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House of Commons

Wednesday 16 May 2012

The House met at half-past Eleven o’clock

Prayers

[Mr Speaker in the Chair]

Oral Answers to Questions

Northern Ireland

The Secretary of State was asked—

Welfare Reform

1. Gordon Henderson (Sittingbourne and Sheppey) (Con): What recent discussions he has had with Ministers in the Northern Ireland Executive on welfare reform. [106609]

The Secretary of State for Northern Ireland (Mr Owen Paterson): I regularly discuss the benefits of our reform agenda with Executive Ministers and the Secretary of State for Work and Pensions. I spoke yesterday to the Minister for Social Development, who will shortly introduce a welfare reform Bill to the Assembly. Lord Freud, the Minister responsible for welfare reform, will visit Northern Ireland again tomorrow and Friday to continue the discussions.

Gordon Henderson: As my right hon. Friend will know, many aspects of social welfare are already devolved to Northern Ireland. Does he agree that it is very important that parity with Great Britain is not broken on this issue?

Mr Paterson: My hon. Friend is absolutely right that it would be very damaging to Northern Ireland if parity were broken, because these reforms will bring tremendous benefit to many of the most disadvantaged people in Northern Ireland. At the same time, this very much has to be a Northern Ireland Bill. I am working very closely with the local Minister, to whom I spoke yesterday, to ensure that there is sufficient flexibility so that when the measure comes to the Assembly, it conforms to the needs of local communities.

Ian Paisley (North Antrim) (DUP): I say to the Secretary of State, SUFTUM, and I am sure he will on Saturday.

Will the Secretary of State assure us that the welfare reform flexibilities that our Northern Ireland Minister is seeking will be accommodated at a policy level, but also at a practical level within the universal credit IT system? It will be vital to have those flexibilities in place next year.

Mr Paterson: For those who are not enlightened, “SUFTUM” is “Stand up for the Ulster men”. We all heartily congratulate the team on having got to where they will be on Saturday, and we wish them all the best.

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The hon. Gentleman is absolutely right to stress that flexibility means that the detailed welfare reform measures must be adapted to the particular circumstances of Northern Ireland. The most obvious one is that there is no council tax in Northern Ireland. I am working closely with the local Minister, and Lord Freud, who has been a frequent visitor and will be in Northern Ireland for two days at the end of the week.

Ms Margaret Ritchie (South Down) (SDLP): Is the Secretary of State aware that conservative estimates indicate that when welfare reform is implemented in Northern Ireland, it will remove about half a billion pounds from the pockets and purses of low-income households? Apart from the social consequences, will he give his assessment of the macro-economic effects of that significant cash withdrawal from the Northern Ireland economy?

Mr Paterson: I am grateful to the hon. Lady for the question, but I have to remind her that the hon. Member for East Antrim (Sammy Wilson), the Northern Ireland Finance Minister, does not agree with her. He has said:

“The claim that welfare spend will fall in Northern Ireland and will lose £500 million is clearly not true. All that will happen is that welfare spending will still be increasing but at a slower rate than if no reform agenda is pursued.”

National Crime Agency

2. Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op): What discussions he has had with the Secretary of State for the Home Department on the implications for Northern Ireland of the replacement of the Serious Organised Crime Agency by the National Crime Agency. [106610]

The Secretary of State for Northern Ireland (Mr Owen Paterson): I am in regular discussion with both my right hon. Friend the Secretary of State for the Home Department and the Minister of Justice in the Northern Ireland Assembly. I believe that the plans for a National Crime Agency should be welcomed in Northern Ireland as a significant step forward in tackling the threat from serious, organised and complex crime in a way that respects the accountability mechanisms in Northern Ireland.

Cathy Jamieson: I thank the Secretary of State, but does he agree that notwithstanding the views on the National Crime Agency, there are specific issues to consider in Northern Ireland about the direction and control of police officers? Will he say more about how he intends to address those issues?

Mr Paterson: I am grateful to the hon. Lady for giving me the chance to clarify that I have worked very closely with the Justice Minister David Ford and the Home Secretary here to ensure that the NCA’s systems and methods of direction are totally compatible with the arrangements in Northern Ireland, which provide strong local accountability. In effect, no direction will go forward without the compliance of the Chief Constable. I am sure the hon. Lady will agree that horrendous crimes such as trafficking need an overarching authority working in close liaison and co-operation with the Police Service of Northern Ireland and, through the PSNI, with the Garda in Dublin.

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Mr Laurence Robertson (Tewkesbury) (Con): In a recent report, the Northern Ireland Affairs Committee highlighted the importance of the work of the Organised Crime Task Force in the fight against fuel and tobacco smuggling, and laundering and counterfeiting. Will the Secretary of State assure the House that the National Crime Agency will play a similar role in the Organised Crime Task Force to that played by the Serious Organised Crime Agency?

Mr Paterson: I am grateful to my hon. Friend and his Committee for their interesting report, which showed significant progress in bearing down on fuel smuggling. I absolutely reassure him that the intention of the National Crime Agency is to work on the success of SOCA and beef it up, and to bear down on many such crimes, which have an international nature.

Mark Durkan (Foyle) (SDLP): Does the Secretary of State accept that role definition and delineation between the Police Service of Northern Ireland and the National Crime Agency is important? Does he envisage a memorandum of understanding in that regard, and if so, would it be published?

Mr Paterson: I entirely agree that the arrangements between the new agency and the devolved police in Northern Ireland must be absolutely clear. There has been an exchange of letters between me, the Justice Minister in Northern Ireland and the Home Secretary here, with an absolutely clear statement that there can be no direction from the NCA, only co-operation with the approval of the Chief Constable.

Mr Philip Hollobone (Kettering) (Con): Will the National Crime Agency have more resources than its predecessor to tackle cross-border criminal activity?

Mr Paterson: That question should be addressed to my right hon. Friend the Home Secretary.

Dr William McCrea (South Antrim) (DUP): Will the Secretary of State assure the House that the proposed changes will have no detrimental effect on the fight against terrorism and organised crime?

Mr Paterson: I assure the hon. Gentleman that it is absolutely the reverse: the proposal is for a stronger agency, with a clear remit to co-operate in a vigorous manner with the PSNI. As I have said, the PSNI works closely with the Garda—I saw Martin Callinan, the Garda Commissioner, in Dublin on Monday. We should never forget the extraordinarily high level of co-operation we have with the Garda. On very serious crime such as terrorism, that co-operation is saving lives as we speak.

Security

3. Jack Lopresti (Filton and Bradley Stoke) (Con): What recent assessment he has made of the security situation in Northern Ireland; and if he will make a statement. [106611]

4. Andrew Bridgen (North West Leicestershire) (Con): What recent assessment he has made of the security situation in Northern Ireland; and if he will make a statement. [106612]

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7. Julian Sturdy (York Outer) (Con): What recent assessment he has made of the security situation in Northern Ireland; and if he will make a statement. [106615]

10. Nic Dakin (Scunthorpe) (Lab): What recent assessment he has made of the security situation in Northern Ireland; and if he will make a statement. [106618]

The Secretary of State for Northern Ireland (Mr Owen Paterson): The threat level in Northern Ireland remains at severe. Those who remain intent on committing violence are defying the will of the overwhelming majority of people, who want to go about their lives without fear and intimidation. This Government remain fully committed to countering terrorism in all its forms.

Jack Lopresti: Newry has unfortunately had three significant bomb threats in as many weeks. Will my right hon. Friend take this opportunity to encourage those who have information about those involved in dissident activities to come forward to the police and stop those who are intent on driving Northern Ireland backwards?

Mr Paterson: I entirely agree with my hon. Friend, who is absolutely right on how to defeat the small minority of people who are defying the overwhelming majority of people of Northern Ireland, who support the PSNI and co-operation with the Garda and who want to make Northern Ireland a peaceful, prosperous place. The former are completely unrepresentative, but we do not underestimate the fact that they are dangerous. My hon. Friend cited the Newry bomb. Had that not been disrupted by police activity, it could have caused very severe danger. We are not complacent, but the key is co-operation between the communities, the people and the police.

Andrew Bridgen: Given the danger that former prisoners will re-engage in paramilitary activities, will my right hon. Friend inform the House what steps are being taken to monitor prisoners released on licence, and under what circumstances those licences may be revoked?

Mr Paterson: If you do not mind, Mr Speaker, I should like to take a few moments to answer this question, which is a matter of huge consequence and debate in Northern Ireland.

The parole commissioners are an independent body appointed by the Justice Minister in Northern Ireland. The commissioners’ role is to make decisions on the release and recall of life-sentence prisoners in Northern Ireland. If information is brought to my attention, I share it with the commissioners and seek a recommendation from them regarding whether to revoke a licence. If they recommend that I do so, I will revoke, because I have a duty to protect the public. The commissioners then arrange a full hearing at which the prisoner can present his or her case and challenge the evidence against them. The commissioners make their decision on whether to release the prisoner because they are no longer a risk to the public, or whether the prisoner should stay in custody. The commissioners’ decision is binding. For those who remain in custody, cases are reviewed every one to two years.

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Julian Sturdy: Does my right hon. Friend agree that the term “alternative policing” is not only a disgrace but a worrying development that needs to be stopped?

Mr Paterson: My hon. Friend is absolutely right. I discussed recent events involving Republican Action Against Drugs with the Chief Constable this morning, and he described some of those activities as an obscenity in a modern democracy. There is absolutely no place in Northern Ireland for any alternative authority. The duly constituted authority, responsible to the democratically elected Assembly and Policing Board, is the PSNI, which needs to work with the full co-operation of the public. The situation is frustrating. As the Chief Superintendent said on television yesterday, the PSNI needs information from the public, so I appeal publicly to all those with any details. Some of these events are horrific and the police need the public’s help to bring the perpetrators to justice. [Interruption.]

Mr Speaker: Order. There are a lot of private conversations taking place in the Chamber. I remind the House that we are discussing the extremely serious matter of the security situation in Northern Ireland.

Nic Dakin: Given that the bomb in Newry was twice the size of the one responsible for the atrocity in Omagh, can the Secretary of State assure the House that the police and other services have all the resources necessary to maintain safety and security in Northern Ireland?

Mr Paterson: I would like to reassure the hon. Gentleman. Shortly after we came to power, we reviewed the security position in Northern Ireland and recognised that, sadly, a small number of people were flouting the democratic will of the people of Northern Ireland and trying to pursue their aims through violence. Working closely with the Justice Minister and the Chief Constable, we have worked out a programme, costing £200 million over the next four years, and I am pleased to say that the Chief Constable himself says we have the resources, the resilience and the commitment to meet the threat.

Mr Nigel Dodds (Belfast North) (DUP): In dealing with security, the Secretary of State will be aware that yesterday evening the PSNI revealed that, alongside other police forces in England, it had retained body parts and human tissue in 67 cases of suspicious and unexplained deaths without notifying the families of those possibly murdered. He will no doubt share my shock and will have sympathy with the relatives being told this terrible news today and in the coming days. What action does he now advocate taking, in co-operation with those in Northern Ireland, to deal with this serious issue?

Mr Paterson: I am grateful to the right hon. Gentleman for raising this matter. I entirely endorse his views and sympathise with those families who have heard this news. These are matters of the greatest sensitivity, and they must be very difficult for families to handle. I think we were all unaware that this material existed. It is most unfortunate that the news came out as it did. The Human Tissue Authority issued a direction to all state agencies, and the Association of Chief Police Officers advised chief constables. I talked to the Chief Constable about the matter this morning. As I understand it, the

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report was due to be published in good order on Monday, and he had prepared a careful plan to address the matter with each individual family in a most sensitive manner. We await the details of the report on Monday, but in the meantime the Chief Constable has assured me that he will have to accelerate his proposals to talk to the families.

