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House of Commons

Wednesday 15 October 2014

The House met at half-past Eleven o’clock


[Mr Speaker in the Chair]

Business before Questions

Spoliation Advisory Panel


That an humble Address be presented to Her Majesty, That she will be graciously pleased to give directions that there be laid before this House a Return of the Report from Sir Donnell Deeny, Chairman of the Spoliation Advisory Panel, dated 15 October 2014, in respect of a silver-gilt renaissance salt, now in the possession of the Ashmolean Museum.—(Alun Cairns.)

Oral Answers to Questions


The Secretary of State was asked—

Joint Ministerial Committee

1. Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op): When the Joint Ministerial Committee next plans to meet; and what will be discussed at that meeting. [905358]

The Parliamentary Under-Secretary of State for Scotland (David Mundell): The Joint Ministerial Committee is an important mechanism for the UK Government and the devolved Administrations to discuss shared priorities and matters of mutual interest. The European session of the JMC met on Monday 13 October.

Cathy Jamieson: Given that all parties now want to see further devolution to Scotland, does he agree that it is time for a review of how that Committee operates and how we can strengthen the way in which the Scottish Parliament, the UK Parliament, the Scottish Government and the UK Government work together in the best interests of the people of Scotland?

David Mundell: I absolutely agree with the hon. Lady. I hope that discussion about the relationship between Scotland’s two Governments will be part of the outcome of the Smith commission’s work; if not, I am sure it will form part of future debate in this House and elsewhere.

Guy Opperman (Hexham) (Con): Surely the key question for the Committee to take to the Scottish National party Government is that no means no?

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David Mundell: I certainly hope that it is now clear that the decisive result of the referendum is respected and that we move forward on behalf of all of Scotland to deliver the new devolved Scotland that everyone wants to see.

Mr Frank Roy (Motherwell and Wishaw) (Lab): The Minister may be aware that in the past hour or so Tata Steel has announced its intention to sell the long products division—more or less, the plate mills in Scunthorpe, Workington, Teesside, Cambuslang and Motherwell—of its company. Throughout the United Kingdom, workers will be affected by this potential sale. Will the Minister ensure that he and other Ministers in both Governments intervene in this national issue for the sake of the workers and for the sake of the construction and manufacturing industry and the infrastructure of the United Kingdom?

David Mundell: This is a serious issue for both Governments. In the past it has been demonstrated that the Scottish Government and the UK Government can work together on serious issues that affect employment in Scotland, such as Grangemouth. I assure the hon. Gentleman that we will follow exactly the same approach. The Secretary of State and I will raise this issue with ministerial colleagues and do everything we can to work with the Scottish Government, North Lanarkshire council and other interested parties.

Angus Robertson (Moray) (SNP): It has been officially confirmed today that Nicola Sturgeon will become the next leader of the Scottish National party and Scotland’s first female First Minister. I would like to extend congratulations to her. She will be outstanding in those roles. Will the Minister be discussing the vow signed by the three UK leaders and the extensive new powers that it promises? What extensive new powers does the Minister especially support being devolved to Scotland?

David Mundell: I join the hon. Gentleman in congratulating Nicola Sturgeon on emulating Margaret Thatcher and becoming the female leader of her party. I most certainly look forward to working with her as the first female First Minister of Scotland. My previous experience of Nicola Sturgeon is that she has adopted a constructive approach to discussions with the UK Government.

The hon. Gentleman will be aware that the Smith commission has been established. All the political parties in Scotland have submitted their proposals. I particularly welcome the fact that the SNP will be part of that process. He will know that my leader in Scotland, Ruth Davidson, has made it quite clear that we see the Strathclyde commission proposals from the Conservative party as a floor and not a ceiling to those discussions.

Angus Robertson: I am sure the Minister would not be wanting to create a false impression. There is absolutely no comparison between Nicola Sturgeon and Margaret Thatcher. Nicola Sturgeon will be leading the most popular political party in Scotland. Margaret Thatcher destroyed the Tory party, and he is the living proof of its having only one seat in Scotland.

I am sure that most people in Scotland think that extensive new powers would help the economy grow, create jobs and deliver greater social fairness, so let me

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give the Minister another opportunity to outline which ones he is in favour of. Will he please, at the Dispatch Box, outline which extensive new powers he is in favour of devolving to Scotland?

David Mundell: I am very disappointed that the hon. Gentleman has not read the Conservative submission to the Smith commission, which clearly sets out, for example, our support for the devolution of 100% of income tax powers to the Scottish Parliament. I welcome the comment from the hon. Member for Glasgow East (Margaret Curran) that she is open to those discussions. We have made it clear that the Conservative position is one of flexibility, and we welcome the fact that the Scottish National party is taking part in the discussions. However, the place for those discussions is the Smith commission, so rather than constantly trying to portray the vow or other commitments as having been broken, let the SNP put its time and energy into the Smith commission process.

Margaret Curran (Glasgow East) (Lab): May I begin by paying tribute to the great Scottish journalist Angus Macleod, who died recently? On behalf of the Opposition, I send condolences to his family.

During the referendum campaign, many voters expressed their deep desire for change in our politics and society. Does the Minister believe that the Joint Ministerial Committee should address the figures published today that show growing poverty across Scotland? That one in three children in Glasgow now live in poverty should not just shock us, but shake us into immediate action. What are the Government doing to give greater priority to the fight against poverty in Scotland? Does the Minister believe that Labour’s policy of increasing the minimum wage to £8 would help in that fight?

David Mundell: I certainly agree that the people of Scotland are fed up with the politicking they see on a range of issues. Nobody in Scotland wants to see child poverty. The people of Scotland want politicians to work together to deal with these issues. The Scottish Parliament already has extensive powers that have not necessarily been used while we have been distracted by the referendum process. I hope that a new First Minister in Scotland will be less divisive and that there will be less politicking on these issues, and that we can all work together to reduce levels of child poverty in Scotland.

Referendum Outcome (Government Policy)

2. Neil Carmichael (Stroud) (Con): What assessment he has made of the implications for Government policy of the outcome of the referendum on independence for Scotland. [905359]

3. Michael Connarty (Linlithgow and East Falkirk) (Lab): What assessment he has made of the implications for Government policy of the outcome of the referendum on independence for Scotland. [905360]

7. Graeme Morrice (Livingston) (Lab): What assessment he has made of the implications for Government policy of the outcome of the referendum on independence for Scotland. [905364]

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8. Fiona Bruce (Congleton) (Con): What assessment he has made of the implications for Government policy of the outcome of the referendum on independence for Scotland. [905365]

The Secretary of State for Scotland (Mr Alistair Carmichael): I wish to echo the words of the hon. Member for Glasgow East (Margaret Curran), the shadow Secretary of State, about the sad passing of Angus Macleod. He was a true highland gentleman and a thorough professional, and our political and public life in Scotland will be much the poorer without him.

The referendum result ensures that Scotland remains part of our United Kingdom. I welcome the fact that all parties have chosen to participate in cross-party talks chaired by Lord Smith to deliver further devolution. On Monday, the Government published a Command Paper. Following receipt of Lord Smith’s report, we will publish draft clauses before Burns night.

Neil Carmichael: I, too, welcome the convincing outcome of the Scottish referendum.

Does the Secretary of State agree that in transferring further powers to the Scottish Parliament, we should have commensurate changes for England, and English votes for English laws?

Mr Alistair Carmichael: This matter was dealt with at length yesterday in the House. I have always been of the view that completing the job of devolution will unlock the door to further constitutional reform across the United Kingdom. I caution the hon. Gentleman, however, that in seeking to devolve within Parliament without devolving within the Executive, we could be replacing one messy system with another.

Michael Connarty: I call on the Government to stop the clock on decisions on fracking for ethane in Scotland under the present reserved powers for the UK. It is quite clear that the matter should now lie with the Scottish people in the Scottish Parliament. I am calling for that to be devolved as a policy response to the referendum decision.

Mr Carmichael: I look forward to reading the hon. Gentleman’s full submission, making that case, to Lord Smith’s commission. The hon. Gentleman will be mindful, however, that significant powers have already been given to the Scottish Parliament and Government through control of planning law, which would have a significant effect on the issue that he raises.

Graeme Morrice: In June, the Prime Minister signed a joint statement with the Deputy Prime Minister and the Leader of the Opposition, committing himself to “full representation” for Scotland in the House of Commons. Did the Prime Minister’s commitment extend only to the first UKIP win?

Mr Carmichael: I assure the hon. Gentleman that the Prime Minister remains committed to the level of Scottish representation on which he had previously given an undertaking.

Fiona Bruce: In light of the high level of public engagement in the referendum—97% registered to vote, 85% voted, and there was an electrified public debate that debunked the view that people are not interested in politics, particularly in the future of the UK—will the Secretary of State confirm that the Smith commission

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will engage not only with all parties but fully with the public across the UK before putting forward its recommendations?

Mr Carmichael: I can certainly confirm that. That has been hard-wired into the remit that the Government gave to Lord Smith to undertake his work. It is a very important part of how, over the years, we have built consensus in Scotland about constitutional change. This is too important to be left to the political parties. We must have—I am confident that we will—the voice of business, trade unions, churches and wider civic Scotland.

Stewart Hosie (Dundee East) (SNP): The UK Government’s devolution policy was outlined in this week’s published Command Paper, which sought to devolve, in a number of ways, about a third of Scotland’s revenue base or less than half of the funding requirements of the Scottish Parliament. Given that this is not the unprecedented devolution of major powers promised by the Prime Minister, will the Secretary of State confirm that the Smith commission will not be restricted in any way by the contents of the Command Paper?

Mr Carmichael: If I may correct the hon. Gentleman, the purpose of the Command Paper was to bring together and to outline the proposals of the three parties. It is not a statement of Government policy. As I said when I launched the paper in a statement on Monday—I cannot remember whether the hon. Gentleman was here or not; I suspect not—it is clear that the publication and the content of the Command Paper are without prejudice and do not seek to limit or prescribe in any way the work that we have given to Lord Smith to undertake.

Mr Alan Reid (Argyll and Bute) (LD): When the Secretary of State goes to the population summit in Dunoon, will he remind the Scottish Government that devolution should be not just from Westminster to Holyrood, but from Holyrood to local communities in Scotland? Will he tell the SNP Government that they should reverse policies such as centralising the police and fire services and closing local courts, which are taking people and jobs away from rural Scotland and into the central belt?

Mr Carmichael: I am very much looking forward to joining my hon. Friend, leaders of his local council and Ministers from the Scottish Government in Dunoon. What he says is very much the message that Ministers from the Scottish Government will hear. It is a message that they get throughout the highlands and islands. Seven years of SNP Government in Edinburgh have given Scotland the most centralised system of government in western Europe. That has got to change.

Margaret Curran (Glasgow East) (Lab): As the Secretary of State knows, extensive new powers for Scotland are being proposed by the Smith commission. As he also knows, a number of substantial changes to income tax in Scotland have already been legislated for by this Parliament. A document that I have obtained from the UK Government indicates a number of risks to implementation—notably, that of a decision from the Scottish Government being delayed around the time of a referendum. Will the Secretary of State update us on

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any delays that are taking place and on what plans he has to begin to communicate with taxpayers in Scotland about imminent changes to the income tax proposals?

Mr Carmichael: I do not know the document to which the hon. Lady refers. If she sends it to me, I will be more than happy to consider it, if I have not already seen it. I can tell her that discussions between Treasury Ministers and Ministers of the Scottish Government about the fine details of the transfer of income tax powers are ongoing. Once those are nailed down, a joint effort by both Governments to communicate what it will mean to Scotland’s taxpayers will obviously be of prime importance.

