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House of Commons

Wednesday 29 February 2012

The House met at half-past Eleven o’clock


[Mr Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked—

Inward Investment

1. Gavin Williamson (South Staffordshire) (Con): What steps she is taking to promote Wales as a destination for inward investment. [96367]

The Secretary of State for Wales (Mrs Cheryl Gillan): You may have noticed, Mr Speaker, that some Members are wearing leek ties or daffodils in advance of St David’s day. May I take this opportunity to wish everybody a happy St David’s day for tomorrow, 1 March?

I am committed to working with UK Trade & Investment, the Welsh Government and others to improve the level of inward investment that is attracted to Wales. Last week’s report by the Welsh Affairs Committee highlights a number of important issues. In particular, the need for joint working between this Government and the Welsh Government is very clear.

Gavin Williamson: Does my right hon. Friend welcome the Welsh Affairs Committee report and agree with it that the Welsh Government should engage more positively with the UK Government to attract investment to Wales?

Mrs Gillan: I can reassure my hon. Friend that I welcome the sterling work of the Welsh Affairs Committee, as I am sure do all Members, given that it was a unanimous report. It highlights areas that must be addressed by the UK Government and the Welsh Government. Recently, I met Nick Baird, the chief executive of UKTI, to discuss the response. I have said right from the start of this Government that I want to encourage closer working between the Welsh Government and the UK Government, particularly in the light of some of the disappointing figures in Wales.

Chris Evans (Islwyn) (Lab/Co-op): General Dynamics has celebrated 10 successful years in my constituency. Will the Secretary of State congratulate the Labour Government, who were instrumental in bringing General Dynamics to my constituency?

Mrs Gillan: I have always said that politicians of all parties should co-operate to bring inward investment to both the United Kingdom and Wales. I have great pleasure in congratulating any individuals who were involved in bringing General Dynamics to Wales. I have

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visited General Dynamics on many occasions and it is an excellent company. I am pleased to concur with the hon. Gentleman’s sentiment.

Karen Lumley (Redditch) (Con): Does the Secretary of State believe that restoring the Welsh Development Agency brand would reignite inward investment to Wales?

Mrs Gillan: I think that—[ Interruption. ] The personal remarks from a sedentary position have put me off my stride temporarily, even though they were not about me. My hon. Friend is absolutely right that branding is exceedingly important. There is no doubt in the UKTI report by the Welsh Affairs Committee that the WDA was a great brand for Wales that was well known across the world. I know that many people would like to bring it back. I think that is worth considering, although perhaps in another form. There is no doubt that branding is an important aspect when marketing Wales.

Mr Peter Hain (Neath) (Lab): I join the Secretary of State in marking St David’s day. Will she join me in marking Wales’s magnificent triple crown victory over England on Saturday? I am sure she will have no trouble in doing so.

Since coming to office, how much private sector inward investment have the Secretary of State and her Government helped to bring to Wales?

Mrs Gillan: What a magnificent victory that was. It brought a tear to a girl’s eye to see the team doing so well. As far as the match on Sunday goes, Cardiff were robbed and they played very well.

Inward investment and that side of business life are devolved to the Labour Welsh Assembly Government, as the right hon. Gentleman should know, given that he was an architect of the legislation. Since coming into government, I have met delegations from Taiwan, China, Turkey, Japan and Russia to promote Wales as an investment decision. Indeed, I launched the first ever trade mission of Welsh businesses to Bangladesh, led by the Wales Bangladesh chamber of commerce. I stress to the right hon. Gentleman that there needs to be a partnership between the UK Government and the Welsh Government because when making inward investment decisions companies look at the UK as a whole. We need to give them reasons to go to Wales.

Mr Speaker: The Secretary of State’s replies are immensely courteous, but I am afraid that they are a bit long.

Mr Hain: I thank the Secretary of State for her reply, but remind her that in the 15 months since the Government spending review, the UK economy has grown by a miserable 0.2%—15 times less over the same period than the Office for Budget Responsibility’s 3% growth prediction in June 2010 after Labour left office. That collapse has massively damaged inward investment and jobs in Wales. Is it not high time that the Government changed course and followed the lead of the Labour Welsh Government with their Jobs Growth Wales scheme, which provides jobs for 4,000 young people in Wales? Where the Tories are hammering Wales, Labour is standing up for Wales.

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Mrs Gillan: I have to say that I will take no lessons from the right hon. Gentleman, particularly given that, since we came into government, we are investing £1 billion in electrifying the great western main line and putting £60 million into broadband. It is important that both Governments work together. If the First Minister goes on a business delegation and brings back business to Wales I will be delighted, but I think that we should work together—and, for the right hon. Gentleman’s information, we will be sticking to plan A.

Feed-in Tariffs

2. Mr David Hanson (Delyn) (Lab): What assessment she has made of the effect of changes to feed-in tariffs on the Welsh economy. [96368]

The Parliamentary Under-Secretary of State for Wales (Mr David Jones): We are continuing to consult and engage with the solar industry on changes to the feed-in tariff scheme and our assessments are ongoing. There are several key innovative businesses in the solar industry in Wales and we are committed to ensuring that they have a prosperous future.

Mr Hanson: According to the Department of Energy and Climate Change’s own figures, the industry is likely to shrink by a third, which means 5,000 jobs, in 2012 as a direct result of Government policies that the Under-Secretary has supported. How many of those jobs will be lost in Wales? Will he put his hand up and say that it has been a hash from start to finish?

Mr Jones: I would certainly say that it was a hash at its inception, because the scheme that the Government of which the right hon. Gentleman was a member put in place was poorly designed and lacked the flexibility to respond to changes in the cost of installing PV and in the price of electricity. The measures that the Government are now putting in place in response to the recent consultation will provide consumers with a proper rate of return, of the sort that was originally envisaged.

Jonathan Evans (Cardiff North) (Con): Does my hon. Friend agree that the important thing is that there is a fair, not an excessive, return? As a result of that, Italy, France and, in the past week, Germany have significantly changed the tariffs, as the Government have endeavoured to do in the UK.

Mr Jones: Yes, of course, and that underlines the fact that the scheme was poorly designed from the start. The Government’s proposals will provide a fair rate of return for investors.

Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC): But this retroactive policy has shattered business confidence in Wales. We are set for advances in the green economy, but who will invest when moneys can be wiped out at the mere flick of a pen in Whitehall? It is simply not good enough, and the Under-Secretary should realise that we are considering a key industry in Wales.

Mr Jones: The right hon. Gentleman’s criticism would be more properly directed at the previous Government. The measures that the Government have now put in

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place will ensure stability in the industry and a fair rate of return for investors, and restore confidence to manufacturers.

Mr Llwyd: I hear what the Under-Secretary says, but can he guarantee that this sort of mess will not happen again and that we can further develop green technology in Wales, where we are well placed to do that, in my constituency and throughout Wales? We need to develop those industries, so will he assure the House that we will not again have this kind of mess, which undermines confidence in the whole sector?

Mr Jones: I agree with the right hon. Gentleman that the sector is extremely important to the Welsh economy, but I am afraid that, as ever, it has been left to the Conservative party to clear up Labour’s mess.

Nia Griffith (Llanelli) (Lab): Given the feed-in tariffs fiasco and this week’s news that big investors in wind energy are threatening to take millions of pounds worth of green jobs abroad because they are losing patience over the Government’s shilly-shallying about renewables policy, how will the Under-Secretary convince companies to invest in the installation and manufacture of renewable energy equipment in Wales, securing much-needed jobs and reducing our dependence on ever costlier imported gas and oil?

Mr Jones: The Government’s response to the consultation does just that: it provides a sustainable framework for the industry to go ahead and for investors to have a proper rate of return.

The People’s Rail

3. Alun Michael (Cardiff South and Penarth) (Lab/Co-op): If she will discuss with ministerial colleagues the potential benefits of Wales being the test bed of the People’s Rail revised governance proposals; and if she will make a statement. [96371]

The Parliamentary Under-Secretary of State for Wales (Mr David Jones): My right hon. Friend the Secretary of State has regular discussions with my right hon. Friend the Secretary of State for Transport about a range of transport issues that affect Wales. I am aware that the right hon. Gentleman spoke to my colleague the Minister of State for Transport only recently.

Alun Michael: I am sure the Minister recognises that the Welsh Government—led by Carwyn Jones, and including Carl Sargeant as the Minister with responsibility for local government and transport—are showing a capacity for innovation and for bringing co-operative principles to bear. Would it not be a good idea to support the Co-operative party’s idea of the People’s Rail, so that railway services in and around Wales are accountable to the travelling public? Will the Minister support that idea?

Mr Jones: The People’s Rail proposals are a helpful contribution to the continuing debate on how we improve our transport infrastructure—I believe they were first floated some four years ago when the Labour party was in power. The Government are currently considering our response to the McNulty review, which has identified ways in which to make the railways more efficient and affordable in the longer term.

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Hywel Williams (Arfon) (PC): Rather than setting up a consumer mutual, which raises concerns about accountability to all the people of Wales, will the Government consider the utility of transferring responsibility for all railways in Wales to the directly democratic body, namely the Welsh Government and Assembly?

Mr Jones: That is not currently on the agenda, but no doubt the hon. Gentleman will make his representations to the Silk commission.

Burdens on Business

4. Fiona Bruce (Congleton) (Con): What recent discussions she has had with (a) ministerial colleagues and (b) others on measures to reduce administrative burdens for businesses in Wales. [96373]

6. Chris Kelly (Dudley South) (Con): What recent discussions she has had with (a) ministerial colleagues and (b) others on measures to reduce administrative burdens for businesses in Wales. [96375]

The Secretary of State for Wales (Mrs Cheryl Gillan): I have regular discussions with ministerial colleagues, the First Minister and other organisations on reducing the regulatory burden on businesses and the public in Wales.

Fiona Bruce: Does the Secretary of State agree that although some decisions on business regulations are devolved, it is vital that the Welsh Government do not introduce any measures that are seen as a disincentive to invest in Wales?

Mrs Gillan: My hon. Friend is absolutely right. The Government—whether the UK or Welsh Government—must be careful to send signals to business that we are on its side. We must not place any more barriers in the way of businesses creating jobs in Wales, which is why I was particularly disappointed when the First Minister supported the extra financial transactions tax. I am sure the financial services industry in Wales will have been daunted by that.

Chris Kelly: The UK Government are scrapping new regulations that would have cost businesses more than £350 million a year and are radically reforming the planning system in England. Many such decisions are devolved to the Welsh Government, but would my right hon. Friend like Labour Ministers in Cardiff to follow suit?

Mrs Gillan: Yes. We are aiming to be the most business-friendly Government in history. By scrapping new regulations and with the red tape challenge, we have thrown down the gauntlet to all those organisations that put barriers in the way of business. I wrote to the First Minister about that some time ago—I am still waiting for his response, but I am sure he would share my sentiments that we need to encourage and not stifle business.

Geraint Davies (Swansea West) (Lab/Co-op): At a time when unemployment is at a 17-year high and more people than ever are forced into short-term work, is the Government’s decision to withdraw working tax benefits

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from low-paid, part-time workers an example of reducing administrative burdens, or is it simply an example of the Government kicking someone after they have thrown them on the ground?