[Official Report, 16 May 2012, Vol. 545, c. 12MC.]

Mr Dodds: I am grateful for the Secretary of State’s response. Given that this practice apparently occurred between 1960 and as late as 2005—it is now illegal, of course, under new legislation—will he and direct-rule Administrations of the past give full co-operation to any independent review or inquiry that might be set up?

Mr Paterson: The right hon. Gentleman raises an important point. We had all better wait to see what the report says, and then I will obviously discuss its implications with the Justice Minister David Ford and the Chief Constable. I suspect that most of the detail might be devolved, but I take onboard what the right hon. Gentleman says. This is a most difficult revelation, and we have to handle it with great sensitivity.

Vernon Coaker (Gedling) (Lab): We know how much the security situation in Northern Ireland has improved—we are all thankful for that—but, as we have seen with the recent escalation in the number of attempted bombings and hoaxes, there remains a severe threat from those who wish to take us back to the past. Does the Secretary of State agree that the Army bomb disposal teams do tremendously courageous and vital work, and will he assure the House and the people of Northern Ireland that they will receive whatever resources they need to do their important job?

Mr Paterson: I am grateful to the hon. Gentleman for his question and I also thank him, on the record, for his great support in our teamwork with the devolved Ministers in bearing down on criminals in Northern Ireland. Let me reassure him that support for the ATOs—ammunition technical officers—is very much a feature of the £200 million programme that we put together two years ago.

Vernon Coaker: I thank the Secretary of State for his remarks. He will be aware that this week is community relations week and I am sure that he will join me in paying tribute to all those involved in trying to create a shared future in Northern Ireland. Does he agree that legitimate grass-roots community organisations across Northern Ireland do hugely effective work in maintaining security and combating paramilitary activity? For those who rely on financial support from the European Union, will he tell the House what support we can expect from the new Peace IV funding initiative?

Mr Paterson: I entirely agree with the hon. Gentleman that we will not bear down on the number of delinquents purely by a security effort. We must give credit to the efforts of the PSNI to penetrate communities and to work on the ground in places where the police have not been seen for many years. This week, we have seen an announcement showing the lowest level of crime for 14 years and the highest level of confidence in policing for a very long time. At the same time, in parallel, there has been success against the terrorists in terms of arrests. However, he is absolutely right that we need to promote

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the programmes he mentioned, and I have discussed this issue with the Tanaiste, the First Minister and the Deputy First Minister, and together we will come up with a new programme.

Mr Gregory Campbell (East Londonderry) (DUP): The dissident terror threat increases in Northern Ireland, but is the Secretary of State aware that supporters of dissident terror are using illegal fundraising activities here in mainland GB, such as fuel smuggling and so on, to fund the campaign in Northern Ireland?

Mr Paterson: I thank the hon. Gentleman for his question. We are aware that such individuals fund their activities by a number of illegal means, and there has to be a question mark over them, whether they are used by criminal organisations or by paramilitary organisations. All such activities are totally and absolutely unsupportable. We have the full backing of the communities. We are talking about a tiny number of people who are not widely supported, and the way to beat them is for the people in the communities on the ground to work with the police.

Creative Industries

5. Dr Thérèse Coffey (Suffolk Coastal) (Con): What assessment he has made of future opportunities for creative industries in Northern Ireland. [106613]

9. Christopher Pincher (Tamworth) (Con): What assessment he has made of future opportunities for creative industries in Northern Ireland. [106617]

11. Alok Sharma (Reading West) (Con): What assessment he has made of future opportunities for creative industries in Northern Ireland. [106619]

The Minister of State, Northern Ireland Office (Mr Hugo Swire): The creative industries in Northern Ireland are worth £500 million a year and employ more than the agriculture sector. The new relief announced in the Budget will assist the industry directly and help to attract further blockbuster productions such as “Game of Thrones”, which was—indeed, is—filmed in Northern Ireland, creating 800 jobs.

Dr Coffey: After the Oscar win for the excellent Northern Irish film “The Shore” and the financial boost given to the film industry by the Chancellor, does my right hon. Friend agree that Northern Ireland has a creative industry to be proud of, bringing in investment in skills and jobs?

Mr Swire: I certainly do agree, and we should not forget that for every £1 spent on the arts, the economy benefits to the tune of £3. There is absolutely no reason why the Cathedral quarter in Belfast cannot rival Temple Bar in Dublin or Covent Garden in London in terms of new creative industries and technologies, and we are very excited by that prospect.

Christopher Pincher: Following the sell-out success of Belfast fashion week, what support can the Minister give to high-quality local designers and niche manufacturers to ensure that local retailers buy quality local goods and do not buy from abroad?

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Mr Swire: My hon. Friend is right, and of course it is not just about those designers and textile manufacturers in Northern Ireland; it is about those around the world. I refer him to Patrick Grant, the Savile Row tailor of E. Tautz—judging by the look of my hon. Friend, he has been to visit him on a number of occasions—as well as Jonathan Anderson and others. There are a huge number of people, both in Northern Ireland and outside, in the industry, and we are—to repeat myself—very excited by the prospects for the industry. [ Interruption. ]

Mr Speaker: Order. There are some very noisy private conversations taking place. Let us have a bit of order for Mr Alok Sharma.

Alok Sharma: Does the Minister agree that the announcement in this year’s Budget to introduce corporation tax reliefs for film and television production will bring even more value to Northern Ireland’s proposition as a world-class production location?

Mr Swire: For my hon. Friend I repeat above the hullabaloo that Northern Ireland is a world-class destination for film and TV production. I welcome the moves taken in the Budget to encourage further investment there. The Paint Hall studio in the Titanic Quarter has recently been used for “City of Ember”, the mediaeval comedy “Your Highness”, and, of course, the first two series of the European “Game of Thrones”, which has so far brought about £43 million to the Northern Ireland economy. Yes, we are open for business, and if anyone out there is watching—I am sure there are many—come to see us in Northern Ireland and we will assure you of an excellent service.

Mr Jeffrey M. Donaldson (Lagan Valley) (DUP): Will the Minister encourage the British film industry to make more use of the facilities available to it in Northern Ireland?

Mr Swire: I rather hoped that was what I had just done, but I welcome the right hon. Gentleman’s question so that I can repeat again that Northern Ireland is a great location, providing a great landscape, very willing people, a hard-working work force, financial incentives and great studio production facilities. More than that I cannot say.

David Simpson (Upper Bann) (DUP): Although it is well and good to encourage the creative industries in Northern Ireland to create short-term employment on some occasions, what can the Minister do to encourage the small to medium-sized companies in Northern Ireland that are currently on their knees? [Interruption.]

Mr Speaker: Order. The House must calm down. It is difficult even for the Minister to hear the question. Let us hear the reply.

Mr Swire: The Budget provided a number of measures and most of them apply, of course, to Northern Ireland as an integral part of the United Kingdom. I am looking forward to visiting a number of these companies with the hon. Gentleman in the forthcoming days or weeks. The Budget was designed for the United Kingdom as a whole to retain the fiscal responsibility that is the signature of this Government. Everyone benefits from

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low interest rates and from taking lower-paid people out of taxation altogether. This is not just for small companies in Northern Ireland; it is for small companies the length and breadth of the kingdom. It was a good Budget to help this country on the road to economic recovery, which it deserves.

Air Passenger Duty

6. Jim Shannon (Strangford) (DUP): If he will take steps to secure a reduction of air passenger duty in Northern Ireland. [106614]

The Minister of State, Northern Ireland Office (Mr Hugo Swire): The Government have worked closely with the Northern Ireland Executive on this matter and have reduced air passenger duty on all direct long-haul flights from Northern Ireland from 1 November 2011. Provisions to devolve APD are set out in part 3 of schedule 23 to the Finance Bill, which is awaiting its Committee stage.

Jim Shannon: I thank the Minister for his response. The Secretary of State recently had a meeting with Willie Walsh of BAA and was assured that the Belfast city airport flight routes were safe. The staff at bmibaby are on a 90-day protective notice, as flight routes are due to finish. At that meeting, air passenger duty was also discussed. If there is one initiative that can retain flights, it is the reduction of APD for Northern Ireland. What steps is the Minister taking to reduce APD and to secure jobs?

Mr Swire: It is very important to make this situation clear. Northern Ireland Ministers asked for APD to be devolved only for bands B, C and D, and we were able to meet that request, thanks to our all-listening Chancellor. We have not been asked to devolve band A flights, which would reduce the block grant by a substantial amount. The hon. Gentleman’s question allows me the opportunity to tell the House that my right hon. Friend the Secretary of State and I have been very proactive on this matter, working with the local Minister of Enterprise, Trade, and Investment, Arlene Foster. As the hon. Gentleman says, my right hon. Friend has spoken to Willie Walsh a number of times. Keeping those routes open from Belfast to Heathrow is very good news.

Mr Speaker: Order. I ask the Minister to shorten his answers, as other Members wish to participate in the debate.

13. [106621] Mr Robert Syms (Poole) (Con): Further to the question on air passenger duty, should the Government not be doing much more to expand Belfast airport, particularly the air links, especially if we are to promote more public sector jobs in Northern Ireland?

Mr Swire: I hope my hon. Friend meant more private sector jobs in Northern Ireland, but more jobs there is great news. The employment figures for Northern Ireland are better today—better than in other parts of the United Kingdom. We are not on the back foot on this one: we want more traffic and more flights to and from Northern Ireland; that is what we are working towards.

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Dr Alasdair McDonnell (Belfast South) (SDLP): Does the Secretary of State agree with me, and with many members of the business community in Northern Ireland, that air passenger duty charges are inhibiting business access and activity, and making it even more difficult to achieve growth and business development?

Mr Swire: I think that this is an opportunity for the Chancellor to be given some credit for responding to what the Executive wanted and having air passenger duty devolved, which is good news for Northern Ireland. We want more flights into and out of Belfast, and we are on the right road towards achieving that. We have also saved the flights to Heathrow, which is good news for the businesses in the hon. Gentleman’s constituency.

Corporation Tax

8. Philip Davies (Shipley) (Con): Whether he has made an assessment of the potential effect on the Northern Ireland economy of changing the corporation tax rate in Northern Ireland to that obtaining in the Republic of Ireland. [106616]

The Secretary of State for Northern Ireland (Mr Owen Paterson): The low corporation tax rate in Ireland has been a key factor in attracting investment. The ministerial working group chaired by my hon. Friend the Exchequer Secretary is considering the potential impact of devolving the power to vary the corporation tax rate to the Northern Ireland Assembly.

Philip Davies (Shipley) (Con): I know that the Secretary of State is, like me, a great believer in low taxes to stimulate the economy. What discussions has he had with the devolved Administration in Northern Ireland, and with the Treasury, to try to lower the corporation tax rate in Northern Ireland?

Mr Paterson: My hon. Friend will be pleased to hear—and the Leader of the Opposition will be delighted to hear—that, thanks to the reductions in corporation tax introduced by my right hon. Friend the Chancellor, 57,000 more people are in jobs in Northern Ireland than were in jobs before the election. The ministerial group is working closely with Ministers in the devolved Administration, the Northern Ireland Office and the Treasury to establish whether further steps could be taken to reduce corporation tax and devolve it to Northern Ireland, and we will report later in the summer. [Official Report, 21 May 2012, Vol. 545, c. 13MC.]

Prime Minister

The Prime Minister was asked—

Engagements

Q1. [106920] Paul Maynard (Blackpool North and Cleveleys) (Con): If he will list his official engagements for Wednesday 16 May.

