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House of Commons

Tuesday 16 June 2015

The House met at half-past Eleven o’clock

Prayers

[Mr Speaker in the Chair]

Oral Answers to Questions

Treasury

The Chancellor of the Exchequer was asked—

EU Referendum and the Bank of England

1. Mr David Hanson (Delyn) (Lab): If he will make representations to the Bank of England on the publication prior to the EU referendum of its assessment of the effect on the UK economy of the UK leaving the EU. [900320]

The First Secretary of State and Chancellor of the Exchequer (Mr George Osborne): Thanks to this Government, the British people will at last have their say on British membership of the European Union. The Bank of England is of course independent, and any questions about publication should be directed to it. The priority of the British Government is clear: the best outcome for the UK economy is that we achieve major economic reform of the European Union for the benefit of Britain and for the whole of Europe. That is why the Prime Minister and the rest of the Government are now fighting hard to achieve that, and we are confident we will succeed.

Mr Hanson: Airbus industries, Toyota vehicles and Vauxhall Motors—all serving my constituency, and employing thousands of people—have all said they believe that the future of the UK economy is in Europe. Would it not be useful for the Chancellor to put pressure on the Bank of England to produce any internal report, and indeed to publish any Treasury reports, so that we can see once and for all what exit from the European Union would mean for our UK economy?

Mr Osborne: I completely agree with the right hon. Gentleman that companies such as Airbus make a huge contribution to the economy not just of north Wales but of the whole United Kingdom, and we want them to succeed. That is why we want the European Union to be a place that attracts jobs and investment from around the world. We are seeking reforms because we do not think at the moment that the European Union is heading in the right direction. I welcome his participation in this debate, and I can assure him that the Treasury will participate in it as well.

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Mr Andrew Tyrie (Chichester) (Con): The Bank of England may be operationally independent, but does the Chancellor agree that Parliament and the Treasury Committee are likely to see the Bank as having a duty to share its thinking, at least as far as it affects its statutory objectives of monetary and financial stability, on the impact of the UK’s membership of the EU?

Mr Osborne: I certainly do not presume to tell the yet-to-be-formed Treasury Committee how to go about its business, but I would be very surprised if it did not want to have sessions on this vital issue of Britain’s future membership of the European Union. It is of course within its power to ask the Bank’s Governor and indeed other members of the Bank of England to attend; they do attend regularly. It would be very surprising if the Bank of England was not engaged in these crucial economic and financial issues. That is part of its statutory responsibilities, and I think we would all be disappointed if it was not engaged.

Bill Esterson (Sefton Central) (Lab): Thirty-one per cent. of businesses surveyed by Ernst and Young have said that they will either freeze or cut investment until the result of the EU referendum is known. Does the Chancellor accept that that uncertainty will cripple our economy until this is sorted out once and for all? Does he accept that that is a reason for bringing forward the date of the referendum as fast as possible?

Mr Osborne: If the hon. Gentleman is worried about the effect of the EU referendum, why did he vote to have one? We have heard the argument over the past couple of years that the fact of having a referendum would put a dampener on investment. In fact, we have attracted the lion’s share of investment in the European Union since my right hon. Friend the Prime Minister set out our policy, and he has now won public support for that policy. Of course we now want to resolve the uncertainty, but the way to do that is to achieve a good deal in the European Union and put that deal to the British people at the referendum, and we will have the referendum when we have the deal.

Philip Davies (Shipley) (Con): Given that even the most fanatical supporters of our membership of the European Union now accept that we could trade freely with the EU even if we left, will the Chancellor set out for us exactly what we get for our £19 billion a year membership fee?

Mr Osborne: I certainly commend my hon. Friend for his consistency. I remember that in his maiden speech he made the case for Britain leaving the European Union, and he will of course have his opportunity in the referendum. I would say that this is precisely the judgment that the British people and this Parliament have to make: what are the economic benefits of our European Union membership, such as the single market, and what would be the alternative? That will be part of the lively debate, and as I say, the Treasury will be fully involved in that debate.

Stewart Hosie (Dundee East) (SNP): There have already been a number of serious interventions in this debate suggesting that the in/out referendum will be disruptive for inward investment. At the very least, businesses seeking to invest need the certainty of knowing what

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the Chancellor believes success will be in the Prime Minister’s negotiations. Will he tell the House today what he considers success in terms of the outcome of the Prime Minister’s negotiations?

Mr Osborne: There are, of course, a number of things that we want to achieve. Speaking as the Chancellor of the Exchequer, I want to ensure that the European Union works for the citizens of the European Union and of the United Kingdom. That means that it must be a place where businesses want to grow, where jobs are created and that attracts investment from around the world. I do not want Europe to be the place that used to be the dynamic centre of the world, but is not any longer. That is what we are fighting for, and if we achieve it, it will be a success.

Stewart Hosie: We all want to see a dynamic EU, but there were no specifics in that answer. Is it not the case that however bad the negotiations, the Chancellor will declare them a success, and however good the negotiations, the out-at-any-cost brigade will declare them an unmitigated disaster? Instead of pandering to the UKIP agenda, should the Government not pull the whole idea of this daft referendum?

Mr Osborne: I do not want to say this to the SNP spokesman, but I am not sure that he is speaking for Scotland, because 58% of Scots want a referendum and 63% of SNP supporters want a referendum. He needs to get in touch with his grassroots.

Mr James Gray (North Wiltshire) (Con): It is extremely important that the Bank of England report and, indeed, other Government reports and other organisations’ reports on this matter are published in the course of the next two years. However, does the Chancellor of the Exchequer not agree that it is vital that such documents, which may well affect the outcome of the referendum, are not published in the so-called purdah period of six to eight weeks before the referendum?

Mr Osborne: As was made clear by the Foreign Secretary in debate and by the Prime Minister from this Dispatch Box, there are serious issues to address about the current law on referendums, because we believe that it would make the debate on the European Union unworkable and inappropriate. We understand the concerns in all parts of the House about that, and we will come forward with reassurances that enable the proper business of government to continue and allow the Government to make the case for the outcome that is achieved and the vote that we recommend, but that ensure that there is not an unfair referendum and that the Government do not, for example, engage in mass communication with the electorate. Those matters will be discussed later today.

Shabana Mahmood (Birmingham, Ladywood) (Lab): The debate and conduct during the referendum campaign must be, and must be seen to be, legitimate and well informed. He has failed to do so thus far this morning, but will the Chancellor make it clear that he agrees that, in the interests of transparency, the Bank of England should publish full details of its risk assessment, which is codenamed Project Bookend, its terms of reference, its personnel and its timetable? Will he add his voice to our call that any publication of the report must happen well in advance of the vote?

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Mr Osborne: I welcome the hon. Lady to her new position as shadow Chief Secretary—long may she continue in it. It is not for me or even, dare I say it, her to tell an independent Bank of England what to do. I have no doubt that it will engage in the debate. Indeed, the Governor of the Bank of England has made it perfectly clear that it will do so. I have no doubt that the Treasury Committee, when it is formed, will want to ask the Bank of England questions about the European Union, because it is central to many of the Bank’s responsibilities. However, as I have said, we have an independent central Bank and I propose to keep it that way.

Shabana Mahmood: There is still no clear answer from the Chancellor and he has given no commitment to push for the transparency that the debate demands. He has a clear responsibility to ensure that the economic impacts are debated and fully understood. I know that he has his mind on other things these days, like moving next door to No. 10, but if he will do nothing further on Project Bookend, will he at least step up and lead the debate by agreeing to commission and publish reports by the Treasury and the Office for Budget Responsibility on the economic impact of the UK leaving the EU?

Mr Osborne: As I have said repeatedly, we are certainly going to take part in the debate. I am sure that the Treasury will publish assessments of the merits of membership and the risks of a lack of reform in the European Union, including the damage that that could do to Britain’s interests. For example, in my Mansion House speech, I talked about the risks for Britain as a non-euro member as the eurozone continues to integrate and about how that needs to be addressed as part of the negotiations. We will take part in the debate. The more that we get on to the big issues that are at stake, rather than focusing on the process details, the better informed the public will be.

Northern Powerhouse

2. Andrew Percy (Brigg and Goole) (Con): What recent steps he has taken to rebalance the economy and create a northern powerhouse. [900321]

3. Oliver Colvile (Plymouth, Sutton and Devonport) (Con): What recent steps he has taken to rebalance the economy and create a northern powerhouse. [900322]

4. David Morris (Morecambe and Lunesdale) (Con): What recent steps he has taken to rebalance the economy and create a northern powerhouse. [900323]

The First Secretary of State and Chancellor of the Exchequer (Mr George Osborne): We have a comprehensive plan to rebalance the economy and create a northern powerhouse by bringing together the great cities and counties of the north of England, alongside plans to support other vital economies in our country, such as the south-west. Those plans involve major investment in transport infrastructure, backing science and skills, and supporting local businesses. The centrepiece of the northern powerhouse is the commitment to a major transfer of power to our great cities and counties so that local people can take more control of the decisions that affect them.

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Andrew Percy: My hon. Friend the Member for Cleethorpes (Martin Vickers) and I were delighted in the previous Parliament that the Humber was at the centre of the northern powerhouse. Will the Chancellor confirm that the East Riding of Yorkshire and north Lincolnshire will continue to enjoy that position? I have a specific local issue in mind. Will he continue to prioritise flood defence funding for our region, because it is important for encouraging investment into the Humber?

Mr Osborne: I can confirm to my hon. Friend that the Humber, the East Riding and northern Lincolnshire are a central part of the northern powerhouse. When we originally set out the vision of the northern powerhouse last year, we talked about the belt stretching all the way from Merseyside across to the Humber. I know about his passionate commitment to improving the flood defences in the Humber. He achieved marked success last year, but has an even more ambitious project in mind. As he knows, because of his work and that of my hon. Friend the Member for Cleethorpes (Martin Vickers), the Environment Agency is undertaking a study of that proposal.

Oliver Colvile: May I congratulate my right hon. Friend for turning the north into a powerhouse, but what plans does he have to ensure that Plymouth and the south-west—

Mr Speaker: Order. The question is about the northern powerhouse and must be confined to the northern powerhouse. We are immensely grateful.

David Morris: In my constituency, a link road was 60 years overdue. The Prime Minister and the Chancellor came, and the Prime Minister put a series of bolts into the bridge there. Does my right hon. Friend the Chancellor agree that the road is vital to the improvement of my constituency, and that such projects should be rolled out across the area to ensure more vitality in the northern powerhouse?

Mr Osborne: My hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) is a huge champion of Plymouth and the south-west. We will have time to address the south-west in questions.

The Heysham link road is a major achievement for my hon. Friend the Member for Morecambe and Lunesdale (David Morris). People have campaigned for it for 70 years. I happened to visit about a week before the general election with the Prime Minister. Because of my hon. Friend’s fight for infrastructure and jobs in his seat, he is back in the House doing his job.

22. [900341] Helen Jones (Warrington North) (Lab): Despite the Chancellor’s talk of a northern powerhouse, will he admit that output per hour in the north-west is still lower than the average for England, and lower than it was in 2007? Is it not true that his plan to improve the economy of the north-west has drastically failed that region?

Mr Osborne: The north-west has seen a huge increase in employment—it has had the fastest rate of employment growth in the entire United Kingdom. I would have thought the hon. Lady would welcome that.

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The northern powerhouse initiative was instigated by me and the Labour and Conservative council leaders of Greater Manchester. It has been done on a cross-party basis. I would like to think that, at the beginning of this Parliament, we can work across the party divide, including in this Chamber, to bring about that major rebalancing of the British economy, which has eluded Governments for many generations.

