18 Dec 2013 : Column 723

House of Commons

Wednesday 18 December 2013

The House met at half-past Eleven o’clock


[Mr Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked—

Whisky Industry

1. Mrs Anne McGuire (Stirling) (Lab): What discussions he has had with the Chancellor of the Exchequer on the employment interests of workers in the whisky industry in Scotland. [901633]

The Secretary of State for Scotland (Mr Alistair Carmichael): I have regular discussions with the Chancellor about a wide range of issues, and I can assure the hon. Lady that the whisky industry in Scotland and its employees are a key priority. My Department has long-standing contact with the Scotch Whisky Association, which aids our understanding of the industry.

Mrs McGuire: Scotch whisky is exported to about 200 countries, and the industry directly employs 10,000 people in Scotland. According to a recent White Paper from the Scottish Government, there will be about 90 Scotch whisky embassies if the Scottish Government have their way after independence. Does the Secretary of State agree that trade agreements brokered by a strong and extensive United Kingdom diplomatic and international trade infrastructure are integral to the success of Scotch whisky exports? I—

Mr Speaker: Order. I am sorry to be discourteous, but the question is too long.

Mr Carmichael: The right hon. Lady is absolutely right. Given that 90% of the product of the Scotch whisky industry is for the export market, it is of supreme importance that Scotland has the best possible access to that market, and we have that facility through the network of some 270 embassies throughout the world and through United Kingdom Trade & Investment. That is what matters, and that is why the Scotch whisky industry makes such good use of it.

Mr Alan Reid (Argyll and Bute) (LD): The Scotch whisky industry provides many jobs in my constituency, but I feel that it is very unfair that whisky is taxed at a higher rate per unit of alcohol than beers and wines. Will the Government look again at alcohol taxation with a view to creating a level playing field?

18 Dec 2013 : Column 724

Mr Carmichael: I may be wrong, and if I am I apologise, but I do not think my hon. Friend is right about the relative taxation of whisky and other alcoholic drinks. [Interruption.] I have now been informed that beer duty is 37% and whisky duty is 42%, but in any event it is wrong to play off one part of Scotland’s highly successful food and drinks industry against another. I am sure that the Chancellor will continue to listen to representations from the Scotch whisky industry, which my hon. Friend and I have made jointly over the years.

Mr Brian H. Donohoe (Central Ayrshire) (Lab): I declare an interest, as secretary of the all-party parliamentary scotch whisky and spirits group. Nearly every week the group receives representations about the whole question of the duty escalator and the unfair treatment of the spirits industry in relation to the beer industry. The Chancellor gave so much to the beer industry in his most recent Budget. What representations has the Secretary of State made to the Chancellor with the aim of overcoming the problem?

Mr Carmichael: I will continue to make representations on behalf of the whole food and drink industry in Scotland, in which the hon. Gentleman and his all-party group play an important part. I have joined the hon. Gentleman on many occasions over the years as part of such delegations, and I will continue to give him as much support as I can.

Angus Robertson (Moray) (SNP): Does the Secretary of State not accept that 80% of the price of a bottle of Scotch whisky is duty, which is paid to the United Kingdom Treasury? Duty discrimination by the UK Government is widening the gap between the price of whisky and the price of other beverages. How does that help the industry and employees?

Mr Carmichael: The point to which the hon. Gentleman should respond—although I suspect that he will not—is that the Scotch whisky industry does very well as part of the United Kingdom industry, taking full advantage of the string of embassies and UKTI offices that we have throughout the world, and his policy of independence puts that at risk.

Angus Robertson: In opposition, the right hon. Gentleman and I, along with others, lobbied the Treasury to end tax discrimination. In fact, the right hon. Gentleman himself tabled an amendment for that purpose, supported by Liberal Democrat Members and the Scottish National party. Since becoming Secretary of State for Scotland, he has taken the Tory shilling, he is letting the industry down, and he is supporting a discriminatory duty. When will he stand up and be Scotland’s man in the Cabinet, rather than the Tories’ man in Scotland?

Mr Carmichael: I do hope that that sounded better when the hon. Gentleman rehearsed it in the mirror earlier this morning, because it sounded pretty poor just now. There is no escaping the fundamental truth that his policy would be the ruination of the Scotch whisky industry, for no good reason.

Low Pay

2. Mr William Bain (Glasgow North East) (Lab): What steps the Government are taking to tackle low pay in Scotland. [901634]

18 Dec 2013 : Column 725

The Parliamentary Under-Secretary of State for Scotland (David Mundell): With your permission, Mr Speaker, before I answer that question, may I draw the House’s attention to the fact that Saturday 21 December will be the 25th anniversary of the Lockerbie bombing? That remains the single largest loss of life ever in the United Kingdom, with 270 people perishing on that fateful evening. I am sure that the thoughts and prayers of the whole House will be with the community and with those who lost friends and family on that day. Much of the focus over the past 25 years has been on the perpetrators, but the friends and families of the victims and the community of Lockerbie deserve our respect and admiration for the formidable way in which they have coped with 25 years of unprecedented global attention.

The national minimum wage is one of Government’s key policies to support the low paid, and it is UK wide. On 1 October, the adult minimum wage increased to £6.31 per hour. We have also increased the income tax personal allowance to £10,000, taking 224,000 Scots out of income tax altogether and benefiting 2.2 million Scottish taxpayers.

Mr Bain: I am sure that the whole House will commend and agree with the Minister’s remarks about Lockerbie.

In his subsequent answer, the right hon. Gentleman omitted to say that prices had risen more quickly than wages in 41 of the 42 months he has served as a Minister in this House, that low pay was on the rise in Scotland and that the value of the national minimum wage had declined in real terms under this Government. When are he and the Business Secretary going to do something concrete to deal with all that? Or is he just going to sit on his hands while the cost of living crisis in Scotland gets worse by the day?

David Mundell: The hon. Gentleman is simply wrong. The October 2013 adult minimum wage rate is around 27% higher in real terms compared with the consumer prices index and about 15% higher in real terms compared with the retail prices index than it was on its introduction in 1999.

Mark Menzies (Fylde) (Con): Does the Minister agree that the best way to tackle low pay in Scotland is to get the economy growing and to create more job opportunities?

David Mundell: I absolutely agree with my hon. Friend, and I hope that Opposition Members will welcome today’s announcement that employment is up and unemployment is down in Scotland. We are not complacent, but we are on the right track.

12. [901644] Mr Frank Roy (Motherwell and Wishaw) (Lab): Low pay is a scourge that is now affecting thousands of families throughout Scotland. Would those families best be helped by giving them a decent living wage or by introducing a tax cut for millionaires?

David Mundell: The Government support the concept of the living wage, where employers can afford to pay it and where it is not introduced at the cost of jobs. It is something to be encouraged.

18 Dec 2013 : Column 726

Stewart Hosie (Dundee East) (SNP): The UK Government’s attitude to the living wage was encapsulated by the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson) earlier this year when she said:

“There is no recognised definition of a national living wage.”—[Official Report, 10 June 2013; Vol. 563, c. 211W.]

She went on to explain that the Government had therefore made no assessment of its consequences, were it to be introduced. Should not the Government move quickly to introduce a living wage for their employees, wherever they might be based in the UK, rather than hiding behind the vacuous argument that it is too difficult to calculate, given that we know it will be £7.65 an hour in Scotland and £8.80 in London next year?

David Mundell: It is never a surprise to hear the Scottish National party mention London in the same breath as Scotland. As I said to the hon. Member for Motherwell and Wishaw (Mr Roy), the Government believe that the living wage is a concept that should be supported, where employers can afford it and where it is not introduced at the cost of jobs.

Margaret Curran (Glasgow East) (Lab): May I associate myself with the Minister’s remarks about the terrible tragedy of Lockerbie?

Low pay is one of the reasons that people are using food banks in Scotland today. I wish nothing personal towards the Minister, but I am disappointed that the Secretary of State did not answer this question himself, because we know that the Secretary of State has recently begun to struggle with some of the details of his brief. Let me see whether the Minister can do any better. Will he tell the House what the percentage increase in the number of people using food banks in Scotland in the past year has been? Given that it is Christmas, I will offer him a hand. Is it (a) 100%; (b) 200%; (c) over 400%?

David Mundell: What the hon. Lady omitted to tell us was that under her Government the increase in people using food banks was 1,000%. Our Government are concerned about people needing to use food banks in a moment of crisis in their lives. We support the development of food banks and those who operate them, and I was very proud to open the food bank in Peebles in my constituency. But to pretend that these crises are of this Government’s making and that they have not been going on for a continuing period is to mislead the House.

Margaret Curran: The Minister should know that the increase in the past year has been 435%, which is more than 34,000 people, including more than 10,000 children, using food banks in Scotland. Those are shameful figures and all Members of this House should pay attention to them. He has refused to be drawn on why this is happening. Citizens Advice, the Trussell Trust and the Child Poverty Action Group are all saying that this Government’s policies are driving people in Scotland to use food banks. Are they all wrong?

David Mundell: Of course the hon. Lady does not acknowledge the 1,000% rise in the use of food banks under the last Labour Government. We want to look at,

18 Dec 2013 : Column 727

and understand, why there has been an increase in the use of food banks. That is why the Department for Environment, Food and Rural Affairs has committed to an extensive study on the use of food aid across the United Kingdom, and she will be able to read that when it is published.

Illegal Immigration

3. Mr Philip Hollobone (Kettering) (Con): What estimate he has made of the number of illegal immigrants in Scotland. [901635]

The Secretary of State for Scotland (Mr Alistair Carmichael): Given the ability of illegal and clandestine immigrants to move freely within the UK, it is not feasible to produce separate estimates for each part of the UK.

Mr Hollobone: It would appear that the Government do not really know how many illegal immigrants there might be in Scotland. Given the attraction of the whole of the UK to people from other countries, I suspect that the problem might be rather greater than the Secretary of State imagines, particularly in cities such as Glasgow and Edinburgh. Will he reassure the House that he will work closely with the UK Border Agency to ensure that Scotland is not an easy route into the UK for illegal immigrants?

Mr Carmichael: Certainly there should be no easy routes for anyone in these circumstances, but I would caution the hon. Gentleman against devoting too much Government resource to the compilation of figures that do not help us to tackle the problem.

Graeme Morrice (Livingston) (Lab): What discussion have the UK Government had with the Scottish Government about the operation of border controls in an independent Scotland?

Mr Carmichael: We have had no such discussion so far. The truth of the matter is that either we can have an open area with no border controls or we can have closely aligned immigration policies—unlike the position of the Scottish National party, we cannot have both.

Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP): For years, immigrants have been vital to the economy—in my constituency, I see the importance of Filipino fishermen—and, since the Union, the problem in Scotland has been emigration, not immigration. But what can we do for Syrian refugees, to enable them to come here as legal immigrants? Although the Secretary of State might have failed to get his colleagues to vote for war in Syria, what might he do this Christmas to help refugees come from Syria, especially given that Germany is taking 80% of the European total and the UK is taking zero, which Amnesty International says should cause heads to hang “in shame”?

Mr Carmichael: This country has a long and proud record of offering asylum to those who seek it and those who deserve it and need it. That will continue to be the case.

18 Dec 2013 : Column 728

Barnett Formula

4. Pete Wishart (Perth and North Perthshire) (SNP): What plans the Government have to review the Barnett formula. [901636]

The Secretary of State for Scotland (Mr Alistair Carmichael): The Government have no plans to review the Barnett formula in this Parliament.