The Prime Minister (Mr David Cameron): I am sure that the whole House will wish to join me in paying tribute to the two servicemen who were killed in Afghanistan on Saturday, Corporal Brent McCarthy of the Royal Air Force and Lance Corporal Lee Davies of the 1st Battalion Welsh Guards. Our deepest condolences are with their families and their loved ones. They were

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both courageous and highly respected men who were engaged in the vitally important work of training and mentoring the Afghan police, and their service to our nation must never be forgotten.

This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today.

Paul Maynard: May I associate myself with the Prime Minister’s correct tribute to our fallen servicemen? It is the right thing to do.

I welcome the fall in unemployment of which we have learnt today, and, perhaps more important, the rise in employment. Can the Prime Minister assure me that he will continue to invest in the apprenticeships, the Work programme, and the other schemes that get my constituents, and all our constituents, back to work?

The Prime Minister: I thank my hon. Friend for what he has said about the schemes that we are introducing. It is welcome that we have seen the largest rise in employment for over a year, that the number of people in work has risen by 370,000 since the last election, and that the number of private sector jobs has increased by more than 600,000. However, we are not remotely complacent. Although there is good news about youth unemployment and the fall in the claimant count, there are still too many people in part-time work who want full-time work, and we still face the challenge of tackling long-term unemployment. We are not complacent, but whereas the flexible new deal took four years to put in place, the Work programme has been put in place within 12 months, and is targeted at helping the difficult to help and the long-term unemployed whom we want to help back to work.

Edward Miliband (Doncaster North) (Lab): May I join the Prime Minister in paying tribute to Corporal Brent McCarthy of the Royal Air Force and Lance Corporal Lee Davies of the 1st Battalion Welsh Guards. They both showed the utmost bravery and courage, and our thoughts are with their families and friends.

We need to ensure that the welcome reduction in unemployment that has been announced today is sustained by economic growth. Can the Prime Minister tell us what discussions he has had with the new President of France about a growth plan for Europe?

The Prime Minister: First, let me welcome the fact that, on this occasion, the right hon. Gentleman has welcomed the fall in unemployment. Unemployment has come down and the claimant count has come down, and I think it is worth making the point that the number of people on out-of-work benefits has fallen by 70,000 since the election. However, there are still challenges, and we must go on investing in apprenticeships and in the Work programme.

I had a brief discussion with the President of France after his victory, and I look forward to having a longer bilateral with him before the G8 starts this weekend. I look forward specifically to discussing what more we can do to help in terms of European growth. As the right hon. Gentleman will know, together with the Italian Prime Minister and many other Prime Ministers, we have put forward a whole series of steps that can help the European economy to move. Let us complete the energy single market; let us complete the digital

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single market; let us complete the services single market. These things could seriously add to growth in Europe. That is what we should be focused on in Europe, and I look forward to discussing that, and more, with the French President.

Edward Miliband: If I may say so, it is a shame the right hon. Gentleman did not see the French President three months ago, when he was in the United Kingdom. But I am sure that a text message and “LOL” will go down very well.

Europe needs a proper growth plan, which this Prime Minister has failed to argue for, and Britain needs a proper growth plan, which he has failed to come up with. Business is pleading with the Government for a growth plan. Does he really agree with the Foreign Secretary that the problem with our economy is that British business is not working hard enough?

The Prime Minister: I have to admit that perhaps I have been overusing my mobile phone—but at least, as Prime Minister, I know how to use a mobile phone, rather than just throw it at the people who work for me. You can probably still see the dents!

I do think there will be common ground between the British view of what needs to happen in Europe and the French view. I note that the French President, when asked how he would stimulate growth, said:

“The means cannot be extra public spending, since we want to rein it in”.

It is interesting that the French President does not back the Labour view that the way out of a debt crisis is to borrow more, spend more and add to the debt. But I do think that what we need in Britain—absolutely vital—are the low interest rates that we have, because when this Government came to power, we had the same interest rates as Spain. Today, ours are below 2%, whereas Spanish rates are over 6%. The shadow Chancellor was saying from a sedentary position that somehow this was delusional. Let me remind him that he said:

“the simplest measure of monetary and fiscal policy credibility”

is long-term low interest rates. Those were his words. That is what Britain has got, and that is what we must not lose.

Edward Miliband: The right hon. Gentleman totally failed to answer the question about the Foreign Secretary, who is saying that the problem in our economy is that British business is somehow not working hard enough. I notice that the right hon. Gentleman is now trying to claim the President of France as an ally—what is he on? But there is one group of people whom we know are losing their jobs, and that is the police, 30,000 of whom marched on the streets last week. Can the Prime Minister tell us how many front-line police officers have been lost since he came to power?

The Prime Minister: I am not surprised that the right hon. Gentleman wants to rush off the economy after his first few questions. Let me just remind him what this Government are doing to boost our economy. We have cut corporation tax; we have boosted enterprise zones; we are investing in apprenticeships; we are investing in housing; we are making sure we put money into infrastructure. But above all, because we have a plan to deal with our deficit, we have the lowest interest rates, whereas he would give us the highest interest rates.

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On policing, Her Majesty’s inspectorate of constabulary has actually found that police forces are planning to increase the proportion of police officers and staff working on the front line, so they are taking people out of the back office and putting them on the front line. But let me say this to the right hon. Gentleman: both parties are committed to making cuts to the police budget. He is committed to £1 billion of cuts, but the point is this: we are reforming allowances, we are cutting paperwork, we are freezing pay, we are reforming pensions. He would not do any of those things, so his cuts would be deeper, because he does not have the courage to do the right thing.

Edward Miliband: First, on the economy, we are in a double-dip recession—a recession made in Downing street by the two of them—him and the Chancellor. That is the reality. On policing, everybody will have noticed the Prime Minister’s answer. It was about the proportion of front-line officers—that is because he is sacking so many police officers from the back office. But what is actually happening to the number of front-line police officers? We have 5,000 fewer front-line officers. We have fewer 999 responders, fewer neighbourhood police and fewer traffic police. What was his sales pitch—[Interruption.] They were elected on a promise of more police officers—no wonder they are losing the elections.

What was the right hon. Gentleman’s sales pitch just before the election? This is what he said—[Interruption.] They do not want to hear about what he said before the election. He said:

“any Cabinet Minister…who comes to me and says, ‘Here are my plans’ and they involve front-line reductions, they’ll be sent straight back to their Department to go away and think again.”

Is it any wonder that the police are absolutely furious about his broken promise?

The Prime Minister: Oh dear, he is having a bad day. Let me try to explain. Whoever was standing here right now would have to cut police budgets—they accept that, we accept that. But if you did not have the courage to deal with allowances, to deal with paperwork and to deal with pay, you would have to make deeper cuts. This is what—

Ed Balls (Morley and Outwood) (Lab/Co-op): Calm down, calm down.

The Prime Minister: I am extremely calm. This is what the Leader of the Opposition’s own police spokesman said. He was asked, “Aren’t you accepting the need for a freeze on police pay? That is what Yvette Cooper has said recently.” “No”, he replied. So that is it: they do not accept the freeze on pay, they do not accept the pension reform, they would not do the paperwork cuts; they would be cutting the police more deeply. That is their position—they have absolutely no policy ideas at all.

Edward Miliband: I know that the right hon. Gentleman is going to have extensive training before he goes before Leveson, and I have a suggestion: I think it should include anger management. I think it would be very good for him.

It is not just on policing that the right hon. Gentleman has broken his promises. We all remember his promises three years ago to the nurses. He told their conference:

“there will be no top-down reorganisation”.

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I notice that he did not go back to the Royal College of Nursing conference this year. Can the Prime Minister tell us how many fewer nurses there are since he came to power?

The Prime Minister: The number of clinical staff in the NHS has gone up, and the reason it has gone up is that this Government have put more money into the NHS every year. What is the right hon. Gentleman’s commitment? His commitment is that spending on the NHS is irresponsible. That is his commitment—to cut spending on the NHS. What is actually happening is that we have the lowest number of people waiting for 18 weeks in our NHS, and that is because we have got more doctors, more clinical staff and fewer bureaucrats working in the NHS.

Edward Miliband: I am afraid it is back to the bunker with that answer. There are 3,500 fewer nurses since the right hon. Gentleman became Prime Minister. The Health Ministers could not even get the figure right on the radio; they could not even tell us how many nurses in training cannot find jobs. This is all because he has diverted billions of pounds from patient care to a top-down reorganisation that nobody voted for and nobody wanted. I know that he does not like being reminded of his words, but that is because he broke his promise. That is the problem with this Government: they cut taxes for millionaires and cut services for the rest of us. [Interruption.] I know they do not like hearing about it. What did the hon. Member for Cleethorpes (Martin Vickers) say? He said:

“We can’t convince voters that we are ‘on their side’ when we give top-earners a tax cut leaving Mr & Mrs Average reeling”.

That is the truth of this Government. They are unfair and out of touch, and they stand up for the wrong people.

The Prime Minister: What this Government have done is delivered a tax cut for every single working person in the country. We froze the council tax for every household in the country. We have taken 2 million people out of tax in our country.

But what is the big decision that the Leader of the Opposition has taken this week? He took the person in charge of his policy review, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne)—the person who said that they had to be serious about the deficit, who said that they had to be serious about welfare reform, the person who told us that they had run out of money—and replaced him with a policy chief who thinks that Labour’s problem is that it is not close enough to the trade unions. That is the Leader of the Opposition’s big decision. I often wonder whether his problem is that he is weak or that he is left-wing—his problem is that he is both.

Several hon. Members rose

Mr Speaker: Order. Perhaps we can now make progress with short questions and short answers.

Sir Peter Tapsell (Louth and Horncastle) (Con): Does my right hon. Friend suppose that Chancellor Merkel now regrets that she did not take the advice he gave her last October about the big bazooka? If she had fired it then, that would have spared the European Union from its present crisis.

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The Prime Minister: I cannot give a direct answer to that, but I can say that the eurozone has to make a choice. If it wants to continue as it is then it has to build a proper firewall and take steps to secure the weakest members of the eurozone, or it will have to work out that it has to go in a different direction. It either has to make up or it is looking at a potential break-up. That is the choice that has to be made, and it cannot long be put off.

Q2. [106921] Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op): If Andy Coulson was not vetted, why did he attend secret briefings, and what documents did he see? Is not this a mess?

The Prime Minister: I know the hon. Lady is desperate to find a smoking gun but I tell her that this is absolutely not it. We took a view, on coming to office, that in the past there were too—[ Interruption. ]

Mr Speaker: Order. The question has been put and the answer must be heard.

The Prime Minister: We took a view that too many people had been cleared at the highest level and that that had led to some of the problems in terms of Alastair Campbell. Actually, when it came to it, Andy Coulson was in the process of being development-vetted, so there is absolutely no mystery about this at all. The hon. Lady should go and look somewhere else.

Q3. [106922] Joseph Johnson (Orpington) (Con): Britain has just posted its first quarterly trade surplus in cars since the 1975 nationalisation of British Leyland by one of the previous Labour Governments. Will the Prime Minister welcome the news that Britain has not only cut its deficit by 25% over the last two years but is once again a net car exporter?

The Prime Minister: My hon. Friend makes an extremely good point; the Labour party does not want to hear good news. He is absolutely right that although we have had to take difficult decisions, the deficit has now been reduced by one quarter, so we are on our way to balancing our budget and dealing with our problems. It is encouraging that for the first time since 1976 we have a surplus in motor car manufacturing. That is because of the hard work that people have put in at Nissan, at Honda, at Jaguar Land Rover. It is extremely good news that, although it has taken this long to get back to a trade surplus in cars, Britain is once again a real home for manufacturing.