Anna Turley (Redcar) (Lab/Co-op): Major employers in the north-east such as Nissan and Hitachi, which are the key drivers of the northern powerhouse, are clear that membership of the EU is vital to their investment in our region, and that they would reconsider their involvement in the UK should we leave the EU. Given that the Under-Secretary of State for Communities and Local Government, the hon. Member for Stockton South (James Wharton), the Minister responsible for the northern powerhouse—I cannot see him in the Chamber—told the “Sunday Politics” show last weekend that he would vote to come out, will the Chancellor tell the House what assessment he has made of the impact of the EU on the north-east economy and his northern powerhouse plans?

Mr Osborne: I commend the work that Nissan and other employers do in the north-east. The north-east is currently producing more cars than the whole of Italy, which is a remarkable achievement and a tribute to the workforce there. I am glad the hon. Lady mentions the Under-Secretary of State for Communities and Local Government. He was not only returned with an increased majority, but is now playing a central role as the Minister helping to deliver the northern powerhouse in DCLG. The debates are about the future of our relationship with the European Union and the reform we need so that major Japanese car manufacturers continue to see Europe and the UK as a place to come, create jobs and invest. We will not do that if our continent prices itself out of the world economy.

Greg Mulholland (Leeds North West) (LD): I am proud that the coalition Government sought to start the rebalancing of the British economy and introduced the northern powerhouse scheme, which I support. It seems clear that we will have to have a mayor in the Leeds city region. Will the right hon. Gentleman seriously consider the possibility of having a Yorkshire-wide mayor to rejoin together that wonderful county, which could be a real powerhouse for the whole of this nation?

Mr Speaker: Order. We have got the gist of it.

Mr Osborne: I am not trying to impose a model on any particular area. It is up to local metro areas to come forward with their proposals. I am clear that if we are to see a massive transfer of power from national Government to local government, there has to be a single point of accountability: someone who carries the can and drives the process forward. The authorities of Greater Manchester have agreed with me that that should be an elected mayor, but, as I say, how the authorities of West Yorkshire, and indeed the whole of Yorkshire, want to proceed is up to them. My door is open to a conversation.

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20. [900339] James Davies (Vale of Clwyd) (Con): I was grateful to the Under-Secretary of State for Transport, my hon. Friend the Member for Devizes (Claire Perry), for meeting me recently to discuss the upgrading of the north Wales main line. Will the Department study the wider economic case for such an upgrade to allow north Wales to link to the proposed HS2 hub at Crewe, and, importantly, to tap into the jobs and prosperity that the northern powerhouse will bring?

Mr Osborne: I welcome my hon. Friend to this House, fighting for the interests of north Wales. He is absolutely right that north Wales is a central part of the northern powerhouse. Of course it is a single economic area, a point made in the lead question. I will take a close look at the rail upgrades he is calling for. It is good to see him championing his constituency so soon after being sent to this place.

Alison McGovern (Wirral South) (Lab): In the north, we know there can be no power without resources. Will the Chancellor be truthful with northern authorities and tell us how much more he is about to cut them by in this financial year?

Mr Osborne: I welcome the hon. Lady to her new position on the shadow Treasury team. Of course we have to make difficult decisions to balance our budget. If we do not get our public finances in order there will not be any powerhouse in any part of the country, and that is what we are doing. It is disappointing that the Labour party, having worked out that it did not have any economic credibility, has started the new Parliament by opposing all the savings we make. As it happens, in the in-year savings I announced we have protected the local government settlement.

Deficit Reduction

5. Craig Mackinlay (South Thanet) (Con): What recent progress he has made in reducing the deficit. [900324]

10. Mr Ranil Jayawardena (North East Hampshire) (Con): What recent progress he has made in reducing the deficit. [900329]

The Chief Secretary to the Treasury (Greg Hands): Thanks to our long-term economic plan, the deficit has more than halved as a share of GDP from its post-war peak of 10.2% in 2009-10 to 4.8% by the end of last year, but the job of fixing the public finances is not yet complete.

Craig Mackinlay: Will my right hon. Friend confirm that competitive procurement continues across all Government Departments to ensure value for money for taxpayers in all that we do?

Greg Hands: I congratulate my hon. Friend on his stellar victory in demolishing both the UK Independence party and Labour. I made a number of visits to his constituency, and I can say that he is truly one of the party’s finest campaigners. The Government remain committed to improving value for money in public procurement, building on the significant progress made in the previous Parliament. The Minister for the Cabinet

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Office and Paymaster General and I meet regularly to discuss this, continuing the excellent work of Francis Maude.

Mr Jayawardena: Despite being left a note by one of his predecessors saying that there was no money, will my right hon. Friend confirm that he will continue to focus on cutting taxes for low and middle-income earners in North East Hampshire while working to eliminate the deficit, so that my constituents pay less tax and less debt interest in the future?

Greg Hands: I congratulate my hon. Friend on taking his seat and on his fine maiden speech last week. He told us then:

“Our best days lie ahead.”—[Official Report, 3 June 2015; Vol. 596, c. 646.]

He is right, but only if we continue to get our deficit, and therefore our debts, under control. Thanks to the plans we have set out, we are set to eliminate the deficit altogether and deliver the tax cuts outlined in our manifesto. We are doing it with the strong endorsement last month of the British people.


Geraint Davies (Swansea West) (Lab/Co-op): There are 800,000 fewer people earning more than £20,000 than there were in 2010. Is that why the Government have borrowed more in five years than Labour did in 13 years?

Greg Hands: The hon. Gentleman ignores the overall employment picture over the last Parliament, in which 2 million new jobs were created and unemployment fell by 1 million. It sounds to me as if the Labour party is starting this Parliament as it started the last one: in a mode of deficit denial and failing to face up to Britain’s problems.

Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): Despite the Chancellor telling us last week he was going to get our economy into surplus, we are still £75 billion in the red. Will the Chief Secretary set out in detail how he will eliminate the deficit, specifically on the £12 billion of welfare cuts?

Greg Hands: To be fair to the hon. Lady, at least she has remembered the deficit today. I have one question for her. During the election campaign, Labour was denying—

Mr Speaker: Order. Let me make something clear, as I know the right hon. Gentleman is a new Minister. The Chief Secretary has no questions for the Opposition—that is not the constitutional position. [Interruption.] I am glad he is getting a bit of advice from the Chancellor. He needs to be clear about that at the start of the Parliament.

Greg Hands: I thank you, Mr Speaker. Welfare savings will be set out in due course. I remind the hon. Lady that we all need to confront the deficit and do something about it, and I hope that creates cross-party support.

Neil Carmichael (Stroud) (Con): Does the Chief Secretary agree that the key part of reducing the deficit is the long-term economic plan, and that it rests on the provision of additional skills for our manufacturing sector, which in turn will drive up opportunities for young people?

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Greg Hands: My hon. Friend is absolutely right, which is why the Government have, and will continue to have, an excellent record on the skills agenda. I look forward to looking at the funding for the further education sector as part of the spending review this autumn.

John Healey (Wentworth and Dearne) (Lab): Among all 20 of the world’s most advanced economies, why have only France, Italy and Japan grown more slowly than the UK in the five years the Chancellor has been in the Treasury? Is not weak growth, not the deficit, the real problem for the UK economy?

Greg Hands: The right hon. Gentleman, as a Treasury Minister in the last Labour Government, will know that the size of the deficit we inherited—which, at more than 10%, was one of the highest—made our job difficult in the first couple of years. However, the UK is now growing faster in 2014 and 2015 than any other EU or G7 country.

Tax Gap

6. David T. C. Davies (Monmouth) (Con): What steps he is taking to reduce the tax gap. [900325]

The Financial Secretary to the Treasury (Mr David Gauke): Since 2010, the percentage tax gap has stayed lower than at any point under the previous Labour Government, saving the country £4 billion. One way in which the Government will address the tax gap is by tackling tax avoidance and evasion. We have committed to raising at least £5 billion more from measures to tackle evasion, avoidance and aggressive planning within the tax system, and we will announce further details at the Budget.

David T. C. Davies: Last year, Caffé Nero managed to make £20 million of profit and pay not one single penny in corporation tax, unlike many hard-pressed local businesses, such as dairy farmers. Does my hon. Friend agree that we might need to look at the rules on tax deductable interest payments and, in the meantime, support coffee chains that pay into the system and support their local businesses?

Mr Gauke: As my hon. Friend will be aware, Treasury Ministers do not discuss individual cases, but I can say that the Government are determined to ensure we have a competitive tax regime in which everyone plays by the rules and pays their fair share. We have been involved in a number of crackdowns on tax avoidance, both domestically and internationally, with the OECD base erosion and profit shifting projects, and we continue to work hard on that.

Barbara Keeley (Worsley and Eccles South) (Lab): Well, it seems that the hon. Member for Monmouth (David T. C. Davies) does not have a lot of confidence in the measures being laid out by Ministers. Never mind percentages: the tax gap has increased to £34 billion. The US-Swiss tax deal raised £800 million in 2013, not the forecast £3.2 billion. Despite these failings, the Minister has just mentioned the manifesto promise to raise a further £5 billion. Will he start to tell us how he will do that? He has not even brought in tougher penalties on the general anti-avoidance rule.

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Mr Gauke: The hon. Lady mentions the general anti-avoidance rule. As we have made clear, we are introducing specific penalties for tax avoidance.

In the last Parliament, HMRC’s yield rose from £17 billion to £26 billion a year, and, as I have said, the tax gap as a percentage has been lower in every year under us than it was in any year under the Labour Government. In the Budget, we will set out further details of how we will raise more revenue by dealing with tax evasion, tax avoidance, and aggressive tax planning.

Personal Allowances

7. Amanda Milling (Cannock Chase) (Con): What fiscal steps he is taking to help people keep more of their earnings. [900326]

The Exchequer Secretary to the Treasury (Damian Hinds): The Government are committed to raising the personal allowance to £12,500 and the higher-rate threshold to £50,000 by the end of this Parliament, but we will go further than that and ensure that in future people who work 30 hours a week for the minimum wage will not pay income tax.

Amanda Milling: Can the Minister provide an estimate of the number of people in my constituency of Cannock Chase who will benefit from the implementation of the Conservative manifesto pledge to increase the personal allowance to £12,500?

Damian Hinds: My hon. Friend is right to highlight the broad benefit of our policy. Increases in the personal allowance and the higher-rate threshold during the current Parliament will benefit 30 million people. It is not possible to make reliable projections for an individual parliamentary constituency, but I can tell my hon. Friend that 2.28 million taxpayers in the west midlands have benefited from personal allowance increases to date, and that a typical basic-rate taxpayer is £825 better off.

Kevin Brennan (Cardiff West) (Lab): Apart from specific tax steps, what steps is the Minister taking to ensure that employers actually pay the minimum wage?

Damian Hinds: Minimum wage compliance is, of course, vital, and work in that regard is ongoing. Universal credit encourages people to work more hours, and, in general, they should be doing higher-paid work.

Jeremy Quin (Horsham) (Con): Will my hon. Friend join me in welcoming the fact that this Government, more than any other, have made quality childcare accessible to hard-working families?

Damian Hinds: My hon. Friend is right. The suite of childcare support that the Government are providing for families is unprecedented. It includes the doubling of provision for three and four-year-olds, the extension of provision under universal credit, and tax-free childcare.

Mr Speaker: Order. I think that the Minister meant to use the phrase “affordably, thereby enabling people also to keep more of their earnings.” I am sure that that is what he meant to say.

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Ms Margaret Ritchie (South Down) (SDLP): Will the Minister assure us that, as part of ensuring that people keep more of their incomes in their pockets, the Chancellor will not increase fuel duty in the forthcoming Budget?