Pete Wishart: That is not quite what the Secretary of State said only a few weeks ago. Gary Robertson asked, “What about the Barnett formula? Will that change post-2014?” The Secretary of State said—because it was he—“Let me be absolutely clear, erm, erm, er, there will be no action taken on the Barnett formula, erm, erm, until the economy has erm, er, stabilised.” Help me Rona! Why is he not just straight with the Scottish people? We all know that the bosses and the paymasters of the no campaign—his Tory friends—want Barnett scrapped. Is that not the real cost to the people of Scotland—£4 billion?

Mr Carmichael: It is a classic of the genre—synthetic outrage at its very best. The hon. Gentleman knows that the Barnett formula is one reason the people of Scotland reject independence. That is why he is operating his own little “Project Smear” to pretend that it is somehow at risk. The position has been put beyond any doubt today by the Prime Minister in a letter to the First Minister. The hon. Gentleman should explain that and tell the people of Scotland that the best way to get rid of the Barnett formula is to vote for independence.

Iain Stewart (Milton Keynes South) (Con): Does my right hon. Friend agree that the Scotland Act 2012 transferred substantial tax-raising powers to Holyrood, and that these complex changes should be allowed to bed in before we start making any further radical changes?

Mr Carmichael: Not only do I agree with my hon. Friend on that point, but I believe that the energies of the Scottish Government would be much better served if they were devoted to dealing with the implementation of those highly complex tax changes, which are due to come on stream in 2016, rather than running around and setting up scare stories of that sort.

Mr Ian Davidson (Glasgow South West) (Lab/Co-op): Is the Secretary of State aware that what we have seen today is the launch of separatists for Barnett?

Mr Carmichael: I could not put it better or more graphically myself.

Mr Russell Brown (Dumfries and Galloway) (Lab): The Barnett formula has served Scotland, and the Opposition believe that it is at the heart of redistribution across the entire UK, which is why we support it. I agree with the Secretary of State that the only threat to the Barnett formula is a vote for independence. Will he share with the House why he believes that the SNP Scottish Government do not understand that they are the only threat to the Barnett formula?

Mr Carmichael: I have a strong suspicion that that is wilful on the part of the Scottish Government. As I said a few moments ago, they know that people in the United Kingdom value the Barnett formula so they try

18 Dec 2013 : Column 729

to pretend that there is some threat to it. That is part of their strategy. They identify things such as the pound, the Bank of England and the ability to build complex warships on the Clyde, which are the things that the people of Scotland value from being part of the United Kingdom, and then pretend that they can hold on to them while becoming independent. It is just not credible, which is why they are losing the argument.


5. Miss Anne McIntosh (Thirsk and Malton) (Con): What recent discussions he has had with the Scottish Government on fisheries policy. [901637]

The Secretary of State for Scotland (Mr Alistair Carmichael): I have regular discussions with Ministers in the Scottish Government on a range of issues, including fisheries policy.

My ministerial colleagues in the Department for Environment, Food and Rural Affairs also work closely with the Scottish Government to ensure that the interests of Scottish fishermen are fully recognised in the UK position in EU fisheries negotiations.

Miss McIntosh: I congratulate the Government on achieving reform of the common agricultural policy and on introducing an element of regional control. What assessment has my right hon. Friend made of the implications for Scottish fishermen, and will they benefit greatly from it?

Mr Carmichael: I have long been an enthusiast for the regionalisation of the common fisheries policy, and I am delighted that, for the second round of reform, we have seen that at the heart of it. There is still more that can be done, but anything that brings fishermen, scientists and other stakeholders together in order to manage fisheries away from Brussels has got to be good.

Fiona O'Donnell (East Lothian) (Lab): Was the right hon. Gentleman as surprised as I was to see Scottish Nationalist party Minister Richard Lochhead claiming that he has secured the quota deal for Scottish fishermen while, at the same time, complaining that he has no voice? Is it not the fact that Scottish fishing is best represented in the EU with a strong voice as part of the UK?

Mr Carmichael: No, I was not at all surprised, because that is exactly the sort of double standard that we have seen from the SNP over the years on this and just about every other issue. The fact is that my hon. Friend the fisheries Minister led the delegation this year to the December Fisheries Council with exceptional skill. He delivered for the Scottish fleet the things that really mattered. In particular, he ensured that there was no further cut in effort and brought home important flexibility on monkfish quotas. He is to be commended for that—[Interruption.]

Mr Speaker: Order. There is far too much noise in the Chamber. Let us have some quiet so that we can hear a Scottish knight, Sir Menzies Campbell.

18 Dec 2013 : Column 730

Sir Menzies Campbell (North East Fife) (LD): No pressure, then, Mr Speaker. When my right hon. Friend is giving proper consideration to the future of the fisheries industry in Scotland, will he pay particular attention to the village-based fisheries industry? That is a particular issue in areas such as my constituency, based as it is on Pittenweem and surrounding ports. It is essential that the interests of the village-based fishing industry are not subjected to the sometimes overbearing influence of those who go further out to sea.

Mr Carmichael: I know from my constituency experience that the small inshore fleet is of great importance to the communities represented by me and my right hon. and learned Friend. His point is well made, and it is important that we do what we can to sustain the fleet in those small ports.

Dr Eilidh Whiteford (Banff and Buchan) (SNP): The Secretary of State knows that the postponement of the negotiations with Norway over shared North sea stocks means that the fishing fleet faces an uncertain new year. Will he support the Scottish Government’s calls for an increase in the North sea cod quota next year, in line with the scientific advice?

Mr Carmichael: As the hon. Lady knows, that is a subject to be determined at the EU-Norway talks in January. They have been held over, and although such an increase would be desirable—it is certainly what the industry is looking for—that is not entirely within our gift, as it is an EU negotiation.

Energy Prices

6. Mr Mike Weir (Angus) (SNP): What assessment he has made of the effect of energy prices on consumers in rural areas of Scotland. [901638]

The Parliamentary Under-Secretary of State for Scotland (David Mundell): I know from my own constituency that rural consumers face particular challenges on energy bills. The Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for Sevenoaks (Michael Fallon), who is responsible for energy, is working with all interested parties to obtain more secure and affordable off-grid supplies. I am due to meet the Office of Fair Trading early in the new year to discuss the matter.

Mr Weir: I thank the Minister for that answer. As he is well aware, rural consumers who are off the grid are often forgotten in arguments over energy prices. The energy company obligation is supposed to be technologically neutral, but the major energy companies will not include LPG or oil boilers in their schemes, which is surely discriminatory. Will he press his colleagues in the Department of Energy and Climate Change to ensure that such boilers are included in ECO schemes?

David Mundell: I am happy to do that. The hon. Gentleman has championed the issue of off-grid supplies, and I suggest that we hold a round table, as we did on rural fuel, with DECC and interested Scottish MPs to discuss that and other issues.

18 Dec 2013 : Column 731

John Thurso (Caithness, Sutherland and Easter Ross) (LD): Is my right hon. Friend aware of the particular difficulties in remote rural areas, where there is no access to main supplies for both gas and oil? Will he commend the concept of heating oil clubs, such as the one I am promoting in Landward Caithness? They have done much to depress that cost. What can the Government do to assist?

David Mundell: The Government are keen to support oil clubs like the one in Landward Caithness. I am sure that the issues that concern the hon. Gentleman’s constituents will be ably discussed at our proposed round table in the Scotland Office with DECC and Scottish MPs.

14. [901646] Anas Sarwar (Glasgow Central) (Lab): Why do the SNP, the Tories and the Liberal Democrats all agree that the price should go on the energy bill and the tax bill and that the energy companies should be let off scot-free?

David Mundell: We believe that something should be done about the mess in the electricity industry that the hon. Gentleman’s party left behind. That is why we are seeking to move people on to lower tariffs, that is why we are rolling back green levies, and that is why we are encouraging competition. What his party offers is a gimmick and a con.

North Sea Oil and Gas

7. Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op): What assessment he has made of the interim report by Sir Ian Wood on the future regulation of oil and gas extraction in the North sea. [901639]

The Secretary of State for Scotland (Mr Alistair Carmichael): The interim report by Sir Ian Wood has given Government and industry alike plenty to think about and that is exactly why we asked him to carry out his review in the first place. After his final report is submitted early next year, the Government will set out our plans to make the most of our offshore oil and gas fields.

Tom Greatrex: I thank the Secretary of State for that answer. He will be aware that Sir Ian Wood’s report refers to much of the North sea as a mature environment and to the need for collaboration to maximise the economic recovery for what is, by record, a volatile and, by definition, diminishing resource. Does he agree that the fragmentation of fiscal and regulatory regimes through separate arrangements for Scotland and for the rest of the UK continental shelf would minimise the chance of achieving that outcome?

Mr Carmichael: I think it is very clear to all who have an informed view of the industry that its best future lies as part of the United Kingdom, rather than as part of a Scotland separated from the rest of the United Kingdom. It is a mature industry that still has a great deal to offer, but it is telling that the Scottish Government’s recent White Paper gives absolutely no guarantees about the future of field allowances in the industry, which will be absolutely crucial to its future development.

Mr Speaker: The Secretary of State will not want to talk out his hon. Friend, Sir Robert Smith.

18 Dec 2013 : Column 732

Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): Is not the most exciting thing about Sir Ian Wood’s report the consensus he has discovered in the industry, which is that with more regulation and a stronger regulator with more resources there is the potential to unlock even greater investment, supporting jobs, taxpaying and energy security?

Mr Carmichael: The real strength of the Wood report, at least the interim version, is its credibility in the industry, because it has been informed by the industry and led by one of its most respected figures.

Prime Minister

The Prime Minister was asked—


Q1. [901683] Mr David Anderson (Blaydon) (Lab): If he will list his official engagements for Wednesday 18 December.

The Prime Minister (Mr David Cameron): I am sure that the whole House will wish to join me in sending our warmest wishes for Christmas to our armed forces in Afghanistan. Having just returned from there, I saw at first hand once again their incredible commitment and dedication. We should remember the families who will be missing them, especially at this time of year, and indeed we should remember all our service personnel around the world. Our country owes them a huge amount for the work they do and the sacrifices they make on our behalf.

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

Mr Anderson: I join the Prime Minister in sending our warmest wishes to our armed forces, and also to all the public sector workers taking care of us over the Christmas period.

Unless the Mesothelioma Bill is changed, 6,000 victims who were criminally and negligently exposed to asbestos at work will not receive any compensation from insurance companies. Will the Prime Minister intervene at the eleventh hour to prevent that from happening? If he does not, it will be fair to assume that he would rather stand up for the insurance companies than for innocent people who were exposed to asbestos at work.

The Prime Minister: I very much respect the hon. Gentleman’s record of campaigning on this issue, but I will say this: the Mesothelioma Bill is a huge step forward. Frankly, for decades there has been no provision for these people, through no fault of their own, who will die from this terrible disease. Once the scheme that we are putting in place is up and running, roughly 300 people a year will receive approximately £115,000 each. I think that is an important step forward. I will obviously look at what he has to say, but I think that we should be proud of the fact that after a long delay we are tackling this issue.

