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19 Nov 2008 : Column 229

leading to tax rises after an election. That is what he said as Chancellor just a few years ago. If he does not agree with his employment Minister, if he does not agree with his Chancellor and if he does not agree with his Trade Secretary, perhaps he can tell us—does he agree with himself?

Hon. Members: More!

The Prime Minister: They all shout, but only a few days ago the Leader of the Opposition himself was saying that borrowing had to be allowed to happen. Then he changed his mind, and he is depriving people of real help for businesses and families. The issue will come down to this: do we want to help people through difficult times, a downturn that every country in the world has faced? It is a downturn, by the way, that even the Americans agree started in America. Do we want to help people through difficult times, or do we want to take the advice that was followed in the 1980s and 1990s by the then Conservative Government and do absolutely nothing to help people in time of need?

We are going to be the party that helps people through this difficult downturn. The Conservative party has changed its policy yet again and now it is unable to help people. The deputy chairman of the Conservative party said only two days ago that the recession must take its course. We will act; the Conservatives would refuse to act.

Andrew Mackinlay (Thurrock) (Lab): Will the Prime Minister agree to meet a delegation of MPs, including me, who lost constituents due to the use by the IRA of Semtex and other weapons that had their provenance in Libya? We are disappointed that the Foreign and Commonwealth Office has not yet taken the initiative of following America’s example and negotiating adequate compensation with Colonel Gaddafi. I believe that Members in all parts of the House, along with victims’ families, would want to press him to remedy this wrong, including the hon. Member for Belfast, North (Mr. Dodds) and colleagues from the SDLP—from people like me—

Mr. Speaker: Order. I believe that the Prime Minister has got the point.

The Prime Minister: It is a very important point. I will be very happy to meet my hon. Friend to talk about it, and then we will review what we do.

Mr. Nick Clegg (Sheffield, Hallam) (LD): I would like to return to the bank bail-out plan. We supported that action because we were told that there would be strings attached—that the banks would be forced to lend. Yet every Member of this House will have heard about local companies receiving e-mails from their banks forcing them out of business overnight. What concrete evidence does the Prime Minister have to show that his bail-out plan is working?

The Prime Minister: The first thing to do was to provide liquidity to the banking system. The second thing to do was to recapitalise the banks so that they would not collapse. Some of these banks would not be in existence today had we not taken the action that we did to recapitalise them. I am pleased that the right hon. Gentleman supported us on this. The next thing to do is
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to secure the funding that is necessary for small businesses and for mortgages. We have expanded the small firms loan guarantee scheme, and we have arranged for £4 billion of funding from Europe. We are meeting banks and building societies almost every second day to consider the technical issues and other reasons why the lending has not happened in some cases, and we are ready to take further measures if necessary. I hope that he agrees that if we take further measures, that may cost money as well as costing the banks changes in the way that they operate, and I hope that he will support us when we do it.

Mr. Clegg: That was an extraordinarily complacent reaction when thousands of jobs are at risk. We all know that the Prime Minister likes to strut his stuff on the world stage telling everybody that his plan is better than their plan, but his plan is not working where it counts—here at home. The bankers cannot believe their luck. They have got billions of pounds of taxpayers’ money, they can keep their bonuses, and they do not have to lend to companies. If he is too weak to get tough on the banks, will he instead consider ways of lending serious money directly to businesses?

The Prime Minister: First, they have not, under our scheme, taken their bonuses as members of the boards. Barclays announced just yesterday that they will not take those bonuses. We are having some success, and I hope that we will have more success, in persuading the executives of these companies to take full responsibility. As for the resumption of lending, every country in the world is facing this problem, and we are all looking at what we can do. What has happened—let us be honest—is that we have gone from a period where banks were prepared to take any risk to one where they are averse to risk, and we have got to turn that round. That means that we are going to have to build confidence in the future of the financial system. Some of the measures we have already taken, but I hope that the right hon. Gentleman will support the further measures that we will take.

Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): Does the Prime Minister believe that it is right for councils to go on encouraging their tenants to take out mortgages that they can ill afford to repay? If he thinks that it is wrong to encourage people who are only on benefits, in arrears or have been bankrupt to take out mortgages, will he please tell Birmingham city council, which is controlled by the Conservative party, that it should stop taking advertising from companies that facilitate just such loans in its council tenants’ freesheet?

The Prime Minister: If there is any area where there are irresponsible lending practices, we must look at it carefully. I will look carefully at what my hon. Friend says about Birmingham city council.

Q3. [236809] Mr. David Burrowes (Enfield, Southgate) (Con): The US President-elect wants change. Will the Prime Minister ensure that extradition arrangements are changed so that UK citizens such as my constituent, Gary McKinnon, are not routinely extradited, despite having Asperger’s syndrome? Will the Prime Minister listen to cross-party calls for an assurance that Gary McKinnon will be repatriated following a conviction in the US?