Q4. [106923] Hugh Bayley (York Central) (Lab): Two years ago, during the general election, The Press in York reported the Prime Minister as promising, “We won’t bring in VAT increase”. Has he considered that if he were to honour that pledge and reverse the VAT increase, that would put money in people’s pockets, stimulate the economy and get Britain out of a double-dip recession made in Downing street?

The Prime Minister: The reason we had to put up VAT is that we were left the biggest budget deficit anywhere in Europe. It was bigger than Greece’s, bigger than Spain’s, bigger than Portugal’s—the complete mess left by Labour. We now know from reading the former Chancellor’s memoirs that he was going to put up VAT too.

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Q5. [106924] Caroline Dinenage (Gosport) (Con): You may be aware that this is adult learners week, Mr Speaker, and Gosport’s inspirational Read and Grow charity has just received lottery funds to support the innovative work it is doing with adult literacy. May I invite the Prime Minister and the education team to visit Gosport and see for themselves how this work could be rolled out across the country to benefit people?

The Prime Minister: My hon. Friend is absolutely right to raise the issue. It is a tragedy that too many adults in our country do not have proper literacy and reading skills, because of not being taught properly at school. It is vital that we put that right through initiatives such as adult learners week, as she recommends, but we have to do better in our schools in the first place, to make sure that no child is left behind. We know that through the phonics scheme that my right hon. Friend the Secretary of State for Education is leading on that we can teach reading so that no child is left behind, and we must make sure it is available for every child in every school.

Mr Nigel Dodds (Belfast North) (DUP): The Police Service of Northern Ireland has revealed that between 1960 and 2005 it kept body parts and tissue samples in 64 cases of suspicious death, without notifying the families and loved ones of those concerned, many of them in my constituency. Police forces in England have done the same. The Prime Minister and the whole House will sympathise with the families; obviously, shock has been felt throughout Northern Ireland as the families have been visited. Will the Prime Minister join me in demanding the fullest and speediest answers about what happened in those cases so that families can know as soon as possible? Does he have sympathy with the idea of holding an independent review in order to explain how that practice could go on for so long right across the United Kingdom?

The Prime Minister: I thank the right hon. Gentleman for his question. I am sure I speak for everyone in the House in expressing sympathy for the families who found out that terrible news about their loved ones; it must be a time of huge anguish for them. I am extremely sorry that the report was leaked, because it was going to be announced properly on Monday, when there could be a proper statement and explanation of what has gone on. I am sure my right hon. Friend the Secretary of State for Northern Ireland will have listened carefully to what the right hon. Gentleman said about the form of inquiry that needs to be held, but let us first publish the information on Monday, so that everyone can see what went wrong and why it happened.

Q6. [106925] Stuart Andrew (Pudsey) (Con): From growing up in a council house, I remember well how proud people in my community were to be the first in their family to own their home. Will my right hon. Friend do all he can to give the same opportunity to a new generation of families?

The Prime Minister: My hon. Friend makes a really important point. The right to buy their council house was a hugely important social and economic change that gave people a stake in their society, a stake in their

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community and led to a huge improvement in many housing estates up and down the country. It is sad that under the last Government discounts were allowed to go—[Hon. Members: “What are you going to do?”] We are going to increase the discount right away to £75,000, which in some cases will mean a quadrupling of the available discount. There were years of Labour neglect, but two years of a coalition Government and we can get council house tenants buying their homes again.

Q7. [106926] Ian Austin (Dudley North) (Lab): In recent weeks, Britain has gone back into recession, we have had a botched Budget and crazy advice from the Cabinet Office to stockpile petrol at home. Which of those does the Prime Minister think has caused the calamitous collapse in his reputation for competence?

The Prime Minister: What the hon. Gentleman should be recognising is that today unemployment has fallen, the claimant count has come down and more people are in work. Yes, we have a difficult economic situation, but if he listened to the Governor of the Bank of England this morning, he will have heard him say that we are coming up with a textbook response to what needs to be done to clear up the mess made by people like the hon. Gentleman.

Q8. [106927] Pauline Latham (Mid Derbyshire) (Con): Businesses and home owners in my constituency are having a tough time at the moment, but it would be worse if it were not for consistently low interest rates. Under Labour, our long-term interest rates were the same as Spain’s; this week our rates are under 2%—a record low—while Spain’s are 6%. Will the Prime Minister assure the people of Mid Derbyshire that he will do nothing to put that situation into jeopardy?

The Prime Minister: My hon. Friend makes an important point: every increase in interest rates of 1% will add £1,000 to the typical family mortgage. The fact is that today British interest rates are below 2% because the world has confidence that in spite of our economic difficulties we have a plan to deal with our debt and our deficit. We can see from looking around Europe what happens when there is no plan. Interest rates go up, which is bad for business, bad for home owners and bad for the economy. That is what we would get if we listened to the Opposition.

Q9. [106928] Tony Lloyd (Manchester Central) (Lab): Many agencies let down the children involved in the Rochdale sex abuse cases, and the whole House must agree that offering our looked-after children a safe and secure place to live is paramount. In that context, given that there are wide concerns about the operation of private children’s homes in the area, will the Prime Minister do two things? Will he look at holding an inquiry into whether they are properly funded and have properly trained staff, and will he make sure that monitoring now works effectively? Clearly it has not done so.

The Prime Minister: I am glad the hon. Gentleman raises this issue. It is a truly shocking case and we need to look very carefully at what went wrong. I have asked my right hon. Friend the Secretary of State for Education to do this. He, in turn, has asked the Children’s Commissioner to do a piece of work on it. We need to

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look at why information was not passed more rapidly from children’s homes to police, and why action was not taken more rapidly. There are obviously issues about inspection, which the hon. Gentleman mentions, but there are also issues about why action was not taken. It is very important that we get to the bottom of a truly, truly dreadful case.

Q15. [106934] Jason McCartney (Colne Valley) (Con): Huddersfield Town fans are celebrating today, having won a place in the league 1 play-off final at Wembley. Also winning in my constituency are local manufacturing businesses, which are winning new orders, creating new jobs and creating apprenticeships. Does the Prime Minister agree that the record number of apprenticeships in the UK is a clear sign that this Government are committed to getting Britain working?

The Prime Minister: I am grateful to my hon. Friend. Through him, I wish Huddersfield Town all the best, although that might be a prime ministerial curse.

We achieved 457,000 apprenticeship starts last year. We are hoping to achieve over 400,000 more this year. The budget has been increased by more than £1.5 billion. This should deliver 250,000 more apprenticeships across this Parliament than were planned by the Opposition. There is a lot more to do also to make sure that these are high-quality apprenticeships, and we are targeting them on the young people who need help most.

Q10. [106929] Simon Danczuk (Rochdale) (Lab): My hon. Friend the Member for Manchester Central (Tony Lloyd) referred to the case and the situation in Rochdale. I want to speak about the girls in that case—the vulnerable girls who went to hell and back through what they experienced. I pay tribute to their bravery in coming forward and standing up to their abusers. They did it to get justice and to stop it happening to others. Vulnerable girls like that do not usually get heard by politicians. They do not get easy access to power or influence. How will the Government respond to these terrible crimes, and will the Prime Minister support a serious case review?

The Prime Minister: First, I pay tribute to the hon. Gentleman. He is absolutely right to say that these girls have been brave to come forward and tell their stories, with all the difficulties that that involved. He has talked about people who have come to his constituency surgeries. Of course this is a problem across communities, but there are particular problems in particular communities and he has been brave to say that, because we need to face up to these problems if we are to deal with them. He asks about a review. I will have a look at that. As I said, the Office of the Children’s Commissioner will—hopefully—come up with recommendations within a month, and I understand that Rochdale borough safeguarding children board has conducted a review of child sex exploitation which will be published, but I am prepared to look at the issue of a serious case review as well.

Q11. [106930] George Eustice (Camborne and Redruth) (Con): Next year Camborne Science and International academy will become the first ever British school to host the international student science fair, welcoming schools from around the world. Does the Prime

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Minister agree that if Britain is to prosper in the future we need to lead the world in science and technology, and that we should support the efforts of schools such as Camborne, which are leading the way?

The Prime Minister: My hon. Friend is absolutely right to highlight the issue and to highlight the school in his constituency that is clearly doing a good job. If we want to compete in a very competitive global market, we need more science teaching, we need more science graduates, and we need also to encourage those science graduates back into the classroom to train up the next generation of scientists and engineers. The good news is that there has been an 80% increase in the number of students taking science GCSEs since 2010, and my right hon. Friend the Secretary of State for Education has put in place some generous bursary schemes to encourage some of our top maths and science graduates back into the classroom, to make sure that they are teaching the next generation.

Q12. [106931] Dan Jarvis (Barnsley Central) (Lab): It is now clear that the Government do not have a comprehensive long-term strategy for care, so does the Prime Minister agree that the sharp increase in home care charges revealed by figures released today is the result of his cut of £1 billion from local council budgets for older people?

The Prime Minister: I am afraid I do not think the hon. Gentleman’s figures are right. In the spending review we put £2 billion extra into adult social care, but we have inherited a situation where there is not a clear strategy or pathway for social care. We need to deliver one. That is why there will be a White Paper this year which has to look at all—

Ian Lucas (Wrexham) (Lab): When?

The Prime Minister: The hon. Gentleman asks when. The Opposition had 13 years. They just ducked decision after decision. Royal commissions were held. Absolutely nothing was done. Within two years we have done far more than they did in 13.

Q13. [106932] Tessa Munt (Wells) (LD): Some 2,000 highly paid public servants have been exposed for avoiding paying their fair share of tax. Does the Prime Minister agree that whenever someone is paid a salary using taxpayers’ money, the Government should insist that they are on the payroll and pay full pay-as-you-earn income tax and national insurance contributions?

The Prime Minister: The hon. Lady is right to raise that and I agree with what she says. We have been shocked by the level of this problem and the Treasury is looking at it closely, but the principle she announces—those paid by the public should pay tax properly—is absolutely spot on.

Mr Peter Hain (Neath) (Lab): Will the Prime Minister meet to take forward the Severn barrage project, which is entirely privately financed and could be the biggest source of renewable generation in Europe, generating

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5% of Britain’s electricity needs? Does he accept that, with a flat economy in Britain and Europe, this £30 billion of private investment in growth and jobs is a no-brainer?

The Prime Minister: I heard the right hon. Gentleman on “Farming Today” waxing eloquent on this project. I think that it has many advantages. A huge amount of renewable energy could be delivered through a barrage of this kind. He knows that there are lots of problems and that the environmental groups have been divided over it, but I am very happy to listen to his views as he takes forward this important piece of work. I think that there are many opportunities in a challenging European economy, as he says, to look at energy connectors and energy co-operation, particularly between England, France and other northern European countries.

Q14. [106933] Christopher Pincher (Tamworth) (Con): Both the National Audit Office and the Public Accounts Committee have praised the Work programme for getting off the ground in under a year, which is in stark contrast to the four wasted years it took to get Labour’s programme off the ground. What further help can the Prime Minister give my striving jobseekers in Tamworth, where unemployment figures monthly are falling, to find the work they want?

The Prime Minister: My hon. Friend makes an important point, because not only did the Work programme get up and running quickly, but it is already helping 519,000 people. It will help over 3 million in total. The key difference between it and previous programmes is payment by results, so we are paying providers more money for the more difficult people who have been out of work for a long time and have serious challenges in getting back into the workplace. I think that we can use this programme to help not only people who have fallen out of work recently, but people who have totally lost connection with the labour market. Those are the people we want to help most, and the Work programme is a very innovative way of doing that.