Mr John Whittingdale (Maldon) (Con): Will my right hon. Friend join me in saluting the courage of the hundreds of thousands of people who have been peacefully

18 Dec 2013 : Column 733

protesting across Ukraine for the past few weeks against their President’s decision to break off talks with Europe and to move closer to Russia? Does he agree that if there is any further violence against them, those responsible should be held personally accountable, and will he continue to hold out the prospect of closer links with Europe in the longer term, which is what the people of Ukraine want?

The Prime Minister: I absolutely agree with my hon. Friend that we should pay tribute to those in Ukraine who want a future linked to Europe and the peace, prosperity and stability that that relationship would bring. I think we should also say, as he has said very clearly, that the world is watching what the Ukrainian authorities have done and are contemplating doing in response to the demonstrations. I think we should stand with the people of Ukraine, who want that peaceful, secure and prosperous future.

Edward Miliband (Doncaster North) (Lab): I join the Prime Minister in paying tribute to all our troops serving around the world, particularly in Afghanistan. Once again this year, they have done our country proud. They have shown the utmost courage and bravery. All our thoughts are with them and their families this Christmas.

Today’s economic figures show a welcome fall in unemployment, and for every person who gets back into work it benefits not just them but their family as well. Does the Prime Minister agree, however, that it is a major challenge for Britain that at the end of this year there are more people than ever before in today’s figures working part time because they cannot get the hours they need?

The Prime Minister: It is worth looking at these unemployment figures in some detail, because I think they do paint an encouraging picture. Unemployment is down by 99,000 and the number of people claiming unemployment benefit has actually fallen by 36,000 in this month alone. There are 250,000 more people in work. Youth unemployment is down. Long-term unemployment is down. Unemployment among women is down. We have talked before about 1 million more people in work under this Government; there are now 1.2 million more in work. There should not be one ounce of complacency, because we have still got work to do to get our country back to work. Having everyone back in work means greater stability for them, a greater ability to plan for their future, and greater help for their families. But the plan is working; let us stick at it and get unemployment down even further.

Edward Miliband: The Prime Minister did not really answer the specific question I asked. It is good that our economy is creating more jobs, but the problem is that too many of them are part time, low paid or insecure. Today’s figures show what is happening to wages. Does he agree with me that it is a matter of deep concern that at the end of this year average wages are £364 lower than they were a year ago and over £1,500 lower than they were at the general election?

The Prime Minister: Let me answer very directly the question about full-time and part-time employment. Actually, full-time employment has grown much faster

18 Dec 2013 : Column 734

in recent months, and overall since the election 70% of the new jobs—and there have been millions of new jobs—are full-time jobs. I agree that we have got more to do. We have got to do more to put in place our long-term economic plan to keep the economy growing. I have to say to the right hon. Gentleman that it is all very well standing up at the Dispatch Box and saying that there would be 1 million fewer jobs; we are still waiting for him to correct the record about that. Of course I want to see more money in people’s pockets. The only way we can do that is to keep on with the economic plan, keep cutting unemployment, keep people’s taxes down, and cut the deficit so that we keep interest rates down. That is our economic plan: what is his?

Edward Miliband: Let us talk about the Prime Minister’s predictions. He said that he would balance the books in five years; he has failed. He said that he would secure Britain’s credit rating; he has failed. The worst prediction of all is that he said he would be good at being Prime Minister, and he has certainly failed at that. He has got no answer—[Interruption.]

Mr Speaker: Order. Members on both sides of the House need to calm down. It will take as long as it takes, as always; it is very straightforward.

Edward Miliband: Is it not interesting, Mr Speaker, that the thing they want to talk about least of all is the cost of living crisis facing families up and down the country? That is because they know that families are worse off. Can the Prime Minister tell us how much higher the average gas and electricity bill is this Christmas compared to last?

The Prime Minister: First of all, let us deal with the predictions. The right hon. Gentleman said this—

Mr Speaker: Order. The question was asked and the answer must be heard.

The Prime Minister: They have a programme which will clearly lead to the disappearance of 1 million jobs. Now we have 1.6 million more private sector jobs and 1.2 million more people in work, it is time that the right hon. Gentleman apologised for his prediction talking the economy down. He asks about the cost of living; let us compare our records on the cost of living. They doubled council tax; we have frozen it. They put up petrol tax times 12 times; we have frozen it. They put up the basic state pension by 75p; we have put it up by £15. [Interruption.] Ah, we have a new hand gesture from the shadow Chancellor! I would have thought that after today’s briefing in the papers the hand gesture for the shadow Chancellor should be bye-bye. You don’t need it to be Christmas to know when you are sitting next to a turkey. [Interruption.]

Mr Speaker: Order. We will wait until colleagues calm down. I do not mind how long it takes; I have all day if necessary.

Edward Miliband: I thought that, just for once, the Prime Minister might answer the question he was asked. Let us give him the answer: energy bills are £70 higher than they were a year ago—despite all his bluster, that is the reality—and £300 higher than when he came to office.

18 Dec 2013 : Column 735

Let us try the Prime Minister on another important issue for families. The cost of child care is crucial for parents going out to work. Can he tell us how much the cost of child care has gone up this year?

The Prime Minister: We are providing 15 hours of child care—of nursery education—for two-year-olds, three-year-olds and four-year-olds. The right hon. Gentleman was never able to do that in government. It is all very well for him to make promises, but the only reason why we are able to keep our promises is that we took tough decisions about the economy. We took tough and difficult decisions to get the deficit down. We took difficult decisions to get our economic plan in place.

What the right hon. Gentleman cannot stand is the fact that this Christmas the economy is growing, 1.2 million more people are in work, our exports are increasing, manufacturing is up, construction is doing better, the economy is getting stronger and Labour is getting weaker.

Edward Miliband: I tell you what, Mr Speaker, that was a turkey of an answer. Why does not the Prime Minister, just for once, answer the question? Child care costs have gone up £300 in the past year—nearly three times the rate of inflation—and he is not doing anything about it.

There is one group the Prime Minister has helped out with the cost of living this year: those on his Christmas card list. I know he does not like my asking about this, but can he tell us how much lower the taxes of someone earning more than £1 million a year are this year compared with last year?

The Prime Minister: The top rate of tax under this Government is higher than it ever was under the right hon. Gentleman’s Government. The fact is that the highest 1% of earners are paying a greater percentage of income tax than they did when he was sitting in the Cabinet. Those are the facts. If he wants to talk about what he has done on the cost of living, we have cut income tax for 25 million people, but Labour voted against it. We have taken 2.4 million people out of tax, they voted against it. We froze the council tax, they voted against it. We froze fuel duty, they voted against it. The only reason we have been able to do this is that we have a long-term economic plan. The right hon. Gentleman ends the year with no plan, no credibility and no idea how to help our economy.

Edward Miliband: We all know what the Prime Minister’s long-term plan is: to cut taxes for those on his Christmas card list and make everyone else sink or swim. That is his long-term plan. [Interruption.]

Mr Speaker: Order. The usual low graders can make as much noise as they like. Let me just say to them, for their own benefit—I will say it again; some of them do not learn very quickly—that however long it takes, right hon. and hon. Members will be heard. It is so simple, I think it is probably now clear.

Edward Miliband: The more the Prime Minister reads out lists of statistics, the more out of touch he seems to the country. This was the year that the cost of living crisis hit families hardest. This was the year the Government

18 Dec 2013 : Column 736

introduced the bedroom tax while cutting taxes for millionaires. This was the year he proved beyond doubt that he is the Prime Minister for the few, not the many.

The Prime Minister: The right hon. Gentleman may not like the facts, but he cannot hide from them. The typical taxpayer is paying £600 less because we cut taxes. The deficit is falling—it is down by a third—because we took difficult decisions. Today, for the first time in our history, there are 30 million people in our country in work. The fact is that at the end of this year we have a recovery Labour cannot explain, growth it said would never come, and jobs it said would never happen. Meanwhile, it is stuck with an economic policy that does not add up and a shadow Chancellor it cannot defend. That is why the British people will never trust Labour with the economy again.

Sir Malcolm Bruce (Gordon) (LD) rose—[Interruption.]

Mr Speaker: Order. We will just have to keep going a bit longer, because I am not going to have—[Interruption.] The right hon. Gentleman will be heard.

Sir Malcolm Bruce: I can give the House something to cheer about. Will the Prime Minister join me in welcoming the fact that investment in our North sea oil and gas industry this year will reach a record £14 billion, accounting for an unemployment rate in my constituency of just 0.7%, but is he aware of Sir Ian Wood’s report that says we need collaboration between Government and industry to unlock between 3 billion and 4 billion barrels of oil worth £200 billion that will otherwise be left under the sea?

The Prime Minister: My right hon. Friend makes a very important point: the Wood report is an excellent report and we are looking to put that in place because we want to maximise the returns and the employment and the investment in the North sea. In recent months we have seen very encouraging signs of greater investment in the North sea, not least because of the decisions taken by the Chancellor to bring into play some of the more marginal fields. We need to keep up with that and implement the Wood report as my right hon. Friend says.

Q2. [901684] Mr Gregory Campbell (East Londonderry) (DUP): Does the Prime Minister understand, even if Dr Richard Haass does not, that agreement and consensus in his talks are desirable but will be impossible to achieve if proposals re-emerge that are viewed in the Unionist community as diluting our very essence of Britishness as Northern Ireland seeks to strengthen its position within the United Kingdom, not weaken it?

The Prime Minister: I think we all agree that Richard Haass is carrying out a very important and extremely difficult task: looking into the issues of parades, of flags and, of course, the past. I have met Richard Haass, and I think he is an incredibly impressive individual. We should let him do his work and we should judge his work on the results he produces, but I hope that everyone will try to look at this process with some give and take to try and bring the communities together.

18 Dec 2013 : Column 737

Mr Stewart Jackson (Peterborough) (Con): Unemployment in the Peterborough constituency stands at 5.5%, the lowest it has been since the financial crisis, and there were 1,180 fewer jobseeker’s allowance claimants than a year ago. However, there are too many young people who are jobless and lacking work skills, so will the Prime Minister give an early Christmas present to Peterborough people by giving his personal support to our bid for a university technical college, to be decided in the new year?

The Prime Minister: I know that my right hon. Friend the Education Secretary will look closely at the proposal for a university technical college. They are working well, and I think that is a very good innovation in our education system.

The news on youth unemployment is better—19,000 down this quarter—and the claimant count is falling as well, but there is a lot more work to do. I think we should particularly look at the work experience programmes which seem to have one of the best records at reducing youth unemployment and see what we can do to encourage companies and businesses to get involved in this work experience programme.

Q3. [901685] Mr Nick Raynsford (Greenwich and Woolwich) (Lab): With the Archbishop of Canterbury reminding us of society’s responsibility to support the poor and the vulnerable, and the Archbishop of Westminster specifically criticising the inhumanity of aspects of Government policy, does the Prime Minister regret, as we approach Christmas, his Government’s retreat from the compassionate Conservatism he used to adopt?

The Prime Minister: I do not accept what the right hon. Gentleman says at all. There is nothing more compassionate than getting more people into work. The best route out of poverty is work and what we can see for the first time in our country is 30 million people in work. I enjoy debating and listening carefully to our Archbishops. I have to say that I do not agree with what the Archbishop of Westminster said about immigration, but I think we should be frank and open about these debates and not be concerned when we do have disagreements.

