 2014 the DfT’s ITSO on Prestige project will enable ITSO smart cards to be accepted by Oyster readers and used across London.

445W

Written Answers

2 JULY 2012

These initiatives will build on the investment that has already been made, for example by including mandatory smart ticketing requirements in the franchises for East Midlands, London Midland, Southern and Southwest trains. TfL is also working on various Oyster related initiatives and emerging contactless bankcard solutions. Rescue Services Angus Robertson: To ask the Secretary of State for Transport on how many occasions each maritime coastguard station has taken over complete operational control of its paired station for a period of more than two hours; and during times of pairing how many rescue incidents were dealt with successfully, in each of [114542] the last five years. Mike Penning: The current pairing arrangements—the Area Operations concept where two MRCC are technically and operationally capable of mutual support—were introduced in 2005. These arrangements are an innate aspect of current HM Coastguard operations and happen on a regular basis and therefore the Maritime and Coastguard Agency does not keep records of instances where pairing is undertaken on operational grounds. Angus Robertson: To ask the Secretary of State for Transport (1) on how many occasions staff from one maritime coast guard station have carried out training in their paired station’s operations room, by station, in [114543] each of the last five years; (2) how many recorded training hours staff of each maritime coastguard station have spent in the operations room of its paired station in order to gain [114544] local knowledge of that station. Mike Penning: The Maritime and Coastguard Agency (MCA) has not specifically recorded this information. The current pairing arrangements—the area operations concept where two Maritime Rescue coordination centres are technically and operationally capable of mutual support—were introduced in 2005. These arrangements are an innate aspect of current Her Majesty’s Coastguard operations and happen on a regular basis and therefore the MCA does not keep records of instances where pairing is undertaken on operational grounds. Katy Clark: To ask the Secretary of State for Transport what testing will take place prior to the proposed closure of the maritime rescue and co-ordination centre at [114568] Clyde in December 2012. Mike Penning: Preparations have been under way since the announcement on 22 November 2011 for the closure of Clyde. Testing will be carried out prior to the closure of Clyde Maritime Rescue Coordination Centre (MRCC) to ensure that the Maritime and Coastguard Agency is able to maintain the same quality of search and rescue service as at present. This will include the management of Clyde MRCC’s current operational area by the centres at Belfast and Stornoway, while Clyde is still operational, to ensure a smooth transition. Staff from these three centres are already carrying out cross-training.

Written Answers

446W

Katy Clark: To ask the Secretary of State for Transport if she will publish the evidence supporting her Department’s claim that the closure of maritime rescue and co-ordination centres will not affect the safety of mariners off the West Coast of Scotland. [114569] Mike Penning: The Maritime and Coastguard Agency has assessed on a national basis the safety risks in relation to HM Coastguard’s current operation and how these are mitigated by the new structure. The MCA has also assessed the impact of the new structure on HM Coastguard’s capability to deliver its national service. These assessments, as well as a location impact assessment, location rationale and supporting tables showing factors taken into consideration in the proposed choice of Coastguard Centres, have been published on the MCA’s website at: http://www.dft.gov.uk/mca/

ENVIRONMENT, FOOD AND RURAL AFFAIRS Agriculture Huw Irranca-Davies: To ask the Secretary of State for Environment, Food and Rural Affairs what assessment she has made of the potential effect on new entrants to farming of freedom contracts replacing the [114232] landlord and tenant structure. Mr Paice: There has been no assessment by DEFRA of the potential effects for new entrants of the replacement of the landlord and tenant structure by freedom contracts. Agriculture: Reservoirs Dr Poulter: To ask the Secretary of State for Environment, Food and Rural Affairs what her policy is on allowing farmers with reservoirs to recharge them during periods of heavy rainfall outside of the recharge [114162] season. Richard Benyon: The result of two dry winters in 2010-11 and 2011-12 has prevented many farmers from filling their reservoirs. The Environment Agency recognised the difficulties farmers would face this summer, and gave them the opportunity to temporarily fill reservoirs outside the normal abstraction period and apply to take summer high flows at a reduced rate. Heavy rain coincided with the Environment Agency’s flexibility, and the majority of farm reservoirs are now full. A small number of farmers have applied to permanently extend their abstraction period and take high flows in summer. The Environment Agency is encouraging farmers to review their licences now and make this ‘water security check’ a regular feature of their business planning. Those that do could be in a much stronger position during future dry periods. Agriculture: Subsidies Huw Irranca-Davies: To ask the Secretary of State for Environment, Food and Rural Affairs what recent advice she has received on the phasing out of direct [114234] subsidy payments to farmers in the UK.

447W

Written Answers

Written Answers

2 JULY 2012

Mr Paice: The Secretary of State for Environment, Food and Rural Affairs, my right hon. Friend the Member for Meriden (Mrs Spelman), and I receive regular representations from both officials and stakeholders, and are in discussions with European and Devolved Administration counterparts on the subject of direct payments. In addition, the UK Government consulted on the Commission’s Common Agricultural Policy (CAP) reform communication, prior to publishing its response document in January 2011. We were very keen to hear what stakeholders thought after publication of the regulatory proposals on 12 October 2011, and published a discussion paper and questionnaire inviting responses. The responses received have been considered and help to inform the UK Government’s position on the proposals. The UK Government is committed to the gradual reduction of direct support under Pillar 1 and a CAP that moves away from market-distorting subsidies while helping to build the capacity, competitiveness, productivity and resilience of EU farmers. We are committed to an increasing focus on actions under Pillar 2, providing environmental public goods that the market cannot deliver. Animal Welfare

448W

We continue to make significant efforts to educate farmers of their obligations with regard to legislative requirements and to encourage good welfare. DEFRA’s welfare codes of recommendations aim to encourage farmers to adopt the highest standards of animal husbandry. Without good stockmanship, animal welfare can never be adequately protected. Livestock farmers and employers are required by law to ensure that all those attending to their livestock are familiar with, and have access to, the relevant codes. Over a number of years ADAS, on behalf of DEFRA, have provided comprehensive welfare advice through a variety of media to producers and private veterinary surgeons to promote good stockmanship and to provide guidance on a wide range of on-farm animal welfare issues. The RDPE Farming and Forestry Improvement Scheme and Rural Economy Grants provide funding to farmers and other businesses in England toward the cost of capital expenditure aimed at improving competitiveness. The improvement of the health and welfare of farm animals is one of the key themes of the schemes with improvement measures over and above standard farm practice being eligible for funding. Animals: Imports

Andrew Rosindell: To ask the Secretary of State for Environment, Food and Rural Affairs what steps she is taking to encourage farmer producers to raise animals [114346] with higher levels of welfare. Mr Paice: This Government sees the promotion of high animal welfare standards across all areas of agricultural activity as essential to the long-term sustainability of the farming sector.

Dogs Cats Other mammals Total

Andrew Rosindell: To ask the Secretary of State for Environment, Food and Rural Affairs how many animals have been detected being illegally brought into the UK in each of the last five years. [112110] Mr Paice: The total numbers of animals that have been detected as being illegally brought into the UK in the last five years are as follows:

2008

2009

2010

2011

2012 (January-May)

132 84 0 216

129 79 3 211

91 65 4 160

110 46 5 161

163 48 1 212

All animals that are found to have been illegally brought into the UK are immediately placed into quarantine as part of the robust disease control arrangements we have in place. Andrew Rosindell: To ask the Secretary of State for Environment, Food and Rural Affairs how many animals were imported into the UK to be sold as pets in the latest period for which figures are available. [112116]

Mr Paice: The number of dogs, cats and ferrets that have been imported into the UK under commercial rules in the last five years is as follows:

Imports into the UK from outside of the EU Total 2008 2009 2010 2011 2012 (January-May)

5,051 4,621 6,388 6,765 4,452

Importers are not required to specify whether these animals are to be sold as pets. The above data is derived from the European Commission’s Trade Control and Expert System (TRACES). Birds of Prey

Imports into the UK from other EU member states Total 2008 2009 2010 2011 2012 (January-May)

121 214 557 539 460

Chris Ruane: To ask the Secretary of State for Environment, Food and Rural Affairs (1) whether her Department has allocated any funding to (a) research into ways of reducing the buzzard population in or near pheasant shoots and (b) reducing the buzzard [110520] population;

449W

Written Answers

2 JULY 2012

(2) what consultation she plans to have (a) within and (b) outside Parliament on proposals to reduce the buzzard population in or near pheasant shoots. [110522]

Richard Benyon: DEFRA has not allocated any funding for use in reducing the buzzard population. DEFRA funded the Food and Environment Research Agency to undertake a desk study in January 2012 entitled ‘Approaches to mitigating bird of prey conflicts with pheasants at release pens, outdoor poultry and lambs’ at a total cost of £24,694. The report can be found on the DEFRA website. DEFRA has made provision for up to £125,000 to be available in each of the current and following two financial years for additional research to look at the relationship between raptors (including buzzards), livestock, wildlife and game birds. DEFRA will collaborate with all the organisations that have an interest in this issue to identify and develop any future research proposals. Birds: Conservation Jim Shannon: To ask the Secretary of State for Environment, Food and Rural Affairs whether she has considered the reintroduction of brent geese to the quarry list; and what discussions she has had with the Countryside Alliance and British Association for Shooting [112215] and Conservation on that matter. Richard Benyon: The Secretary of State for Environment, Food and Rural Affairs, my right hon. Friend the Member for Meriden (Mrs Spelman), has not considered placing the brent goose on schedule 2 of the Wildlife and Countryside Act 1981 (‘the quarry list’), and has had no discussions on the matter with either the Countryside Alliance or the British Association for Shooting and Conservation. Breeding and Sale of Dogs (Welfare) Act 1999 Graeme Morrice: To ask the Secretary of State for Environment, Food and Rural Affairs if she will review the effectiveness of the provisions of the Breeding and [114889] Sale of Dogs (Welfare) Act 1999. Mr Paice: The Government has no proposals to review the Breeding and Sale of Dogs (Welfare) Act 1999. The independent Advisory Council on the Welfare Issues of Dog Breeding under the chairmanship of Professor Sheila Crispin, works with key dog interest groups such as The Kennel Club and Dogs Trust to try and tackle problems associated with the health and welfare of dog breeding. I will of course consider any recommendations that the Council make. Cattle: Exports Andrew Rosindell: To ask the Secretary of State for Environment, Food and Rural Affairs how many live male dairy calves were exported in each of the last five [114343] years. Mr Paice: While we collect figures for the numbers of cattle exported, we do not collect information on their age or gender and therefore are unable to provide the information requested.

Written Answers

450W

Dog Control Orders Gloria De Piero: To ask the Secretary of State for Environment, Food and Rural Affairs how many dog control orders have been issued in (a) England and Wales, (b) Nottinghamshire and (c) Ashfield constituency in the last three years. [114788] Mr Paice: DEFRA holds no central records for Dog Control Orders. This information is only held by individual local authorities, for the Dog Control Orders issued in their own area. Energy: Conservation Lorely Burt: To ask the Secretary of State for Environment, Food and Rural Affairs what estimate her Department has made of the likely (a) average net contribution to the economy and (b) reductions in carbon emissions of the combined effect of the EU Energy Labelling Directive and Eco-design for Energy Using Products Framework Directive in the next 10 [114196] years; and if she will make a statement. Richard Benyon: Improvements in the sustainability and energy efficiency of domestic, commercial and industrial energy-using products and appliances are recognised as one of the most cost-effective ways of reducing energy demand, carbon emissions and energy bills. A number of measures relating to the Eco-design for energy using products framework directive and the EU energy labelling directive to improve these types of products have been, or are in the process of being, agreed at European level. Measures agreed so far include minimum energy performance standards and energy labels for products which include televisions, washing machines and fridge freezers. These are projected to reduce UK emissions by around 7 million tonnes of carbon dioxide equivalent (MtC02e) in 2020, with corresponding net benefits to society of approximately £10 billion over the next 10 years. It is estimated that the next set of measures to be agreed will save a further six MtC02e in 2020, with corresponding net benefits to society of approximately £5.5 billion over the next 10 years. EU Law Miss McIntosh: To ask the Secretary of State for Environment, Food and Rural Affairs what representations her Department made to the European Commission at the time that (a) Regulation (EC) No 999/2001 and (b) Regulation (EC) No 853/2004 were negotiated. [114323] Mr Paice: DEFRA and its predecessor MAFF were directly involved in all EU negotiations that led to the adoption of the TSE Regulation (EC) 999/2001. The proposal for a TSE Regulation was adopted by the Commission in November 1998 and is based on Article 152(4b) of the Treaty on the protection of public health. The European Parliament adopted its opinion in first reading on 17 May 2000. A Common Position, incorporating all key amendments of the European Parliament was unanimously agreed by the Council in February 2001.

451W

Written Answers

2 JULY 2012

Since its adoption, the regulation has been amended over 40 times to adjust it to new developments and scientific evidence. A comprehensive chronology of BSE/ TSE legislation in the EU is available on the European Commission’s website. The EU’s measures to fight TSE’s have led to a significant reduction in cases. The Commission’s TSE Roadmap 2, published in July 2010, notes that the positive trend in the BSE epidemic has continued since 2005, when the European Commission’s first TSE Roadmap was published, and that the impact of BSE on human health appears to be more limited than initially feared. The Commission’s objective for the coming years is to continue to review the TSE measures while assuring a high level of food safety. Amendments to the TSE measures will be stepwise and supported by scientific advice from the European Food Safety Authority (EFSA). DEFRA continues to contribute to EU negotiations for more proportionate TSE controls and surveillance, to reduce the economic burden and contribute to a sustainable farming sector. The Food Standards Agency (FSA) contributed to these negotiations in respect of the food safety aspects of Regulation (EC) No. 999/2001, which fall within the policy remit of the FSA. Regulation (EC) No. 853/2004 sets down food hygiene rules for products of animal origin which fall within the policy remit of the FSA. The FSA was the lead Government Department in negotiations at European level on Regulation (EC) No. 853/2004. As such, no representations were made by DEFRA to the European Commission at the time the Regulation was negotiated, but DEFRA liaised as appropriate with the FSA.