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The Prime Minister: The hon. Gentleman refers to the case of his constituent, which he has taken up with Lord West. The UK has important obligations in that area, and we take those obligations seriously. I am sure that he will be aware that the case is before the courts again on 5 December, and I cannot comment on any specifics. As I understand it, however, the UK and the US are signatories to the Council of Europe convention on the transfer of sentenced persons, which enables a person found guilty in the United States of America to serve their sentence in the UK.

Q4. [236810] Miss Anne Begg (Aberdeen, South) (Lab): For those of who have had to suffer post office closures in our constituencies, the recent news that the Post Office card account will continue was extremely welcome. More has to be done, so what else can the Government do, and what can they encourage others to do, to ensure that we see the continuation of the existing post office branch network?

The Prime Minister: I believe that the whole House will support the decision made on the Post Office card account. It gave stability to the post office network at a very difficult time for the economy. We have also invested £2 billion for the next three years to help the post office network and we will do what we can to sustain services. One of the ways that we can do so is for people to use the post office network.

Mr. Speaker: Alistair Burt.

Several hon. Members rose

Mr. Speaker: Mr. Burt is standing—[ Interruption.] Well, speak.

Alistair Burt (North-East Bedfordshire) (Con): May we have an answer from the Prime Minister to the question posed by my hon. Friend the Member for Ludlow (Mr. Dunne)? If it were true that the economy is better placed than any other to come out of the recession, what is the Prime Minister’s explanation of why our currency has fallen so far, and so fast?

The Prime Minister: That was the first time I ever saw the hon. Gentleman lost for words. Now that he has asked his question, I say to him that what puts our economy in a good position to deal with the problems that we face is that we were able to bring interest rates down. That was not possible in the recession of the early ’90s, when interest rates were 15 per cent. What makes it possible for us to be strong is that employment remains high in this country—3 million more than in 1997, something that was not possible in the downturn of the early ’90s. What is also strong about our country is that company balance sheets outside the financial sector are in a generally healthy position, which will stand us in good stead. What also stands us in good stead is that we are making the right decisions to come through this, not the wrong ones.

Q5. [236812] David Taylor (North-West Leicestershire) (Lab/Co-op): As chair of the all-party group on smoking and health, I joined Cancer Research UK at the Department of Health today, to present a petition of more than 50,000 signatories calling for the prohibition of point-of-sale tobacco displays and tobacco vending machines, and for the introduction of
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plain packaging. Does my right hon. Friend agree that more measures of that kind are needed to protect our children and young people from the impact of tobacco marketing, and to discourage them from starting smoking in the first place?

The Prime Minister: I applaud the action that my hon. Friend has taken, and I also applaud what Cancer Research UK has done. We will publish our response to the consultation with which it was involved very soon, and we will launch a new national tobacco control strategy in 2009. Tobacco use in this country has fallen from 28 to 22 per cent., and for children it has fallen from 13 to 6 per cent., but that is not good enough. The age of sale for tobacco products was raised from 16 to 18, and stronger sanctions will be made against retailers who persistently sell cigarettes and tobacco to children.

Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): Earlier this year, the Prime Minister visited my constituency to meet representatives of the oil and gas industry to hear about the challenges to investment in the North sea. What reassurance will the pre-Budget report on Monday give the many thousands of people in the north-east of Scotland and throughout the country who work in that industry that the Government remain committed to maximising investment and production from the North sea to protect our security of supply and maximise future revenue for the Treasury?

The Prime Minister: We will continue the enhanced support that we have given new investment in new fields—fields west of Shetland—and the support for an enhanced recovery rate in existing fields. Much of the oil that can be taken out of the North sea in future is in existing fields, some of which have already been left behind. With enhanced technology, there can be enhanced recovery rates, and we are determined to support that. I cannot say what is in the pre-Budget report, but we are determined to support the extra development work, and then production in the North sea.

Q6. [236813] Mr. Gordon Prentice (Pendle) (Lab): Is it not an absolute disgrace that 40,000 students are still waiting for their education maintenance allowances? However, is it not right that the Learning and Skills Council has today sacked Liberata, the dysfunctional private sector company that is supposed to deliver on that? What can we learn about the culture of contracting out and outsourcing from that example of something going so pear-shaped?

The Prime Minister: The private company responsible for delivering the education maintenance allowance has not delivered. We are taking action to protect the students who are affected by that, and I believe that that action will be announced in the next few hours.

Q7. [236814] Andrew Selous (South-West Bedfordshire) (Con): Can the Prime Minister explain why, in the past three years, employment of British workers has fallen by more than 300,000, while the employment of migrant workers has increased by 900,000?