Q4. [901686] Dr Thérèse Coffey (Suffolk Coastal) (Con): Thank you for calling me, Mr Speaker, and a merry Christmas to you and your family. The people of Suffolk have enjoyed a cracker of a Christmas present with the excellent news on the A14, which will encourage greater investment and growth. In that spirit, does my right hon. Friend agree that calls to abandon the Government’s long-term economic plan and adopt the Opposition’s plan to borrow and spend more will raise taxes and mortgage rates for hard-working people in this country?

The Prime Minister: First, I congratulate my hon. Friend on her ingenious way of ensuring that she is called regularly in debates and questions in this House, an example that I am sure others will follow. On that note, a very happy Christmas to you and your wife and children, Mr Speaker.

18 Dec 2013 : Column 738

My hon. Friend has been very clear in her campaign against the toll on the A14, and I am glad that we have settled that issue. She is right to say that the biggest threat to our economy now would be to abandon our plan. We are getting the deficit down; we are keeping interest rates down; we are cutting people’s taxes; and we are seeing the country get back to work. The biggest risk is more borrowing, more spending, more taxes—all the things that got us into this mess in the first place.

Q5. [901687] Mr Clive Betts (Sheffield South East) (Lab): At the end of November, I visited Handsworth Grange community sports college in my constituency. The head, Anne Quaile, told me about the school collecting food to help their needy families over Christmas. Indeed, there will be a food bank on the school site in the new year. What really shocked me was when she told me about a young girl, aged 15, who arrived on a Monday—just before my visit—not having eaten all weekend, because there was no food in the house. How does the Prime Minister expect that young girl to fulfil her educational potential?

The Prime Minister: We have to do everything we can to help Britain’s families and to help families into work, and that is exactly what we are doing under this Government. We also have to make sure that we protect the income levels of the poorest, and that is why, for instance, child tax credit is up £390 under this Government, protecting the money that goes to the poorest people in our country.

Ian Swales (Redcar) (LD): Experts said that Labour’s energy price freeze announcement—[Interruption.]

Mr Speaker: Order. Opposition Members should not yell at the hon. Gentleman. He is asking his question. Let us hear it.

Ian Swales: Experts said that Labour’s energy price freeze announcement would raise prices in the short term and protect the big six by freezing new investment. Since then, prices have gone up. National Grid says that half of new investment—

Mr Speaker: Order. I am struggling to find anything that relates to the responsibility of the Prime Minister in the hon. Gentleman’s question. Therefore, we will proceed with Mr Gordon Marsden.

Q6. [901688] Mr Gordon Marsden (Blackpool South) (Lab): As the Prime Minister sits down for Christmas dinner to chillax with his family and friends, will he spare a thought for my Blackpool constituents and 500,000 others, whose Christmas will be mired in the incompetence and random cruelty of the benefit sanctions imposed by the Department for Work and Pensions? My casework on this includes a woman denied jobseeker’s allowance for doing voluntary work at one local branch of a national charity rather than at another. Will his new year resolution be to resolve the chaos of sanctions and of universal credit?

The Prime Minister: I think the best thing we can do for the hon. Gentleman’s constituents, and indeed everyone’s constituents, is to keep on with the economic plan that is generating more jobs in our country. If we look at the

18 Dec 2013 : Column 739

north-west, we see that the number of people employed is up by 37,000 since the election, and unemployment has fallen by 29,000 since the election. We need to keep on with that, while of course making sure that the benefit system works for people who need it, but he does not do his constituents any favours by talking down the performance of the economy.

Q7. [901689] Mr Henry Bellingham (North West Norfolk) (Con): Will the Prime Minister pay tribute to Norfolk’s emergency services and volunteers, who have done such a brilliant job both in tackling the recent coastal floods and in helping to repair the damage? The floods were potentially worse than the floods of 60 years ago that killed 300 people and destroyed 25,000 homes. Does he agree that special mention should be made of two local newspapers, Eastern Daily Press and Lynn News, which have campaigned tirelessly? The former has raised more than £100,000 in its appeal. Will he tell the House what Departments can do, working in conjunction with Norfolk’s local authorities?

The Prime Minister: My hon. Friend is absolutely right to raise this issue. I was very impressed when I went to Norfolk—to Wells-next-the-Sea—to see the amazing contribution made by not only the emergency services, but, as he said, local newspapers in highlighting this issue and helping to prepare people for what was to come, as well as the flood co-ordinators and the people who work voluntarily to help our communities. I was particularly impressed by what I saw the lifeboats had done. An enormous wave swept through their station but, even with that, they were able to get out there and help people. As he says, because we have put money into flood defences, we protected a lot more homes that otherwise would have been affected, but the work needs to continue.

Q8. [901690] Derek Twigg (Halton) (Lab): Ministers have admitted to me that there are delays in completing personal independence payment claims. My constituent, Kathy, who is suffering from cancer, made her claim in August, but a decision is still to be made. She had a home appointment yesterday with an Atos assessor, but they did not turn up. Why is the Prime Minister allowing cancer patients to suffer because of the incompetence of his Government?

The Prime Minister: I am very happy to look at the individual case that the hon. Gentleman raises. It is worth noting that Atos worked under the last Government, in which he served. I am happy to look at the individual case to see what can be done.

John Howell (Henley) (Con): The number of unemployed claimants in the Henley constituency has fallen to 439. That makes it the third best performing constituency in the country. Will the Prime Minister join me in congratulating local businesses for the role that they have played in that?

The Prime Minister: I am very happy to congratulate local businesses on what they have done. What we are seeing, which Labour predicted would never happen, is a private sector-led recovery. For every job that has been lost in the public sector, we have seen three or even four jobs created in the private sector, mostly by small businesses.

18 Dec 2013 : Column 740

We need to keep up the economic environment that is helping those businesses to take people on, invest and grow.

Q9. [901691] John McDonnell (Hayes and Harlington) (Lab): At the last election, many of my constituents truly believed the Prime Minister when he said

“no ifs, no buts, no third runway”

at Heathrow. They are now faced with the threat of a third runway and a fourth runway, with thousands losing their homes and schools being demolished. There is even the threat that we will have to dig up our dead from the local cemetery. Does he appreciate that many have lost all faith in him as a man who keeps his word?

The Prime Minister: The hon. Gentleman has a very strong view about this matter, but I simply do not accept what he says. We said that there would not be a third runway. We have stuck with that promise. We now have a report that is being done by Howard Davies, which has all-party support. The interim report is very good.

John McDonnell: You have lied to my constituents.

The Prime Minister: I think that people should read that report before they start shouting across the House of Commons in a completely inappropriate way. [Hon. Members: “Order.”]

Mr Speaker: Order. I know what I am doing. I do not need any help from Back Benchers. A reference was made to the treatment of constituents, not to observations that have been made in respect of Members of the House. I am clear on that and the procedure is extremely clear as well.

Guy Opperman (Hexham) (Con): In the north-east, all 29 constituencies have seen an increase in apprenticeship starts since 2010. I recently opened an engineering academy in Hexham. Does my right hon. Friend agree that it is only through the provision of better skills and apprenticeships that we will improve the living standards of our young people?

The Prime Minister: My hon. Friend is absolutely right. I saw for myself on a visit to Stockton and Darlington what a difference the extra apprenticeships and funding are making. We want the recovery to be shared right across our country. In the north-east, unemployment has fallen by 3,000 this quarter, but it is still too high. There are 28,000 more people in work than there were at the time of the election, but we have further to go and we must stick to the economic plan that is delivering.

Q10. [901692] Mr Iain Wright (Hartlepool) (Lab): Is the Prime Minister concerned that in the detail of the small print of the autumn statement, it says that by the end of this Parliament real wage levels will be 5.8% lower?

The Prime Minister: The point that I would make to the hon. Gentleman is that disposable income is higher this year than in any year between 1997 and 2010. The reason for that is that, in spite of slow wage growth, we have cut people’s taxes. We can cut people’s taxes only if

18 Dec 2013 : Column 741

we take difficult decisions about the deficit and about spending. We have not had the support of the Labour party for a single one of those difficult decisions.

Mrs Anne Main (St Albans) (Con): Will the Prime Minister help to get justice for my constituents, who want to know why an investigation into the meetings that were had by Theresa Villiers, the former Transport Minister, has not been reported on, despite four months of waiting and various assurances that I would have the answer?

Mr Speaker: The hon. Lady was referring to the right hon. Member for Chipping Barnet (Mrs Villiers).

The Prime Minister: I am aware of my hon. Friend’s letters about this matter. She has taken up the issue and I am sure that she will get an answer shortly.

Q11. [901693] Stephen Pound (Ealing North) (Lab): On a slightly more seasonal note, may I probe the Prime Minister on the revelation in the autumn statement that over this Parliament borrowing is forecast to be £198 billion higher than originally planned? Will he accept that his pledge to balance the books by 2015 had all the credibility of a proposal to build an airport on a non-existent island in the middle of a bird sanctuary in the Thames estuary?

The Prime Minister: The hon. Gentleman always brings a flavour of pantomime to our proceedings. If he is worried about the deficit, and if he is worried about borrowing, he ought to look in front of him, rather than behind him, because we have not had one bit of support for anything we have done to cut the deficit. If he is worried about the deficit, why does the Labour party propose to put it up?

Harriett Baldwin (West Worcestershire) (Con): It is very good news that a record number of people are in work and keeping more of their take-home pay, but there was another milestone this week when we reached 2 million new pension savers, thanks to auto-enrolment. Is that another example of how this Government are taking the right long-term decisions for this country?

The Prime Minister: My hon. Friend is right to raise auto-enrolment. It means that more people are saving for their retirement, which means more stability and security for them, and a greater ability to plan for their future. There are 30 million people in work—so many more in work this Christmas than there were last Christmas—all of whom are better able to plan for their future and have that basic security that people in our country rightly crave.

Q12. [901694] Mr Steve Reed (Croydon North) (Lab): Now that the Prime Minister has declared mission accomplished in Afghanistan, will he guarantee that none of our brave servicemen and women who have served there will face redundancy after they come home?

The Prime Minister: I urge the hon. Gentleman to look at what I said when I was praising the role that our armed forces have played. They have carried out the

18 Dec 2013 : Column 742

tasks that we asked them to carry out, and they have done it with huge professionalism and skill. As I said, they will be able to leave that country with their heads held high, secure in the knowledge that we put in place what is necessary to stop terrorism and terrorist training camps returning to Afghanistan. Very clear rules are in place about redundancy, which mean that those people about to serve, serving, or having returned from Afghanistan, are not able for redundancy.

Q14. [901696] Mr Robin Walker (Worcester) (Con): Today 1,000 fewer people are out of work in Worcester than when unemployment peaked under Labour. With 700 businesses in the constituency likely to benefit from the Government’s extension of small business rates relief, I urge the Prime Minister to continue to do everything he can to help the high street and remove burdens on businesses creating jobs.

The Prime Minister: What is happening in Worcester is welcome news. Across the country not only is unemployment down but vacancies are up, which is good news for the future. I think we have taken some important steps forward with the rate rebate of £1,000 announced in the autumn statement for businesses on the high street, and, of course, the £2,000 employment allowance, which means that businesses do not have to pay their first £2,000 of national insurance contributions. That means that businesses in Worcester and elsewhere will be able to take on more people.

