“The issue before us is not about the Northern Ireland peace process or about the resumption of the Assembly; it is about the role of Members of Parliament, what it means to sit in the House and the nature of the job of being an elected representative of this place. It is primarily on that basis that we oppose the action that the Government are seeking to take and will be voting against the motions.” —[Official Report, 8 February 2006; Vol. 442, c. 912.]

The Conservative party was equally forthright in its public pronouncements on the issue, inside the House and outside it. The proposals represented, one spokesman said,

“more unreciprocated concessions to Sinn Fein...treating the rules of the House of Commons as the currency for such concessions.”—[Official Report, 18 December 2001; Vol. 377, c. 160.]

Both the right hon. Member for Maidenhead and the Conservative party generally were absolutely correct in their assessment of the situation. The reality was that the previous Government used taxpayers’ money and disregarded the rules of this House to facilitate republican dogma around the issue of the Oath or affirmation.

Sinn Fein is not the only Irish nationalist political party represented in the House of Commons. The SDLP has representatives elected for Foyle, South Down and Belfast South, who, although seeking to remove Northern Ireland from the United Kingdom, come to this House and make their arguments to that effect. I do not agree with those arguments and I will strongly argue against them, but does anyone seriously believe that they are any less committed to the goal of a united Ireland because they come and sit in the House of Commons, represent their constituents and fight their constituents’ corner? This is a taboo that exists only inside the heads of Sinn Fein schemers, and it is disgraceful that public money should be used to subsidise such self-indulgence.

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David Simpson (Upper Bann) (DUP): I congratulate my hon. Friend on securing this debate. When we look at the economic situation in this country, where families have to struggle to make ends meet, a political party, over the lifetime of a Parliament, is receiving some £500,000. It does not come to this House, does not take the Oath and does not carry out the day to day functions that every other party has to do.

Dr McCrea: I thank my hon. Friend for making such a valid point. We are constantly being reminded that we are in a deep hole economically, yet we find that representative money is without the same scrutiny and accountability that applies to Short money and to every other political party and elected representative. We all know that the Independent Parliamentary Standards Authority has stringent rules for MPs’ expenses. There is a proper accountability, and rightly so. However, unlike every other party in this House, Sinn Fein can use that money for political ends and political purposes, rather than being subject to the accountability of using it for representing constituents.

On the scrutiny of MPs’ expenses, it was interesting to note that one Sinn Fein Member made a single flight to London from Northern Ireland, yet they claimed £18,000 that year for accommodation. I do not know what hotel they were staying in or what champagne they were drinking, but it must have been very expensive. They claimed for one flight and £18,000 for accommodation, yet this House and the scrutinisers did not lift an eyelid in surprise. Of course, we should not be surprised, bearing in mind the other things that Sinn Fein-IRA were up to at that time. It was a cynical ploy, which it has used right up to this present moment.

Pensioners are not able to get appropriate moneys and there are cutbacks in the welfare budget and every other budget, yet we are told we will still play the game for one political party in opposition to every other party. Every other party has to play by the rules of the game in politics, so it is not right that one political party is able to absent itself from that situation. It is a disgrace. It is discriminatory and therefore totally unacceptable. Why should pensioners, young people and the unemployed or people who are endeavouring to get into work find themselves in difficult situations financially when we have a political party walking away and enjoying the fruits of not representing its constituents in this mother of Parliaments?

Sinn Fein also sits in the Northern Ireland Assembly. It says it does that because of its political allegiance to a united Ireland, so it is showing its distaste and objection to the United Kingdom and being a part of a British institution. Let us examine that. Sinn Fein sits in the Northern Ireland Assembly, an institution created by statute of this House of Commons. It is a British institution. The laws passed there, just like the laws passed here, go to Her Majesty the Queen to receive Royal Assent. Sinn Fein Ministers participate in that process on a day-and-daily basis. As a benefit of its participation in the Northern Ireland Assembly, Sinn Fein receives money for party administration and support staff, just like every other party. It takes that money as a benefit of its participation in the Assembly at Stormont—participation that it does not undertake here, yet it is paid the money without representation.

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The argument that the special arrangement at Westminster is equivalent to that at Stormont is simply not true. In opposition, the Conservatives drew the same distinction as we do. The then shadow Secretary of State, Quentin Davies, said:

“There is in fact no comparison at all between the position in Stormont and that in the House because Sinn Fein-IRA have agreed to take their seats in the Assembly at Stormont and in the Executive there”.—[Official Report, 18 December 2001; Vol. 377, c. 162.]

Given subsequent developments, and Mr Davies’s departure to the Labour party, I appreciate that some Conservative Members might not want to hear a quote from him, but I believe that he was entirely correct in his annunciation of the party position, and I trust that he and his colleagues still hold to that.

In the run-up to the 2010 general election, the Conservative party made several clear-cut commitments on the continued payment of allowances to Sinn Fein MPs. The previous Secretary of State for Northern Ireland, the right hon. Member for North Shropshire (Mr Paterson), was equally vocal on the issue. In the Daily Mail of 8 April 2009, he said:

“It is completely unacceptable for Sinn Fein representatives, who won’t even sit in Parliament, to claim hundreds of thousands at the taxpayers’ expense.”

Although he is no longer Secretary of State for Northern Ireland, and he might consider that he has been given a higher position in government, he is a member of the Cabinet. Who can argue with his statement? On one of his many visits to Northern Ireland during the European election campaign, he made clear what direction the Conservative party would take on the issue—I ought to know because my constituency was one to which he seemed to pay special attention. He said that

“it is inconceivable that incoming Conservative MPs would vote to continue paying millions of pounds of public money to elected Members who do not take their seats.”

That is a clear statement. There is no ambiguity and no way round it, and there is no justification for his shifting from the position he announced before the election.

David Simpson: Does my hon. Friend agree that Gerry Adams, the leader of Sinn Fein, has clearly stated that there will never be any circumstance under which Sinn Fein MPs will take their seats in the mother of all Parliaments?

Dr McCrea: With the greatest respect, Gerry Adams has said a lot of things. He has said that he was never a member of the IRA, yet he was seen as one of its leading members in the city of Belfast, so we have to be careful with what he has to say.

That highlights something else that is galling to the Unionist community and, indeed, to every law-abiding citizen. There seem to be elected representatives in Northern Ireland, and now even in the Irish Republic, who are treated differently from other Members of Parliament. I suggest that everyone is equally subject to, as well as equal under, the law. That ought to apply to Gerry Adams and to Martin McGuinness; it certainly applies to my hon. Friends and colleagues and to every other Member of this House. As far as Adams, who now sits in another Parliament, is concerned, I would take certain statements from him with a pinch of salt.

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Given such a catalogue of publicly stated positions, there can be no doubt as to the stance of the Conservative party, which is the major partner in the coalition Government, on this issue. The chickens have come home to roost. It was easy for the Conservatives to point the finger at the Labour Administration. It was easy for them to go through the voting Lobby whenever a proposal came from the Labour Government, but now the responsibility rests with this Administration and they will not be able to get out of facing up to it. That is what government is all about, and we are told day-and-daily that government is about taking hard decisions. I suggest that this Government have taken many harder decisions than this, on cutting benefits and so on, and they believe that they do so in the interests of the economic well-being of the country. I do not doubt their sincerity or the premise on which they present their case, but if they make such decisions on those grounds, there are no grounds whatever for them to move away from the principle of every Member and every party in this House being equal and being treated with equality.

There were clear and unambiguous statements that an incoming Tory Administration would mean the end of the wasteful and anti-democratic use of public resources. I can imagine the Government spokesman, the right hon. Member for Carshalton and Wallington (Tom Brake), preparing the argument that this is not a Conservative Administration, and that is true. But it is a Conservative-led Administration, and the Prime Minister is a Conservative Prime Minister. He might say that there is a coalition and, as a consequence, some things that were said on the assumption of an overall Tory majority have to be reviewed. The logic of that argument is correct, and it means that we need to consider the matter of the Liberal Democrats.

The Liberal Democrats, for whatever reason, did not adopt a formal position on the issue back in 2001, choosing instead to afford their Members a free vote, and I have not heard or seen anything from the Liberal Democrat leadership to indicate a change in that position. Liberal Democrat Members can vote freely on the matter, and I have no doubt that a great many of them, perhaps even a majority, would be persuaded by the arguments made so eloquently by their coalition partners. I certainly hope that that will be so. The coalition has taken hard financial decisions to try to rescue our country from the economic pit that it finds itself in, so it has to face the hard decision concerning this money.

The logic for introducing the changes back in 2001 was flawed. Not only was it based on handing out concessions to a political party that at the time refused to come up to the same minimum democratic standards as the rest of us, but it served to create two classes of MP and to render as nothing the rules of this House. In practice, it has demonstrably failed. If the plan was to kill off abstentionist politics through financial inducement, it has not worked. The Sinn Fein position is as immovable as it was 20 years ago. Despite the fact that Martin McGuinness can meet the Queen or that Sinn Fein Ministers participate in the institutions at Stormont, Sinn Fein has indicated repeatedly that it would not, even if the Oath or affirmation were removed, attend the House of Commons. Its Members receive allowances from the Northern Ireland Assembly as a benefit of their participation there, and the same logic should

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apply here. No show should mean no pay. I urge the Government to act in that regard without further delay, and make good their many and repeated public promises on this issue.

2.59 pm

Mr Gregory Campbell (East Londonderry) (DUP): I congratulate my hon. Friend the Member for South Antrim (Dr McCrea) on securing this debate.