Damian Hinds: During the last Parliament, the Government made difficult decisions in order to keep fuel duty frozen and save motorists £9 every time their tanks were filled. Of course, no decisions of that kind are cost-free, and difficult measures had to be taken so that we could afford the freeze. All taxes are kept under review, and my right hon. Friend the Chancellor will announce the details in the Budget.

Saving and Home Ownership

8. Alan Mak (Havant) (Con): What steps his Department is taking to (a) support savers and (b) promote home ownership. [900327]

13. Iain Stewart (Milton Keynes South) (Con): What steps his Department is taking to (a) support savers and (b) promote home ownership. [900332]

The Economic Secretary to the Treasury (Harriett Baldwin): The Government stand firmly on the side of people who want to work hard, save up, buy their own homes, and retire with dignity. We have increased allowances for individual savings accounts, introduced the Help to Buy scheme, pensioner bonds and pension freedoms, and taken 95% of people out of tax on their savings.

Alan Mak: Alongside the support that has been introduced over the last five years, maintaining a strong economy and low interest rates is one of the most important ways of helping home owners. Can my hon. Friend assure my constituents in Havant that the Government will continue to ignore the Opposition’s calls for more taxes and more spending, which put our economy at risk and make it harder for people to get on to the housing ladder?

Harriett Baldwin: What a pleasure it is to welcome my hon. Friend to the Chamber. He is absolutely right: more people are employed than ever before, and mortgage rates are extremely low. As a result of our long-term economic plan, my hon. Friend’s constituents in Havant, and constituents elsewhere, can now aspire to own their own homes one day.

Iain Stewart: Policies such as Help to Buy have proved very popular in my constituency, but may I urge my hon. Friend to be more ambitious in the longer term? Will she consider expanding the shared-ownership model, which enables people to take an initially small equity share in a property at the start of their careers, and then save up in order to expand it as their careers progress?

Harriett Baldwin: I congratulate my hon. Friend on the strong endorsement he received from the voters of Milton Keynes to return here and express their interests. I am very pleased to hear Help to Buy is so popular in Milton Keynes. The town tops the charts for the attractiveness of buying versus renting. Shared ownership is indeed an excellent way to help people take their first steps on the property ladder, and the Government remain committed to it.

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Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op): The Minister talks about housing topping the charts in Milton Keynes, but in my constituency we are in danger of topping the charts in house prices, with the average price now £606,000. That is being fuelled in part by overseas buyers who purchase a property and either rent it out or do not live there. Have the Government any plans to tackle this and help my constituents get on the housing ladder?

Harriett Baldwin: My hon. Friend the Member for Milton Keynes South (Iain Stewart) topped the chart in Milton Keynes personally as well, but the hon. Lady raises an important question: London house prices are a key issue for her constituents. That is why the Government have brought in so much support to increase the number of affordable homes. The number of social homes and affordable homes increased by over 200,000 in the last Parliament. We are committed to continuing that great work and to bringing in the concept of starter homes, which we hope will add further to housing supply.

Mr Barry Sheerman (Huddersfield) (Lab/Co-op): I genuinely welcome the Minister to her post, but I ask her to be very careful about the right to buy housing association properties. Will she look across at cities such as Paris, where people on low incomes have been driven out and live in ghettoes many, many miles outside the city? If we do not build more social housing that is available to lower-income people, that will happen in our cities.

Harriett Baldwin: I am sure the hon. Gentleman—who kindly welcomes me to my place—will welcome the fact that more social housing was built in the last Parliament than in the entire 13 years of the last Labour Government. He rightly raises a point about housing associations: we must allow more supply of housing association properties. That is why this Government will bring in the right to buy for housing association tenants, which will enable more capital to come into that sector and more housing association properties to be built.

Home Ownership

11. Mrs Maria Miller (Basingstoke) (Con): What steps his Department is taking to promote home ownership. [900330]

The Economic Secretary to the Treasury (Harriett Baldwin): The Government are taking a range of steps to promote home ownership, including helping almost 100,000 households through the Help to Buy scheme. The Government have extended the Help to Buy equity loan to 2020, introduced a Help to Buy ISA and extended the right to buy, and we are delivering 200,000 new starter homes.

Mrs Miller: Hundreds of Basingstoke residents have a home of their own because of this Government’s Help to Buy policy. What assurances can the Minister give today that Help to Buy will continue into the future, because we are currently putting together our local plan, which includes a commitment to more affordable housing?

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Harriett Baldwin: I can give my right hon. Friend the assurance that the Government want people who work hard and want to buy their own home to enjoy the security of owning their own home. The equity loan scheme will last until 2020, which should support another 120,000 households in Basingstoke and elsewhere to get on to, and up, the housing ladder. In addition, as my right hon. Friend the Chancellor announced in his recent Budget, the Help to Buy ISA is expected to help over 1 million first-time buyers save for a deposit.

Wes Streeting (Ilford North) (Lab): The Government’s policies were not popular in every part of the country, in particular in my constituency. May I therefore ask the Minister, as this has been a week for U-turns, to listen to the National Housing Federation, the CBI and the Institute for Fiscal Studies and revisit right to buy for housing association stock, which will lead to a decrease in the availability of affordable homes for rent, and to deal instead with the fundamental problem of housing supply?

Harriett Baldwin: I welcome the hon. Gentleman to the House. This Government are firmly on the side of those people who want the right to buy their own properties, and that includes extending the right to buy to housing association properties. Perhaps he will agree with the right hon. Member for Birkenhead (Frank Field), who published a report with the Institute for Public Policy Research in recent years calling on his party to do exactly the same thing.

Julian Knight (Solihull) (Con): Many hard-working homeowners in my constituency take in lodgers to meet their mortgage repayments. However, the rent-a-room tax-free threshold has remained unchanged at £4,250 a year since 1997. Now that the deficit is being paid down, would it not be a positive step to help aspirational homeowners by raising the rent-a-room tax-free threshold?

Harriett Baldwin: I welcome my hon. Friend to the Chamber. He clearly brings a wealth of experience in this area, and he is right to highlight the fact that people who rent out a room can receive the first £4,250 tax-free. I note the point that he has made. My right hon. Friend the Chancellor of the Exchequer is sitting beside me and he will no doubt take that as a Budget submission and consider it as part of that process.

Fiona Mactaggart (Slough) (Lab): Following on from that question, one aspect of the tax gap that everyone admits is part of the problem is the collection of tax on rental properties. Will the Minister confirm that there will be a Treasury study on how to deal with the tax gap on rental properties, in order to find out how big it is and how we can challenge it?

Harriett Baldwin: The right hon. Lady is right to highlight that point. It is important to recognise that although the first £4,250 of rent is covered by the allowance, once it goes above that level it becomes taxable income. HMRC is constantly looking at ways in which it can improve the collection rate in that area.

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Child Benefit

12. Ruth Smeeth (Stoke-on-Trent North) (Lab): If he will maintain current levels of and entitlement to child benefit over the next five years. [900331]

The Exchequer Secretary to the Treasury (Damian Hinds): As the Prime Minister pledged before the election, this Government will not cut child benefit.

Ruth Smeeth: In my constituency, there have been reports of children returning to school in September malnourished because their parents are struggling to afford to feed them. Does the Minister agree that cuts to either child benefit or child tax credit would exacerbate the problem and make the issue of holiday hunger even more common?

Damian Hinds: The Prime Minister has made this extremely clear by stating categorically that child benefit stays as is. The most important thing in regard to affordability and household budgets is to increase employment and ensure that people are in good jobs. The Government have also done an awful lot to bear down on household costs to make them more affordable.

Rishi Sunak (Richmond (Yorks)) (Con): Will my hon. Friend tell my constituents what this Government will continue to do to cut the costs of childcare for hard-working families?

Damian Hinds: The coalition Government had a very strong record on extending childcare, and we are going to go much further in this Parliament with the extension from 15 to 30 hours of childcare for the three and four-year-old children of working parents, the introduction of tax-free credits and the further extension of childcare provision under universal credit when that migration happens.

Science Budget

14. Stephen Metcalfe (South Basildon and East Thurrock) (Con): What his policy is on the future ring-fencing of the science budget. [900333]

The Chief Secretary to the Treasury (Greg Hands): We committed in our manifesto to protect the science capital budget of £6.9 billion up to 2021. Decisions on the wider science budget will take place in the spending review.

Stephen Metcalfe: I was grateful to my right hon. Friend the Chancellor of the Exchequer for protecting the science budget during the last Parliament, but the flat cash settlement agreed in 2010 is now worth 15% less than it was then. Will the Minister agree to look at that and at least make good that loss when preparing the Budget and going into the spending review, so that our excellent science base can play its full part in delivering our long-term economic plan?

Greg Hands: I once again congratulate my hon. Friend on his excellent election result in Basildon. I note that, to date, he has served five years on the Science and Technology Committee, so there cannot be many in the House who take a stronger interest in the matter. He will know that our capital funding for science almost

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doubled in the last Parliament, and that we take science very seriously. Wider decisions on science funding will be dealt with in the spending review.

Helen Goodman (Bishop Auckland) (Lab): Traditionally, Britain has been absolutely brilliant at basic science, but less good at translating that into innovation for industry. What are the Government going to do to address that issue?

Greg Hands: The hon. Lady makes a reasonable point, but that is why in the previous Parliament we increased spending on innovation, including on the new catapult centres and on a whole host of other projects, and we look forward to doing more in this Parliament.

Productivity

15. Christian Matheson (City of Chester) (Lab): What assessment he has made of the level of productivity in the economy. [900334]

The Financial Secretary to the Treasury (Mr David Gauke): The UK’s productivity has been lower than the G7 average since OECD records began 45 years ago. In the previous Parliament, we took a number of steps to increase the UK’s productivity in the long run, including cutting the corporation tax rates to the lowest in the G20 and investing in skills, infrastructure and science. The Chancellor will set out what further action this Government will take to boost productivity in our productivity plan to be published before the Budget.

Christian Matheson: I thank the Minister for his reply. In Chester, the number of people on apprenticeships continues to decline, and I am talking about Conservative-style cheap and cheerful apprenticeships with little added value at the end. Was the creation of a low-skill, low-wage economy an intention of the Government, or was it an unintended by-product?

Mr Gauke: On the subject of Chester, unemployment fell over the course of the last Parliament by 49%, which is something I would have expected the hon. Gentleman to welcome. The reality is that we are investing in apprenticeships; we saw 2.2 million people undertake apprenticeships in the previous Parliament, and we will increase that to 3 million in this Parliament.

Crispin Blunt (Reigate) (Con): Following the crash, the remarkable record of the economy was that unemployment did not rocket up more post-2008 and 2009. Now, in my constituency, it is the labour market that is very tight. I ask the Front-Bench team to focus very hard on improving productivity because that is where the improvement in our economy must now come from.

Mr Gauke: I entirely agree with my hon. Friend. Improving our infrastructure and skills and ensuring that we have a competitive tax system can all help to drive up productivity.

21. [900340] Jo Cox (Batley and Spen) (Lab): According to the Office for Budget Responsibility, if productivity growth per worker was closer to 4%, our national debt would be around £350 billion lower by the end of this

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Parliament. The OECD confirmed that continued weak productivity could lead to a higher than expected budget deficit. Why does the Minister not realise that his failures on productivity explain why we are doing so badly on bringing down the deficit?

Mr Gauke: I have said that productivity is important. One element of that is attracting more business investment into the UK. That requires a Government who are pro-business. I am not sure that the hon. Lady’s ambition to make the hon. Member for Islington North (Jeremy Corbyn) Prime Minister will help.