Alan Johnson (Kingston upon Hull West and Hessle) (Lab): In April last year the Government announced the successful bids in round 1 of the regional growth fund. Hull was very pleased to be included, because it means 500 jobs and rescuing people from some of the poorest housing conditions in the country. However, 13 months later, not a penny of that regional growth fund money has materialised. Will the Prime Minister tell me why and, if he cannot, will he undertake to find out and ensure that that money flows before the summer recess?

The Prime Minister: I will certainly look at the case the right hon. Gentleman raises. With the regional growth fund as a whole, around half of the projects are now under way and serious amounts of money are being disbursed. By way of comparison with the regional development agencies, the overhead costs are £3 million, compared with £240 million, so we are able to put a lot more money into these projects, but I will certainly look at his specific project and write to him shortly.

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Debate on the Address

[5th Day]

Debate resumed (Order, 15 May ).

Question again proposed ,

That an humble Address be presented to Her Majesty, as follows:

Most Gracious Sovereign,

We, Your Majesty’s most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.

Cost of Living

Mr Speaker: I inform the House that I have selected the amendment in the name of Mr Edward Miliband.

12.33 pm

Caroline Flint (Don Valley) (Lab): I beg to move an amendment, at the end of the Question to add:

“but believe that the Gracious Speech fails to help families, squeezed households and pensioners to deal with the cost of living crisis and the double-dip recession; regret that cuts to feed-in tariffs and the Warm Front scheme mean that families and pensioners who are paying higher electricity and gas bills have been abandoned by the Government; call on your Government to ensure that energy companies meet their obligations and provide the cheapest tariffs for over 75s, to protect small business owners, to ensure the Green Deal is offered fairly to all consumers and cuts bills to increase competition in the energy market to drive down energy bills for all; urge your Government to reverse their out of touch decision to increase rail fares by three per cent above inflation in 2013 and 2014, and to allow train companies to increase train fare prices by a further five per cent; call on your Government to ensure that train operators cap all regulated fares fairly across all journeys so that no regulated train fare increase is more than one per cent above inflation, to reform the bus market by extending to the rest of England London-style powers to regulate fares, protect services and to require operators to provide a concessionary scheme for young people; and further call on your Government to help hard pressed motorists by temporarily reducing VAT to cut fuel prices and boost the economy.”.

This Government promised recovery, but they have delivered recession—a recession made in Downing street: the worst unemployment in 16 years; 1 million young people out of work; the first double-dip recession since the 1970s; a lost decade for Britain’s families and pensioners, who are being subjected to the most sustained assault on their living standards in living memory; and a Government who are hurting, not helping.

Unfolding day by day in kitchens and living rooms in every town, village and city up and down this country is a cost-of-living crisis. Two of the biggest pressures on family budgets are rising energy bills and soaring transport costs, so my hon. Friend the Member for Garston and Halewood (Maria Eagle), who will close the debate for the Opposition, and I could not let the Queen’s Speech pass without addressing those vital concerns.

The VAT hike will cost a family with children an extra £450 this year and push the price of petrol at the pumps even higher. Just when the costs of child care are rising twice as fast as wages, this Government have cut the child care element of working tax credit. While bankers have seen their taxes slashed, cuts to front-line services will mean fewer police on the beat, longer NHS

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waiting times and more families pushed to the brink because of the costs of social care and the closure of Sure Start children’s centres and other vital support for families.

We have a Government who stand up for the wrong people, with a Budget in which millions are asked to pay more so that millionaires can pay less; a Government who do more for the rail companies than for hard-pressed commuters; and a Government who put the energy companies before families struggling to make ends meet.

Dr Julian Huppert (Cambridge) (LD): I am sorry to interrupt the rhetoric with some facts, but will the right hon. Lady remind the House what happened to rail and bus fares during 13 years of Labour Government, and can she confirm that Labour’s policy is that rail fares should continue to increase above inflation?

Caroline Flint: We saw what was happening and put a cap on those fares. This Government have decided to remove the cap and to let fares rise way above inflation, but we have said that when they do rise above inflation they should do so by no more than 1%, so we are not going to take any lectures about supporting families from the Tories and Liberal Democrats in this Government.

The truth is that in every corner of the country families have huge worries when they look at depressed and frozen wages, more part-time work and more people who are long-term unemployed; and every week families worry about energy bills.

Energy bills have now risen up the agenda for families and are one of the biggest worries that they face. The latest figures from Ofgem put the typical annual energy bill at £1,310, so what is the Government’s answer? At their energy summit last year, they told people:

“Check, switch and insulate to save.”

But, in an answer on 18 April to one of my parliamentary questions, we found out that fewer people switched energy supplier in the final month of 2011 than ever before. I do not remember seeing that in one of the departmental press releases.

The Government said that energy efficiency was a no-brainer, but the Warm Front scheme has collapsed, the energy companies are not delivering the measures that they were meant to and the green deal is in chaos. In last week’s Queen’s Speech the Government promised

“reform of the electricity market to deliver secure, clean and affordable electricity and ensure prices are fair,”

but the irony of the Government’s electricity market reforms is that one thing they do not do is reform the electricity market. There is no change to the way in which energy is bought and sold, nothing to open the books of the energy giants and nothing even to improve competition in the energy market and break the stranglehold of the big six: no change, no hope and, I am afraid, not a clue how to help families affected by those pressures on the cost of living.

Our energy market is not working in the public interest. Confidence in the energy companies is at a near-record low, complaints have soared and today five of the big six energy companies are under investigation by Ofgem. Yet they see fit to award themselves huge bonuses totalling millions of pounds and even discounts on their own energy bills, while leaving their customers to struggle.

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Last winter, more than 6.6 million families and pensioners across the UK could not afford to heat their homes properly. The number of pensioners dying from hypothermia has doubled in the past five years. Yet four out of five people are paying more for their energy than they need to. Energy prices are already at near record levels, and last year, when wholesale prices rose, every energy company put up its gas and electricity prices, in some cases by as much as nearly 20%. Yet when wholesale prices fell this year, none of the companies cut both their gas and electricity prices. British Gas, for example, cut only its electricity prices, even though it has twice as many gas customers. On the other hand, EDF, which has significantly more electricity customers, cut only its gas prices. Now, with increases in wholesale prices on the horizon again, British Gas, Britain’s biggest energy supplier, is threatening yet another round of price hikes.

These are not the signs of a healthy, functioning competitive market; they are the symptoms of a market that works in the interests of the energy companies, not of the public. There is a reason the market works like that. We have companies that both produce and retail power. They generate the power and sell it to themselves, and then on to the public. When wholesale prices are high, the generation side of the business makes big profits; when wholesale prices are low, the retail side of the business makes big profits. Either way, the energy companies always make big profits and customers always foot the bill.

That was exactly what the respected Institute for Public Policy Research think-tank found a few weeks ago. Its research shows that if the market were truly competitive, efficiency savings alone would knock £70 a year off the average bill. It reckons that over 5 million households in the UK are currently being overcharged and that if something were done about it they could see savings of at least £300 a year. That is why we have said that all energy suppliers should have to sell the power that they generate into an open pool from which anyone could bid to retail to the public. That would allow new firms to enter the market, increase competition and help to drive down bills. Of course it would not be popular with the big energy companies, but unlike the Government, Labour Members are putting the interests of the public ahead of those in the energy industry.

Angie Bray (Ealing Central and Acton) (Con): It is all very well for the right hon. Lady to recite a catalogue of problems, but I am scratching my head about the record of her party in government, when prices were going up and we all had problems. I was not aware that the Government of the time were stepping in to look after consumers as prices rose. It is worth pointing out, of course, that Labour’s own leader was Energy Secretary at the time.

Caroline Flint: This Government have now been in office for nearly two years. The truth is that—

Laura Sandys (South Thanet) (Con) rose

Caroline Flint: Could I first answer the question from the hon. Member for Ealing Central and Acton (Angie Bray)?

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The truth is that the leader of the Labour party, when he was Secretary of State for Energy and Climate Change, did start to tackle the discussion about the energy market. He said that we should have a pool, and that was in our manifesto. He also undertook to look at better ways in which we could provide for energy efficiency, and I will come to those shortly. In government, we had a good record of helping people with their bills. Millions of people were helped by Warm Front and millions of pensioners were helped by the winter fuel payments. What are this Government doing to help people with that? [ Interruption. ]

Mr Speaker: Order. There is an excessive amount of noise in the Chamber. It would be good if the issues could be aired in an orderly manner. I am grateful for the assent to that proposition from so experienced and senior a denizen of the House as the hon. Member for Gainsborough (Mr Leigh), who is himself setting an excellent example that others could follow.

Caroline Flint: I am always pleased to talk about Labour’s record in government, but let us now talk about the other side of the debate about energy prices—that is, saving energy. As Ministers are fond of telling us, the cheapest energy is the energy that we do not use. I am very proud that over 2 million households were helped with energy efficiency and insulation under the previous Labour Government. Through Warm Front, we helped over 200,000 households each and every year. This year, only 40,000 people are getting help.

The last time we debated this matter, the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker), said:

“Warm Front does not deliver insulation”.—[Official Report, 11 January 2012; Vol. 538, c. 256.]

He obviously had not browsed his Department’s website, which states clearly:

“The Warm Front scheme offers a package of heating and insulation measures”.

With such insight into his Department’s policies, we can only hope that the job of deciding who was eligible for a Warm Front grant did not fall to him. However, that might help to explain why nearly 30,000 people who applied for help last year were turned down.

Let us reflect on the figures. Under Labour, in each and every year more than 200,000 households were helped by Warm Front. This year, under this Government, only 40,000 households received help and 30,000 were turned down. They were turned down even though there was an underspend in the Warm Front budget of more than £50 million. That is right: hundreds of thousands of families face higher bills next winter and every winter because of cuts to Warm Front, and tens of thousands of families and pensioners who applied for help last year were left in the cold because of the incompetence of the Secretary of State and his Department, while £50 million that is in the Government’s coffers is going back to the Treasury. We asked whether the underspend could be used to provide further help through the programme. The answer, which I received very recently, was that it is going back to the Treasury.

The Secretary of State for Energy and Climate Change (Mr Edward Davey): I will try to help the right hon. Lady, because her own Front Benchers are laughing at

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her. May I take her back to the comments that she made about the Leader of the Opposition? When he was doing my job, he was pressed on what the Labour Government were going to do about energy prices. In 2009, Andrew Marr asked him:

“When it comes to the price of energy…are we or are we not going to have to pay more?”

He responded:

“There are upward pressures on prices, yes”.

I am afraid that the right hon. Gentleman did very little on consumer prices. Labour had a record of failure.

Caroline Flint: We have not seen much of the Secretary of State since he took up his post. If that is the best he can offer after a number of absences from the Chamber, I worry about this Government and their handling of one of the most important areas for consumers and for jobs.

It is absolutely true that in reshaping the energy market to provide a low-carbon future, there are pressures. We have never denied that. However, today we are talking about the efforts to make the energy market more competitive; how we can ensure that a trail of energy companies is not investigated for mis-selling and dodgy dealing; and the increasing number of families who, under this Government, are paying more than they need to. The Government are stepping away from any responsibility to help the most vulnerable people in this country to tackle their fuel bills and keep their energy consumption down. It is possible to have policies on that, while recognising that there are pressures in the bigger scheme of things. It is a given that there are pressures—it is what a Government do about them that counts. This Government are doing nothing at all.