Referendum Campaign (Intimidation Allegations)

4. Mr Andrew Robathan (South Leicestershire) (Con): What assessment he has made of allegations of intimidation during the recent referendum campaign. [905361]

The Parliamentary Under-Secretary of State for Scotland (David Mundell): I hope that we can all agree that the referendum campaign was carried out in a democratic and open way, giving Scotland the debate it deserved. Given that the people of Scotland voted decisively to remain part of the United Kingdom, what matters now is respecting the result and working together to secure the new devolution settlement.

Mr Robathan: Elections and voting in the United Kingdom have traditionally been viewed as free and fair, and free from intimidation, but only yesterday the hon. Member for Glasgow South West (Mr Davidson) described being called a traitor and a Judas. A former Deputy Leader of the Scottish National party was reported as saying that there will be a day of reckoning for those opposed to separation. There has been graffiti stating that those who voted no will be shot. That is disgraceful and a shame on those responsible. Notwithstanding the devolution of justice, will the Minister ask the Advocate-General for Scotland, Lord Wallace, to see whether further action should be taken and whether there was any criminal activity during the referendum campaign?

David Mundell: It is evident that there was some appalling behaviour during the referendum, not least towards people such as J.K. Rowling, when they expressed their views. However, I think we must regard the referendum overall as a triumph of the democratic process. After all, 85% of the Scottish population voted, and voted decisively to keep Scotland in the United Kingdom.

Mr Brian H. Donohoe (Central Ayrshire) (Lab): It is clear that there was intimidation during the referendum, but a more important question for the Minister is: when does he see the possibility of another referendum? The last thing we need to get in the way of politicians’ day business is another referendum in a generation.

David Mundell: I absolutely agree. It is disappointing that in the days before the referendum the First Minister of Scotland was able to say that he did not foresee another referendum in his lifetime; then he said a generation; and now he is saying a few months. That is totally

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unacceptable. The sovereign will of the Scottish people is that Scotland should remain part of the United Kingdom. We should all come together to forge the new devolution settlement.

Sir Malcolm Bruce (Gordon) (LD): On the Tuesday before the referendum, I was present in Inverurie when a small group of Better Together supporters who had been manning a street stall day was suddenly surrounded by a flash mob of 150 nationalists waving banners, shouting, playing music and creating an intimidating atmosphere. The Better Together supporters stood their ground sufficiently to ensure that the people of Gordon rejected independence by a majority of nearly 2:1.

David Mundell: The right hon. Gentleman is absolutely right to highlight the fact that such intimidatory and bad behaviour in the street and on the internet did nothing to further the cause of Yes Scotland. If demonstrators had not been outside the BBC but had been knocking on doors on the Sunday before the referendum, the result might have been closer.

Pete Wishart (Perth and North Perthshire) (SNP): May I tell the Minister what intimidation feels like? Banks threatened to leave Scotland; supermarkets threatened to put up prices; big business threatened to relocate to London; No campaigners told pensioners they would lose their pensions. The premise of “Project Fear” was built, designed and packaged to scare Scottish voters from voting for independence.

David Mundell: It disappoints me that the hon. Gentleman has so little faith and confidence in the voters of Scotland. I believe they were quite capable of seeing through bluff and bluster from any campaign. They voted in the way they wanted, which was to keep Scotland as part of the United Kingdom.

Constitutional Reform (Timetable)

5. Ian Lucas (Wrexham) (Lab): What the Government’s timetable is for constitutional reform in Scotland. [905362]

The Secretary of State for Scotland (Mr Alistair Carmichael): Lord Smith of Kelvin has agreed to oversee the process to take forward devolution commitments to Scotland. Lord Smith will publish his proposals by the end of November. The Government will publish draft clauses by 25 January 2015.

Ian Lucas: Will the Secretary of State confirm that compliance with the vows given to the Scottish people ahead of the referendum will in no way be contingent on other constitutional reform within the United Kingdom?

Mr Carmichael: I can confirm that absolutely for the umpteenth time from this Dispatch Box. There will be no delay while the rest of the UK catches up with Scotland.

Sir Bob Russell (Colchester) (LD): When the Government look at the timetable for constitutional reform in Scotland, will they take account of the fact that more people live in Essex than voted yes in the referendum and that if

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United Kingdom residents are to be treated fairly and equally, what is good enough for Scotland is good enough for East Anglia.

Mr Carmichael: I can only repeat to my hon. Friend that the timetable that we have given to Scotland will be met. Let me add, however, that the distinction between Scotland and England is that we already have a well-established consensus. The main thing that was apparent to me from yesterday’s debate in the House was that the people of England still have some way to go in building that consensus, and I wish them the best of luck.

Ian Murray (Edinburgh South) (Lab): The Secretary of State at the Dispatch Box and many Opposition Members continue to repeat that the timetable is on track, but the nationalists keep putting it about that it has been broken. Why does the Secretary of State think that is, and what does he think we can do about it?

Mr Carmichael: I confess that that timetable has been broken, because the Command Paper that was published on Monday was published two and a half weeks before the deadline that had been set for publication. The nationalists will have to speak for themselves, but every time they seek to undermine the work of Lord Smith and his commission, it raises a suspicion in my mind, and among a growing number of people in Scotland, that although they are part of the process, they are not acting in good faith. [Interruption.]

Mr Speaker: Order. There is excessive noise in the Chamber. However, I feel sure that there will now be an atmosphere of hushed anticipation for Sir William Cash.

Sir William Cash (Stone) (Con): Given what the Secretary of State has just said, and given what he said yesterday in regard to the issue of English laws for English voters, how does he reconcile his statement from the Dispatch Box with collective responsibility in this Government? In the light of that question, is it not time that the coalition was brought to an end?

Mr Carmichael: No. I am confident that the coalition will continue until the end of this Parliament. As my hon. Friend will know, the Prime Minister has set up a Cabinet Committee, chaired by my right hon. Friend the Leader of the House, which is intended to establish Government policy on this issue if that is at all possible.

Gordon Banks (Ochil and South Perthshire) (Lab): In 2010, the Secretary of State called for a citizens’ convention on the constitution. Yesterday, at the Dispatch Box, he said that the constitutional convention should not be seen as kicking devolution into the long grass. Does he still stand by what he stood for in 2010 in his manifesto, and what he said in the House yesterday?

Mr Carmichael: I think there are lessons that the rest of the United Kingdom can learn from the way in which we have gone about building consensus to achieve constitutional reform throughout the United Kingdom. Bringing together not just the political parties but the other interested voices is absolutely essential. It is the best way in which to proceed, and I hope very much that the rest of the United Kingdom will take a leaf out of Scotland’s book.

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Scottish Constitutional Settlement

6. David Mowat (Warrington South) (Con): What further plans he has for a Scottish constitutional settlement. [905363]

The Secretary of State for Scotland (Mr Alistair Carmichael): Lord Smith of Kelvin has agreed to oversee the process to take forward devolution commitments to Scotland. He will publish his proposals by the end of November, and the Government will publish draft clauses by 25 January.

David Mowat: My constituents are very much in favour of the direction of the settlement, but they fear that it may enshrine the £1,600 per annum public sector differential between England and Scotland. Can the Secretary of State assure us that that will be reviewed as part of the process?

Mr Carmichael: One of the express elements in the vow that was delivered to the people of Scotland was an assurance that there would be no change in the Barnett formula. I should add, however, that once we have delivered the extra tax-raising powers that I believe will go to the Scottish Parliament, the formula will obviously account for a lesser proportion of the Scottish Government’s income than is currently the case.

Mr Ian Davidson (Glasgow South West) (Lab/Co-op): Does the Secretary of State accept that if fundraising powers such as the power to tax income are transferred to the Scottish Parliament to a greater extent, adjustments will have to be made to the Barnett formula to take account of fluctuations, just as account will have to be taken of fluctuations in the oil price?

Mr Carmichael: Adjustments will certainly have to be made to the way in which the Barnett formula operates in detail. That is already being undertaken by Treasury officials and Ministers in relation to the powers that are going to Scotland under the Scotland Act 2012.

Anas Sarwar (Glasgow Central) (Lab): Any future constitutional settlement must make it easier to build a fairer society in Scotland. According to a report published by Oxfam, inequality should be measured in terms of welfare, housing, health, education, justice, and employability. Five out of those six have already been devolved to Scotland. Does that not demonstrate that we have two Governments who are failing the people of Scotland?

Mr Carmichael: What it shows is that these are complex problems that will require close working by Scotland’s two Governments in order to tackle them. I very much hope that, now we have got the referendum behind us, we will be able to see the cross-party and cross-government working that the people of Scotland need and demand.

Prime Minister

The Prime Minister was asked—


Q1. [905373] Joan Walley (Stoke-on-Trent North) (Lab): If he will list his official engagements for Wednesday 15 October.

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

Joan Walley: Everyone in Stoke-on-Trent is finally breathing a sigh of relief that the Government have at last committed extra money to fund the merged hospital services in mid and north Staffordshire, but will he now listen to the widespread local public concern and commit to reversing his Government’s £1.2 billion privatisation of cancer care in Staffordshire?

The Prime Minister: I welcome the hon. Lady’s welcome for the fact that money is being put forward to help what the University Hospital of North Staffordshire NHS Trust is doing. A £256 million investment, including £80 million of capital funding, is going into making sure that this project can work well. I have been following the situation in Staffordshire very closely, and I will continue to do so. On cancer, I would say to her that the number of people being referred for cancer treatment under this Government is up 50%. We inherited some of the worst cancer survival rates anywhere in Europe, but in this country they are now at record levels.

Mr Stewart Jackson (Peterborough) (Con): Does my right hon. Friend agree with the opinion of at least one Member of this House sitting on the Opposition Benches—he knows who he is—that the only way to get an EU referendum is to vote Conservative with my right hon. Friend as Prime Minister? Will he commend such eminently sound judgment?

The Prime Minister: I cannot think who my hon. Friend is referring to, but it is certainly true to say that if we are not satisfied—as I am not satisfied—with the way the EU is working at the moment and if we want change, reform, renegotiation and, crucially, an in/out referendum—not for us to decide, but for the British public to decide—there is only one choice, and that is to vote Conservative.

Edward Miliband (Doncaster North) (Lab): I should say at the outset that I am speaking through a sore throat, but I would not have missed this meeting with the Prime Minister for the world. Today’s fall in unemployment is welcome. Every time someone gets a job, it is good for them and for their family. Will the right hon. Gentleman confirm, however, that the latest figures show that wages are still failing to keep pace with inflation and that he is presiding over the longest fall in living standards for a century?

The Prime Minister: Let me say to the right hon. Gentleman that I am sure the whole House will want his sore throat to get better soon. I hope that, if he gets a doctor’s appointment, he will not forget it. He must make sure he turns up on time.

I am glad that he has asked me about unemployment, because the figures out today show that our long-term plan is working. We see unemployment now below 2 million, we see the claimant count below 1 million and we have just seen the biggest annual fall in unemployment since records began. Long-term unemployment, youth unemployment, long-term youth unemployment and women’s unemployment are all down, but there is absolutely

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no complacency. To answer his question directly: yes of course we have seen slow wage growth, but that is because we are recovering from the longest and deepest recession in this country’s history. Let me remind him what the Institute for Fiscal Studies said:

“We’ve had a great big recession. We had the biggest recession we’ve had in 100 years. It will be astonishing if household incomes haven’t fallen and earnings haven’t fallen”.

Of course that has happened, and we know who is responsible.