Q13. [901695] Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): Further to the question from the hon. Member for St Albans (Mrs Main), four months have passed since serious allegations were made that the Northern Ireland Secretary broke the ministerial code during her time as Transport Minister. Will the Prime Minister ensure that the Cabinet Secretary responds before the House rises for the Christmas recess?

The Prime Minister: I have seen a copy of the Cabinet Secretary’s response, and I am confident it will be sent in the next few days.

Philip Davies (Shipley) (Con): I welcome the Prime Minister’s acceptance that something needs to be done to stop EU migrants accessing British benefits. Would he agree that what he is proposing—which will probably be found illegal by the European Court—is really spitting in the wind when it comes to the problem we face, and that the only way to get back control of our borders and our benefits system is to leave the European Union?

The Prime Minister: I do not share my hon. Friend’s pessimism and we are taking these steps—including the announcement today that people coming to the UK should not be able to claim benefits within the first three months—on the basis of legal advice, and looking carefully at what other countries in the EU do. I want to do everything possible to ensure that the right of free movement is not abused. There is a right to work in different countries of the European Union, but there should not be a right to claim in different countries of the European Union. Where I would agree with my hon. Friend is that I think we need to do more in future, and we must learn the lesson from the mistake that Labour made by giving unfettered access to our labour

18 Dec 2013 : Column 743

market when Poland and others joined the European Union. That led to 1.5 million people coming to our country and was a profound mistake.

Q15. [901697] Julie Elliott (Sunderland Central) (Lab): Average household incomes will be substantially lower in 2015 than they were in 2009. Is the Prime Minister concerned about that? What does he say to my constituents, who are struggling with the cost of living crisis caused by his Government’s policies?

The Prime Minister: The first thing I would say to the hon. Lady’s constituents is that we are raising to £10,000 the amount people can earn before they pay income tax. That is worth £705 to a typical taxpayer. Because of the progress we have already made, disposable income this year is higher than it was in any year between 1997 and 2010. Opposition Members might not like those facts, but they are true. It is worth remembering why we are in this situation in the first place. [Interruption.]

Mr Speaker: Order. The Prime Minister has a very strong voice, but he should not have to shout to make himself heard. Let us hear the Prime Minister’s answer.

The Prime Minister: The point I was making is that the reason we are in this situation was laid out by the Institute for Fiscal Studies two weeks ago. It pointed out that we had the biggest recession for 100 years under the last Government, which cost the typical family £3,000. Opposition Members should apologise for that before moving on to the next question.

18 Dec 2013 : Column 744

Several hon. Members rose—

Mr Speaker: Last but not least, I call Mr Rory Stewart.

Rory Stewart (Penrith and The Border) (Con): Christmas in Syria will be defined by unstopping grief and horror in sub-zero temperatures. I encourage the Prime Minister to keep a relentless focus on humanitarian relief in Syria, to encourage the rest of the international community to meet the UN’s demands for £4 billion of assistance, and to ensure that that assistance is much more imaginative and generous.

The Prime Minister: On behalf of the House, I am grateful to my hon. Friend for raising that issue before Christmas. That is where our thoughts should be. There is a huge humanitarian crisis affecting up to half of the Syrian population. Britain can be proud of the fact that, at £500 million, we are the second-largest bilateral donor of aid going to Syria and neighbouring countries and we are helping people in those refugee camps. We should encourage other countries to step up to the plate in the way we have done, and ensure that we fulfil our moral obligations to those people who will suffer at Christmas time.

Michael Connarty (Linlithgow and East Falkirk) (Lab): On a point of order, Mr Speaker.

Mr Speaker: Order. There is to be an urgent question. I feel sure the hon. Gentleman can keep his point of order in the oven until after that.

18 Dec 2013 : Column 745

Local Government Finance

12.37 pm

Hilary Benn (Leeds Central) (Lab) (Urgent Question): To ask the Secretary of State for Communities and Local Government if he will make a statement on the provisional local government finance settlement.

The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis): My Department has today published the provisional financial settlement for English local authorities for 2014-15 and 2015-16. The technical details are outlined in a written statement, and associated documents have been placed in the Library and in the Vote Office. This is effectively the second year of a settlement announced last year. We have been consulting over the summer on the detail of the statement, so it should not come as a surprise to any local authority.

This year’s settlement is fair to all parts of the country—rural or urban, district or county, city or shire—meaning that councils can deliver sensible savings while protecting front-line services. Every bit of the public sector needs to do its bit to pay off Labour’s deficit, including local government, which, we should remember, accounts for a quarter of all public spending.

Opinion polls clearly suggest that satisfaction with local government is either constant or even improved compared with 2010, despite the need for councils to make savings to tackle that deficit. Today’s fair funding deal arms councils with a significant spending power average of £2,089 per household.

The autumn statement protected local authorities from further spending reductions for 2014-2015 and 2015-16. Overall, the average spending power reduction for councils in 2014-15 is expected to be limited to just 2.9% per household. Extra funding has been provided for sparse rural areas. With English councils spending £117 billion this year, councils must continue to focus on cutting waste and making sensible savings. There is significant scope for councils to merge back-office services or do more joint working: get more for less and they will do better with their £60 billion a year procurement budget; tackle £2 billion of local fraud; reduce the £2 billion of lost money in council tax arrears or use their record £19 billion of reserves; and get better value for money from their billions in property assets.

Local authorities should be looking to protect their residents and give them help with the cost of living. Extra funding is on offer to councils to freeze council tax for a fourth year in a row. The Government have provided up to £550 million for the next two years, which allows for a fourth year of freeze worth up to £718 for the average bill payer, with more savings to come next year. I am proud to be part of a Government that have allowed that freeze in council tax. In contrast, the previous Labour Government doubled council tax for hard-working people.

From April next year, funding for the 2011-12 and 2013-14 freezes will be in the main local government settlement total for future years. Funding for the next two freeze years will also be built into the spending review baseline, which will give maximum possible certainty for councils that the extra funding for freezing council tax will remain available without a cliff-edge effect. The Government are clearing up the mess left by the previous

18 Dec 2013 : Column 746

Labour Government, paying off Labour’s deficit and helping hard-working people with the cost of living. Councils are doing well and playing their part.

Hilary Benn: Given the scale of the cuts affecting local authorities, the Minister really should have made an oral statement today instead of having to be dragged to the House. Will he explain why the further cut of, supposedly, 10% in real terms—announced by the Chancellor in the spending round for 2015-16—is actually a 15% real cut to the settlement funding assessment? Why are the most disadvantaged communities once again the hardest hit? Will he confirm that by 2017 the city of Liverpool, the most deprived local authority in the country, will have lost 62% of the Government grant it was receiving in 2010? How on earth can he justify that? As the Audit Commission recently reported:

“Councils serving the most deprived areas have seen the largest reductions in funding relative to spending.”

Tough times do indeed require tough decisions, but this Government, as they have shown time and again, from the bedroom tax to the top rate of tax and local government funding, take most from those who have least. That is unfair and unjust.

Despite Government talk of a freeze, many councils, including Tory authority after Tory authority, will increase the council tax next year, including for residents who work but are on the lowest incomes and will lose council tax benefit. Why is the Minister top-slicing money from council funding that is based on need, and putting it into the so-called “new homes bonus” in areas where new homes would have been built anyway? Does he not realise that hundreds of thousands of vulnerable people have already been denied social care due to cuts in council funding, while the Government have wasted money on their expensive and failed reorganisation of the NHS? Is it not the case that even more people will lose out because of what has been announced today?

Another week, another Minister in denial—when will the Government realise that the future set out today means that more and more councils in the years ahead will simply not be able to maintain the services on which so many people rely?

Brandon Lewis: I am somewhat surprised; I had been expecting the right hon. Gentleman to outline for the first time these several years exactly where Labour’s promised £52 billion of cuts would come from.

In reality, we have heard nothing new this morning. This statement comes after last year’s statement set out a two-year settlement for local authorities. In fact, whereas more than 3% had been predicted, this year local authorities will get a 2.9% reduction, falling to below 2% next year. So it is a good news day for local government. [Interruption.] The right hon. Gentleman’s comments did not match up with the facts of life. The Audit Commission’s recent report outlined how local authorities were coping well with the changes. [Interruption.]

Mr Speaker: Order. Mr Ronnie Campbell—[Interruption.] Order. Your apprenticeship to become a statesman will never be completed at this rate. I know you are a bit over-ebullient, but you must calm yourself. [Interruption.] Calm yourself. I say two things, if I may: first, Members must not shout at the Minister, and

18 Dec 2013 : Column 747

secondly, I think the Minister was deploying a rhetorical device, but he will be aware that on these occasions, a question is put to Ministers; it is not an occasion for another party to set out policy. That is not the nature of the urgent question procedure, but I know, from his wry smile, that the Minister is well aware of that important fact.

Brandon Lewis: Thank you, Mr Speaker. Your point is well made. I think the hon. Member for Blyth Valley (Mr Campbell) must be excited about the local government settlement, as we all are today—it is an exciting day for local government.

If the right hon. Gentleman looks at the figures, he will see that we have gone even further this year to protect the most difficult areas and those councils left abandoned by the last Labour Government through their reduction in the working neighbourhood fund. I am thinking of councils such as my local authority of Great Yarmouth and others such as Pendle and Hastings, which they left with massive black holes that this Government have filled with the transitional grant. Those councils will be protected even further this year with a reduction of no more than 2.9%, which is good news for local authorities working hard to deliver good front-line services—services that Labour left hanging on a ledge.

The right hon. Gentleman referred to councils such as Liverpool. I gently remind him that Liverpool and Newcastle are similar in being among the best-supported councils in the country and having the highest spending power per dwelling. For example, Newcastle receives £2,400 per dwelling, which is about £900 more than areas such as Windsor and Maidenhead. I think that he and his colleagues should look at the figures. [Interruption.]

Mr Speaker: We will get through these matters. I call Mr Philip Hollobone.

Mr Philip Hollobone (Kettering) (Con): Under the leadership of councillor Russell Roberts, Kettering borough council, of which I have the privilege to be a member, has for the past three years offered a policy of “triple zero”: no cuts to front-line services, no cuts to voluntary grants and no increase in council tax. The Minister will know, because he has twice visited Kettering borough council, that it is an exemplary local authority. Does the message not go out that if Kettering can do this, other councils, if they really want to, can also do it?

Brandon Lewis: My hon. Friend makes a very good point. Kettering is an excellent example of a good Conservative council managing its finances properly for the benefit of local residents, keeping down the cost of living by keeping council tax frozen and providing excellent front-line services, as good councils all over the country are doing.

Mr Clive Betts (Sheffield South East) (Lab): In the June spending round, the Chancellor stated that in future years local government spending would drop not by the 10% to 15% that the Local Government Association said, but by 2.3%. The Prime Minister has repeated that figure. I wrote to him asking how it was calculated, but got a response from the Chief Secretary to the Treasury that did not do that. Will the Minister now explain

18 Dec 2013 : Column 748

where that 2.3% figure is in the document and how it is calculated? If it is not in here now, will he write to me, placing a copy in the Library, showing how it has been calculated?

Brandon Lewis: I am happy to write to the Chairman of the Communities and Local Government Committee with the figures. He will find that the gap between some of the points the right hon. Member for Leeds Central (Hilary Benn) made and the real figures is explained by the fact that we are interested in how much local authorities have to spend on their residents, not just what they spend on bureaucracy and red tape, through the Government grant.