The Prime Minister: May I just tell the hon. Gentleman that, in his constituency— [Interruption.] Long-term unemployment is down by 80 per cent. I thought that the hon. Gentleman would be far happier because, instead of what happened in the last downturn, 3 million
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more people are employed in Britain now than there were in 1997. More British citizens are employed in Britain since 1997 as well.

Mary Creagh (Wakefield) (Lab): Last year in Yorkshire, 158 employers were caught not paying the minimum wage to their employees, 10 years after the Labour Government introduced it in the teeth of Tory opposition. What more can my right hon. Friend do to ensure that rogue companies that pay poverty wages are brought speedily to justice?

The Prime Minister: The minimum wage was raised to £5.73, and to £4.77 for 18 to 21-year-olds, on 1 October. We will do everything in our power to ensure that the legal minimum wage is applied in every part of the country. We have doubled the number of inspectors who monitor the development of the minimum wage. In addition, we will introduce legislation so that tips cannot be taken off the minimum wage—people should be paid tips on top of that.

Q8. [236815] Mr. Mike Weir (Angus) (SNP): In the real world, the difficulties that small businesses face with banks are not just to do with lending. A constituent came to me who had previously had a small business loan at base plus 2.5 per cent. Last week, he went back to the bank to get a replacement business loan and was quoted base plus 4 per cent. He was not given the benefit of the fall in interest rates from the Bank of England. When will we have real action to stop banks treating our small business men with such contempt?

The Prime Minister: That is exactly what we plan to do: take action to help small businesses through the difficult period. I have to tell the Opposition parties that that will also cost money, and those who resist fiscal activism and help for businesses and families at this point are making a big mistake.

Mark Durkan (Foyle) (SDLP): As the Government rightly consider targeted timely fiscal measures to assist growth, will the Prime Minister assure us that they will remember pensioners, who will spend to good economic effect any extra money they receive from either a one-off top-up this year of the winter fuel payment or the automatic payment for three months of pension credit, which could assist several pensioners through the hardship of the winter, and would improve take-up rates of that credit for the longer term?

The Prime Minister: The hon. Gentleman is absolutely right. We want to help pensioners through these difficult times. We have already raised the winter allowance to
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£250, which will be paid in the next few days, and we have already raised it for the over-80s by £80, and that will also be paid in the next few days. Any additional action that we take to help pensioners through these difficult times, which I know hon. Members on this side of the House would support, will require extra resources. The Conservative party really has to make up its mind: is it going to deny families and businesses real help in difficult times simply because of its ideology or will it support us in helping people through the difficult times?

Q9. [236817] Bill Wiggin (Leominster) (Con): Point 3 of the G20 communiqué makes it clear that policymakers should take responsibility for what went wrong. The Prime Minister signed up to that communiqué and he has been the policymaker for the past 11 years. Why can he not take responsibility and why can he not apologise?

The Prime Minister: Because what that section was referring to was financial regulation and what had happened principally in the United States of America. The Conservatives cannot accept that the problems that we are facing started with the sub-prime market in America and they do not seem to be able to understand that even the regulators in America accept that the problem happened first of all in America. If the Conservatives do not understand the sources of the problem, they will never be able to solve the problem.

Q10. [236818] Mr. Jamie Reed (Copeland) (Lab): Constituencies such as mine are set to benefit from new schools, new hospitals, new health facilities and new social housing in the near future, but those developments will be put at risk by the public spending cuts from the Opposition. Does the Prime Minister agree that constituencies such as mine throughout the north of England would be decimated by such proposals?

The Prime Minister: I want us to be able to say that in difficult times we were able to maintain our services in education, health and other areas. If the Conservative party had its way in that the recession has got to take its course, as its vice-chairman said, and the Conservatives do nothing to try to help people through these difficult times, then they will make the return of growth even more difficult. We are going to take action to help people through difficult times and to get growth into the economy, so that we can move ourselves out of this downturn more quickly. I had hoped that that would be the united view of the whole country, as well as the whole House, but unfortunately in one part of the House we do not yet have agreement.

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Point of Order

12.31 pm

Mr. Peter Bone (Wellingborough) (Con): On a point of order, Mr. Speaker. Yesterday the Chancellor of the Exchequer made a written statement about bank recapitalisation, in which he said:

Since yesterday I have been trying to get those final versions, but those that are available are undated and have gaps in them, so that the space after “Amount” has been left blank. They cannot be the final versions, so I wonder whether you could help me to obtain them, Mr. Speaker.

Mr. Speaker: I thank the hon. Gentleman for raising the matter. I will look into it and see that the agreements are delivered to him.

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