Mrs Gillan: I hope the hon. Gentleman has noticed that in creating the most competitive tax regime in the G20, which is the aim of the Treasury and this Government, we have also taken the lowest-paid out of tax. That will make a great difference to families and individuals across the UK, including in Wales.

Ian Lucas (Wrexham) (Lab): But John Longworth, the director general of the British Chambers of Commerce, says that businesses tell him that they are still not feeling the burden of regulation lifting. Will the Secretary of State listen to business and confirm that the Cabinet was yesterday lambasted by the Chancellor of the Exchequer for not achieving satisfactory growth?

Mrs Gillan: Right from the beginning when I was appointed Secretary of State for Wales, I set up a business advisory group so that I could listen directly to the concerns of business and industry. I hold regular meetings with that group, and as recently as this week I met the new chief executive of the CBI Wales. I certainly listen to what businesses are saying, as do this Government.

Funding Reductions (Women)

5. Jessica Morden (Newport East) (Lab): What assessment she has made of the effects of Government funding reductions on women in Wales. [96374]

The Secretary of State for Wales (Mrs Cheryl Gillan): We want to put women at the heart of our economic future. Although we have had to make difficult decisions, we are ensuring that the reductions made are shared fairly, while still protecting the most vulnerable in society.

Jessica Morden: Not only are Welsh women being hit particularly hard by the cuts but, as my hon. Friend the Member for Swansea West (Geraint Davies) said, on April 6 more than 9,000 families in Wales will discover that they will be hit by a change to working tax credits that could mean the loss of up to £3,800 a year unless they increase their hours. Does the Secretary of State have any comprehension of how hard it will be for those families to increase their hours, especially in retail, and what is she doing to fight their corner?

Mrs Gillan: As the hon. Lady knows, the Government’s top priority is an economic recovery that provides jobs for everybody, including women. In difficult times, the Government have been helping families with the cost of living. For example, we have been freezing council tax, while the Welsh Labour Government have refused to implement a similar policy in Wales, and extending free health care and child care. We have increased that entitlement in England. I challenge Labour, in power in Wales, to match that record.

Guto Bebb (Aberconwy) (Con): Many of the claims made about the effect on women of the reform of the welfare state in Wales have unfortunately been repeated in reports published yesterday by Cuts Watch Wales which, despite making claims about the effect on Wales

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of changes to the welfare system, state that there is no evidence to back up those claims. Does the Secretary of State agree that it is unfortunate that many public sector organisations, supported by the taxpayer, have agreed to be mouthpieces for Labour party propaganda on this issue?

Mrs Gillan: I always condemn organisations funded by the taxpayer being propaganda mouthpieces for the Labour party, so I agree wholeheartedly with my hon. Friend. He must remember that the Government are providing flexible parental leave, working with employers to end the travesty of the gender pay gap, establishing a women’s business council and providing enterprise mentors to help more women to start their own businesses. We have a proud record on women. [Interruption.] And as my right hon. Friend the Minister for Women and Equalities has just joined us on the Front Bench, I would like to offer her my congratulations on her work on this front.

Public Service Delivery

7. Stuart Andrew (Pudsey) (Con): What recent discussions she has had with (a) ministerial colleagues and (b) others on the delivery of public services in Wales. [96376]

The Parliamentary Under-Secretary of State for Wales (Mr David Jones): My right hon. Friend the Secretary of State and I have regular discussions with ministerial colleagues and Welsh Government Ministers to discuss a wide range of matters, including public services in Wales.

Stuart Andrew: Given the reports of patients in Wales crossing the border for better health care in England, does my hon. Friend agree that the NHS in Wales is in need of reform and deserves proper funding as in England?

Mr Jones: Yes indeed. The Government are seeking in England to create an NHS that is fit for the 21st century and that gives greater discretion to professionals and choice to patients. By contrast, Wales increasingly has a one-size-fits-all health service that is falling behind the rest of the country.

Chris Bryant (Rhondda) (Lab): One of the key public services in Wales is housing, but a constituent who came to my surgery last week is in work and works a full week but unfortunately is homeless. Were he to resign from his job, the local authority would be required to find him a home, and it would be paid for by the taxpayer. He does not want to do that. What will the Government do to end the manifest unfairness whereby somebody who is in work and paying Child Support Agency fees can still be homeless?

Mr Jones: I am sure that the hon. Gentleman, as the constituency MP, is making appropriate representations to the Welsh Assembly Government, who are responsible for housing in Wales.

Stephen Lloyd (Eastbourne) (LD): Another area of public service delivery is the additional £350 million for child care tax credits that the coalition Government are delivering. What difference does the Minister think that will make to working mothers and mothers trying to get into work?

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Mr Jones: This is currently a matter for discussion between the Welsh Assembly Government and the relevant Whitehall Department, and those discussions continue.

St David’s Day

8. Kevin Brennan (Cardiff West) (Lab): What plans her Department has to mark St David’s day. [96377]

The Secretary of State for Wales (Mrs Cheryl Gillan): Tonight my right hon. Friend the Prime Minister is holding a reception for St David’s day. Tomorrow the Welsh flag will be flying over No. 10, and I will be attending the Back-Bench St David’s day debate and welcoming Welsh children from the Dreams and Wishes charity to the House of Commons and Gwydyr house. Tomorrow I will also be attending a St David’s day dinner in London and a church service in the Crypt, at St Mary Undercroft. I presented the Prime Minister with daffodils from the national botanic garden of Wales yesterday, and Gwydyr house is full of daffodils.

Mr Speaker: Almost enough material for an Adjournment debate.

Kevin Brennan: This St David’s day will be tinged with some sadness, as Wales plays a memorial match in my constituency tonight in memory of Gary Speed, the Wales manager who died so tragically at the age of 42. Money will be raised for a charity called CALM—the Campaign Against Living Miserably—to help to prevent suicide among young men. Will the Secretary of State hold a collection in support of that charity at her St David’s day event?

Mrs Gillan: I hope that the memorial match in the memory of Gary Speed goes extremely well and that a lot of money is raised for the charity. In answer to the hon. Gentleman’s question, I will come back to him and let him know, because I would like to ask the people who work in the Wales Office. We are having a charity called Dreams and Wishes come in on St David’s day tomorrow. That is what we are focusing on, but I will see what I can do for the hon. Gentleman. [ Interruption. ]

Mr Speaker: Order. We could do with a bit of quiet, both out of respect for St David’s day and in order to hear the Chairman of the Select Committee on Welsh Affairs.

David T. C. Davies (Monmouth) (Con): I wonder whether the Minister would consider marking St David’s day by allowing patients to opt out of the NHS in Wales and instead enjoy the lower waiting lists, lower infection rates and better funding that are the hallmark of the NHS in Conservative-run England.

Mrs Gillan: I am grateful to my hon. Friend for reminding us, on the eve of St David’s day, of the differences that are arising because of Labour Government policies in Wales. I am sure that his question will be heard by many people across Wales. I hope that the Welsh Labour Government will emulate our reforms and produce a first-class health service in Wales for all our citizens.

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High Speed 2

9. Jonathan Edwards (Carmarthen East and Dinefwr) (PC): What discussions she has had on Barnett consequentials to Wales for High Speed 2. [96378]

The Parliamentary Under-Secretary of State for Wales (Mr David Jones): My right hon. Friend the Secretary of State and I have had recent discussions with ministerial colleagues in Her Majesty’s Treasury on a range of issues, including funding for Wales.

Jonathan Edwards: HS2 is clearly an England-only project, yet the Chief Secretary to the Treasury said last week in answer to a question that I had tabled that Barnett consequentials would be decided after “budgeting and funding arrangements” had been completed. Will the Minister ensure that Wales does not lose out on the £1.9 billion that it should receive as a result of HS2, by securing guarantees that the project will be funded via a stream that results in Barnett consequentials? [ Interruption. ]

Mr Speaker: I hope the Minister caught the thrust of that—the Prime Minister was momentarily troubled by some sort of insect.

Mr Jones: I did get the thrust of that, Mr Speaker, and there might be some force in the hon. Gentleman’s argument were it not for the fact that the rail network in Wales is not a devolved issue. As such, there is no force in his argument whatever.


10. Mr Wayne David (Caerphilly) (Lab): What recent discussions she has had with the Secretary of State for the Home Department on crime levels in Wales. [96379]

The Parliamentary Under-Secretary of State for Wales (Mr David Jones): My right hon. Friend the Secretary of State and I have regular discussions with Home Office Ministers on a range of issues relating to crime in Wales.

Mr David: We have already lost 40 police officers in Gwent. Does the Minister believe that this cut in police numbers will help or hinder the fight against crime?

Mr Jones: I visited Gwent police last week, and I was delighted to see that the most recent crime figures show an 11% reduction in crime in that force area. One might have thought that, rather than talking Gwent police down, the hon. Gentleman would offer the force some support.

Simon Hart (Carmarthen West and South Pembrokeshire) (Con): Does the Minister agree that policing in Wales will be more effective and more accountable following the election of commissioners in November?

Mr Jones: Yes I do. I believe that, for the first time, some democratic accountability will be introduced into the policing process in Wales and throughout the United Kingdom.

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11. Stephen Mosley (City of Chester) (Con): What recent discussions she has had with (a) ministerial colleagues and (b) others on the promotion of tourism in Wales. [96380]

The Secretary of State for Wales (Mrs Cheryl Gillan): As this is Welsh tourism week, I have been out on visits. I also have regular discussions with ministerial colleagues and others on the promotion of tourism in Wales. Tourism is primarily a devolved matter for the Welsh Government but, as usual, we are keen to work with them to promote Wales internationally. [ Interruption. ]

Mr Speaker: Order. The Secretary of State’s answers can scarcely be heard, and that is simply not fair. Let us have a bit of order for Mr Mosley.

Stephen Mosley: Thank you, Mr Speaker.

There are huge opportunities for boosting tourism in north Wales by working with the beautiful, historic border town of Chester. Has my right hon. Friend had any discussions with the Welsh Assembly Government to encourage the joint marketing of our tourism gems on both sides of the Anglo-Welsh border?

Mrs Gillan: I will certainly ensure that my hon. Friend’s request is on the agenda at my next meeting with the First Minister. I also hope that many people visiting this country, particularly for the Olympic games, will take the opportunity to visit the many attractions on both sides of the border, but especially in Wales.

Chris Ruane (Vale of Clwyd) (Lab): What more could be done to capture the Irish tourist market in Wales, especially north Wales?

Mrs Gillan: As the hon. Gentleman knows, that is the responsibility of the Labour Welsh Government, but I will certainly ensure that that matter is brought to the attention of Irish Ministers in my conversations with them.

Prime Minister

The Prime Minister was asked—


Q1. [97130] Mr Andy Slaughter (Hammersmith) (Lab): If he will list his official engagements for Wednesday 29 February.

The Prime Minister (Mr David Cameron): This morning, I had meetings with ministerial colleagues and others, and, in addition to my duties in the House, I shall have further such meetings later today.