Edward Miliband: The right hon. Gentleman obviously noticed that I lost a couple of paragraphs in my speech. I have noticed that since we last met he has lost a couple of his Members of Parliament. Let us talk about what he said at conference. Before the last election he lectured the Tory party and said this:

“you can’t talk about tax reduction unless you can show how it is paid for, the public aren’t stupid”.

So when he announced his £7 billion unfunded tax cut he must have had a secret plan to pay for it. What is it: cutting public services or raising VAT?

The Prime Minister: People do not have to look in the crystal ball with us; they can read the book. We have cut taxes for 26 million people in our country; we have taken 3 million people out of income tax altogether; and we have raised the personal allowance to £10,000, so that if someone is on the minimum wage, we have cut their income tax bill by two thirds. But we have been able to do that only because we remembered something important: you have got to have a long-term economic plan and you have got to cut the deficit. We do have a plan, the deficit is down by a third, and the International Monetary Fund says that we are the fastest-growing economy in the G7. With a record like that, we can afford tax cuts—that people deserve.

Edward Miliband: We can see the record: higher VAT; cuts to tax credits; hitting working families; and the bedroom tax. That is the record of this Prime Minister. He cannot be straight about his tax plans, so perhaps he can be straight about his plans for tax credits. Can he confirm that as a result of his plans a one-earner family with two children on £25,000 a year will lose almost £500 a year?

The Prime Minister: The best way to help people is to take them out of income tax altogether. Next year, people will be able to earn £10,500 before they pay any income tax. We think it is better not to take money off people in the first place, but the right hon. Gentleman wants to compare records. After all, this is the Labour party, so let us look at the record on labour. Here it is: women’s unemployment up 26% under Labour, down 11% under this Government; and youth unemployment up 44% under Labour, down 22% under this Government. The fact is that the economy is growing, the deficit is coming down and we are getting Britain back to work. The long-term plan is working, but the one thing that could wreck it is a Labour Government.

Edward Miliband: The right hon. Gentleman did not answer the question or confirm the figures. Let me just tell him that they are the Chancellor’s own figures showing that people will be £500 a year worse off, and

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the Prime Minister cannot even admit that. Let me ask him about a very specific issue about disabled people and the minimum wage, which goes to the issue of living standards. In response to a question at the Conservative party conference, Lord Freud, the welfare reform Minister, said:

“You make a really good point about the disabled…There is a group…where actually as you say they’re not worth the full wage.”

Is that the Prime Minister’s view?

The Prime Minister: No, absolutely not. Of course disabled people should be paid the minimum wage, and the minimum wage under this Government is going up, and going up in real terms. It is now at £6.50, and we will be presenting our evidence to the Low Pay Commission calling for another real-terms increase in the minimum wage. The right hon. Gentleman talked about the Chancellor’s figures, so let me give him the Chancellor’s figures: inflation is at 1.2%—a five-year low; we have had the biggest annual fall in unemployment since records began; we have the fastest-growing economy in the G7; and next year pensioners will be getting an extra £150 a year. Those are the Chancellor’s figures, those are the Government’s figures, and we know that we just get mayhem from Labour.

Edward Miliband: We need to be clear about what the welfare reform Minister said, because it is very serious. He did not just say that disabled people were “not worth” the minimum wage. He went further and said that he was looking at

“whether there is something we can do…if someone wants to work for £2 an hour.”

Surely someone holding those views cannot possibly stay in the right hon. Gentleman’s Government?

The Prime Minister: Those are not the views of the Government. They are not the views of anyone in the Government. The minimum wage is paid to everybody, disabled people included. [Interruption.]

Mr Speaker: Order. Passions are running high but the answer from the Prime Minister must be heard, and I want to hear it.

The Prime Minister: Let me tell you that I do not need lectures from anyone about looking after disabled people, so I do not want to hear any more of that. We pay the minimum wage, we are reforming disability benefits, we want to help disabled people in our country and we want to help more of them into work. Instead of casting aspersions, why does not the right hon. Gentleman get back to talking about the economy?

Edward Miliband: If the Prime Minister wants to protect the rights of disabled people, I suggest that he reads very carefully what his welfare reform Minister has said, because they are not the words of someone who should be in charge of policy relating to disabled people. In the dog days of this Government, the Conservative party is going back to its worst instincts: unfunded tax cuts, hitting the poorest hardest and now undermining the minimum wage. The nasty party is back.

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The Prime Minister: I can tell the right hon. Gentleman what is happening under this Government: inflation is down, unemployment is down, the economy is growing and the deficit is coming down. We have faced some tough and difficult times in our country, but we have a Government who are on the side of hard-working people. He came here and told us about the forgotten paragraphs in his speech—I have a copy of them with me. They came under the heading “Hard truths”. Well, I have a hard truth for him: he is not remotely up to the job.

Mark Hunter (Cheadle) (LD): Hundreds of thousands of people across the United Kingdom have their privacy invaded every day of the week by the menace of nuisance phone calls. Those unwanted and intrusive calls blight the lives of far too many of our citizens. Does the Prime Minister think that the Government have done enough to tackle the problem, and will he support stronger action against the perpetrators?

The Prime Minister: I am happy to look at what my hon. Friend says. We do have the Telephone Preference Service that helps people to avoid a lot of those calls, but I have had pressure for more to be done, and I am happy to look at what he says.

Q2. [905374] Kerry McCarthy (Bristol East) (Lab): A survey I did of GPs in Bristol this summer showed that they are at breaking point: their workloads have doubled, they cannot recruit and surgeries are at serious risk of closure. It was said this week that the Prime Minister did not have a clue about the NHS reforms. Will he at least acknowledge that it is now harder to be a GP and to see a GP on his watch?

The Prime Minister: Of course there are pressures on our NHS; everybody knows that. We made some big decisions on becoming the Government, which were to go on spending on the NHS—we put £12.7 billion more in—and to cut the bureaucracy so that there are 20,000 fewer administrators and 6,000 more doctors, including, crucially, 1,000 more GPs. We need to go on to ensure that the reform plus the money eases the pressure on our health service so that we can continue to see the sort of success that we have in our NHS today.

Q3. [905375] Mr David Davis (Haltemprice and Howden) (Con): As the Conservative party and only the Conservative party will deliver a referendum and a renegotiation on Europe, will the Prime Minister tell us his intentions of bringing to this House the red line issues that will feature in his renegotiations, and can he give us a preview of some of those issues today?

The Prime Minister: I have set out some of the things that need to change. They include safeguards for the single market, the ability to block new regulation, ensuring that Britain comes out of ever-closer union and, crucially, as I said in my conference speech, addressing the issue of immigration. I am looking forward to addressing all of those issues in the months ahead.

Mr Nigel Dodds (Belfast North) (DUP): Given the very serious spread of the Ebola virus worldwide, with reports that there could be up to 10,000 new cases per week in two months’ time, will the Prime Minister, as part of his meetings later today and in Cobra, ensure

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that he liaises very closely with the authorities in Northern Ireland, which shares a land frontier with another jurisdiction, in relation to checks on people coming into the UK? It is a very serious issue for Northern Ireland and potentially a very serious issue for the rest of the United Kingdom.

The Prime Minister: The right hon. Gentleman is absolutely right. There will be another Cobra meeting chaired today by the Foreign Secretary. I will be chairing one tomorrow. We are looking at all these issues about where people are arriving, and co-operating properly with all the devolved authorities. It is worth stressing that there are no direct flights from Liberia, Sierra Leone or Guinea into the United Kingdom, so we are talking about people who come here indirectly, which is why it is so important that we put in place the screening processes, starting at Heathrow but to be rolled out more as the days go by. I am absolutely convinced that we will do everything we can to keep this country safe. I will ensure that proper liaison takes place not only with Northern Ireland but with the Republic.

Q4. [905377] Robert Halfon (Harlow) (Con): Is my right hon. Friend aware that over the past couple of years in Harlow youth unemployment has been cut by 53% and general unemployment by 43%, the number of apprentices has gone up by 82% and there have been tax cuts for thousands of low earners? Does that not show that we are the true workers party now and the modern trade union movement for hard-working people?

The Prime Minister: I congratulate my hon. Friend on all the work he does locally to help promote jobs, apprenticeships and training. He is absolutely right, and there has been a 56% decline in unemployment in his constituency, but let me stress that there is still more work to be done. We have got to stick to our long-term economic plan. We are not immune from pressures, including the problems in the eurozone, so we need to stick to the plan and do everything we can to get even more people back to work.

Q5. [905378] Mr Adrian Bailey (West Bromwich West) (Lab/Co-op): In the light of the National Audit Office’s estimate of a £750 million cost to the taxpayer of the sale of Royal Mail, what measures will the Government take to ensure that when they sell Eurostar, the City gravy train will not take the taxpayer for a ride yet again?

The Prime Minister: Let me say to the hon. Gentleman that there was not a cost to the taxpayer of the sale of Royal Mail. There was a benefit to the taxpayer, because for the first time we had a receipt in for the sale and no longer had, as we did in the Labour years, loss after loss after loss. We are looking at expressions of interest for the business that he mentions and we will make sure that we get value for money for the taxpayer if we look to involve the private sector.

Richard Graham (Gloucester) (Con): The 1984 joint declaration committed Britain and China together to preserve the freedoms and stability of, and a high degree of autonomy for, Hong Kong for 50 years. Recent large demonstrations there show that the people of Hong Kong have real concerns over proposals for the

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election of their next Chief Executive. Does my right hon. Friend agree that we should do everything possible to encourage the Governments of Hong Kong and China to find ways to provide the widest possible choice in that important election and that that is vital to the stability of Hong Kong and the interests of both Britain and China?

The Prime Minister: I agree with my hon. Friend that it is important that democracy involves real choices. I also think that we should be very clear about the importance we attach to the 1984 joint declaration, which makes it very clear that the current social and economic systems in Hong Kong will remain unchanged, including lifestyle. It talks about:

“Rights and freedoms, including those of the person, of speech, of the press, of assembly, of association, of travel, of movement, of correspondence”

and, indeed, “of strike”. Those are important freedoms jointly guaranteed through that joint declaration and it is that, most of all, that we should stand up for.

Q6. [905380] Graham Jones (Hyndburn) (Lab): Proposed cuts to GP funding, the proposed closure of a walk-in centre in Accrington, proposed cuts to the GP practice in Accrington Victoria hospital, accident and emergency in special measures, the police taking constituents to A and E at Blackburn Royal hospital in police cars: the NHS in my constituency is in crisis. What can the Prime Minister ever do, considering the broken promises he has given, to assure my constituents that the NHS is safe?

The Prime Minister: We are not cutting spending on the NHS, which is what those on the hon. Gentleman’s Front Bench recommended at the beginning of this Parliament. We are spending £12.7 billion more on the NHS, and if we look at his own clinical commissioning group in East Lancashire, we can see that the funding this year of £490 million is going up by 2.14%. That is an increase of more than inflation. That is our policy and that is not the policy of the Labour party.

Q7. [905381] Mr David Ward (Bradford East) (LD): The Palestinian ambassador, Mr Hassassian, has described Monday’s vote on the recognition of the Palestinian state as “a momentous vote”. Indeed it was. He has also said:

“Now is the time for the UK government to listen to its democratically elected parliament and to take decisive political action by recognising the State of Palestine and upholding its historical, moral and legal responsibility towards Palestine”.

Does the Prime Minister agree?

The Prime Minister: Of course, I look forward to the day when Britain will recognise the state of Palestine, but it should be part of the negotiations that bring about a two-state solution. That is what we all want to see—a state of Israel living happily and peacefully alongside a state of Palestine—and that is when we should do the recognition.