Kevin Hollinrake (Thirsk and Malton) (Con): In 2010, according to the World Economic Forum, the UK had the second highest burden of red tape in the G7. By 2015, we have the lowest. Does the Minister agree that that alone will have a significant impact on productivity in the UK?

Mr Gauke: Yes, my hon. Friend makes an important point. Regulations that are burdensome and do not achieve their objective do nothing to help productivity; they hold businesses back. That is why it is right that for every new regulation we bring in, two are taken out.

Topical Questions

T1. [900345] Mike Weir (Angus) (SNP): If he will make a statement on his departmental responsibilities.

The First Secretary of State and Chancellor of the Exchequer (Mr George Osborne): The core purpose of the Treasury is to ensure the stability and prosperity of the economy. I can report to the House that the latest inflation figures show that consumer prices index inflation is at 0.1%, which is good news for working families. Inflation is close to an all-time low, and wages are growing strongly, which is further proof that our long-term economic plan is working.

Mike Weir: I thank the Chancellor for that response. However, one of his responsibilities is to ensure that the correct tax is paid. Given that there is huge public support for a Bill to tackle tax dodging, will he introduce such a measure in this Parliament to deal with the tax avoidance by UK companies both in the UK and in developing countries?

Mr Osborne: Every single Finance Bill we have introduced has been about tackling tax evasion and tax avoidance. Indeed we have also introduced into this country the diverted profits tax—almost a first in the world—which is tackling those international businesses that move their profits offshore to avoid tax. I can tell the hon. Gentleman that in the Budget we will take further action to clamp down on avoidance and evasion.

T2. [900346] Glyn Davies (Montgomeryshire) (Con): Last week, the Chancellor announced a simple new rule to ensure that we run a surplus in normal times. Does he agree that the Opposition’s description of this as no more than a “distraction” proves that no lessons have been learned and that they would make exactly the same mistakes if they were ever given the opportunity again?

Mr Osborne rose—

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Mr Speaker: Order. I am sure that the hon. Gentleman, who is a seasoned hand, was asking a question about the Government’s intentions. I am sure that he was not asking about Opposition policy, and that the Chancellor will not answer about Opposition policy.

Mr Osborne: Of course. Perish the thought, Mr Speaker. The Government will introduce their new approach to fiscal policy in the Budget. It will include a commitment to a surplus in normal times, and we look forward to wide cross-party support for that approach.

Chris Leslie (Nottingham East) (Lab/Co-op): Tomorrow the House of Commons will debate productivity, probably the central challenge facing our economic recovery. Will the Chancellor of the Exchequer be leading for the Government in response to that debate?

Mr Osborne: No, I will not.

Chris Leslie: The Chancellor clearly feels that productivity is not a priority of his. I am surprised that he will not be responding on this central question. After all, he will be here, as he will be acting as Prime Minister in Prime Minister’s questions tomorrow. If I can bring him back to the economy and he could rein in his personal ambitions for a moment, will the Chancellor set out where productivity features in his ambitions? While we have got the Chancellor here today—he is obviously not bothered about the debate tomorrow—will he explain why he failed to mention productivity in his March Budget speech just three months ago?

Mr Osborne: Well, I never thought I would say, “Bring back Ed Balls.” The Labour party needs to look at the productivity of its own Front Bench after those two dismal questions. I spoke in the Mansion House about the importance of raising the productivity of the United Kingdom. It is a challenge that has existed for many decades, as the hon. Gentleman knows. We will bring forward further proposals in the Budget to tackle the productivity gap in skills and infrastructure and the regional imbalance of our economy. Perhaps the Labour party could find some credible economic spokesman to take part in the debate.

T5. [900349] Caroline Nokes (Romsey and Southampton North) (Con): Pensioners in Romsey and Southampton North have welcomed their new freedoms over their pensions. What evidence does my right hon. Friend have that they are taking advantage of those new freedoms?

Mr Osborne: Conservative Members believe that we should trust people who have worked hard and saved hard with those savings in retirement. These unprecedented pension freedoms have been widely welcomed. I can give the House the latest numbers—indeed, the first numbers—on how many people have taken advantage of the freedoms. So far, in the few weeks since they came into effect, 60,000 people have made use of them. More than £1 billion has been transferred out of people’s pension funds as a result. It is a sign that this is a real success, but we have to make sure that people get the best advice, that the market responds and that companies up their game in helping customers make use of these freedoms. We will be watching these things very carefully.

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T3. [900347] Mr David Crausby (Bolton North East) (Lab): Given that the population of Greater Manchester is bigger than those of both Wales and Northern Ireland and not far short of the population of Scotland, why are the people of Greater Manchester being denied the opportunity to decide whether they want a directly elected mayor? What is wrong with a constitutional referendum in England for a change?

Mr Osborne: I am sorry to hear that the hon. Gentleman disagrees with the Labour civic leadership across the authorities of Greater Manchester. They are elected, of course, and the elected national Government put together this deal. It will increase accountability in Greater Manchester because there will be an elected mayor whom people can hold directly to account.

T6. [900350] Mike Wood (Dudley South) (Con): The latest Office for National Statistics figures show that disposable household income was rising more quickly in the west midlands than anywhere else in the country. Will the Chancellor consider creating further local enterprise zones such as Waterfront Business Park in Dudley South to help create further local growth, opportunities and prosperity for my constituents?

Mr Osborne: I welcome my hon. Friend to the House. I know that he will be a strong voice for Dudley. We are looking at smaller enterprise zones that are better fitted to areas such as his, to build on the success that we have had with the bigger enterprise zones. Enterprise zones for individual towns will help the west midlands and the black country to be an engine of growth for the British economy.

T4. [900348] Richard Burgon (Leeds East) (Lab): Is the Chancellor aware of the letter in The Guardian on Friday from 80 senior economists, in which they say—these are their words—that his plans are

“risky experiments with the economy to score political points…have no basis in economics”

and

“are not fit for the complexity of a modern 21st-century economy”?

Does this not show that the Chancellor’s extreme cuts agenda is out on a limb and that his ideological fixations are outside the economic mainstream?

Mr Osborne: I do not read The Guardian every single day but I was made aware of that letter. I disagree. The same sort of people were saying the same things five years ago and now we have one of the fastest-growing economies of any major economy in the world. This is not the first thing on which I disagree with the hon. Gentleman. This morning he called for the abolition of the monarchy, so he is making an interesting start to his political career.

Mr John Baron (Basildon and Billericay) (Con): As the economy continues to recover and the deficit falls, will the Chancellor consider increasing funding to the Foreign and Commonwealth Office, given that continual cuts under successive Governments have reduced its capacity and its skill base to such an extent that many people are saying that that has hindered our recent foreign policy decisions?

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Mr Osborne: I know that my hon. Friend takes a close interest in the issue; indeed, he has been in contact with me about it. We absolutely want to make sure that Britain’s diplomatic reach is as wide as possible across the world, and we should commend my former colleague William Hague who, during his period as Foreign Secretary, despite the Foreign Office playing its part in delivering value for money and getting the best deal for taxpayers, was able to open more embassies and consulates around the world and increase Britain’s footprint on the global stage.

T8. [900352] Graham Jones (Hyndburn) (Lab): The Chancellor’s Government keep talking about the Tory fantasy of a northern powerhouse, which never mentions Lancashire. Is it still his Government’s policy on the Treasury revenues from fracking that 1% will go to Lancashire and more than 60% will go to Whitehall?

Mr Osborne: I gave the original speech on the northern powerhouse in Lancashire, if we count Manchester as being in the traditional county—[Interruption.]

Mr Speaker: Order. Mr Jones, it is unseemly. I thought you were on an apprenticeship to become a statesman, but it has a long way to travel. It is courteous to hear the Chancellor. Let us hear him.

Mr Osborne: I think it will be one of those four-year apprenticeships, at this rate. I will say to the hon. Gentleman something which I know is not universally agreed with: I think the potential for shale gas in the north of England is a massive boost to the local economy there. I know it is not always popular with some local communities. That is why we have made sure that the benefits go to local communities, and we committed in our manifesto to creating a sovereign wealth fund for the north of England from the revenues from shale gas exploration so that we get a lasting benefit to the natural resources of that part of our country.

Several hon. Members rose

Mr Speaker: On the subject of statesmanship, I call Mr Michael Fabricant.

Michael Fabricant (Lichfield) (Con): My right hon. Friend has been enthusiastic and proactive in promoting the northern powerhouse, but will he shift his gaze southwards towards the midlands? I suggest to him that the midlands has the productivity that the United Kingdom needs, and the midlands engine needs promotion too.

Mr Osborne: I agree. That is why I was recently in both Derby and Birmingham after the election stressing that there is a massive potential for the midlands to be this engine of growth, and I am sure Lichfield will be a key part of that engine.

T9. [900353] Wes Streeting (Ilford North) (Lab): I am sure the Chancellor agrees that pro-business parties are pro-European parties, so when will he come off the fence and confirm that he will be leading the charge for Britain to stay in Europe?

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Mr Osborne: What we are fighting for is Britain to be part of a reformed European Union. Now that we have finally persuaded the Labour party to come to its senses and support the referendum, we can get on with the business of negotiating a good deal for this country.

Richard Fuller (Bedford) (Con): May we have a Treasury review into how effectively the balance sheets of housing associations are meeting the challenge of building new housing, looking in particular at their average cost of capital, the amount of leverage and whether a change in accounting policy would help to meet the housing challenge?

Mr Osborne: I congratulate my hon. Friend on his re-election; I enjoyed visiting him in Bedford just before the election. He raises an interesting point about how efficient housing associations are in increasing the housing supply, which is what we want them to do, and we are certainly looking at that at the moment.

T10. [900354] Mr Jim Cunningham (Coventry South) (Lab): Given that the Chancellor wants to create the west midlands powerhouse, what is he doing to protect the powers and identity of local authorities such as Coventry?

Mr Osborne: I met local authority leaders from Coventry, Birmingham and the surrounding local authorities only a couple of weeks ago, and I made it clear that it is up to them to come together in a combination that suits them and reflects local identities, and that my door is open for any discussions they want to have.

Martin Vickers (Cleethorpes) (Con): Further to my right hon. Friend’s reply to our hon. Friend the Member for Brigg and Goole (Andrew Percy), both my hon. Friend and I are big supporters of further devolution to northern Lincolnshire so that the economy can expand at an even faster rate. Can the Chancellor assure me that he will support any proposals that come forward from the leadership of our local authorities?

Mr Osborne: I can absolutely give my hon. Friend that assurance. Because of his campaigning, and that of our hon. Friend the Member for Brigg and Goole (Andrew Percy), we have made sure that northern Lincolnshire is part of the northern powerhouse concept and that it is not left behind or neglected, as it was under the Labour Government.

Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP): The last Chancellor to run a budget surplus was Gordon Brown, thanks to a sell-off of gold at a rock-bottom price. Now this Government are pursuing a budget surplus by selling off RBS at a loss. When are we likely to see a banking strategy, rather than a costly political gimmick?

Mr Osborne: I never thought that I would hear the Member for Kirkcaldy and Cowdenbeath admit that the gold was sold off at the wrong price—I welcome the hon. Gentleman to the House. With the Royal Bank of Scotland we have a serious decision to make: do we continue to believe that at some point we might get back the money that the previous Labour Government put in, or do we take the advice of the independent reports that have been commissioned, and of the Governor

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of the Bank of England, which is that now is the right time to start selling RBS, and indeed that that might stimulate a higher share price? Above all, it will help to support the British banking system. We have had countless questions in this House about the impact on small businesses of what went wrong at RBS. I think that as soon as we can get that business back into the private sector, the more we can support the general economy, and indeed give a great future for the RBS work force.