The obligations of Members of Parliament are many. One of the additional onerous tasks on a small number of Members of Parliament, usually one in each party, is to be a treasurer. I say “onerous task” because I had the misfortune of agreeing to have that post foisted upon me many years ago. I have lived to regret it—I mean, never to regret it—ever since.

With that post, of course, comes part of the onerous task of ensuring that the political party’s accounts are supplied, maintained, updated and kept in order on a regular basis. That includes the money known as Short money. I say that because I have a number of years’ experience of knowing how rigorous and assiduous each political party has to be in giving its returns through the Electoral Commission on all income and expenditure, including the money known as Short money.

Each and every treasurer in each and every political party is in that position, with one exception, which is the political party so comprehensively alluded to by my hon. Friend: Sinn Fein. Members should by now know—and if they do not, they will know by the end of the debate—what the representative money was about when it was devised. If we cut through all the red tape and all the diplomatic doublespeak, representative money was about the Government here in Westminster attempting to roll out a green carpet in the House of Commons or a red carpet in the House of Lords—any kind of carpet—in the hope that, at some point in the future, Sinn Fein Members might say, “Okay, guv, the game’s up. We’ll enrol, we’ll sign up, we’ll take the pledge and we’ll come.”

As my hon. Friends the Members for South Antrim and for Upper Bann (David Simpson) have indicated, Sinn Fein has made it clear that it does not intend to change its position. Sinn Fein has made numerous claims that have been abandoned, of course, but it is fairly clear at the moment that it does not intend to abandon that position. Even if it does, what we are suggesting does not run counter to any position it might adopt. We are simply saying that a system should be put in place that represents a level playing field, and that is rigorous and exhaustive for every political party so that no one is exempt and no one can operate under a different set of rules.

Sinn Fein has for many years had an abstentionist policy, to which it is entitled. If Sinn Fein puts that policy before the electorate in a number of constituencies and Members are legitimately returned on that basis—however illegitimate all the other things that Sinn Fein stands for may be—it may legitimately say, “We were elected on an abstentionist ticket, and therefore we are not going to take our seats.” It should be spelled out in advance that, if a party does that, it will not receive

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money for which an integral part is attendance in the House to carry out duties here. If Sinn Fein wishes to forgo that money, that is a matter for the party.

We all know that representative money was an attempt to bring Sinn Fein in from the cold. We also know—I more than others—that the rules for income and expenditure for my political party, and all other political parties, are different from those for Sinn Fein, because of the rigorous nature of the rules on accountability for what representative money, the money known as Short money, may be spent on.

We should recall the scale of Sinn Fein’s income, including representative money. According to the most recent accounts submitted by Sinn Fein, the party had an income of £1.25 million in the last recorded year. To give an idea of the pro rata scale of that income, it would be similar to the Labour party having an income of some £35 million and spending about £33 million or £34 million. The difference is that the Labour party would not be spending more than £30 million on employing hundreds of people, many of whom used to kill people, which is what Sinn Fein does. Sinn Fein employs scores of “former combatants.” When Sinn Fein runs out of money to employ people on that basis, as has been the case in the Stormont Assembly, it sometimes tries to employ one of the “former combatants” as an adviser to a Minister until there is a furore and it has to sideline that person and bring in someone else. That is what Sinn Fein uses the money for.

Sinn Fein is a wealthy political party. Indeed, according to the most recent figures in the public domain, it is the wealthiest political party in Northern Ireland. No one should get caught up in some sort of false sympathy and think that such a measure might in some way impinge on Sinn Fein’s capacity to represent people.

Our contention is simple: Sinn Fein should abide by the rules in the same way as everyone else. Abiding by the rules is a concept that, up to 15 years ago, was not really something Sinn Fein could do very well. Sinn Fein did not abide by the rules. It thought, “Rules are for others, not for us.” Sinn Fein now has to abide by rules.

Dr McCrea: I appreciate my hon. Friend’s point, but is it not true that the fact we are having this debate means that, up to this moment, Sinn Fein is not abiding by the rules? The Government are not making Sinn Fein abide by the rules by which every other political party has to abide. The inequality being accepted here runs contrary to many of the other decisions that the Government have taken; they are telling us that there must be equality.

Mr Campbell: That is why there must be a review of the rules of this House. We spent a long time with the Conservative party when it was in opposition before the last election, and with the Government since the election, reminding them of their commitment before 2010 on the need to ensure that people in Northern Ireland had a degree of assurance that moneys were being spent appropriately.

Every Member of this House, from every political party, knows that even perfectly legitimate expenditure and income is questioned and examined by our constituents. If that is the case for rigorously accounted income and expenditure, we can imagine what people are thinking

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about other moneys that are set aside separately for one party and for one party alone. There is rising resentment in Northern Ireland, and it is not confined to Northern Ireland, because on occasion I have had correspondence from residents in other parts of the UK who are equally annoyed and angry at the lack of accountability that exists for one political party.

Whenever this issue arises—other hon. Members will see this, too—we get correspondence from Sinn Fein Members saying that they will arrive here on sporadic visits to inform people and Members about the situation in Northern Ireland. We had a flying visit a couple of weeks ago by an abstentionist Member to inform other MPs about what was happening in Northern Ireland. Those visits normally coincide with the issue we are debating coming to the fore again. Why is that? It is not just a cynic who would be led to believe that when Sinn Fein Members see the prospect of this special money being reviewed and possibly taken from them, they hop on a plane from Belfast to London, and a hurriedly arranged meeting to update Members is on the cards. People are asked to come along and hear what is happening with the flag protest or the austerity measures. Members are perfectly entitled to ask questions about those issues and be updated on them, but not on the basis of Sinn Fein sporadically trying to justify the moneys it gets.

For that and a number of other reasons, I believe and hope that the Minister will respond by giving some assurance. We use the phrase “hard-pressed taxpayers” lightly, but people are suffering. They are examining each and every aspect of Government policy. They are looking at welfare reform and every pound they spend, as well as every pound the Government spend. When people see an unjustifiable and indefensible position such as this, they say, “The time has come to review, to change and to abandon the special status.”

Dr McCrea: Does my hon. Friend agree that Sinn Fein’s most recent ploy of holding little seminars and little meetings is in many ways an affront to democracy? Over the years, Sinn Fein Members have become used to concession and appeasement whenever they raise their voices, and they feel that, if they raise their voices in opposition to what has been suggested today, the Government will somehow back down again.

Mr Campbell: I agree with my hon. Friend. We know that some of the representative money can be used in a creative fashion. Sinn Fein are masters not only of financial creativity, but of a series of other creative measures. Anyone who denies that Sinn Fein is not just misusing this money, but using it for purposes for which it was never intended, is living in cloud cuckoo land. The time for this matter to be reviewed has long since passed. Time needs to be set aside for a review. Every Member who is elected to this House has to be treated on an identical basis. If we take our seats and make representation, whether it be good or bad, we are judged at the following election by our electorates in our constituencies. If we decline to take our seats and are elected on that basis, we should not get representative money for failing to represent our constituents.

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3.14 pm

Jim Shannon (Strangford) (DUP): I congratulate my hon. Friend the Member for South Antrim (Dr McCrea) on bringing this matter to the House. I also congratulate my hon. Friend the Member for East Londonderry (Mr Campbell) on his contribution. Both of them made heartfelt contributions. They espoused the concerns that we all have on this issue.

The issue greatly troubles my party, and it should trouble every party—the Conservatives, the Lib Dems, Labour and all the other parties too. The tremendous scrutiny of expenses is essential for us to be able to stand by every pound that is allocated. It is important for us as parties to account for all that money. It is also important for Sinn Fein as a political party to account for the moneys that it receives in this House.

The issue of Short money being paid to those who do not take their seats has been raised, and I cannot see how any Member of this House can justify the unjustifiable. We in the Democratic Unionist party can use Short money only to carry out parliamentary duties, and rightly so. This matter is of some importance, not only to us as MPs, but to our constituents. I receive regular correspondence about it. Members of my party and members of other parties ask, “When will the Government address the anomaly of Sinn Fein expenses at Westminster?”

David Simpson: Does my hon. Friend agree that not only is there an inequality in this House, where all Members should be treated equally, but an inequality in the press and in the BBC today? If the Democratic Unionist party was identified as doing the things we are talking about, the press would crucify it—it would be the same for every other democratic party—but for some reason they do not touch Sinn Fein.

Jim Shannon: I thank my hon. Friend for that contribution. It is clearly an issue that we all feel particularly peeved and concerned about. There seems to be a double standard when it comes to Sinn Fein compared with every other political party.

The 1999 resolution on Short money did not specifically state that it could not be used by parties who had not taken the Oath. It was understood that, as it was specified for the carrying out of parliamentary duties, those who do not sit in Parliament should not access it. That is clearly the position, and that is where we stand on the matter. The 2008 motion, however, which was specifically for those who do not take their seat, allowed such a party to access the money for its representative business. As I was listening to my colleagues, I thought, “Sinn Fein are the hokey-cokey party.” They are in, they are out and they are shaking it all about. They are in for the money, but they are out for representation. If money is going they are part of it, but then they get outside and they do not want to represent their people here in the mother of Parliaments.

I have had occasion to speak to some Sinn Fein Members when they come here. I spoke to the Deputy First Minister, and I said, “It’s great you’re here. Are you now coming in here to represent your constituents?” and he said, “No, I’m not.” I had occasion to speak to the Member for Belfast West two or three weeks ago on the same issue. He was here expressing concern about benefits and welfare reform, but he was not prepared to

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express them in the Chamber to try to change the Government’s mind and support those who have concerns about welfare reform. Sinn Fein Members are in when it comes to taking the money, but they are out when it comes to representing the people. Many of us are concerned about that.