Annette Brooke (Mid Dorset and North Poole) (LD): I welcome for the second year running the one-off payment to sparse rural areas, but many well-run councils of all political colours are predicting a cliff edge in 2015, when they fear they will have to cut services dramatically. What advice would the Minister give those councils following today’s statement?

Brandon Lewis: I am sure my hon. Friend will be pleased to know that the settlement for rural areas will be rolled into the base, giving them a better base going forward, enabling them to continue their good work of sharing services and management and ensuring they are efficient and delivering good front-line services for residents.

Mr Nick Raynsford (Greenwich and Woolwich) (Lab): I remind the Minister that for many years—in fact, decades—it has been an accepted practice for Ministers to announce the provisional settlement in the House, to allow proper debate and discussion, in good time and preferably around the end of November or early December. I put it to the hon. Gentleman that it does not help local government to have a late—no, very late—provisional settlement put out by written statement, with the Minister subsequently being dragged here to answer an urgent question.

Brandon Lewis: Far from being dragged here, I always find it a pleasure to be at the Dispatch Box. The right hon. Gentleman might like to look back at past records and see that his own party regularly made written statements. More importantly, local government has had two years’ notice, as we made an oral statement on a two-year settlement last year.

Nick de Bois (Enfield North) (Con): Does the Minister agree that it is unacceptable that Enfield Labour council has allowed uncollected council tax to increase over the last three years, against the trend for the rest of London, from £6 million to a staggering collective £32 million, particularly given that those figures already discount uncollectable council tax?

Brandon Lewis: My hon. Friend makes a good point. There is some £2 billion-worth of uncollected council tax, and councils should be working on the problem. This is not councils’ money, but taxpayers’ money. Whenever there is uncollected council tax, it costs other taxpayers more money. My hon. Friend is absolutely right to highlight this issue; good councils will be working hard on it.

18 Dec 2013 : Column 749

Mr Ronnie Campbell (Blyth Valley) (Lab) rose—

Mr Speaker: The hon. Member for Blyth Valley (Mr Campbell) has often been heard from his seat; it is now time that he was heard on his feet. I call Mr Ronnie Campbell.

Mr Campbell: Thank you, Mr Speaker, and a merry Christmas to you.

Is the Minister aware that in Northumberland, where I come from, we have had to cut £30 million this year and £60 million last year, and we are sacking workers and cutting social services, while education has been cut right down to the bone—and there is no money left? The Minister is living in cloud cuckoo land.

Brandon Lewis: I hope that the hon. Gentleman will go back and convince his local authority, using his great powers of persuasion, to do the right thing by its residents—to cut back-office costs and bureaucracy and perhaps look at our Department’s “50 ways to save” document. That would help the council to protect front-line services rather than try to score political points with people’s everyday lives.

Mr David Nuttall (Bury North) (Con): Last year, hard-working families in my Bury North constituency faced an inflation-busting increase of 3.5% in their council tax, which was put down to the levies imposed by the Greater Manchester joint authorities. Can the Minister assure them that the same thing will not happen again next year?

Brandon Lewis: I thank my hon. Friend for his question. It is unacceptable for council tax payers to have to pay that level of increase when there is so much more local authorities can do to save money—and the good ones are already doing it. Yesterday saw the Third Reading of the Local Audit and Accountability Bill, which contains provisions on levies and council tax referendums that will prevent that sort of thing from ever happening again.

Mr John Denham (Southampton, Itchen) (Lab): As the Minister will be aware, it has been said that all the cuts have fallen in the north and not in the south. Does he agree that that is not the case and that the Government have, in fact, been just as vicious in cutting the budgets of the most deprived towns and cities in the south of England as they have in the north, looking after the more prosperous councils wherever they are?

Brandon Lewis: Let me tell the right hon. Gentleman that the Government have produced a settlement that we believe is fair to rural and urban areas, north and south. We are having to make tough decisions—difficult, complicated ones—following the complete financial mess left to us by the last Labour Government.

Dr Thérèse Coffey (Suffolk Coastal) (Con): My hon. Friend will be aware that the Government’s getting rid of many regulations has helped councils with the cost of services. I am keen, however, for the Minister to reinforce the message that district councils should pass on the tax grant to parish councils that have a reduced tax base.

18 Dec 2013 : Column 750

Brandon Lewis: My hon. Friend makes a good point. I am pleased that 98% of authorities are already doing that. As we made clear in today’s statement, we expect local authorities to pass that money on to the parish councils. My hon. Friend was quite right about that.

Lilian Greenwood (Nottingham South) (Lab): Does not the Audit Commission’s finding that the most deprived areas have been hit with the biggest cuts show that this Government are on the side of the rich and are quite happy to balance the books on the backs of the poor?

Brandon Lewis: As I have said to other Members, the hon. Lady should look at the total amount. Areas such as Liverpool and Newcastle have a much higher spending power than pretty much anywhere else in the country. Even those areas most affected by the black hole left by the last Labour Government—areas such as Hastings, Great Yarmouth and Pendle, which are doing good work to transform themselves—are being protected with an efficiency support grant, which the last Government never bothered to provide.

Neil Parish (Tiverton and Honiton) (Con): I very much back the rural fair share campaign and I welcome the money that has come forward. Given that it is Christmas, I would have liked it to be a little more generous, but can you outline exactly how much extra you are going to give to rural authorities that you would not have given otherwise?

Mr Speaker: I am giving nothing extra at all, but the Minister might do. We will see.

Brandon Lewis: My hon. Friend has participated in a strong and ongoing campaign with colleagues across the House—including at least one Opposition Front Bencher—about the gap between rural and urban areas. We listened last year and made a one-off payment. This year we have provided increases, which will be rolled into the baseline. My hon. Friend will see that from the figures in the Library.

Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): Birmingham city council’s controllable spend has been cut from £1.2 billion to £400 million. We will have to cut services. Will the Minister tell my constituents whether we should cut school patrols, school libraries or public conveniences?

Brandon Lewis: I would suggest that the hon. Lady use her powers of persuasion to encourage Birmingham city council to do the right thing and, instead of playing political games with its local taxpayers, be more efficient with its back office, and look at how to use its reserves to invest for the future.

Mr Graham Stuart (Beverley and Holderness) (Con): People living in rural areas earn less on average than people living in urban areas, pay higher council tax and get fewer services, which are more expensive to deliver, yet there is a 50% rural premium or penalty, with 50% more going to urban areas than rural ones. We welcome the rolling of this grant into the general fund, but it will do nothing to close the gap between urban and rural, which cannot be defended.

18 Dec 2013 : Column 751

Brandon Lewis: My hon. Friend has made a passionate and strong case for rural areas throughout the year. That is why we rolled an increased amount into the base. It goes further to narrow the gap. It narrowed last year and narrowed slightly further this year. I am sure that my hon. Friend will be lobbying me on the issue over the next few weeks of consultation procedures.

Mr Dennis Skinner (Bolsover) (Lab): Now that the Minister, like most of his Tory Front-Bench colleagues, has referred to debts being left behind, is he aware that in Derbyshire, where the Tories lost control last May, they have left behind the biggest mess that Derbyshire county council has ever had to deal with—£151 million in cuts? Is not the truth of the matter that this Tory Government, with their coalition allies, are intent on wrecking the public sector and bringing local government to its knees? That is the policy of this Government, whose massive cuts have mostly been in the Labour-controlled areas.

Brandon Lewis: If we look at what has happened, we find that even the independent report last year showed that the settlement was fair as between north and south, urban and rural—and we would argue that the same applies this year. It is true that, thanks to the mess created by the last Government, we have had to cut back. Local government accounts for a quarter of all public spending, so it has its part to play. The last Labour Chancellor outlined £52 billion-worth of cuts, which the Opposition have not outlined yet, but they have opposed every single change that this Government have made. That is not a credible position, so I take no lectures from the hon. Gentleman. I suggest that he go back to his now Labour-controlled authority and ask it to do what the last Conservative authority was doing, which was managing better so that local taxpayers do not have to be punished by increased council tax. It should freeze its council tax, as the Conservative-led coalition Government have done, and make things better for its local residents.

Mr David Heath (Somerton and Frome) (LD): A significant group of authorities, mainly in rural areas, have been historically underfunded. The Government have recognised that, but does the Minister understand that improving the distribution formula does no good whatever if a damping mechanism is then imposed, which removes the benefit?

Brandon Lewis: I understand the hon. Gentleman’s point. Last year, damping was brought in to avoid volatility in the system. We put in extra grant—the money we are rolling in this year—on top of that, so it is not affected by the issue that the hon. Gentleman raised.

Diana Johnson (Kingston upon Hull North) (Lab): Can the Minister explain exactly how this is good news for people in Hull, which, although one of the most disadvantaged areas in the country, is experiencing far deeper and more savage cuts than other, wealthier areas?

Brandon Lewis: This is a good settlement for local government generally. Councils’ spending power is being reduced by just 2.9%, and a reduction of 1.8% is predicted for next year. That will ensure that local authorities can

18 Dec 2013 : Column 752

manage. More important, the Government are putting money—taxpayers’ money—into a council tax freeze for the fourth successive year in order to help hard-working people. I hope that all Labour authorities will follow the example of good Conservative and Liberal Democrat authorities and deliver that freeze to their residents.

Guy Opperman (Hexham) (Con): On 25 November, in the House, I raised the issue of the council tax benefit support grant, which is not being passed on to all the parish councils in Northumberland. On that occasion, my hon. Friend responded by saying that local authorities should be ensuring that that was done. Has he made any further progress in forcing them to do so?

Brandon Lewis: It is true that a very small number of authorities are not yet passing on the grant, and we are telling them that they should. It is a matter for the authorities themselves, but we made it very clear in today’s written statement that they should be passing the money on to the parish councils.

Mrs Mary Glindon (North Tyneside) (Lab): This morning I received a phone call from a representative of North Tyneside council, who was very anxious because the council had not received any confirmation that the details of the settlement were to be issued today. Why were they not issued to my local authority through the normal channels?

Brandon Lewis: Let me gently say to the hon. Lady that they were issued through the normal channels. That is the normal procedure. As for the question of timing, which was raised by the right hon. Member for Greenwich and Woolwich (Mr Raynsford). we are a prudent, sensible, fiscal Government. It would have been imprudent to do anything before the autumn statement. Perhaps we take the finances of the country slightly more seriously than the last Government.

Justin Tomlinson (North Swindon) (Con): Regrettably, some councils are tempted to increase council tax simply to build their base and their reserves. What measures are the Government taking to reward councils that do the right thing and freeze the tax?

Brandon Lewis: My hon. Friend has made a very good point. Local authorities should indeed be freezing council tax, and we have now adopted a reward-based system. We reward councils that do good work through the new homes bonus, the business rates retention scheme and the innovation fund. All those measures benefit good councils such as my hon. Friend’s in Swindon, which has done some really good innovatory work. The council tax freeze grant is now in the baseline, and there can be no questions, no ifs and no buts: councils should freeze the tax to help hard-working families.

Julie Hilling (Bolton West) (Lab): Bolton will have lost £100 million since 2010. It is not celebrating, but mourning the services that it is losing, and it is desperately worried about its vulnerable residents. When will the Minister stop blaming the last Government and local authorities, and take responsibility for what he himself is doing?