Q8. [905382] Mrs Emma Lewell-Buck (South Shields) (Lab): South Tyneside hospital in my constituency is facing an extra 30,000 visits a year because of the closure of the walk-in centre in nearby Jarrow. Is that acceptable?

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The Prime Minister: As I have said, NHS funding is going up. If we look at South Tyneside clinical commissioning group, we see that this year its funding has increased by 2.14%. That is more money for the NHS, but obviously it is up to local commissioners to decide how to spend it. They have more money under this Government, whereas they would have had less money under Labour, which said that spending more money on the NHS was “irresponsible”.

Angie Bray (Ealing Central and Acton) (Con): Does my right hon. Friend agree that far too many people who cannot be described as rich are finding themselves caught up in inheritance tax? Does he also agree that that is not only unfair, but not what the tax was originally intended for? Does he agree that we need to reform it as soon as possible?

The Prime Minister: I agree with my hon. Friend. It was a step forward when the threshold was effectively increased by allowing things to be passed between husband and wife, making it £650,000 rather than £350,000, which I think it was before. That only happened because of the pressure from the Conservative party when we were in opposition. Taxes, as they say, are a matter for the Chancellor in his Budget, but we all want to see a system—this might have to wait some time—in which only the very rich pay inheritance tax, not hard-working people.

Q9. [905383] Jenny Chapman (Darlington) (Lab): This summer, mothers from Darlington marched 300 miles to show their anger at the this Government’s wasteful mismanagement of the health service. Darlington—I want to help the Prime Minister—is in the north-east of England, like the constituency of my hon. Friend the Member for South Shields (Mrs Lewell-Buck). Does he agree with the Darlington mums and, it seems, a member of his own Cabinet that spending £3 billion on reorganising the NHS was his biggest mistake?

The Prime Minister: What we did at the beginning of this Parliament was ensure that we cut the bureaucracy and put in the extra money. The only way to have a strong national health service is by having a strong economy. Let us look at the countries that ignored their deficits. Greece cut its NHS by 14%; Portugal cut its NHS by 17%. They have something in common with the hon. Lady’s leader: they all forgot the deficit.

Jeremy Lefroy (Stafford) (Con): I welcome the £300 million investment in Stafford, Stoke, Cannock and Wolverhampton hospitals, but will my right hon. Friend recognise the substantial improvements at Stafford in recent years and the very hard work of its staff, and will he confirm when the NHS England-led review of consultant-led maternity services at Stafford will take place?

The Prime Minister: I am delighted to add to what my hon. Friend says about the hard work being done at Stafford hospital. The link-up with North Staffordshire and the extra money that has been put in gives an opportunity for a fresh start. Obviously, like him, I want to see as many services as possible maintained at Stafford hospital, and I know the importance that local people attach to maternity services. People who live in Stafford want to have their children in their local hospital, and I quite understand that.

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Q10. [905384] Mr Steve Reed (Croydon North) (Lab): Does the Prime Minister agree that the £11.5 million wasted on a botched and abandoned reorganisation of south-west London’s NHS services would have been better spent providing more GPs so that my constituents do not have to wait over two weeks to see a doctor?

The Prime Minister: The hon. Gentleman mentions waiting times, so let me remind him that when this Government came into office there were 18,000 people waiting longer than a year. That number is down to 500, and that is because we have run the health service and the economy effectively. The reorganisation that took place in the NHS was about getting rid of bureaucracy. There are now 20,000 fewer administrators, 6,000 more doctors and 3,000 more nurses. That is a record we can be proud of.

Q11. [905385] Lorely Burt (Solihull) (LD): One in four beds in our hospitals is occupied by a patient with dementia. Being treated in ordinary wards can cause them distress and confusion, hampering their recovery and that of other patients. Does the Prime Minister agree with me, and with health practitioners in my local hospital in Solihull, that patients with dementia should be cared for by specially trained staff and, where necessary, in separate wards, and will he support my campaign to make it so across England?

The Prime Minister: In dementia, we face an enormous challenge in our country and, indeed, across the world, because so many people have this condition and so many people are likely to get it. This Government have increased massively the research that is going into dementia. We have trained over 1 million dementia friends so that we build more dementia-friendly communities, and we have trained over 100,000 NHS staff in how better to treat people with dementia. We are putting something like £50 million into hospitals to try to help them with the way that we treat dementia sufferers. But the hon. Lady is absolutely right: the more people who we can treat in the community and who we can maintain at home the better, because very often being in a hospital, particularly in A and E, is not the right answer for someone with dementia.

Barbara Keeley (Worsley and Eccles South) (Lab): My constituent Alan Henning was brutally murdered by the self-styled Islamic State. In Eccles we have lost a local hero who ignored his own safety to take aid to children in need in Syria. People from across this country have told me that they believe that this noble sacrifice should be recognised in some way by a national honour and by support for his widow and children. Can the Prime Minister tell me if he supports these ideas and what we can do to progress them?

The Prime Minister: I will look very carefully at the suggestion that the hon. Lady makes, because she is absolutely right that Alan Henning was a hero. He went to serve others. He went with no thought of his own safety: it was about helping other people in their time of need. He was an entirely innocent man, and the fact that he was murdered in such a brutal fashion demonstrates the dreadfulness of the people who we are dealing with in ISIL. I know that people in Eccles and in Salford

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miss him greatly. I spoke to his wife; the family have been incredibly brave. The hon. Lady makes a very good suggestion which I will take away and look at.

Q12. [905386] Rehman Chishti (Gillingham and Rainham) (Con): Will the Prime Minister join me in congratulating the excellent Conservative-run Medway council on securing nearly £30 million from the Government’s national growth fund, which will further help to improve economic regeneration in the local area? The fact that youth unemployment in the local area is down, unemployment overall is down, apprenticeships are up, business creation is up and jobs are up clearly shows that our long-term economic plan is working both locally in Medway and nationally across the country.

The Prime Minister: My hon. Friend is absolutely right. The claimant count in his constituency is down by 36%, which is a huge advance over recent years. He is right about the importance of the local growth deal. This is going to mean more transport links in and around Medway and investment in the growth hub. A total of £442 million of growth funding has gone into this deal. Like him, I have got a feeling I will be spending some time in the Medway towns in the months and years—in the weeks—to come.

Douglas Carswell (Clacton) (UKIP): My hon. Friend the Member for Richmond Park (Zac Goldsmith) will be pressing amendments to ensure that the Recall of MPs Bill makes MPs meaningfully accountable to their constituents—real recall. Will the Prime Minister now support these amendments in order to honour the promises on which he sought office in 2010?

The Prime Minister: We made it very clear that we wanted to see a recall Bill come in front of Parliament and be voted on, and I am delighted that we are keeping that promise; the Second Reading of the recall Bill will be happening very soon in this House. I will look very carefully at all amendments that come forward because, frankly, in getting this Bill together we have come up with the minimum acceptable for recall, but I think there are a lot of very good arguments to be had about how we can go further, and I look forward to having them in the House of Commons.

Q13. [905387] Richard Harrington (Watford) (Con): Since 2010 there has been £50 million-worth of investment in schools in Watford. Only last week, we had the announcement about St John’s Church of England primary school, under Father David Stevenson. Can my right hon. Friend assure me that this situation of massive investment in schools will continue, because it is hugely benefiting my constituents and their children?

The Prime Minister: We are spending £18 billion in this Parliament on school buildings—that is more than Labour spent in their first two terms in office combined—and I want to see that continue. What we are seeing in our schools is not just this important building work but a massive change in culture and leadership as we see standards rise and we see school after school really transformed through their results. I know that is happening in Watford, as elsewhere, and so what we must do is

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carry on with this programme, carry on with our reforms, and make sure we give more young people the chance of a good start in life.

Nic Dakin (Scunthorpe) (Lab): Today, Tata has announced that it hopes to sell its long products business, including the integrated steel site in Scunthorpe. People are understandably concerned about that. Will the Prime Minister meet me and a cross-party group of MPs whose communities are affected by the decision, in order to make sure there is a bright future for long product steel in the UK, which underpins so much of British manufacturing?

The Prime Minister: I am very happy to meet the hon. Gentleman and other north Lincolnshire MPs to discuss this vital issue. Over the past four years we have seen some good developments in the steel industry, not least with the reopening of Redcar and what has happened in Port Talbot. I want to see a strong future for steel making in Scunthorpe. I know how important this issue is. We are engaging with both Tata Steel and the company that is looking to buy, and we look forward to those discussions. The hon. Gentleman will also know that we took action in the Budget to try to ease the burden on energy-intensive users. We have seen a recovery of manufacturing in this country, particularly through the car industry, and obviously we want to see the steel industry as part of that.

Duncan Hames (Chippenham) (LD): As the economy gets stronger, we on the Government Benches will not forget the deficit, but if the Prime Minister can afford his tax cuts, will he also commit to continuing the protection of school budgets that we have achieved under this coalition, or must tax cuts for high earners and those inheriting estates come first?

The Prime Minister: As my hon. Friend knows, the truth about all these things is that we can afford a strong school system and a strong health system only if we maintain a strong economy. That is why he is absolutely right to say that we must not forget about the deficit, as the Leader of the Opposition did. We have to make sure that we keep getting the deficit down and keep getting the country back to work. The truth is that, as we stand here today, the British economy is growing and more people are getting into work. We are making good progress on all our economic plans, but there is no complacency, because we face real challenges in terms of what is happening in the rest of the world. The biggest threats to the British economy are sitting a few

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feet away from me—people who have learned absolutely nothing. They would borrow more, tax more and spend more. They would take us right back to the start.

Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op): The people of Kobane in northern Syria are desperately fighting off attack from ISIS. The United Nations Secretary-General has asked for immediate action to tackle it and support the beleaguered civilian population. What are the UK Government doing to try to make sure that massacre is prevented in Kobane?

The Prime Minister: Of course, we are taking action in the skies over Iraq, but we fully support the action that America and other states, including Arab states, are taking in the skies over Syria, which has had some effect on the town of which the hon. Lady speaks. I think there is a case for Britain doing more, but I recognise that what we have to focus on right now is the air power over Iraq and the training of an effective Syrian national opposition, because in time the right answer for Syria is the same as the right answer for Iraq: a Government who can represent all of their people and armed services that can fight on behalf of all of their people. Britain should play its role in making sure that happens.

Nigel Adams (Selby and Ainsty) (Con): Will the Prime Minister join me in thanking the 45 companies and organisations that attended my fourth jobs fair last week? Will he also thank Selby college for putting on the event and the staff at Selby Jobcentre Plus, and welcome the fact that unemployment in Selby and Ainsty is now down by more than half since the last election?

The Prime Minister: I congratulate my hon. Friend on holding those jobs fairs, which have been a very effective way of helping people who are looking for work to get jobs. If we look at Yorkshire and Humberside overall, we see that across the year there has been a 46,000 reduction in unemployment. That demonstrates that unemployment is coming down right across our country, but we have to stick to the long-term economic plan that is delivering that.

Several hon. Members rose

Mr Speaker: Order.

Mr Dennis Skinner (Bolsover) (Lab): Just one more.

Mr Speaker: Mr Skinner will, I am sure, be in his place next week and probably several times before then.

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Mental Health Act 1983 (Amendment)

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

Mr Speaker: Colleagues who are perambulating around will no doubt leave the Chamber swiftly so that we can move on to the ten-minute rule motion.

12.35 pm

Sir Paul Beresford (Mole Valley) (Con): I beg to move,

That leave be given to bring in a Bill to amend section 136 of the Mental Health Act 1983; and for connected purposes.