It is completely unacceptable that Sinn Fein Members refuse to take their seats and that they use funds for press and publicity that the rest of the Commons cannot use. Where is the parity between Members? Members will be aware that Sinn Fein was the largest-spending political party by a mile in the past year. It spent £1.16 million out of a total of £1.27 million. Those figures are confirmed by the Electoral Commission, which means there is clear support for what I am saying. The Electoral Commission records party political direction and expenditure across the whole UK and compares them.

If Sinn Fein was spending money to carry out its activities in this House for the democratic process, I would understand, but the fact remains that Sinn Fein Members still do not attend this House in the full way that they should. It has five MPs. My hon. Friend the Member for Upper Bann (David Simpson) referred to the £500,000 that Sinn Fein has drawn down, and our concern about that is on the record.

Sinn Fein members do represent their colleagues at the Assembly and on councils, so there is a democratic process that they feel committed to. Since we are all under the democratic process of this House, we acknowledge the status of Westminster and the position of Her Majesty. We also have that in our chambers in the councils back home and at the Assembly, so there is clearly an issue for us there as well.

My right hon. Friend the Member for Lagan Valley (Mr Donaldson) has raised the matter of funds being raised overseas and suggested that it is time it was brought to an end. He has said:

“We have had concerns for some time that Sinn Fein can raise significant sums outside of Northern Ireland and in any review of funding of parties in Northern Ireland this should come to an end.”

Other issues are involved—not just the House expenses that those Members draw down without representing their people, but what they do in other countries. The Political Parties, Elections and Referendums Act 2000 banned donations by foreign nationals. We support that principle and oppose the anomaly that permits a political party to be funded by citizens and organisations from another state. That is not the practice anywhere else in the UK, and the DUP supports it being brought to an end. As well as political allowances for parties, we want to consider the question of funding from overseas.

In 2011 my right hon. Friend the Member for Belfast North (Mr Dodds) raised the subject and made it clear that the practice had to stop. That is why today’s Westminster Hall debate is happening. In 2013, I ask again what has been done to stop the practice in question. What action has been taken and by what date will the issue be addressed? The issue is of some importance to the Democratic Unionist party and all Unionist parties throughout Northern Ireland, but Labour Members are also concerned, and have asked questions, and so are Conservative Members, some of whom unfortunately cannot be here today because of the debate in the other

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Chamber. They want the anomaly to come to an end. The DUP has brought the matter to the House, but it concerns us all.

Dr McCrea: I appreciate my hon. Friend’s remarks. Would he, like me, be interested in knowing what consultation the Government have held since coming into government? The question greatly exercised the mind of the Conservative party before the election—including in my constituency—and even exercised the Prime Minister, when the Conservatives tried to get someone else, namely Sir Reg Empey, into the South Antrim seat instead of me. Since then, have there been meetings or consultation about the matter with Her Majesty’s Opposition and the rest of the parties?

Jim Shannon: Indeed, we have concerns about the involvement of other parties and their opinions. In response to a parliamentary question the Secretary of State said:

“I have had a number of discussions with representatives of political parties on this issue. These discussions are continuing.”—[Official Report, 29 February 2012; Vol. 541, c. 314W.]

Nothing was done. In response to a question from a Labour Member he replied:

“I have had no discussions with the House of Commons Commission in relation to this issue.”—[Official Report, 30 November 2011; Vol. 536, c. 955W.]

Again, nothing was done. The same Member asked again about donations to such parties, and the reply was:

“We will legislate to deliver this as soon as we can.”—[Official Report, 19 October 2011; Vol. 533, c. 886W.]

There are words but no action. That is the problem we have. Perhaps hon. Members can gauge the frustration that we experience as representatives, when our people regularly bring the issue to our offices and doors and when we meet the Members in question swanning in and out and not making any contribution.

Since 2008 the Government have deplored the situation in which Members will not take their seat and honour the Queen as they should, but will gladly accept the Queen’s head on notes, as has been said. I do not ask for an assurance. I ask for an action—something to say that the current grossly unequal practice will stop. All of us in the House are conscious of the taxpayer, and of what money is available. We must be mindful of taxpayers, as my hon. Friend the Member for East Londonderry said; it is important to stress that. Taxpayers will be happy if the unequal practice stops, and so will every MP who takes pride in their seat, and in being appointed to the seat of democracy, with the privilege it brings. We will also be heartened by the fact that absenteeism will no longer pay greater dividends than involvement, and that more money will not be shelled out for disrespect than for basic respect for the great process that we all work hard to be part of.

3.25 pm

Mr Nigel Dodds (Belfast North) (DUP): First, I apologise for not being here for the beginning of the debate to hear the speech of my hon. Friend the Member for South Antrim (Dr McCrea), as I was taking part in the debate on the Electoral Registration and Administration Bill. That debate is of considerable interest and importance and, if it were not for that, many hon. Members who

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are in support of the debate here, and of the view that my hon. Friends have put—hon. Members who have told us so, and who would welcome a debate in the main Chamber, to which we will no doubt shortly be treated—would be here too.

I congratulate my hon. Friend the Member for South Antrim on securing the debate. I want to make some brief remarks. As has been mentioned, I raised the issue in Westminster Hall on 30 June 2010. The then Deputy Leader of the House, the hon. Member for Somerton and Frome (Mr Heath), who, like the current holder of the post, is a member of the Liberal Democrat party—said:

“Over the coming months, Ministers will be talking to all Northern Ireland parties to address how to take the issue forward”—

not “if” or “possibly” but “how” to do so—

“in light of the views and clear issues of principle we discussed today.”—[Official Report, 30 June 2010; Vol. 512, c. 253WH.]

To continue the theme that my hon. Friend the Member for Strangford (Jim Shannon) was developing, about there being plenty of commitments, but no action, at business questions on 7 July 2011, the then Leader of the House, who is now the Government Chief Whip, said in response to a question from the hon. Member for Vauxhall (Kate Hoey) about the inequitable situation in which there are two classes of Member, that

“the Secretary of State for Northern Ireland is having discussions with the parties in Northern Ireland”.

For what purpose was he doing so? It was

“with a view to bringing that unsatisfactory situation”—

so it is acknowledged by the Government that it is unsatisfactory—

“to a satisfactory conclusion.” —[Official Report, 7 July 2011; Vol. 530, c. 1661.]

We very much welcome those commitments. That question followed one that I raised in business questions, and have consistently raised on the Floor of the House.

Government spokespersons have on several occasions said that the matter is being discussed, and that it is hoped that satisfactory solutions will be brought forward. Today we want to highlight the need to get on with it, and bring about some kind of conclusion—now that we are more than halfway through the Parliament—and reach a decision. We heard in the debate in the main Chamber about the need for certainty—drawing lines under issues and moving ahead. We heard a lot of talk about equality and fairness, in relation to Members and the constituencies that they represent. People in all parties are concerned about fairness and equality among Members of the House. Some parties may not be represented here today, but it has been made clear in their discussions with us that they do not accept as proper and fair a situation in which, although they are confined to spending parliamentary allowances on constituency and parliamentary work—as everyone accepts is right and proper—under the representative money arrangement, Sinn Fein can spend that money on party political campaigning and activities, without reprimand or possibility of its being taken away. That immediately puts it at a considerable advantage over other parties.

The advantage is not just over the Democratic Unionist party, or other Unionists. Sinn Fein is also put at a considerable advantage over its nationalist rivals for votes, who take their seats in this House. Its nationalist rivals—who, to be frank, are more likely to garner votes from Sinn Fein than we are—are at a severe disadvantage,

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because they play by the rules. They come here and have to spend their money, in accordance with the rules of the House, for parliamentary constituency purposes. Sinn Fein Members do not have to take their seats, do the work or come here, yet they can spend their representative money on party political campaigning. There is absolutely no justice in it at all.

Dr McCrea: Does my right hon. Friend accept that the Social Democratic and Labour party is indeed at a disadvantage? Although its Members are here in the House representing their constituents, their opponents in Sinn Fein can use the money from Westminster on political propaganda against them. Is it not also true that nobody will be discriminated against if action is taken on the policy of paying allowances? On the contrary, we are asking for equality and balance to be restored.

Mr Dodds: I agree, and that absolutely backs up the points that I was making.

Sinn Fein says in a statement published this afternoon that this debate and the efforts of Members from different parties to raise these issues in the House are

“an attempt to disenfranchise our constituents, and it’s unacceptable”.

That is utterly preposterous. No attempt whatever is being made to disfranchise the constituents represented by Sinn Fein; it is Sinn Fein Members who are disfranchising their constituents by not representing them properly in the House to which they were elected. They are the ones who chose not to take their seats.

Sinn Fein Members could take their seats and have access to all parliamentary expenses and allowances on the same basis as everybody else, but they have chosen not to. Ultimately, if they are saying, “We are elected on the basis that we abstain, and on principle we are not going to take our seats,” one would think that the same principle would extend to not taking the money either, but obviously there are limits to principle when it comes to Sinn Fein.

Mr Gregory Campbell: Does my right hon. Friend share my sense of irony that one of Sinn Fein’s magic mantras is equality? That word is normally used in any debate in which they engage, yet they seem to want to shy away from this debate. That is what we are demanding: equality in how moneys are given out in the House and how they are reported and accounted for.

Mr Dodds: My hon. Friend is absolutely right. Equality is one of their great mantras, and we hear it over and over again, but in this situation, they want a unique position, in which they have a special class of MP who can avail themselves of the moneys without taking their seats and enjoy an advantage over everybody else in the use of those moneys. It is a totally iniquitous position. This is not about disfranchising anyone in Northern Ireland. It is Sinn Fein who disfranchises its own constituents by not coming here or engaging in parliamentary work.