Richard Graham (Gloucester) (Con): The Government’s support for more, better and higher apprenticeships has been critical to the halving of youth unemployment in Gloucester over the past year. The other side of the equation is making sure that work always pays, and many of us want to play a part in ensuring that that happens. Universal credit is the key. It will come to Gloucester later this summer. What does my right hon. Friend think will be the tangible and intangible benefits of seeing people able to work longer than 16 hours, increase their income and reduce welfare benefits?

Mr Osborne: My hon. Friend is absolutely right that universal credit, the major reform of our welfare system that will be widely felt in this Parliament, will create a very simple system in which people know that if they work that extra hour, they will be rewarded for it. That simplicity, and the fact that people can keep more of their income by working that extra hour, will be a powerful incentive that makes work pay.

Several hon. Members rose

Mr Speaker: Order. We are very constrained for time—in fact, we have run out of it—but we will hear from Mr Sammy Wilson.

Sammy Wilson (East Antrim) (DUP): Yesterday, as a consequence of the refusal by Sinn Féin and the Social Democratic and Labour party to implement welfare reform, the Northern Ireland Assembly gave authority to the Departments to breach spending limits and increase spending by 6% over the block grant. What steps will the Chancellor take to ensure that Assemblies and Parliaments across the United Kingdom do not recklessly breach spending limits?

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Mr Osborne: The hon. Gentleman raises a serious question that I suspect this House will have to return to on a number of occasions. We have a clear agreement in the Stormont House agreement that we now expect all parties in Northern Ireland to implement, including Sinn Féin. Frankly, it is not acceptable for any devolved Administration simply to breach the spending limits that have been agreed with the United Kingdom Government, so that is something we will have to address. As he knows, the key is to implement welfare reforms that will not only deliver value for money for the taxpayer, but ensure that more people in Northern Ireland are released from the poverty trap and are able to work.

Stephen Hammond (Wimbledon) (Con): Yesterday, borrowing costs across Europe increased as the contagion from the Greek economic crisis spread. May I congratulate the Chancellor on the long-term economic plan, which, in contrast, has brought jobs and growth to the UK economy? May I also urge him to use the Budget to reduce the deficit by increasing resources for infrastructure, such as the £250 million needed for Crossrail 2, which will bring even more jobs to my constituency and to the UK?

Mr Osborne: My hon. Friend is right to remind the House after an hour and five minutes of Treasury questions that out in the real world there are some serious economic risks, not least the risk that we see growing in Greece of a potential default and exit from the euro. People should not underestimate the damage that that would do to financial confidence. Of course, in the UK we take all steps to prepare for and protect ourselves from such eventualities, but the best thing that a Government can do is to ensure that it is living within its means, that it has a productive economy and that its public finances are in good order. That is what we are going to deliver in this Parliament.

Several hon. Members rose

Mr Speaker: Order. I am sorry, but demand has exceeded supply.

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Point of Order

12.36 pm

Kevin Brennan (Cardiff West) (Lab): On a point of order, Mr Speaker. Dr Grace Kodindo’s work in Africa with African mothers was the feature of a BBC “Panorama” programme 10 years ago. That resulted in a charity being set up in Cardiff called Life for African Mothers, which celebrates its 10th anniversary this year. The charity has invited Dr Kodindo to the UK to celebrate that anniversary but, despite her great distinction, her visa has been turned down by the Home Office. Other than speaking to the Chair of the Select Committee on Home Affairs, as I have done, is there any way in which I can use the offices of the House to draw the matter urgently to the attention of Home Office Ministers?

Mr Speaker: I think that the hon. Gentleman is slightly ahead of himself. The right hon. Member for Leicester East (Keith Vaz) is not currently the Chair of the Committee, although I know at what the hon. Member for Cardiff West (Kevin Brennan) was driving. He asks how he can highlight the matter, and it is clear from the puckish grin on his face that he knows that he has already succeeded in doing so. Many years ago, he accused me of suffering from compulsive questioning disorder, and I wore that as a badge of pride. He is no mean questioner himself, and he will use other opportunities in the House to air the matter, either through questions or, if necessary, through debate. If there are no further points of order, we will move on.

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European Union Referendum Bill

[1st Allocated Day]

Considered in Committee

[Mr Lindsay Hoyle in the Chair]

12.39 pm

The Chairman of Ways and Means (Mr Lindsay Hoyle): We begin with amendment 16.

Alex Salmond (Gordon) (SNP): On a point of order, Mr Hoyle. I could not help noticing in your excellent selection of amendments that you have selected in the second group Government amendment 55, which, as I see from my amendment paper, is a starred amendment. That is not surprising, since it was tabled, I understand, at 9.35 pm last evening in a disorganised, spatchcock, humiliating climbdown. I accept the Government’s humiliating climbdown with good grace, but how usual is it for a starred amendment to be called and, presumably, divided on in Committee of the whole House?

The Chairman: The good news is that I was in charge of selection, and it is well within order. It is unusual, but that is where we are at. We will now continue, because I know that the hon. Gentleman wants to get us under way.

Clause 1

The referendum

Alex Salmond: I beg to move amendment 16, page 1, line 4, at end insert—

‘(2) The Chief Counting Officer shall declare whether the result of the referendum is that a majority wish the United Kingdom to leave the European Union.

(3) The Chief Counting Officer may declare that a majority wish the United Kingdom to leave the European Union only if—

(a) a majority of total votes cast in the referendum in the United Kingdom are against the United Kingdom remaining a member of the European Union, and

(b) a majority of the votes cast in the referendum in each of England, Scotland, Wales and Northern Ireland are against the United Kingdom remaining a member of the European Union.”

This amendment imposes a double majority requirement for withdrawal, which would have to be supported by a majority the whole of the UK and by majorities in each of its four constituent parts.

The Chairman: With this it will be convenient to discuss the following:

Amendment 49, page 1, line 7, leave out “31 December” and insert “1 July”.

The amendment would require the referendum to take place before 1 July 2017.

Amendment 50, page 1, line 8, leave out “2017” and insert “2016”.

The amendment would require the referendum to take place before 31 December 2016.

Amendment 4, page 1, line 8, at end insert—

‘(3A) No later than ten weeks before the date on which the referendum is to be held the Secretary of State must lay before both Houses of Parliament an independent report by the Office for Budget Responsibility on the implications for the sustainability of the public finances of the United Kingdom leaving the European Union.”.

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The amendment would require the Secretary of State to publish, ten weeks before the referendum, a report by the OBR on the consequences of the United Kingdom leaving the European Union.

Amendment 5, page 1, line 8, at end insert—

‘(3A) No later than ten weeks before the date on which the referendum is to be held the Secretary of State must lay before both Houses of Parliament a report on the consequences of the United Kingdom leaving the European Union for each ministerial departments’ responsibilities.”.

The amendment would require the Secretary of State to publish, ten weeks before the referendum, a report by each Secretary of State on the consequences of the United Kingdom leaving the European Union for their areas of ministerial responsibility.

Amendment 6, page 1, line 8, at end insert—

‘(3A) No later than ten weeks before the date on which the referendum is to be held the Secretary of State must ask for and lay before both Houses of Parliament any assessment made by the Bank of England on the consequences of the United Kingdom leaving the European Union.”.

The amendment would require the Secretary of State to publish, ten weeks before the referendum, any assessment by the Bank of England on the consequences of the United Kingdom leaving the European Union.

Amendment 46, page 1, line 8, at end insert—

‘(3A) No later than ten weeks before the date on which the referendum is to be held the Secretary of State must lay before both Houses of Parliament a report by the Office for Budget Responsibility on the consequences for the Transatlantic Trade and Investment Partnership of the United Kingdom leaving or remaining a member of the European Union.”

The amendment would require the Secretary of State to publish, ten weeks before the referendum, a report by the OBR on the consequences for TTIP of leaving or remaining a member of the European Union.

Amendment 47, page 1, line 8, at end insert—

‘(3A) No later than ten weeks before the date on which the referendum is to be held the Secretary of State must lay before both Houses of Parliament a report on the consequences for negotiations on the Transatlantic Trade and Investment Partnership of the United Kingdom leaving or remaining a member of the European Union.”

The amendment would require the Secretary of State to publish, ten weeks before the referendum, a report on the consequences for negotiations on TTIP of leaving or remaining a member of the European Union.

Amendment 54, page 1, line 8, at end insert—

‘(3A) Before appointing a day under subsection (2) the Secretary of State shall lay before both Houses a report on materials which any Minister of the Crown, government department or local authority or any other person or body whose expenses are defrayed wholly or mainly out of public funds or by any local authority intend or expect to publish in the period of 28 days ending with the date of the referendum that—

(a) deals with any of the issues raised by any question on which the referendum is being held;

(b) puts any argument for or against any particular answer to any such question; or

(c) is designed to encourage voting at the referendum.”

This amendment requires the Government, prior to setting a date for the Referendum by regulations subject to the affirmative procedure, to publish a report on what publications which would normally be prohibited by Section 125 of the Political Parties, Elections and Referendums Act 2000 the Government intends or expects to publish in the four weeks before the referendum.

Amendment 11, page 17, line 37, in schedule 1, leave out paragraph 25 and insert—

‘25 (1) Section 125 of the 2000 Act (restriction of publication etc of promotional material by central and local government etc) applies in relation to the referendum during the referendum period with the following modification.

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(2) Section 125(2)(a) of the 2000 Act has effect for the purposes of the referendum as if, after “Crown”, there were inserted “including ministers in the Scottish Government, the Welsh Government, the Northern Ireland Executive and Her Majesty‘s Government of Gibraltar”.’

The purpose of the amendment is to apply the “purdah” arrangements that govern ministerial and official announcements, visits and publicity during general elections to the campaign period before the referendum.

Amendment (a) to Schedule 1, leave out “modification” and insert “modifications”.

Amendment (b),  at end add—

‘(3) Section 125(2) of the 2000 Act has effect for the purposes of the referendum with the addition of subsection—

“(e) advocacy on any issue having a bearing on the outcome of the referendum””

New clause 3—Restriction on publications etc—

‘(1) This section applies to any material, which—

(a) provides general information about the referendum,

(b) deals with any of the issues raised by the referendum question,

(c) puts any arguments for or against any outcome, or

(d) is designed to encourage voting at the referendum.

(2) Subject to subsection (3), no material to which this section applies is to be published during the relevant period by or on behalf of—

(a) the UK government,

(b) the House of Commons or House of Lords,

(c) the devolved administrations,

(d) any local authority,

(e) public bodies, or

(f) the European Commission and European Parliament.

(3) Sub-paragraph (2) does not apply to—

(a) existing material made available to persons in response to specific requests for information or to persons specifically seeking access to it, or

(b) anything done by or on behalf of—

(i) a designated organisation,

(ii) the Electoral Commission, or

(c) the Chief Counting Officer or any other counting officer, or

(d) the publication of information relating to the holding of the poll.

(4) In this paragraph—

“publish” means make available to the public at large, or any section of the public, in whatever form and by whatever means (and “publication” is to be construed accordingly),

“the relevant period” means the period of 28 days ending with the date of the referendum.

(a) A breach of the rules set out in this section, will be an offence.

(b) A person guilty of an offence under this section, is liable—

(i) on conviction on indictment, to a fine;

(ii) on summary conviction in England and Wales, to a fine;

(iii) on summary conviction in Scotland or Northern Ireland, to a fine not exceeding the statutory maximum;

(iv) on summary conviction in Gibraltar, to a fine note exceeding level 5 on the Gibraltar standard scale.’