Written Answers

452W

allocation (FQA) units during the course of 2013. We are undertaking this work in conjunction with the devolved Administrations. Meat: Imports Miss McIntosh: To ask the Secretary of State for Environment, Food and Rural Affairs how many tonnes of (a) desinewed meat, (b) mechanically separated meat and (c) 3mm Boarder meat have been imported into the UK from (i) ruminants and (ii) non-ruminants from (A) Holland, (B) Italy, (C) Spain, (D) France, (E) Austria, (F) Poland and (G) other EU member states since the end of April 2012. [114322] Mr Paice: It is not possible to identify quantities of desinewed, mechanically recovered or boarder meat from the available trade figures. Nanotechnology Mr Brady: To ask the Secretary of State for Environment, Food and Rural Affairs if her Department will review the arrangements for the regulation of the emission or [114292] use of nanoparticles. Richard Benyon: The European Commission has been undertaking a thorough review of arrangements for the regulation of manufactured nanomaterials and nanoparticles over the past year or so, following a request from the European Parliament. DEFRA officials have actively contributed to the exercise. We will carefully study the Commission’s findings once they have been published.

Fish Farming Andrew Rosindell: To ask the Secretary of State for Environment, Food and Rural Affairs what quantity of fish was farmed in UK waters in each of the last five [114357] years. Richard Benyon: The following amounts of fish were farmed in the UK in each of the last five years: In 2007: 159,000 tonnes finfish and 27,500 tonnes shellfish; In 2008: 144,000 tonnes finfish and 35,500 tonnes shellfish; In 2009: 161,000 tonnes finfish and 35,600 tonnes shellfish; In 2010: 170,000 tonnes finfish and 31,500 tonnes shellfish; .and In 2011: 171,000 tonnes finfish and 32,000 tonnes shellfish.

The data include fish farmed in both freshwater and marine waters, and include both natural and artificial waters. Around 65-75% of the total fish farmed in each year is Scottish salmon. Fisheries Miss McIntosh: To ask the Secretary of State for Environment, Food and Rural Affairs if she will publish a register of all UK fishermen; and if she will make a [113885] statement. Richard Benyon: We do not currently have plans to publish a register of all UK fishermen. We are planning to publish a register of all holders of fixed quota

Mr Brady: To ask the Secretary of State for Environment, Food and Rural Affairs if she will bring forward legislative proposals to regulate nanoparticles [114293] smaller than PM 2.5. Richard Benyon: The manufacture, use and importation of chemical substances, including manufactured nanoparticles, is covered by the EU Regulation 1907/2006 on industrial chemicals, the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) Regulation. UK officials have actively contributed to a European Commission review of REACH. The review is expected to report later this year on, among other things, the way in which the regulation addresses manufactured nanomaterials. We will carefully consider the findings once published. Elsewhere, there are currently no plans to specifically regulate nanoparticles below PM 2.5. Mr Brady: To ask the Secretary of State for Environment, Food and Rural Affairs what assessment she has made of research into the toxicology of nanoparticles; and if [114294] she will make a statement. Richard Benyon: The UK is a key contributor to the global nanosafety effort, much of which is brought together through the Organisation for Economic Co-operation and Development’s priority nanomaterials sponsorship programme. This £50 million research collaboration is expected to start delivering results of its research into the toxicity and effects of manufactured

453W

Written Answers

2 JULY 2012

nanomaterials soon. This will further our understanding of the basis for measures that might be needed to manage potential risks. Mr Brady: To ask the Secretary of State for Environment, Food and Rural Affairs if she will assess the feasibility of utilising electron microscopy in the [114295] evaluation of nanoparticles. Richard Benyon: Electron microscopy is extensively used and provides a valuable tool in the characterisation and evaluation of nanoparticles. Transmission electron microscopy (TEM) and scanning electron microscopy (SEM) have been used to characterise and measure nanoparticles for many years and they continue to be part of UK and EU research into nanomaterials. Standards are being developed for the use of TEM and SEM to look at carbon nanotubes and there is a working group in the international Standards Organisation’s Nanotechnologies Committee which is developing a standard to measure primary particle size using electron microscopy.

Written Answers

454W

We are also actively engaging with the European Commission’s study into the impacts of EU consumption of imported food and non-food commodities on deforestation. This includes a review of Community policy areas with the greatest potential for reducing pressure on forests beyond the EU and to ensure that options for addressing impacts from palm oil are considered. There are no plans at present for an EU-wide legislative approach, but we will be pressing the Commission to provide robust proposals once its consultant’s report has been finalised. Palm Oil: Imports Zac Goldsmith: To ask the Secretary of State for Environment, Food and Rural Affairs what steps she plans to take to prevent the importation of unsustainable palm oil. [113881] Richard Benyon: I refer my hon. Friend to my reply to him of 19 June 2012, Official Report, column 858W. Pigs: Animal Welfare

Origin Marking: Israel Richard Burden: To ask the Secretary of State for Environment, Food and Rural Affairs with reference to paragraph 10 of her Department’s technical advice on the labelling of produce grown in the Occupied Palestinian Territories, what her Department’s policy is on whether goods originating from Israeli settlements in the West [114296] Bank should be stocked by retailers. Mr Paice: The Government’s policy in relation to Israeli settlements on the West Bank is quite clear: those settlements are illegal, and they constitute a barrier to a lasting peace. However, it does not believe that a Government-imposed ban or boycott of settlement produce would help engage or influence Israel, or lead to progress in the Middle East Peace Process. The reason why DEFRA issued the technical advice referred to by the hon. Member was to make it easier for consumers to make their own choices about whether or not to buy produce originating in the illegal settlements, and of course retailers themselves are free to decide not to sell goods from the Israeli settlements if they so wish. Palm Oil Zac Goldsmith: To ask the Secretary of State for Environment, Food and Rural Affairs if she will work with her international counterparts to bring forward EU legislative proposals to regulate the (a) sale, (b) possession and (c) purchase of unsustainable palm oil. [113973]

Richard Benyon: We are in contact with other member states regarding their policies to promote sustainable palm oil. In particular, we are keen to learn from Dutch and Belgian colleagues on the commitments their industries have made to use 100% sustainable palm oil. We are working to replicate this in the UK and, as my right hon. Friend, the Prime Minister, announced as part of his recent visit to Indonesia, we are working with British trade associations to set out a roadmap for sustainable palm oil usage nationwide.

Huw Irranca-Davies: To ask the Secretary of State for Environment, Food and Rural Affairs what discussions she has had with retailers on the potential effect of the EU partial stalls ban to be introduced in 2013. [114231] Mr Paice: Recognising the importance of compliance with the upcoming partial sow stalls ban, I recently met with leading representatives from the pig meat supply chain (including the British Retail Consortium), to discuss the UK’s position. The discussion was fruitful with retail, processing and trade representatives stating their intention to source pig meat only from compliant systems of production. There are plans for a follow up meeting with wider groups of stakeholders, including retailers, in the autumn to discuss progress made and next steps. Huw Irranca-Davies: To ask the Secretary of State for Environment, Food and Rural Affairs how many EU member states she estimates will not comply with the European partial stalls ban to be introduced in [114571] 2013. Mr Paice: At the June Agriculture Council meeting, the Commission announced that overall 18 member states had said that they would be fully compliant by the sow stall ban deadline of 1 January 2013, including the UK pig industry’s main competitors. Those member states estimating full compliance are Belgium, Bulgaria, Czech Republic, Denmark, Estonia, Germany, Hungary, Ireland, Latvia, Lithuania, the Netherlands, Malta, Romania, Slovakia and Spain. Sweden, Luxembourg and the UK have already banned sow stalls. Of the nine member states remaining, most are anticipating levels of compliance in excess of 90%. Pollution: Rockall Sheryll Murray: To ask the Secretary of State for Environment, Food and Rural Affairs whether her Department is responsible for pollution clearance around [114320] the Island of Rockall.

455W

Written Answers

2 JULY 2012

Written Answers

456W

Richard Benyon: The Scottish Government is responsible for the management of Scottish inshore and offshore waters, other than for reserved functions. Action to prevent marine pollution remains a responsibility of the UK Government and the Maritime and Coastguard Agency, as an Executive agency of the Department for Transport, has overall responsibility for the monitoring and implementation of counter pollution measures within the United Kingdom Pollution Control Zone. Rockall sits within this zone.

are regularly estimated and there are now approximately 60 individuals remaining in the UK from an estimated 4,400 at the start of the programme. Ruddy ducks migrating to the UK will be culled as part of the ongoing work and DEFRA is working with colleagues in other European countries through the Bern convention to collaborate on eradication of the population from the Western Palearctic. An action plan to achieve this can be viewed on the Bern convention website.

Poultry: Pest Control

Seas and Oceans: Biodiversity

Jim Shannon: To ask the Secretary of State for Environment, Food and Rural Affairs how many licences were granted for the control of brent geese in the latest period for which figures are available; how many birds were culled; and in what locations. [112216]

Zac Goldsmith: To ask the Secretary of State for Environment, Food and Rural Affairs what agreements were reached on the conservation of marine biodiversity in the high seas at the UN Rio+20 conference on Sustainable Development. [114200]

Richard Benyon: A summary of licences issued for the management of brent geese issued by Natural England in 2011 is given in the following table: County

Licences granted

Licensed to be shot

Kent 11 150 Essex 31 454 Hampshire 2 30 Lincolnshire 13 116 Norfolk 5 80 Suffolk 4 20 West Sussex 6 165 Total 72 1,015 1 Not all end-of-licence returns have yet been received.

Reported shot 1 38 319 30 65 29 1 3 1 104 1 588 1

Jim Shannon: To ask the Secretary of State for Environment, Food and Rural Affairs what control measures for the eradication of the ruddy duck her Department has put in place; how much she estimates such eradication will cost; and what steps she has taken to ensure that ruddy ducks which migrate to the UK [112217] from other countries will be culled. Richard Benyon: The ruddy duck is a North American species introduced into the UK in the 1940s. It has bred very successfully here and has spread to mainland Europe, where it has bred and hybridised with the globally threatened white-headed duck, endangering its survival as a distinct species. The UK Ruddy Duck Eradication Programme is targeted at protecting the white headed duck. The programme began in 2005 and ran until March 2011 at a cost of £3.3 million, approximately half of which was provided by EU LIFE-Nature funding, with the remainder funded by DEFRA. The programme was delivered by the Food and Environment Research Agency (Fera) and DEFRA has continued to fund Fera to undertake ongoing work on eradication. Funding amounted to £200,000 in the 2011-12 financial year and for this financial year £150,000 has been allocated. During the course of the programme and the ongoing work, Fera has made regular reports that provide information on the progress of the eradication programme and which are available on its website. Population levels

Richard Benyon: Rio+20 reaffirmed the importance of the conservation and sustainable use of marine diversity. On areas beyond national jurisdiction, the declaration recognised the need for a new Implementing Agreement (IA) before the end of 2014. The Government will continue to press for this IA to include marine protected areas in locations beyond national jurisdiction. Sheep Huw Irranca-Davies: To ask the Secretary of State for Environment, Food and Rural Affairs what assistance her Department is providing to farmers to help tackle [114233] sheep lameness. Mr Paice: I certainly recognise that lameness in sheep is a significant welfare issue. Over a number of years ADAS, on behalf of DEFRA, have provided comprehensive welfare advice through a variety of media to producers and private veterinary surgeons on the control and prevention of lameness in sheep, most recently in their 2011 advisory programme for farmers. The Sheep Welfare Code contains specific recommendations on the management of lameness and practical measures to help prevent, or treat the condition can be found on the DEFRA website in the 2003 publication ’Lameness in Sheep’. I also fully support the work of the Food Animal Initiative and National Sheep Association in their ’Stamp out Lameness’ campaign which aims to raise awareness in the farming industry of one of the most significant welfare issues in sheep. It also aims to promote a proven, yet practical ’Five Step’ lameness reduction plan which has been shown to cut lameness by up to half in the first year. Shellfish: Dredging Mark Menzies: To ask the Secretary of State for Environment, Food and Rural Affairs what recent assessment she has made of the environmental effect of [115071] dredging cockle beds. Richard Benyon: DEFRA has made no assessment of the environmental impact of cockle dredging. Cockle fisheries in England occur in the inshore area (predominantly between zero to six nautical miles), and as such their management is the responsibility of the

457W

Written Answers

458W

Written Answers

2 JULY 2012

inshore fisheries and conservation authorities, who have a duty to ensure fisheries are managed in such a way that they do not adversely impact on the marine environment.

she has made of the volume of water leaking from pipes [114118] in each region in each of the last five years.

Water Supply

Richard Benyon: Ofwat, the economic regulator of water and sewerage companies in England and Wales has collected the following information on the volume of water leaked from pipes in each water company area:

Robert Halfon: To ask the Secretary of State for Environment, Food and Rural Affairs what recent estimate

1 megalitre (M/l) = 1 million litres Total leakage (Ml/day) 2006-07

2007-08

2008-09

2009-10

2010-11

Anglian Water Services

202.16

208.55

210.61

211.15

229.50

Dwr Cymru Cyfyngedig (Welsh)

209.48

204.01

194.39

192.80

199.28

Northumbrian Water (NNE)

145.94

136.17

149.80

155.74

157.78

Severn Trent Water Ltd

523.83

490.15

491.25

496.65

497.01

South West Water Ltd

82.94

84.23

84.16

82.42

83.73

Southern Water Services Ltd

82.03

81.78

86.90

95.15

92.15

Thames Water Utilities Ltd

790.32

713.22

698.43

669.85

664.56

United Utilities Water plc

468.22

462.19

461.63

462.28

464.24

Wessex Water Services Ltd

72.12

72.13

72.20

73.92

70.65

293.47

293.63

295.02

294.70

325.40

Bristol Water plc

53.56

52.86

53.57

52.78

50.30

Cambridge Water Company plc

13.44

13.89

13.95

14.17

13.68

Dee Valley Water plc

10.62

10:33

10.33

10.44

9.92

Essex and Suffolk Water

67.99

68.25

66.76

67.44

65.10

Portsmouth Water Ltd

29.24

29.62

30.40

28.67

29.55

Sembcorp Bournemouth Water

21.93

22.21

22.10

21.78

22.00

South East Water Ltd

97.81

93.80

95.89

96.08

95.31

Yorkshire Water Services Ltd

South Staffordshire Water plc

73.11

71.54

74.25

74.43

72.83

Sutton and East Surrey Water Ltd

24.01

24.29

24.46

24.20

24.51

Veolia Water Central

144.79

141.78

142.11

143.21

181.48

Veolia Water East

5.05

5.04

5.09

5.02

5.02

Veolia Water Southeast

7.81

7.89

7.72

7.78

7.21

Water Supply: Complaints Mr Andrew Turner: To ask the Secretary of State for Environment, Food and Rural Affairs in how many and what proportion of consumer complaints the Independent Consumer Council for water declined to intervene in the latest period for which figures are available; and for [114284] what reasons in each such case. Richard Benyon [holding answer 28 June 2012]: In 2011-12, the Consumer Council for Water (CCWater) received a total of 11,338 complaints about water companies, and dealt with 11,323 (99.87%) of them. Fifteen of those cases (0.13%) fell entirely outside of CCWater’s statutory powers to help resolve complaints. The reasons for this were: five complaints concerned legal issues; four were about damage claims; and six related to non-water industry bodies.