Sinn Fein has long since conceded the point of principle. Its members are prepared to take their place in the Northern Ireland Assembly, accept posts as Ministers there and enact legislation under the Queen. They are prepared to take their seats in Dail Eireann and to be part of structures that they once denounced as separatist, partitionist and illegitimate. They are prepared to take

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their seats in the European Parliament and denounce the European Union, but uniquely, they will not take their seats here, although they want all the financial advantages and privileges that go with it, and indeed special privileges and advantages. This is not about principle and it is not about disfranchising anyone. For us, it is about equality and fairness.

To put the latest figures on the record, in the year 2005-06, Sinn Fein Members received £35,163 in representative money. In 2006-07, they received £86,245; in 2007-08, £90,036; in 2008-09, £93,639; in 2009-10, £94,482; in 2010-11, £95,195; in 2011-12, £101,004. In the current year, 2012-13, they will get another £105,850. By the end of this financial year, they will have pocketed almost £750,000 since the introduction of the money in 2005, for activities not necessarily to do with parliamentary, constituency or any other type of work. They may have spent it on party political campaigning.

Taxpayers throughout the United Kingdom are entitled to be outraged at that abuse of public money. We have been told that it will be addressed, and it is now time for the Government to take action. We look forward to hearing when that action will happen.

3.35 pm

Angela Smith (Penistone and Stocksbridge) (Lab): Sir Roger, it is a pleasure to serve under your chairmanship. It is not the first time, and I hope that it will not be the last.

I congratulate the hon. Member for South Antrim (Dr McCrea) on securing this debate, and on his clear and comprehensive exposition of the history and background of the topic. I also thank him for his passionate articulation of his strongly held views on the matter, which were echoed by the hon. Members for East Londonderry (Mr Campbell), for Strangford (Jim Shannon) and for Belfast North (Mr Dodds). It is worth putting on record how consistently Democratic Unionist party Members have presented their arguments and their case.

The measure to provide representative money was introduced by the previous Government in 2006 as a result of negotiations with Sinn Fein on a range of issues. Since then, we have made great progress in Northern Ireland, and despite the scenes that we have seen in the last few weeks, the political landscape has changed dramatically. DUP and Sinn Fein Ministers have sat together in a power-sharing Executive for six years. Policing and justice is devolved, and support for the Police Service of Northern Ireland is required of all parties in the Executive.

Jim Shannon: There is no better illustration of how the landscape has changed in Northern Ireland than Liam Neeson’s comments yesterday on receiving the freedom of the borough in Ballymena. He thanked the DUP publicly for our contribution to making life in Northern Ireland better.

Angela Smith: I pay tribute to the efforts made by all politicians, including those from the DUP, to make life better in Northern Ireland. One can only hope that the

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peace process continues and progresses as it has done in recent years, despite the problems experienced in the past few weeks.

Much, too, has changed in the House. How public money is used has never been under greater scrutiny. MPs’ allowances and funding for opposition parties are carefully monitored, as is right. It is clear that representative money is an anomaly that needs to be looked at. Our view is that it is a matter for the House and must be decided by the House.

The DUP has consistently argued for the removal of all moneys paid to Sinn Fein and its MPs. However, this debate focuses on representative money. Sinn Fein will receive more than £108,000 in public money in the form of representative money in the current financial year, in addition to the Members’ allowances to which each of the five MPs are entitled. Its Members do not receive a salary, of course, but it is important that there is an equal playing field among opposition parties in how financial support for their work is calculated and what activities they can use such money for.

In June 2010, the then Deputy Leader of the House, the hon. Member for Somerton and Frome (Mr Heath), said that the Government would look into the issue and discuss it with the Northern Ireland parties. The Prime Minister has repeated that commitment inside and outside the Chamber since then, as has the Leader of the House. It is clear that the DUP’s patience on the matter has been tested. The Government should indicate where they are and how far they have progressed in reviewing the situation, as they said they would.

We believe that all Members should take their seats and play a full role in the business of the House. Representative money was introduced in a different political context, both in Northern Ireland and in Great Britain. It is right that it should be looked at to ensure that it meets the standards set by this House and demanded by the public.

3.40 pm

The Deputy Leader of the House of Commons (Tom Brake): It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate the hon. Member for South Antrim (Dr McCrea) on securing this debate, and I congratulate the hon. Members for East Londonderry (Mr Campbell) and for Strangford (Jim Shannon), the right hon. Member for Belfast North (Mr Dodds), and the hon. Member for Penistone and Stocksbridge (Angela Smith) on taking part.

The hon. Member for South Antrim said that there was an important debate going on elsewhere today, but the debate in this Chamber is equally important. He made his representations in a calm, focused manner. He encouraged me perhaps to speak for Conservative Members when they were in opposition and for a former Conservative Member who defected to the Labour party. I am not particularly well placed to do that. In the debate in the main Chamber, the Leader of the House was asked to comment on the Liberal Democrat manifesto, but felt unable to do so. I am not in a position to comment in any detail on what Conservative Members may have said in opposition.

The hon. Gentleman mentioned the audit that applies to parties’ financial expenditure, as did the hon. Members

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for East Londonderry, for Upper Bann (David Simpson) and for Strangford. If hon. and right hon. Members have suggestions about how improvements could be made to that audit process, I am sure that the Government would be happy to ensure that they were passed on to the appropriate place.

Mr Campbell: So that the Minister is not under any misunderstanding, we are not asking for any adjustment to how the representative money is monitored and scrutinised. We want a level playing field, so that all Members and parties in this House are treated the same.

Tom Brake: I thank the hon. Gentleman for his intervention. I understood the point that he and his colleagues made.

In an intervention, the hon. Member for South Antrim asked what meetings had taken place. I confirm that my right hon. Friend the Secretary of State, her predecessor and ministerial colleagues have discussed this issue on a number of occasions with representatives of the party, both in the House and in the Northern Ireland Assembly.

In passing, in his willingness to take on financial responsibilities for his party the hon. Member for East Londonderry is a braver man than me. In my experience, that normally involves people taking out their own cheque book to cover the difference, but I hope that is not so for him.

The right hon. Member for Belfast North mentioned that in a previous debate in this Chamber, my hon. Friend the Member for Somerton and Frome (Mr Heath), then Deputy Leader of the House, gave certain undertakings. I hope that, at the end of the debate, the right hon. Gentleman will feel that we have made some progress. I should like to put some things on the record. It may be helpful for me briefly to set out the financial assistance available to opposition parties, specifically those whose Members have not taken their seats, without going over too much ground that has already been covered.

Short money for opposition parties in the House of Commons was introduced by resolution of the House in 1975 to assist opposition parties in carrying out their parliamentary business. Although that is not defined precisely, the money is used largely for the employment of research staff and support to the Whips’ Offices. In addition, Short money is used for funding for opposition parties’ travel and associated expenses, and funding for running costs of the office of the Leader of the Opposition. Levels of funding are calculated with reference to the number of seats won at the previous general election, with a sum for the number of votes gained by the party. I had wondered whether other parties from Northern Ireland might attend, to ask why they were not entitled to that funding. In the House of Lords, Cranborne money, the equivalent of Short money, was introduced in 1996. Hon. Members know that Short money is available only to parties whose Members have taken their seats, so Sinn Fein is not eligible.

In July 2005, the IRA formally announced an end to its armed campaign and undertook to pursue its aims by exclusively peaceful and democratic means. That paved the way for the provision of a new representative allowance payable to Members not taking the Oath, which is the subject of the bulk of this debate. On

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8 February 2006, the House passed a resolution providing financial assistance to such Members towards expenses

“wholly, exclusively and necessarily incurred for the employment of staff and related support to Members designated as that party’s spokesmen in relation to the party’s representative business.”—[Official Report, 8 February 2006; Vol. 442, c. 897.]

Expenditure is audited in the same way, whether it is Short money or representative money. The term “representative business” is not specifically defined, although it is understood to include expenditure on press, publicity and related purposes. The sums provided are calculated on a similar basis to, and can be seen as an equivalent of, Short money. The right hon. Member for Belfast North set out the expenditure incurred by Sinn Fein.

In the context of this debate, it is important to note that both this House and the political situation in the Northern Ireland have changed significantly since the debates of 2001 and 2006. I know that all hon. Members would acknowledge that. In Northern Ireland, Sinn Fein Members play a full role in the Assembly. Despite attempts by dissidents to undermine the peace process, Northern Ireland’s devolution settlement has set it on a political path. Sinn Fein has accepted the consent principle set out in the Belfast agreement, which states that all parties

“recognise the legitimacy whatever choice is freely exercised by a majority of the people of Northern Ireland with regard to its status”,

and that

“it would be wrong to make any change in the status of Northern Ireland save with the consent of a majority of its people”.

It is true that Sinn Fein is elected on an abstentionist platform, so the electorate are well aware of its stance on taking seats and vote for it anyway. Nevertheless, the Government’s view, as the Prime Minister said in January 2011, is that

“we should be aiming for all Members who are elected to take their seats in this House.”—[Official Report, 26 January 2011; Vol. 522, c. 290.]

It is the Government’s view that the issue of representative money for parties that do not take the Oath is primarily a matter for the House itself to resolve.