Thank you for clearing my line of vision through to you, Mr Speaker. As you are well aware, the useful advantage of the ten-minute rule Bill mechanism is that it can, if a Member so wishes, be used to introduce small changes that cannot easily be fitted into the flow of legislation through the House. My Bill would make a tiny amendment, and I wish it to be supported as a classic example of such a Bill.

I am sure that you are aware of the police parliamentary scheme, Mr Speaker. I highly recommend it to any Member who would appreciate seeing how the police act in the field under existing legislation. It is a great opportunity to be made aware of small changes in legislation that would assist the police in their duties. I am currently part of the way through the course.

A few weeks ago, I joined two young uniformed police officers based in Wandsworth in their police response car. The first call was a blue-light-and-siren dash to a Wandsworth council residential tower block. As it was a Wandsworth property, the lift was clean and fully functioning. We progressed to the source of the emergency call, which was a flat on the 14th floor. The mother of the household nervously let in one of the two officers to see her daughter, aged 22, who was standing on the window ledge and threatening to jump. It was quickly elucidated that she had a short history of having made a previous attempt to commit suicide, but I am not sure if that was by the same means.

The appearance of the uniformed officers did little to ease the problem; but fortunately, we were backed up by two plain-clothes officers, and the young female officer seemed to be acceptable to the young lady on the window sill. With great expertise, she after some time persuaded the lady to come down off the window sill and, eventually, to sit on the bed beside her, as they calmly discussed the problem. The police officer suggested that she might wish to go to a place of safety for medical and psychiatric help. This was refused, and was followed by agitation and more threats to dive out the window.

As all that was being played out, the officers outside the flat had contacted St George’s hospital psychiatric unit to obtain assistance. After a couple of hours, such

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an individual arrived with an ambulance and a crew of two. Their introduction to the young lady required more re-calming, and we went through the whole procedure all over again. Offers of help, particularly of psychiatric help, caused more alarm and more rejection. The NHS gentleman who had arrived with the ambulance then indicated to the police that the young lady really needed to be taken in for care. The fact that that was glaringly obvious is of course beside the point. A struggle ensued, which required some of the officers to hold her, and in due course she was transported to St George’s hospital as the designated place of safety.

This whole pantomime had occupied up to five police officers and three NHS staff, and it had taken three to four hours to sort out. It was quite obvious from the very beginning that the young lady needed help. It appeared to me that the police officers managed the situation well, and that they could themselves have taken the young lady in for care well within the 45 minutes during which they expeditiously persuaded her. That would have reduced not only police officer and NHS manpower hours, but the time taken and the risk of the young lady dashing back to the window and leaping out.

From discussions with the officers, I found, first, that this kind of situation is far from unusual, and secondly—this surprised me—that if this incident had occurred in a public place, the police would have been able to act immediately. I fail to see why the fact that it happened in a private place meant that they were unable to do so. I therefore wish to make some small changes to the legislation.

I should like section 136 of the Mental Health Act 1983 to be amended as follows. First, the heading, “Mentally disordered persons found in public places”, should be changed to, “Mentally disordered persons found by the police in the course of their duties”. Secondly, the words

“in a place to which the public have access”,

should be changed to, “in the course of carrying out his duties”. That is a small change, but it demonstrates that at the moment we are prepared to place our trust in the police in a public place, but apparently not in a private place. I think that that small change would be very effective, as the example that I have portrayed demonstrates.

I usually call Paul Goggins to present such Bills with me but, regretfully, he cannot do so, so I am doing it on my own.

Question put and agreed to.


That Sir Paul Beresford present the Bill.

Sir Paul Beresford accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 24 October, and to be printed (Bill 98).

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Opposition Day

[6th Allotted Day]

National Minimum Wage

12.41 pm

Mr Chuka Umunna (Streatham) (Lab): I beg to move,

That this House notes that the value of the National Minimum Wage has been eroded since 2010 as working people have been hit by the cost-of-living crisis and are on average £1,600 a year worse off; recognises that the fall in the real value of the minimum wage since 2010 is now costing the public purse £270 million a year in additional benefit and tax credit payments; further notes that the Chancellor of the Exchequer cruelly misled working people by saying he wanted to see a minimum wage of £7 while the Government has no plans to reach this goal; calls on the Government to set an ambitious target for the National Minimum Wage to significantly increase to 58 per cent of median average earnings, putting it on course to reach £8 before the end of the next Parliament; supports action to help and encourage more firms to pay a living wage through “make work pay” contracts to boost living standards and restore the link between hard work and fair pay so that everyone shares in the UK’s wealth, not just a few at the top; and further calls on the Government to set a national goal of halving the number of people on low pay by 2025.

We are a great country with some of the most hard-working and creative people in the world, but there are challenges and problems that must be addressed. We are the sixth largest economy in the world, yet too many people do not have secure, fulfilling jobs that provide dignity, respect and a wage that they can live on. Most people who are living in poverty in this country have a job. If people do the right thing, play by the rules and work hard, day in, day out, they should not have to live in poverty in this country; but the reality in 2014 is that they do. More than 5 million people do not earn a decent wage.

We can see the economic data and, yes, on paper, GDP growth is better than it was two years ago, but the reality of people’s lived experience suggests otherwise. Just in the past fortnight, the much respected Resolution Foundation has produced research that paints a different picture. Tens of thousands of people are trapped in low-paid jobs with little hope of a pay rise. Among those minimum wage employees who have been employed for at least five years, a record one in four has failed to progress off the minimum wage for the entirety of that period. That compares with just one in 10 minimum wage workers a decade ago.

That is the background to our motion. What each party says it will do to address that situation and to make work pay will provide the context in which the next general election is fought. Before I set out what the Labour party would do if elected next year, I will remind people what we have already done. I have said it before and I will say it again: in 2010, this party left the country in an immeasurably better state than we found it in 1997. [Interruption.] If the Minister waits, he will get his time in a moment. One of the many reasons for that was our utter determination to end the outrage of people being exploited at work, which led to our establishment of the national minimum wage in the face of opposition from Conservative Members.

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In 1997, the current Secretary of State for Work and Pensions—I note that he is not here—told the House that if we introduced the national minimum wage, it would

“negatively affect, not hundreds of thousands but millions of people.”—[Official Report, 4 July 1997; Vol. 315, c. 526.]

In the same year, the current Defence Secretary told the House that the Conservative party had “always resisted” the minimum wage and that he thought there were “other better solutions” to extreme low pay. Then, of course, there was the Conservative party leader—now the Leader of the House—who said that a minimum wage would be

“either so low as to be utterly irrelevant or so high that it would price people out of work.”—[Official Report, 17 March 1997; Vol. 308, c. 618.]

They and their Conservative colleagues made those claims and arguments to justify inaction at a time when some people in this country were earning as little as £1 an hour.

We had the good sense to ignore the Conservatives, and in my view establishing a national minimum wage was one of our greatest ever achievements. As a consequence, between 1997 and 2001 extreme low pay fell from 6.9% to 1.5% of the work force, and we are proud of that. All the evidence shows that the minimum wage boosted earnings considerably, without causing the unemployment that we were told would follow. So when people say that we are all the same, I point to the establishment of the minimum wage to illustrate our very different instincts as parties, our different approaches and the kind of difference that a Labour Government make when in office.

Mr Russell Brown (Dumfries and Galloway) (Lab): I served on the Committee that considered the National Minimum Wage Bill, and the only other person in the Chamber who did that is you, Mr Speaker. We spent many long hours through the night—

Chris Bryant (Rhondda) (Lab): He was wrong then!

Mr Brown: I will refer to that later, but it is right that my hon. Friend the Member for Streatham (Mr Umunna) continues to push this issue, because some people out there believe that the national minimum wage would have happened in any case.

Mr Umunna: I thank my hon. Friend; that is interesting and I look forward to hearing his comments on who took what position at that time.

Yesterday, I revisited an interview with the great Sir Ian McCartney, a former Member of this House, who was the Minister at the Department of Trade and Industry and pushed the National Minimum Wage Bill through the House. He said that he would have “died in the ditch” to ensure that we got it through, and—my hon. Friend the Member for Dumfries and Galloway (Mr Brown) will remember this—we had a record sitting of the House to get the national minimum wage through in the face of resistance from Conservative Members.

I distinctly remember Sir Ian McCartney at a press conference with the Westminster lobby, explaining why we were doing what we were doing. He was a former kitchen worker and earned poverty wages. I remember seeing the news report of him weeping at that press

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conference, explaining how he was paid something like 1p or 2p per potato that he put in a bag in that kitchen, and asking the lobbying journalists, “How can you defend that in our country in this day and age?”

As I said, Labour Members are rightly proud of the national minimum wage, and we make no apologies for reminding people of the resistance that we met when we introduced it, and of the difference that a Labour Government make to people’s lives.

Andy Sawford (Corby) (Lab/Co-op): My hon. Friend is right to highlight the stark choice around fairness that people faced in this country all those years ago in 1997, and the different positions that the Labour and Conservative parties took on the minimum wage. Does he agree that today that choice is perhaps best symbolised by the support of Conservative Members for the bedroom tax, which makes me think that they have learned nothing from their opposition to the minimum wage?

Mr Umunna: I completely agree with my hon. Friend, and in my constituency I have seen the stress, upset and angst caused by the bedroom tax, causing people to have to leave an area in which many of them have grown up and love so much. My hon. Friend is right: the bedroom tax shows the instincts of our different parties.

Although we are, of course, proud to have established the national minimum wage, which helped to end exploitation and extreme low pay, it did not end low pay per se. Under this Government working people have experienced their wages dropping by an average of more than £1,600 a year. The 1 October rise in the minimum wage is the first real-terms increase during this Parliament, and it is still 4.1% below its 2008 peak and just 2p above its equivalent value in 2005. Therefore, if we are elected next year, our goal will be to halve the number of people on low pay in our country. To achieve that, we need the minimum wage to evolve to address the broader problem of low pay, which is the purpose of the motion.

Andrew Gwynne (Denton and Reddish) (Lab): We need that proposal, but we also need effective enforcement of the national minimum wage. Is my hon. Friend appalled, as I am, to learn that as many as 300,000 people in this country are still being paid below the national minimum wage and yet, in the past four years, there have been only two prosecutions?

Mr Umunna: I am appalled by that. My hon. Friend is right to mention enforcement. I will come to that, but I pay tribute to his work—I have been to his constituency—on ensuring that those who work hard get a decent day’s pay, in addition to his work on training and apprenticeships, which he has talked about a lot.

Mrs Anne Main (St Albans) (Con): In the interests of fair pay for a fair day’s work, does the hon. Gentleman share my concern that so many right hon. and hon. Members, including many Opposition Members, pay absolutely nothing to some of the young people who work in this place? He should campaign to ensure that all hon. Members pay a fair wage for a fair day’s work.

Mr Umunna: I do not know to whom the hon. Lady refers, but in my experience, my Labour colleagues have always sought to ensure that those who work for them

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are paid a decent wage. I am sure that she, like others, might occasionally, as I do in my constituency office, have sixth-formers who are work experience students. Their situation is different from those whom hon. Members employ, but if hon. Members employ somebody to work for them, they should be paid a decent wage.