Mr Slaughter: According to Revenue and Customs, some families earning just £13,000 a year will lose £1,000 a year in tax credits from April. Before the election, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), now the Work and Pensions Secretary, described our warning that low-income families would lose tax credits as a lie and as irresponsible “scaremongering”. Did he mislead the public?

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The Prime Minister: What we have done is increase tax credits for the lowest-paid people in our country, and we have actually lifted over 1 million low-paid people out of income tax altogether by raising the personal allowance. If the hon. Gentleman is worried about taxation issues, he should have a word with his candidate for Mayor of London, Ken Livingstone, and ask whether he is going to pay his taxes.

Mark Reckless (Rochester and Strood) (Con): Many Irish people were moved by what the Prime Minister said about Bloody Sunday. Given that it is becoming increasingly clear that eurozone support for Ireland is conditional on its saying yes in the referendum, will the Prime Minister confirm that this country will support Ireland, whatever it decides?

The Prime Minister: We are certainly very good friends of the Republic of Ireland and the people of the Republic of Ireland. It is their choice whether to sign the treaty of fiscal union, and their choice whether to have a referendum on that treaty. As in all things, people’s views in a referendum should be respected.

Edward Miliband (Doncaster North) (Lab): Before turning to other matters, does the Prime Minister agree with me that the allegations made by Deputy Assistant Commissioner Sue Akers in the Leveson inquiry about widespread corrupt behaviour at the heart of the press and the police are devastating, and that such behaviour can have no place in the national institutions of our country? Does he further agree with me that this underlines the importance of the police inquiry, which must get to the bottom of these allegations without fear or favour, and of the Leveson inquiry itself?

The Prime Minister: I completely agree with the right hon. Gentleman about this issue. There is all-party support for the Leveson inquiry, which needs to get on with its work—which it is conducting in a very reasonable and thorough way—and also proper support for the police inquiry. It is important to make the point that there is always a debate about what is right for newspapers to do to get stories that are in the public interest, but it is hard to think of any circumstances in which it is right for police officers to take money.

Edward Miliband: I thank the Prime Minister for that answer. On the Leveson inquiry, may I ask him to ensure that, in the weeks and months ahead, none of his senior Ministers does anything to undermine its work? Would he accept that it was ill-judged of the Education Secretary to say last week that the inquiry was having a “chilling” effect on freedom of expression? Does the Prime Minister now dissociate himself from those comments, and urge his colleagues, whatever their closeness to particular newspaper proprietors, not to undermine the Leveson inquiry?

The Prime Minister: I answered this question last week. The Education Secretary, like the rest of the Cabinet, fully supports the Leveson inquiry and wants it to proceed with the very important work that it does. That is the position of the Education Secretary and the position of the entire Government.

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Edward Miliband: I thank the Prime Minister for that answer, but I have to remind him that the Education Secretary said:

“The big picture is that there is a chilling atmosphere towards freedom of expression which emanates from the debate around Leveson.”

I hope that the Education Secretary, who is sitting further down the Bench, will have heard the Prime Minister’s words.

Now, let me move on from one area where I hope there can be cross-party agreement, to an area where there is not. On Sunday, Lord Crisp, the man who ran the NHS for six years, said about the Prime Minister’s Bill:

“it’s a mess…it’s unnecessary…it misses the point…it’s confused and confusing and…it’s…setting the NHS back.”

Why does the Prime Minister think that, with every week that goes by, there are yet more damning indictments of his NHS Bill?

The Prime Minister: Let me just make one further point about the Leveson inquiry, because I think it is important. What my right hon. Friend the Education Secretary was saying—and I think it is important for all of us in this House to say—is that while these inquiries are going on, it is important for politicians who, let us be frank, benefit sometimes when the press are a little bit less hard hitting than they have been in recent years, to say that we support a free, vibrant, robust press. I do think that that is an important point, which is what my right hon. Friend was saying.

Turning to the health reforms, the right hon. Gentleman actually said something last week that I agreed with. He said:

“The NHS will have to change.

…because of the rise in the age of the population”,

because of the rise in

“the number of long-term conditions”,

and because of the rise in “expectations and costs.” It sounds a bit familiar. He is right that it has to reform. The problem for the Labour party is that it is against the money that needs to go into the NHS, which it says is irresponsible, and that although it supported competition and choice in the past, it does not support them any more.

Edward Miliband: The Prime Minister seems to have forgotten the question I asked him; it was about Nigel Crisp who ran the health service for six years. He was the chief executive of the national health service and he says that the Prime Minister’s Bill is “a mess…and confusing”—but the right hon. Gentleman will obviously not want to listen to him.

Let me ask the Prime Minister about somebody else, who appeared on the Conservative party’s platform at the spring conference in 2010. He hosted the first speech of the Health Secretary—he is not here, I do not think—and he advised the Labour Government, that is true. He is the GP at the head of the clinical commissioning group in Tower Hamlets. He wrote to the Prime Minister on Monday and said this:

“We care deeply about the patients that we see every day and we believe the improvements we all want to see in the NHS can be achieved without the bureaucracy generated by the bill.”

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[Interruption.] Government Members say no, but this is a man who is in charge of a clinical commissioning group. Is it not time that the Prime Minister recognised that he has lost the confidence even of the GPs whom he says he wants to be at the heart of his reforms?

The Prime Minister: There are 8,200 GP practices covering 95% of the country implementing the health reforms, which is what they want to see happen. The right hon. Gentleman asks me if I will listen to those people who ran the NHS over the last decade, so let me give him a selection of people who ran the NHS in the last decade and see what they think of competition. This is what Lord Darzi said:

“The right competition for the right reasons can drive us to achieve more”.—[Official Report, House of Lords, 11 October 2011; Vol. 730, c. 1492.]

This is what John Hutton said. He was a Health Minister under the last Government—[Interruption.] Opposition Members do not want to listen to Labour Ministers from when they used to win elections. Anyway, this is what he said:

“Competition can make the NHS more equitable.”—[Official Report, House of Lords, 11 October 2011; Vol. 730, c. 1569.]

That is the view of a former Labour Secretary of State. What about an adviser to the last Labour Government, Julian Le Grand, who specifically looked at competition? This is what he said:

“the measured effects of competition have not been trivial…evidence shows that the introduction of competition in the NHS could be credited with saving hundreds of lives.”

The truth is that the right hon. Gentleman does not want to listen to past Labour Ministers because he is taking a totally opportunistic position in opposition to this Bill.

Edward Miliband: The reason that 95% of GPs are now having to implement part of these changes is that the Prime Minister has imposed them. Dr Everington addresses this in the last line of his letter, where he says:

“Your government—

I believe that this is a letter to the Prime Minister—

“has interpreted our commitment to our patients as support for the bill. It is not”.

And 98% of those in the Royal College of General Practitioners oppose the Bill. I have to say that it is hard to keep track of opposition to this Bill, because in the past seven days alone the Royal College of Physicians has called the first emergency general meeting in its history about the Bill, and the Prime Minister has lost the support of the British Geriatrics Society and the Royal College of Paediatrics and Child Health. So every week that goes by more and more health care organisations come out against this Bill. I have a simple question for the Prime Minister: can he now give the House a list of significant health organisations that are still wholehearted supporters of the Bill?

The Prime Minister: The right hon. Gentleman specifically said—[Interruption.] This is very important—[Interruption.]

Mr Speaker: Order. The Prime Minister has been asked a question, so let us hear the answer.

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The Prime Minister: He said that 98% of GPs oppose the reforms—that was the figure. Let me give him the actual figures. There are 44,000 members of the Royal College of General Practitioners. Out of a total of 44,000, just 7% responded opposing the Bill. What about the royal college of physiotherapists? Of the 50,000 in the royal college of physiotherapists, 2%—[Interruption.] I know that that is enough for the unions to elect him leader of the Labour party, but that is about as far as it will go.

Hon. Members: More!

Edward Miliband: Government Members are obviously well trained today, but let me tell them that their support for the health Bill is digging their own burial at the next general election. I asked the Prime Minister a specific question. I know, by now, that he does not like to answer the questions, but I just simply asked him who supports his Bill, and answer came there none from this Prime Minister. Let me refresh his memory as to who opposes his Bill. By the way, it is no good the Deputy Prime Minister smirking—I do not know whether he supports the Bill or opposes it.

The Deputy Prime Minister (Mr Nick Clegg): I support it.

Edward Miliband: Oh, he supports it! Well there is firm leadership for you.

Let me refresh the Prime Minister’s memory as to those who want the Bill withdrawn: the Royal College of General Practitioners; the Royal College of Nursing; the Royal College of Midwives; the Royal College of Radiologists; the Faculty of Public Health; the Chartered Society of Physiotherapy; the Community Practitioners and Health Visitors Association; and the Patients Association. Does it not ever occur to him that, just maybe, they are right and he is wrong?

The Prime Minister: The right hon. Gentleman did not mention: the National Association of Primary Care—supporting the Bill; the NHS Alliance—supporting the Bill; the Association of Chief Executives of Voluntary Organisations—supporting the Bill; the Foundation Trust Network—supporting the Bill; Lord Darzi, a former Labour Minister—[Interruption.] Who was Lord Darzi? He was the surgeon Labour hired to run the health service. Here we are having had four weeks in a row of NHS questions but not a single question of substance—not one. It is all about process, all about politics, never about the substance. We all know that it is leap year, so maybe just this once I get to ask the question. We all know what the right hon. Gentleman is against, but is it not time he told us what on earth he is for?

Q14. [97144] Ian Swales (Redcar) (LD): In my area, there are plans for 120 metre-high wind turbines between the beautiful villages of New Marske and Upleatham, which are less than a mile apart. Does the Prime Minister agree that such giant turbines should not be built so close to residential areas without local people having a say?

The Prime Minister: We want to see a balanced energy policy and there is a place for renewable technologies in such a policy. We are making two changes that I think will be welcome to the hon. Gentleman. First, we are cutting the subsidy to onshore wind, because I think

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that it has been over-subsidised and wasteful of public money. Secondly, when the Localism Act 2011 fully comes in, that will give local communities a greater say about issues such as wind turbines. Of course, we tried to do that earlier by abolishing the regional spatial strategies that the previous Government put in place, but we lost that case in the courts so we need the Localism Act to come into force in full.

Q2. [97131] Tony Lloyd (Manchester Central) (Lab): Earlier, the Prime Minister answered a question from my hon. Friend the Member for Hammersmith (Mr Slaughter) with a little more abuse than he would have wanted. Does the Prime Minister recognise that 200 couples in his constituency with 400 children and 600 couples in my constituency with more than 1,500 children will lose working tax credit, possibly up to the level of £3,800 or more, which can be 25% of their income? Without sounding complacent, can he say how he will answer those couples and their children?

The Prime Minister: As the hon. Gentleman knows, we have had to take difficult decisions because of the enormous debt and deficit that we inherited. In taking those decisions, we have protected the poorest families by increasing the child tax credit. That is what we have done. We have also helped the poorest who are in work by lifting 1 million people out of income tax. The question must come back to Labour: “You left us with this mess, what would you do about it?”

Richard Graham (Gloucester) (Con): This summer, in my constituency of Gloucester, and everywhere around the country, people will be looking forward with huge excitement to the start of the Olympic games. It is a great opportunity to celebrate how well the UK manages these great global events, but not everybody sees it as that sort of an opportunity. The general secretary of Unite sees it instead as an opportunity for a general strike. Does the Prime Minister agree with me that nothing could be further from the spirit of the Olympics and nothing could do more damage to the reputation of our country?

The Prime Minister: I think my hon. Friend speaks for the whole country about what the general secretary of Unite said. Let me quote it directly:

“I’m calling upon the general public to engage in civil disobedience.”

That is what he said. Let us remember that Unite is the biggest single donor to the Opposition, providing around a third of their money, and had more of a role than anybody else in putting the right hon. Member for Doncaster North (Edward Miliband) in his place. It is not good enough for the Opposition just to put out a tweet; they need to condemn this utterly and start turning back the money.

Q3. [97132] Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): No top-down reorganisation of the NHS, no reduction in front-line police officers and no cuts to tax credits for low-income families: why does the Prime Minister find it so hard to keep his promises to the British public?

The Prime Minister: We promised to increase spending on the NHS and we are boosting spending on the NHS. We promised the cancer drugs fund, and 10,000 people

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have got extra drugs through that fund. We promised that the number of doctors would grow faster than the number of bureaucrats and, since the election, the number of doctors has gone up by 4,000 and the number of bureaucrats has gone down by 5,000. That is what coalition policy is doing for our health service.

Mr Stewart Jackson (Peterborough) (Con): When will the Prime Minister close the loophole for multinational companies that allows the migrant cap to be flouted using intra-company transfers, or is that another tough immigration policy that will fall victim to the “curse of Clegg”?

The Prime Minister: On this one, my hon. Friend is being unfair. We have a tough migrant cap for migrant workers, and business said how important it was to have intra-company transfers, but only at relatively high salary levels. That is what we put in place and it demonstrates that over time we will be able both to control immigration and to do so in a way that does not damage business.

Q4. [97133] Mr Nick Raynsford (Greenwich and Woolwich) (Lab): We now know that the Government were made aware of fraud allegations at A4e before the Prime Minister appointed that company’s chairman as his family tsar. As the Prime Minister is in danger of acquiring a reputation for ill-judged personal appointments, will he tell the House what independent checks he believes should be carried out before such appointments are made and whether any such checks were carried out in respect of Emma Harrison?

The Prime Minister: First, let me be absolutely clear that I was not aware of any allegations of irregularities when Emma Harrison became an adviser to the Government on troubled families. At the time she was appointed, there were no formal investigations into A4e; there was just the company’s own probe into irregularities. I think that this issue needs to be properly dealt with and I am concerned that subsequent to Emma Harrison’s appointment, information needed to be passed up the line to Ministers more rapidly. I have asked the Cabinet Secretary, Sir Jeremy Heywood, to review the guidelines across Government and this particular case. When the right hon. Gentleman talks about the horse having bolted, he might want to put into his question the fact that Emma Harrison was given a CBE by the previous Government and that all the allegations that are being made are into contracts that his Government handed out. A little more transparency about that might be a good thing.

Dr Sarah Wollaston (Totnes) (Con): Will the Prime Minister join me in paying tribute to the courage of the war photographer Paul Conroy from Totnes, who was injured showing the world the horrors of the Syrian regime? Will he join me in thanking all those who helped to secure Mr Conroy’s safe passage to Lebanon?

The Prime Minister: I certainly join my hon. Friend in doing that. The role that the media play by being in incredibly difficult places such as Homs in Syria to bring the truth and the news to the world is very important. That is what Paul Conroy was doing and that is what Marie Colvin was doing when she tragically

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lost her life. I certainly pay tribute to Paul Conroy and above all, as my hon. Friend says, to the very brave people who helped to get him out of Syria, many of whom have paid an incredibly high price. I can tell the House that Paul Conroy is now safe; he has been in our embassy in Beirut in Lebanon. He is being properly looked after and I am sure that soon he will want to come home.

Q5. [97134] Sheila Gilmore (Edinburgh East) (Lab): Last October, the Chancellor announced a new policy called credit easing. Can the Prime Minister tell us how many businesses have been helped?

The Prime Minister: The Chancellor said at the time of the autumn statement that the policy would be in place in time for the Budget, and that is exactly what is going to happen. [ Interruption. ]

Mr Speaker: Order. Let us hear Mr Peter Aldous.

Q6. [97135] Peter Aldous (Waveney) (Con): High streets across the country, including those in Lowestoft, Beccles and Bungay in my constituency are facing tough trading conditions at present, including the prospect of a 5.6% increase in business rates. Can the Prime Minister outline what the Government are doing to support traders to enable them to grow their businesses and create jobs?

The Prime Minister: My hon. Friend is right to raise this issue. There are real concerns about the hollowing out of some of our high streets and the number of empty properties. What we have done is double the small business rate relief scheme, and that has helped an estimated 330,000 small firms. We are also removing legal red tape that requires ratepayers to fill in paperwork to claim that relief, which is something that Labour refused to do when in office. From working with Mary Portas, we have a whole plan for how we can try to help reinvigorate our high streets, which is absolutely vital for our towns and cities across the country.

Mr Nigel Dodds (Belfast North) (DUP): The Prime Minister might have seen the headlines in the newspapers today that the happiest people live in Northern Ireland. As the Democratic Unionist party has been the major party of government for the past five years in Northern Ireland, we on the DUP Benches are not surprised by that. Of course, one thing that overshadows that happiness is the high and escalating price of petrol and diesel, which is the highest not only in the United Kingdom but in the European Union. Can the Prime Minister bring happiness to all parts of the UK by agreeing to do away with the August fuel tax increase and address fuel allowances as soon as possible?

The Prime Minister: I am delighted to hear that the people of Northern Ireland are the happiest in the United Kingdom, although I have to say that their representatives in the House do not always give that impression. Perhaps I have been missing something. We recognise that families and businesses are continuing to feel the pressure from very high prices. We have cut the fuel duty and scrapped the automatic fuel duty stabiliser. That has meant that average pump prices are 6p lower

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than they would have been under the previous Government’s plans, but clearly we are also being impacted by a higher oil price.

Q7. [97136] Mike Freer (Finchley and Golders Green) (Con): This week, the Government took action on unacceptable tax avoidance. Does the Prime Minister agree that the principles of paying a fair share of tax should apply both to banks and to former Mayors of London?

The Prime Minister: My hon. Friend makes an important point. Whether it is Barclays bank or, frankly, Ken Livingstone, people should pay the proper amount of tax, and I hope that Her Majesty’s Revenue and Customs will look carefully at all these sorts of cases. Londoners, many of whom live in Labour-controlled areas with high Labour council taxes, will be pretty angry about what they have seen and will probably conclude that red Ken has been caught red-handed.

Q8. [97137] Julie Hilling (Bolton West) (Lab): The Institute for Fiscal Studies has reported that the Government’s tax and benefit changes will hit families with children five times harder than those without children. Is that what the Prime Minister means by

“the most family-friendly Government…ever”?

Is it fair, or is it just another broken promise?

The Prime Minister: What this Government have done is increase tax credits for the least well-paid; lift people out of tax; and introduce free nursery care for two, three and four-year-olds, and expand it for families. All those things have made a difference.

Incidentally, the hon. Lady did not mention that she is sponsored by the Unite union. She could have taken this opportunity to condemn Len McCluskey. [Interruption.]

Mr Speaker: Order.

Q9. [97138] Stephen Metcalfe (South Basildon and East Thurrock) (Con): Since the furore about work experience broke out, has my right hon. Friend had any businesses and/or organisations come forward to support this vitally important and publicly popular initiative, which will help young people to get the skills that they need to get into work?

The Prime Minister: My hon. Friend is entirely right: the whole country wants to see more young people given the opportunity that work experience provides. The good news is that since this row in the pages of our newspapers, we have had expressions of interest from 200 small and medium-sized employers who want to get involved in the programme. It is time for businesses in Britain, and everyone in Britain who wants to see people have work experience, to stand up against the Trotskyites of the Right to Work campaign, and perhaps recognise the deafening silence there has been from the Labour party.

Q10. [97139] Mr Jeffrey M. Donaldson (Lagan Valley) (DUP): Happily, Mr Speaker, I am able to welcome the Prime Minister’s commitment to the reform of the European convention on human rights and the powers of the European Court of Human Rights. Will the Prime Minister give a commitment to allowing this

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House a proper debate on the subject when the Brighton declaration is published, and will he ensure that, once again, the principle of subsidiarity is respected, and that the British courts have a proper say in what goes on in this country?

The Prime Minister: I do want to see the principle of subsidiarity get a fairer hearing at Strasbourg—that was in the speech I made at the Council of Europe about reform of the Court—so that it does not become a court of the fourth instance, whereby someone who has already been in front of a local court, a court of appeal and a supreme court in their country then comes to the ECHR. We do have proposals for reform. On what is debated in this House, we now have the Backbench Business Committee, which has an enormous number of days in this House—

Mr Peter Bone (Wellingborough) (Con): Not enough.

The Prime Minister: Not enough, I hear. It has more than enough in my view, and it can make over a day for that debate.

Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): Does the Prime Minister agree that one of the best ways to deliver on our commitment to the fairness agenda is to go ahead as quickly as possible with implementing the coalition’s agreement to raise the tax threshold to £10,000?

The Prime Minister: The coalition agreement commits us to real increases in that threshold. We have achieved that in Budgets over the past two years in spite of the difficult conditions that we face in the economy. I think it is a good idea to lift people out of tax. It particularly helps low-paid people, and it particularly helps low-paid women.

Q11. [97140] Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab): The Ministry of Defence is buying tankers from South Korea when the work could be done here. The MOD says it will

“not consider wider employment, industrial, or economic factors”

in procurement. Why will this arrogant and complacent Prime Minister not stand up for world-class British industry?

The Prime Minister: I do stand up for world-class British industry, and as I said, when I travel the globe, I am very happy to have British Aerospace and Rolls-Royce on an aeroplane with me, promoting Great British companies. It is just a pity that when I do that, I get attacked by the Labour party.

Q13. [97142] David Morris (Morecambe and Lunesdale) (Con): Is the Prime Minister aware of the tragic death of my constituent, Penny Hegarty from Over Kellet? Penny’s husband, Dr Phil Hegarty, believes that his wife’s death is just one example of systemic management failures at the University Hospitals of Morecambe Bay NHS Trust. Will the Prime Minister assure Dr Hegarty and all my constituents that recent work to improve the management will continue, and that this trust will be turned around?

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The Prime Minister: I can certainly give my hon. Friend that assurance, but first I am sure that the whole House will want to send the deepest condolences to the husband and family of my hon. Friend’s constituent, Penny Hegarty. I know that the Minister of State, Department of Health, my right hon. Friend the Member for Chelmsford (Mr Burns), has met local MPs on a number of occasions to keep them updated. Clearly, patients have the right to expect far better standards of care. I know that the Care Quality Commission and Monitor have both raised concerns about standards at the trust. As my hon. Friend says, it is being turned around, but that work needs to be undertaken with all speed.

Q12. [97141] Michael Connarty (Linlithgow and East Falkirk) (Lab): Is the Prime Minister aware that Graeme Brown, who is the director of Shelter Scotland, described the proposal for a bedroom tax as

“grossly unfair and shows the UK Government is simply failing to listen to the voice of reason being put forward by housing professionals, social landlords, MSPs and individuals”?

Does the Prime Minister accept that widows and widowers left in their family home when their children leave and on a low income can lose up to 25% of their housing benefit support if he continues with this? Is he unfeeling, or is he just determined to get his way?

The Prime Minister: The issue is this: we desperately need to reform housing benefit. If we had not done anything about housing benefit, it was expected to cost over £24 billion a year. As the hon. Gentleman’s own welfare spokesman, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) said, Beveridge

“would scarcely have believed housing benefit alone is costing the UK over £20bn a year. That is simply too high.”

I am getting slightly frustrated with these statements in principle about reform. The Opposition say they are in favour of a benefit cap, but they vote against it. They say they are in favour of welfare reform; they oppose it. They recognise that housing benefit is out of control, but they frustrate every attempt to deal with it.

Amber Rudd (Hastings and Rye) (Con): On this leap day, when shy men throughout the country will be nervously hoping that their girlfriends might make a commitment to them, may I ask the Prime Minister to give romance a nudge and to remind us and confirm that the reforms made through the welfare system will always, always support hard-working families?

The Prime Minister: I was wondering where my hon. Friend was going with that for a minute or two, but she is right. It is a leap year, a very special day, when all sorts of things can happen—all sorts of possibilities. The key thing is that through both our tax system and our welfare system we should be encouraging families to come together and stay together, and celebrating commitment.

Sir Gerald Kaufman (Manchester, Gorton) (Lab): Is the Prime Minister aware that the entry clearance office in Abu Dhabi has rejected an application by Mrs Maqsood Jan to come from Pakistan to attend her granddaughter’s wedding in Manchester? Would the right hon. Gentleman specify what kind of employment a 72-year-old woman

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who does not speak English and has never left Pakistan is liable to obtain in my constituency, where unemployment is 10.6%? Will he overrule this barmy decision and allow Mrs Jan the once-in-a-lifetime opportunity to attend her granddaughter’s wedding? If the Home Secretary has said—


Mr Speaker: Order. The right hon. Gentleman has been lucidity itself. I am sure he is bringing the question to an end.

Sir Gerald Kaufman: I am; I am bringing it to an end. If the Home Secretary has whispered to the Prime Minister that Mrs Jan can appeal, I should add that the wedding is on 2 April and the appeal procedure is too slow to make that possible.

The Prime Minister: To answer the right hon. Gentleman very directly, I was not aware of the individual case. There are hundreds of thousands of people who travel between Pakistan and Britain every year. We must have tough controls to prevent the abuse of our immigration system, but I suggest that he takes up the case individually with my hon. Friend the Minister for Immigration, who has a superb grip on these issues and I am sure will be able to give him some satisfaction.

Mr Peter Bone (Wellingborough) (Con): Under Tony Blair’s regime, we could sleep safely at night because we knew that Lord Prescott would take over if Tony Blair was incapacitated. What would happen if the Prime Minister were incapacitated?

The Prime Minister: I have been waiting for this question for some time, because I know that my hon. Friend has asked almost every Cabinet Minister, including the Deputy Prime Minister who, I think, replied that my hon. Friend seemed to have a morbid fascination with the end of the leader of the Conservative party. All I can say is that I have no plans to be incapacitated.

Mr Speaker: We are very relieved.

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Helen Goodman (Bishop Auckland) (Lab): Further to the Prime Minister’s answer to my right hon. Friend the Member for Doncaster North (Edward Miliband) on the Leveson inquiry, he is of course absolutely right that we need a free press, but the nation will not thank him if he goes along with the suggestion made by Tory peer Lord Hunt, chairman of the Press Complaints Commission, that the Defamation Bill, which is coming forward in September, should be used to legislate for a new system. That would pre-empt the Leveson inquiry. Will the Prime Minister make it clear that he will not do that?

The Prime Minister: I am glad that the hon. Lady asked that question, because I have absolutely no intention of pre-empting the Leveson inquiry in any way at all. I think that if we look back to the debate we had in this House, we will see that both the leader of the Labour party and I said how important it was to trust Leveson to get on with the job and to give every signal that we want to be able to adopt what is proposed without there being regulatory arbitrage between the parties. I think that there is an understanding on that basis but, given that there is that understanding, I repeat again that it is important that hon. Members on both sides stress the importance of a free press to the health of our democracy.

Bob Blackman (Harrow East) (Con): Hard-working families in my constituency are absolutely astonished that a benefit cap of some £26,000 is being opposed by the Labour party. Does my right hon. Friend agree that we will always make work pay and provide benefits for those who are unable to work?

The Prime Minister: I am delighted, Mr Speaker, that my hon. Friend caught your eye, because today is the day that the Welfare Reform Bill becomes an Act, and for the first time we will have a proper cap on welfare. That is supported by this side of the House, opposed by that side, but backed by the overwhelming majority of people in our country.

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Points of Order

12.36 pm

Julie Hilling (Bolton West) (Lab): On a point of order, Mr Speaker. Further to the Prime Minister’s statement that I am sponsored by the union Unite—I am grateful that he has waited to hear this—can you advise me on how this untruth can be corrected, as I am not sponsored by Unite, and on what opportunity the Prime Minister will be given to correct the record?

The Prime Minister (Mr David Cameron): Further to that point of order, Mr Speaker. I believe that I was reading something from the Register of Members’ Financial Interests, which is that Bolton West constituency Labour party received £1,250 from Unite in 2010 and that the hon. Lady registered a donation of £2,250 from Unite in 2010 in the register. Of course, if I have in any way got that wrong, I will come back to the House at the earliest opportunity.

Mr Speaker: I am most grateful to the hon. Lady for her point of order, to the Prime Minister for his response to it and for this opportunity to set out the position. Let me say this for the benefit of the hon. Lady and the House: whether or not she is sponsored by Unite, and I emphasis whether or not she is—I am happy to accept that she is not if that is the factual position, because I do not know—[ Interruption. ] I do not need any help from a junior Government Whip—he would not know where to start—[ Interruption. ] The hon. Member for Lichfield (Michael Fabricant) says that he is a senior Government Whip—[ Interruption. ] I do not think that

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the Speaker has ever greatly cared about the level of seniority of Whips as far as that goes.

Whether or not the hon. Lady is sponsored by Unite, I emphasise that there is nothing wrong constitutionally in our arrangements with being sponsored by a trade union, so it is not an accusation. The matter is not—[ Interruption. ] Order. The hon. Member for Ealing North (Stephen Pound) is a man of magnificent qualities, but he is in no position to advise the Chair on what is or is not allowed. This is not—I repeat “not” for the benefit of the hon. Gentleman—a point of order for the Chair. That, as I often say, is the beginning and the end of the matter. The hon. Lady has put her concerns on the record.

Robert Halfon (Harlow) (Con): On a point of order, Mr Speaker. Following my point of order with you on Monday about charges for the Clock Tower, do you have any information about whether Members will be given a vote on that very unfortunate decision to charge people to visit the House of Commons?

Mr Speaker: No, I have no such information, and I am afraid that it is not a point of order for the Chair. I have known the hon. Gentleman for over 20 years—probably nearer to 25—so I know what a tenacious terrier he is, but he must raise these matters in an orderly way. I think that we have got his point; he has got my response; and at least as far as today is concerned we will leave it there.

If there are no further points of order, we come now to the ten-minute rule Bill, for which the hon. Member for Wycombe (Steve Baker) has been so patiently waiting. It would be helpful if people going past him would do so quickly and, preferably, quietly, so that we can hear from Mr Steve Baker.

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Financial Institutions (Reform)

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

12.40 pm

Steve Baker (Wycombe) (Con): I beg to move,

That leave be given to bring in a Bill to enforce strict liability on directors of financial institutions; to require directors of financial institutions to post personal bonds as additional bank capital; to require personal bonds and bonuses to be treated as additional bank capital; to make provision for the insolvency of financial institutions; to establish a financial crimes investigation unit; and for connected purposes.

I draw the House’s attention to my registered interest in Cobden Partners.

In a developed society such as ours, we need a vibrant, dynamic, reliable and robust means of executing payments and intermediating savings to entrepreneurs: we need a good banking system. Unfortunately, as the Governor of the Bank of England said in his 2010 Bagehot lecture:

“Of all the many ways of organising banking, the worst is the one we have today.”

Elsewhere in that speech, he said:

“At the heart of this crisis was the expansion and subsequent contraction of the balance sheet of the banking system.”

We might well discuss why balance sheets expanded so far and which factors and choices drove that expansion, but for today’s purposes it suffices to quote Martin Wolf, writing in the Financial Times on 9 November 2010, who said:

“The essence of the contemporary monetary system is the creation of money out of nothing, by private banks’ often foolish lending.”

Further, on 23 February this year the Bank of England’s executive director for financial stability, Andy Haldane, published an article in the London Review of Books, in which he wrote:

“The continuing backlash against banking, as evidenced in popular protests on Wall Street and in the City of London, is a response not just to the fact that the world is poorer, as pre-crisis riches have turned to rags, but to the way these riches were privatised, while the rags are being socialised. This disparity is nothing new. Neither in the main, is it anyone’s fault. For the most part the financial crisis was not the result of individual wickedness or folly. It is not a story of pantomime villains and village idiots. Instead the crisis reflected a failure of the entire system of financial sector governance.”

It seems that there is an increasingly unified message coming out of the Bank of England.

We must rise above that inadequate story of pantomime villains. Entrepreneurial error and gaming rules in the pursuit of self-interest are nothing new, and the system should have been able to cope. It is that foolish lending of new money, that failure of the entire system of financial sector governance, which must be addressed.

What is to be done? Mr Haldane supplied an answer. He wrote:

“The best proposals for reform are those which aim to reshape risk-taking incentives on a durable basis”.

That is what my Bill intends to do. It aims to reconnect risk and reward in the financial system, and to deal with the moral hazard that allowed the privatisation of vast gains and the projection of vast risks and losses on to the public.

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I believe that profit is right and proper when earned through voluntary exchange without force or fraud. Bonuses based on just profits are a good thing. If some people gain but the costs of their actions are forced on to others through state power, however, that is an injustice. It is one from which our constituents are still smarting, and it is one which is causing people to question the basis of our social system. If we are to prosper, we must preserve and extend commercial freedom, promote personal, professional and mutual responsibility and facilitate enterprise under the rule of law. In banking, a business that is categorically different from others, we must ensure that those who stand to gain also bear the risks of their actions. I therefore propose the following measures.