In 2001 and 2006, the previous Government introduced motions to facilitate decision and debate. In 2010, this Government introduced proposals from the Wright Committee to establish a Backbench Business Committee, giving Back-Bench Members direct access to the scheduling of business on the Floor of the House. When my predecessor as Deputy Leader of the House responded to a debate on this issue in June 2010, which was mentioned earlier, the Backbench Business Committee was in its infancy, having elected its Chair only the previous week and not having met to schedule a debate. It was right then that the Government decided that at such an early stage it was not appropriate to ask the House to come to a swift resolution. The Backbench Business Committee is now an established, successful part of the House of Commons and has scheduled debates on a wide range of issues that might otherwise not have come to the Floor of the House.

The hon. Member for South Antrim may wish to consider approaching the Backbench Business Committee to demonstrate that the House should come to a view on this issue, on which there may well be a range of opinions that would benefit from being debated and, if appropriate, voted on.

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Dr McCrea: I appreciate the attention that the Minister has given to the matter in his speech, but the Government cannot abdicate responsibility. They should be leading. There is an inequality among Members of the House which has been acknowledged by everyone, as enunciated by the Prime Minister and others for some time. Surely it is time for decisions, with Government leading rather than relying on a humble Back Bencher to bring the issue to the Floor of the House of Commons.

Tom Brake: I thank the hon. Gentleman for his intervention, but the agreement to provide representative money to Sinn Fein Members was made through a resolution of the House. He should go to the Backbench Business Committee because, in my experience, it is now in a position to provide for debates promptly. If it looked favourably on his approach, I am confident that the debate could be held soon after he sought it.

The subject generates strong views and is clearly an important matter of principle. Hon. Members have used the short debate today to set out some of those views. I hope that, in providing some background and a route open to Members for achieving a resolution, I have been able to assist hon. Members who wish to make progress.

David Simpson: I have listened to what the Minister has said on the different points, but, as the Minister, he must accept that the situation is intolerable and needs to be addressed as soon as possible.

Tom Brake: The hon. Gentleman and his colleagues have made some forceful points. I hope that, in responding to the debate, I have provided a route by which he and his colleagues could ensure that the matter was debated in the House, which would allow for the views of all Members to be expressed. Indeed, depending on how the motion was presented, it could be something on which the House might vote.

Dr McCrea: From what the Minister is saying, the Government are clearly not going to take the issue to the Floor of the House themselves. I will certainly be making the approaches suggested, but the notion of a Government who pride themselves on enunciating the principle that inequality must be done away with does not sit well with a Government who are afraid somehow to bring the subject of our debate to the Floor of the House. The Government should act, because every Member ought to have equality and, equally, ought to be treated fairly.

Tom Brake: I have noted what the hon. Gentleman has said and his request that the Government should undertake the matter. I will ensure that that is communicated appropriately, but he and his colleagues have the opportunity to bring the subject to the attention of the House by using the Backbench Business Committee, which has been successful in bringing often controversial matters up for debate. I hope that he will use that opportunity.

3.52 pm

Sitting suspended.

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Young People (Employment and Training)

4 pm

Mr Barry Sheerman (Huddersfield) (Lab/Co-op): It was, as ever, with pleasure and surprise that I realised that I had secured a debate on youth unemployment and the raising of the participation age, in which subject hon. Members will know that I have a long-term interest. As responsibility for this area stretches across the Department for Education, the Department for Work and Pensions, the Department for Business, Innovation and Skills and, as ever, the Treasury, it is a complicated matter. I want to say a few words to introduce the debate, and to emphasise that I do so in a non-party political way.

We are at a crossroads for so many young people in our country. All parties agree that we want the very best outcomes for young people. We do not want, as a think-tank that reported this morning on youth unemployment said, a lost generation of young people in our country. We all want to achieve at least as well as the very best countries, particularly in Europe.

The last investigation I carried out as Chair of the former Select Committee on Children, Schools and Families looked at the problem of NEETs—young people not in education, employment or training. Our most convincing experience of how to handle that challenge was when the Committee went to the Netherlands, where we found better organisation and an emphasis that young people do not automatically gain social benefits until they are almost into their mid to late 20s. That emphasis on the need for every young person to be in education, training or some form of work experience is absolutely the way to tackle youth unemployment.

It was clear from our visit that an holistic approach is needed. Young people in the places we visited near Rotterdam would pitch up at a centre where they were assessed medically and their aptitude was rigorously tested. In one wing, there were private trainers, state trainers and people from colleges and education, while in the other wing there were employers—the presence of employers is particularly important—and private sector trainers. In addition, there were seminar rooms where, with professional leadership, these young people and those who used to be like them investigated how to get into further education or work.

I asked for this debate because at the moment this country has a fragmented approach, not a holistic one. I want to ask some challenging questions. Is 14 the new 16? What does it feel like to be a 14-year-old moving through the education system today? What choices does a 14-year-old—

4.3 pm

Sitting suspended for a Division in the House.

4.22 pm

On resuming—

Sir Roger Gale (in the Chair): The start time should have been 4.19 pm, so I propose to add 13 minutes of injury time.

Mr Sheerman: Thank you, Sir Roger. Some of us were told emphatically by a normally well informed source that there would be two votes, one after the other. We were obviously misinformed. I will get back to the question that I finished on, if I can catch my breath.

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What choices does a 14-year-old have to make about their education, training and future plans? One piece of research, which I will come back to in a moment, suggests that the countries that do rather better than the United Kingdom are those with well formulated dual education systems. What does that mean? It is not rocket science; it means that there is not just one trajectory. In our country, it is far too often the belief that there is only one path that anyone cares about.

Mr Andrew Smith (Oxford East) (Lab): I am grateful to my hon. Friend for giving way and it may give him a little time to catch his breath. I am very grateful to him for introducing this enormously important debate, especially with all the expertise that he brings to the subject. Does he agree that, especially with the increasingly free-for-all institutional arrangements that we have with our schools, whereas there is at least some common framework of expectation for academic achievement—five GCSEs at grades A to C and all the rest of it—there seems to be nothing equivalent on the vocational level? Does he further agree that that is particularly damaging for those youngsters whose self-esteem is perpetually knocked back by academic underachievement and that therefore urgent attention needs to be given to good vocational options?

Mr Sheerman: My right hon. Friend is absolutely right. I was talking about that rather obscure way of describing it—a well formulated dual education system. It is right to say that, too often, our education system is predicated on the expectation that children will go to school, go through the primary and junior years, go into secondary education at 11, take their GCSEs at 16 and be successful, and go through to the sixth form and get the qualifications to go into higher education. That does not apply to the majority of young people in our country yet. The majority of our young people do not actually do that, yet if people listened to most of the chattering classes, they would expect that that was the case.

The rest of the young people in our country have a much less certain future, only because we—all parties and all Governments—have tinkered with and changed the alternative. We have not changed the route through to higher education that dramatically, although there has been some change in nuance and there are some changes going through now. However, the fact is that we have been frantically trying to find ways in which to engage young people in meaningful further education, whether that be in colleges, by which I mean FE colleges, or whether it be through young people going into apprenticeships, going directly into employment—employment with training or, sadly, without training—or, of course, going into the hands of private trainers. There has been a range of opportunities.

The private training sector is very underestimated. I know the private training world very well. Unlike most parts of the education system, there are brilliant private sector educators and trainers, and there are some average ones and some not quite so good, but the market in private training is such that if someone does not perform, they are more likely to go out of business or see their business shrink quite dramatically than if they are running a college. That is the truth of the matter.

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There is a cold wind coming through the education system and particularly in relation to the area that we are talking about today—the employability of young people and their getting the right skills for employability. That suggests that increasingly we must have greater transparency in the outcomes of the alternatives and accountability for what is delivered, whether it is the private sector through the Work programme, Jobcentre Plus and anything that it contributes, or what colleges do.

We all have to be very conscious of the last annual report of the chief inspector of schools. I was surprised that there was such a critical evaluation of the quality of FE in our country, which I felt, as a former Chairman of the Select Committee, was a slumbering giant. I was recently on the Skills Commission, looking at specialism in further education. Where further education is good, it is really good. We need only look at Newham and Hackney. We need only look at the brilliant experience in Cornwall. A fantastic-quality education is being delivered off six sites. People there know absolutely what the labour market is like and are engaging absolutely with small and medium-sized enterprises, not just the easy big ones, and delivering relevant skills training.

Caroline Dinenage (Gosport) (Con): I commend the hon. Gentleman for the incredible work that he has always done in wanting to improve the life chances of our young people. Does he agree that there has been a tendency in recent years for the FE sector almost to compete for the low-hanging fruit, rather than seeking ways in which it can engage those who are not in education, employment or training by offering innovative and inspiring courses?

Mr Sheerman: I absolutely agree with the hon. Lady. There is no doubt that the blemish on the record of our country, under several Governments, has been the inability to deliver high-quality education and training to about 25%—it is sometimes as high as 30%—of the population. They are a lost generation in many ways.

How do we have a system that allows so many children to underperform in primary school? We can predict by the time they are 10 that a significant percentage will never get the GCSEs to take them into a fulfilling career. By then, all the odds are stacked against them. What have we done wrong in primary school education? It is the new frontier. More people will look at the quality of primary education outcomes over the next few years, especially given the enormous pressure on places due to the boom in population growth. There will be a crisis in primary education. I am looking at the Minister, because he must know that.

We are not talking about primary education today, but when one goes into schools, and I still go into many schools over the year, every head says that they can predict NEETdom—the likelihood of a child becoming not in education, employment or training—very early, as the child emerges out of pre-school and into the early years of primary education. That is how challenging the problem is.

I am not sure, Sir Roger, how much time we have left for the debate.

Sir Roger Gale (in the Chair): Sorry?

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Mr Sheerman: How much time is left in the debate? I am being tentative, because I do not want to speak for too long.

Sir Roger Gale (in the Chair): That was the issue under discussion, which is why I was not paying attention. I am terribly sorry. I do not want to be ungenerous, so due to the interruption, the hiatus and some confusion over whether there would be a second vote, if the hon. Gentleman takes no more than another five minutes and we finish the debate at 4.45 pm, that would be fair.

Mr Sheerman: Thank you, Sir Roger. I shall carry on the journey.

At 14, a young person is likely to be in school and studying full time. However, they could also enrol at a university technical college, study full time at a further education college or go to a studio school. Their older sibling may be starting an apprenticeship and their other sibling may be starting a different sort of apprenticeship —one in a different sector and perhaps of a different length—or a traineeship. What should the 14-year-old do? Should they stay in school or choose another option? What support are they given to make that choice? Are the options of equal value? Does each lead to a decent job? What happens if a young person chooses one option, changes their mind and wants to transfer?

At a time of record youth unemployment, the educational choices made by young people have never been more important. At the same time, the participation age is rising to 17 by September and 18 by 2015. The structures and institutions that make up our 14-to-19 education system are not evolving but being radically reshaped in design. That gives us a problem. It is a difficult path. There are no clear, simple pathways to progression.

This is the only party political bit of my speech: the Government seem to have given up on careers information, guidance and advice. They have more or less said, “If you want that sort of thing, it is up to a school or you do it on the internet.” I was on the Skills Commission inquiry into careers information, advice and guidance, and about 17% of young people were using the internet to access such information then—that percentage is probably in the 20s now. All the research shows that the key to getting through the pattern of complex choices is face-to-face guidance from a human being with experience, knowledge and networks.

I recently talked to a head of history in a school, who said, “I have just been asked to look after careers. I have no history of knowing about careers. I’ve had two interviews, which said, ‘Go into that classroom and show us you can teach.’ I know nothing about choosing a career, but I’ve been asked to teach careers.” Careers guidance is an important profession, but we have got rid of the system. If we do not do something about that, we will be in grave danger.

Raising the participation age means that we face a fundamental change. There are two choices: ignore it and fill schools with people who do not want to be there, or proactively ensure that when young people stay on at 17 and then 18, they are given opportunities for high-quality work experience. I have never been one of the naysayers about work experience. It is important. Having four brushes with work experience at school increases the likelihood of a person getting a job by 10 times. Young people at those ages must have

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opportunities for good traineeships and apprenticeships. Most of the good apprenticeships in Holland, Germany and the Nordic countries last three years; our average is one year.

The debate is a little chaotic for all sorts of reasons, but my plea in the truncated time available is about quality. We must ensure that we stop the party political shouting match and agree that we want our young people up to 25 never to be unemployed. They must always be in education, training or doing work experience, and should not be living on the margins of society on tiny bits of benefit, otherwise we will have intergenerational worklessness for the foreseeable future. Our young people should not be forgotten. We must deliver high-quality guidance and ensure that our country can be proud of what every young person, whatever their background, achieves.

4.36 pm

The Parliamentary Under-Secretary of State for Skills (Matthew Hancock): I am grateful for the opportunity to set out what the Government are doing to tackle NEETs in the context of raising the participation age. I am particularly pleased to hear from the hon. Member for Huddersfield (Mr Sheerman). He has experience and a long-held passion. He was Chairman of the Select Committee on Education and Skills in the previous Parliament and clearly has a huge amount to say. It is important and valuable for young Ministers such as me to listen to what he has to say. I strongly agree that there is cross-party consensus on tackling youth unemployment, which rose too much in the good years and, although it is still far too high, is thankfully now falling.

The only point of partisan contention was the rather disappointing part about information, advice and guidance. The new duty on schools to provide independent and impartial advice, the age range for which has since been extended, came into force only in September and is now in place. It did not replace a system. The Connexions system was widely regarded as a failure. It is incumbent on us all to ensure that the information, advice and guidance duty on schools is in place. Misrepresenting it, as the hon. Gentleman did—for party political reasons, he said—is unhelpful, because this is an area with broad party political support.

I shall take the opportunity to answer the series of questions the hon. Gentleman raised. I will try to get through as many of them as possible, but I am happy to answer them all in more detail if I cannot get through them in the seven or eight minutes I have left. The debate about the future of 16-to-18 education takes place in the context of raising the participation age, which was set out in legislation in 2008 under the previous Government and which we are taking forward. Since 2009, participation in education and work-based learning has risen from 78.8% to 82.2%. It is going in the right direction, but we must ensure that the tools are in place to make it go further. I shall touch on six areas where we are taking action to achieve that aim.

The hon. Gentleman rightly mentioned apprenticeships and their value and importance. Doug Richard’s recent review of apprenticeships puts employers in a central role, setting standards, overseeing testing and becoming more demanding purchasers of training. We can all sign up to and agree with that. He wants a shift from what he

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saw as a box-ticking assessment to having clear standards towards the end of an apprenticeship, accompanied by a more open and innovative training market, with greater freedoms in how people are trained and greater emphasis on the outcome. I am very attracted to that model, which builds on some of the principles being tested through the employer ownership pilot. We will respond formally to the Richard review in the spring, and we will consult employers, educators, providers and apprentices, but we welcome the review’s direction of travel.

We know that, as apprenticeships become more rigorous, many young people are highly motivated by the prospect of work, but need support to get into it. I strongly endorse the hon. Gentleman’s support for work experience. The statistic that four episodes of work experience lead to a 10 times greater chance of getting a job was new to me; I am interested in the analysis behind that and want to know more about it.

The idea behind having a high-quality apprenticeship programme is that, as employers often tell me, young people lack the right skills and attitudes to succeed in the application process. When they have to compete against adults for jobs, they risk being passed over because they do not have such skills. Traineeships will support a significant number of young people into apprenticeships. We are consulting very broadly on their design, but our aim is for them to be available for young people from September 2013. They will offer a combination of extended work placements, work skills and English and maths, together with other flexible training and support to suit individual needs.

Caroline Dinenage: I completely endorse everything that the Minister says about building links between business and students, which will give students much more experience of the real world. I wonder whether, like me, he was very impressed by the “We made it” school exhibition earlier today? It has encouraged young school kids—often from year 9 upwards—to get involved in innovation and invention to build the entrepreneurs, engineers and inventors of tomorrow. We should encourage more such projects.

Matthew Hancock: I am extremely excited by that project and many similar ones that are springing up. Part of the duty on schools to give information, advice and guidance to that age group is to encourage inspirational

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people to get into schools to show what they can do with their life, and to motivate pupils by bringing a plethora of opportunities and those from different industries face to face with them, so that they can understand what is available.

Mr Sheerman: The only point that the Minister and I have fundamentally disagreed about is that if a school has no independent voice with experience about careers information, guidance and advice, all the emphasis is on keeping children in school, because bums on seats means income and money: if they go off to an apprenticeship or anywhere else, the school loses money. There is a terrible agenda in schools and colleges to keep children on one track, which is often not the one that is good for them.

Matthew Hancock: There is a duty on schools to provide independent and impartial advice. Ofsted is conducting a thematic review of how that is being implemented, which will report in the summer, and I shall look closely at its outcomes.

In my remaining minute, I will touch on the strengthening of vocational education and further education through a new FE guild and through stronger intervention in failing colleges, which is an important step, and on the introduction of progression through vocational education by ensuring that the highest quality vocational qualifications are supported and recognised. Those will include a Tech Bacc to ensure that, for students at 18, there is a high-quality and well-recognised suite of qualifications. When vocational education rightly becomes as rigorous and demanding as academic education, it will be seen as on a par with academic education, and that is what we hope to achieve.

I welcome this debate and the insights of the hon. Member for Huddersfield. I am sure that there can be plenty of cross-party collaboration to improve the life chances of our pupils and young people in this country for many years to come.

Sir Roger Gale (in the Chair): I thank both the Minister and the hon. Member for Huddersfield (Mr Sheerman) for their understanding. I am sad that the debate has had to be concluded in this way, but that is owing to the business of the House, and I am afraid that we all have to live by it.

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Council Tax (Benefit Claimants)

4.45 pm

John Hemming (Birmingham, Yardley) (LD): I am pleased to serve under your chairmanship, Sir Roger, and I thank Mr Speaker for allowing such an important debate.

A single person on jobseeker’s allowance or income support gets £56.25 a week if they are under 25 or £71 a week if they are over 25, but the Welfare Reform Act 2012 means that those people’s income will fall about 56p or 71p behind inflation next year. Some councils are proposing to charge them £3.55 a week, or even more, for council tax. Birmingham city council intends to ask for 20% of the full amount from people on a subsistence income.

The financial position in western countries is bad. Between the fourth quarter of 2011 and the fourth quarter of 2012, UK GDP grew from an index of 102.8 to 102.9. People who have not looked at the source data think that the economy flatlined, when it in fact crawled up a single tenth of an index point, but the consequences are much the same. I have argued for some time that the high price of oil, and hence the high price of energy, will reduce economic activity. Unless we see a material reduction in energy prices, we will continue to have a stuttering economy.

That affects the public finances, because tax revenue is anaemic and more people are out of work. To keep sovereign debt interest rates under control, we need to control public spending. Unless there is a very high economic spending multiplier, additional spending will not result in a sufficient increase in tax revenues to allow a reduction in borrowing. Little of the fiscal debate concerns the key issue that we are in fact borrowing to keep up revenue spending, and that there is no space for additional spending. Furthermore, we must reduce Government spending to reduce the deficit and show sufficient commitment to keep gilt interest rates down. It is important to remember that every one percentage point on gilt interest rates increases costs by more than £10 billion a year in additional cuts or additional taxes.