In government, we put tough obligations on all the big energy companies to use some of their profits to help poorer customers in deprived areas make their homes more energy-efficient. The community energy saving programme was meant to help 90,000 households. Two and a half years into the scheme—most of it under this Government—and with only a matter of months left, just 30,000 households have been helped. What are the Government doing about that? As far as we know, they are doing absolutely nothing.

We do know that the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle, had a meeting with all the big energy companies on 1 February this year. We also know that the energy companies are lobbying the Government to relax the obligations on them or to push back the deadline. The Minister refuses to tell us what exactly was discussed at the meeting, what was agreed and whether he has caved in to the companies’ demands. Why will he not tell us that? He will not share with us—

The Minister of State, Department of Energy and Climate Change (Gregory Barker): Will the right hon. Lady give way?

Caroline Flint: I will just finish the point that I am making.

Gregory Barker: Will the right hon. Lady give way?

Caroline Flint: No, I will not give way before I inform the House of the reason that the Minister has given me. He will have to wait a second. Tell me if this is wrong—

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Gregory Barker rose—

Mr Speaker: Order. The Minister of State is a rather excitable fellow. I am not interested in whether he thinks he can answer now. He will answer at the point at which the intervention is allowed. The hon. Gentleman is a senior member of the Government. He needs to cultivate a reputation for being a cerebral figure, not an over-excitable one.

Caroline Flint: Thank you, Mr Speaker. We have tabled parliamentary questions and used parliamentary procedures to get information, because Ministers at the Department of Energy and Climate Change are not especially forthcoming off their own bat. In response to my question, what did the Minister say? He said that he would not tell us, and I quote—[ Interruption . ]

Mr Speaker: Order. Let me make the point for the last time. We conduct debate in an orderly way. We do not have Members, be they Back Benchers, Ministers or Opposition Front Benchers, yelling out from a sedentary position, encouraged by cheerleaders behind them. It is an unseemly way to operate. The Minister has registered his interest in offering his view, and no doubt he will have the opportunity to do so in due course. In the meantime, he should sit in statesmanlike quietude and the House will benefit.

Caroline Flint: Thank you, Mr. Speaker. When I asked the Minister precisely why he could not tell us what was discussed at the meeting and what had been decided, he replied that he could not because it would “prejudice the commercial interests”—presumably of the big energy companies. That is a direct quote. I find it hard to believe that the big six energy companies are revealing, in front of each other—apparently, they are competitors—information, so sensitive that it would prejudice their commercial interests, about why they are not on target to meet their obligations to help people with their fuel bills and energy efficiency.

Gregory Barker: What we said is that we could not give the minutes of the meeting, but I can tell the right hon. Lady extremely clearly that I made it absolutely, perfectly clear that we expect the companies to fulfil all their obligations, we are not backing down and we will continue to hold them to account—unlike the previous Government.

Caroline Flint: I listened very carefully to that intervention, but I still do not understand why the hon. Gentleman said to me that he could not share the minutes because it would “prejudice the commercial interests”. I am interested to know what commercial interests were in the minutes of that meeting. I find it hard to believe that any of the six companies would discuss such sensitive information in front of each other.

Gregory Barker: The right hon. Lady will know that no minutes of any meeting were ever shared under the previous Government. We do not release minutes. However, I tell her again, very clearly, that we are holding the energy companies to account, we fully expect them to deliver their obligations and we will make sure that they do.

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Caroline Flint: All fine words, but obviously the excuse for not sharing is changing as the debate continues. What is very clear from that answer is that it is all flannel, all rhetoric. There is no sense of what demands the Government have put on the energy companies, or of whether the companies will have to meet those demands by the set deadline, a few months hence, or of whether the number of families helped will increase from 30,000 to the 90,000 the companies are supposed to be helping. There is no sense of clarity, and no practical suggestions or effort by this Government to get a grip. On delivery, the Minister of State, the hon. Member for Bexhill and Battle, has previous in so many other areas that it is becoming rather a pattern.

The truth is that the Government have not defined what action they will take. They hold private meetings in which they are not willing even to share some practical explanation of what will happen next. Is it impossible to understand why the public are feeling so let down and why organisations that support families in difficult circumstances are worried about whether this Government have the gumption to get on top of this issue, when they are failing in so many other areas? If there is a choice between the interests of the big energy companies and those of people who are struggling to make ends meet, it seems that under this Government the energy companies win every time. That is the real problem with the Government: not only are they out of touch, but they stand up for the wrong people.

Laura Sandys: Having got quite a lot of exercise in the last few minutes trying to intervene, I welcome the opportunity to point out a few facts. In 13 years of Labour Government there were six or seven energy White Papers, I think, but only one Bill. In two years of this coalition Government, we have got retail market reform coming through from Ofgem; one piece of energy legislation has been passed, and there is a second in this Queen’s Speech. That shows that the Government are absolutely committed to delivering a competitive and fair market to a greatly squeezed consumer.

Caroline Flint: The truth is that the Labour Government left in place—[Hon. Members: “A recession.”]

Mr Chuka Umunna (Streatham) (Lab): We did not leave a recession.

Caroline Flint: As my hon. Friend says, we did not leave a recession, that’s for sure. That is at the door of this Government. When we left Government, we were a world leader in setting targets for reducing emissions and signing up to international agreements—acknowledged by the present Government as an historic effort by a British Government in any situation—and unlike in many other countries, we had a consensus around that, which is good. The problem is that this Government are squandering that legacy with the measures they are taking. We have fallen back in investment in renewables. Families are being abandoned, left on their own to deal with rising energy bills. In addition—I am sorry if the hon. Member for South Thanet (Laura Sandys) did not catch my earlier remark—we do not have an energy Bill that will achieve real reform of the energy market to make it more competitive and fair for British citizens.

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Warm Front has collapsed. The Government are not standing up to the energy companies. A lot is resting on the green deal. We want the green deal to work. It is an idea on which the leader of the Labour party worked very hard; it was included in our manifesto and the pilots started under our Government. The truth is, however, that unless Ministers want the green deal to be a good deal, it simply will not work. Time and again, in debates in this Chamber and in Committee, we have proposed improvements, but the Government have refused to listen. Last year, the Government said that the green deal would help 14 million households to improve their energy efficiency, but today their impact assessment forecasts that the programme will reach fewer than 4 million. Even the Government’s own advisers think that is optimistic: the Committee on Climate Change now thinks it will help only 2 million or 3 million households. The Government claimed that the green deal would help to create 100,000 jobs, but today that estimate has been halved to just 60,000—[Hon. Members: “That’s not half.”] I said nearly half. It is still nothing to be proud of.

My next point is very important, because one of the Government’s trails for the green deal was that it would save households money. The so-called golden rule was supposed to guarantee households that the savings they made from greater energy efficiency would cover the costs of the original measures, and just last month the Deputy Prime Minister promised:

“We’ll ensure customers are never charged more for the home improvements than we expect them to make back in cheaper bills.”

However, in answer to a written question from me, the Department was forced to admit:

“It is not possible for Government to guarantee people will save money”—[Official Report, 26 April 2012; Vol. 543, c. 983W.]

If Ministers are not careful, they will have a mis-selling scandal on their hands, and it will be entirely of their own making.

The Minister of State, Department of Energy and Climate Change (Charles Hendry): The right hon. Lady talks about the Leader of the Opposition, when he was Energy Secretary, working very hard on the green deal. Why then, when we proposed an amendment to the green deal in the Labour Government’s last Energy Bill, which became the Energy Act 2010, was it voted down by Labour Members, and why did the then Minister, the right hon. Member for Lewisham, Deptford (Dame Joan Ruddock), say it was simply illegal and impossible to deliver it?

Caroline Flint: The hon. Gentleman has been a Member of this House for some time and he knows that the last Government, under the leadership of my right hon. Friend the Member for Doncaster North (Edward Miliband), were absolutely committed to pursuing the green deal. That is why the pilots started under our Government. That is why the measure was in our manifesto. I think the record speaks for itself. The fact that, on one occasion, we did not support an amendment tabled by the Conservatives is proof, and the result was that the green deal was going ahead. The pilots were under way, it was in our manifesto, and had we won the last election—sadly, we did not—it would be in a better state today. The green deal was meant to be up and running by this October, and the secondary legislation

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should have been laid in March. With just over a week until the House rises, we will not see anything until the middle of June at this rate.

There are question marks over whether the energy companies even have the technology in place to bill people correctly. No green deal assessors have been trained, because the courses have not even started yet. Most importantly of all the public, the people who are meant to be taking up the green deal, have absolutely no idea what the interest rate will be or how much it will cost them.

So desperate are Ministers to prop up the policy that they are now considering whether to force it on people who find that their boiler breaks down. Imagine—a family whose boiler breaks down on Christmas eve could have to wait for the council to come round to do a full audit of the property’s energy efficiency, and then have to agree to take out other measures, before they get their heating and hot water turned back on. That is the type of policy that the Government are proposing, and it just shows how out of touch they are.

The truth is, even when times are tough and money is in short supply there are still things that a Government can do to help families and businesses. I know that the Government are short of ideas. At one of my speeches earlier this year, no fewer than 18 civil servants were on the attendance list, including five from the Department of Energy and Climate Change alone. If the Secretary of State is in the market for good ideas for his energy Bill, here are two that I offer him.

First, let us put all those who are over 75 on the cheapest tariff. We know that the elderly are the most vulnerable to the cold weather, the least able to access the best online deals and the most likely to pay over the odds for their energy. In the Secretary of State’s own constituency, if we put all those over 75 on the cheapest deal it would help nearly 8,000 pensioners. It would help more than 8,000 in my constituency. Across the country, it could save as many as 4 million pensioners as much as £200 a year on their energy bills, not through spending more money but by getting our energy firms to show greater responsibility to their most vulnerable customers. However, I am afraid this do-nothing Government stand idly by, content to leave Britain’s pensioners paying more than they need to.

Mrs Anne McGuire (Stirling) (Lab): Does my right hon. Friend also accept that given the number of people who self-disconnect because of the higher charges on key cards, it would be valuable for energy companies to consider how there could be a lower tariff for families who are under pressure? Those families have to take the decision themselves not to continue to heat their homes.

Caroline Flint: I absolutely agree with my right hon. Friend. There are a number of areas in which more could be done to make energy companies more responsible, but we hear nothing from the Government about issues such as people on prepayment meters or key cards.

We are talking not about a social tariff but about people over 75 missing out on a deal that they could get if they looked online. For all sorts of reasons, they do not necessarily use online systems as much as others do. Putting them all on the cheapest tariff would be a simple way of making the energy companies step up to their responsibility, and it would get those people the

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deal that they deserve. They should be able to do that, but every time I have mentioned it in the House I have been knocked back by the Government, who think it would be a measure just for rich over-75s. It would not. It is about justice and tackling the way in which energy companies run their customer services, which are not working in the interests of customers. I would have thought the Secretary of State, as a former Consumer Minister, would understand that a little better.

The second idea among many that we have is that we should consider the position of small businesses. We believe that some straightforward, practical steps can be taken to help relieve the pressure on them and give our economy a shot in the arm. First, we should put an end to unfair contracts and the practice of rolling small businesses on to more expensive tariffs without their consent. Secondly, we should stop small businesses being subject to six years of crippling back-billing for mistakes made not by them but by their energy supplier. We do not allow that to happen to households, and we should not allow it to happen to small businesses either. Thirdly, we should ensure that the energy companies act responsibly towards small firms that have fallen into difficulty with their bills. Just as they have to take all factors into account when a family find themselves in trouble, so should we ask them to come up with sensible and realistic repayment plans for small businesses.