I spoke of the evolution of the national minimum wage and what Labour wants to do. With that in mind, we asked the former deputy chair of KPMG, Alan Buckle, to consult business, trade unions and others on how we can strengthen the minimum wage and restore its value. In so doing, Mr Buckle consulted many companies extensively. There is a growing body of opinion that the value of the minimum wage should rise. Sir Ian Cheshire, chief executive of Kingfisher, Jeremy Bennett, chief executive officer for Europe for Nomura, and Steve Marshall, the executive chairman of Balfour Beatty, are among those who are calling, as the economy recovers, for the minimum wage to increase faster than it has in the recent past. They say that that will benefit businesses and improve the public finances—the fall in the real value of the minimum wage since 2010 now costs the Exchequer £270 million a year in additional benefit and tax credit payments, a point that my hon. Friend the Member for Leeds West (Rachel Reeves), the shadow Work and Pensions Secretary, will build on later.

Guy Opperman (Hexham) (Con): Does the hon. Gentleman accept that the minimum wage has risen, both by reason of the Government’s increase and the increase in the tax threshold, whereby the tax take from the minimum wage earner has decreased, and that the Government’s projections show that the minimum wage will rise to £8.06 by 2020?

Mr Umunna: I will address precisely all three points the hon. Gentleman makes, which I have read and heard the Minister make in the media, but the issue is how we evolve what we have to tackle the fact that, despite the minimum wage, more than 5 million people are in low pay. When we introduced the minimum wage and when, as I have said, the hon. Gentleman’s Conservative colleagues opposed its introduction, people were earning as little as £1 an hour in some parts of the economy. We helped to do away with extreme low pay—[Interruption.] I will come to tax if the hon. Gentleman is patient. We now want to move things to address the bigger, broader issue of the large body of people in our country who are in low pay.

Mr Frank Field (Birkenhead) (Lab): When the Opposition are developing policy, we should consider that there are clearly some sectors of industry that could pay substantially above the national minimum wage. When we go into the election, should we not only advocate an increase in the national minimum wage, but encourage those sectors that could pay higher wages without unemployment effects to do so?

Mr Umunna: I will come to my right hon. Friend’s point on different sectors if he bears with me for a moment.

How will Labour improve on the current arrangements? When the Labour Government established the national minimum wage, we tasked the Low Pay Commission with the discrete and technical job of setting the minimum

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wage within existing economic parameters. My right hon. Friend was one of the Ministers involved in its introduction. The Low Pay Commission’s job was to play the hand it was dealt, not to attempt to change the game. Over the years, it has played its hand well, but it has remained relatively hands-off. In that sense, those who say that it is more akin to a minimum wage commission as opposed to a Low Pay Commission are right.

Labour wants to transform the Low Pay Commission into a proper, official low pay watchdog, setting out what it believes we need to do tackle low pay, monitoring progress and making recommendations on how to boost productivity and make a higher minimum wage possible in different sectors. My vision for the Low Pay Commission is for it to be far more active. If we give it a bigger, more active role, it can not only challenge the Government more, but challenge different sectors. I would like it to have a much bigger standing in the national consciousness. Currently, I believe that it has around six to seven staff, who are mainly focused on statistical analysis, but I can see it becoming a big, low pay watchdog, playing a big part in the national conversation.

Mr Field: I rise merely to say how much I welcome that statement, because it relates to the work of the shadow Work and Pensions Secretary and other Opposition Front Benchers. If we are to control the welfare bill in a civilised way, making people who could pay higher minimum wages pay their due, rather than relying on taxpayers, is a crucial part of the strategy.

Mr Umunna: My right hon. Friend is absolutely right. I could not agree more with him.

My second point is that, up to now, the minimum wage has been set with a view to its short-term impact over the coming year. The Low Pay Commission is asked to describe the labour market as it is when it sets the rate, six months before the rate comes into force. It sets the context and gives the rate, but it does not give any guidance on how a higher level can be reached. Therefore, a Labour Government will set a target to increase the minimum wage from its current level of 54% of median earnings to 58% of median earnings by 2020, to be implemented by the Low Pay Commission during the next Parliament.

Forecasts show that that will take the minimum wage from £6.50 this year to £8.00 in October 2019—I can see the hon. Member for Hexham (Guy Opperman) looking up at me, but I will come to his point on the forecasts of £8.06. That long-term target will give businesses time to plan and to adapt their business models to boost productivity to support the higher level. The international evidence shows that countries can support minimum wages with such a measure, which could give us a similar level to that in Australia and other EU countries.

Guy Opperman: Will the hon. Gentleman give way?

Mr Umunna: I will give way to the hon. Gentleman after I have addressed his point, which, as I have said, has been raised in the media by the Minister. I read in The Sun earlier this month some nonsense from him. He suggested that the minimum wage was on course to

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be more than £8 by 2020 in any event, as the hon. Member for Hexham said, and therefore that Labour’s commitment to get the minimum wage to £8 by the end of the next Parliament would mean cutting it. That is desperate stuff. Let me be clear that, under the Labour’s plans, there would be nothing to stop the Low Pay Commission from setting the rate beyond £8. In any event,

The Sun

pointed out that the Treasury estimates on which the story was based relied on a significant recovery of earnings growth. Not many subscribe to those estimates. My point is that Labour Members are not prepared to sit on our hands and just hope for that earnings growth to come about. We are determined to do what we can to ensure it happens by setting that target.

Guy Opperman: I took good note of what the hon. Gentleman said, and if I understood him correctly, he said his plan is predicated upon raising median earnings from 54% to 58%. Surely that is only possible by having a strong economy, for which, of course, he would need a long-term economic plan. Surely that means he agrees with us.

Mr Umunna: I think the hon. Gentleman will probably have to wait for the reshuffle. [Interruption.] He gets the prize for mentioning the long-term economic sham, which is his party’s plan. I do not disagree, however, with the point he—[Interruption.] The hon. Gentleman keeps shouting at me. If he will let me reply, I will engage with his point. Is the national minimum wage on its own a panacea for ensuring that people can earn a wage they can live off and have security? No, it is not a panacea, but it is a very important part of the equation. Of course a strong economy is important in this respect, however. I would not disagree with him about that. Anyway, he has got in a reference to the long-term economic plan that he wanted to mention, and I am sure the Whip present, the hon. Member for Croydon Central (Gavin Barwell), will have taken note of that.

Mr William Bain (Glasgow North East) (Lab): Is my hon. Friend aware that in my constituency 38% of children are now growing up in poverty? Their parents are working harder, but have a lot less to show for it. Does that not demonstrate that the Low Pay Commission needs to take a long-term view and have an ambitious target to raise low pay, and does he regret the Government’s failure to adopt one?

Mr Umunna: That is right. On that 38% figure, I must say that I have a similar situation in parts of my constituency. I agree with my hon. Friend but I would add that I think so much of our economic debate takes part around the GDP figures, statistics and data, and of course that is right—we should look at the data—but the question is the lived experience of people in this country: do they think they have never had it so good? When we listen to the rhetoric from Government Members, that is often what we would be led to believe.

Ms Karen Buck (Westminster North) (Lab): Has the Conservative party not got it completely the wrong way round? Is not strong economic growth dependent upon strong earnings growth, which in turn will help us to make sure we have a sustainable recovery that is shared among all the people?

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Mr Umunna: I could not have put it better myself; I completely agree with my hon. Friend. We know we have a productivity issue in this country. If people are earning more—if they get better pay—they are more productive. All the research shows that.

I wanted to add a point in respect of our target. Of course the economy might be subject to economic shocks—we had the crash in 2008-09—and the LPC might therefore take the view that the target cannot be met without risk to the economy, and we will build flexibility into the system to account for that.

Mr Dennis Skinner (Bolsover) (Lab): Is it not the plan to get rid of evil zero-hours contracts as well, like those in my constituency—at Sports Direct, Mike Ashley? If that happens, it will considerably add to the wages of more than 1 million people in Britain, and that figure is growing as the unemployment statistics supposedly fall. All that put together makes it an even better package.

Mr Umunna: I completely agree with my hon. Friend, and the point he makes about zero-hours contracts shows that, in some respects, the big difference between the two sides of the House is that—[Interruption.] The Minister will have his time in a moment. From our point of view, of course people having work is the absolute priority, and having a job is of course better than not having a job, but we have got to be more ambitious than that given the nature of the work that so many people in our economy are doing.

Mr Iain McKenzie (Inverclyde) (Lab): What does my hon. Friend think of this Government’s lacklustre approach to, and lack of enthusiasm for, naming and shaming employers who pay under the living wage?

Mr Umunna: My hon. Friend raises a good point, and I will come to it very shortly.

Mrs Main: I can accept that there are some abuses of zero-hours contracts but, as someone who formerly worked as a supply teacher I would caution against getting rid of all zero-hours contracts. Our health and education services rely on people picking up casual contracts—if that is how the hon. Gentleman wants to put it—so that we fill in the gaps when there are shortfalls. It is not always a demon policy to have zero-hours contracts.

Mr Umunna: I hear what the hon. Lady says about some zero-hours contracts—if memory serves me correctly, I may have been on one myself when I was a student—but the point is that we are seeing far too many exploitative zero-hours contracts. That is the problem, and we are not going to sit on our hands when we are faced with that situation.

John Glen (Salisbury) (Con): Is it not very important that Government take seriously the failure by employers to act responsibly, and that is why the hon. Gentleman should welcome this Government’s move to increase fourfold the fines on employers who are paying below the minimum wage? That did not happen under the previous Labour Administration. We take those breaches very seriously. What does he have to say about that?

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Mr Umunna: As I was saying earlier, there would have been no national minimum wage or any fines if it were not for the last Labour Administration, but I take the hon. Gentleman’s point that fines need to be increased, and I will come to that very shortly as he makes a good point there.

Sheila Gilmore (Edinburgh East) (Lab): Will my hon. Friend comment on the experience of my constituent whose fixed-hours part-time job, which fitted in with school hours, was changed recently by a very respectable employer—a large department store, not some unscrupulous employer—to a zero-hours contract in order to make her terms more flexible? She had to stop work because she could not find the child care to help her. That is surely the sort of contract we must do something about.

Mr Umunna: Well, that is it, and that is precisely why we will introduce a far tougher package than the sole measure we have seen on zero-hours contracts from the Government, which is basically just a do-away with exclusivity on those contracts. That is simply insufficient given the story that my hon. Friend has just told—and I would be very interested to know who the employer was.

The third point I want to make on the changes we need is that, when the minimum wage was introduced, the hope was that it would have a ripple-effect causing wages to rise up the income scale, but that has not turned out to be the case. Frankly, it is becoming the going rate in some sectors, as my right hon. Friend the Member for Birkenhead (Mr Field) alluded to. This explains why 1.2 million employees currently just earn the legal minimum. That is up from just over 600,000 in April 1999, so we have seen a considerable increase in the number of people on the minimum. Therefore, in its beefed up role, we will ask the LPC to advise on what sectors of the economy could afford to pay more than the minimum wage and how that could be achieved.

Finally, enforcement has been mentioned, and much more needs to be done on that, as the hon. Member for Salisbury (John Glen) said. There has in some respects been a systematic failure in the way the minimum wage has been policed. To address that, we will give local authorities, working alongside Her Majesty’s Revenue and Customs, powers to enforce the law, and we will increase the fines tenfold for rogue companies that do not meet their obligations. In this way, we will evolve the national minimum wage so that it moves beyond the narrow task of setting a minimum wage to avoid extreme low pay to a broader mission to reduce low pay in Britain. As far as the Minister’s party is concerned, I discern no desire to move beyond the status quo and the current arrangements.

Andy Sawford: On my hon. Friend’s point about where the Government stand, I had an assurance from the Prime Minister in February that they would name and shame those employers who had been found out and fined for not paying the minimum wage in my constituency. They still have not done that. Does that not show there is no real commitment on this from the Conservative party?

Mr Umunna: My hon. Friend’s remarks illustrate a point I have been making.