The welfare bill cannot be immune to savings, although the £3 billion-plus arising from the 2012 Act is small in comparison with the deficit. I supported that legislation, although I am concerned about what will happen to the cost of living, and we may have to revisit that either if there is greater than expected economic growth—that currently looks unlikely—or if the cost of living goes up by more than expected.

Historically, local government had a great ability to increase central Government financing merely by putting up the council tax, because a major proportion of council tax was paid by central Government through council tax benefit, with an increase of the council tax resulting in an increase in central Government funding. The total central funding was around £5 billion; in Birmingham, it was about a quarter of council tax revenues.

We needed to put tight controls on central Government spending, but there also needed to be a change in the relationship between councils and the central Government in the operation of council tax benefit.

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Sir Roger Gale (in the Chair): Order. I am sorry to interrupt the hon. Gentleman. He does realise that he can speak until 5.15, does he not? The time has been extended.

John Hemming: Thank you, Sir Roger. I am trying to ensure that I can make my speech and allow time for interventions, but I will slow down a little.

On council tax benefit, it may be that that relationship can be changed, but I would expect it to be needed for at least a decade. Any additional funding could be only by discussion, not through automaticity, as has previously been the case. The old system gave people such as Sir Albert Bore a local hand in George Osborne’s central Government pocket.

Thereafter, local councils will have the difficulty of a 10% cut in that support, but they will have the ability to raise additional costs from empty properties, flexibility as to how to provide support for people on lower incomes and the offer of grant support, which would be £2.1 million for Birmingham. There is an argument that it is a good idea for everyone to contribute something towards local government spending. A contrary argument is that it is silly for all of someone’s income to come from benefits and for there also to be an additional tax transaction.

My own view is that we need to look at things from the perspective of someone on £56.25 or £71 a week after rent. They have certain fixed costs, such as water and energy bills, for which there is no support. Without a phone, such a person will have more difficulty getting a job. I was uncomfortable about their falling behind inflation by 56p or 71p, but Labour is proposing to charge those in band H—some people in band H are on benefits—up to £8.50 a week in Birmingham. The food budget is about £20 a week for somebody on £71 a week, and Sir Albert is asking for more than a day’s worth of that budget for the council. Furthermore, food costs are expected to increase and energy costs do not look as though they are on the way down.

It is true that the average stay on JSA is about four months, but we must have a system that enables everybody to cope. I accept that some people have no recourse to public funds. We cannot say with certainty that everybody who cannot get a job in 12 months is a scrounger. There is a baby and bathwater problem—if we make the system too tough, we start hitting a lot of people who are trying hard to get a job and just find the economic situation too tough.

The good news, if it can be called good news, is that the courts will only attach benefits of up to £3.55 a week—5% of the 25-plus JSA figure—for council tax and so on. Hence, in the end, the council can only get £3.55 a week, but that is five times the cut that the Opposition opposed last week. The figure of £3.55 a week includes the £65 summons fee. Hence on Birmingham’s figures after collection costs, there would even be a cash shortfall for people in band A. The council has not taken that into account in its calculations.

It is worth looking at the figures behind the calculations. In 2012-13, Birmingham expects £88.2 million of council tax grant, and it is likely to get £79.5 million in 2013-14. That is a shortfall of £8.7 million. Using a 98% collection rate for the new charges, the council can get £6 million from additional empty homes charges, with only an 80% collection rate on the 150% charge.

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The council is offering a grant of £2.1 million, which leaves a shortfall of £600,000. That can be covered by changing the rules on backdating, which will potentially bring in £883,199. In any event, that allows the council to cover the costs of the cut without charging people on JSA a penny. The Government grant allows a charge of between zero and 8.5%, and I believe that the passing of the Welfare Bill justifies the zero charge.

We then come to the sting in the tail of Sir Albert Bore and Birmingham Labour’s approach on charging people on JSA council tax. They put out a misleading consultation that argued that they should keep support costs within the level of Government funding. That means taxing poor people to pay for benefits for the poor. They estimate a 1.45% increase in the cost of council tax more generally, an increase of £1.3 million. The real sting in the tail, however, is the taxing of a “contingency” figure of £882,316 on those people on JSA.

The absurdity of such a policy is obvious in the long term. It will require a further increase in the proportion of tax on those on JSA for each year that the council tax is increased by 1.45%. However, the key is that we should ask for the burden to be shared, not simply hit those people on the lowest incomes with a tax to pay for people who also have low incomes. Yes, that does mean that somehow the cost of £1.3 million should be found from the general fund. Furthermore, the contingency risk, which could go either way, should be borne by the general reserves. However, the general fund is getting an additional £1.4 million from an increase in the tax base in any event.

Sir Albert, in his “jaws of doom” graph, says that inflation will go up by £18 million from £8.2 million in 2012-13 to £26.2 million in 2013-4. He has recognised that that is too high by more than £5.3 million, but there is still an increase of £12.7 million. That is more than a doubling in the council’s assessment of inflation and easily allows the £1.3 million needed to avoid taxing the poor to be found.

There is a problem with low pay. The biggest problem is the driving of wages down towards the minimum wage and it may be worth having visas for Romanians and Bulgarians from 2014 to reduce that effect. However, Sir Albert Bore’s “jaws of doom” graph suggests a cost to the council of £11.5 million in 2016-17 for increasing the pay of the employees of contractors. That is a nice thing to do, but when we are taxing the poor—including those people affected by that increase—in part to pay for it, that has to be questioned.

Those on the minimum wage are not paying council tax, and Labour’s proposals would increase their costs also by the full amount of 20% of JSA. Given the wage increase and the tax increase, someone in band C would get an additional £28 a week after tax, but lose £9.46 in additional council tax. Those who do not work for contractors would just pay the additional tax.

The Government, however, cannot come out of this without having to think carefully about the future. The funding provided in this year should also be provided in future years. This issue may not have got the media attention of the cut in child benefit for higher earners, because inherently very few people in the media are on JSA—they have jobs—whereas quite a few are affected by the cut in child benefit. It is, however, a very important

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issue for those people facing this tax. I do not think the Government can use financial constraints to justify this tax while increasing foreign aid.

Richard Burden (Birmingham, Northfield) (Lab): I am grateful to the hon. Gentleman for giving way. I am pleased and reassured that he has drawn breath before anything more serious happened in the Chamber. I think he might agree with me that all this takes place in a context. As I recall, at the time when Labour was in power, the hon. Gentleman was very vocal, both as a councillor and subsequently as a Member of this place, in saying that Birmingham did not get enough money from the Government. He is now quoted in The Birmingham Post as saying that the authority

“has done relatively well in the local government settlement in comparison to other authorities.”

Does he think that a cut in spending power of £149 for every single Birmingham resident, compared with £74 as a national average, really counts as doing well?

John Hemming: The argument is about whether it is best to compare people on the basis of the percentage cut in spending power or the total cut. If another council is spending only £40 and it has the whole amount cut, that is going to cause it a lot more problems. There is no doubt that it is the percentage that matters, and Birmingham’s percentage in this particular spending round is relatively good. It has to be accepted that all the figures are better than the average. Unquestionably, Birmingham has done relatively well. If the Labour party goes round whinging, no one will give them any credibility whatever. I am happy to take further interventions.

Steve McCabe (Birmingham, Selly Oak) (Lab): The hon. Gentleman’s words may come back to haunt him. Most people in Birmingham expect their MPs to stand up for them. If I have understood the hon. Gentleman’s position, he is trying to suggest that Birmingham council is deliberately over-charging the poor. In doing that, he is managing completely to ignore the fact that it his Government who are cutting council tax support.

The hon. Gentleman seems to be advocating that Birmingham should accept the transitional grant. I have just read the Institute for Fiscal Studies report. Will he tell me whether he accepts that this is a one-off, one-year grant that is designed to persuade councils not to cut council tax support by as much as the Government are cutting council tax funding? Despite his maverick use of figures, does not it ultimately mean that further services will be cut to make up the shortfall? If that is his position, why does not he tell people?

Sir Roger Gale (in the Chair): Order. There is a limit to what I am prepared to permit.

John Hemming: I thank the hon. Gentleman for his questions. On the first one, which is fighting for the city, the right hon. Member for Wentworth and Dearne (John Healey) and I campaigned considerably, including in this Chamber, for an increase in fire funding, because the proposals from the Government were unfair. The Government indeed changed those proposals, and it is now accepted that the new proposals on fire funding are completely fair. However, when the city does relatively

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well out of the funding settlement, I will have no credibility at all if I go around whinging about it, which is what Sir Albert Bore does whatever happens. On the first point, of course I will fight for the city, but when we get a reasonably good deal I will say just that, because it is foolish to complain about things when we are actually doing quite well.

I accept that I have gone through a lot of figures. I can give hon. Members the spreadsheets if they want to see them. If the Government grant is £2.1 million, it is true that £1.3 million is needed from the general fund. However, if houses are built and people move into the city, there is more council tax. The estimated figure for next year is £1.4 million more. The Government grant leaves a shortfall of £1.3 million. If we then use the £1.4 million of extra council tax to prevent ourselves from having to pay the poor, we are far better off.

Steve McCabe: Is the hon. Gentleman saying that any additional council tax revenue that is generated by new growth should all go towards the council tax support scheme, and that there should be nothing to deal with any of the other cuts being inflicted on Birmingham?

John Hemming: I have highlighted areas in which there are reserves within the council. I have particularly identified the over-budgeting for inflation. I quoted the figures from the council’s background papers, and I am happy to share the spreadsheets with all Birmingham Members if there interested. The issue is about choices. It is clear that the administration in Birmingham has decided that its choice is to try to charge poor people council tax. My view is that it has a lot of alternatives. To say, “We must do it,” is complete nonsense.

I accept, as the hon. Gentleman said, that the grant is a one-off scheme at the moment, but in my speech I said—I did not say it all that quickly—that we should extend it into further years. I hope that the Minister is listening. I repeat that I want to see the Government extend the grant to further years, because it is important that we try to protect the poorest people in society. The argument of the administration in Birmingham is that we need work incentives. We already have things such as the Welfare Benefits Up-rating Bill, but the administration is pushing it too far.

Steve McCabe: I am interested in the hon. Gentleman’s point about work incentives. Does he accept that the change in council tax support will fall on those who are of working age? They are the people who will be hit.

John Hemming: I accept that. That is why the Labour party administration in Birmingham argued that it wanted to do this—to encourage people to work. I want to encourage people to work, but let us recognise that the Welfare Benefits Up-rating Bill is coming in. If we ladle things on top of people, it gets very difficult. They are householders, so they are having to manage being in a household. The courts will not enforce the whole tax bill, and the council has ignored that, but the point is serious. It is a political choice made by the authority. The grant that I want to be continued costs only £100 million. I say “only”—£100 million is quite a bit of money, but it is not difficult to find from the national budget.

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It was a real struggle to get the information that I have used in this speech from the Labour administration in Birmingham. In its report, its reason for not taking the Government grant was:

“The deferral of the scheme for 12 months may not truly promote positive work incentives or support people back into work.”

It seems to me, however, that it wishes to tax the poor in order to blame the Government and for party political gain.

5.2 pm

The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis): It is a pleasure to serve under your chairmanship today, Sir Roger. I am grateful to my hon. Friend the Member for Birmingham, Yardley (John Hemming) for providing us with the opportunity to debate the policy of localising council tax support, which will be delivered through the Local Government Finance Act 2012. I will touch on the salient points generally as well as the specific points about the council in Birmingham if time allows.

There is widespread recognition that welfare spending needs to be targeted better. My hon. Friend made that point. More needs to be done to tackle poverty by getting people off benefits and into work. Council tax benefit expenditure more than doubled between 1997 and 2010 under the Labour Government. Localising support for council tax delivers a 10% saving on council tax benefit expenditure, making a vital contribution to deficit reduction.

Importantly, however, this reform also gives local authorities control over how this saving is delivered, and it gives them a direct financial stake in supporting local people into work. I am clear that councils are best placed to understand local priorities and the needs of residents on low incomes. Localisation enables them to take local factors into account when deciding on levels of support and programmes.

Localising council tax support gives local authorities a real stake in the economic future of their areas. We want local authorities to do more to grow their local economy and reap more of the benefits of local economic growth. Making local authorities responsible for council tax support reinforces the positive benefits of driving economic growth in their areas. Funding for local council tax support schemes is being provided through the retained business rates system itself, further strengthening the incentive for local authorities to grow their local economy and get more people into work in the first place. In doing so, local authorities will not only be helping to create jobs, but will be increasing the income from increases in business rates and, therefore, the amount that they can spend on other valued local services.

Through our other local government reforms we have been clear that we want local authorities to be fully accountable for the decisions that they take. At present, councils can put up council tax without considering the impact on council tax benefit costs. Localising council tax support will change that and encourage greater local financial accountability. It will also strengthen the incentives to drive down fraud and error. We have shown that local authorities can do far more about that.

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Councils have choices about how to design their schemes and manage the reduction in funding. As well as being able to choose whether some awards should be reduced, they can also manage the reduction by reconfiguring funding for other services through efficiency savings, using reserves, or using the flexibility that we have now given over council tax charges. I am aware that some local authorities, such as East Hampshire district council, Bristol and the London borough of Merton have decided to do just that, so that council tax benefit claimants in their areas see no reduction in the support that they receive, which shows that it can be done.

Local authorities have until this Thursday to agree their local schemes. I am aware of a range of options that are being considered across different authorities in addition to the examples I have given.

John Hemming: Will the Minister confirm that if a local authority has not agreed a scheme, central Government will impose a scheme where people on JSA pay no money?

Brandon Lewis: I will come back to that point in a moment.

Let me give another example. Mansfield district council has agreed a scheme that will see claimants pay a maximum of 8.5% of their council tax bill and no change to the support that they receive on top of that for six weeks after returning to work, which is better than the current four. The council has also set up a hardship fund to assist people who experience genuine financial difficulties as a result of the changes. That is the kind of sensible, forward-thinking approach that I hope to see other local authorities adopting. The debate is a good opportunity to put on the record some of the great work that authorities are doing.

Richard Burden: In reality, Birmingham is losing £11 million in Government support to help people on low incomes or on fixed low incomes with their council tax. It is being told by the Government that for two years, perhaps—no commitment after that—it might get £2 million back if it does what the Government say. The Government’s financial envelope, looking forward to the next five years, will leave Birmingham with a shortfall of £625 million, although it is being told that if it freezes council tax, it will get another bung, but only for two years. This sounds like a loan shark offering a payday loan that will leave Birmingham’s citizens much worse off in the space of two years.

Brandon Lewis: I will touch on a comment that was made by my hon. Friend the Member for Birmingham, Yardley earlier. To be fair, he made the point very well. Some hon. Members are confusing their role as Members of Parliament in representing their residents when they criticise my hon. Friend and make comments about supporting Birmingham. The job of an MP is not to support the council; it is to support, defend and stand up for the residents. There is nothing wrong with a Member of Parliament standing up for the residents and challenging the council on whether it is doing the right thing and putting in a good scheme. I have already given examples of councils that are doing the right thing by their residents. If Birmingham does not choose

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to do that, that is a decision that Birmingham residents should consider carefully when they get their opportunity at the ballot box.

John Hemming: Does the Minister agree that if the council produces massive figures by exaggerating, for instance, inflation, it gets misleading results?

Brandon Lewis: That is a fair point. Obviously, anybody can use figures in a way that suits them. The reality is that we have put in some money to help councils through the first year or so, and I will come back to that in a moment. However, if councils have not done anything by Thursday, the current scheme stays in place.

I see the most variation in the amount that local authorities propose to charge benefit claimants who have previously received 100% support. Suggested amounts range from 6% to 30% of council tax bills.

Steve McCabe: Will the Minister confirm what the Institute for Fiscal Studies has said, which is that the support that has been offered is worth 25% of the cuts? Is that not the difficulty?

Brandon Lewis: I will come back to that point in a moment, but as it happens I do not agree that that is the difficulty; it is just part of a wider package. As ever, Opposition Members tend to pick on one thing rather than look at an issue as a whole. The flexibilities that we have given to local government, along with councils’ ability to crack down on fraud and error—£200-odd million last year alone, which in most people’s books is a lot of money—give local government enough to deal with the measure. Across the country, that comes to more than its cost.

I am disappointed that some councils have failed to rise to the challenge to explore every option, and that they are taking what they perceive to be the easier route of looking at double-digit across-the-board cuts. That is a short-term approach that slashes entitlements for the poorest without looking at other ways in which to manage the funding reduction, and it is not sustainable. It is common sense that asking the poorest to pay contributions of 30% is simply unreasonable and, in the longer term, as the funding for council tax support is built into the baseline level of business rates funding, councils have everything to gain from helping people back into work. That is where their focus should be.

It is, of course, for local authorities to consider the appropriate funding to be applied to support local taxpayers as part of their wider budget decisions. Making councils financially responsible for providing support creates stronger incentives for them to get people back into work and to reduce costs.

Richard Burden: Why is the support scheme that the Government are offering only temporary?

Brandon Lewis: That issue was raised earlier, and I said that I would come to it, so if the hon. Gentleman will bear with me I will do so.

We want to ensure that councils are doing all the right things. They should be looking at back-office functions, tackling fraud and error, and carrying out

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every one of the “50 ways to save”, especially an authority such as Birmingham, where the spending reduction for 2013-14 is just 1.1%.

To provide the space and the support for local authorities to design a scheme that protects the poorest by making the most of opportunities to find savings elsewhere, the Government announced in October the provision of an additional £100 million transitional grant for 2013-14. The money will be available to councils—billing and major precepting authorities—that choose to design their local schemes so that people currently on 100% support pay between 0% and no more than 8.5% of their liability, the taper rate does not increase above 25%, and there is no sharp reduction in support for people entering work. Details of how the grant can be claimed were sent out on Friday.

As time is of the essence, I will skip to the core query about the grant being for only one year. I recommend that authorities that have not yet looked at their schemes do so very quickly now so that they might qualify for the grant. It is for only one year because it is, effectively, pump priming. It gives councils that year—that opportunity —to redesign their schemes, to consider how they fund

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other services and look at what they do with the flexibilities we give them regarding council tax and encouraging local growth. The benefits will come during and towards the end of the first year, and we are putting the money in up front to give the councils a cushion to get them through that year. I will be very clear about this: we will closely watch the decisions local authorities take on their schemes and the impact on the poorest people in their communities before deciding whether to take further action.

Localising council tax support is an important step towards reducing the welfare bill. The measure will not only reduce spending by £470 million, but give local authorities significant local control. It will give them an opportunity to make council tax support an integral part of the council tax system. Ultimately, the new localised system will enable councils to take decisions locally about the provision of council tax support in their areas, and it is consistent with the drive for greater local financial accountability and decision making.

Question put and agreed to.

5.13 pm

Sitting adjourned.