The New Clause prescribes a period of “purdah” in the four weeks before the referendum.

New clause 4—Referendum Fairness Board—

‘(1) There shall be a committee of privy counsellors, to be called the Referendum Fairness Board, whose duty is to consider any alleged breach of section (Restriction on publications etc) which comes attention of any of its members.

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(2) Each of the following presiding officers for the time being may appoint any privy counsellor as a member of the board—

(a) the Speaker of the House of Commons,

(b) the Lord Speaker,

(c) the Presiding Officer of the Scottish Parliament,

(d) the Speaker of the Northern Ireland Assembly, or

(e) the Presiding Officer of the National Assembly for Wales.

(3) The Board shall prescribe its own rules of procedure, which must include procedures for—

(a) instituting legal action to interdict or injunct any further breach or repetition of an alleged breach, and

(b) drawing to the attention of the relevant prosecuting authority any serious or continuing breach of section (Restriction on publications etc).’

The New Clause provides for swift enforcement of the “purdah” rules which would apply under the linked New Clause in the four weeks leading up to the referendum.

Alex Salmond: There is a link of continuity between amendment 16 and the point of order that I made—that the theme should be one of respect. There has been a great deal of talk about respect by the Prime Minister in recent years, but particularly since the result of the election of last month. He said, for example:

“Governing with respect means recognising that the different nations of our United Kingdom have their own governments, as well as the UK government.”

The amendment is about giving acknowledgment to that respect in relation to the European referendum. [Interruption.] Does the right hon. and learned Member for Beaconsfield (Mr Grieve) want to intervene? If so, then of course I will gladly allow him.

Mr Dominic Grieve (Beaconsfield) (Con) indicated dissent.

Alex Salmond: He was just stretching his legs, I suspect.

On the subject of respect for all nations of the United Kingdom, the amendment puts forward the view that a simple majority across the UK would not be enough to have the UK exit the European Union but that we would have to pay attention to the voting in the four constituent nations of the United Kingdom. It is not unusual, in international terms, even in federal and confederal states, for there to be a so-called double majority—in this case, a quad lock between Scotland, England, Northern Ireland and Wales. In America, 14 states can block a constitutional amendment, even if they could comprise only 5% of the population. My hon. Friend the Member for Ochil and South Perthshire (Ms Ahmed-Sheikh) will go through some of the other international examples where even in federal and confederal states there is a double lock or a blocking minority with regard to the constitution, recognising the component parts of those states.

Chris Philp (Croydon South) (Con): Does the right hon. Gentleman not accept that matters such as this are determined at the UK level, so the reason Scotland is voting with the rest of the UK as one is that the Scottish people themselves voted last year to remain part of the United Kingdom, and therefore, on matters of foreign affairs and the European Union, we speak as a nation with one voice?

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Alex Salmond: I think that even the Prime Minister and many of his right hon. and hon. Friends would concede that Scotland is a nation and that the United Kingdom is a multi-national state. I suspect that terminology is not the key problem with the Conservative party in Scotland and why it reached the nadir of 14%, its lowest result for over a century, in last month’s general election. If the hon. Gentleman fails to recognise the nationality and nationhood of Scotland, which is a theme running through the ranks of the Conservative party, then the road back to having two MPs as the summit of the Tory party’s ambition, as opposed to the current lonely one, will be a long, hard road indeed.

It is exactly because the United Kingdom is a multi-national state that we should recognise that respect, as evinced by the Prime Minister, is about more than a simple majority across the UK; it must also give reference to the component nations of the United Kingdom.

Kevin Brennan (Cardiff West) (Lab): I welcome the right hon. Gentleman back to this House. Is not the analogy with the United States a little tenuous, because we are talking about international relations and treaty relations, and in the United States treaties will be determined by the Executive with confirmation by the Senate of the whole of the United States and with no veto for the constituent states?

Alex Salmond: I was merely pointing out that there are a number of international examples. As I said, my hon. Friend the Member for Ochil and South Perthshire will go through some of those in some great detail. This is not unusual in matters of constitutional import.

There is no doubt that a constitutional referendum on whether the United Kingdom should be part of the European Union carries constitutional implications. It is not unusual internationally, even in a federal or confederal state, to have more than a simple majority on such matters, and also reference to the various component parts of that state. If that is the case for a confederal or federal state, surely it should be so much more the case for a United Kingdom of four component nations.

Mr Kenneth Clarke (Rushcliffe) (Con): The right hon. Gentleman is being generous in giving way. Will he confirm my suspicion that his secret wish—the perfect result, from his point of view—is for Scotland to vote yes and England to vote no? Personally, I would regard that as a disaster. Does he agree that if Scotland voted to stay in the European Union and England voted to leave, the end of the United Kingdom would probably be quite imminent?

12.45 pm

Alex Salmond: I am always dubious about accepting a Conservative interpretation of the secret wishes of the Scottish National party. The sole Liberal Democrat Member with a Scottish constituency is in considerable trouble for trying to publicise what he thought were the secret wishes of the First Minister of Scotland, in a manner that no doubt will be fully investigated. No, the secret and public wish of the Scottish National party is for us to secure a yes vote in the referendum.

However, the right hon. and learned Gentleman does have a point, and the First Minister of Scotland has put her finger on it in her usual adroit fashion. If, across the

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United Kingdom, there was a majority vote against staying in the EU but Scotland had voted in favour, that could very well provide the material change in circumstances that the First Minister would indicate made another constitutional referendum on Scottish independence well nigh inevitable. With his usual insight, the right hon. and learned Gentleman has put his finger on an important point.

Mr Grieve rose—

Alex Salmond: I see that this right hon. and learned Gentleman has stopped stretching his legs and now wants to intervene.

Mr Grieve: I am grateful to the right hon. Gentleman. It seems to me that he, too, has put his finger on the issue, which is essentially a political one. Although he might wish to change the current structure of the United Kingdom and there might be arguments in favour of a federal or other solution, that structure currently clearly provides that the decision should be taken in common. In those circumstances, although there might be terrible fallout from a result that produced separate outcomes in Scotland and England, that fallout would be political and would not justify the amendment.

Alex Salmond: Let us continue the point exactly on that question. It was as a solution to the scenario painted by the right hon. and learned Member for Rushcliffe (Mr Clarke) that the First Minister put forward the idea of having the quad lock or double lock system for the referendum. It is up to the Committee, of course, whether it accepts the amendment or not. If it were accepted, the scenario painted by the right hon. and learned Gentleman would not come to pass because it would be provided for in the terms of the referendum itself. If, on the other hand, the Committee chooses to reject the amendment, the possibility of that scenario remains open.

Sammy Wilson (East Antrim) (DUP) rose—

Alex Salmond: I will make a wee bit of progress and then give way.

The amendment is phrased so that it would protect any of the four component nations of the United Kingdom. However, given the arithmetic, it would be unlikely for the numerically dominant nation, England, to be outvoted by any of the smaller nations. However, it is entirely possible and credible that things might happen the other way round.

The amendment is fair to all four component nations, and the theme underlying it is one of respect. It is up to the Committee to decide whether the national statuses of Scotland, Wales and Northern Ireland within the United Kingdom are important enough to be given that respect.

Several hon. Members rose

Alex Salmond: I am spoilt for choice. Given that we are on a theme, I give way again to the right hon. and learned Member for Beaconsfield.

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Mr Grieve: It seems to me that the question is about not lack of respect, but what decisions are taken in common and in relation to what decisions we give a veto to the different component parts. The right hon. and learned Gentleman argues—it is a perfectly persuasive argument—that there should be an effective veto in each component part. However, there is an equally perfectly valid argument that the decision is ultimately a political one for the Government and that the Government would be entitled to take a view that, in the interests of the community in its widest sense—all the component parts—they should come to a decision one way or the other, irrespective of the fact that one component part did not want that decision.

Alex Salmond: I congratulate the right hon. and learned Gentleman on intervening at such length without attracting the ire of the Chair. That was adroitly done. The question of whether there is respect will be judged on whether amendment 16 is considered as a valid and interesting point for debate. I was taking the Prime Minister at his word when he said:

“Governing with respect means recognising that the different nations of our United Kingdom have their own governments”.

If the Prime Minister wants to recognise respect, the Government will take the amendment seriously. I will listen to what those on the Treasury Bench say, when they make their contributions, about whether Scotland is a country or a county—let us put it that way—and about whether it is a serious matter of import or just something to be swept aside. That is a matter for the Government’s reaction.

There should be some sort of lesson in the spatchcock, humiliating climbdown, to which I referred earlier. It is true that the Government did not say over the past few weeks that they would not have the referendum on the same day as the national elections in Scotland, Wales and Northern Ireland—they could have said that at any point over the past two weeks, but they chose not to because they wanted to keep that option open—and then found last evening that they were likely to secure a humiliating defeat in Committee and, in a desperate scramble, they had to produce a last-minute amendment. My contention is that if they had shown a bit more respect over the past two weeks, they would not have had to engage in the humiliating climbdown last evening.

Sammy Wilson: Is the right hon. Gentleman really saying if, for example, a majority of people in England, Scotland and Wales voted to stay in the European Union and 51% of people in Northern Ireland voted to leave, with 49% of them voting to stay, that that 2% in Northern Ireland could hold the rest of the United Kingdom to ransom? That is the import of his amendment 16.

Alex Salmond: Far be it from me to be the one who stands up for the rights of the people of Northern Ireland, but that is the consequence of being in a multi-national state. Nations within a multi-national state should be recognised as more than regions, counties or areas and should not be counted by population; they are national entities in their own right, and that confers a relationship of respect.

Although the hon. Gentleman and I may disagree on amendment 16, I know we were at one in insisting that this Government show respect to our respective nations

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in not having the referendum on the same day as our national elections. Our success on that matter indicates the advantage of working together, and I hope we are able to do that on a number of aspects of the Bill.

Mr Laurence Robertson (Tewkesbury) (Con): Will the right hon. Gentleman give way?

Iain Stewart (Milton Keynes South) (Con): Will the right hon. Gentleman give way?

Alex Salmond: I am very tempted to do so, but I can see that the Chairman is encouraging me to move on to our other amendments in this group, new clauses 3 and 4, on the whole question of how the Government should behave in a referendum campaign.

The members of this group of 56 speak from the standpoint of being totally united in our support for the European Union—we are pro-European to our fingertips —but that does not mean we would be willing to accept a referendum that was in any way biased or rigged by the Government. Just because they are pro-European, and the suspicion is that the Government may wish to bias the referendum in the pro-European direction, does not mean that that would be right and proper. It does seem to SNP Members that if the rules of purdah about the behaviour of a Government during an election campaign are correct, as recommended in the Political Parties, Elections and Referendums Act 2000 all those years ago, that must pertain during a referendum campaign as well. In new clauses 3 and 4, we have set out in some detail what a referendum code of conduct for the Government should be.

It is astonishing that the Government should think that the exclusion of any such restrictions from the Bill would be meekly accepted by a majority of Members in Committee. It is entirely wrong for the Government to do so. We have a very recent example of why it would be very foolish for the Committee to take the Government at their word in saying that they would not engage in behaviour that breached the normal standards of purdah in the upcoming referendum campaign.