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The Minister has said he would like to see the minimum wage strengthened, but his party has set out no plans whatsoever on how it will make that happen. It is all very well picking holes in, and raising issues with, the suggestions we have put forward, but I do not see any coming from Government Members. All we have seen—as the Minister’s boss the Secretary of State, who I know is away in India, said in June—is the Chancellor, in talking about the minimum wage increasing to £7 earlier this year, simply explaining the arithmetic of what would happen if a real minimum wage were restored; commentary from the Chancellor, but no action.

Mr Gregory Campbell (East Londonderry) (DUP): The hon. Gentleman talks about how we best deal with the scourge of low pay. Does he not agree that a combination of raising the minimum wage, which he has alluded to, and raising the thresholds at which people begin to pay tax is the answer, so that the people earning £200 or £250 a week retain all of that as their take-home pay?

Mr Umunna: I will come to that point very shortly after giving way to my hon. Friend.

Mr David Winnick (Walsall North) (Lab): Is it not a fact that it is often said that the House of Commons is rather remote from the lives of many people outside? Surely one of the ways we can combat the idea that MPs do not care is to do everything possible to overcome the poverty that so many people, and certainly many of my constituents, suffer week after week because of low wages. Of course, had it not been for a Labour Government, as my hon. Friend says, there would have been no national minimum wage.

Mr Umunna: My hon. Friend makes a very good point and it makes me reflect on the 2010 general election. In the polling districts covering the most deprived estates in the two most deprived wards in my constituency—Brixton Hill and Tulse Hill, which were most impacted by our introduction of the national minimum wage—the turnout was more than 70%, and sometimes 80%. That is because the people on estates such as the Tulse Hill estate had been directly impacted by our introduction of the national minimum wage: it helped to reduce poverty in those areas. My hon. Friend is absolutely right.

The hon. Member for East Londonderry (Mr Campbell) talked about tax and thresholds. The Minister has said that, in addition to thinking about the national minimum wage, we should consider the impact of tax on the low- paid. I agree. That is why we will introduce a starting rate of tax of 10%, paid for by abolishing the Government’s ill-conceived married couples allowance.

The Minister will no doubt refer to the increases to the personal allowance—[Interruption.] I thought that might provoke a reaction. I will give way to the hon. Member for Elmet and Rothwell (Alec Shelbrooke) in a moment. I am sure the Minister will no doubt refer to the increases in this Parliament to the personal allowance to seek to show that he “gets it”, as my hon. Friend the Member for Walsall North (Mr Winnick) mentioned. I doubt, however, that the Minister will mention the fact

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that any benefit the low paid derived from the increase in the personal allowance was wiped out by the Government’s hike in VAT and the benefit and tax reductions that we have seen for working people in this Parliament.

Alec Shelbrooke (Elmet and Rothwell) (Con): Will the hon. Gentleman clarify the thresholds at which the 10% rate and the 20% rate would be paid?

Mr Umunna: We will set out in detail the plans we have on the 10% rate nearer to the general election. I cannot give the hon. Gentleman the exact thresholds right now, but I am sure that the Whip will have noticed that he asked the question.

On enforcement, I am sure the Minister will refer to their so-called “name and shame” policy, which the Government announced. [Interruption.] The Whips have already noticed that the hon. Member for Hexham (Guy Opperman) has mentioned the long-term economic plan, so he can quieten down. [Interruption.] I will take no lectures from any Government Member on tax rates, or anything else, when they have made a £7.5 billion unfunded tax commitment. I will take no lectures from them whatsoever. I will return to the point I was making about their “name and shame” policy. Only 25 firms have been named, and even that will be worthless unless Ministers beef up enforcement.

I agree with the Minister on the points I have heard him make about productivity. Increasing productivity enables companies to pay more. As I said before, it is key that we invest in human capital to increase productivity, and that means more investment in skills and training.

Before I wrap up, I just want to say something about the living wage. My hon. Friend the Member for Walsall North talked about what people think of Parliament. We should, on all sides of this House, be proud that the parliamentary estate pays everybody who works here, including contractors, a London living wage. It is very important that we set an example in that respect, and I am pleased to hear that that is happening here.

Mr Winnick: There was a campaign on that in the previous Parliament and I am glad if the issue has been rectified. Cleaners who were not in regular employment but contracted from outside were certainly not getting the same wage as those who were in regular employment in the House of Commons. If that has been rectified, Mr Speaker, I am pleased. The conditions and circumstances in which cleaners worked here in the Palace of Westminster were absolutely disgraceful. They reminded one of Charles Dickens’s times. I hope all that has been rectified.

Mr Umunna: I do, too. No doubt Mr Speaker will be able to give us more details. I can only talk about my understanding of the London living wage. It is very important that we set an example in this House on paying a living wage. I also think it is very good that this House has set an example in not using zero-hours contracts for people working on the estate.

Mike Crockart (Edinburgh West) (LD): Will the hon. Gentleman give way?

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Mr Umunna: I am just going to make a little more progress, because I sense that I have been going on for a while.

The minimum wage is set by reference to economic factors, including growth levels, the labour market, economic forecasts and so on. The living wage is calculated by looking at the basic cost of living and the salary needed for an individual to meet their own or their family’s basic day-to-day needs, including housing, food, clothing and so on. We recognise it is very challenging for employers to pay a living wage, so we would not impose it on them by having a statutory living wage. Instead, a future Labour Government will encourage employers to pay the living wage through new “make work pay” contracts. Firms that sign up to becoming living wage employers in the first year of the next Parliament will benefit from a 12-month tax rebate of up to £1,000, and an average of £445, for every low-paid worker who gets a pay rise. This will help firms towards a higher-productivity, higher-wage model. The measure will be funded entirely from the increased tax and national insurance revenue received by the Treasury when employees receive higher wages. Additional savings in lower tax credits and benefit payments, as well as increased tax revenues in future years, will cut social security bills and help pay down the deficit. Not just ensuring people are in work but that they get a decent salary when they are working, is the most effective way to reduce the social security bill.

In conclusion, I would like to go back to where I started. This area—what people are paid at work and the nature of the work they do—will be a key battleground at the next general election. That is why we have come out with the most detailed proposals, both in respect of wages and security at work, that will make a difference to people’s lives. Instead of mocking us, and instead of coming forward with proposals of their own, we see Government Members sitting on their hands while we carry on in the situation in which too many people who work hard do not earn a wage that they can live on. Ultimately, that is why the only way to do anything about this is to elect a Labour Government next year. I commend this motion to the House.

1.19 pm

The Minister for Business and Enterprise (Matthew Hancock): You would not have believed it from the speech the hon. Member for Streatham (Mr Umunna) has just made, Mr Speaker, but a fortnight ago those of us on the Government side of the House put up the national minimum wage in real terms for the first time since Labour’s great recession. The national minimum wage is now at its highest level ever in terms of average earnings. Enforcement of the national minimum wage is stronger and because of the recovery the national minimum wage is set to rise. For the last half hour, the Opposition have talked about the past and the glory days of 1997, but I want to talk about the future.

Sheila Gilmore: Is the Minister suggesting, yet again, that the recession in Europe, the United States and throughout the world was Labour’s recession?

Matthew Hancock: I am certainly suggesting that we had one of the deepest recessions in the world because of the failure of the last Labour Government to regulate

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the banks properly and to mend the public finances in the run-up to the recession. That youth unemployment had risen by 40% even before the crash shows the failure of Labour’s economic policy. That is a theme to which I shall warm in my speech.

Mr Bain: On the future, the Minister’s close colleague the Chancellor promised that the national minimum wage would reach £7 an hour. When will the Government make good on that promise?

Matthew Hancock: I will come later to progress on raising the national minimum wage, but the central point, which Labour Members do not understand, is that we cannot have a strong national minimum wage without a strong economy.

Alec Shelbrooke: Does my right hon. Friend agree that the interventions we have heard from Labour Members show that the Opposition have learned nothing from their time in government?

Matthew Hancock: I could not have put it better myself.

The rise in the national minimum wage comes against a background of record job creation, the biggest fall in unemployment since records began—before I or my hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke) were born—falling youth unemployment, falling long-term unemployment, unemployment of fewer than 2 million and a claimant count of fewer than 1 million; and that is all part of our plan to build from the ruins of the past an economy that works for everybody.

Steve Rotheram (Liverpool, Walton) (Lab): Will the Minister confirm whether, before the worldwide financial crash, he was asking for more or less regulation? Certainly his Chancellor was asking for a lighter-touch regulatory framework, not what, with hindsight, the Minister now claims.

Matthew Hancock: In 1998, when the Labour Government removed the requirement to regulate levels of leverage in the City, the Conservative party complained, and it was that removal which led to the crash being bigger in the UK. It was the result of poor regulation of the financial sector. Labour did not fix the roof when the sun was shining, but instead spent money they did not have even before the crash.

Instead of forgetting about the deficit, as Labour does, and ignoring Britain’s economic challenges, we know that a strong recovery underpins a strong society and that we cannot have a strong minimum wage without a strong economy.

Julie Hilling (Bolton West) (Lab): I love the way the right hon. Gentleman is rewriting history. Will he explain why we had three years of a flat-lining economy and why it only started to recover when the Chancellor went to plan B and started to invest in infrastructure?

Matthew Hancock: The hon. Lady needs to look at the economic statistics: there was no double-dip recession and ours is the fastest-growing economy in the G7. Economic growth has been strong, the number of jobs is growing at a record rate, our economy is turning

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around and we have the fastest growth in the G7. Labour might want to deny it, but we want to support the plan and, crucially, ensure that economic growth reaches all parts of the country and that all can benefit. That is why we support and are strengthening the minimum wage. We know that the only route to higher living standards is not through more borrowing, more taxes and more debt, but through fair pay for a job well done.

Today was another test of Labour’s economic credibility, and yet again it was found wanting. Instead, the true supporters of the national minimum wage now reside on the Government Benches. First and foremost, a strong minimum wage requires a strong economy.

Mr Umunna: The Minister said he supported strengthening the minimum wage. How has he strengthened it or proposed to strengthen it?

Matthew Hancock: I will give the hon. Gentleman a couple of examples. We have increased the budget for enforcement by 15%, while the Small Business, Enterprise and Employment Bill, which I am leading through the House, backs up those resources with tougher penalties for those who break the law. While we are at it, we are also tackling the scourge of zero-hours contracts—something Labour failed to do after 13 years in office.

If anybody has ever queried the idea that the plight of the low-paid is linked to the health of the economy, all they have to do is study what happened as a consequence of the great recession. When the economy shrank after 2008, the incomes of the lowest-paid took a hit, through jobs lost, hours cut and wages frozen, and our nation’s finances shrank by 6%, which inevitably had a profound impact on people’s incomes—after all, national income is merely the aggregate of individuals’ incomes. The need to turn that around is why our long-term economic plan is so vital.

The evidence shows that the plan is working. Record numbers of jobs have not been created by accident, but because the economy is growing, but we are keenly aware of the risks that remain and the costs that would be paid, especially by the low-paid, if we abandoned the plan. Those who truly support the minimum wage also support the plan to tackle the deficit and repair the health of the economy, and that is why Government Members are the true supporters of the national minimum wage.

Guy Opperman: Is not the most crucial point, as well as raising the minimum wage, the need to address and examine the issue of tax? This coalition Government have raised the minimum threshold and actually given people on the minimum wage more money in their pockets. Will he set out in detail the effect it will have when we elect a Conservative Government and introduce a £12,500 tax threshold?

Matthew Hancock: Of course, it is post-tax income that matters to families. Having raised the threshold to £10,500, we are proposing to raise it to £12,500, meaning that no one working full time on the national minimum wage would pay any income tax at all. That is the sort of

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action we can get only if we have the grit to deal with public spending and leave more money in people’s pockets, thereby supporting the low-paid.

True supporters of the minimum wage also know that it is a partnership with business.

Richard Fuller (Bedford) (Con): My right hon. Friend has rightly talked about post-tax income, but for people on low incomes, what matters is post-tax and post-benefit take-home disposable income. The shadow Secretary of State did not say what his policies would be on tax credits. Does he agree that that is an important part of the debate about how we improve living standards?

Matthew Hancock: The shadow Secretary of State could not even explain his own tax policy when he was asked by my hon. Friend the Member for Elmet and Rothwell. On the other hand, we are clear about ours—[Interruption.]—and I am delighted every time the Opposition complain about it. They should put it on their leaflets. We will increase the threshold to £12,500 so that anybody on the minimum wage doing 30 hours a week will not pay a penny in income tax.

Alec Shelbrooke: Labour Members chunter about VAT, but does my right hon. Friend find it surprising that Labour increased VAT by 2.5% and doubled taxes on the lowest-paid workers while, by comparison, we have put VAT up by 2.5% and raised the tax threshold?

Matthew Hancock: We know what would be most damaging for the low-paid—if we lost control of the economy and had another great recession like the last time Labour was in office.

Julie Hilling: I want to return to the Minister’s point about the number of new jobs being created. I asked him once about this matter and got the following reply:

“Information regarding the number of jobs created is not available. As an alternative…estimates relating to the net change in the number of people in employment are available… Unfortunately the requested information on duration of employment is not available”.—[Official Report, 12 November 2013; Vol. 570, c. 578-9W.]

The Government continue to talk about the number of jobs created, but they do not have the evidence to back it up.

Matthew Hancock: The evidence was published at 9.30 this morning. It showed that record numbers of jobs had been created and that in the hon. Lady’s constituency the number of unemployment claimants fell by 32% in the last year. If I were her, I would look at the statistics before complaining about our record on jobs.

True supporters of the national minimum wage know that it is a partnership with business. Jobs cannot be created without job creators. Business is a force for social good, not only because it creates jobs, but because business prospers by finding solutions to other people’s problems. It is something for something, and it is what the British people mean by fairness. After all, the Low Pay Commission was set up because the minimum wage relies on consensus to keep the support of both employers and employees. In fact, the hon. Member for Streatham made that point in his speech, but then sadly undermined it with a policy that I think was probably pushed on him by his leader.

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Mr Bain: On the issue of fairness, does the Minister agree that people should be treated equally under the minimum wage legislation? Will he take this opportunity personally to disown the distasteful comments made by his ministerial colleague, Lord Freud—that some disabled people were not worth the full rate? Is that not an outrage; should not the Government apologise?

Matthew Hancock: Yes, of course, everybody who is in work should be paid the minimum wage.

Mr Umunna: I must say that the comments to which my hon. Friend the Member for Glasgow North East (Mr Bain) referred were absolutely disgraceful and that Minister must answer for them. The Minister talked about how the Low Pay Commission does things and how it works through the tripartite model and we absolutely want to see that go forward into the future. The Minister did not say it, so I will: the issue that some people worry about is the possible politicisation of the Low Pay Commission. I think that can be avoided, in much the same way that having a 2% target for the Monetary Policy Committee did not lead to the politicisation of that process.

Matthew Hancock: Unfortunately, the hon. Gentleman says one thing and his party then proposes something quite different. The Low Pay Commission was set up to support that consensus, to ensure that the minimum wage has the support of both employers and employees and to ensure that the low paid are not priced out of work. When politicians such as the hon. Gentleman’s boss get on a soapbox and undermine the Low Pay Commission consensus by clearly stating an amount that should be achieved by 2020, they undermine the very people they claim to support. As the Federation of Small Businesses says—the hon. Gentleman can address this when I give way to him,

“the decision on what the rate is should be set only after consultation with the Low Pay Commission.”

Labour’s proposal, according to the FSB, “does the opposite”.

Mr Umunna: As I said, I believe it is possible to move towards a new framework without leading to politicisation and to address the concerns that some have raised. I am taken aback when the Minister says that the Leader of the Opposition’s talk about achieving a certain rate for the national minimum wage undermines the Low Pay Commission, when that is precisely what the Chancellor of the Exchequer did when he talked about a £7 rate.

Matthew Hancock: No, because every year the Government present evidence to the Low Pay Commission of what level of pay the economy can support. In fact, I can go further. Today, we are publishing the economic evidence that is going in to the Low Pay Commission. It shows what level of pay the Government believe can be supported. It shows that the recovering economy is creating jobs, with unemployment falling faster than any country in the G7. Indeed, the Low Pay Commission has said that it can raise the national minimum wage in real terms this year only because of that recovering economy. Government analysis underpinning today’s evidence projects that on the Office for Budget

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Responsibility’s economic earnings forecast, the minimum wage is set to reach £8.06 by 2020—only because of the recovering economy.

Mrs Main: Did the Minister note—I am sure he did—that the shadow Secretary of State said that there would be some “flexibility” in the plans, but without saying what that flexibility entails? It seems to me that this is a fudge; there is not really any particular figure that he is looking towards.

Matthew Hancock: I was going to come on to that. The hon. Member for Streatham made an important admission today. I think it is the first time that Labour has admitted that if the £8 target was going to damage the economy, there would be “flexibility”, as my hon. Friend said. Within a month the hon. Gentleman has completely undone the promise that was made with such loud cymbals at the party conference. It was a promise made for a party conference by a desperate party leader who is struggling to get his message across. Today, it has been completely undermined by the man who wants to replace him as party leader after Labour loses the next election.

Mr Umunna: I have to say that this is really desperate stuff from a desperate Minister. In the same way as there is flexibility for the Monetary Policy Committee in setting the interest rate target, there would be flexibility in our system. The Minister talks as if this were some new revelation. What I have said is absolutely no different from what the Leader of the Opposition has said. The Minister can pick holes in what we have suggested, but he has come forward with no proposals whatever to evolve or move on the national minimum wage—none.

Matthew Hancock: I certainly can pick holes in what the hon. Gentleman said, and I intend to do exactly that. I would say that today’s admission that there is no £8 target from the Labour party because there will be “flexibility” around it shows that Labour has nothing to say on low pay, just as it has nothing to say on any other area of economic policy. The grin of the hon. Member for Streatham as he came to the Dispatch Box after the discussion about who will be the leader of the Labour party after the next election demonstrates, I think, that undermining his leader was part of his job today—and he has done it brilliantly.

Andy Sawford: Clearly, the Opposition have initiated this debate on the minimum wage, so it is quite bizarre to suggest that we do not have anything to say about low pay when we put it on the agenda. However, perhaps one of the Minister’s colleagues has had too much to say about the minimum wage by suggesting that disabled people are not worth it. Can the hon. Gentleman confirm whether Lord Freud is still a Government Minister? How can his position be tenable?

Matthew Hancock: I have said that everybody should be paid the minimum wage. That has been our policy throughout the whole period of this Government and it will continue. In fact, we are strengthening it—an issue I want to come on to. We have rejected the Opposition’s advice that the national minimum wage should be limited to £8 by 2020, not least because, on the central projection from the OBR’s earning figures as reported in The Sun,

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the national minimum wage will, under the Government’s plans, reach £8.06 by 2020—but only so long as we continue the economic recovery and not if we put that recovery at risk by adopting Labour’s plans.

Mr Umunna: I am grateful to the Minister for giving way, which provides me with the opportunity to remind him of what I said earlier, which is that the claim he made in The Sun was complete and utter nonsense. He should have rewritten his speech before delivering that passage.

Matthew Hancock: On the contrary, Government analysis underpinning today’s evidence projects that, on the OBR’s earnings forecasts, the minimum wage is set to reach £8.06 by 2020.

Alec Shelbrooke: I am sure that we all want the facts to be right when we have a debate, so let me quote directly what the Leader of the Opposition said as reported in the Sunday Mirror:

“I am delighted to be able to tell Sunday Mirror readers that we are going to raise the minimum wage–if we win the election–in the next Parliament to over £8 an hour.”

There was no qualification in that statement.

Matthew Hancock: Absolutely. I concur strongly with what my hon. Friend says. Today’s Labour U-turn on low pay policy shows that ours is the only party and this is the only coalition Government strongly supporting the national minimum wage. We are the ones who are raising the minimum wage, putting it up in real terms at record levels when compared with average earnings, while at the same time reducing taxes. It is those on the Government Benches who support the minimum wage, and it is particularly the Conservative party that is the party of the low-paid.

Mr Iain McKenzie (Inverclyde) (Lab): I would like to tempt the Minister to say more about our proposal for “make work pay” contracts and partnership with the Government and business. Does he not think that business would embrace such contracts in order to promote investment in their employees’ skills, providing not just jobs but a career for their employees?

Matthew Hancock: It is absolutely true that the long-term and fundamental way to support the increase in productivity is to ensure more rigorous education and more skills, which is why we increased the number of apprenticeships. We are on track to have 2 million apprenticeships started in this Parliament, and we are clear that we will deliver 3 million in the next Parliament. The hon. Gentleman is absolutely right that education and skills underpin the long-term advance of prosperity for everyone in this country. I suggest that he would support the Government’s policies to strengthen education if he was truly interested in supporting a long-term increase in productivity.

We have discussed enforcement, the increase in the budget for enforcement and the Small Business, Enterprise and Employment Bill. We have quadrupled the maximum penalty to £20,000—per worker, not per firm. As a result, the amount from enforcement has increased

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from £2.6 million in 2003 to £4.6 million today. We know that a strong minimum wage must be properly enforced.

My third and final point is that the true champions of the low-paid know that the minimum wage is only one tool among many. We are reforming welfare so that it supports people into work rather than trapping them in poverty, and we are letting people keep more of what they earn. Thanks to our rise in the tax threshold, a typical taxpayer already pays £700 less income tax than in 2010. The tax bill of someone working a 30-hour week on the minimum wage has been cut by two thirds. In the next Parliament, we will abolish income tax for those working full time on the minimum wage. We can do that only because we are prepared to make difficult decisions on spending.

It seems that the Labour party does not want to make those difficult decisions. Perhaps the shadow Minister will explain why all we have heard from it is taxes on jobs, taxes on business, taxes on homes, pensions, investments, taxes on driving and now even taxes on death.

Mr Russell Brown: Does the Minister recognise that the economic recovery he talks about is not being witnessed in many parts of the country? He talks about people coming out of the tax bracket, but the reality is that in many parts of the country less than half the work force works anywhere near enough hours to pay tax.

Matthew Hancock: Absolutely. I recognise that as we get the recovery moving we must ensure that it benefits all parts of our country. That is why we are ensuring that the jobs recovery is spread throughout the country. This morning’s jobs data show that unemployment is falling in all regions, and in the hon. Gentleman’s constituency it has fallen by 28% in the last year. Instead of pointing fingers, he should congratulate the Government on that effort.

The Labour party forgets that we do not support the incomes of those at the bottom by making the whole country poorer. Tax cuts and welfare reform are both essential, but ultimately must go hand in hand with strengthening education and skills.

The Government support work and our record shows that we deliver work. We have a plan that will work. A strong minimum wage is possible only with a strong economy. We passionately support the minimum wage, not for a headline, but for the benefit of those who rely on it. It is just one part of our long-term plan to restore the health of the British economy from the ruins of the past. Instead of that past, we will build an economy that works for all and secures a brighter future for Britain.

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