There we go—two ideas: helping the over-75s to get the tariff they deserve, which through no fault of their own they cannot get because it requires online technology, and helping small businesses with some of the ways in which energy companies are exploiting them. We are accused of not having ideas, but there are a few for which I hope we can get Government support. We are trying to think practically about ways to rein in the energy companies and make them more accountable to their customer base, whether it is households or businesses.

What is the biggest drag on people’s living standards? The scandal of millions of people being unemployed, and a Government who have no vision and strategy for putting them back to work. I was at the Yorkshire Post environment awards last week and met businesses at the cutting edge of innovation. I saw that Britain is not short of the skills or technology to lead the world to a new low-carbon economy. However, the Government are short of the political vision to do so, and today we learn that even the Foreign Secretary, a fellow Yorkshire MP, told businesses just last weekend to work harder. He does not believe the Government are doing enough to support Britain’s green businesses.

As I have argued many times, the transition to a low-carbon economy has the potential to be a major source of wealth and employment for this country, both for young people looking to get their first job and for older workers looking to put their skills to use in new industries. However, Britain is falling behind. When Labour left office, the UK was ranked third in the world for investment in green business; today we are seventh. Investment levels are still billions short of where they were in 2009, and jobs and industries that should be coming to this country are now going overseas.

Let us look at solar energy. The Minister of State, the hon. Member for Bexhill and Battle—he has his fingerprints all over these projects—took a knife to the solar industry and had the audacity to claim that more people would get solar power and more people would be employed in the solar industry as a result. Today we see that because

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of his cuts and his strategy, solar installations have fallen by 90% and 6,000 people have lost their jobs, with yet more cuts on the way. In the end, whether it is solar or any other type of clean energy, businesses will not invest, build factories and create jobs until the Government end the dithering, stop shifting the goalposts and get behind the industries of the future.

We have an electricity market reform Bill that does not reform the electricity market, a Queen’s Speech that does nothing to help families with the cost of living and a Government who, I am afraid, are too much on the side of the big energy companies and not enough on the side of hard-pressed households. I am aware that a number of the Secretary of State’s colleagues, led by the right hon. Member for Wokingham (Mr Redwood), have put forward an alternative Queen’s Speech on energy. The Prime Minister has to decide whether he is going to run with the Vulcans or stick with the huskies.

To advocate cutting support for clean energy, and instead dash for gas when wholesale gas prices are the single biggest factor in driving up people’s bills, is madness. There is an alternative—Labour’s fair deal on energy. It would put the public first, protect the most vulnerable and deliver a competitive energy market with fair prices for all. I commend the amendment to the House.

1.7 pm

The Secretary of State for Energy and Climate Change (Mr Edward Davey): I am grateful to the Opposition for selecting a debate on the cost of living, which is a very important issue. There can be no doubt that many people in our country have been through, and are going through, some tough times, not least because inflation has cut into their living standards. I am sure that all of us pick that up in our constituencies. I do two advice surgeries a week for my constituents, and the cost of living comes up frequently.

When we talk to and listen to people, we find that the rising cost of electricity, gas and fuel has been hurting the most. We should all be concerned when we see pensioners and families worrying about basics such as food and fuel, groceries and gas. Despite the rhetoric that we have just endured, infused with the memory of an amnesiac, I wish to make it absolutely clear to the House that this Secretary of State and this Government understand those worries, share them and are acting to relieve them. Labour sometimes talks as though it had a monopoly on compassion and caring, but it never has, it never will, and to boot it does not have the record to show that it ever did.

The Government are committed to helping households cope with rising energy bills. We cannot control volatile global energy markets, and I think reasonable people understand that. However, we can act, and are now acting, to ease the pressure on consumers. In the short term, we are making it easier for people to get a better deal from their energy suppliers, about which I will say more shortly. In the medium term, we are making it easier for people to save money by insulating their homes. In the long term, we are making it easier for investors to build clean power plants here in the UK, protecting British consumers from global wholesale energy prices.

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I want to set out the short, medium and long-term policies that are helping, and that will continue to help, consumers with their energy bills, not least by explaining the purpose of the energy Bill, as contained in the Gracious Speech, before its publication, which will come shortly. However, before I do so, it is only right to respond to the amendment and the speech of the right hon. Member for Don Valley (Caroline Flint). The key thing I have learned in my first few months as Secretary of State for Energy and Climate Change is that energy and climate change policies take a long time. They involve big infrastructure, huge shifts in the structure of the economy, and changing behaviours that have developed over years. Therefore, to get results, we must act decisively and strategically. This Government have been doing just that for the two years we have been in office.

We are introducing some of the most innovative and ambitious policies to bring forward billions of pounds of investment, which will be essential for our country over the next few decades. Such investment will help our growth, from the green investment bank to electricity market reform, and enable us to decarbonise our economy, especially our electricity generation sector, so we can tackle climate change.

The problem is that the previous Labour Government did not act decisively or strategically, but lurched from one White Paper to the next consultation document. Unable to make up their mind, they delayed and dithered. This Government have been left to pick up the pieces.

However, let me give the previous Government credit. They were very good at setting targets; they just never hit them. Even on fuel poverty, they set a target. However, Professor John Hills has examined their fuel poverty targets in detail, and it turns out that they could not set a target for fuel poverty competently—they could not even measure fuel poverty properly. This coalition will clear up the Labour Government’s legacy on energy as well as on the economy.

Let me therefore explain to the Opposition why living standards have fallen in the last year. It was partly down to high world prices for oil, gas and food, but it was also partly because they left the country poorer and borrowed to hide the truth. When the economy contracts in one of our country’s deepest ever recessions, when the country’s national income falls by 7%, and when the Government borrow to compensate, there must be a day of reckoning. The problem is that the Opposition are incapable of admitting that.

The right hon. Lady and others make out that the problems are all the Government’s fault because of the cuts to feed-in tariffs or because of lower take-up on Warm Front, but they simply do not understand their legacy or the changes we are making.

David Wright (Telford) (Lab): I have been in the House for 11 years and have watched the right hon. Gentleman progress in his career. I remember him sitting on the Opposition Benches and consistently calling on the previous Labour Government to spend more. It is interesting that he now completely ignores that fact. What are his targets for reducing fuel poverty and how will he deliver them?

Mr Davey: I must remind the hon. Gentleman that the Chief Secretary to the Treasury of the previous Government left a message to say that there was no

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more money. That is the legacy this Government are dealing with. We will take fuel poverty seriously. My predecessor commissioned a report to ensure we have proper targets and measurements of fuel poverty. John Hills has produced a welcome report, on which we will consult—

[

Interruption.

]

We have plenty of policies to tackle fuel poverty and I will come to them, but we want to ensure we are tackling the real thing, not the fake one.

Mr David Ruffley (Bury St Edmunds) (Con): Raising the personal allowance to £9,200 is worth about £220 in cash to the average basic taxpayer. It also takes many low-paid people out of tax altogether. Does my right hon. Friend agree that that is one way of protecting people, particularly the low paid, from the rising cost of living?

Mr Davey: My hon. Friend is absolutely right. By next April, we will have saved a two-earner family on the basic rate of tax more than £1,000 a year in income tax. That is a policy to help people on low pay.

Caroline Flint: The Labour Government left office with 1 million fewer people in fuel poverty than we inherited in ’97. No doubt this is a complex area, but the truth is that in the last two years, according to Consumer Focus, there has been a sharp increase in the number of homes in fuel poverty in England and Wales—it has increased from one in five to one in four. What are the Government doing about that?

Mr Davey: The right hon. Lady ought to know that we saw a massive V-curve because of how fuel poverty was measured under the previous Government—fuel poverty came down earlier in their period of office and shot up dramatically as global gas prices increased. She is not living in the real world if she thinks that is the correct way to measure fuel poverty. That is why this Government are getting to grips with the problem. We are ensuring we measure the problem properly so we have the right policies, which the previous Government never did.

To return to feed-in tariffs, I remind the right hon. Lady that we have had to reform the scheme designed by the Leader of the Opposition so that huge windfalls do not go to a few people. Our reforms will ensure that many people benefit from solar PV. We are the party of the solar many; they are the party of the solar few.

On Warm Front, the right hon. Lady offered no recognition of the progress we have made to spend our budget; of the reality that a warmer winter last year reduced demand; or of the fact that the shameful scaremongering by Labour Members on Warm Front, who said the scheme was closing more than a year before it will, might just have put some people off applying.

When it comes to Governments being responsible for putting people’s bills up, the right hon. Lady ought to talk to the leader of her party. Let me refer her to the UK’s low carbon transition plan, published by the Leader of the Opposition when he was in my job. Let me further refer her to the analytical annex, page 66, table 9, and the estimate of the cost of the renewable heat incentive on people’s gas bills, as proposed by Labour. The estimated increase in gas bills by 2020 was £179, but this Government stopped that approach,

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because we were not going to put £179 on people’s gas bills. That is 179 reasons for not taking Labour seriously on energy bills.

Albert Owen (Ynys Môn) (Lab): I welcome the right hon. Gentleman to his post. I am a member of the Select Committee on Energy and Climate Change, so we will have a bit of knockabout on some issues, but knockabout on fuel poverty is not right. Whether or not we are changing the measures, more people have found themselves in fuel poverty this year and last year, and the previous Government reduced the number by 1 million people. That is a fact, whether the curve is V-shaped or not. What measures are this Government taking to assist those people who have fallen into fuel poverty?

Mr Davey: Let me give the hon. Gentleman one exact policy, for which Labour never legislated: the warm home discount is a way of targeting cuts in people’s bills directly, for the poorest people in our country. We have legislated for that, it is delivering, and we are proud of it.

Sir Bob Russell (Colchester) (LD): I congratulate my right hon. Friend on the measured approach he is taking from the Dispatch Box. Further to the previous question, does he agree that requiring the major energy suppliers to notify customers of the lowest tariff every year will help many of the people in fuel poverty with their cost of living?

Mr Davey: I was just about to come to that measure. My hon. Friend will know that our right hon. Friend the Deputy Prime Minister announced that package, which will be a big help, last month.

On our agenda for helping consumers in a practical way, I should like to highlight three things—they are part of our short-term approach to ensure that we help consumers and get more competition in our markets so we can make it easier for people to take advantage of good deals.

Angie Bray: Will my right hon. Friend give way?

Mr Davey: I will in a second.

First, the consumer deal was agreed with the big six last month and announced by my right hon. Friend the Deputy Prime Minister. Secondly, I have pushed collective switching since becoming Secretary of State for Energy and Climate Change, following on from the work I did as Minister with responsibility for consumer affairs. Thirdly, Ofgem is working on tariff simplification. I will describe the detail of the practical measures that we are taking and that the previous Government never took after I have given way to my hon. Friend.

Angie Bray: Talking about energy is important, but I would like to draw my right hon. Friend’s attention briefly to another important utility in people’s lives—water. Water rates are a big cost of living and are particularly frustrating in London, given that we are under serious drought orders, despite the rain tumbling down almost every day. Particularly galling is the discovery that the very slow pace of plugging water leaks is apparently well within the target range set by the water regulator. If the water regulator is not on the side of consumers, who is?

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Mr Davey: My hon. Friend makes a very good point. I am sure that my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs will note her arguments.

David Wright rose

Mr Davey: I want to make some progress. I have already given way to the hon. Gentleman once.

Gavin Shuker (Luton South) (Lab/Co-op): Will the Secretary of State give way?

Mr Davey: No, I will not.