Let us take the scenario or possibility that, at some point in the course of the referendum campaign next year or the year after, the no side moves to the front. In that scenario, let us just assume that, to try to get the yes result that the Prime Minister wishes, he needed a last-minute initiative. With no rules or restrictions saying that new political initiatives should not be made at governmental level during the last 28 days of the campaign, what would stop the Prime Minister doing a tour of the capitals of each of the Governments across Europe—suspending Question Time in the national Parliament—and stop their flying as one to London to announce a new commitment, a new undertaking, a new pledge, a new vow? A new vow might be made to the people of the United Kingdom saying, “Only if you vote yes will we secure these new terms, which we did not mention before the campaign started, but which we now, as good Europeans, undertake to offer to the people.” Let us just say that, under those circumstances, that vow was influential in persuading enough people, perhaps one in 20, to switch their vote and to vote in favour, and let us just say that, after the dust had settled, all those

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European leaders did not really want to go forward with the full extent of the vow they had made. How would people in the United Kingdom view that situation? Would it not be rather better for the Bill to state explicitly that during the last 28 days—and only during the last 28 days—of a campaign period, the people must be able to make a judgment on the arguments that are property presented, without the use of the governmental machine to bias the result one way or the other?

When the Government explain why they want to wipe away these rules, I hear them say, “Of course, Government cannot really function in a purdah period. We won’t be able to make representations to the European Council. It will be impossible to do so over a 28-day period.” But that is what happens in each and every general election that we fight. In April and May, I did not notice that the Administration of this country ground to a halt. In fact, a lot of people thought it was better not having a fully activated Government during the campaign period. If it can be done in each and every general election, it can certainly be done in this referendum campaign.

Even more insidious than the role of the Government in making political announcements is the role of the civil service. In normal times, the civil service quite rightly views impartiality as following the policies of the elected Government. That is what the civil service is there to do; it is not meant to be neutral on issues, but to follow Government policy. When it comes to the purdah or quarantine period in an election or in a referendum, however, it is the job of the civil service to be impartial over that 28-day period.

Mr David Burrowes (Enfield, Southgate) (Con): The right hon. Gentleman is making not a party political point, but an important cross-party point. The Committee on Standards in Public Life made that case in 1998, when it reported—this relates to section 125 of the 2000 Act—that

“just as in general election campaigns, neither taxpayers’ money nor the permanent government machine—civil servants, official cars, the Government Information Service, and so forth—should be used to promote the interests of the Government side of the argument.”

The then Government accepted that point.

Alex Salmond: And the point has been broadly accepted since. It is not just a question of the Government accepting that point, however, but of having them live by it. In the Scottish referendum, which is what I was clearly alluding to, the UK Government accepted the principle of a purdah period and all that, but despite that, they went ahead with what I would argue was the governmental, political initiative of the vow in the last few days of the campaign.

Despite the fact that the UK civil service should have been neutral in that 28-day period, that was not the case, particularly of Sir Nicholas Macpherson. I notice that his knighthood has recently been enhanced in the recent honours list—let us all congratulate Sir Nicholas on his extra honour for services rendered. In particular, the Treasury had a referendum unit working through the purdah period to place in the press stories hostile to the yes side of the argument. I know that many right hon. and hon. Members on the Conservative Benches who were on the no side of the Scottish referendum campaign did not feel that that was particularly

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objectionable at the time, but I ask them to imagine how they would feel if they were arguing on the no side of the European referendum debate and Her Majesty’s Treasury and its civil servants under Sir Nicholas Macpherson did the same thing. That is exactly what will happen unless the House sets rules that have to be abided by.

1 pm

Nadhim Zahawi (Stratford-on-Avon) (Con): Does the right hon. Gentleman agree that it does not matter which side one is on? Even people on the yes side should not want their victory to be tainted by the perception of a fix.

Alex Salmond: Absolutely; that is why I am making this argument from the yes side of the campaign.

I am suggesting not only that the rules should be written back into the Bill, but that there should be an enforcement mechanism. I commend new clause 4 to the Committee. It suggests that there should be a fairness committee of Privy Councillors, of which I am one. Who knows? I might be favoured in such a recommendation. The committee of Privy Councillors, selected by the Speaker of this House and the Presiding Officers of the Assemblies of Northern Ireland and Wales and the Parliament of Scotland, would have the job of making sure that the rules were abided by. It would have the power of injunction in England and interdict in Scotland to prevent the publication of anything that it believed may breach the rules of purdah, and the right to refer matters to the prosecuting authorities. New clause 3 sets out the appropriate penalties for Ministers who have the audacity to breach the rules of purdah and for civil servants who forget that they are there to serve the public, not their political point of view.

I commend those proposals to the Committee. I will listen closely to the debate. I know that many right hon. and hon. Members have similar concerns. I say to those on the Treasury Bench that, just as they were mistaken not to understand the resentment at the lack of respect that was shown by floating the idea of holding a referendum on the same day as our national elections in Scotland, Wales and Northern Ireland, they would make a grave mistake if they did not understand the cross-party concern about a potential breach of purdah by Ministers and the civil service. I hope that our proposals are given proper and due consideration.

Dr Liam Fox (North Somerset) (Con): I rise to support amendment 11.

I congratulate the Government on having the good sense not to press ahead with their proposal to hold the referendum on the date that they had set out. That shows that they were listening and I urge them to continue in that mindset.

I will be very brief because I want to make only three points in this debate. First, it is unseemly at best for the Executive to exempt themselves from the legal, electoral and constitutional arrangements that they find inconvenient during any electoral process. We had the period of purdah during the Scottish referendum. The arguments that have been made sound like the arguments of civil servants and lawyers that Ministers have been too keen to listen to. Under the full glare of scrutiny in this House and in the media, those arguments have sounded increasingly self-serving.

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Secondly, there is a reason why we have purdah: it is to prevent the Government of the day from affecting the independence or fairness of any electoral process and from using the machinery of government to do so by spending taxpayers money, using the press or using other resources that are available to them. The fear is that the Government at all levels—central and local—could use taxpayers’ money to support one side of the debate, potentially changing its course. The precedent that that would set in this country would be extremely unfortunate. We require the independence of the civil service and the government machine to ensure that our electoral process is not interfered with unduly.

My third point is about the perception or optics of this matter. After any referendum, particularly one that, as we know from previous debates on Europe, will arouse great passions on both sides, we require the result to be regarded as fair, reasonable and legitimate if there is to be any chance of the country coming together on the issue once the voters have spoken. If people believe that they have been bounced or that the result is the consequence of a rigged process, it will be extremely difficult for the country to come together, and the political consequences will be intense. It must be seen that the legitimacy of the process is related to the fairness of the process. That is what is being put at risk by the Government’s proposals.

It is clear from the letter that came from my right hon. Friend the Minister for Europe earlier today that the Government recognise that they will have to make changes to their proposals in the Bill. There are two ways of doing that. The Government can either remove the current restrictions, as they have in the Bill, and set out their own code of conduct on Report—in other words, tell the House what they will be able to do—or accept amendment 11, return to the legal status quo and ask the House on Report what exemptions they should be permitted to have. There are crucial differences between those two processes. The first suits the Executive and allows them to dictate the terms to Parliament in respect of what they want; the second asks that Parliament be given due respect and be allowed to set out the exemptions that it believes are acceptable.

I have not once, in 23 years in the House of Commons, voted against my party on a whipped vote. I urge my right hon. Friend the Minister for Europe not to force those of us who are in that position to take an alternative course tonight.

Tulip Siddiq (Hampstead and Kilburn) (Lab): It gives me great pleasure to make my maiden speech during the Committee stage of the European Union Referendum Bill—a topic that is close to my heart and the hearts of my constituents in Hampstead and Kilburn. Indeed, this topic cropped up frequently in the 22 hustings that we had during the election period and was raised by many people. It is indicative of the debate that goes on in my constituency and of the highly engaged residents in Hampstead and Kilburn—a constituency that I am so proud to represent here at Westminster.

What can I say about my constituency, with its deep history and its intellectuals—the melting pot of cultures and ethnicities that is Hampstead and Kilburn? I do not believe that any other constituency has the radical background that we have in the arts, social awareness, politics, architecture and poetry.

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We are home to one of London’s paradises of walking and swimming. We welcome all political leaders who want to take a walk on Hampstead heath and meet fellow walkers. [Laughter.] Many years ago, two leaders of literature, Samuel Coleridge and John Keats, took a famous walk on Hampstead heath, where they discussed a thousand different things. Perhaps if they took a walk today, instead of talking about metaphysics and nightingales, they would talk about econometrics and the blue bird of Twitter—indeed, about Milifandom and the Cameronettes.

We are proud to have housed George Orwell when he wrote two of his most famous books: “Nineteen Eighty-Four” and “Animal Farm”. He was down and out in both Kilburn and Hampstead. As someone who raised the importance of privacy, he might turn in his grave at the knowledge that there are now 32 CCTV cameras within 20 yards of the very room in which he wrote “Nineteen Eighty-Four”.

As a constituency that has elected a female MP for 23 years, we are proud that we once housed Marie Stopes, who pioneered birth control for women in the aftermath of world war one. Even today, my constituency nurtures the likes of Bradley Wiggins, Mitchell and Webb and Zadie Smith, but for me, the most important part of my constituency is the resilience of the people who live there—the teachers, the doctors, the nurses, the public sector workers, the trade unionists, the small business owners and, yes, the bankers and lawyers as well.

Those are the people who, in 1966, caused national shock by electing a Labour MP in the form of Ben Whitaker. They turned that blue-stained seat Labour. Ben Whitaker was a man who showed the world that Hampstead is part of a London where affluence and social conscience go hand in hand. Ben Whitaker’s time in the House was important but, for me, what really stands out is the work he did in raising international awareness of the plight of Armenians, and the support he gave to a war-torn Bangladesh in the 1970s.

In 1992, my constituency decided once again to go against the blue national tide and elected my predecessor. What can I say about her? A woman in love with social justice. A lady with more than just a touch of class. Glenda Jackson, the queen of Hampstead. I remember her fervent opposition to the Iraq war, her powerful rhetoric against tuition fees and her advocacy of women’s rights. Perhaps her most dramatic moment was when she stole the show by defying all the bookies and winning the seat for Labour by just 42 votes in 2010. I am pleased that her formidable Conservative opponent now sits on the Government Benches as the hon. Member for Croydon South (Chris Philp), but not as the hon. Member for Hampstead and Kilburn.

On 7 May this year, my constituency elected the daughter of a political asylum seeker. My mother came to Kilburn in the 1970s because 19 members of her family had been assassinated at home. My mother and my aunt were the two surviving daughters of the founding father of Bangladesh. I am pleased to say that they are in the Gallery today, listening to my maiden speech. [Hon. Members: “Hear, hear.”]

My mother came to Britain because this was a safe haven for her. Her story tells us that immigration is not simply an economic phenomenon. Britain has been seen

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for many years as a safe haven for political freedom. We must not let that slip away. An ill-conceived net migration target that includes refugees and asylum seekers is, frankly speaking, immoral, and it should put us to shame.

In my constituency we have shown our welcoming attitude to migrants from Ireland and to refugees fleeing political persecution in Nazi Germany. I am proud to say that that tradition stands today in Salusbury World, the only refugee centre to be based in a primary school. In my constituency of Hampstead and Kilburn, we recognise the link between aspiration and immigration. We recognise that public services will be put under pressure because of a larger population. We recognise that housing will be put under pressure, but we still recognise the benefits of immigration, and how it enriches us.

We believe that the Government should be able to take the benefits of immigration and ensure that it translates into prosperity. We think the Government should be able to maintain standards in housing and public services. Think about this: 46% of constituents in Hampstead and Kilburn are foreign-born. Without an open door to immigration, we might not have Hampstead and Kilburn. If we want Britain to remain open for business, we cannot shut the door of the shop.

My fear is that the EU referendum will become a proxy referendum on immigration. Both topics require a cool head and a moral compass. I believe that Members on both sides of the House need to work together to ensure that we give people the right choice to make the right decision when it comes to voting in the EU referendum.