In those cases where CCWater was unable to help, staff gave advice to the customer on alternative avenues of assistance. JUSTICE Human Trafficking: Victim Support Schemes Mr Bone: To ask the Secretary of State for Justice what assessment he has made of the Salvation Army’s efforts in running the Government’s scheme to protect [114865] victims of human trafficking.

Mr Blunt: We will review the first year’s operation of the contract, which was implemented on 1 July 2011, later this year. Magistrates: Nottinghamshire Gloria De Piero: To ask the Secretary of State for Justice how many magistrates there were in Nottinghamshire (a) on the most recent date for which figures are available and (b) in each year between 2008 [114892] and 2011. Mr Djanogly: Judicial Office figures for the number of magistrates in Nottinghamshire for the requested years are as follows: Magistrates Number 29 June 2012 (current) 31 March 2011 31 March 2010 31 March 2009 31 March 2008

577 644 679 673 736

The fall in the number of magistrates recruited in Nottinghamshire reflects the national picture. This is due to the reduced workload in the magistrates courts. The Nottinghamshire Advisory Committee has recommended seven candidates for appointment as magistrates. The appointment submission is currently in progress and waiting for approval by the Lord Chancellor

459W

Written Answers

and Secretary of State for Justice, my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), in concurrence with the senior presiding judge. Parole Board Simon Reevell: To ask the Secretary of State for Justice pursuant to the answer of 18 June 2012, Official Report, column 681W, on sentencing, what other indicators the Parole Board considers in ascertaining whether a prisoner’s risks have been reduced; and what instructions are given to the Parole Board regarding such indicators when they are used in lieu of offending [114793] behaviour programmes. Mr Blunt: The Parole Board is an independent body which has the power to direct release of indeterminate sentence prisoners if it is satisfied that their detention is no longer necessary for the protection of the public. The only extant guidance to the Parole Board provided by the Lord Chancellor and Secretary of State for Justice, my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), are the “Secretary of State Directions” issued pursuant to Section 239(6) of the Criminal Justice Act 2003. The Court of Appeal in the case of R (Girling) v. Secretary of State for the Home Department [2006] EWCA Civ 1779 has ruled that these Directions can be regarded only as guidance in respect of cases where the Parole Board has the power to direct release. The Directions set out all the factors the Secretary of State consider the Parole Board should take into account when considering whether to direct release. These Directions were intended to apply to all cases, including those where the prisoner may not have completed offending behaviour programmes (OBPs). Copies of the Directions have been placed in the Libraries of both Houses. As explained in my answer of 18 June 2012, Official Report, column 681W, the independent Parole Board’s assessment of a prisoner’s suitability for release is based upon areas of risk, rather than whether or not specific OBPs have been completed. A prisoner may address his or her risk in a variety of ways and is not limited to participation in group-based intervention programmes. The Parole Board will look at a range of indicators that a prisoner’s risks have been reduced, including addressing the area of risk by completing an alternative OBP, engaging with one to one work, education and training, non-accredited courses, work, specialist support and resettlement or demonstrating a sustained period of stable behaviour. Prisoners: E-mail Philip Davies: To ask the Secretary of State for Justice pursuant to the answer of 6 May 2012, Official

April to June From Cambridgeshire

Written Answers

2 JULY 2012

460W

Report, column 179W, on prisoners: email, how many contacts were made in each prison in each of the last three years. [114790] Mr Blunt: I believe the hon. Member is referring to my response of 16 May 2012, Official Report, column 179W, rather than 6 May. As I stated in that response it is not possible to provide the number of contacts each prisoner has received through the Emailaprisoner.com scheme as such information is not held centrally. To provide such information would require the collection of data from each prison and this could be achieved only at disproportionate cost. Probation Mr Stewart Jackson: To ask the Secretary of State for Justice how many individuals managed under the MultiAgency Public Protection Arrangements regime usually domiciled in or in the prison estate in (a) Peterborough, (b) Cambridgeshire and (c) areas outside Peterborough and Cambridgeshire have been resident for any period of time in the bail hostel in Peterborough in each quarter since 2001; and if he will make a statement. [114635]

Mr Blunt: There are a number of reasons why an individual offender may be placed, on release from custody, in an approved premises in a different probation area from the one in which he resided prior to his custodial sentence. Some probation areas have no approved premises. Approved premises that are adjacent to a school or nursery exclude child sex offenders. In other cases, it is necessary to place an offender away from the area in which his victim resides; indeed, an offender will often have an exclusion zone as part of his licence conditions, in order to protect the victim. Data identifying the probation areas from which cases are referred to approved premises have been collected centrally only since April 2008. The data collected cover the referral of any offender from another area to the approved premises in question and do not identify whether the offender is managed under the Multi-Agency Public Protection Arrangements (MAPPA). However, as places in approved premises are primarily for high risk of harm offenders on release from custody, in order to protect the public, it is likely that many of the offenders referred to an approved premises from another area will be managed under MAPPA. The available data are set out in the following table. It shows total admissions into Peterborough approved premises for each full quarter since April 2008, counting Cambridgeshire and out-of-area cases separately. These include short-term admissions such as releases on temporary licence.

Admissions to Peterborough approved premises by quarter July to September October to December From From From other From other From other areas Cambridgeshire areas Cambridgeshire areas

January to March From From other Cambridgeshire areas

2008-09

14

4

13

4

10

4

14

8

2009-10

8

6

19

9

8

11

16

7

2010-11

19

7

22

8

15

8

15

6

2011-12

26

4

17

11

21

12

23

7

461W

Written Answers

2 JULY 2012

Written Answers

462W

Social Security Benefits: Appeals

Victim Support Schemes

Mr Ainsworth: To ask the Secretary of State for Justice pursuant to the answer of 14 June 2012, Official Report, columns 620-1W, on social security benefits: appeals, what steps he is taking to ensure that the average waiting time at appeal hearing venues in Coventry [114808] is no longer than the national average.

Priti Patel: To ask the Secretary of State for Justice (1) when he expects to announce policy measures arising from his Department’s consultation Getting it right for victims and witnesses; how many responses were received to the consultation; and how many of those responses related to the proposals for police and crime commissioners to commission services for victims; [114641]

Mr Djanogly: Her Majesty’s Courts and Tribunals Service (HMCTS) has implemented a number of measures to bring down the average waiting time for an appeal hearing in Coventry. Additional venue capacity was brought into use in December 2011 and HMCTS is working to identify further suitable venues. Work is also under way to reassess the area which is served by the Coventry venue, to examine whether certain appeals which would currently be heard at the Coventry venue can be heard in other nearby HMCTS estate. This is in addition to the measures being implemented nationally to increase the capacity of the SSCS Tribunal and reduce waiting times, which include recruiting more judges and medical panel members; increasing administrative resources; increasing the number of cases listed in each tribunal session; running double shifts in its largest processing centre; setting up a customer contact centre to deal with telephone inquiries and the review and continuous improvement of business processes. These measures are having a positive effect. The total number of disposals has increased significantly from 279,000 in 2009-10 to 433,600 in 2011-12, with the capacity for half a million disposals in 2012-13. Disposals outstripped receipts for the 14 months between January 2011 and February 2012, and the number of cases waiting to be heard fell by 25% in 2011-12. Waiting times are stabilising nationally and HMCTS is working as a matter of priority to reduce them further, in particular in areas where they remain longer than we would wish. Solicitors Philip Davies: To ask the Secretary of State for Justice if he will place in the Library a list of the solicitors that [114608] have been struck off in the last two years. Mr Djanogly: The regulation and discipline of solicitors is a matter for the Solicitors Regulation Authority, the regulatory arm of the Law Society and the Solicitors Disciplinary Tribunal. Neither organisation publishes a list of the names of solicitors struck off the solicitors’ roll therefore I am unable to provide a copy for the Library. The Solicitors Disciplinary Tribunal does publish the number of solicitors that have been struck off in its Annual Reports. Figures for 2009-10 and 2010-11 show that a total of 163 solicitors were struck off the roll during that period. It also publishes its decisions on its website. The Solicitors Regulation Authority publishes a list of the 50 most-recently published regulatory decisions on its website. It will provide members of the public with the most complete, up-to-date information about an individual’s or firm’s regulatory record upon request. It also provides a search engine on its website, that allows members of the public to search an individual’s or a firm’s regulatory record.

(2) if he will publish all responses received to questions 4 to 7, on the commissioning of services for victims, in his Department’s consultation Getting it right for victims and witnesses; and how many respondents to (a) the consultation and (b) question 5 of the consultation (i) agreed and (ii) disagreed with the proposal to make police and crime commissioners responsible for the commissioning of victim support services at a local [114642] level. Mr Blunt: The Government response to the consultation “Getting it right for victims and witnesses” was published on 2 July. It contains the information sought. We were determined to be open and clear about the views put to us, and about whether the majority of respondents agreed or disagreed with a particular proposal, and that is what we have done. We have no plans to publish the individual responses on questions four to seven. Young Offenders: Bolton Yasmin Qureshi: To ask the Secretary of State for Justice how many young adult offenders aged 18 to 20 years from the metropolitan borough of Bolton have been held in (a) young offender institutions, (b) local prisons, (c) women’s prisons and (d) other parts of the secure estate in each month since May 2009. [113901] Mr Blunt: All young offenders serving sentences of DYOI are held in appropriately designated young offender institution (YOI) accommodation within the prison estate. The majority of this accommodation is in dedicated YOIs, although some establishments in the estate have a dual designation (designated both as a prison and a YOI) and hold both adult prisoners and young offenders. The following table shows the number of offenders aged 18 to 20-years-old from the metropolitan borough of Bolton on a set day in each month where data are available since May 2009. The data have only been recorded centrally since May 2009 and from September 2010 are available on a bi-monthly basis. These figures have been drawn from administrative IT systems, which, as with any large scale recording system, are subject to possible errors with data entry and processing. Information on offenders’ residences is provided by offenders on reception into prison and recorded on a central IT system. Addresses can include a home address, an address to which offenders intend to return on discharge or next of kin address and these figures are provided in the table.

463W

Written Answers

If no address is given, an offender’s committal court address is used as a proxy for the area in which they are resident. These figures are also included in the table. 2009 Prisoners originating from Bolton held in: (a) Young offender institutions

464W

Written Answers

2 JULY 2012

No address has been recorded and no court information is available for around 3% of all offenders, these figures are excluded from the table.

2010

2011

2012

May

Sep

Nov

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

75

54

50

46

46

43

33

35

32

19

27

19

(b) Local prisons

3

9

15

14

8

12

9

13

15

23

20

10

(c) Women’s prisons

8

1

4

4

2

3

1

0

0

1

1

1

(d) Other parts of the secure estate

0

3

0

0

6

6

9

8

14

16

15

16

Defendants aged 10 to 15 and 16 to 18 found guilty at all courts for ‘Sexual offences against a child’1, by police force area, England, 20112, 3

Young Offenders: Offences Against Children

Force

Mr Andrew Turner: To ask the Secretary of State for Justice how many children aged (a) under 16 and (b) between 16 and 18 have been convicted of a sexual offence against a child in (i) the smallest area for which [114877] figures are available and (ii) England.

16 to 18

Warwickshire

2

1

West Mercia

3

8

West Midlands

4

8

West Yorkshire

3

12

Wiltshire Total England

Mr Blunt: The number of defendants aged 10 to 15 and 16 to 18 found guilty at all courts for sexual offences against a child, by police force area in England, for 2011, can be viewed in the following table.

10 to 15

1

1

136

221

1

Cleveland

2

1

Cumbria

1

6

Derbyshire

2

6

Offences include: Sexual assault on male/female aged under 13, rape or attempted rape against a male/female aged under 16, sexual activity involving a child, familial sexual offences, abuse of children through prostitution and pornography, abuse of a position of trust, sexual grooming, taking, making or possessing indecent photographs of children. 2 The figures given in the table relate to persons for whom these offences were the principal offences for which they were dealt with. When a defendant has been found guilty of two or more offences, it is the offence for which the heaviest penalty is imposed. Where the same disposal is imposed for two or more offences, the offence selected is the offence for which the statutory maximum penalty is the most severe. 3 Every effort is made to ensure that the figures presented are accurate and complete. However, it is important to note that these data have been extracted from large administrative data systems generated by the courts and police forces. As a consequence, care should be taken to ensure data collection processes and their inevitable limitations are taken into account when those data are used. Source: Justice Statistics Analytical Services: Ministry of Justice.

Devon and Cornwall

1

9

Young Offenders: Oldham

Dorset

1

4

Defendants aged 10 to 15 and 16 to 18 found guilty at all courts for ‘Sexual offences against a child’1, by police force area, England, 20112, 3 Force Avon and Somerset Bedfordshire

10 to 15

16 to 18

7

4



1

Cambridgeshire

1

5

Cheshire

5

2

Durham

8

5

Essex

2

2

Gloucestershire

1

1

15

17

Hampshire

7

6

Hertfordshire

1

5

Humberside

1

1

Greater Manchester

Kent



5

Lancashire

5

16

Leicestershire

1

1

Lincolnshire

1

2

Merseyside

5

8

Metropolitan Police

27

25

Norfolk

3

4

North Yorkshire

2

7

Northamptonshire

1

7

Northumbria

4

9

Nottinghamshire

2

5

South Yorkshire

4

2

Staffordshire

1

4

Suffolk

2

2

Surrey

1

3

Sussex

3

9

Thames Valley

6

7

Mr Meacher: To ask the Secretary of State for Justice how many juvenile offenders from the Metropolitan borough of Oldham have been held in a (a) secure children’s home, (b) secure training centre and (c) young offender institution in each month since May [114366] 2005. Mr Blunt: The following table shows the number of young people attached to the Oldham Youth Offending Team (YOT) who have been held in a (a) secure children’s home, (b) secure training centre and (c) under-18 young offender institution in each month since May 2005 to April 2012. These data have been provided by the Youth Justice Board (YJB). The YJB holds data at the YOT area level, not at the local authority level. YOT area data may cover more than one local authority area. Oldham YOT is the same geographic area as the Metropolitan borough of Oldham. This is based upon monthly population snapshot data. Therefore one young person who is held more than one month in custody will be shown in more than one month in the table.

465W

Written Answers

2 JULY 2012

The data from April 2011 onwards are provisional and will be finalised when the 2011-12 Youth Justice Statistics are published in 2013. These figures have been drawn from administrative IT systems, which, as with any large scale recording system, are subject to possible errors with data entry and processing and can be subject to change over time. Table 1: Number of young people (aged 10-17) in custody attached to the Oldham Youth Offending Team (YOT) by establishment type in each month since May 2005 Secure children’s homes

Secure training centres

Young offender institutions

2005

Written Answers

466W

Table 1: Number of young people (aged 10-17) in custody attached to the Oldham Youth Offending Team (YOT) by establishment type in each month since May 2005 Secure children’s homes

Secure training centres

Young offender institutions

January

2

0

10

February

5

0

9

March

4

1

7

April

5

1

7

May

3

1

5

June

1

2

6

July

3

3

8

August

1

1

8

September

1

0

9

1

0

11

May

2

2

8

October

June

2

2

7

November

2

0

11

December

1

0

10

11

July

1

3

10

August

0

2

15

September

0

1

14

2010

October

0

1

13

January

1

0

November

1

1

16

February

1

0

14

December

0

1

18

March

1

0

18

2006

April

2

0

17

May

2

0

11

January

0

0

15

June

3

0

10

February

0

0

11

July

1

0

7

0

0

7

March

0

0

9

August

April

2

0

7

September

0

0

9

May

1

0

10

October

0

0

9

June

0

1

16

November

2

2

10

July

1

1

16

December

2

2

9

August

2

1

15 8

September

4

1

16

2011

October

2

1

13

January

1

1

November

4

1

16

February

1

1

7

December

1

2

12

March

1

0

8

2007 January

1

1

April

2

0

8

May

2

0

8

16

June

4

0

9

3

0

10 9

February

2

1

16

July

March

2

1

15

August

3

0

April

3

0

17

September

2

0

6

0

0

7

May

1

0

12

October

June

2

1

10

November

0

0

7

July

3

1

10

December

0

0

7

August

3

0

10

September

3

0

16

October

1

2

13

November

3

2

14

January

0

1

10

December

3

0

11

February

1

1

14

March

2

0

14

April

1

1

15

2008 January

2

0

February

2

1

12

March

3

1

17

April

5

0

17

May

3

0

17

June

2

0

18

July

1

0

12

August

3

0

12

September

1

1

13

October

1

1

11

November

1

1

10

December

2

0

11

2009

11

2012

Notes: 1. The data comes from the Youth Justice Board’s Secure Accommodation Clearing House System (SACHS). 2. These figures have been drawn from administrative IT systems, which, as with any large scale recording system, are subject to possible errors with data entry and processing and may be subject to change over time. 3. The YJB does not hold data at local authority level. However, it does hold data down to Youth Offending Team area, some of which cover more than one local authority area. Oldham YOT is the same geographic area as the Metropolitan borough of Oldham. 4. The table shows the number of young people aged under 18 attached to the Oldham Youth Offending Team who have been held in a (a) secure children’s home, (b) secure training centre and (c) young offender institution in each month since May 2005, either on remand or sentenced. 5. This is based upon monthly snapshot data. Therefore one young person who is serving more than one month in custody, may be shown in more than one month in the table. 6. Please note, data from April 2011 onwards is provisional. Data from April 2011 onwards will be finalised when the 2011-12 Annual Youth Justice Statistics are published in 2013 and data from April 2012 will be finalised in 2014.

467W

Written Answers

Mr Meacher: To ask the Secretary of State for Justice how many young adult offenders aged 18 to 20 from the Metropolitan Borough of Oldham have been held in a (a) young offender institutions, (b) local prisons, (c) women’s prisons and (d) other parts of the secure [114367] estate in each month since May 2009. Mr Blunt: All young offenders serving sentences of DYOI are held in appropriately designated young offender institution (YOI) accommodation within the prison

468W

Written Answers

2 JULY 2012

estate. The majority of this accommodation is in dedicated YOIs, although some establishments in the estate have a dual designation (designated both as a prison and a YOI) and hold both adult prisoners and young offenders. The following table shows the number of young adult offenders aged 18 to 20-years-old from the metropolitan borough of Oldham on a set day in each month where data are available since May 2009. The data have only been recorded centrally since May 2009 and from September 2010 are available on a bi-monthly basis.

May 2009

Sept 2010

Nov 2010

Jan 2011

March 2011

May 2011

July 2011

Sept 2011

Nov 2011

Jan 2012

March 2012

May 2012

45

25

21

20

18

23

24

20

19

22

20

17

(b) Male local Prisons

1

4

4

6

5

7

10

12

11

11

4

5

(c) Female Prisons

2

2

3

3

2

4

1

1

1

0

0

0

(d) Other Prisons

0

0

0

0

2

1

1

1

2

3

3

6

Location (a) Male Young Offender Institutions

These figures have been drawn from administrative IT systems, which, as with any large scale recording system, are subject to possible errors with data entry and processing. Information on offenders’ residences is provided by offenders on reception into prison and recorded on a central IT system. Addresses can include a home address, an address to which offenders intend to return on discharge or next of kin address and these figures are provided in the table above. If no address is given, an offender’s committal court address is used as a proxy for the area in which they are resident. These figures are also included in the table above. No address has been recorded and no court information is available for around 3% of all offenders, these figures are excluded from the table above.

Energy Caroline Flint: To ask the Secretary of State for Defence (1) whether his Department switched its (a) gas or (b) electricity supplier in any of the last 10 years; [113464]

(2) which energy supplier supplies his Department [113481] with (a) gas and (b) electricity. Peter Luff: In mainland UK, the Ministry of Defence competes its requirements for gas and electricity supply in mainland UK every three to four years. Current mainland UK suppliers are: Corona Energy (gas supply—all sites) EDF Energy (electricity supply—medium and large sites) British Gas Business (electricity supply—small sites).

Current Northern Ireland suppliers are: DEFENCE British Indian Ocean Territory Andrew Rosindell: To ask the Secretary of State for Defence how many officials from his Department are stationed in the British Indian Ocean Territory. [114360] Mr Gerald Howarth: There are around 40 members of the armed forces based in British Indian Ocean Territory; there are no civilian officials. Andrew Rosindell: To ask the Secretary of State for Defence what recent discussions he has had with his US counterpart on the future of the British Indian [114361] Ocean Territory. Mr Gerald Howarth: The Secretary of State for Defence, my right hon. Friend the Member for Runnymede and Weybridge (Mr Hammond), has not had any recent discussions on the future of the British Indian Ocean Territory, but he and other Defence Ministers have regular discussions with their US counterparts about a range of subjects which are of interest to both our mutual defence and security interests.

Firmus Energy and Phoenix Natural Gas (gas supply) Viridian Energy (electricity supply).

Overseas locations are subject to local supply arrangements. European Fighter Aircraft Angus Robertson: To ask the Secretary of State for Defence what aspects of the P1EA upgrade for the Eurofighter have been integrated into the aircraft; how many aircraft have received such upgrades; if he will estimate the cost to the public purse of each upgrade; and when all such upgrades will achieve release-to[113136] service status. Peter Luff: Although the technical work on integration is well advanced, no aspects of the Phase one enhancement (P1E)a upgrades have yet been integrated into RAF Typhoons. The date by which the upgrades will be introduced into service with the RAF is under review. The cost of this upgrade is interwoven within the Future Capability Programme 1 which includes costs for the follow-on P1Eb upgrade. The cost of this combined upgrade to the UK as published in Major Projects Report 2011, including risk and cost of capital, is £458 million.

469W

Written Answers

2 JULY 2012

Government Procurement Card Rachel Reeves: To ask the Secretary of State for Defence (1) how many procurement card holders in his Department were (a) paid off-payroll, (b) employed on a part-time basis and (c) employed as a non-permanent employee in (i) 2009-10, (ii) 2010-11 and (iii) 2011-12; [113345]

(2) on which dates his Department has published Government procurement card spending over £500 [113363] since May 2010. Peter Luff: The information on the detailed breakdown of the nature of employment of Government Procurement Card (GPC) holders is not held centrally and could be provided only at disproportionate cost. GPC cards are only issued to Crown Servants or contractors who are required to make purchases on behalf of the Department where this offers an efficient way of purchasing. The dates on which the Ministry of Defence has published GPC spending over £500 since May 2010 are as follows: Spend during March 2012 was published on 7 June 2012. Spend during February 2012 was published on 30 April 2012. Spend during January 2012 was published on 3 April 2012. Spend during December 2011 was published on 29 February 2012. Spend during November 2011 was published on 31 January 2012. Spend during October 2011 was published on 23 December 2011. Spend during the period April 2011 to September 2011 was published on 31 October 2011. Spend during the period April 2010 to March 2011 was published on 3 May 2012.

Nuclear Submarines Caroline Lucas: To ask the Secretary of State for Defence pursuant to his oral contribution of 18 June 2012, Official Report, column 614, on nuclear powered submarines, when a planning application will be submitted for refurbishment of the Rolls-Royce Raynesway site; when construction is expected to commence; and when [113877] the new facilities are expected to open. Peter Luff: Planning permission for the regeneration of the Raynesway site was granted by Derby city council in February 2010 (planning permission number 11/09/ 01360). The first construction contract is planned to be let by Rolls-Royce towards the end of this year, with work starting in early 2013. The first part of the facility is planned to start operating in summer 2016, with the remainder planned to start operating in 2021. Caroline Lucas: To ask the Secretary of State for Defence pursuant to his oral contribution of 18 June 2012, Official Report, column 614, on nuclear powered submarines, how many submarine reactor cores will be built by Rolls-Royce by 2023; and how many such cases will be of the (a) PWR2 and (b) PWR3 design. [113878]

Written Answers

470W

Peter Luff: In the period up to 2023, the recently announced contract with Rolls-Royce is planned to deliver one pressurised water reactor (PWR) 2 reactor core and one PWR3 reactor core. The PWR3 core will not be manufactured until after the Successor Main Gate decision in 2016. Caroline Lucas: To ask the Secretary of State for Defence whether his Department owns the nuclear reactor core facility at the Rolls-Royce Power Engineering site in Raynesway, Derby; and what the asset value of that [113879] facility is. Peter Luff: The existing facilities and machinery are owned by Rolls-Royce except for equipment that has been provided as Government Funded Equipment. The Ministry of Defence does not therefore hold the asset value of the facilities. Caroline Lucas: To ask the Secretary of State for Defence whether he intends to issue individual contracts for the construction of reactor cores for future submarines. [113880]

Peter Luff: The procurement strategy for reactor cores for later boats, after Successor Boat One, has not yet been decided and will not be decided until after the Successor Main Gate decision in 2016. Nuclear Submarines: Fires Angus Robertson: To ask the Secretary of State for Defence what assessment he has made of the risk that vacuum cleaners used on nuclear submarines may start [113751] a fire. Peter Luff: All equipment fitted or carried onboard Royal Navy submarines, including vacuum cleaners, is assessed before it enters service to determine the fire risk it presents. When risks are identified, all practicable measures are taken to reduce their severity before a further assessment is made to ensure any remaining risk is tolerable; this assessment is kept under periodic review. Once in-service, equipment undergoes periodic maintenance, in accordance with defined procedures, to ensure that it continues to function safely and correctly. During major overhaul periods, fire safety becomes the responsibility of the relevant contractor, who is required to provide appropriate fire safety arrangements. This includes conducting assessments of the risks presented by the activities to be undertaken and the equipment to be used. Angus Robertson: To ask the Secretary of State for Defence whether he has commissioned a review of fire safety on submarines following the recent fire aboard [113752] the submarine USS Miami. Peter Luff: The Ministry of Defence has a strict regime to manage fire safety on submarines. This includes the routine assessment of all fire incidents on board Royal Navy ships and submarines, as well as those fire incidents reported by foreign navies. The recent fire on board the USS Miami will be assessed in accordance with these processes, with lessons being identified and taken forward as appropriate.

471W

Written Answers

Written Answers

2 JULY 2012

472W

Parliamentary Armed Forces Scheme

Procurement

Dr Julian Lewis: To ask the Secretary of State for Defence pursuant to the answer of 20 June 2012, on the Armed Forces Parliamentary Scheme, what (a) letters, (b) emails and (c) other correspondence the Minister of State for the Armed Forces received directly on the subject from (i) former members of the armed forces and (ii) other members of the public since May 2010.

Tom Greatrex: To ask the Secretary of State for Defence what the total (a) number and (b) value of contracts issued by (i) his Department and (ii) bodies for which he is responsible which were awarded to small and medium-sized enterprises was in the latest period for which figures are available. [111183]

[113842]

Nick Harvey [holding answer 27 June 2012]: I refer the hon. Member to the answer I gave on 20 June 2012, Official Report, columns 1043-44W. The Ministry of Defence holds no records of letters, e-mails or other correspondence received directly by Ministers from former members of the armed forces or other members of the public, on the subject of the Armed Forces Parliamentary Scheme, since May 2010. I am, however, in regular contact with Sir Neil Thorne, chairman of the Armed Forces Parliamentary Scheme, in relation to the management of the scheme itself.