First, on the liability of bankers, board members of financial institutions should be strictly liable for losses—that is, liable without the need to prove fault on their part. In the event of bank insolvency, board members would be subject to unlimited personal liability. Their own wealth—all assets, houses, pensions and so on—would be at risk. In addition, bank directors would be required to post personal bonds that would be potentially forfeit in the event of losses, not as a cap but as a guarantee. Bonds should be at £2 million, adjusted for inflation, or 50% of net wealth. Any board member who resigned would still be subject to unlimited liability and the requirement to post bonds for a period of two years following their resignation, so that they could not run away from impending disaster.

Secondly, bonus payments would be deferred for a period of five years. The bonus pool would be invested in escrow accounts, with appropriate provision for stocks, dividends, stock options and cash.

Thirdly, personal bonds and the bonus pool would be used to make good bank losses. Should a bank report losses over any period, they would be borne by beneficiaries of the bonus pool in the first instance. Further losses would be borne by board members and made good from their posted bonds. Any further losses would then be borne by shareholders in the usual way. Finally, in the event of insolvency, bank directors would be exposed without limit.

Additional measures would cover the definition of core capital and accounting standards, provide a robust definition of bank insolvency, require a new fast-track receivership regime for banks, which is long overdue, and produce a programme to end state support and return financial institutions to normal operations. There would also be provisions relating to EU passporting rules and provisions for criminal investigations and criminal liability.

Those measures are targeted at banks, which are categorically different from other businesses, but whether they can be achieved without extending the scope of the Bill to any company regulated under the Financial Services and Markets Act 2000 is a matter for debate. To promote diversity and competition, wholly owned mutuals and new small banks might be exempted from certain provisions, such as the requirement to post bonds.

The obvious question is who would become a director of a bank under a regime of unlimited liability. Actually, unlimited liability banking has an illustrious history. The two greatest bankers of the 19th century, Nathan Rothschild and J. P. Morgan, both operated highly successfully under unlimited liability. It made them

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conservative in their risk-taking and reassured counterparties who appreciated what they stood to lose if a deal went wrong. I am grateful to my hon. Friend the Member for Wyre Forest (Mark Garnier) for reminding me that unlimited liability partnerships were relatively common until the 1980s.

The principle of unlimited liability for directors in certain circumstances was placed on a statutory basis in 1929 and remains in section 232 of the Companies Act 2006. My Bill would make bank directors’ duties openly enforceable. Let us not forget that, as colleagues in all parts of the House will know, banks are often quick to require small business directors to provide personal, secured guarantees. What is sauce for the goose is sauce for the gander.

Members will have seen that both HSBC and Lloyds have been engaged in bonus clawbacks, and that, too, establishes the principle that bonuses should be at risk in the event of losses and damage. The banking system is, after all, capable of generating losses so large as to threaten our entire economic system.

Hard-working families and individuals paying tax out of typically modest incomes must never again suffer the injustice of carrying the risks, and consequences of risks, taken in the pursuit of often enormous private returns. Risks must fall to those who take them. Instead of vicarious liability of taxpayers, there must be responsibility in the banking system. The Bill represents an opportunity to free the banking sector and the public from regulatory capture and lobbying. It could raise standards from the bottom up, through the preservation and extension of commercial freedom and the development of professional, personal and mutual responsibility.

The Prime Minister has called for a responsibility revolution, and that is what this Bill would provide. It would end the culture of rewards for failing in the banking system and establish a basis on which London could continue to grow into the future as the world’s leading trustworthy financial centre. It is time for us to say to bankers, “Put your money where your mouth is. By all means make a fortune, but if you want the reward, bear the risks.”

Question put and agreed to.


That Steve Baker, Mr Douglas Carswell, Ian Paisley, Peter Aldous and Mr Richard Bacon present the Bill.

Steve Baker accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 27 April , and to be printed (Bill 312).

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Treaty on Stability, Co-ordination and Governance

Emergency debate (Standing Order No. 24 )

12.51 pm

Mr William Cash (Stone) (Con): I beg to move,

That this House has considered the matter of the legal and other action now to be taken by the Government in upholding the rule of law and protecting UK interests in respect of the nature and content of the Treaty on Stability, Co-ordination and Governance in the Economic and Monetary Union.

Thank you, Mr Speaker, for approving my application for this debate. I am also deeply grateful to all those Members—some 100 or so—who rose so spontaneously and strongly to support the proposal that I put to the House yesterday afternoon. This is only the fifth emergency debate since 2001. The debate is about the rule of law: not only the rule of law as it affects the United Kingdom but, inevitably, the rule of law in Europe as a whole. The Prime Minister, to his great credit, rightly exercised the veto to protect UK interests, but this is not simply a question of the single market and financial services, however important they may be to the UK economy.

The rule of law is inseparable from democracy, which, based on freedom of choice, leads to the making of law through general elections in line with the wishes of the voters. That is as important as it is simple. Unfortunately, the European Union, despite its much-vaunted claims and aspirations, has increasingly departed from democratic principles and from the rule of law in the pursuit of ideology. We are now witnessing ever-increasing tendencies towards bureaucracy, and even the imposition of technocratic Governments on individual member states, as in Italy and Greece. Yesterday, as it has in the recent past, the Bundestag voted on European bail-outs. According to opinion polls, about 80% of the German people are against the bail-outs, yet the German Government and the Bundestag passed the proposals by a massive majority.

Mr Denis MacShane (Rotherham) (Lab): This line about European technocrats imposing technocratic Governments all over the place is very fashionable. However, the truth is that the current crisis, which is very serious—the hon. Gentleman is right to hold this emergency debate—is about the raw power of politics. It is about the politics in Germany in not wanting to bail out Greece; the politics here; the politics in Greece, where people voted pretty overwhelmingly to accept the bail-out package, with parties splitting up; and the politics in Italy, where people dumped the wretched Berlusconi and put in quite a good guy, Monti, for the time being. The Commission is not involved in this; the technocrats are out of the game; the Eurocrats are off the pitch. It is about raw politics. We are in the driving seat, and the hon. Gentleman might be as well.

Mr Cash: I am grateful to the right hon. Gentleman, who makes an important point. However, this is not merely about technocrats but about the brutal fact that the political game as it is now being played is increasingly coercive. That is part of the problem that I shall address.

Henry Smith (Crawley) (Con): Following yesterday’s announcement of the Irish referendum, does my hon. Friend share my concern that if the result is the wrong

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one as far as the European establishment are concerned, it will be ignored and overruled by some method or another?

Mr Cash: I do indeed. A new rule is being imposed through the arrangements under this treaty which involves a kind of qualified majority voting for referendums whereby if member states do not have the requisite number of referendums in which they say that they do not want the treaty, they will simply be ignored. I hope that when it comes down to it and the Irish people have this explained to them, that will be a spur to their voting no, because people are being taken for a ride.

Mr John Baron (Basildon and Billericay) (Con): I congratulate my hon. Friend on securing this emergency debate. Does he share my concern that with democracy having been suspended, in effect, in two countries, with a deepening democratic deficit across the eurozone as rules are bent, and with a eurozone fiscal compact that seems to undermine the EU institutions, we could fast be reaching a tipping point as regards the EU’s credibility and legitimacy?

Mr Cash: Absolutely. For those of us who have been critical of the European Union, but not of Europe, because we believe that we need stability and prosperity in Europe, my hon. Friend’s remarks are entirely justified. We are now facing the breaking of the rule of law through the imposition of European rules. It is an extraordinary paradox that the law should be used to break the principle of law itself.

Chris Bryant (Rhondda) (Lab): How is the hon. Gentleman going to vote on this motion? As I understand it, his idea is that the treaty should not go forward, but if the motion is agreed to, we will have decided that we have considered the matter, and the Government will therefore be able to proceed with the treaty.

Mr Cash: The hon. Gentleman is rather missing the point. The question before the House is that we should have a proper debate about legality. There will not be a vote, as far as I am concerned, because we need to have an open discussion among Members of Parliament, not only in the European Scrutiny Committee, as has been the case so far. We have heard evidence from many distinguished lawyers and economists, and from the Minister for Europe, although sadly, and deeply regrettably, not from the Foreign Secretary, who has twice declined to come before us. He did say that he would come on 27 March, but that is far too late for the purposes of our proceedings. The most important thing is that we have an open and transparent debate about questions that otherwise would not get across to Members of Parliament, let alone to the people at large.

I have just spent two days in Brussels as Chairman of the Committee, with my hon. Friend the Member for Hertsmere (Mr Clappison). We had an extremely constructive dialogue with members from the national Parliaments and Members of the European Parliament. The only remedy that is provided in this time of economic and, I submit, political crisis in Europe is more Europe, not less. That completely misses the point.

As I discovered only a few months ago at the multi-annual surveillance framework meeting, some people want further European institutional change towards greater political

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union. In effect, they say that the solution to the problem is the European Parliament, rather than the national Parliaments, although they do want us to be involved so that we can sign our own suicide note. On economic matters and the multi-annual surveillance framework, they want more money to be spent, irrespective of the failure of the European economic systems that they have put in place. The Minister for Europe, who was at that meeting, will recall that he, I and others who were being realistic about this matter were simply astonished by the continuing stream of determination to seek more and more money for the European Union, through the financial transaction tax, by increasing its resources and through the common commercial tax base.

Michael Connarty (Linlithgow and East Falkirk) (Lab): No one can beat the Chairman of the European Scrutiny Committee for diligence. However, I will not be staying to take part in this debate for one reason: I am disappointed at his timing. The Committee has yet to hear from the Financial Secretary to the Treasury, we have not yet finished our evidence sessions and we have not yet presented our report. I know that the Government are desperate for something to fill the gap in this debating hall, which has frankly turned into a disappointing—

The Vice-Chamberlain of Her Majesty's Household (Mr Mark Francois): Do you think we put him up to it?

Michael Connarty: I am not immune to the value of the Whips, but I honestly believe that they have got themselves into such a situation that they have allowed even this debate because they are desperate to fill the Order Paper.

Mr Speaker: Order. First, the hon. Gentleman’s intervention is too long. It is very enjoyable, but too long. Secondly, although I do not usually comment on the content of debates at all, I feel that I must do so for the benefit of the House. I know that it will please the senior Government Whip—I must get my seniority right—when I make the point that this debate was granted by me. It was nothing whatever to do with any Whip, senior or junior, and that is the end of it.

Chris Bryant: On a point of order, Mr Speaker. Of course, what you say is absolutely true, but you would not have granted this debate unless 100 Members had stood up. My hon. Friend the Member for Linlithgow and East Falkirk (Michael Connarty) is absolutely right to say that a lot of Tory Back Benchers have been dying for anything other than the complete vacuum—

Mr Peter Bone (Wellingborough) (Con): What rubbish!

Chris Bryant: The hon. Gentleman said so last night to me in the gym. They are dying for anything other than the absolute vacuum that there has been in the business in this, the longest parliamentary Session since the Long Parliament.

Mr Speaker: That is an interesting point, like many of the hon. Gentleman’s points, but it is not a point of order for the Chair, as he knows perfectly well.

Mr Cash: That was not really a point worthy of comment, but I will certainly reply to the hon. Member for Linlithgow and East Falkirk (Michael Connarty), who is my colleague on the European Scrutiny Committee.

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The question of legality has already been canvassed. The Government have demonstrated that in the letter written by Sir Jon Cunliffe, on their instruction, to the secretary-general of the European Council, which expresses severe reservations about and, in effect, disputes the advice of the legal adviser to the European Council. Without wishing to prejudice what the European Scrutiny Committee may conclude in our report, the fact is that there is already sufficient notice of the concerns over legality for the matter to be considered by the whole House, rather than just in the Committee, as important as that is. There is one simple reason for that: silence or acquiescence can be assumed to be consent. I will explain that point in a moment.

While the question of legality is allowed to continue without challenge, and while it is decided whether the European Court of Justice should be called upon to make a judgment about this matter, which will itself take time, we are depending on the action, legal or otherwise, of the Prime Minister, who is going to the Council tomorrow. It is therefore important for us to at least indicate our view in this debate, in amplification of what the European Scrutiny Committee is considering and what it may yet conclude. I cannot make any assumptions about what its conclusion will be. We have certainly had the most powerful evidence from the likes of Professor Paul Craig, who is by no means unknown in European Union circles as a person of immense stature.

Michael Connarty: I am about to leave the Chamber, because I believe that this is not the right time to debate something that we are considering in the European Scrutiny Committee. I am used to all-party Back-Bench Committees being run as the fiefdom of the Chair. However, as a former Chair of the European Scrutiny Committee, I think that it is extremely discourteous, when we have not finished our inquiry or published our report, to have a debate on something that the Chair of the Committee sees as a matter of interest. It is wrong to do that and I think that it should be discussed in the Committee. I am now going to read my papers for the Committee sitting at 2 o’clock so that we can have some debate.

Mr Cash: I will reply to that point simply by saying that it is important that we, as a House, consider matters as they are going on concurrently. There should be no presumption that other Members of the House necessarily know the detail of the matters that we are discussing.

Mr Robert Buckland (South Swindon) (Con): May I reinforce my hon. Friend’s point that it is important for the House as a whole, and indeed for departmental Select Committees, to have thematic debates about issues that arise from the EU? Such debates should happen at an earlier stage than they do, which so often seems to be at the last minute. I agree with him on that point.

Mr Cash: There is also the important question of whether action might need to be taken on the advice of the Attorney-General in relation to the ratification process, which, as I shall explain in a moment, was initiated by the German vote yesterday.

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Mr John Redwood (Wokingham) (Con): It is quite right to have this debate as it is urgent and on a matter of great moment. Does my hon. Friend think that there is any way in which 25 countries can construct a treaty that presumes to use the EU institutions that belong to the 27 member states as a whole, without having an adverse or substantial impact on the UK? Should we not be warning our Prime Minister of that threat before he negotiates?

Mr Cash: Absolutely. Given that the Prime Minister is going to the Council tomorrow, where it is inconceivable that this matter will not be raised, and that the ratification process is under way, it is important to get that point on the record. I believe the arguments to be self-evident.

Neil Carmichael (Stroud) (Con): I am enjoying this interesting debate. It is an opportunity to air some key issues. Why does the European Scrutiny Committee meet in private? It would be more helpful if it was open to us all more often.

Mr Cash: We have periodically sat in public, but then the position has been reversed. That depends on what is decided by the House as a whole, because these matters relate to the Standing Orders. I see that the Leader of the House is here. He knows how vexed this question is. We have gone backwards and forwards on it. However, the issues that we are discussing have been discussed extensively in public. My hon. Friend is more than welcome to come along if he wants to listen to any of our sessions. [ Interruption. ] As my hon. Friend the Member for Rochester and Strood (Mark Reckless) has just indicated, if he does not want to come along, he can read the transcript. I have copies of it here if he wants to look at it. I do not think that anyone can dispute the fact that the information is out there.

The question of when action needs to be taken is highly relevant in determining whether the Government are seen to acquiesce in decisions that are being taken by other Parliaments, which, as my right hon. Friend the Member for Wokingham (Mr Redwood) said, will affect us vitally.

Mr Nigel Dodds (Belfast North) (DUP) rose—

Mr Speaker: Order. Before the hon. Member for Stone (Mr Cash) takes an intervention, may I say that it is always a privilege to listen to his speeches, and today is no exception, but gently point out that about a dozen people wish to speak? I therefore confidently anticipate that he is approaching the conclusion of his remarks.

Mr Dodds: I congratulate the hon. Member for Stone (Mr Cash) on securing the debate. I think that it is right and proper that the whole House considers such matters. On the Irish referendum, will he confirm that the rules have been rigged so that if 12—never mind the rest—eurozone countries approve, the pact will be deemed to be ratified?

Mr Cash: Absolutely. I do not know whether the right hon. Gentleman was in the Chamber at the time, but I referred to that in reply to another colleague. We are effectively having a new qualified majority voting system for referendums.

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The catalogue of breaches of the spirit and the specific legal requirements were epitomised in Madame Lagarde’s remarks on 17 December 2010 about the first bail-out fund, otherwise known as the EFSM—the European financial stabilisation mechanism. She said:

“We violated all the rules because we wanted to close ranks and really rescue the euro zone.”

That is the objective and the method. She is now head of the International Monetary Fund, and we are faced with the prospect of the United Kingdom being expected to contribute to the IMF for what everybody knows is a back-door arrangement to underpin and guarantee the bail-outs in the European Union, which the IMF was not set up to provide, as the United States and other countries have made clear.

Indeed, Germany and France broke the stability and growth pact as it was originally instituted. Now we have a new feature in the big political landscape: in the pursuit of a tax and fiscal policy and compliance with a so-called golden rule to balance their budgets by a form of coercion, 25 member states of the European Union have now come up with an agreement to increase the powers of the stability and growth pact as it applies to them, irrespective of whether a country held a referendum and voted no, as the right hon. Member for Belfast North (Mr Dodds) just suggested. The vote would simply be swept away by a majority vote of the other countries, which insisted on applying the golden rule. One is bound to ask what kind of golden rule it is and whether it is not possible for individual countries to balance their budgets out of self-interest and through their own democratic decisions, rather than having a rule imposed on them in pursuit of the ideology of economic and political union. Indeed, the imposition of such a rule will, of itself, not balance the budgets anyway, as has been found in the past. This is using rules of law to breach the rule of law.

The real solution to the European crisis, which is not confined to the eurozone and deeply affects the United Kingdom, is that the levels of public expenditure, which led to the breaches of the criteria in the treaties, can be solved only by generating growth and giving oxygen to small and medium-sized businesses, for example, through deregulating the massive over-regulation and multiplicity of laws, such as the working time directive, among many others. The list is vast.

Yet again, the whole treaty is a vain attempt to sacrifice practicality and democracy on the altar of ideology, just as the referendums in Ireland, France, Holland and so on were all simply thrown away.

Martin Horwood (Cheltenham) (LD): Will the hon. Gentleman give way?

Mr Cash: I will not give way again. I have listened to what Mr Speaker has said and I have no intention of giving way. I have given way a great deal already, as I am sure Mr Speaker appreciates.

Even today, the European Central Bank is departing from its established rules in providing what some suggest is as much as a trillion euros of guarantees, and flooding the markets with unearned money to support countries which are failing to run their economies properly. There is a further problem, which is an increasing trend towards coercion, again in pursuit of ideology.

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There is an increasing tendency by Germany to impose its will on other member states, but it should not be forgotten that although Germany pays vast sums into the European Union, it benefits enormously from that, and it could be argued that both French and German banks have played roulette with the Greek economy, and are now, through the rules and the treaty, seeking to obtain repayment and bolster their own banks and their own economies by imposing new rules to suit their requirements. Germany, of course, wants to help the euro. It has an enormous investment in it, but I would argue that the tendencies to coercion are not in the interests of Germany, the European Union or the United Kingdom. Indeed, today, we read that the constitutional court in Germany yesterday blocked the powers of a special parliamentary panel to fast-track emergency decisions affecting the rescue fund.

The new treaty is described as the “treaty on stability, co-ordination and governance” in the EU, yet it is not, contrary to what the Opposition said at an earlier stage, an EU treaty. The Lisbon treaty lays down specific requirements before changes can take place. They specify that the rules shall not be changed unless everyone agrees. The false assumption underlying the new treaty between the 25 is that, despite the failure to achieve unanimity, and even though the rules on enhanced co-operation have not been used, they claim that it remains legitimate to obtain those ends by a different route. I put that to the Minister for Europe the other day—namely that the treaty is based on the dangerous assumption that the end justifies the means, and that they would argue that, even if it is unlawful, the requirement to introduce the treaty for political reasons overrides the law. The question is whether it is lawful for the EU institutions, such as the Commission and the European Court, to be involved in such an agreement.

The new treaty is the triumph of expediency over the law. Professor Paul Craig sets out his arguments in 11 pages of carefully analysed argument. I am certain that the Government know all that and I am glad that the Attorney-General is here. If he wishes to intervene, I shall be only too happy. As a former shadow Attorney-General, I am sure that my right hon. and learned Friend knows the parameters of the unlawfulness of this treaty, which is why I suggested that he should come today.

I believe profoundly that the Government know that the treaty is unlawful and, in the words of Professor Paul Craig, it is important to consider whether it can

“confer new functions on EU institutions.”

He continues:

“I believe this would be contrary to the existing Lisbon treaty and to legal principle.”

He then examines articles 7 and 8, which I have no time to go into, as well as articles 3(2) and 273. They all raise questions that are before the European Scrutiny Committee about detailed matters, which we will tackle in due course in our report.

Chris Kelly (Dudley South) (Con): Will my hon. Friend encourage people who wish to find out more to visit the European Scrutiny Committee’s website at www.parliament.uk/ESCOM?

Mr Cash: I certainly would, as I said earlier.

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Angela Merkel is quoted in The Wall Street Journala few days ago as saying:

“As Chancellor of Germany, I should and sometimes must take risks but I cannot embark on an adventure.”

I cannot think of any more dangerous adventure than moving away from the rule of law and inviting the tendency to coercion, which is increasingly evident in German policy making. Indeed, I believe that new rules of law are being asserted to break the rule of law. I am sorry to say that in Germany they seem to believe in government by rule. We believe in government by consent.

The process will not work. We are now in the period of a phoney war. Those who have seen the play “Three Days in May”, about 1940, may well wonder whether it is now obvious that, if we were to acquiesce in imposing the new and unacceptable rules, and in using EU institutions, that would become a new process of appeasement. Fortunately for us, in those dark days, Churchill refused to accept Halifax’s advice at the end of that fateful month.

The letter that the Prime Minister has sent, through Sir Jon Cunliffe, to the secretary-general of the European Council makes it clear that we have serious reservations. We now have two Europes, both built on sand. It is essential that we have a referendum in this country so that the people can have their say because there are such profound questions—

Mr Buckland: On what?

Mr Cash: On what kind of Europe we want. It is increasingly obvious that the position has become unacceptable and that the rule of law itself is now in jeopardy. We are involved and we must have a referendum on our relationship with the EU. However, first the Government must decide what action they will take about the challenge to the rule of law in Europe. They must put referral to the European Court of Justice firmly on the agenda, follow that through and, at the same time, reassess our policy towards the European Union and insist on a renegotiation of the treaties to ensure that the United Kingdom is not found wanting.

1.20 pm

Emma Reynolds (Wolverhampton North East) (Lab): I congratulate the hon. Member for Stone (Mr Cash) on his innovative use of House procedures to secure this debate. In fact, it would have been unnecessary for him to use such innovation if the Government had agreed to re-establish the pre-Council debates that Labour held when it was in government.

I welcome the opportunity to debate this important issue. The Opposition would not usually want to intrude on the private grief of the Conservative party, or indeed of the coalition, but we nevertheless have a duty to point out the inconsistencies in the Government’s position. I might not always agree with the hon. Gentleman, but I sympathise with him today, because the only thing that is clear is that the Government’s position is manifestly unclear.

The fighting talk we heard from the Government in December and January flies in the face of reality. Ministers loyally and repeatedly rehearse the script that the Prime

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Minister vetoed the use of the European institutions. The Foreign Secretary was categorical in his assertion that EU institutions were reserved for the use of the 27. He stated:

“What we are clear about is this, that the institutions of the European Union belong to the 27 member states”.

On the eve of the January European Council, the Secretary of State for Work and Pensions, who is listened to closely on those issues by Conservative Members, could not have been clearer. He said:

“The fact is the prime minister vetoed them using the institutions”.

The Chancellor took to the airwaves just hours after the January European Council ended, saying, without hesitation and seemingly without equivocation:

“If we had signed this treaty…we would have found the full force of the…European Court, the European Commission, all these institutions enforcing those treaties, using that opportunity to undermine Britain’s interests…We were not prepared to let that happen”.

Martin Horwood: The hon. Lady makes a robust call for clarity on policy. Can she confirm whether the Labour party is in favour or against the use of EU institutions by the 26?

Emma Reynolds: If only the position of the Liberal Democrats were clear on that matter—[ Interruption. ] I will come to that.

There was a guarantee from the top of the Government that EU institutions would not be used—I hesitate to describe it as a “cast-iron” guarantee, because it might upset some Conservative Members, but none the less, the position seemed to be clear. The evidence seemed compelling and the Government seemed to be clear what they were saying, but how quickly things unravelled—on the European Commission, on the use of the buildings and on the role of the European Court of Justice. One by one, the Government’s guarantees faded into yesterday’s headlines, and their empty rhetoric was painfully exposed.

Mr Baron: The shadow Minister will accept that the fiscal compact is designed to save the euro. Could we therefore have clarity on the official Opposition’s position on the euro? Given that all the economic evidence and the 85 currency devaluations since the second world war show that countries that have left a currency bloc benefit, and given that Greece desperately needs a devaluation, will she explain why she supports the cry to save the euro when that policy serves only to make the austerity packages worse?

Emma Reynolds: Unlike the hon. Gentleman, the Opposition believe that the stability and preservation of the eurozone is in our country’s interests. If those countries took on their former currencies, there could be a disastrous impact on our economy. I do not agree with him.

David Cameron walked out of the negotiation at the—

Mr Bone: Who?

Emma Reynolds: I am sorry. I meant the Prime Minister. I do apologise.

Mr Baron: Will the shadow Minister give way?

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Emma Reynolds: Not for a minute—I have taken a couple of interventions already.

The Prime Minister walked out of the negotiation at the December Council with no additional guarantees or safeguards to protect British interests; no protections on the single market; no additional safeguards for financial services; and not even a seat at the table of eurozone meetings to ensure that we had a voice, if not a vote. In short, he gained nothing apart from the short-lived praise of some Conservative Back Benchers, but even that is changing.

Article 8 of the new treaty states that the Commission, the European Court of Justice and the buildings will all have a part to play in the working of the fiscal compact. In fact, the Government’s representative in Brussels, Sir Jon Cunliffe, stated in a letter to the European Council that articles 3, 7 and 8 all make explicit reference to the role of the EU institutions in the fiscal compact.

Despite profound confusion over the Government’s interpretation of the legal basis for the treaty, the treaty is clear. According to the terms of reference set out in the text of the agreement to be signed tomorrow, the fiscal compact will rely on the operation of the EU institutions upholding the terms and workings of the agreement. The Europe Minister told the European Scrutiny Committee last week that one can argue about the politics of the terms, but they amount to a promise by 25 countries that they want to support doing certain things under the European treaties. He said that in those cases, the use of the European institutions is, by definition, already authorised.

Andrew Percy (Brigg and Goole) (Con): Will the shadow Minister give way?

Emma Reynolds: Not for a minute.

Will the Minister therefore state clearly, and once and for all, whether the Government believe the legal status of the agreement, as set out in the terms of the fiscal compact, and specifically in the articles I have cited, is wrong? If it is wrong, what will the Government do to correct it? If they will do nothing to correct it, are we right to assume that that is their way of quietly admitting that they have been forced into a humiliating U-turn?

Mr Baron: Will the shadow Minister give way?

Emma Reynolds: I will not give way. I have given way once to the hon. Gentleman already.

At least the leader of the Conservatives in the European Parliament, Martin Callanan, has been clear. He said:

“There is no doubt that the government’s position has altered since the December summit, when they were insisting the institutions could not be used…I blame a combination of appeasing Nick Clegg, who is desperate to sign anything the EU puts in front of him, and the practical reality that this pact is actually quite hard to prevent.”

Does the Europe Minister therefore agree with the analysis of his party’s leader in the European Parliament?

Andrew Percy: Will the shadow Minister give way?

Emma Reynolds: Not for the minute.

Does the Minister agree with what the Deputy Prime Minister said on “The Andrew Marr Show” in December? He said:

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“Well it clearly would be ludicrous for the 26, which is pretty well the whole of the European Union with the exception of only one member state, to completely reinvent or recreate a whole panoply of new institutions.”

Perhaps there is more agreement between Martin Callanan and the Deputy Prime Minister than first meets the eye. They both believe, as the Opposition do, that the Government have flip-flopped. Despite their initial bravado, they have been unable to veto the use of the institutions.

Henry Smith: I have waited patiently since the intervention from my hon. Friend the Member for Basildon and Billericay (Mr Baron) to hear exactly what the official Opposition policy is on the fiscal treaty. Incidentally, is it still official Opposition policy to join the euro?

Emma Reynolds: The shadow Chancellor has made it clear that we do not think we will join the euro in his political lifetime.

The ultimate irony is that the Prime Minister, who has previously been so scathing of the EU, has now been reduced to relying on that institution to be the last line of defence in the protection of British interests, because the EU, unlike him, will be in the room. The UK will be barred from key meetings, rendering us voteless and voiceless in future negotiations. Without being in the room, we stand little chance of knowing—let alone influencing—whether eurozone Ministers will stray into areas of decision making that affect the 27.

The Opposition are right to be concerned at that prospect and to doubt the effectiveness of such a system in protecting British interests, and we are right to ask questions on how that situation was allowed to happen.

Andrew Percy: The shadow Minister said strongly and clearly that she believed the euro needed to be saved, and that any country leaving the euro would have a negative impact on our country and economy. What evidence does she draw on to support that assertion?

Emma Reynolds: A disorderly default by any member of the eurozone could have disastrous implications for that country and knock-on effects for the rest of the EU. There would be a contagion effect that the hon. Gentleman would be naive to think would not take place.

We are right to stress that the response by the Government and centre-right Governments across the EU to the eurozone crisis has been economically inadequate, and any worsening of the crisis will have a devastating impact on our economies. Although we welcome the fact that in January the European Council spoke about the need for growth and jobs in order to ensure the recovery of the eurozone, we are concerned that this is merely an add-on to the current deal rather than an integral part of it. In the light of that, will the Europe Minister comment on the position of the French Socialist presidential candidate, who is visiting the UK today and urging EU member states to reopen the treaty to include more commitments to growth and jobs?

I will cite the words of one Member of the House who seems to share our deep scepticism about the consequence and cause of the Prime Minister’s diplomatic defeatism last December—the Deputy Prime Minister. Earlier this month, he explained:

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“The language gets confusing. Veto suggests something was stopped.”

The phantom veto of December has now been exposed. He also said that over time the treaty would

“be folded into the existing EU treaties so you don’t get a permanent two parallel treaties working separately from each other…We all see this as a temporary arrangement rather than one which creates a permanent breach at the heart of the EU.”

According to him, the Prime Minister’s walkout in December was a temporary arrangement.

The crux of the issue was eloquently and pithily expressed by the hon. Member for Rochester and Strood (Mark Reckless) the day after the 30 January European Council, when he asked the Prime Minister:

“Will the Prime Minister explain what it is that he has vetoed?”—[Official Report, 31 January 2012; Vol. 539, c. 687.]

Nothing, it seems. The Government Back Benchers who gave the Prime Minister a hero’s welcome in December have now realised that he did not prevent anything from happening. We said at the time that his walkout was not an expression of the bulldog spirit but a form of diplomatic defeatism.

Mark Reckless (Rochester and Strood) (Con): Is the hon. Lady aware of one thing that the Prime Minister seems to have achieved with this veto—as it has been described? In Ireland, the Irish Attorney-General has said that the fact that the compact is outside the EU treaties has influenced the advice that Ireland needs a referendum.

Emma Reynolds: That suggests that the Prime Minister’s influence is greater than it is. It is up to the Irish people to decide whether to accept the treaty, whether within the European treaties or outside.

Despite the penny dropping with everyone else, the Prime Minister resolutely clings to his phantom veto. At the press conference after the January European Council, he said:

“There isn’t an EU treaty because I vetoed it; it doesn’t exist.”

That flies in the face of the evidence. The European treaty involves 25 out of 27 of the member states. It involves the European Commission and the European Court of Justice. It sounds like a European treaty; it walks like a European treaty; it clearly is a European treaty. The Deputy Prime Minister is at pains to describe this situation as temporary, but in truth he was powerless to prevent the Prime Minister from putting the Conservative party interest above the national interest, as it was reported he was advised to do by the Foreign Secretary.

Bob Stewart (Beckenham) (Con): Does that mean that the official Opposition would be happy with the treaty, leave it as it is and do nothing?

Emma Reynolds: We have made it clear that we are not happy with the treaty. We would not have walked out of the negotiations in December when a text was not even on the table. We would have negotiated a different treaty. We believe that this is a fiscal straitjacket like the one that the Government are putting on our country, and it is not in the interests of the eurozone or the UK.

29 Feb 2012 : Column 310

As a result of the Government’s actions, Britain has never been so excluded from decisions affecting its vital national interests. That is bad for British business, bad for jobs and bad for families across the country. No British Government, regardless of political colour, have been as complacent as this Government about the emergence of a two-speed Europe. By putting party interest above the national interest, the Prime Minister has rendered the Government dependent on what could be described, euphemistically, as the Conservatives’ least-favourite institution—the European Commission—to protect the UK from decisions being taken without us even being in the room. Even Baroness Thatcher, a staunch critic of the EU, understood that being in the room was of paramount importance. She would never have relied on the European Commission to defend the British national interest.