Brandon Lewis: When they say sorry.

18 Dec 2013 : Column 753

Mark Pawsey (Rugby) (Con): Does the Minister agree that enlightened and far-sighted local authorities such as Rugby borough council anticipated several years ago the tough economic environment in which we now find ourselves, and started to put their houses in order at an early stage by taking a hard look at all their items of expenditure?

Brandon Lewis: I do agree with my hon. Friend. There are very good councils all over the country which have been streamlining their bureaucracy and administration, sharing management, sharing services, improving their procurement practices, and delivering great front-line services to their residents. They should be warmly thanked for doing great work while also playing an important role in lowering the country’s deficit.

Jack Dromey (Birmingham, Erdington) (Lab): Birmingham is reeling from the biggest cuts in local government history, totalling £840 million, and the other core cities have also been particularly hard hit. Common to all the cuts has been a grotesquely unfair approach. Why has Birmingham been hit twice as hard as the national average, and why is every citizen in high-need, high-unemployment Birmingham losing £149 of local government services while in leafy, low-need, low-unemployment Wokingham the figure is only £19?

Brandon Lewis: If the hon. Gentleman looks at the starting model, he will see that Wokingham had rather less spending power per dwelling than Birmingham in the first place.

Andrew George (St Ives) (LD): The Minister accepted in his statement that rural areas were being comparatively underfunded, but I am sorry to say that, once again, the adjustment in the settlement is chicken feed when it comes to addressing the inequality between rural and urban areas. Does the Minister not realise that, at this rate, it will take more than 1,000 years to put that right?

Brandon Lewis: We have actually increased last year’s amount. We have put it into the baseline. I appreciate the point made by Members about the need to narrow the gap between rural and urban areas, but they should appreciate that we are acting against the backdrop of the financial mess in which we were left by the last Government and with which we now have to deal. Obviously, that somewhat restricts our room for manoeuvre.

Sheila Gilmore (Edinburgh East) (Lab): Is the Minister aware, or willing to admit, that a council tax freeze is a very regressive measure? Those who did not pay previously receive nothing back, and the higher people’s council tax band, the more they gain. We in Scotland have had a great deal of experience of that regressive tax policy over nearly seven years.

Brandon Lewis: I am not sure whether the hon. Lady is arguing that councils should increase the tax, but that is certainly not something that we would support. We think that freezing council tax in order to make families several hundred pounds a year better off is a good thing to do for hard-working families.

Andrew Stephenson (Pendle) (Con): I thank the Minister for taking the time to visit Pendle and meet the council’s leader, Joe Cooney, and its chief executive, and for meeting them again when they came to London recently.

18 Dec 2013 : Column 754

Will he join me in congratulating councils such as Pendle, which has already made significant savings by, for instance, reducing by 35% the disgraceful number of properties in the borough that were left empty by the last Labour Government?

Brandon Lewis: It was a pleasure to meet Joe, the leader of Pendle borough council, a couple of weeks ago, when I met a number of council leaders. Pendle is a fine example of a small authority that has worked hard to make really good savings while protecting front-line services. I congratulate that council, and other councils that are taking similar measures, on their excellent work.

Alison Seabeck (Plymouth, Moor View) (Lab): Plymouth city council has won awards under different administrations. Over the past five years it has cut its back-room staff, innovated, and, sadly, laid off staff. Now it is telling us that it will not have enough money to fulfil its statutory duties over the three-year period, which is not acceptable. Will the Minister please tell us what the council is supposed to do when it is being encouraged to freeze council tax, which is a wholly regressive measure?

Brandon Lewis: If the council freezes the tax, which would be good for its residents, it will receive a support grant from the Government. If it is looking for ideas in order to do more than it has already done, I am sure that the Local Government Association will be happy to help. It could probably learn a lesson or two from Hammersmith and Fulham, which has some good ideas that would help it to cut its tax for local residents.

Several hon. Members rose—

Mr Speaker: What an assortment of riches! I call Mr John Stevenson.

John Stevenson (Carlisle) (Con): Cumbria has six district councils and one county council for half a million people. Many Cumbrians believe that the councils should merge in order to save money and improve local services. Were the councils to make such an approach to the Government, would it be favourably received?

Brandon Lewis: As my hon. Friend knows, we are not fans of top-down reorganisation in local government, unlike the last Administration. However, I am very supportive of any local authorities that join forces to find new and innovative ways of saving back-office costs, and I shall always be happy to meet their members and discuss what is achievable for them.

Helen Jones (Warrington North) (Lab): If the Minister believes in fairness, can he explain why West Oxfordshire, one of the richest local authorities in the country, will gain from the settlement, while, according to the Audit Commission, the most deprived areas in the country will lose from it? Are not the Government pursuing a systematic policy, in local government, health and taxation, of transferring money from the poorest areas to the richest?

Brandon Lewis: The hon. Lady’s argument falls completely flat for a couple of reasons. First, we are helping the hardest-hit councils, such as Pendle, Hastings, Great Yarmouth and Hyndburn, whereas the last Government left them with a black hole to fall into in

18 Dec 2013 : Column 755

2010. Secondly, the hon. Lady is living in the past, because this year the Government adopted a reward-based system that enables local authorities to increase their income through the business rates retention scheme and the new homes bonus. Councils that do good things such as building houses and securing economic growth will experience the benefits of that.

Stephen Mosley (City of Chester) (Con): Like all local authorities, Cheshire West and Chester council has had to tighten its belt in recent years. By cutting waste and sharing services, it has managed to keep council tax increases down while improving local services. Does my hon. Friend agree that if a local authority makes itself more efficient, it can make itself more effective too?

Brandon Lewis: My hon. Friend makes a good point in naming one of the local authorities that has done great work in proving that the efficiencies deliver not only savings but, more importantly, better services for their residents. I encourage other authorities to look at those good councils and the great work that they are doing through the community budget programme and the transformation network to become more efficient and effective for their residents.

Steve McCabe (Birmingham, Selly Oak) (Lab): I am sure that the Minister must have used a public library as a young man. Is he at all worried that community libraries could all but disappear as this squeeze on non-essential council services continues to grow?

Brandon Lewis: I suggest that, if the hon. Gentleman looks around the country, he will also find local authorities that are opening new libraries, where they think that they are right for their area. As I have said to other Members, I urge him to use his powers of persuasion to get his authority to make the savings in the most efficient way possible, and to look at back-office functions, at fraud, at its reserves and at its council tax collection procedures in order to protect front-line services, rather than playing politics with people’s money.

John Pugh (Southport) (LD): The Minister says that the average cut in spending power is 2.9%, but spending power is a rather slippery concept. What is the average cut in formula grant, and how does that vary by type of authority?

Brandon Lewis: As I said to the Chair of the Select Committee, the hon. Member for Sheffield South East (Mr Betts), we use spending power not only because local government has talked to us about using it but because it gives the whole picture of spending power in a local area, rather than just the grant. That is what impacts on the services that residents get, and that is what matters to people.

Chris Williamson (Derby North) (Lab): Derby city council is already reeling from the unprecedented cuts that have been imposed by this Government since they came to power, yet under this settlement it will have to find another £81 million of cuts from its budget, and it will soon be unable to fund even its statutory obligations. Will the Minister advise the council on which statutory services it should cut? Should it cut services for vulnerable

18 Dec 2013 : Column 756

children, or services for vulnerable elderly people? It will not have the resources to fulfil all its statutory obligations.

Brandon Lewis: The hon. Gentleman highlights part of the problem for some local authorities. First, I want to thank him for being one of the great advocates of spending power, and I am sure that he will thank us for ensuring that we make it clear why that matters to people in terms of the services they get. He was right about that, and we have listened and put that formula forward. I know that, if his local authority is playing political games with people’s money, he will want to fight for his local residents and go back to his authority and tell it to think again. If the councillors and officers cannot make the right decisions to look after their local residents, they should step aside and get somebody in who can.

Several hon. Members rose—

Mr Speaker: The hon. Member for Reading East (Mr Wilson) has only just started bobbing, but I am assuming that he was here at the start.

Mr Rob Wilson (Reading East) (Con): Thank you, Mr Speaker. Labour councils such as Reading are again increasing the burden of council tax on families this year. Does the Minister agree that, during these challenging times, any rise in council tax should be put to a local authority referendum?

Brandon Lewis: My hon. Friend makes a good point. This Conservative coalition Government have done what they can to ensure that a council tax freeze is available to every resident in the country, and we are proud of that. Any authority that is looking to put up its council tax and to penalise local residents by charging them more should have the courage to hold a referendum and let the public decide.

Catherine McKinnell (Newcastle upon Tyne North) (Lab): The Minister knows that quoting spending power levels completely ignores the different challenges that areas such as Newcastle and Liverpool are facing. On the new homes bonus, will he explain the fairness of the north-east contributing £42.3 million to the pot while receiving only £29.3 million in return?

Brandon Lewis: Actually, the spending power formula goes in completely the opposite direction, in that it represents exactly what affects residents. Calculating spending power per dwelling takes account of the entire pot of money in a local authority area. The hon. Lady is quite right to say that Newcastle has a spending power of almost £2,500 a head compared with other areas that have closer to £1,500. The formula does reflect need. With the new homes bonus, the more houses people build, the more money they will get.

Barry Gardiner (Brent North) (Lab): The Minister knows that my borough of Brent has one of the highest levels of deprivation. The leader of the council, Muhammed Butt, has engaged with the programme of shared services and sought to drive efficiencies through, despite more than £100 million of cuts, but the time is now fast approaching when the authority will be able to fund

18 Dec 2013 : Column 757

only its statutory service obligations. What does that say about the view of the Minister’s Department on localism?

Brandon Lewis: I am sure that the hon. Gentleman’s local authority will want to come to talk to me during the consultation process. If it looks at authorities such as Hammersmith and Fulham—and, indeed, the whole tri-borough area—it will see the hundreds of millions of pounds-worth of savings that can be made to ensure that it provides great front-line services.

Steve Rotheram (Liverpool, Walton) (Lab): It is farcical for the Minister to try to spin this as a good day for local government. There will certainly be no parties in the city of Liverpool today. We are struggling to meet our statutory duties, after the 62% cut that this Government have imposed on us, and there are no discretionary pots left. If the Minister and his Secretary of State do not believe me, I will offer them a first-class ticket to come to Liverpool and look at the books, and ask them to tell us where they believe we can cut further.

Brandon Lewis: I appreciate the hon. Gentleman’s offer, but we do not tend to travel first class in our Department. We protect the taxpayer’s money. I have met the mayor of Liverpool, and obviously—

Steve Rotheram: I will pay for it.

Mr Speaker: Order. The financial generosity of the hon. Gentleman is duly noted, but it is somewhat unparliamentary for him to chunter from a sedentary position—[Interruption.] Order. His point has been heard—[Interruption.] Order. I was being good-humoured towards the hon. Gentleman, but I am sorry that he is not showing good humour in the festive season. [Interruption.] Order. I am not debating the point with the hon. Gentleman; I am simply telling him what the situation is. He has asked his question, and he must now have the courtesy to listen to the response. He can make his own evaluation of that response, of course.

Brandon Lewis: I am sure that the mayor of Liverpool will want to talk to us and make his case during the consultation procedure. I met representatives of the core cities last year, and I am happy to meet any individuals. I must also point out to the hon. Gentleman that Liverpool gets one of the highest amounts of spending power per dwelling in the country and that, on top of that, it gets regional growth fund money, growing places fund money and a city deal, all of which are helping Liverpool to be the town that it should be.

Mr Jim Cunningham (Coventry South) (Lab): The Minister’s justifications for inflicting cuts on local government sound like something that we would expect to hear from the North Korean regime. When Ministers start talking about cutting back-room staff, we know right away that they have no answers. More importantly, Coventry will have to find between 15% and 20% cuts over the next three years. Translated one way, that means more than 1,000 jobs. Translated another way, it means that we would have to find £48 million.

Mr Speaker: I have to say politely to the hon. Gentleman that I have struggled to find the question mark at the end of his observation. Perhaps he was asking a

18 Dec 2013 : Column 758

rhetorical question. If the Minister wants to reply, he is welcome to do so, but he is under no obligation. No? Fair enough.

Nic Dakin (Scunthorpe) (Lab): The Minister says that this is a really good day for local government, following previous good settlements. Will he explain why 64 Conservative councils have refused the offer of a freeze and are putting up their council tax?

Brandon Lewis: The hon. Gentleman must be a bit of a mind reader or a fortune teller, because councils will not set their council tax for another month or two. We will have to wait and see what happens. I say to all local authorities, whatever their colour and political party, that they should be freezing their council tax to protect their local residents. If they are not sure where they can find more savings, I suggest that they look at good councils such as Vale of White Horse in Oxfordshire, High Peak and Staffordshire Moorlands, which are saving up to 18% in back-office costs by sharing management and chief executives.

Andrew Miller (Ellesmere Port and Neston) (Lab): In his answer to the original question, the Minister expressed pride. In his answer to the hon. Member for City of Chester (Stephen Mosley), he praised that Tory-controlled council. Is he proud of the fact that that council is closing women’s refuges?

Brandon Lewis: It is up to local residents to take a view on those local services. I say to the hon. Gentleman and to all Members in that area that, if the local authority is making decisions they do not like, they should lobby the authority to get it to do what they think is the right thing. I have to say that, when I have visited that area, I have found the residents to be very happy with the services. Some great work is being done there on shared services and shared management with Manchester, on freezing the council tax and on troubled families, to ensure that people are getting great services and improved services in that area.

Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op): There is no doubt that, either by accident or design, this Government have redistributed money from poorer areas towards the more affluent ones. Let me give the Minister an example relating to the new homes bonus. The bonus excess each year is financed by the redistribution of the formula grant. Because of the collapse in housing completions that this Government have presided over—in Greater Manchester, that involves about a third of the homes that we had been planning for—there has been a redistributional effect away from areas that really need the funds and towards London and the south-east. That funding imbalance then goes into the local enterprise partnerships and the local growth funds that the Government believe should drive prosperity in local economies. Surely the Minister knows the impact of his own policies on councils up and down the country.

Brandon Lewis: The new homes bonus is fairly simple: you build more houses, you get more money.

Andrew Gwynne (Denton and Reddish) (Lab): The Minister must surely be aware that many local authorities have already committed significant reserves to meeting

18 Dec 2013 : Column 759

additional equal pay requirements, especially as a result of the Birmingham ruling. That money cannot be spent twice, so will he cover those additional costs, should they arise, if those councils take his advice and spend the reserves on front-line services?

Brandon Lewis: If the hon. Gentleman looks at the Birmingham case, he will find that we have been helpful to Birmingham, particularly with capitalisation. It would have been better, however, if that authority had made decisions earlier for good financial planning.

Mr Steve Reed (Croydon North) (Lab): The level of total spending power is central to the local government settlement, so can the Minister explain here and now how the 2.3% cut in local government spending power that the Secretary of State announced in June turned into a 15% cut for most London boroughs once the detail came through?

Brandon Lewis: That is simply not true; we have got a protection in there. This year, it is even better than last year, so even the biggest cut in the country is only 6.9%.

18 Dec 2013 : Column 760

Point of Order

1.21 pm

Michael Connarty (Linlithgow and East Falkirk) (Lab): On a point of order, Mr Speaker. Possibly in anticipation of the fact that I had a question today on the post office network, I received a message—it was not in my e-mail and I could not find it on my computer; it came through my mobile device—from the Minister with responsibility for postal services, the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson). It said that it was going to all MPs and explained that she was having to put £640 million extra into the network reorganisation fund, on top of the £1.34 billion that was already there. My point of order relates to the fact that this did not come through my computer and it was not in today’s written statement from BIS. If she is going to give a statement like that telling all MPs about a massive spending increase because of a shortfall and the failure of her policies, which are destroying the post office network, is she not obliged to do so in a formal written statement or here at the Dispatch Box?

Mr Speaker: I am grateful to the hon. Gentleman for his point of order. Certainly it would be incumbent on the Minister to find a way of disseminating that information to Members of the House other than by purely electronic means. If that did not happen, I understand that there may be some disappointment on that front. It is not something I can pursue further today, but in response to his inquiry I think I have put the point clearly on the record as to what ordinarily is expected. [Interruption.] The hon. Gentleman is gesticulating from a sedentary position—some people are never satisfied. The inquiry has been made, the answer has been given and that is the end of the situation.

Royal Assent

Mr Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:

Energy Act 2013

Financial Services (Banking Reform) Act 2013

London Local Authorities and Transport for London Act 2013

Humber Bridge Act 2013

City of London (Various Powers) Act 2013.

18 Dec 2013 : Column 761

Credit Union (Armed Forces)

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

1.23 pm

Mr Gareth Thomas (Harrow West) (Lab/Co-op): I beg to move,

That leave be given to bring in a Bill to provide for the establishment of a credit union for members of the armed forces and family members who live in the same household; and for connected purposes.

The Bill is designed to ensure that our soldiers, sailors and Air Force personnel on lower incomes have access to low-cost loans and other low-cost financial services and, as a result, are not vulnerable to high-interest payday loan businesses. I should declare at the outset that I am a member of my local credit union, M for Money, which serves my constituency in Harrow, and also of the Rainbow Saver credit union.

Credit unions are financial co-operatives. They are one powerful demonstration of how through pooling our efforts and through co-operation with others, we can each become better off. Those of us who champion credit unions have always believed that what makes them different from other financial services providers is not just the lower interest rates they offer, but their mission to operate for the benefit of their communities, to retain money in local economies and to empower people, especially those often unable to access credit elsewhere. Key to credit unions is a common bond between the members, who in turn are the investors and consumers—indeed, they can also serve as directors. It is, in essence, about people in the same community looking out for each other but benefiting directly themselves from a service that they are able to provide together.

As many in this House will recognise, many successful credit unions are already operating in the UK: the police credit union has 21,000 members, has been going for 10 years and has Lord Stevens, the former head of the Metropolitan police, as its president; the former British Airways credit union, which is now known as Plane Saver and covers more than just British Airways, has more than 7,500 staff as members; and the London mutual credit union, with its origins in Southwark, has more than 15,000 member owners, and offers competitive online and affordable payday loan services. For a 30-day, £400 payday loan, the LMCU charges, typically, an interest rate of 27%, or £19. For the same loan, a commercial payday loan company might charge an annual percentage rate of 5,600%, or £127. In short, it might be £108 more expensive for the same amount over the same period. That shows the kind of service that should specifically be available to our servicemen and women, and their families: a low-cost credit union. Only a credit union—a financial co-operative—would be able to offer such a service.

My Bill specifically draws inspiration from the biggest and most successful credit union in the world. A rear-admiral of the US navy and former commander of the American enterprise battle group is probably not the most obvious enthusiast for financial co-operatives, yet Rear-Admiral Cutler Dawson is president and chief executive officer of Navy Federal, the world’s largest credit union. It is based in the United States and serves all Department of Defence and Coast Guard active

18 Dec 2013 : Column 762

duty, civilian and contractor personnel, and their families. Rear-Admiral Dawson previously served in the United States navy for some 34 years.

Navy Federal was founded by its members in 1933, when soldiers returning from war were unable to access affordable credit. It now offers a service to US special forces, navy cooks, veterans and the families of servicemen and women. In the US, payday lenders used to target military bases, trying to hook American sailors and soldiers with their high-cost financial services, yet Navy Federal is able to offer some of the most highly competitive financial services in the US market. Indeed, Navy Federal now holds some $55 billion in assets, and has some 4 million members, 235 branches around the world and a work force of more than 11,000 employees. Surely our soldiers, sailors, airmen and women, and their families, could benefit from a similar credit union.

My Bill aims to address the growing fears that low-paid service personnel are having to turn to payday loan companies to get through the last week of each month. Research by the Royal British Legion found that about a third of veterans, including almost half of the recently injured, experience financial difficulties, leading many into unaffordable levels of debt. The RBL’s dedicated benefits and money advice service helped some 2,500 people in its first year, 2007, but last year that figure rose to more than 11,000 Army personnel being helped out, and the RBL predicts that the figure will keep rising.

We know from the Debt Advice Foundation that one in four people who take out payday loans need the money to buy food or essentials, with 44% using them to pay off other debts. Similarly, Citizens Advice research has shown a fourfold rise in just two years in the number of people coming to their citizens advice bureau with debt problems as a result of taking out payday loans. I have spoken to the chief executives of many citizens advice bureaux located close to military bases and I have heard about some of our soldiers and sailors who are facing real financial difficulties. One serving Army soldier who was living in MOD accommodation with his wife and children had two payday loans, one for £435 and one for £375, both due for payment at the beginning of the month. If he failed to repay the loans in full, he incurred an £80 charge for deferring them. He was in a vicious circle. If he repaid the loans, he was left without sufficient funds to finance his monthly expenditure and again had to take out a payday loan to manage until the end of the month.

It is a story that many of us will have heard time and again in our own constituency surgeries—a small loan that, through huge interest rates, gets bigger and bigger. Of course it is true that families across the UK are feeling the pinch, and we need a major expansion in the promotion of and access to credit unions across the UK. A levy on the profits of the payday lenders could help to drive that expansion of low-cost financial services that credit unions offer. I hope the House will recognise that serving personnel and veterans face particular challenges. Surely it is time to inject new energy into the credit union market and take the steps necessary to address this particular problem for our soldiers and sailors.

I must give some credit to the Government. There has been some interest in this matter from the Ministry of Defence, but I say gently that it is at best tentative. Ministers need to show more enthusiasm and energy for

18 Dec 2013 : Column 763

this most basic of services that our troops should be able to expect. When US soldiers, sailors and marines are on active service duty, they can focus on their day job without worrying about their financial affairs at home. The British armed forces surely deserve the same support. I commend this Bill to the House.

Question put and agreed to.

Mr Speaker: Who will prepare and bring in the Bill?

Mr Thomas: Apart from the first one, they are a talented and handsome lot, Mr. Speaker.

Mr Speaker: Usually we are content with a factual list, rather than a Member putting a divisible proposition to the House, but we will manage; it is Christmas.


That Mr Gareth Thomas, Mr Andrew Love, Meg Hillier, Stella Creasy, Mrs Louise Ellman, Seema Malhotra, Mr Adrian Bailey, Stephen Twigg, Tom Greatrex, Stephen Doughty, Mr Ian Davidson and Mr Steve Reed present the Bill.

Mr Gareth Thomas accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 28 February 2014, and to be printed (Bill 148).