Our first priority is to encourage consumers to switch suppliers, which could save households up to £200 per year. I am surprised that the right hon. Member for Don Valley was so negative about switching. The problem is that, despite rising prices, only one in six consumers switched their supplier in 2010. She was right that the number of people switching has been falling. There are several reasons for that, one of which, as she will know, is the plethora of energy tariffs. There are currently about 120 tariffs. We want fewer tariffs and much clearer pricing, so that customers can find a better deal more easily. That is the right approach. We support much of Ofgem’s work as part of its retail market review and will work with it to bring more transparency to the energy market.

Last month, my right hon. Friend the Deputy Prime Minister announced the deal that we secured working with the six big energy companies to give customers a guaranteed offer of the best tariff. From the autumn, suppliers will contact consumers annually to tell them which is the best tariff for their household, and if consumers call energy companies, they will have to offer them the best tariff. That is real progress—progress that Labour failed to make but which I have made in my first few months as Secretary of State.

Lyn Brown (West Ham) (Lab): May I tell the right hon. Gentleman about a constituent of mine living in a two-bedroom flat with her daughter and grandson? She works as a teaching assistant in a local primary school and earns just £1,025 a month, of which she pays £201 on utility bills—nearly 20% off her income is spent on utility bills. She is already on the lowest tariff, and she is in massive debt and worried. What can the Secretary of State offer her from the Queen’s Speech?

Mr Davey: Actually, the hon. Lady’s constituent will be a big beneficiary of the coalition’s policy to increase the personal income tax allowance. She will benefit from that big income tax cut—bigger than anything that Labour did. In fact, I remember Labour taking the 10p rate away from people such as her constituent, costing them £236 a year. So I am afraid she has shot herself in the foot.

Caroline Flint: I thank the right hon. Gentleman for providing the House with more information about what the Government are attempting to do. The chief outcome of last autumn’s summit, however, was that the companies agreed to write to people to let them know that they should switch and save. Labour argued that the energy companies should be much more specific and make it clear to people what cheaper tariff they should be on. I take it from what he has just said, therefore, that we have a Labour policy gain today.

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Mr Davey: That was a good try, but no one believes the right hon. Lady.

We are working with energy companies in a range of ways that Labour failed to do. For example, we are working to ensure that companies put special barcodes on energy bills, so that people can scan them, search for quotes and switch suppliers. We are also working with consumer groups to make it easier for people to band together, get the best deal and bring down bills without having to negotiate them. That is called collective switching. It brings people together to make a collective purchase based on collective, mutual and co-operative principles. One would have expected Labour to use those principles in government. It did not, we are, and it should be ashamed.

We have already seen the big switch campaign from Which?—the first big collective switching scheme—and I am delighted it was so successful. Through the big switch, people have saved £120 on average—but £200 if they have paid by cash and cheque. [Interruption.] The right hon. Member for Don Valley says we did nothing. Let me explain to her. As consumer affairs Minister, last April I published a consumer empowerment strategy, right at the heart of which were proposals to look at collective purchasing. While working on that strategy, I noticed that under Labour no work had been done on that. As a result of our work, we got Consumer Focus to work on collective switching and we talked to Which? and others, and that work is bearing fruit. She is on the wrong track again.

Simon Hughes (Bermondsey and Old Southwark) (LD): My right hon. Friend knows that I greatly welcome his robust and clear attitude to these issues and the Government’s strong policy. I encourage him to be really tough with Ofgem and the big six energy companies, which have often had far too easy a time. May I put a suggestion to him? Every year, local authorities send out council tax bills and people address their council tax and housing benefit requirements. Will he see whether, within that same mailing, everyone—in all our constituencies—could be sent information about the cheapest tariffs? That would ensure that local authorities share the responsibility for spreading the news about how housing costs can be kept down.

Mr Davey: As always, my right hon. Friend has come up with an ingenious idea. The good news is that the Deputy Prime Minister, following my work with energy companies, is already on to that, through this annual communication that the big six will now send out to ensure that people know the best tariff for them. However, my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) is right that local authorities have a role—in the green deal and many other things. I am happy to talk to him in detail about that.

My right hon. Friend might also be interested to know that the collective switching schemes we are trying to promote through trusted third party intermediaries, such as Which?, are beginning to take off. Many social housing providers and councils are interested in seeing whether they can work with their communities to push these schemes, and People’s Power, a social housing provider, has pushed the huge switch after the big switch. That is exceedingly good news.

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David Simpson (Upper Bann) (DUP): One big issue facing all our constituents is the price of fuel for their vehicles. Is it not a sad state of affairs that it costs families more to fill up their cars than to put food on the table? Surely something needs to be done about the 3p increase and other increases.

Mr Davey: The Government have taken many measures to try to keep down the cost of fuel, but the hon. Gentleman will know that we do not control the price of oil globally. I am delighted, however, that we are not suffering from a tanker fuel dispute. The resolution of that dispute is extremely important. [Hon. Members: “No thanks to you!”] That shows how little Opposition Members follow these things.

I will shortly be holding a round-table discussion at my Department to continue the momentum building behind collective purchasing schemes. Together with our policies to make markets work better and to help consumers to get the best deal, we are also making it easier for people to save energy. As the right hon. Member for Don Valley reminded us, one of our mantras is that the most affordable energy of all is the energy we do not have to pay for—she is quite right about that—yet too many of our homes and businesses are leaking heat and wasting energy. Making them more efficient will help consumers and small businesses to cope with costs. We can cut those bills and keep people warmer for less.

Later this year, we will introduce the green deal, bringing energy saving within reach for millions of homes across the country. A new Government-backed scheme will enable householders to make energy efficiency improvements at no upfront cost. Trusted local and national brands will pay for the work with the costs recouped from energy bills, and the green deal will help householders to stay warm for less. We estimate, for example, that a three-bed semi could save £120 a year by installing wall cavity insulation.

When costs rise, the poorest are often hardest hit, so we are committed to helping the most vulnerable heat their homes more affordably. I mentioned the warm home discount in response to the hon. Member for Ynys Môn (Albert Owen). It will continue to assist about 2 million low-income households with the cost of heating their homes in 2012-13. Alongside the green deal, parts of the new energy company obligation will deliver heating and insulation measures to low-income vulnerable households, including those in some of the most deprived communities.

Caroline Flint: Will the right hon. Gentleman provide clarification on the energy company obligation? I understand that about 50% of the money will go to the most vulnerable families and the other 50% to those with hard-to-treat homes—we are talking about solid walls. Within the second group, is he prepared to consider prioritising the most fuel poor, rather than subsidising people on large incomes? We recognise that hard-to-treat homes are a problem, but we must ensure that that side of the budget prioritises the fuel poor and the vulnerable living in such homes and gets the subsidies to them.

Mr Davey: Since becoming Secretary of State, I have spoken to Professor John Hills, given all the work he did analysing fuel poverty, and I have made changes to the energy company obligations as originally designed. The

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Deputy Prime Minister talked about this issue recently. We will be laying regulations before the House for debate this summer which will contain all the details that the right hon. Lady seeks. I say to her in the nicest possible way that she needs to wait a little bit, but those regulations will be laid before this House.

Dr Alan Whitehead (Southampton, Test) (Lab): Does the Secretary of State accept that unless action is taken on the interest rates charged by those providing the loans for the green deal, the green deal is unlikely to deliver what he says its likely benefit is? What action has he taken to get that right, and why is he doing nothing further to ensure that the interest rate is compatible with an effective green deal for the future?

Mr Davey: I have been looking at the financial arrangements of the green deal. When we are able to announce even more details than we have already, I believe that people will see that it is a very attractive offer. I also believe that there are many low-income households that will actually welcome the rate of credit that will be asked through the green deal, compared with some of the rates of credit that they have to pay other lenders.

Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP) rose

Anas Sarwar (Glasgow Central) (Lab) rose—

Mr Davey: I will not give way, because I want to make some progress and address the Queen’s Speech.

We need to make dramatic changes to our energy policies in the longer term. The right hon. Member for Don Valley said, in a rather bizarre passage towards the end of her speech, that we were not really reforming the electricity market—but we are making the biggest reform of the electricity market since privatisation. It is the sort of reform that Labour Members failed to get their head around and failed to deliver, despite 13 years in power.

There are huge challenges for our electricity market, with 20% of our power plants coming offline during the next decade. There is an energy security issue. We will have to ensure that the infrastructure is brought forward in the most competitive way, otherwise there will be a big impact on bills. We will have to attract more than £110 billion of investment in a way that ensures that low-carbon technology can be introduced, so that we can meet our carbon budgets. That is a heck of a challenge, and this Government have developed the policies to meet it.

If we do not act now, we estimate that by the mid-2020s up to 2.5 million households will be affected by blackouts, costing the economy more than £100 million a year. Even without interruptions to supply, our consumers would be exposed to volatile global energy markets if we did not do anything. Wholesale energy costs already make up half of the average consumer bill. Last year, the winter gas price was 40% higher than the year before. That is the real reason why bills have been going up so dramatically. We have to act and make the strategic changes to tackle that issue.

Mr MacNeil: Following on from the point made by the hon. Member for Upper Bann (David Simpson) about road fuel, what stage are the Government at in introducing a fair fuel regulator, which was much talked about while the two coalition parties were in opposition?

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Mr Davey: I am sure that my right hon. Friend the Secretary of State for Transport will touch on those issues. This Government have done far more on petrol duty than the previous Government did. However, I will not pretend that we can isolate ourselves from world oil prices—the hon. Gentleman will know how high the price of oil has gone internationally.

We will do everything we can to insulate consumers from such price spikes. That is why, as stated in Her Majesty’s Gracious Speech, the Government will introduce legislation to reform the electricity market. The measures in the forthcoming energy Bill will ensure that we have secure, reliable low-carbon electricity supplies. We want to build a diverse portfolio of clean-energy technologies, including nuclear, renewables, clean coal and gas, and let them compete on cost.

Jim Shannon (Strangford) (DUP): Is the Secretary of State aware of the proposed 15% increase in gas prices? There is much talk about the increase in oil prices and other prices, but gas prices are also going to cause real hurt. What steps can the Government take to help those who have gas as their sole source of energy?

Mr Davey: The hon. Gentleman is right to say that there are people predicting that wholesale gas prices will go up later this year. We had the announcement from Centrica last week, and we also had the announcement from E.ON. I am sure that other providers will be competing on price. However, I have already laid out some of the measures that we have been taking, whether it is the discussions that we had with the energy providers on gas and electricity bills, the collective switching or the work that Ofgem is doing on tariff simplification. All those measures make up quite a strong package to try to help the constituents he has just mentioned.

Returning to the energy Bill, there are four parts to our reforms: new long-term supply contracts to provide stable incentives to invest in low-carbon electricity generation; a capacity mechanism to ensure that we can keep the lights on; an emissions performance standard to keep carbon emissions from new fossil fuel plants down; and a carbon price floor to give investors certainty to commit capital to low-carbon projects. These reforms will attract the investment that we need to secure our electricity supplies. The investment will bring real rewards: up to 250,000 jobs in the construction and operation of new power plants, 19 GW of new electricity capacity, and an energy system that is fit for the future.

This is one of the biggest delivery programmes that this Government will oversee. It will stimulate growth, support new skilled jobs, upgrade our ageing energy infrastructure and bring down consumer energy bills. Our latest analysis shows that over the next two decades the average household energy bill will be 4% lower than if we did nothing. If we do not act now, we face a higher risk of blackouts and more exposure to price spikes, and higher consumer bills for both homes and businesses. That is not a future that this Government are willing to consider, so we will take the right decisions for the long term. The provisions in the forthcoming energy Bill will keep the lights on and our carbon emissions down, at the lowest cost to the consumer.