MOD Defence Science and Technology Laboratory Defence Support Group UK Hydrographic Office

Peter Luff: Ministry of Defence spend with small and medium-sized enterprises (SMEs) has been reported in the Cabinet Office report ‘Making Government business more accessible to SMEs—One Year on’, which is available at: www.cabinetoffice.gov.uk/resource-library/makinggovernment-business-more-accessible-smes-one-year

The approximate number and value of new contracts placed with SMEs, for the latest period available are given in the following table:

Number

Value (£ million)

Latest period for which figures are available

1,790 4,173 537 1,331

1,124 62.77 16.42 8.35

April 2011 to March 2012 April 2011 to March 2012 June 2011 to May 2012 April 2011 to March 2012

INTERNATIONAL DEVELOPMENT Argentina Mr Ruffley: To ask the Secretary of State for International Development (1) what discussions he has had with the US government on its decision on 24 April 2012 to oppose a loan to Argentina from the [114203] Inter-American Development Bank; (2) whether the UK representative at the InterAmerican Development Bank (IADB) opposed the proposed loan to Argentina from the IADB on 24 [114205] April 2012; and if he will make a statement. Mr Duncan: There were no loans for Argentina tabled for approval or discussed by the IADB board on 24 April 2012. A loan however was discussed on 21 June. The UK representative at the Inter-American Development did not support this loan. The Secretary of State for International Development, my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell), has not had discussions with the US Government on loans to Argentina. Bangladesh Rushanara Ali: To ask the Secretary of State for International Development (1) what his policy is on support for open-pit coal mining in Bangladesh; [114514]

(2) what representations his Department has received [114518] on open-pit coal mining in Bangladesh. Mr Duncan: The decision to allow open-pit mining in Bangladesh is for the Government of Bangladesh to make.

DFID received representations from NGOs in London last year, at official level focussing particularly on the Phulbari mine. As far as we are aware, this is the only representation that we received. Bilateral Aid Rushanara Ali: To ask the Secretary of State for International Development what proportion of his Department’s bilateral aid will be delivered through the private sector in each year between 2010 and 2015. [114505]

Mr Andrew Mitchell: DFID does not have the information available to be able to calculate the proportion of bilateral aid that will be delivered through the private sector between 2010 and 2015. Spending decisions are decentralised within the organisation and the amount of aid spent through the private sector is the result of a large number of specific project decisions that are based on achieving the highest value for money. Developing Countries: Biofuels Rushanara Ali: To ask the Secretary of State for International Development with reference to the EU Development Council meeting of 14 May 2012, what discussions he has had with his European counterparts on biofuels and their effect on (a) developing countries [114512] and (b) world food prices. Mr Andrew Mitchell: Biofuels were not on the agenda at the EU Development Council meeting on 14 May. Some EU Development Ministers mentioned biofuels as an example of ensuring policy coherence in their intervention when discussing other issues under the wider EU development agenda.

473W

Written Answers

2 JULY 2012

I have not had formal discussions on biofuels with my European counterparts. My Department is working closely with other UK Government Departments, including the Department for Environment, Food and Rural Affairs, the Department for Energy and Climate Change (DECC) and the Department for Transport to address key concerns related to the impact of biofuels on food prices and on developing countries. These concerns have been also addressed in the DECC ’UK Bioenergy Strategy’ published in April. Developing Countries: Family Planning Rushanara Ali: To ask the Secretary of State for International Development what criteria he will use to judge the success of the Family Planning Summit in [114509] July. Mr Andrew Mitchell: Success will ultimately be judged in 2020 when we can assess whether millions more women in the world’s poorest countries have access to family planning. On the day of the summit, we will judge success by whether we put family planning back on the international development agenda as a life-saving intervention. Developing Countries: Females Rushanara Ali: To ask the Secretary of State for International Development whether the forthcoming Family Planning Summit will address the circumstances of women living in conflict situations in developing countries; and what his priorities are for the Summit. [114507]

Mr Andrew Mitchell: The Family Planning summit will focus on women and girls in the world’s poorest 69 countries including many that are fragile and conflict states. The summit is aiming to halve the current number of women and girls in the world’s poorest countries who wish to avoid pregnancy but are not using modern contraception. It will support the right of girls and women to decide whether, when and how many children to have. It will mobilize global policy, financing, commodity and service delivery commitments to support the rights of an additional 120 million women and girls in the world’s poorest countries to use contraceptive information, services and supplies, without coercion or discrimination, by 2020. Developing Countries: Malnutrition

Written Answers

474W

The UK plans to take forward a number of these G8 commitments on malnutrition and stunting through a major event on hunger which is scheduled to take place during the Olympics. The UK will also continue to play a leading role in the Scaling Up Nutrition movement, recognising that SUN is the most promising mechanism for delivering international resources to the critical ’1000 day window’ of opportunity. Since 2010 the UK has more than doubled resources for tackling under-nutrition and made a commitment to reach 20 million pregnant women and children under five with nutrition interventions by 2015. Global Fund to Fight AIDS, Tuberculosis and Malaria Steve McCabe: To ask the Secretary of State for International Development when the UK last made a contribution to the Global Fund; and what the value of [113951] such a contribution was. Mr O’Brien: The UK Government brought forward a payment of £127.8 million into November 2011, so that all approved grants under the fund’s 10th round of applications (round 10) could be signed. Steve McCabe: To ask the Secretary of State for InternationalDevelopmentwhatcontributiontheGovernment [113952] plans to make to the Global Fund. Mr O’Brien: Since 2008 the UK Government has contributed some £638 million to the Global Fund to fight AIDS, TB and Malaria. The Secretary of State for International Development, my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell), confirmed to the International Development Committee on 17 April this year that the UK would be providing a further £128 million in each of 2012, 2013 and 2014. The Secretary of State also indicated that he is prepared to make a significant increase in the UK contribution in 2013 and 2014, in addition to this £128 million per year, subject to successful progress with reforms that are under way within the fund and in the way it does business with implementing countries. Overseas Aid Rushanara Ali: To ask the Secretary of State for International Development what criteria his Department uses to determine the appropriateness of private, public and other delivery mechanisms for official development [114503] assistance to different programmes.

Mr O’Brien: The UK is firmly committed to taking forward the important agreements which were made at the 2012 G8 Camp David summit to tackle malnutrition and stunting. These agreements include:

Mr Andrew Mitchell: Since January 2011, all DFID Department decisions to spend aid money are based on a detailed business case. DFID’s Business Case is based on HM Treasury’s ’five case’ model. Each business case sets out and appraises the different options and mechanisms to deliver the development outcome being sought. The five interdependent cases assess the strategic, value for money, financial, commercial and management elements of each aid programme. All DFID business cases are published on our external website.

actively supporting the Scaling Up Nutrition (SUN) movement; improving tracking and disbursements for nutrition across sectors; and supporting the accelerated release, adoption and consumption of bio-fortified crop varieties.

Rushanara Ali: To ask the Secretary of State for International Development what proportion of his Department’s budget will be allocated to wealth creation [114504] in each year between 2012 and 2015.

Ms Abbott: To ask the Secretary of State for International Development what steps he plans to take to ensure that the outcomes of the 2012 G8 Summit lead to the implementation of an effective strategy to [114130] tackle malnutrition and stunting.

475W

Written Answers

2 JULY 2012

Mr Andrew Mitchell: The Department for International Development’s (DFID) Annual Report and Accounts contain planned allocations by sector for future years. Currently DFID’s planned Wealth Creation allocations as a proportion of total budget (excluding conflict pool) are at least: Percentage 2012-13 2013-14 2014-15

8 10 11

A copy of DFID’s latest Annual Report and Accounts is available from the DFID website at this link:

Written Answers

476W

Mr Andrew Mitchell: In 2011 when UN Women was established, the Department for International Development, pledged funding via core support of £10 million for years 2011-12 and 2012-13, with a further indicative £10 million per year for the following two years based on reform against the four priorities set out in the Multi-lateral Aid Review (MAR). We will continue to fund UN Women up till 2015, based on their ability to perform, but beyond that no decision has been taken as is the case for all UN Agencies that we support. This continued support reiterates the view that DFID has of the important role UN Women play globally on gender mainstreaming.

http://www.dfid.gov.uk/About-us/How-we-measure-progress/ Annual-report/

Pages 189 and 191 detail the planned future year allocations by sector. Please note that the above proportions are subject to change via DFID’s results and resources planning cycle. Publications Jonathan Ashworth: To ask the Secretary of State for International Development what consultation documents have been released by his Department since May 2010. [114167]

Mr Duncan: DFID has issued 12 consultations documents since May 2010: Innovation and economic growth in poor countries—2 June to 5 July 2010; Public consultation on the design of the new Poverty Impact Fund—29 July to 22 September 2010; Choice for women: Every pregnancy wanted, every birth safe— 27 July to 20 October 2010; Malaria: Breaking the cycle—2 August to 26 October 2010; Microfinance (re-named SIMBA: Skills and innovation for micro banking in Africa)—2 August to 9 October 2010; Humanitarian Emergency Response Review—10 November to 5 January 2011; Trade white paper—5 November to 14 January 2011; Reforming CDC Group plc—5 November to 31 January 2011; Match Funding Scheme—12 January to 25 February 2011; UK implementation of the UN Convention against Corruption— 4 October to 18 October 2011; The Girls Education Challenge—14 October to 25 November 2011; and Global resilience action programme—27 March to 20 May 2012.

Telephone Services Graeme Morrice: To ask the Secretary of State for International Development how many private sector call centre staff were used by his Department in each of the last three financial years; and at what cost to the [114459] public purse. Mr Duncan: None. UN Women Rushanara Ali: To ask the Secretary of State for International Development whether he plans to continue [114508] funding for UN Women after 2015.

FOREIGN AND COMMONWEALTH OFFICE Bahrain Andrew Miller: To ask the Secretary of State for Foreign and Commonwealth Affairs what steps he has taken to raise allegations of torture and repression of opposition supporters with the authorities in Bahrain. [114337]

Alistair Burt: The UK regularly raises human rights concerns with the Government of Bahrain, including the importance of investigating any allegations of torture and ensuring those responsible are brought to justice. The UK formally raised this issue, and encouraged Bahrain to ratify the Optional Protocol to the Convention against Torture, during Bahrain’s Universal Periodic Review at the UN Human Rights Council in May 2012. I visited Bahrain on 11 June 2012 and raised our concerns about the human rights situation with a wide range of representatives from the Bahraini Government, as well as opposition parties and representatives from civil society. Mr MacShane: To ask the Secretary of State for Foreign and Commonwealth Affairs for what reason the UK has not signed the joint statement on the human rights situation in Bahrain submitted at the 20th Session of the UN Human Rights Council on [114878] 27 June 2012 in Geneva. Alistair Burt: The UK did not sign up to the joint statement as we did not consider it appropriate at this stage to raise Bahrain under agenda item 4. A number of other countries, including the US and other EU member states, agreed with our assessment and also did not sign the statement. We agree with much of the substance of the Swiss-led statement and our overall objective remains to support improvements in Bahrain’s human rights records. However, we do not believe that the situation in Bahrain is comparable with the situation in the other countries raised under this item such as Syria. Progress has been made in a number of areas relating to human rights. The Bahrain Government has established a Special Investigations Unit to investigate allegations of torture and mistreatment, amended the penal code to ensure greater accountability for officials connected with torture charges, and introduced a police code of conduct imposing strict rules on the use of force.

477W

Written Answers

2 JULY 2012

But clearly much more needs to be done and the UK, as a long standing ally, is supporting Bahrain on their path of reform. British Indian Ocean Territory Andrew Rosindell: To ask the Secretary of State for Foreign and Commonwealth Affairs how much his Department has spent on the maintenance of the marine protected area around the British Indian Ocean Territory in the last 12 months for which figures are available. [114358]

Mr Bellingham: The direct costs of maintaining the world’s largest ‘No Take’ marine protected area (MPA) in the British Indian Ocean Territory (BIOT) were just over £2.1 million in the last year. This figure includes funding for the patrol vessel the Pacific Marlin, the fuel for the vessel, and the Fisheries Protection Officer. The BIOT Administration received £700,000, in the same period, from the Bertarelli Foundation, to contribute to the costs of safeguarding the MPA. Additional work on maintaining the MPA is also carried out by the BIOT Administration, regular operations by members of the armed forces in Diego Garcia and by visiting scientists. Foreign and Commonwealth Office staff and UK armed forces personnel do not keep detailed timesheets of work on different tasks and it is not possible to estimate these costs. Andrew Rosindell: To ask the Secretary of State for Foreign and Commonwealth Affairs how much his Department has spent on legal advice in respect of the [114359] Chagos Islands in the last year. Mr Bellingham: This year, up to 29 June 2012, £77,438.37 (inclusive of VAT) was spent in respect of the Chagos Islands. This covers fees to Treasury Solicitors and Counsel. It does not cover associated costs such as external copying costs, couriers etc. Central African Republic Andrew Rosindell: To ask the Secretary of State for Foreign and Commonwealth Affairs what recent assessment he has made of the UK’s relationship with the Central African Republic; and if he will make a statement. [114349]

Mr Bellingham: The UK has a limited but cordial bilateral relationship with the Central African Republic through our high commission in Cameroon. The British deputy high commissioner to Cameroon met the Central African Republic Foreign Minister Gambi in May in relation to an ongoing consular case. Our non-resident British ambassador hopes to present his credentials shortly. Democratic Republic of Congo Andrew Rosindell: To ask the Secretary of State for Foreign and Commonwealth Affairs what recent assessment he has made of the UK’s relationship with the Democratic Republic of Congo; and if he will [114348] make a statement.

Written Answers

478W

Mr Bellingham: We enjoy good diplomatic relations with the Democratic Republic of Congo (DRC). Our embassy in Kinshasa has enjoyed a number of positive meetings with the new Government Ministers and engages regularly with the Government of DRC on a range of issues. Britain is a major bilateral donor to DRC and the Secretary of State for International Development, my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell), visited DRC in March. Egypt Neil Parish: To ask the Secretary of State for Foreign and Commonwealth Affairs what recent representations he has made to the Egyptian Government on the Egypt[114603] Israel peace treaty. Alistair Burt: Throughout the period of transition, we have pressed the Egyptian authorities to respect the existing obligations already agreed by Egypt. We want Egypt to continue to act as a force for regional peace and stability, including by maintaining a productive relationship with Israel. We were encouraged by the President-elect, Dr Mohammed Morsi’s, speech on 24 June in which he stated that Egypt would respect all international conventions and obligations already agreed by Egypt. We will follow closely the development of the new Egyptian Government’s foreign policy, including relations between Egypt and Israel. Israel George Galloway: To ask the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with his Israeli counterpart on International [114116] Atomic Energy Authority inspections. Alistair Burt: Israel is not a member of the nuclear non-proliferation treaty which would require among other things inspections of their nuclear facilities. Israel continues to voluntarily allow inspections of the US-supplied research reactor at Nahel Soreq. British Government officials have regular dialogue with the Government of Israel on nuclear issues, including on the treaty on the non-proliferation of nuclear weapons (NPT) and the International Atomic Energy Agency (IAEA). Our long-standing position is to encourage all countries to adhere to the NPT. Kenya Ian Lucas: To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the potential effect of the ongoing process at the International Criminal Court on Kenyan politics. [114265]

Mr Bellingham: The British Government strongly supports the International Criminal Court (ICC) process, which provides justice for the victims of post-elections violence in 2007-08 and serves as a powerful deterrent to the use of violence for political ends. Polls consistently show that Kenyans want to see justice against the perpetrators of that violence. The ICC cases should be treated as an independent legal process, not a political one. We welcome the co-operation of the suspects and the recent statement by the Minister of Justice and

479W

Written Answers

2 JULY 2012

Attorney-General confirming the Government of Kenya’s continued co-operation with the Court. Seeing the process through will bring great credit to Kenya. Ian Lucas: To ask the Secretary of State for Foreign and Commonwealth Affairs what steps the Government is taking to promote free and fair parliamentary and [114266] presidential elections in Kenya in 2013. Mr Bellingham: The British Government is supporting the Government of Kenya’s efforts to ensure the next elections are free, fair and safe, with no return to the post-elections turmoil and violence of 2007-08. Since 2008 we have supported wide-ranging reform in Kenya, including the creation of new institutions such as the Independent Electoral and Boundaries Commission. Our support for civil society and others is helping to address some of the causes of previous electoral violence, such as hate speech. We also support police and judicial reform. Together with the international community we will continue to deliver strong messages on the need for peaceful and credible elections and welcome similar statements made by President Kibaki and other senior politicians. Ian Lucas: To ask the Secretary of State for Foreign and Commonwealth Affairs what his assessment is of [114267] the security situation in Kenya. Mr Bellingham: While Kenya is generally safe and stable, there are high levels of crime in parts of the country. There is also a high threat of terrorism. The Kenyan authorities have increased security to counter reprisal attacks following Kenyan military intervention in Somalia last October. Recent terrorist attacks have occurred in Kenya’s North East Province, Mombasa and Nairobi. The Kenyan people have borne the brunt of these attacks to date but places frequented by expatriates and foreign travellers could also be a target. The British Government is providing assistance to the Kenyan authorities to help counter security threats. Latin America Mr Robin Walker: To ask the Secretary of State for Foreign and Commonwealth Affairs what recent steps the Government has taken to support parliamentary [114425] democracy in Latin America. Mr Jeremy Browne: The Foreign and Commonwealth Office is currently supporting projects in a number of countries in the region, including Colombia, Peru and Guatemala. The British Government also encourages parliamentary exchanges between the UK and Latin American parliamentarians. The UK has a long history of supporting democracy and good governance in Latin America, both bilaterally and through the work of the European Union and Organisation of American States (OAS) in the region. Libya Caroline Lucas: To ask the Secretary of State for Foreign and Commonwealth Affairs what steps his Department is taking to secure the release of the four International Criminal Court staff detained in Libya [114539] since 7 June 2012.

Written Answers

480W

Alistair Burt: Following the detention of the International Criminal Court (ICC) representatives during a visit to Saif al-Islam al Gaddafi on 7 July, our ambassador in Tripoli has been working closely with the Libyan authorities, ICC representatives and other partners to secure a rapid resolution to this case. He has discussed this issue on a number of occasions with several Libyan counterparts, including Prime Minister al-Kib and Libyan Deputy Foreign Minister Abdul Aziz. Given UK consular responsibility for Commonwealth Citizens, our ambassador in Tripoli and the Secretary of State for Foreign and Commonwealth Affairs, my right hon. Friend the Member for Richmond (Yorks) (Mr Hague), have been in especially close touch with Australian counterparts to support their requests for consular access. We will continue to encourage all parties to conclude the negotiations to secure the release of the delegation so that the ICC and Libyan authorities can resume co-operation on the case involving Saif al-Islam al Gaddafi. Malta Andrew Miller: To ask the Secretary of State for Foreign and Commonwealth Affairs how many industrial tribunal claims or civil court claims were lodged in which the British High Commission in Malta stood as defendant in the last eight years; and how [114351] many such cases were lost. Mr Lidington: In the last eight years, six cases have been lodged with the industrial tribunal in which the British high commission in Malta has stood as defendant. Four of these cases have not yet reached their conclusion. To date, the high commission’s decision-making has always been confirmed by the tribunal as being justified and correct; and the high commission has never been found guilty of breaking the law concerning employees. However, the high commission has been directed to pay compensation in some cases. The high commission has lodged appeals in two cases which will be heard in 2013. Andrew Miller: To ask the Secretary of State for Foreign and Commonwealth Affairs with reference to the answer of 23 April 2012, Official Report, column 762W, on Malta, what the reasons were for the [114352] implementation of the verification exercise. Mr Lidington: The collective agreement between the British high commission and the General Workers’ Union (GWU) states that the high commission has the right to withdraw recognition of the union for collective bargaining purposes should the membership of the union amongst British high commission staff fall below 50% + 1. Recognition of the GWU was withdrawn because they no longer had the support of a majority of staff, and their demands were unreasonable and unrealistic. The GWU requested the verification exercise to confirm whether or not they had a majority; the Director of Industrial and Employment Relations determined that the union did not have a majority. Andrew Miller: To ask the Secretary of State for Foreign and Commonwealth Affairs with reference to the answer of 23 April 2012, Official Report, column 762W, on Malta, whether the local trade union in Malta has requested to reduce its recognition for collective [114353] bargaining purposes.

481W

Written Answers

2 JULY 2012

Mr Lidington: The General Workers’ Union stated to the Directorate of Industrial and Employment Relations that if the union no longer represented an absolute majority of staff then it expected the British high commission to reduce recognition to supervisory, clerical and industrial grades. Maltese law makes no provision for this. The British high commission believes that the union should represent all grades of locally engaged employees, not selected grades. Andrew Miller: To ask the Secretary of State for Foreign and Commonwealth Affairs how many redundancies were made by the British high commission in Malta in the last five years; under what legislation such redundancies were made; what legal advice was requested by the commission in respect of redundancies; and whether the high commission has lost any tribunal or court case in relation to those redundancies. [114354] Mr Lidington: In the last five years there have been six redundancies within the British high commission in Malta. The high commission implemented these in full consultation with the British high commissioner’s honorary legal adviser, who advised in accordance with Maltese labour law. The British high commission has only once been directed by the Court of Appeal to compensate an employee as a result of redundancy. Two other cases are still sub judice. Middle East: Christianity Andrew Rosindell: To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the comments made by the Grand Mufti of Saudi Arabia on 12 March 2012 that churches within the Arabian peninsula should be destroyed. [114347]

Alistair Burt: My assessment of the Grand Mufti’s comments remains as set out in the response I gave to my hon. Friend on this issue on 30 April 2012, Official Report, column 1358W. Paraguay Mr Robin Walker: To ask the Secretary of State for Foreign and Commonwealth Affairs what representations the Government has received on the change of government in Paraguay and the impeachment proceedings against [114429] President Lugo. Mr Jeremy Browne: The British Government is following political developments in Paraguay closely. Foreign and Commonwealth Office officials have met with the Paraguayan ambassador in London to discuss the situation. We welcome the decision on 26 June by the Secretary-General of the Organisation of American States (Jose Miguel Insulza) to travel to Paraguay to gather information on recent events and to report back to the organisation’s Permanent Council next week. The EU’s High Representative for Foreign Affairs and Security Policy (Baroness Ashton) issued a statement expressing concern and calling on all parties to respect the democratic will of the Paraguayan people.

Written Answers

482W

Kerry McCarthy: To ask the Secretary of State for Foreign and Commonwealth Affairs what recent assessment he has made of the political situation in Paraguay; and if he will make a statement. [114709] Mr Jeremy Browne: The British Government is following political developments in Paraguay closely. Foreign and Commonwealth Office Officials have met with the Paraguayan ambassador in London to discuss the situation. We welcome the decision on 26 June by the Secretary General of the Organisation of American States (Jose Miguel Insulza) to travel to Paraguay to gather information on recent events and to report back to the organisation’s Permanent Council next week. The EU’s High Representative for Foreign Affairs and Security Policy (Baroness Ashton) issued a statement expressing concern and calling on all parties to respect the democratic will of the Paraguayan people. Procurement Jeremy Lefroy: To ask the Secretary of State for Foreign and Commonwealth Affairs how many contracts issued by his Department were awarded to small and medium-sized enterprises in 2011-12; what proportion that figure represents of all contracts let; and what the [113964] monetary value was of such contracts. Mr Lidington: The Foreign and Commonwealth Office spend with small and medium-sized enterprises (SMEs) has been reported in the Cabinet Office report ‘Making Government business more accessible to SMEs—One Year On’: www.cabinetoffice.gov.uk/resource-library/makinggovernment-business-more-accessible-smes-one-year

The FCO procurement group works to remove barriers for SMEs wishing to compete for FCO contracts. For the financial year 2011-12, approximately 20% of FCO procurement in the UK by value was awarded to businesses that it can classify SMEs. Procurement of contracts under a value of £80,000 is devolved to 270 posts around the world; there is no central record of all contracts awarded globally and this information could be obtained only at disproportionate cost. Rockall Daniel Kawczynski: To ask the Secretary of State for Foreign and Commonwealth Affairs what steps he is taking to exert British sovereignty over Rockall. [114321]

Mr Bellingham: The Island of Rockall Act 1972 formally incorporated Rockall into the UK and there is no dispute over the UK’s sovereignty over Rockall. Somalia Ian Lucas: To ask the Secretary of State for Foreign and Commonwealth Affairs what his policy is on the action taken by the Kenyan army to stabilise the [114268] government in Somalia.

483W

Written Answers

Written Answers

2 JULY 2012

Mr Bellingham: Kenya bears much of the burden of the threat emanating from Somalia. We welcome the signature on 2 June of a Memorandum of Understanding that formally integrates Kenyan troops into the African Union Mission in Somalia. We urge military operations to comply with international law and not impede humanitarian assistance and encourage all regional actors to pursue a coherent military and political approach that will support the long-term change that Somalis want. But military action needs to be part of a broader approach which seeks to achieve stability and a political settlement. We are encouraged by the progress being made towards a new political future for Somalia by Somalis, with support from regional and international partners. Syria Karen Lumley: To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the extent of targeting of women and vulnerable groups in the conflict in Syria; and if he will [114128] make a statement. Alistair Burt: There have been disturbing reports, including from the UN Human Rights Council-mandated Commission of Inquiry (COI), that many men, women and children have been subjected to rape, sexual assault and other degrading treatment at the hands of the Syrian security forces and Shabbiha. It is difficult to corroborate these reports, in part due to the social stigma that victims would endure if they came forward. However, the COI assess that fear of rape and sexual assault has restricted the freedom of movement of women and young girls, and many of the women interviewed by the COI had fled to neighbouring countries because of this fear. The COI in their report of 26 June 2012, also found that the victims of the atrocity in al Houla were predominantly women and children. We call on the Syrian regime to immediately cease the widespread human rights violations committed by Government and paramilitary forces. These include arbitrary arrest and detention, violations of children’s rights and use of sexual violence. We are also concerned by increased accounts of human rights abuses being committed by the armed opposition. These are unacceptable and we call on them to stop. Karen Lumley: To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the extent of torture and abuse of children in Syria; and if he will make a statement. [114129]

Alistair Burt: The independent Commission of Inquiry (COI), mandated by the UN Human Rights Council to investigate alleged violations of human rights in Syria, reported on 22 February 2012 that more than 500 children had been killed by the Syrian regime since the unrest began in March 2011, many being targeted by snipers. In their subsequent report of 26 June 2012 the Commission found that the victims of the atrocity in al Houla were predominantly women and children. The Commission has also reported that children continued to be arbitrarily arrested and tortured while in detention, including boys as young as 10 years of age.

484W

We call on the Syrian regime to immediately cease the widespread human rights violations committed by Government forces and paramilitary forces. These include arbitrary arrest and detention, violations of children’s rights and use of sexual violence. Also criticised in the report are anti-Government armed groups that are using children as ancillary staff in field units and hospitals. We are concerned by these increasing accounts of human rights abuses being committed by the armed opposition. These are unacceptable and we call on them to stop. Telephone Services Graeme Morrice: To ask the Secretary of State for Foreign and Commonwealth Affairs how many private sector call centre staff were used by his Department and its agencies in each of the last three financial years; and at what cost to the public purse. [114432] Mr Lidington: The following private sector call centres based in the UK provide services on behalf of the Foreign and Commonwealth Office (FCO): Call centre: Teleperformance Service: (a) travel advice and (b) consular crisis calls (where volume and/or waiting times exceed the capacity of our Crisis Management Department’s internal call centre facility). The number of call handlers deployed by Teleperformance at any given time to deliver FCO travel advice varies according to call volumes. We do not therefore have figures for the number of individuals who have been involved in delivering this service over the last three years. The cost to the FCO of providing this service to the public over the last three financial years is shown in the following table. £ 2009-10 2010-11 2011-12

237,006 198,173 145,635

The number of call handlers deployed by Teleperformance at any given time to respond to calls to the crisis hotline varies according to call volumes. We do not therefore have figures for the number of individuals who have been involved in delivering this service. The cost to the FCO of providing this service to the public over the last three financial years has been as follows: 2009-10—n/a 2010-11 (including Volcanic ash cloud, Libya, Bahrain, Japan and Thailand)—£97,472.97 2011-12 (including Libya, Syria, Thailand and Morocco)— £129,716.3 Total—£204,860.26

Call centre: Careline Service: advice on our legalisation services (and births, deaths and marriages, registration from 1 June 2011). The number of call handlers deployed by Careline at any given time to provide information on the legalisation process and how to apply varies according to call volumes. We do not therefore have figures for the number of individuals who have been involved in delivering this

485W

Written Answers

2 JULY 2012

service. The cost to the FCO of providing this service to the public since it was set up in February 2010 has been as follows: 2010-11—Legalisation office calls formed part of the ‘courtesy’ element of the Careline contract for passport inquiries (from 3 February 2010) so no cost to the taxpayer; 2011-12—Following the novation of passport service to the Identity and Passport Service (IPS), costs for a continuing Careline service for legalisation and births, deaths and marriages inquiries (from 1 June 2011)—£81,864

Call centre: Careline Service: advice on passport services. Careline is a private sector provider. The contract is managed by the IPS. It is a user pays contract and as such there is no cost to the taxpayer. Our consular call centres overseas are staffed by locally engaged FCO staff, all of whom are properly trained and consistently deliver an excellent service to British nationals seeking assistance. Information on call centres operated by our global network of over 260 overseas posts and the agencies and non-departmental bodies for which we are responsible is not held centrally. This information could therefore be obtained only at disproportionate cost. Turks and Caicos Islands Andrew Rosindell: To ask the Secretary of State for Foreign and Commonwealth Affairs what recent progress has been made by the Special Investigation and Prosecution [114350] Team in the Turks and Caicos Islands. Mr Bellingham: The Special Investigation and Prosecution Team continues to make good progress. 13 people have been charged with corruption, conspiracy to defraud and money laundering (including four former Ministers). In each case the Turks and Caicos Islands Supreme Court has ruled that there is sufficient evidence for the matter to go to trial. A Plea and Directions hearing will take place in the Supreme Court on 10 July. The Chief Magistrate of the Turks and Caicos Islands has issued an arrest warrant for the former Premier, Michael Misick, and a ‘Red Notice’ has been issued by Interpol. United Nations Jason McCartney: To ask the Secretary of State for Foreign and Commonwealth Affairs what financial contribution the UK made to the UN in (a) 2009, (b) [114091] 2010 and (c) 2011. Mr Bellingham: I refer my hon. Friend to the answer I gave to the hon. Member for Bassetlaw (John Mann) on 17 January 2012, Official Report, column 722W. Work Experience Andrew Gwynne: To ask the Secretary of State for Foreign and Commonwealth Affairs how many (a) people undertaking unpaid work experience, (b) unpaid interns and (c) other people in unpaid positions were working in his Department in the most recent period for [114186] which figures are available.

Written Answers

486W

Mr Bellingham: All internship and work experience schemes run by the Foreign and Commonwealth Office (FCO) in 2011 were advertised publicly and remunerated. I refer the hon. Member to my answer of 23 March 2012, Official Report, column 904W, to the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), which gave further details of numbers of participants in the schemes. For 2012, the FCO has expanded the range of work experience schemes available. We continue to offer a number of paid work experience or internship opportunities designed to help us recruit high calibre graduates from backgrounds where the FCO is under-represented or where the FCO has a skills shortage. We will also participate in three Government-wide schemes with different funding/compensation arrangements: the Whitehall Social Mobility Internship Programme for 16 to 18-yearolds, the Department for Work and Pensions (DWP) Social Mobility Programme for 13 to 14-year-olds and the DWP/Job Centre Plus scheme for individuals in receipt of social benefits.

EDUCATION Atos Tom Greatrex: To ask the Secretary of State for Education when each contract between his Department and Atos was most recently (a) agreed, (b) renewed [111197] and (c) extended. Tim Loughton: The Department has one contract with ATOS (Origin IT Services) which was awarded following a competitive tendering exercise. The contract started on 1 October 2010 with an expiry date of 30 September 2013. This is a new contract and has not been renewed or extended. CAFCASS John McDonnell: To ask the Secretary of State for Education (1) how many Children and Family Court Advisory and Support Service employees are on long-term [111159] sick leave due to stress; (2) what steps (a) he and (b) Children and Family Court Advisory and Support Service (CAFCASS) corporate management are taking to address the workloads of CAFCASS practitioners in offices where over (i) 25%, (ii) 50% and (iii) 90% of practitioners are working [111162] a high red or high amber workload weight. Tim Loughton: Cafcass is an independent body with its own procedures. Operational issues, including staff workloads and sickness are the responsibility of the chief executive. Anthony Douglas, the chief executive of Cafcass has written to the hon. Member and a copy of his response has been placed in the Libraries of the House. Letter from Anthony Douglas, dated 12 June 2012: I am writing to you in order to provide answers to the two Parliamentary Questions that you tabled recently: PQ111159 - To ask the Secretary of State for Education, how many Children and Family Court Advisory and Support Service employees are on long term sick leave due to stress.

487W

Written Answers

Written Answers

2 JULY 2012

Cafcass currently has one member of staff on long term sick leave due to stress. Please note: 4 weeks (28 days) or more constitutes long term sickness. Fewer than 4 weeks (1-27 days) constitutes short-term. PQ 111162 -To ask the Secretary of State for Education, what steps (a) he and (b) Children and Family Court Advisory and Support Service (CAFCASS) corporate management are taking to address the workloads of CAFCASS practitioners in offices where over 25 per cent, 50 per cent and 90 per cent of practitioners are working a high red or high amber workload weight. Cafcass workloads have increased due to the rise in demand faced by all agencies in the child protection and family justice systems. Cafcass is committed to ensuring every child referred to us receives a service, and our staff are also committed to that objective. In recognition of these increased pressures, we introduced a workload weighting tool in March 2011 on a trial basis. Working with our trade unions, we have been refining the methodology since. As at 1 June 2012, which is the final month during which data is being produced using the weightings based on the March 2011 trial workload weighting tool, there were 52 teams where 25% or more of the Family Court Advisers (FCAs) were in the high amber or high red bands. There were 28 teams (drawn from among the 52 teams) where there were 50% or more of the FCAs in the high amber or high red bands. There were no teams where 90% or more of the FCAs were in the high amber and high red bands. Each monthly report is given active consideration by the operational managers to whom it is distributed, with a view to gaining a fuller understanding of the workload pressures that are being experienced by teams and, in the case of first line managers (Service Managers), individual members of staff.

Computers Mr Watson: To ask the Secretary of State for Education pursuant to the answer of 17 May 2012, Official Report, column 312W, on computers, how many computers are available solely for his use; and whether any of the devices have been used to receive emails from private [113423] accounts in the last 12 months.

488W

The Department is in the first year of a four-year agreement, with the option to extend for a further year. The Department uses E.ON for its electricity supplies for its property in Histon. The energy provision for this site is currently being transferred to the Government Procurement Service’s framework agreement. Since its formation the Department has achieved significant reductions in its energy consumption. Between May 2010-11 and 2011-12 these reductions were 7% in electricity and 32% in gas consumption. Caroline Flint: To ask the Secretary of State for Education which energy supplier supplies his Department with (a) gas and (b) electricity. [113476] Tim Loughton: The Department for Education procures its energy supplies through the Government Procurement Service’s (formerly Buying Solutions) framework agreement. The framework suppliers are: EDF Energy—half hourly metered electricity; British Gas Business—non-half hourly metered electricity; and Corona Energy—gas.

The Department utilises all three of suppliers across its estate. The Department also uses E.ON for its electricity supplies for its property in Histon. The energy provision for this site is currently being transferred to the Government Procurement Service’s framework agreement. Since its formation the Department has achieved significant reductions in its energy consumption. Between May 2010-11 and 2011-12 these reductions were 7% in electricity and 32% in gas consumption. Caroline Flint: To ask the Secretary of State for Education how much his Department spent on (a) gas and (b) electricity bills in each of the last 10 years. [113503]

Tim Loughton: The Secretary of State for Education, my right hon. Friend the Member for Surrey Heath (Michael Gove), receives e-mails from a wide range of senders in the normal course of business, both from inside the Department and outside. The Secretary of State has been provided with one departmental desktop computer and one departmental laptop, both of which are obviously capable of receiving e-mails from nondepartmental e-mail accounts.

Tim Loughton: The Department for Education was formed in May 2010. The amount spent on utilities is detailed in the following table. Spend is detailed as follows against gas and electricity for the financial years 2010-11 to 2011-12. £ Electricity May 2010 to March 2011

Energy

2011-12

Caroline Flint: To ask the Secretary of State for Education whether his Department switched its (a) gas or (b) electricity supplier in any of the last 10 years. [113458]

Tim Loughton: The Department for Education was formed in May 2010 and uses the Government Procurement Service’s (formerly Buying Solutions) framework agreement for its energy supplies. It has not switched its gas or electricity supplier during this period. The Government Procurement Service’s framework agreement delivers pan-Government energy supplies through the Official Journal of the European Union (OJEU) competitive tender process. The utility contracts are typically four years in duration with the option to extend by one year.

Gas

996,438

93,927

1,204,414

115,861

Since its formation the Department has achieved significant reductions in its energy consumption. Between May 2010-11 and 2011-12 these reductions were 7% in electricity and 32% in gas consumption. Official Visits: Israel Richard Burden: To ask the Secretary of State for Education pursuant to the answer of 11 June 2012, Official Report, columns 381-82W, on official visits: Israel, what discussions he or his Department had with (a) the Israeli embassy in the UK, (b) the Israeli Ministry of Foreign Affairs, (c) Mr Lieberman’s office and (d) the Britain-Israel Communications and Research Centre on the possibility of his meeting Mr Lieberman [112981] during his recent visit to the UK.

489W

Written Answers

Tim Loughton: The Department for Education had discussions with officials at the Israeli embassy in the UK about the possibility of arranging a meeting with Mr Lieberman during his recent visit to the UK. No discussions took place with any other organisation. Pre-school Education: West Midlands Steve McCabe: To ask the Secretary of State for Education how many children aged (a) three and (b) four years old are receiving 15 hours a week of free nursery education in (i) Birmingham Selly Oak [113725] constituency and (ii) the West Midlands. Sarah Teather [holding answer 27 June 2012]: The number of three and four-year-olds receiving 15 hours a week of free early education in Birmingham Selly Oak and the West Midlands in 2011 is shown in the table. Three and four-year-olds1, 2 receiving 15 hours a week3, 4 of free early education in private, voluntary and independent providers and in maintained nursery, primary, secondary and special schools Birmingham Selly Oak parliamentary constituency and West Midlands region, position at January 2011 Number Three-year-olds Four-year-olds Birmingham Selly 703 924 Oak West Midlands 55,917 64,752 1 Count of children aged three and four at 31 December in the previous calendar year. 2 Any child attending more than one provider may have been counted twice. 3 This covers children who are receiving 15 hours a week at a single provider. Children receiving less than 15 hours are not included. Those who spread their 15 hours entitlement over more than one provider will not be included in this table. 4 Four-year-olds can receive up to 25 hours a week of free early education therefore figures for four-year-olds covers children receiving at least 15 hours a week. Source: Early Years Census (EYC), School Census (SC); and School Level Annual School Census (SLASC).

Date

Written Answers

2 JULY 2012

490W

Data for 2012 will be available from 28 June following the publication of the ″Provision for Children under Five Years of Age in England: January 2012″ Statistical First Release at the following link: http://www.education.gov.uk/rsgateway/DB/SFR/s001074/ index.shtml

Steve McCabe: To ask the Secretary of State for Education how many nursery places per head of population there were in the West Midlands in each of the last 10 [113950] years.

Sarah Teather [holding answer 28 June 2012]: This information is held by Ofsted. The chief inspector, Sir Michael Wilshaw, has written to the hon. Member and copies of his reply have been placed in the House Libraries. Letter from Sir Michael Wilshaw, dated 26 June 2012: Your recent parliamentary question has been passed to me, as Her Majesty’s Chief Inspector, for response. The information you require is presented in Tables A and B below. At the introduction of the Early Years Foundation Stage on 1 September 2008, Ofsted changed the way it registered providers and recorded the availability of child care places. Data has been presented separately for periods before and after this change, as these data are not directly comparable. A copy of this reply has been sent to Sarah Teather MP, Minister of State for Children and Families, and will be placed in the library of both Houses.

Table A: Nursery places per head of population in the West Midlands between 2003 and 2008 Population in the West Child care places per Midlands aged five and child age five and Nursery places West 1,2,3 4 under under5 Midlands

Children aged 5 and under per child care place5

31 March 2003 2004 2005

111,500 121,400 125,300

— — 376,097

0.2965 0.3228 0.3332

3.37 3.10 3.00

2006

133,000

379,760

0.3502

2.86

2007

135,600

388,132

0.3494

2.86

2008

137,500

399,151

0.3445

2.90

1

Source: Ofsted registration data. 2 Number of places relates to providers of full, sessional, out of school and crèche day care. 3 Individual providers may provide, multiple types of day care. For these, data relate to the sum of the places available for each type of day care, which may be greater than the number of places available at any one point in time. 4 Source: ONS population estimates for each year 2003-10: http://www.ons.gov.uk/ons/publications/all-releases.html?definition=tcm:77-22371 5 Estimates of population of children aged 5 and under are not available for 2003 and 2004 so data for 2005 have been used in calculations. Table B: Nursery places per head of population in the West Midlands between 2009 and 2012 Population in the West Child care places per Children aged 5 and Midlands aged 5 and child age 5 and under per child care Nursery places West under5,6 under5 place5 Date Midlands1,2,3 30 June 20094 31 March 2010

109,773 108,431

408,059 414,011

0.2690 0.2619

3.72 3.82

491W

Date

Written Answers

2 JULY 2012

Written Answers

Table B: Nursery places per head of population in the West Midlands between 2009 and 2012 Population in the West Child care places per Nursery places West Midlands aged 5 and child age 5 and Midlands1,2,3 under5,6 under5

492W

Children aged 5 and under per child care place5

31 March 2011 107,229 — 0.2590 3,86 31 March 2012 106,971 — 0.2584 3.87 1 Source: Ofsted registration data. 2 Number of places relates to providers of child care on non-domestic premises. 3 For providers only on the Early Years Register, data relate to places available for children aged from birth until the 31 August following their fifth birthday. Where providers are also on the compulsory part of the Childcare Register, data relate to places available to children up to eight years old. 4 Data covering child care places as at 31 March 2009 are not available. Data as at 30 June 2009 have been used instead. 5 20l0 is the most recent year for which population estimates are available. These have been used in calculations for subsequent years. 6 Source: ONS population estimates for each year 2003-l0. http://www.ons.gov.uk/ons/publications/all-releases.html?definition=tcm:77-22371

Schools: Food Tom Blenkinsop: To ask the Secretary of State for Education whether he plans to bring forward amending regulations to require academies and free schools to adhere to the Education (Nutritional Standards and Requirements for School Food) (England) Regulations [109268] 2007. Sarah Teather [holding answer 24 May 2012]: The Department has no plans to bring forward amending regulations to require academies and free schools to adhere to the Education (Nutritional Standards and Requirements for School Food) (England) Regulations 2007. Schools: Vending Machines Ms Abbott: To ask the Secretary of State for Education how many schools had vending machines containing [114550] junk food in each of the last five years. Sarah Teather: The Department does not hold this information. With the introduction of the food-based standards in 2007, schools required to comply with the standards that used vending machines had to assess whether the food and drink in their machines complied with the standards. Over recent years, a number of food and drink manufacturers have developed products which comply with the standards and which can be provided in vending machines. For some schools, the use of vending machines can help them cope with busy lunchtimes, by providing an alternative food outlet for pupils to use instead of queuing in the school dining hall. Schools are often used by the community after school hours, which the vending machines support. Some schools ensure that vending machines containing confectionery and crisps are not in operation during school hours. Special Educational Needs Mr Bailey: To ask the Secretary of State for Education what modelling the Education Funding Agency has undertaken on the effect on (a) students aged 16 and over and (b) providers of education of changes in the

funding system proposed in the document Support and Aspiration: A New Approach to Special Educational Needs and Disability; and if he will publish such modelling. [113094]

Sarah Teather [holding answer 26 June 2012]: In planning for the proposed funding reforms for high needs pupils and students, and in preparation for their implementation from the start of 2013-14, the Education Funding Agency and other areas of the Department for Education have worked together closely to consider the impact of these changes. In relation to provision for students aged 16 and over, extensive modelling has been carried out by the EFA at local authority, provider and learner levels. The modelling that officials have carried out has been used to provide advice to Ministers and inform the Government’s decisions about funding reform. The Government does not intend to publish this modelling. The Government, has, however provided a number of illustrative examples showing how the new arrangements will work for individual pupils and different types of providers. These were published as part of ‘School funding reform: Next steps towards a fairer system’. Special Educational Needs: Rural Areas Dr Poulter: To ask the Secretary of State for Education what steps he is taking to support the provision of special educational needs pupil places in [113984] small rural secondary schools. Sarah Teather: In our Green Paper, ‘Support and aspiration: A new approach to special educational needs and disability’, and the follow up document, ‘Progress and next steps’, we set out our ambitious plans to reform radically provision for children with special educational needs (SEN) and disabled children. These reforms will benefit all children with SEN, including those in rural schools.

CABINET OFFICE Employment: Birmingham Shabana Mahmood: To ask the Minister for the Cabinet Office what the net change in the number of private sector jobs was in (a) Birmingham, Ladywood constituency and (b) the Birmingham City Council area in the latest [114454] period for which figures are available.

493W

Written Answers

2 JULY 2012

Mr Hurd: The information requested falls within the responsibility of the UK Statistics Authority. I have asked the Authority to reply. Letter from Stephen Penneck, dated June 2012: As Director General for the Office for National Statistics, I have been asked to reply to your Parliamentary Question asking what the net change in the number of private sector jobs was in (a) Birmingham, Ladywood constituency and (b) the Birmingham City Council area in the latest period for which figures are available. (114454) The official estimates of public and private sector jobs are compiled from Work Force Jobs (WFJ) series. However, WFJ do not produce private/public sector job statistics at a geography lower than regional level, so private sector employment has been provided from the Annual Population Survey (APS). Individuals in the APS are classified to the public or private sector according to their responses to the survey. Table 1 attached shows the net change in private sector employment from the APS in Birmingham and Birmingham, Ladywood constituency, between the 12 month period ending in March 2012 (the latest available period) and the period one year earlier. As with any sample survey, estimates from the APS are subject to a margin of uncertainty. National and local area estimates for many labour market statistics, including employment, unemployment and claimant count are available on the NOMIS website at http://www.nomisweb.co.uk Table 1: Net change in private sector employment between the 12 month period ending March 2011 and March 2012 Thousands Private sector employment Net change 12 months ending: March 2011 March 2012 Birmingham 288 *292 4 Birmingham, 22 ***29 8 Ladywood Note: Coefficients of Variation have been calculated for the latest period as an indication of the quality of the estimates. See Guide to Quality as follows. Guide to Quality: The Coefficient of Variation (CV) indicates the quality of an estimate, the smaller the CV value the higher the quality. The true value is likely to lie within +/- twice the CV—for example, for an estimate of 200 with a CV of 5% we would expect the population total to be within the range 180-220 Coefficient of Variation Key (CV) (%) Statistical Robustness * 0 ≤ CV < 5 Estimates are considered precise ** 5 ≤ CV < 10 Estimates are considered reasonably precise *** 10 ≤ CV < 20Estimates are considered acceptable **** CV ≥ 20 Estimates are considered too unreliable for practical purposes Source: Annual Population Survey

Jobseeker’s Allowance Mr Ainsworth: To ask the Minister for the Cabinet Office how many 16 to 24 year-olds in (a) Coventry, (b) Coventry North East constituency, (c) the West Midlands and (d) England claimed jobseeker’s allowance [114809] in each of the last five years.

Written Answers

494W

how many 16 to 24 year olds in (a) Coventry, (b) Coventry North East constituency, (c) the West Midlands, and (d) England claimed jobseeker’s allowance in each of the last five years. (114809) The Office for National Statistics (ONS) compiles the number of claimants of Jobseeker’s Allowance (JSA) from the Jobcentre Plus administrative system. Table 1 shows the number of people aged 16 to 24, resident in (a) Coventry, (b) Coventry North East constituency, (c) the West Midlands, and (d) England, who were claiming Jobseeker’s Allowance in May 2008, 2009, 2010, 2011 and 2012, which is the latest date available. National and local area estimates for many labour market statistics, including employment, unemployment and claimant count are available on the NOMIS website at: http://www.nomisweb.co.uk Table 1: Number of persons1 aged 16 to 24 resident in Coventry, Coventry North East constituency, the West Midlands and England claiming jobseeker’s allowance As at Coventry West May: North East Coventry Midlands England 2008 930 2,130 2009 1,365 3,325 2010 1,275 3,030 2011 1,185 2,910 2012 1,210 2,840 1 Age data is only available for computerised for 99.7% of all claims. Note: Data rounded to nearest 5. Source: Jobcentre Plus administrative system

30,950 51,465 47,745 47,190 48,665 claims, which

211,960 381,290 342,580 341,710 371,625 account

Fiona O’Donnell: To ask the Minister for the Cabinet Office what recent estimate he has made of the number of people aged (a) 18 to 24 and (b) over 50 in receipt of jobseeker’s allowance and resident in East Lothian [114922] constituency. Mr Hurd: The information requested falls within the responsibility of the UK Statistics Authority. I have asked the authority to reply. Letter from Stephen Penneck, dated June 2012: As Director General for the Office for National Statistics, I have been asked to reply to your Parliamentary Question asking what recent estimate he has made of the number of people aged (a) 18 to 24 and (b) over 50 in receipt of jobseeker’s allowance and resident in East Lothian constituency. (114922) The Office for National Statistics (ONS) compiles the number of claimants of Jobseeker’s Allowance (JSA) from the Jobcentre Plus administrative system. In May 2012 the number of people resident in East Lothian and claiming JSA (a) aged 18 to 24 was 605 and (b) aged 50 and over was 355. Age data is only available for computerised claims, which account for 99.7% of all claims. Age data is rounded to the nearest 5. National and local area estimates for many labour market statistics, including employment, unemployment and claimant count are available on the NOMIS website at http://www.nomisweb.co.uk

Migration Mr Hurd: The information requested falls within the responsibility of the UK Statistics Authority. I have asked the authority to reply. Letter from Stephen Penneck, dated June 2012: As Director General for the Office for National Statistics, I have been asked to reply to your Parliamentary Question asking

Mr Raab: To ask the Minister for the Cabinet Office (1) what information his Department holds on the number of (a) people and (b) British citizens who travelled from the UK to the US in the most recent [114483] year for which figures are available;

495W

Written Answers

Written Answers

2 JULY 2012

(2) what information his Department holds on the number of (a) people and (b) US nationals who travelled to the UK from the US in the most recent year for [114484] which figures are available. Mr Hurd: The information requested falls within the responsibility of the UK Statistics Authority. I have asked the authority to reply. Letter from Stephen Penneck, dated June 2012: As Director General for the Office for National Statistics (ONS), I have been asked to respond to your Parliamentary Question to the Secretary of State for the Home Department, asking:

496W

1. what information her department holds on the number of (a) people and (b) British citizens who travelled from the UK to the US in the most recent year for which figures are available.[114483] 2. what information her Department holds on the number of (a) people and (b) US nationals who travelled to the UK from the US in the most recent year for which figures are available. [114484] I am able to report estimates derived from the International Passenger Survey. Estimates are published in two forms, firstly the number of overseas travel and tourism visits of less than 12 months in duration which are completed in the reporting year; secondly number of people migrating for 12 months or more (long term migration) during the reporting year. The most recent year for which both sets of estimates are available is 2010.

Table 1: Number of visits made to the US) by (a) UK residents of any nationality and (b) UK residents of British nationality during calendar year 2010 Thousand Overseas travel and tourism visits (of less Long term migration (12 months or than 12 months) more) Travel by UK residents of any nationality 3,240 24 Travel by UK residents who are British nationals 2,927 13 Source: International Passenger Survey 2010 Table 2: Number of visits made to the UK by (a) US residents of any nationality and (b) US residents of US nationality during calendar year 2010 Thousand Overseas travel and tourism visits (of less than 12 months) Long term migration (12 months or more) Travel by US residents of any nationality Travel by US residents who are US nationals Source: International Passenger Survey 2010

2,711 2,252

22 15

Operating Costs

Part-time Employment: Bexley

Mr Redwood: To ask the Minister for the Cabinet Office how much was spent on the administration of his Department in (a) 2009-10, (b) 2010-11 and (c) [109831] 2011-12.

Mr Evennett: To ask the Minister for the Cabinet Office what proportion of people in Bexleyheath and [114531] Crayford are employed in part-time roles.

Mr Maude: The Cabinet Office’s administration spend for 2009-10 was £198.296 million and for 2010-11 was £202.311 million; a breakdown can be found on page 99 in the Annual Report and Accounts 2010-11 (HC999). The increase in administration spend is due to machinery of government transfers and budgetary cover transfers from other Government Departments to the Cabinet Office. The increase in expenditure is therefore offset by reductions in other Departments’ spending. Meanwhile the Cabinet Office has generated approximately £35 million of efficiency savings in 2011-12. Machinery of government transfers amounted to £8.165 million (main items being Constitutional and Political Reform from Ministry of Justice—£5.9 million; Office of Government Commerce from HM Treasury—£1.5 million). The actual spend for 2011-12 is currently being audited and will be published in the Annual Report and Accounts 2011-12 in mid July 2012. http://www.cabinetoffice.gov.uk/resource-library/cabinetoffice-annual-reports-and-accounts http://www.hm-treasury.gov.uk/main_supply_ estimates_2011_12.htm http://www.hm-treasury.gov.uk/psr_pse_201112.htm

Mr Hurd: The information requested falls within the responsibility of the UK Statistics Authority. I have asked the authority to reply. Letter from Stephen Penneck: As Director General for the Office for National Statistics, I have been asked to reply to your Parliamentary Question asking what proportion of people in Bexleyheath and Crayford are employed in part-time roles. (114531) The Office for National Statistics (ONS) estimates employment statistics for local areas from the Annual Population Survey (APS). Table 1 as follows shows the number and proportion of people aged 16 to 64 employed in part-time jobs resident in Bexleyheath and Crayford parliamentary constituency from APS for the 12 month period ending March 2012, the latest period for which figures are available. As with any sample survey, estimates from APS are subject to a margin of uncertainty. A guide to the quality of the estimates is given in the table. National and local area estimates for many labour market statistics, including employment, unemployment and claimant count are available on the NOMIS website at http://www.nomisweb.co.uk

497W

Written Answers

Written Answers

2 JULY 2012

498W

Table 1 Number and proportion of part-time employment in Bexleyheath and Crayford parliamentary constituency Aged 16-64 (thousand)

Part-time proportion (percentage)

Total people

Employed

Part-time

Of total people

Of employed

**51

***37

***10

19.4

27.4

April 2011-March 2012

Note: Coefficients of Variation have been calculated as an indication of the quality of the estimates, as described below: Guide to Quality: The Coefficient of Variation (CV) indicates the quality of an estimate, the smaller the CV value the higher the quality. The true value is likely to lie within +/- twice the CV—for example, for an estimate of 200 with a CV of 5% we would expect the population total to be within the range 180-220. Key: * 0 ≤ CV