Several hon. Members rose

The Chairman of Ways and Means (Mr Lindsay Hoyle): Order. We now come to another maiden speech. I call Andrea Jenkyns.

1.15 pm

Andrea Jenkyns (Morley and Outwood) (Con): I congratulate the hon. Member for Hampstead and Kilburn (Tulip Siddiq) on her maiden speech—she has an incredible family history.

It is a great honour to make my maiden speech on my 41st birthday. [Hon. Members: “Oh!”] I know—I don’t look it. Birthdays are important occasions in our calendar year. For many of us, Christmas is also an important annual milestone. With that in mind, I would like to talk about my predecessor, otherwise known as the House of Commons Father Christmas. Ed Balls spent a number of years entertaining children as Father Christmas, in stark contrast to his public persona. I always found him personable. We ran positive campaigns and treated each other respectfully. We often discussed our shared love of music. At the election count, he was incredibly gracious. He wished me good luck and said that I would do the job very well. I know it must have been an incredibly difficult evening for him and his family, although it should be noted that, back in February, he called for an extension to paternity leave. The moral is we should be careful what we wish for.

But seriously, Ed Balls progressed to the highest levels of Government, holding the positions of Economic Secretary to the Treasury and Secretary of State for Children, Schools and Families. I genuinely wish him well and thank him for his 10 years in public service.

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Morley and Outwood is a diverse constituency, and each of its settlements has its own rich history. Morley is perhaps the most patriotic town in Britain. Its St George’s day celebration attracts more than 10,000 people. It is worth going to see St George on horseback. It has been home to many famous people, such as the Liberal Prime Minister Herbert Asquith, pioneering female cyclist Beryl Burton, and Bridget Jones author Helen Fielding. I was tempted to mention ladies’ big undergarments.

Asquith is perhaps Morley’s most famous son. As the Chairman of Ways and Means will be aware, it is 100 years since he was forced to shore up his Government with the Conservatives in a coalition. Fortunately, with the boot having been on the other foot over the past five years, I am pleased to say that no shoring up is required today.

West Yorkshire’s famous rhubarb triangle is centred on my constituency—it once produced 90% of the world’s forced rhubarb. According to the Morley Heritage Centre, which I am glad to be involved with, England’s first Viking Parliament was held in Tingley. Nearby East Ardsley was the birthplace of comedian Ernie Wise. The village of Robin Hood is named after Yorkshire’s best-known folk hero. Robin Hood was a champion of the taxpayer—he made sure the workers got to keep more of their hard-earned money, and might well have sought to fight Morley and Outwood for the Conservatives had he been alive today.

My journey to becoming a Member of Parliament was quite unexpected, but sometimes fate can lead us on a new journey. I experienced career diversity at a young age through my father. He began his career as a lorry driver, then set up his own transport company. In later life, he became something of an inventor, designing walking sticks for the blind and a dog lead that turned into a portable seat.

My career was equally diverse, from a beginning on the shop floor at 16 as a Saturday assistant in a bakery, to having a career in retail management, to running my own business, and then becoming a music tutor in schools. My father taught me that life is what we make it, and that it is not where we come from that matters, but what we do in our lifetime and how we personally contribute to society.

It was the loss of my father in 2011 that led me to be here today. He went to a local hospital for a routine operation but tragic circumstances led to him catching a hospital infection and he passed away a few months later. I became involved in the health charity sector and became a trustee of MRSA Action UK. I championed better standards in our hospitals and campaigned on the importance of finding new antibiotics. I am pleased that our Prime Minister and the chief medical officer, Dame Sally Davies, are leading a global campaign on antimicrobial resistance.

I graduated just last year as a mature student. I studied economics at the Open University and my dissertation was on comparing healthcare systems around the world: their per capita spend and whether it has any correlation with health outcomes. At the same time, I studied international relations at the University of Lincoln. My dissertation asked the question: is British foreign policy endogenous? Does it exist in its own right, or is it influenced by party politics and their leaders? I charted the parties’ policies in three key areas, from 1945 to

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date, which included looking at Britain’s relationship with Europe. That is one reason why I chose to make my maiden speech during this debate.

In the past two years, the topic of the European Union has proven to be of great importance to my constituents. Research into my university thesis revealed that the Conservatives have held a consistent foreign policy view on Europe: to be part of a European trading entity, but not a fully integrated political union. The pro-European-with-a-realist-caveat stance was led by Churchill in the 1940s, peaked during the 1970s, and is still true today of my right hon. Friend the Prime Minister.

My research also revealed that the Labour party has had a somewhat inconsistent view on Europe, demonstrated by its manifestos and the actions of its leaders. Its views changed to a more pro-European stance in the mid 1990s, and further integration has been its policy since. In the past few weeks, Labour has again demonstrated an inconsistent standpoint, changing from being against having a referendum and giving the public a voice, to now being in support of it.

I am unhappy with our current relationship with Brussels. There is a lack of transparency on where taxpayers’ money is being spent, and on further integration and political union. I am a proud Brit, a proud Englishwoman and a proud Yorkshirewoman. I stand here today on behalf of my constituents in full support of holding a renegotiation, reform and a referendum. Like many of my Conservative colleagues, I want the best for Britain. We trust the British public to decide.

The Conservatives have the right policy. We must look into renegotiation first. We cannot unsteady the markets and put pressure on our economy by holding a referendum tomorrow. We need to plan to ensure that in two years’ time we hold a referendum and that the British public are given a choice to be either part of a much-reformed European Union or have the option to come out altogether. I, for one, trust my constituents to make this choice. I will fight to ensure they have the opportunity to do so.

Before this year, Morley last elected a Conservative MP in 1931 and some parts of the constituency have never had one. I stand here, in memory of my father, wanting to make a difference in people’s lives. I hope that over the next five years I can prove to the residents of Morley and Outwood that we are a perfect fit, and that my upfront, passionate Yorkshire style resonates with theirs so I can truly become another strong Yorkshire voice in Westminster.

Mr Pat McFadden (Wolverhampton South East) (Lab): I shall speak to amendments 4, 5 and 6 on the publication of information, and amendment 54, in my name and those of my right hon. Friends, on the application of purdah.

I congratulate the hon. Member for Morley and Outwood (Andrea Jenkyns) on her maiden speech. She enjoyed a famous victory at the election and she is entitled to enjoy it. She spoke very movingly about her father and I wish her well for her time in the House.

I also congratulate my hon. Friend the Member for Hampstead and Kilburn (Tulip Siddiq) on her excellent maiden speech. She reminded us—it was a good reminder —of the reasons why people come to these shores,

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and of the wonderful chances and opportunities that this great country can bring to people who do come to these shores. I know she brought with her some very distinguished and very welcome guests to watch our proceedings.

Another week has brought more European troubles for the Conservative party. Last week, we had the debacle over collective ministerial responsibility. The Prime Minister was first reported as saying that it would apply, then that he had been misinterpreted, and then that no decision had been taken on the issue. This week, we have had the tabling overnight of an amendment saying that in response to pressure, from the Opposition and from elsewhere in the House, the referendum will not take place in May next year in combination with other important elections that will be taking place throughout the country. We welcome that change of heart from the Government, but I must point out to the Minister that his amendment deals only with the issue of May next year and not May 2017. That is an issue to which we will want to return. There have also been reports overnight that the Government may have something to say about purdah. I will question the Minister more on that as we go.

Amendments 4, 5 and 6 concern the provision of information for the public on the implications of Britain leaving the EU. I say at the outset that this is not the same as a discussion about purdah, which is dealt with by amendment 54 and others. Amendments 4, 5 and 6 deal with information that we feel should be provided at least 10 weeks before the referendum takes place, not in the final four weeks of the campaign.

The UK has been a member of the EU for more than 40 years, so we know what membership means in terms of trade, legal obligations, costs and so on. Of course, the Prime Minister has set out on a renegotiation process that may change to some degree the terms of that membership, but all of that will be made public well before the referendum takes place and people will be able to make a judgment on whatever he achieves in the negotiations. What is less clear, as was pointed out by the right hon. and learned Member for Rushcliffe (Mr Clarke) on Second Reading, is what being out of the EU would mean. The amendments are intended to inform the public debate on this issue.

Graham Stringer (Blackley and Broughton) (Lab): I have some sympathy for providing as much information as possible during the referendum campaign, but is my right hon. Friend aware that probably the most definitive assessment of the costs and benefits of leaving the European Union has been provided by Open Europe? It says that on the one hand there may be benefits and on the other hand there may be disbenefits, depending on what assumptions are put into the calculation. How does he expect the Government to come down on one side or the other, and which assumptions would go into that assessment?

Mr McFadden: I have read the work by Open Europe. My hon. Friend is right to say it has made an assessment, but it is one assessment among many—there have been many others. As I go, I will explain why I think there is merit in Government Departments taking a proper look at this.

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There has been much talk of whether the UK would adopt the Norwegian model, the Swiss model or some other model of being outside the EU. The Committee will be glad to know that I am not going to go through all the costs and benefits of those models today, but they all raise questions about being outside the EU that have not yet been answered.

Amendment 4 calls for a report from the Office for Budget Responsibility on the implications for the public finances of a British exit. Few would dispute that since the OBR was established it has gained a reputation for both independence and quality. The reports it produces on the Budget and the autumn statement are valued across the House and have helped to inform the debate about fiscal policy in the past five years. In the run-up to the recent election, my party called for the OBR to assess the tax and spending promises of each of the main parties, a demand supported by the Treasury Committee in the previous Parliament, although there was some debate about whether the request had come too late in the Parliament to be brought into being in time for the election.

Wayne David (Caerphilly) (Lab): My right hon. Friend has mentioned some of the work of Select Committees, but he will also know that the Foreign Affairs Select Committee has done some work on the possibility of Britain leaving the EU and following the Norwegian or Swiss models. Will he find a way to ensure that those ideas and findings are brought into the national debate as well?

1.30 pm

Mr McFadden: My hon. Friend makes a good point. All these models need to be examined to see what their strengths and weaknesses might be.

Aside from its regular work on the Budget and the autumn statement, the OBR already produces a longer-term fiscal sustainability report on future trends and pressures, the latest edition of which was published just a few days ago, so it already ranges more widely than the work we are most familiar with on Budgets and autumn statements. Our amendment asks the OBR to produce a report on the implications for the public finances of a British exit. For example, can we assume that the UK would save all its budget contribution to the EU, as claimed by the advocates of exit, or could we expect to contribute some or most of that in return for continued access to the single market? Some countries outside the EU but part of the European free trade area have to make substantial contributions for access to the market. Are there other effects to take into account, such as the implications for the public finances of any migration changes as a result of exit? Would exit have any impact on the long-term demographics of the country that might in turn impact on the public finances? There are a number of issues that the OBR might want to consider that could impact on the public finances.

Mr Christopher Chope (Christchurch) (Con): Will the right hon. Gentleman explain why he and his party objected to my Bill in the last Parliament calling for an independent audit of the economic costs and benefits of our current membership of the EU? Is that not the most fundamental issue about which the public want to be informed before the referendum?

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Mr McFadden: We know the costs of being in. The point of the amendments is to assess the costs of being out. Amendment 5 calls for each Secretary of State to produce a report at least 10 weeks before polling day on the possible consequences of exit for their area of responsibility. I will resist the temptation to get back into the issues of collective responsibility by saying that a report from each Department might test that. That is not the point of the amendment; the point is that EU membership touches many parts of what the Government do, and the public have a right to know about them.

Most obviously, there are the trade issues. What would exit mean for exports, inward investment and some of our great companies that operate across borders? For example, Airbus president Paul Kahn has said: