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House of Commons

Wednesday 25 November 2015

The House met at half-past Eleven o’clock


[Mr Speaker in the Chair]

Oral Answers to Questions

Northern Ireland

The Secretary of State was asked—

Northern Ireland Executive (Financial Position)

1. Mary Glindon (North Tyneside) (Lab): What steps she is taking to ensure that the Northern Ireland Executive’s financial position is sustainable. [902242]

9. Chris Evans (Islwyn) (Lab/Co-op): What steps she is taking to ensure that the Northern Ireland Executive’s financial position is sustainable. [902250]

The Secretary of State for Northern Ireland (Mrs Theresa Villiers): It is for the Executive to deliver a balanced budget and sustainable finances. The Stormont House agreement and last week’s fresh start agreement set out a range of measures to help them deliver that. These include implementation of welfare reform, measures to improve efficiency in the public sector and a new independent fiscal council for Northern Ireland.

Mary Glindon: Following the welcome agreement between Northern Ireland parties and the British and Irish Governments last week, how confident is the Secretary of State that the Executive’s budget can be put on a sustainable footing, allowing a greater focus on value for money and public service delivery?

Mrs Villiers: I am confident about those matters. Earlier this week, the House passed the welfare reform proposals needed to apply welfare reform in Northern Ireland, which will make a huge difference to financial sustainability, and which also made progress in the House of Lords yesterday.

Chris Evans: Given that the Conservative party has come late in the day to the merits of devolution, what assessment has the Secretary of State made of devolving income tax to the Northern Ireland Executive as a means of putting them on a sure financial footing?

Mrs Villiers: The Conservative party is a strong supporter of devolution. Previous agreements with the Northern Ireland Executive make it clear that we are open to considering the devolution of further tax powers, but the Executive’s highest priority is the devolution of

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corporation tax, which we hope to press ahead with as soon as the Stormont House agreement conditions on financial sustainability are met.

Mr Laurence Robertson (Tewkesbury) (Con): The petition of concern advice in the fresh start agreement is not compulsory or binding on all parties, but does the Secretary of State agree that adherence to it will be important in enabling the Assembly to function properly and set a budget in a timely manner next year?

Mrs Villiers: My hon. Friend puts his points well. I agree that it is important that petitions of concern are focused on those matters for which they were devised—where individual parts of the community need to be protected on equalities issues—and I believe that the protocol agreed under the fresh start agreement will help to focus them on matters for which they were always intended.

Mark Pawsey (Rugby) (Con): It is important that the agreement puts Northern Ireland’s finances on a sustainable footing. What steps will the Secretary of State take to make sure it lasts over the longer term?

Mrs Villiers: One of the most important things that the UK Government are doing to ensure sustainable public finances for the Northern Ireland Executive is implementing our long-term economic plan to deliver economic stability and prosperity. The Northern Ireland economy is growing, and these measures will help to support the Executive in their efforts to ensure that there are sustainable public finances.

Mr Nigel Dodds (Belfast North) (DUP): Does the Secretary of State agree that without the fresh start agreement there would be no prospect whatsoever of a sustainable budget for the Northern Ireland Executive, which would lead inexorably to the return of direct rule, which would be bad for Northern Ireland and all its people? Does she also agree that the agreement provides for the most generous welfare system in the UK, provides help for hard-working families and sets a date for lowering corporation tax, which will help to create jobs and boost employment?

Mrs Villiers: I can agree with all of that. I have made it clear that without the successful outcome of the talks and the fresh start agreement, we would have been on an inexorable path to the collapse of the institutions and a return to direct rule. I wholeheartedly agree that that would have been a major setback, and one that everyone in the House has striven to avoid.

Mr Dodds: Following the fresh start agreement, will the Secretary of State now talk to her Cabinet colleagues, particularly the Chancellor, about how, along with the Northern Ireland Executive, we can link Northern Ireland in with the northern powerhouse, to our mutual benefit?

Mrs Villiers: That is a very good idea to consider, and I will certainly raise it with the Chancellor. The proposals in the economic pact agreed between the Executive and the Government a couple of years ago demonstrate that the two Administrations are working more closely together than ever before, but including a northern powerhouse element is a good idea.

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Deidre Brock (Edinburgh North and Leith) (SNP): Once again, I commend the Secretary of State for her work over the past few months, ensuring with all the parties that Stormont continues. As she knows, the bedroom tax and various other sanctions will not be imposed in Northern Ireland, which, for historical reasons, has a higher welfare spend than elsewhere in the UK. This will place a heavier burden on Northern Ireland than elsewhere. What plans do the Government have in place to back up the Northern Ireland Government should they struggle to fulfil these commitments?

Mrs Villiers: A reasonable compromise was reached in the two agreements between the parties and the UK and the Irish Governments that welfare reform would be implemented with certain top-ups agreed. As we have heard this morning, that gives Northern Ireland the most generous welfare system in the United Kingdom. Although we will not pay for a more expensive welfare system in Northern Ireland than elsewhere, the block grant gives a public spending per head rate in Northern Ireland that is higher than anywhere else in the UK. That provides support for Northern Ireland.

Dr Alasdair McDonnell (Belfast South) (SDLP): Does the Secretary of State agree with me that Northern Ireland’s financial position cannot ever be sustainable or confident without a major prosperity strategy and an economic development plan that deal with the low skills, low pay and low productivity levels that we have?

Mrs Villiers: I agree that a strategy on prosperity is crucial in Northern Ireland just as it is everywhere else. That is why we are pursuing our long-term economic plan and why the Executive are working hard to make Northern Ireland a fantastic place in which to do business. Recent examples of new jobs announcements are 800 jobs in Enniskillen from Teleperformance; 250 in Belfast from Intelling; and 87 in Ballymoney from McAuley Precision and McAuley Fabrication. The Northern Ireland economy is a great success story, and I think the Executive should take pride in the role they have played in that.

Economic Development

2. Mr Alan Mak (Havant) (Con): What recent discussions she has had with the Northern Ireland Executive on economic development. [902243]

The Parliamentary Under-Secretary of State for Northern Ireland (Mr Ben Wallace): The Secretary of State and I hold regular discussions with the Northern Ireland Executive on economic development issues. Indeed, I met Jonathan Bell, the Minister for Enterprise, Trade and Investment last Thursday on such issues. The fresh start agreement, signed only last week, reaffirmed the Government’s commitment to devolving corporation tax powers to Northern Ireland, if sustainable Executive finances are secured. This measure has the potential to have a truly transformative impact on the Northern Irish economy.

Mr Mak: I thank the Minister for his answer. Will he join me in welcoming the rise in visitor numbers to Northern Ireland and the economic benefits that it brings, and will he support stronger economic links between Hampshire and Northern Ireland?

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Mr Wallace: The one thing that Hampshire and Belfast have in common is the cruise ships in Southampton. I am delighted to say that there has been an increase in cruise ships using Belfast as a gateway to Ireland, where people can visit the fantastic Giant’s Causeway, the golf clubs and enjoy the Titanic Experience.

Danny Kinahan (South Antrim) (UUP): There has been no movement in Northern Ireland on an enterprise zone. Will the Secretary of State consider helping Belfast international airport to achieve an enterprise zone in my constituency?

Mr Wallace: During the original Stormont House agreement, the Government committed themselves to supporting an enterprise zone and indeed a city deal, should one come forward. It is for the Northern Ireland Executive to bring forward that city deal. My right hon. Friend and I are here to support that and make sure it happens.

Tom Pursglove (Corby) (Con): What benefits does the Minister think the hosting of the 2019 open championship at Royal Portrush will have on the Northern Ireland economy?

Mr Wallace: It will showcase the fantastic golf courses outside Belfast and around the rest of Northern Ireland. It is important to get tourists not just into Belfast but further afield. Golf is one of Northern Ireland’s great offerings.

Ms Margaret Ritchie (South Down) (SDLP): Will the Secretary of State and the Minister have immediate discussions with the Northern Ireland Executive and the Secretary of State for Energy and Climate Change to reinstate the renewables obligation so that the contacts that people already have can be facilitated and so that we can underpin the local rural economy in Northern Ireland?

Mr Wallace: I thank the hon. Lady for her question. The Secretary of State for Energy and Climate Change is sitting here and will have heard her question. I will certainly be happy to discuss it with my right hon. Friend.

Vernon Coaker (Gedling) (Lab): Wherever I go in Northern Ireland, one of the major concerns that business raises with me is the need for improved access to broadband. According to a House of Commons Library research paper, as part of the Government’s £530 million investment over the past five years in the UK’s broadband network, English counties have received £294.8 million, Scotland has received £100.8 million, and Wales has received £56.9 million, whereas Northern Ireland received just £4.4 million. Will the Minister explain why that figure is so low?

Mr Wallace: I cannot answer exactly why the figure is so low other than to say that some of the responsibility lies with the Northern Ireland Executive and some obviously with the Government. I am happy to take up the low amount for broadband with the relevant Minister. It is important for Northern Ireland that that is improved.

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Ian Paisley (North Antrim) (DUP): My constituency has taken a real kicking from the loss of manufacturing jobs in recent days, and, indeed, in the past 12 months. In a recent statement, the business Minister promised that the Government would go the extra mile. Can the Minister give me any hope or encouragement this morning at Question Time for manufacturing jobs in North Antrim?

Mr Wallace: As I have always said to the hon. Gentleman, who is a doughty champion of his constituents and always campaigns to increase manufacturing in his constituency, I will try to help him. This morning and last week, I spoke to the Mayor of London, and I hope that there will be some good news very soon about Wrightbus and more orders to come.

National Procurement Contracts

3. Gavin Robinson (Belfast East) (DUP): What discussions she has had with her Cabinet colleagues on ensuring that Northern Ireland benefits from national procurement contracts. [902244]

The Parliamentary Under-Secretary of State for Northern Ireland (Mr Ben Wallace): Northern Ireland firms, like those in the rest of the UK, can apply for large public sector contracts through the Official Journal of the European Union. The Government have also set a target that one third of central public procurement spend is delivered by small and medium-sized enterprises. Government Departments and their Northern Ireland Executive counterparts are here to help companies benefit from improved access to public sector contracts, and that includes companies in Northern Ireland.

Gavin Robinson: I know that the Minister, like me, is proud of the contribution that Thales, Bombardier and Harland and Wolff, which are in my constituency, make. However, following Monday’s strategic defence and security review, will the Minister, alongside the aerospace, defence and security group, undertake to organise a round table, where companies in east Belfast and across Northern Ireland can ensure that they avail themselves of the opportunities in forthcoming procurement contracts?

Mr Wallace: The hon. Gentleman is right that Northern Ireland’s skill base is perfect for increasing and exploiting its aerospace companies. I was delighted to visit Thales not long ago—it recently won another order in Malaysia. [Interruption.] My right hon. Friend the Minister for Small Business, Industry and Enterprise agrees that the hon. Gentleman has put forward a good idea, and I will be delighted to arrange that round table with him and my right hon. Friend.

Mike Wood (Dudley South) (Con): With 90% of firms in Northern Ireland being SMEs, what support is being put in place to safeguard their interests when collaborative procurement is promoted?

Mr Wallace: My hon. Friend is correct that SMEs suffer when bureaucracy is too great, and that is why the Cabinet Office has been leading the red tape challenge, which is designed to reduce red tape for small business.

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If we continue to progress on those lines, small business will have an opportunity to thrive and take advantage of the low corporation tax that will hopefully be delivered in 2018.


Mr Speaker: Order. I can scarcely hear the Minister’s mellifluous tones, partly because there is too much noise and partly because the Minister understandably looked back at the person whom he was answering. His full visage should face the House—I feel sure that the House will benefit.

Lady Hermon (North Down) (Ind): Will the Minister commit to meeting senior representatives of Northern Ireland companies who have serious concerns about delays and waste in the UK’s defence procurement procedures?

Mr Wallace: As a former aerospace worker, I know the extent to which delay can damage the supply chain. Under the leadership of our Defence Procurement Minister, we have improved defence procurement since I was working in aerospace and the previous Government were awarding contracts. I would be delighted to meet the heads of the hon. Lady’s businesses, and to ensure that they are getting an efficient service from the contracting Departments and that more business is done in Northern Ireland.

Stormont House Agreement

4. Bob Blackman (Harrow East) (Con): What progress has been made on implementing the Stormont House agreement. [902245]

The Secretary of State for Northern Ireland (Mrs Theresa Villiers): The fresh start agreement reached last Tuesday opens the way for implementation of a range of provisions in the Stormont House agreement on welfare and sustainable public finances, flags, parades and reform of the devolved institutions, including establishing an official Opposition, reducing the size of the Assembly and cutting the number of Executive Ministers.

Bob Blackman: I thank my right hon. Friend for the progress that she has made on implementing the agreement. However, there are many other aspects still to be implemented. Will she update the House on what action she is taking to ensure that the entire agreement is implemented forthwith?

Mrs Villiers: I think that the fresh start agreement is a good deal for Northern Ireland. It is vital that we put the implementation of the Stormont House agreement back on track. It is, of course, a matter of regret that we were unable to agree on enough points on the legacy of the past to introduce legislation, as we had hoped to do, but we will be working hard on this matter, and I shall be meeting the victims commissioner and the Justice Minister next week to consider a way forward.

Mr Jeffrey M. Donaldson (Lagan Valley) (DUP): Will the Secretary of State work with members of my party to ensure that we continue to address the issues relating to the legacy of our troubled past? It is crucial that we

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do our best to provide support and care for the innocent victims, and that we find a way of enabling them to have access to truth and justice.

Mrs Villiers: I can give the right hon. Gentleman that assurance, and I look forward to continuing to work with him on these important matters. I believe it is very important for the institutions envisaged under the Stormont House agreement to be set up, because the current institutions are not providing good enough outcomes for victims and survivors. We need to do something about the current situation, and that is why we need to make progress.

13. [902255] Wendy Morton (Aldridge-Brownhills) (Con): As we all know, politics is not an easy business, but what lessons can be learnt from the recent events, so that we can do everything possible to ensure that they do not happen again?

Mrs Villiers: That is a very good question, but I think we have already learnt from the problems relating to the Stormont House agreement, whose implementation was stalled a few months after it was established. Both the Northern Ireland Executive and United Kingdom Government have moved swiftly on the fresh start agreement. The Assembly has passed a legislative consent motion agreeing to a balanced budget in the Executive, and we in the House of Commons have pressed ahead with legislation on welfare reform.

Vernon Coaker (Gedling) (Lab): Despite the best efforts of the parties and the Irish Government, and despite the welcome deal that was done last week, the victims, survivors and their families will be both frustrated and disheartened by the fact that measures dealing with the past could not be agreed. However, I am told that progress was made on the issue. Will the Secretary of State tell us exactly what the problem was, who disagreed, and whether any of the documents that were discussed can be published?

Mrs Villiers: We will certainly reflect on whether it might be appropriate, in the coming months, to publish a draft Bill for consideration, but we would take no such steps without engaging in extensive discussions with the First and Deputy First Minister and with victims.

We made considerable progress on the issues of how the Historical Investigations Unit would work in practice and what sort of reflection in statute would be needed for the Implementation and Reconciliation Group. A number of issues were more or less resolved, although a key problem was establishing a mutually agreeable arrangement when it came to matters relating to national security. The Government made it very clear that we would provide the fullest possible disclosure for the HIU, but we have to ensure that documents that go from the HIU into the public domain do not jeopardise national security.

Vernon Coaker: I thank the Secretary of State for what I thought was a helpful answer. As I have said, the planned Stormont House agreement Bill was supposed to include new mechanisms to deal with the past so that victims and their families could find out more about

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what happened during the conflict, to ensure that justice was done, and to provide better help and support for those who were affected. Is it not critical that that work is not lost or forgotten, and that we take it forward? How do the Government propose to do that, and will the families be included in the process?

Mrs Villiers: As I have said, I think it important for discussions to take place with victims’ groups on charting a way forward. I also think it important for the issue not to be parked by the Northern Ireland parties pending the Assembly elections. We cannot let it rest for another year without taking action. We need to find a way to make progress, and we should try to retain the progress made in the Stormont House talks, which, as I have said, involved broad agreement on a number of important issues.

Legacy Issues

5. Maria Caulfield (Lewes) (Con): What steps the Government are taking to deal with the legacy of Northern Ireland’s past. [902246]

The Secretary of State for Northern Ireland (Mrs Theresa Villiers): The recent political talks established significant common ground between the parties on dealing with the past, but, sadly, not enough to allow us to legislate at this point. We will keep working to achieve the necessary consensus to allow new structures for dealing with the past to be established.

Maria Caulfield: Does the Secretary of State agree that one of the key ways of moving away from the past, and from the lure of paramilitary activity, is to improve the economy of Northern Ireland, which currently has a higher level of working-age inactivity than any other region in the United Kingdom? What measures are the UK Government taking to help the Assembly to improve employment opportunities for young people in particular?

Mrs Villiers: My hon. Friend is absolutely right that a strong economy is key to more or less every other goal in government. Unless we have a strong economy, we cannot deliver the effective mechanisms for dealing with the past. The Government will continue to pursue their long-term economic plan to deliver opportunities for people young and old in Northern Ireland by creating new jobs: 33,000 more people are in work in Northern Ireland than in 2010. [Interruption.]

Mr Speaker: Order. I understand the sense of anticipation in the Chamber at this time on a Wednesday, but I point out that we are talking about the legacy of Northern Ireland’s past. Out of respect for the people of Northern Ireland, if for no other reason, a seemly atmosphere would be appreciated. Let us hear Mr David Simpson and the Minister’s reply.

David Simpson (Upper Bann) (DUP): I am sure the Secretary of State will agree that, whatever settlement is agreed on the legacy of Northern Ireland, the victims are paramount in this, as has already been mentioned. Does she agree that no one, but no one, should be allowed to rewrite the history of Northern Ireland when we make that settlement?

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Mrs Villiers: I can give the hon. Gentleman that assurance. It would be unacceptable to set up institutions that facilitated attempts to rewrite history. That is why the Stormont House agreement has written very clearly into it that new bodies must be objective, fair and impartial in all the work they do.

Sir Gerald Howarth (Aldershot) (Con): My right hon. Friend was not here in the House last week when I pressed my urgent question about the arrest of Soldier J, formerly of the Parachute Regiment. In answer, her excellent and gallant Friend, the Under-Secretary of State for Northern Ireland, said that the Secretary of State and the Irish Government had decided, on legacy issues, that the best future is to move forward and not back. Does she agree that to prosecute, nearly 50 years later, former British soldiers now in their late 60s and 70s who have done their best to serve their country would be an injustice?

Mrs Villiers: I am of course very much aware of my hon. Friend’s long-standing concern about that case. He will appreciate that decisions on policing and prosecution are rightly matters for the police and prosecuting authorities entirely independent of Ministers, but I reassure him that I am absolutely confident that the Police Service of Northern Ireland will approach that sensitive case with all the principles of objectivity, fairness, impartiality and respect for human rights that it displays in all its work.

Mark Durkan (Foyle) (SDLP): Does the Secretary of State recognise not just that dealing with the past is what we owe to victims, but that people want to know that we have not simply replaced the years of dirty war with a dirty peace? Does she recognise that, in the light of the serious questions raised by the “Spotlight” programme last night, the strictures she is placing on national security could suppress the truth not just about what state forces and state actors did, but about what paramilitary forces and paramilitary actors did during the troubles?

Mrs Villiers: The UK Government are committed to the Stormont House agreement provisions on the past. We do think that they need to be set up, that it is important to give clearer answers to victims who suffered as a result of the troubles and to do all we can to pursue evidence of wrong-doing. However, I emphasise that I believe the vast majority of the police and armed forces in Northern Ireland during the troubles carried out their duties with exceptional courage, bravery, integrity and professionalism, so I wholly dissociate myself from the hon. Gentleman’s characterisation of this as a “dirty war”.

Security Situation

6. Seema Kennedy (South Ribble) (Con): What recent assessment she has made of the security situation in Northern Ireland. [902247]

10. Nick Smith (Blaenau Gwent) (Lab): What recent discussions she has had on the security situation in Northern Ireland; and if she will make a statement. [902251]

The Secretary of State for Northern Ireland (Mrs Theresa Villiers): The terrorist threat in Northern Ireland continues to be severe. It is being suppressed through effective and dedicated work by the PSNI and MI5, but the need for a high state of vigilance remains.

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Seema Kennedy: So that paramilitary organisations no longer have a place in Northern Ireland, it is important to deter people from joining them in the first place. What measures are being taken to prevent vulnerable young people from joining paramilitary organisations?

Mrs Villiers: There are already a number of excellent programmes run by charities such as Co-operation Ireland to deter young people in Northern Ireland from a life of crime or association with paramilitary organisations. The fresh start agreement makes a stronger commitment to increase these programmes, so that young people are shown an alternative path and not drawn into association with terrorism, paramilitary organisations or crime.

Nick Smith: Last week’s agreement contained welcome measures to tackle dissident republican groups. What is the Minister’s assessment of the threat that is still posed by those terrorist groups?

Mrs Villiers: Those groups have lethal intent and lethal capability. They have been responsible for 150 national security attacks over the past five years. The threat from those groups is being suppressed by highly effective activity in the PSNI, aided in many instances by the Garda Síochána in cross-border activities.

Tom Elliott (Fermanagh and South Tyrone) (UUP): How concerned is the Secretary of State that the IRA army council is still in place and that IRA members are still murdering citizens on our streets?

Mrs Villiers: It is entirely unacceptable that any paramilitary organisations continue to exist in Northern Ireland. I believe that the fresh start agreement will mark a turning point and put us on the path to a day when those organisations are consigned once and for all to Northern Ireland’s past and have nothing to do with its present or its future.

Prime Minister

The Prime Minister was asked—


Q1. [902327] Fiona Bruce (Congleton) (Con): If he will list his official engagements for Wednesday 25 November.

The Prime Minister (Mr David Cameron): Before I start, I would like to say something. Everyone in this House and many people watching at home will know from “Yes, Prime Minister” the central role that Bernard, the Prime Minister’s principal private secretary, plays in the life of the Prime Minister and of No. 10 Downing Street. This morning, my Bernard, my principal private secretary, Chris Martin, died of cancer. Chris Martin was only 42. He was one of the most loyal, hard-working, dedicated public servants that I have ever come across. I have no idea what his politics were, but he would go to the ends of the earth and back again for his Prime Minister, for No. 10 and for the team he worked for. Today, we are leaving the seat in the officials’ box, where he used to sit, empty as a mark of respect to him. We think of his wife, Zoe, his family and the wider No. 10 family—because it is a bit like a family and we feel we have lost someone between a father and brother to all of us. Whatever happens, we will never forget him.

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

Fiona Bruce: May I first echo the Prime Minister’s sentiments regarding the passing of Chris Martin? I am sure that all Members will send their heartfelt thoughts and prayers today, and we would be grateful if they could be conveyed to his family at this time.

Visyon, the excellent children’s mental health charity in Congleton, tells me that the lack of a secure family life is a root cause of many of the problems experienced by the children it helps. The Prime Minister is a champion of family life, so will he confirm that announcements to be made later today will pass his family test by providing security for family relationships and opportunities for vulnerable children?

The Prime Minister: I thank my hon. Friend for her remarks. There will be condolence books in No. 10, and in the Treasury and the Security Service, where Chris Martin also worked. She is absolutely right to say that families are the best welfare state that we have. They bring up our children, they teach us the right values and they care for us when we are sick and unwell. We want to help families, and the Chancellor will have something to say about that later as we boost the national living wage, as we deliver tax cuts for working people and, crucially, as we help with childcare. As I have said before, all these policies should pass the test of helping Britain’s families.

Jeremy Corbyn (Islington North) (Lab): On behalf of the Opposition, may I also express my condolences to the family of Chris Martin on his death? The Prime Minister told me how ill he was on Remembrance Sunday, and I am pleased that he was able to visit him at that time. Also, on behalf of the many Members who worked with Chris Martin when we were in government, I would like to say how much we appreciate the professional work that he did in the very highest and best traditions of the civil service in this country. It would be very helpful if our condolences could be passed on.

This week, 55 Labour councils have made a commitment for their areas to be run entirely on green energy by 2050. With the Paris climate talks just days away, will the Prime Minister join me in commending those councils, and will he call on all Conservative councils to do the same?

The Prime Minister: I certainly commend all councils for wanting to promote green energy, and we have made that easier in our country by having the feed-in tariffs and the other measures, particularly solar power and wind power. We will be taking part in the Paris talks because it is absolutely vital to get that global deal, but we have to make sure that we take action locally as well as globally. I would make the point that if you compare the last Parliament with the previous Parliament, we saw something like a trebling of the installation of renewable electricity.

Jeremy Corbyn: The commitment of those Labour councils is a bit of a contrast with the Prime Minister’s performance, because he used to tell us that his Government were the greenest Government ever. Does he remember

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those days? Does he agree with the Energy Secretary that Britain is likely to miss its target of getting 15% of our energy from renewables by 2020?

The Prime Minister: First of all, I believe that the previous Government does rightly claim that record: the world’s first green investment bank pioneered in Britain; a trebling of renewable energy; a meeting of all our climate change targets; contributing to an EU deal that means we go to the climate change conference in Paris with a very strong European record; and the ability to say to other countries that they should step up to the plate. Also, in the previous Parliament we spent record sums helping developing countries to go green. In the next five years, we will be spending $9 billion on helping other countries, which will be crucial in building the Paris deal next week.

Jeremy Corbyn: The problem with the Prime Minister’s answer is that the gap between Britain’s 2020 target and our current share of renewable energy is the biggest in the European Union. Some of the decisions he has made recently include cutting support for solar panels on home and industrial projects, scrapping the green deal, cutting support for wind turbines, putting a new tax on renewable energy, increasing subsidy for diesel generators. Is it any wonder that the chief scientist of the United Nations environment programme has criticised Britain for going backwards on renewable energy?

The Prime Minister: The facts paint a different picture. As I said, the trebling of wind power in the previous Parliament is an enormous investment. The right hon. Gentleman makes a point about solar panels. Of course, when the cost of manufacturing solar panels plummets, as it has, it is right to reduce the subsidy. If we do not reduce the subsidy, we ask people to pay higher energy bills, something I seem to remember the Labour party in the previous Parliament making rather a lot of. If you look at the speech by the Secretary of State for Climate Change, you can see the right balance between affordable energy and making sure we meet our green targets. That is what we are committed to. In addition, we are building the first nuclear power station in our country for decades, something that the Labour party talked about a lot in government but which we are putting into action now that we are in government.

Jeremy Corbyn: In the past few weeks, 1,000 jobs have been lost in solar companies in Britain as they have gone bust. I have a question from some apprentice solar fitters at Banister House, a large community energy project. Ziggy, Israel and Jay say that cutting feed-in tariffs means stopping solar projects that are needed to help our environment and to give us jobs. They asked the Prime Minister this: “Why do you want to throw all this away?”

The Prime Minister: We are doubling investment in renewable energy in this Parliament. As for solar panels, I think I am right in saying that in the previous Parliament over 1 million homes were fitted with solar panels. It is right that we go on supporting that industry, but we should do it recognising that the cost of manufacturing solar panels has plummeted. Therefore the subsidy

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should be what is necessary to deliver solar power, not what is necessary to pump up the bills of hardworking families.

Jeremy Corbyn: That is not much help to those who are losing their jobs in the solar industry at the present time.

I would like to ask the Prime Minister something else. Today is the International Day for the Elimination of Violence against Women. On average, two women a week are killed by a current or former partner, and domestic violence accounts for up to a quarter of all violent crime. Will the Prime Minister please explain why one third of those referred to women’s refuges in England are now being turned away?

The Prime Minister: We have put more money into refuges and the Chancellor will have something to say in his autumn statement about funding women’s charities. The fact is that when it comes to rape crisis centres, which we have protected, or domestic violence centres that we help to fund, the Government have a good record on helping women and making sure that the crime of domestic violence is properly investigated by the police and prosecuted in our courts.

Jeremy Corbyn: The late Denise Marshall, who was chief executive of the domestic violence charity Eaves, put this very well when she said:

“If you are a woman who has experienced some form of violence, I believe you have the right to the very best service and the community owes you an opportunity to recover”.

In 2012, the Prime Minister’s Government signed the Istanbul convention on preventing and combating violence against women and domestic violence. This would make women’s support services statutory and would have stopped the closure of Eaves. Can the Prime Minister please tell the House when he will ratify the Istanbul convention?

The Prime Minister: We are going one further than that, and in the autumn statement the right hon. Gentleman will hear in a minute that we are actually going to be putting more money into women’s charities, including charities that fight domestic violence, that fight rape and that make sure that we cut out these appalling crimes in our country. In addition to that, we have done more than any previous Government to help prevent forced marriage and prevent the horrors of female genital mutilation, which do not just happen in Nigeria and countries in north Africa—they happen here in our country, too. I do not think any Government before this one have got a stronger record on those grounds.

Q4. [902330] Maria Caulfield (Lewes) (Con): Many of my constituents come to my surgery desperate to be able to own their home. Many of them are on a low income and they recognise that a monthly mortgage payment will be significantly lower than their current monthly rental payments—sometimes it will be up to 50% lower. Does my right hon. Friend therefore share the excitement of many of my constituents about the starter homes initiative contained in the Housing and Planning Bill, which will see affordable housing lower the monthly outgoings of many people in this country?

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The Prime Minister: I do share my hon. Friend’s enthusiasm for that. Clearly, there are lots of individual interventions we can make, such as Help to Buy, which has put buying homes within the reach of many more people by reducing the deposits they need. We can help people to save, which we do with our Help to Buy ISA, whereby we are contributing every time people make a saving. But the biggest contribution we can make is building more houses, which we are going to be doing during this Parliament, and, crucially, by maintaining a strong, secure and stable economy with low interest rates, so that people can afford to take out a mortgage.

Angus Robertson (Moray) (SNP): May I begin by associating the Scottish National party with the condolences sent by the Prime Minister? Having spoken to him last week, I am aware of how much of a personal loss this is to him, as of course it is to Chris Martin’s family and friends.

The fatal dangers of unintended consequences and escalation in Syria are clear for everybody to see in these days. All serious observers agree that an air campaign alone will not lead to the ultimate defeat of Daesh on the ground and that ground forces will be needed. How many troops, and from which countries, does the Prime Minister have in his plan for Syria?

The Prime Minister: First, I thank the right hon. Gentleman for his remarks about Chris Martin, whom I know helped all parties in this House when they had inquiries.

Let me deal very directly with the Syria issue and the question the right hon. Gentleman asked, because this is so crucial. I am not for one minute arguing that action from the air alone can solve the very serious problem we have with ISIL. Clearly, we need a political settlement in Syria and a Government in Syria who can act comprehensively with us against ISIL. The question for the House, which we need to address tomorrow and in the days to come, is: should we wait—can we afford to wait—for that political settlement before we act? My view is: no, we cannot wait for that political settlement. We should work as hard as we can for it, but we should be acting now, with allies, because this is about keeping our own people and our own country safe. He asked specifically about ground troops. The fact is that there are troops in Syria—the Free Syrian Army and the Kurdish forces—who would work with us to help eliminate ISIL, but of course the full range of ground troops will be available only when there is a political settlement in Syria. But the question is simple: can we afford to wait for that political settlement before taking action to keep us safe here at home? My answer to that is: no, we cannot afford to wait.

Angus Robertson: The United Kingdom spent 13 times more on bombing Libya than on investing in its reconstruction after the overthrow of the Gaddafi regime. Reconstructing Syria will be essential to securing stability and allowing refugees to return. How much does the Prime Minister estimate this will cost? How much has he allocated from the UK?

The Prime Minister: Obviously, we have one of the largest development budgets anywhere in the world, as the support that we have given to the Syrian refugees, which stands at £1.2 billion, demonstrates. Clearly, part of our plan, which I will set out tomorrow in a statement

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in this House, will be to help fund the reconstruction and rebuilding of Syria alongside the political deal that we believe is necessary. I would far rather spend the money on reconstructing Syria than on supporting people who are kept away from their homes and their country and who dearly want to return.

Q6. [902332] Richard Drax (South Dorset) (Con): I know that my right hon. Friend is aware of the growing chorus of concern surrounding the conviction of Alexander Blackman, the former Royal Marine non-commissioned officer who shot a fatally wounded insurgent in Afghanistan in 2011. If there is indeed new evidence and if, as many feel, there has been a miscarriage of justice, does my right hon. Friend agree it is right that this matter should be looked into again?

The Prime Minister: This is exactly why the Criminal Cases Review Commission exists—to look at where there is or may have been a miscarriage of justice. As my hon. Friend knows, we gave the internal report of the naval services to Sergeant Blackman’s legal advisers, so there is proper disclosure in this case. The legal team says that it is looking at the option of applying to the Criminal Cases Review Commission. While we are on this point, let me say that our Royal Marines have a worldwide reputation as one of the world’s elite fighting forces. They have made an incredible contribution to our country, and we should pay tribute to them.

Q2. [902328] Margaret Ferrier (Rutherglen and Hamilton West) (SNP): The Government’s handling of child sexual abuse inquiries has done little to instil public confidence so far. Last month, the Goddard inquiry announced that it had accidentally and permanently deleted all the victim testimonies submitted through its website over an 18-day period without anyone from the inquiry ever reading them. These victims deserve justice and for their voices to be heard. Will the Prime Minister please tell the House what independent investigation has taken place to establish the cause of the data loss, and whether or not there was any criminality behind it?

The Prime Minister: I am sure the whole House will welcome the fact that the Goddard inquiry is now up and running. The best way to get justice for these victims is to make sure that we have the full and independent inquiry that we have spoken about. As for the specific issue that the hon. Lady raises, it is a matter for the inquiry. If there is further detail that I can give her, I will certainly write to her. What matters is that this inquiry is now up and running.

Q8. [902334] Robert Jenrick (Newark) (Con): Three thousand jobs in Newark were lost under Labour. This month, we celebrate the creation of the 10,000th new job in Newark since 2010. Does the Prime Minister agree that, once again, Newark leads the way to a strong economy, high employment, higher wages and lower welfare?

The Prime Minister: I am delighted to hear that Newark has met that landmark. It is worth remembering that this figure of 10,000 represents 10,000 people, each with a job and livelihood and a chance to support their families. I well remember visiting my hon. Friend’s

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constituency. I cannot promise to visit it as many times in this Parliament as I did in the previous one, but I know that a business we visited called Knowhow last week announced the creation of more than 800 jobs. As ever, where Newark leads, I am sure that others will follow.

Q3. [902329] Emily Thornberry (Islington South and Finsbury) (Lab): Has the Prime Minister ever heard of Shaquan Sammy-Plummer, Alan Cartwright, Stefan Appleton, or Vaso Kakko? They are all teenagers stabbed to death on the streets of Islington in the past year. Vaso was murdered just two days ago. Given the growing culture of drugs, gangs and violence in my borough and many boroughs like it, does the Prime Minister really think it is in the interests of the safety and security of my constituents to cut the Metropolitan police?

The Prime Minister: First, every life lost in the way that the hon. Lady talks about is of course a tragedy, and many of these lives have been lost because of drugs, gangs and knife crime. Overall, knife crime has come down over the past few years, which is welcome, but there are still too many people carrying a knife and not recognising that it is not only against the law but an enormous danger to themselves as well as to others. We will continue with our tough approach on knife crime and with the work that we are doing to disband and break up gangs and to try to deal with the problems of drugs. In London we have actually seen an increase in neighbourhood policing, and the Metropolitan police have done a good job of cutting back-office costs and putting police on our streets.

Q10. [902336] Steve Double (St Austell and Newquay) (Con): After many years of neglect under Labour, Cornwall is once again seeing investment in our roads, railways, airport and tourism. Cornwall is ambitious to diversify its economy and become a centre for the UK aerospace industry; indeed, Newquay airport is the frontrunner to be the location of the UK spaceport. Will the Prime Minister please provide an update on the decision for the spaceport, and does he agree that Newquay would be the perfect place for it?

The Prime Minister: It is good that this Parliament contains such strong voices for Cornwall, speaking up for that county and ensuring that it gets the assistance, resources and help that it needs. I am a strong supporter of Newquay airport, not just as a user but because it provides the opportunity for a hub of great businesses in Cornwall. We want to become the European hub for space flight, which will help to attract further investment in the UK and create jobs. A number of other airports are in the running, and I wish them all well. We aim to launch the selection process next year.

Q5. [902331] Tulip Siddiq (Hampstead and Kilburn) (Lab): The Government and I disagree about much of what constitutes progress on gender equality, but I agreed with the Prime Minister last year when he pledged to change the law to include mothers on marriage certificates. I have heard nothing since. With the fast-approaching birth of my daughter, I would like to be valued equally in her life with my husband, so will

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the Prime Minister take the important and symbolic step of ensuring that mothers are not written out of history?

The Prime Minister: This is an area on which the hon. Lady and I agree. My understanding is that proposals for that legislation have gone to the relevant committee in Government, and she has made an articulate case for why such a Bill should be included in the next Session.

Q13. [902339] Graham Stuart (Beverley and Holderness) (Con): Will the Prime Minister join me in commending the French Government for facing down terror and continuing with the climate summit in Paris next week? Will he acknowledge the important role of legislators such as those at the GLOBE summit on 4 and 5 December, and does he agree that his personal presence in Paris sends a message to the world about our continuing commitment to a lasting climate deal?

The Prime Minister: I am grateful for what my hon. Friend says. I will be going to Paris for the start of this vital conference to set out what Britain and the European Union will be doing to bring about that deal. As I have said, what we put on the table in terms of climate finance—nearly $9 billion over the next five years—is one of the most generous offers made by any country anywhere in the world. The good news about the Paris conference is that, unlike with the Kyoto deal, China and America will be signatories to the deal, which means that many more of the world’s emissions will be covered by it. We must work hard to ensure that it is a good deal with proper review clauses, and we need a way of tightening any deal to ensure that we keep to the 2° target. That is the task, but nobody should be in any doubt that Britain is playing a leading role, and has led by example and with money.

Q7. [902333] Caroline Flint (Don Valley) (Lab): There will never be a future where we do not need steel, but the Government are spending millions of pounds to compensate for the loss of UK steelmaking. Will the Prime Minister send a clear signal today to potential investors in our UK steel industry that he will do whatever it takes to back a sustainable, cutting-edge UK steel industry in the future? We want more steel that is used in the UK and across the world to be stamped “Made in Britain”.

The Prime Minister: I completely agree with the right hon. Lady. We want to support our steel industry, which is why we are taking action on procurement. If we consider what we have done through our Royal Navy, and what we can do through Railtrack and other organisations, we should back British Steel. We will also exempt heavy energy users such as British Steel from the higher electricity charges, and that rather goes to the questions asked by the Leader of the Opposition. If we endlessly push up bills for everybody else, it costs even more to exempt the high energy users, and that is why we need a balanced programme. Everything that we can do to help British Steel— including a clear infrastructure plan that the House will hear a bit more about in a moment—is all to the good.

Q14. [902340] Mark Garnier (Wyre Forest) (Con): In 2010, unemployment in Wyre Forest stood at around 5% of the working population, but it has now dropped

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to just 1.6%. Does my right hon. Friend agree that to help those who are still unemployed, and to boost productivity and wages in places such as Wyre Forest, we should offer more opportunities for skills and training? What more can the Government offer to help places such as Wyre Forest?

The Prime Minister: Our vision is that all young people aged 18 should have a real choice of either being able to take up an apprenticeship—we are planning for 3 million in this Parliament—or being able to go to one of our universities. We do not want anybody left behind; everyone should have that choice. My hon. Friend is right that unemployment has fallen in his constituency, as around the country. We will hear from the Chancellor in a minute about what has happened over the past five years, but the fact is that Britain, over those five years, has grown as fast as any other G7 country in terms of our economic performance. We can now look back and see that the decisions made in 2010, 2011 and 2012 were difficult decisions but they laid the platform for sustained economic growth and jobs.

Q9. [902335] Imran Hussain (Bradford East) (Lab): Education in Bradford is facing a funding and school places crisis, and we remain at the bottom of the league tables. Bradford’s children cannot be failed any longer, so will the Prime Minister support my call for a Bradford challenge based on the highly successful London challenge, and will he stop the dangerous changes to the schools funding formula that will drag the children of Bradford further into the land of inequality, despair and neglect?

The Prime Minister: We made commitments at the last election about funding our schools and funding school places, and we will be keeping to all those commitments, not just in the revenue that we provide to schools, where we will not be reducing the amount that goes in per pupil, but also in spending much more on new school places in this Parliament than in the Parliament that preceded my becoming Prime Minister. We are also helping with building new academy chains and new free schools, and they are available for the hon. Gentleman’s constituency as for others.

David Tredinnick (Bosworth) (Con): Does my right hon. Friend agree that the turmoil in northern Iraq and Syria gives opportunities to resolve long-standing international disputes, not least with Russia? Does he agree that the attack on the Russian bomber, something that never happened in the whole of the duration of the cold war, was disproportionate, and will he make absolutely sure that we do not get into a conflict with Russia over Syria?

The Prime Minister: There are opportunities for sensible discussions with Russia about the agenda in Syria, which is about a political transition so there can be a Government who represent all the people of Syria. I had that conversation with President Putin last week. My hon. Friend mentions the downed Russian jet. The facts of this are not yet clear. I think we should respect Turkey’s right to protect its airspace, just as we defend our own, but it is very important that we get to the bottom of exactly what happened.

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Q11. [902337] Mr Jim Cunningham (Coventry South) (Lab): The Prime Minister very often tells us that the first duty of any Government is to protect the public. Will he give an undertaking to restore the cuts to the police and the emergency services to ensure that the public in this country are protected?

The Prime Minister: This Government have a good record of protecting the public, not least because we protected counter-terrorism policing and we gave funding to the police that enabled them to help with the cut in crime of 31% since I became Prime Minister.

Jake Berry (Rossendale and Darwen) (Con): Jon Morton, a drink-driver, destroyed the lives of Amy Baxter and Hayley Jones, with Miss Baxter being so severely injured that she is paralysed from the neck down and still in hospital 16 months later. He was sentenced to just a three-year driving ban, a fine and a 20-week tag. Weeks later, he successfully applied to Bolton magistrates court for his tag to be removed so that he could go on holiday to a stag party. Will my right hon. Friend look to issue guidance to magistrates that a tag, when part of a sentence, should never be removed to allow criminals to go on holiday?

The Prime Minister: My hon. Friend makes a very powerful point, and I will look at this very carefully. Let me first express my sympathy to the victim and her family in what is undoubtedly an incredibly distressing case. It is always very difficult to comment on individual cases, because I was not sitting in the courthouse and I did not hear all the points that were made, but the point he makes does seem to be very powerful. A punishment is a punishment, a tag is a tag, and I think he is making a strong case.

Q12. [902338] Stewart Malcolm McDonald (Glasgow South) (SNP): Today’s middle east is increasingly resembling the central Europe of a century ago. Minorities, be they linguistic, religious or sexual, find themselves under more pressure than ever. My constituents, the Scottish National party and I understand the threat posed to these groups by Daesh, but how is the Prime Minister planning to prosecute a bombing campaign that does not alter the demographic map of the middle east, prevent Aleppo from becoming the new Lublin and Mosul the new Budapest?

The Prime Minister: We will set out the arguments clearly tomorrow, but there is a clear and present danger to the United Kingdom from ISIL, based in Iraq and Syria, planning attacks against our country today. We do not live in a perfect world and we cannot deliver a perfect strategy, but we can deliver a clear, long-term strategy that will work. The hon. Gentleman talks about the lessons we learned from the last century. One of the lessons I would say we should learn from the last century is that when your country is under threat, and

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when you face aggression against your country, you cannot endlessly sit around and dream about a perfect world—you need to act in the world we are in.

Nusrat Ghani (Wealden) (Con): Will my right hon. Friend join me in congratulating all the staff at the Crowborough birthing unit, including the midwives and the matron Emma Chambers, and local activist Richard Hallett, on scoring 100% on their friends and family survey on satisfaction and care? The commitment of the midwives is matched only by the Conservatives’ commitment to the NHS, given the fact that for two elections in a row we have promised and delivered greater investment than Labour in our national health service.

The Prime Minister: My hon. Friend is absolutely right to highlight the friends and family test. It is a simple way of measuring whether our hospitals are giving great care, and I think it has been a real advance in our NHS to have that. As well as a good scheme to make sure that you want your friends and family to be treated in a hospital, we need to provide the resources for that hospital, and that is exactly what we are doing with the spending figures announced today. Crucially on childbirth, it is not often that I stand here and cite the Daily Mirror, but it is worth looking at what it is saying about the importance of a seven-day NHS and making sure that we have high standards across our NHS every day of the week. As well as the extra money this Government are putting into the NHS, the seven-day NHS will also mean a much stronger NHS.

Q15. [902341] Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP): The Big Lottery Fund supports important local projects in my constituency, including the Gate in Clackmannanshire, a small children’s playground in Auchterarder, and Perthshire Women’s Aid—projects that play an essential role in their communities, supporting the vulnerable people this Government have left behind. Will the Prime Minister join me in congratulating those local projects on their work and reassure the House that this Government will protect the current level of national lottery funding earmarked for charities and community projects?

The Prime Minister: I can certainly tell the hon. Lady that we will protect the Big Lottery Fund. It does an absolutely excellent job, but I am afraid I cannot resist making the point that one of the things that the United Kingdom brings is a bigger national lottery—a bigger pot—that can support Scottish charities. Following what has happened to the oil price, if there were a Scottish November autumn statement, it would be about cuts, cuts, cuts and taxes, taxes, taxes, with no relief from the national lottery. [Interruption.]

Mr Speaker: Order. Mr Angus Brendan MacNeil, calm yourself. You may be a cheeky chappie, but you are also an exceptionally noisy one.

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Spending Review and Autumn Statement

12.33 pm

The First Secretary of State and Chancellor of the Exchequer (Mr George Osborne): This spending review delivers on the commitment we made to the British people that we would put security first—to protect our economic security by taking the difficult decisions to live within our means and bring down our debt, and to protect our national security by defending our country’s interests abroad and keeping our citizens safe at home. Economic and national security provide the foundations for everything we want to support: opportunity for all, the aspirations of families and the strong country we want to build.

Five years ago, when I presented our first spending review, our economy was in crisis and, as the letter said, there was no money left. We were borrowing one pound in every four we spent, and our job then was to rescue Britain. Today, as we present this spending review, our job is to rebuild Britain—build our finances, build our defences, build our society—so that Britain becomes the most prosperous and secure of all the major nations of the world, and so that we leave to the next generation a stronger country than the one we inherited. That is what this Government were elected to do, and today we set out the plan to deliver on that commitment.

We have committed to running a surplus. Today, I can confirm that the four-year public spending plans that I set out are forecast to deliver that surplus so that we do not borrow forever and are ready for whatever storms lie ahead. We promised to bring our debts down. Today, the forecast I present shows that, after the longest period of rising debt in our modern history, this year our debt will fall and keep falling in every year that follows.

We promised to move Britain from being a high-welfare, low-wage economy to a lower-welfare, higher-wage economy. Today, I can tell the House that the £12 billion of welfare savings we committed to at the election will be delivered in full, and delivered in a way that helps families as we make the transition to our national living wage.

We promised that we would strengthen our national defences, take the fight to our nation’s enemies and project our country’s influence abroad. Today, this spending review delivers the resources to ensure that Britain, unique in the world, will meet its twin obligations to spend 0.7% of its income on development and 2% on the defence of the realm.

But this spending review not only ensures the economic and national security of our country, it builds on it. It sets out far-reaching changes to what the state does and how it does it. It reforms our public services so that we truly extend opportunity to all, whether it is in the way we educate our children, train our workforce, rehabilitate our prisoners, provide homes for our families, deliver care for our elderly and sick, or hand back power to local communities. This is a big spending review by a Government that do big things. It is a long-term economic plan for our country’s future.

Nothing is possible without the foundations of a strong economy, so let me turn to the new forecasts provided by the independent Office for Budget Responsibility, and let me thank Robert Chote and his

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team for their work. Since the summer Budget, new economic data have been published which confirm this: since 2010, no economy in the G7 has grown faster than Britain. We have grown almost three times faster than Japan, twice as fast as France, faster than Germany and at the same rate as the United States. That growth has not been fuelled by an irresponsible banking boom, like in the last decade. Business investment has grown more than twice as fast as consumption, exports have grown faster than imports, and the north has grown faster than the south. For we are determined that this will be an economic recovery for all, felt in all parts of our nation, and that is already happening.

In which areas of the country are we seeing the strongest jobs growth? Not just in our capital city—the midlands is creating jobs three times faster than London and the south-east. In the past year, we have seen more people in work in the northern powerhouse than ever before. Where do we have the highest employment rate of any part of our country? In the south-west of England. Our long-term economic plan is working.

But the OBR reminds us today of the huge challenges we still face at home and abroad. Our debts are too high; and our deficit remains. Productivity is growing, but we still lag behind most of our competitors. I can tell the House that, in today’s forecast, the expectations for world growth and world trade have been revised down again. The weakness of the eurozone remains a persistent problem, and there are rising concerns about debt in emerging economies. These are yet more reasons why we are determined to take the necessary steps to protect our economic security.

That brings me to the forecasts for our own GDP. Even with the weaker global picture, our economy this year is predicted to grow by 2.4%. Growth is then revised up from the Budget forecast in the next two years to 2.4% in 2016 and 2.5% in 2017. It then starts to return to its long-term trend, with growth of 2.4% in 2018 and 2.3% in 2019 and 2020. That growth is more balanced than in the past. Whole economy investment is set to grow faster in Britain than in any other major advanced economy in the world this year, next year, and the year after that.

When I presented my first spending review in 2010 and set this country on the path of living within its means, our opponents claimed that growth would be choked off, a million jobs would be lost and inequality would rise. Every single one of those predictions has proved to be completely wrong. So, too, did the claim that Britain had to choose between sound public finances and great public services. It is a false choice; if we are bold with our reforms we can have both. That is why, while we have been reducing Government spending, crime has fallen, a million more children are being educated in good and outstanding schools, and public satisfaction with our local government services has risen. That is the exact opposite of what our critics predicted. Yet now, the same people are making similar claims about this spending review, as we seek to move Britain out of deficit and into surplus, and they are completely wrong again.

The OBR has seen our public expenditure plans and analysed their effect on our economy. Its forecast today is that the economy will grow robustly every year, living standards will rise every year, and more than a million extra jobs will be created over the next five years. That is

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because sound public finances are not the enemy of sustained growth; they are its precondition. Our economic plan puts the security of working people first, so that we are prepared for the inevitable storms that lie ahead. That is why our charter for budget responsibility commits us to reducing the debt to GDP ratio in each and every year of this Parliament, reaching a surplus in the year 2019-20 and keeping that surplus in normal times. I can confirm that the OBR has today certified that the economic plan we present delivers on our commitment.

That brings me to the forecasts for debt and deficit. As usual, the OBR has had access to both published and unpublished data, and has made its own assessment of our public finances. Since the summer Budget, housing associations in England have been reclassified by our independent Office for National Statistics and their borrowing and debts been brought on to the public balance sheet, and that change will be backdated to 2008. This is a statistical change and therefore the OBR has re-calculated its previous Budget forecast to include housing associations, so that we can compare like with like. On that new measure, debt was forecast in July to be 83.6% of national income this year. Now, today, in this autumn statement, the OBR forecasts debt this year to be lower at 82.5%. It then falls every year, down to 81.7%—

Clive Lewis (Norwich South) (Lab): Wow, it’s magic.

Mr Speaker: Order. Mr Lewis, get a grip of yourself, man. Calm. Take up yoga—you will find it beneficial, man. Now look, the record shows that the Chancellor stays for a very considerable period after his statement to respond to questions, and Members will always find the Chair a friend if they wish to question a Minister—[Interruption.] Yes, they will. Those who have questions to ask will be heard. Meanwhile, the Chancellor will be heard.

Mr Osborne: Mr Speaker, I am looking forward to it.

On that new measure, debt was forecast in July to be 83.6% of national income this year. Now, today, in this autumn statement, the OBR forecasts debt this year to be lower at 82.5%. It then falls every year, down to 81.7% next year, down to 79.9% in 2017-18, then down again to 77.3%, then 74.3%, reaching 71.3% in 2020-21. In every single year, the national debt as a share of national income is lower than when I presented the Budget four months ago.

This improvement in the nation’s finances is due to two things. First, the OBR expects tax receipts to be stronger—a sign that our economy is healthier than thought. Secondly, debt interest payments are expected to be lower, reflecting the further fall in the rates we pay to our creditors. Combine the effects of better tax receipts and lower debt interest, and overall the OBR calculates that it means a £27 billion improvement in our public finances over the forecast period, compared with where we were at the Budget.

This improvement in the nation’s finances allows me to do the following. First, we will borrow £8 billion less than we forecast, making faster progress towards eliminating the deficit and paying down our debt—fixing the roof when the sun is shining. Secondly, we will spend £12 billion more on capital investments, making faster progress to

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building the infrastructure our country needs. Thirdly, the improved public finances allow us to reach the same goal of a surplus while cutting less in the early years. We can smooth the path to the same destination.

That means that we can help on tax credits. I have been asked to help in the transition as Britain moves to the higher-wage, lower-welfare, lower-tax society the country wants to see. I have had representations that the changes to tax credits should be phased in. I have listened to the concerns. I hear and understand them. Because I have been able to announce today an improvement in the public finances, the simplest thing to do is not to phase these changes in, but to avoid them altogether. Tax credits are being phased out anyway as we introduce universal credit.

What that means is that the tax credit taper rate and thresholds remain unchanged. The disregard will be £2,500. I propose no further changes to the universal credit taper or to the work allowances beyond those that passed through Parliament last week. The minimum income floor in universal credit will rise with the national living wage.

I set a lower welfare cap at the Budget. The House should know that helping with the transition obviously means that we will not be within that lower welfare cap in the first years, but the House should also know that, thanks to our welfare reforms, we will meet the cap in the later part of this Parliament. Indeed, on the figures published today, we will still achieve the £12 billion per year of welfare savings we promised. That is because of the permanent savings we have already made and further long-term reforms that we announce today.

The rate of housing benefit in the social sector will be capped at the relevant local housing allowance—in other words, the same rate that is paid to those in the private rented sector who receive the same benefit. That will apply to new tenancies only. We will also stop paying housing benefit and pension credit payments to people who have left the country for more than a month. The welfare system should be fair to those who need it and fair to those who pay for it.

Improved public finances and our continued commitment to reform mean that we continue to be on target for a surplus. The House will want to know the level of that surplus, so let me give the OBR forecasts for deficit and borrowing. In 2010, the deficit we inherited was estimated to be 11.1% of national income. This year, it is set to be almost a third of that, 3.9%. Next year, it falls to less than a quarter of what we inherited, 2.5%. The deficit is down again to 1.2% in 2017-18 and down to just 0.2% the year after that, before moving into a surplus of 0.5% of national income in 2019-20, rising to 0.6% the following year.

Let me turn to the cash borrowing figures. With housing associations included, the OBR predicted at the time of the Budget that Britain would borrow £74.1 billion this year. Instead, it now forecasts that we will borrow less than that at £73.5 billion. Borrowing falls to £49.9 billion next year and then continues to fall. It falls to lower than was forecast at the Budget in every single year after that: to £24.8 billion in 2017-18 and down to just £4.6 billion in 2018-19. In 2019-20, we will reach a surplus—a surplus of £10.1 billion.

That is higher than was forecast at the Budget—Britain out of the red and into the black. In 2020-21, the year after that, the surplus rises to £14.7 billion.

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So the deficit falls every year; the debt share is lower in every year than previously forecast; we are borrowing £8 billion less than we expected overall; and we reach a bigger surplus. We have achieved this while at the same time helping working families as we move to the lower-welfare, higher-wage economy, and we have the economic security of knowing our country is paying its way in the world.

That brings me to our plans for public expenditure and taxation. I want to thank my right hon. Friend the Chief Secretary, our other ministerial colleagues at the Treasury and the brilliant officials who have assisted us for the long hours and hard work that they have put into developing these plans.

We said £5 billion would come from the measures on tax avoidance, evasion and imbalances. Those measures were announced at the Budget. Together we go further today, with new penalties for the general anti-abuse rule, which this Government introduced, and action on disguised remuneration schemes and stamp duty avoidance, and we will stop abuse of the intangible fixed assets regime and capital allowances. We will also exclude energy generation from the venture capital schemes, to ensure that they remain well targeted at higher-risk companies.

Her Majesty’s Revenue and Customs is making efficiencies of 18% of its own budget. In the digital age, we do not need taxpayers to pay for paper processing or 170 separate tax offices around the country. Instead, we are reinvesting some of those savings, with an extra £800 million in the fight against tax evasion—an investment with a return of almost 10 times in additional tax collected.

We are going to build one of the most digitally advanced tax administrations in the world in this Parliament, so that every individual and every small business will have their own digital tax account by the end of the decade in order to manage their tax online. From 2019, once these accounts are up and running, we will require capital gains tax to be paid within 30 days of completion of any disposal of residential property. Together, these things form part of the digital revolution we are bringing to Whitehall with this spending review. The Government Digital Service will receive an additional £450 million, but the core Cabinet Office budget will be cut by 26%, matching a 24% cut in the budget of the Treasury, and the cost of all Whitehall administration will be cut by £1.9 billion. These form part of the £12 billion of savings to Government Departments that I am announcing today.

In 2010, Government spending took up 45% of national income. This was a figure we could not sustain, because it was neither practical nor sensible to raise taxes high enough to pay for that, and we ended up with a massive structural deficit. Today the state accounts for just under 40% of national income, and it is forecast to reach 36.5% by the end of the spending review period. The structural spending that this represents is at a level that a competitive, modern, developed economy can sustain, and it is a level that the British people are prepared to pay their taxes for.

It is precisely because this Government believe in decent public services and a properly funded welfare state that we are insistent that they are sustainable and affordable. To simply argue all the time that public

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spending must always go up and never be cut is irresponsible and lets down the people who rely on public services most.

Equally, to fund the things we want the Government to provide in the modern world, we have to be prepared to provide the resources. So I am setting the limits for total managed expenditure as follows. This year, public spending will be £756 billion. Then it will be £773 billion next year, then £787 billion the year after, then £801 billion, before reaching £821 billion in 2019-20, the year we are forecast to eliminate the deficit and achieve the surplus. After that, the forecast public spending rises broadly in line with the growth of the economy and will be at £857 billion in 2020-21.

The figures from the OBR show that over the next five years, welfare spending falls as a percentage of national income while departmental capital investment is maintained and is higher at the end of the period. That is precisely the right switch for a country that is serious about investing in its long-term economic success.

People will want to know what the levels of public spending mean in practice and the scale of the cuts we are asking Government Departments to undertake. Over this spending review period, the day-to-day spending of Government Departments is set to fall by an average of 0.8% a year in real terms. That compares with an average fall of 2% over the last five years, so the savings we need are considerably smaller. This reflects the improvement in the public finances and the progress we have already made. Indeed, the overall rate of annual cuts that I set out in today’s spending review is less than half of those delivered over the last five years. So Britain is spending a lower proportion of its money on welfare and a higher proportion on infrastructure; seeing the budget balanced, with cuts half what they were in the last Parliament; making the savings we need, no less and no more; and providing economic security to the working people of a country with a surplus that lives within its means.

This does not, of course, mean that the decisions required to deliver these savings are easy. But nor should we lose sight of the fact that this spending review commits £4 trillion over the next five years. It is a huge commitment of the hard-earned cash of British taxpayers, and all those who dedicate their lives to public service will want to make sure it is well spent. Our approach is not simply retrenchment, it is to reform and rebuild.

These reforms will support our objectives for our country: first, to develop a modern, integrated health and social care system that supports people at every stage of their lives. Secondly, to spread economic power and wealth through a devolution revolution and invest in our long-term infrastructure. Thirdly, to extend opportunity by tackling the big social failures that for too long have held people back in our country. Fourthly, to reinforce our national security with the resources to protect us at home and project our values abroad. The resources allocated by this spending review are driven by these four goals.

The first priority of this Government is the first priority of the British people—our national health service. Health spending was cut by the Labour Administration in Wales, but we Conservatives have been increasing spending on the NHS in England, and in this spending review we do so again. We will work with our health professionals to deliver the very best value for that

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money. That means £22 billion of efficiency savings across the service; it means a 25% cut in the Whitehall budget of the Department of Health; and it means modernising the way we fund students of healthcare. Today there is a cap on student nurses—over half of all applicants are turned away, and it leaves hospitals relying on agencies and overseas staff. So we will replace direct funding with loans for new students, so that we can abolish this self-defeating cap and create up to 10,000 new training places in this Parliament.

Alongside these reforms, we will give the NHS the money it needs. We made a commitment to a £10 billion real increase in the health service budget, and we fully deliver that today, with the first £6 billion delivered up front next year. This fully funds the five-year forward view that the NHS itself put forward as the plan for its future. As the chief executive of NHS England, Simon Stevens, said,

“the NHS has been heard and actively supported.”

Let me explain what that means in cash. The NHS budget will rise from £101 billion today to £120 billion by 2020-21. This is a half a trillion pound commitment to the NHS over this Parliament—the largest investment in the health service since its creation.

So we have a clear plan for improving the NHS. We have fully funded it, and in return patients will see more than £5 billion of health research in everything from genomes to antimicrobial resistance, a new dementia institute and a new, world-class public health facility in Harlow. And more—800,000 more elective hospital admissions; 5 million more out-patient appointments; 2 million more diagnostic tests; new hospitals funded in Cambridge, in Sandwell and in Brighton; cancer testing within four weeks; and a brilliant NHS available seven days a week.

There is one part of our NHS that has been neglected for too long, and that is mental health. I want to thank the all-party group led by my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell), the right hon. Member for North Norfolk (Norman Lamb) and Alastair Campbell for its work in this vital area. In the last Parliament we made a start by laying the foundations for equality of treatment, with the first ever waiting time standards for mental health. Today, we build on that with £600 million of additional funding, meaning that by 2020 significantly more people will have access to talking therapies, perinatal mental health services and crisis care—all possible because we made a promise to the British people to give our NHS the funding it needed, and in this spending review we have delivered.

The health service cannot function effectively without good social care. The truth we need to confront is that many local authorities will not be able to meet growing social care needs unless they have new sources of funding. That, in the end, comes from the taxpayer, so in future those local authorities that are responsible for social care will be able to levy a new social care precept of up to 2% on council tax.

The money raised will have to be spent exclusively on adult social care, and if all authorities make full use of it, it will bring almost £2 billion more into the care system. It is part of the major reform we are undertaking to integrate health and social care by the end of the

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decade. To help to achieve that I am today increasing the better care fund to support that integration, with local authorities able to access an extra £1.5 billion by 2019-20. The steps taken in this spending review mean that by the end of the Parliament, social care spending will have risen in real terms.

A civilised and prosperous society such as ours should support its most vulnerable and elderly citizens. That includes a decent income in retirement. More than 5 million people have already been auto-enrolled into a pension thanks to our reforms in the last Parliament. To help businesses with the administration of that important boost to our nation’s savings, we will align the next two phases of contribution rate increases with the tax years. The best way to afford generous pensioner benefits is to raise the pension age in line with life expectancy, as we are already set to do in this Parliament. That allows us to maintain a triple lock on the value of the state pension, so never again will Britain’s pensioners receive a derisory increase of 75p.

As a result of our commitment to those who have worked hard all their lives and contributed to our society, I can confirm that next year the basic state pension will rise by £3.35 to £119.30 a week. That is the biggest real-terms increase to the basic state pension in 15 years. Taking all our increases together over the past five years, pensioners will be £1,125 better off a year than they were when we came to office. We are also undertaking the biggest change in the state pension for 40 years to make it simpler and fairer by introducing the new single-tier pension for new pensioners from April of next year.

I am today setting the full rate for our new state pension at £155.65. That is higher than the current means-tested benefit for the lowest income pensioners in our society and another example of progressive government in action. Instead of cutting the savings credit, as in previous fiscal events, it will instead be frozen at its current level where income is unchanged.

So the first objective of this spending review is to give unprecedented support to health, social care and our pensioners. The second is to spread economic power and wealth across our nation. In recent weeks, great metropolitan areas such as Sheffield, Liverpool, the Tees Valley, the north east and the west midlands have joined Greater Manchester in agreeing to create elected mayors in return for far-reaching new powers over transport, skills and the local economy. It is the most determined effort to change the geographical imbalance that has bedevilled the British economy for half a century.

We are also today setting aside the £12 billion we promised for our local growth fund and I am announcing the creation of 26 new or extended enterprise zones, including 15 zones in towns and rural areas from Carlisle to Dorset to Ipswich. But if we really want to shift power in our country, we have to give all local councils the tools to drive the growth of business in their area and the rewards that come when they do so, so I can confirm today that, as we set out last month, we will abolish the uniform business rate. By the end of the Parliament, local government will keep all of the revenue from business rates. We will give councils the power to cut rates and make their area more attractive to business, and elected mayors will be able to raise rates, provided they are used to fund specific infrastructure projects supported by the local business community.

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As the amount we raise in business rates is in total much greater than the amount we give to local councils through the local government grant, we will phase that grant out entirely over this Parliament and we will also devolve additional responsibilities. The temporary accommodation management fee will no longer be paid through the benefits system. Instead, councils will receive £10 million a year more, up front, so they can provide more help to homeless people. Alongside savings in the public health grant, we will consult on transferring new powers and the responsibility for its funding, as well as elements of the administration of housing benefit.

Local government is sitting on property worth a quarter of a trillion pounds, so we will let councils spend 100% of the receipts from the assets they sell to improve their local services. Councils increased their reserves by nearly £10 billion over the last Parliament. We will encourage them to draw on those reserves as they undertake reforms.

That amounts to a big package of not only new powers but new responsibilities for local councils. It is a revolution in the way we govern this country and if we take into account both the fall in grant and the rise in council incomes, it means that by the end of the Parliament local government will be spending the same in cash terms as it does today.

The devolved Administrations of the United Kingdom will also have available to them unprecedented new powers to drive their economies. The conclusion last week of the political talks in Northern Ireland means additional spending power for the Executive to support the full implementation of the Stormont House agreement. That opens the door to the devolution of corporation tax, which the parties have now confirmed they wish to set at a rate of 12.5%. That is a huge prize for business in Northern Ireland and the onus is now on the Northern Ireland Executive to play their part and deliver sustainable budgets so that we can move forward. Northern Ireland’s block grant will be more than £11 billion by 2019-20 and funding for capital investment in new infrastructure will rise by more than £600 million over five years, ensuring that Northern Ireland can invest in its long-term future.

For years, Wales has asked for a funding floor to protect public spending and now, within months of coming to office, this Conservative Government are answering that call and providing that historic funding guarantee for Wales. I can announce today that we will introduce the new funding floor and set it for this Parliament at 115%. My right hon. Friend the Secretary of State for Wales and I also confirm that we will legislate so that the devolution of income tax can take place without a referendum. We will also help to fund a new Cardiff city deal. So the Welsh block grant will reach almost £15 billion by 2019-20, while the capital spending will rise by more than £900 million over five years.

As Lord Smith confirmed earlier this month, the Scotland Bill meets the vow made by the parties of the Union when the people of Scotland voted to remain in the United Kingdom. It must be underpinned by a fiscal framework that is fair to all taxpayers and we are ready now to reach an agreement. The ball is in the Scottish Government’s court. Let us have a deal that is fair to Scotland, fair to the UK and built to last. We are

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implementing the city deal with Glasgow, and negotiating deals for Aberdeen and Inverness too. Of course, if Scotland had voted for independence, it would have had its own spending review this autumn. With world oil prices falling, and revenues from the North sea forecast by the OBR to be down 94%, we would have seen catastrophic cuts to Scottish public services.

Thankfully, Scotland remains a strong part of a stronger United Kingdom, so the Scottish block grant will be more than £30 billion in 2019-20, while the capital spending available will rise by £1.9 billion through to 2021—the UK Government giving Scotland the resources to invest in its long-term future. For the UK Government, the funding of the Scotland, Wales and Northern Ireland Offices will all be protected in real terms.

We are devolving power across our country, and we are also spending on the economic infrastructure that connects our nation. That is something that Britain has not done enough of for a generation. Now, by making the difficult decisions to save on day-to-day costs in departments, we can invest in the new roads, railways, science, flood defences and energy that Britain needs. We made a start in the last Parliament, and in the last week Britain topped the league table of the best places in the world to invest in infrastructure. In this spending review, we go much further. The Department for Transport’s operational budget will fall by 37%, but transport capital spending will increase by 50%, to a total of £61 billion—the biggest increase in a generation. That will fund the largest road investment programme since the 1970s—for we are the builders.

That means that the construction of High Speed 2 to link the northern powerhouse to the south can begin and that the electrification of lines such as the trans-Pennine, the midland main line and the Great Western can go ahead. We will fund our new Transport for the North to get it up and running, London will get an £11 billion investment in its transport infrastructure, and having met my hon. Friend the Member for Folkestone and Hythe (Damian Collins) and other Kent MPs, I will relieve the pressure on roads in Kent from Operation Stack with a new quarter of a billion pound investment in facilities there. We are making the £300 million commitment to cycling that we promised, we will spend more than £5 billion on roads maintenance this Parliament, and thanks to the incessant lobbying of my hon. Friend the Member for Northampton North (Michael Ellis), Britain now has a permanent pothole fund.

We are investing in the transport we need, and in the flood defences too. The day-to-day budget of the Department for Environment, Food and Rural Affairs falls by 15% in this spending review, but we are committing more than £2 billion to protect 300,000 homes from flooding. Our commitment to farming and the countryside is reflected in the protection of funding for our national parks and for our forests—we are not going to make that mistake again. In recognition of the higher costs they face, we will continue to provide £50 off the water bills of South West Water customers for the rest of this Parliament—a Conservative promise made to the south-west, and a promise kept.

Investing in the long-term economic infrastructure of our country is a goal of this spending review, and there is no more important infrastructure than energy. So we are doubling our spending on energy research with a major commitment to small modular nuclear reactors.

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We are also supporting the creation of the shale gas industry by ensuring that communities benefit from a shale wealth fund that could be worth up to £l billion. Support for low-carbon electricity and renewables will more than double. The development and sale of ultra-low emission vehicles will continue to be supported, but in light of the slower than expected introduction of more rigorous EU emissions testing, we will delay the removal of the diesel supplement from company cars until 2021.

We support the international efforts to tackle climate change, and to show our commitment to the Paris talks next week, as the Prime Minister just explained, we are increasing our support for climate finance by 50% over the next five years. The day-to-day resource budget of the Department of Energy and Climate Change will fall by 22%, we will reform the renewable heat incentive to save £700 million, and we will permanently exempt our energy intensive industries, such as steel and chemicals, from the cost of environmental tariffs, so we keep their bills down, keep them competitive and keep them here.

We are introducing a cheaper domestic energy efficiency scheme that replaces the energy company obligation. Britain’s new energy scheme will save an average of £30 a year from the energy bills of 24 million households, because the Government believe that going green should not cost the earth. And we are cutting other bills too. We will bring forward reforms to the compensation culture around minor motor accident injuries, which will remove over £l billion from the cost of providing motor insurance. We expect the industry to pass on this saving, so that motorists see an average saving of £40 to £50 per year off their insurance bills.

We are a Government who back all our businesses, large and small, and Conservative Members understand that there is no growth or jobs without a vibrant private sector and successful entrepreneurs. So this spending review delivers what business needs. Business needs competitive taxes. I have already announced in the Budget a reduction in our corporation tax rate to 18%. Our overall review of business rates will report at the Budget, but I am today helping 600,000 of our smallest businesses by extending our small business rate relief scheme for another year.

Businesses also need an active and sustained industrial strategy. That strategy, launched in the last Parliament, continues in this one. We commit to the same level of support for our aerospace and automotive industries, not just for the next five years but for the next decade. Spending on our new catapult centres will increase. We will protect the cash support we give through Innovate UK—something we can afford to do by offering £165 million of new loans to companies instead of grants, as France has successfully done for many years. That is one of the savings that helps us reduce the budget of the Department for Business, Innovation and Skills by 17%.

In the modern world, one of the best ways to back business is to back science, and that is why, in the last Parliament, I protected the resource budget for science in cash terms. In this Parliament, I am protecting it in real terms, so that it rises to £4.7 billion. That is £500 million more by the end of the decade, alongside the £6.9 billion capital budget. We are funding the new Royce Institute in Manchester, and new agri-tech centres in Shropshire,

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York, Bedfordshire and Edinburgh. And we will commit £75 million to a transformation of the famous Cavendish laboratories in Cambridge, where Crick and Rutherford expanded our knowledge of the universe. To make sure we get the most from our investment in science, I have asked another of our Nobel laureates, Paul Nurse, to conduct a review of the research councils. I want to thank him for the excellent report he has just published. We will implement its recommendations.

Britain is not just brilliant at science; it is brilliant at culture too. One of the best investments we can make as a nation is in our extraordinary arts, museums, heritage, media and sport. Now, £1 billion a year in grants adds a quarter of a trillion pounds to our economy—not a bad return. So deep cuts in the small budget of the Department for Communities and Local Government are a false economy. Its core administration budget will fall by 20%, but I am increasing the cash that will go to the Arts Council, our national museums and galleries. We will keep free museum entry and look at a new tax credit to support their exhibitions. I will help UK Sport, which has been living on diminishing reserves, with a 29% increase in its budget, so we go for gold in Rio and Tokyo. The right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson), a former Home Secretary,has personally asked me to support his city’s year of culture, and I am happy to do so with a grant. His campaign has contributed to the arts, while his Front-Bench team contributes to comedy.

The money for Hull is all part of a package for the northern powerhouse that includes funding the iconic new Factory Manchester and the Great Exhibition of the North. In Scotland, we will support the world famous Burrell collection, while here in London we will help the British Museum, the Science Museum and the V&A move their collections out of storage and put them on display, and we will fund the exciting plans for a major new home for the Royal College of Arts in Battersea. We are also increasing the funding for the BBC World Service, so that British values of freedom and free expression are heard around the world.

All this can be achieved, as my right hon. Friend the Prime Minister said, without raiding the Big Lottery Fund, as some feared. It will continue to support the work of hundreds of small charities across Britain. So too will our £20 million a year of new support for social impact bonds. There are many great charities that work to support vulnerable women, as was mentioned in Prime Minister questions. My hon. Friend the Member for Colchester (Will Quince) has proposed to me a brilliant way to give them more help. Some 300,000 people have signed a petition arguing that no VAT should be charged on sanitary products. We already charge the lowest rate—5%—allowable under European law and we are committed to getting the EU to change its rules. Until that happens, I will use the £15 million a year raised from the tampon tax to fund women’s health and support charities. The first £5 million will be distributed between the Eve Appeal, SafeLives, Women’s Aid, and The Haven, and I invite bids from other such good causes.

It is similar to the way we use LIBOR fines—and today I make further awards from them, too. We will support a host of military charities, from the organisation for guide dogs for military veterans to Care after Combat. We renovate our military museums, from the Royal

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Marines and D-Day museums in Portsmouth to the National Army museum, the Hooton Park aerodrome, and the former HQ of RAF Fighter Command at Bentley Priory. In the Budget, I funded one campaign bunker, but more have emerged since then.

At the suggestion of my right hon. Friend the Member for Mid Sussex (Sir Nicholas Soames), we will support the fellowships awarded in the name of his grandfather by funding the Winston Churchill memorial trust. We will fund the brilliant Commonwealth War Graves commission, so it can tend to over 6,000 graves of those who died fighting for our country since the second world war; and we will contribute to a memorial to those victims of terrorism who died on the bus in Tavistock square 10 years ago. That is a reminder that we have always faced threats to our way of life, and have never allowed them to defeat us.

We deliver security so we can spread opportunity. That is the third objective that drives this spending review. We showed in the last five years that sound public finances and bold public service reform can help the most disadvantaged in our society. That is why inequality is down, child poverty is down, the gender pay gap is at a record low and the richest fifth now pay more in taxes than the rest of the country put together. The other side talks of social justice; this side delivers it because we are all in this together.

In the next five years, we will be even bolder in our social reform. It starts with education, because that is the door to opportunity in our society. This spending review commits us to a comprehensive reform of the way it is provided from childcare to college. We start with the largest ever investment in free childcare, so working families get the help they need. From 2017, we will fund 30 hours of free childcare for working families with three and four-year-olds. We will support £10,000 of childcare costs tax free. To make this affordable, this extra support will now be available only to parents working more than 16 hours a week and with incomes of less than £100,000. We will maintain the free childcare we offer to the most disadvantaged two-year-olds. To support nurseries delivering more free places for parents, we will increase the funding for the sector by £300 million. Taken together, that is a £6 billion childcare commitment to the working families of Britain.

Next, schools. We build on our far-reaching reforms of the last Parliament that have seen school standards rise even as exams become more rigorous. We will maintain funding for free infant school meals, protect rates for the pupil premium and increase the cash in the dedicated schools grant. We will maintain the current national base rate of funding for our 16 to 19-year-old students for the whole Parliament. We are going to open 500 new free schools and university technical colleges, and invest £23 billion in school buildings and 600,000 new school places. To help all our children make the transition to adulthood—and learn about not just their rights, but their responsibilities—we will expand the National Citizen Service. Today, 80,000 students go on National Citizen Service. By the end of the decade we will fund places for 300,000 students on this life-changing programme pioneered by my right hon. Friend the Prime Minister.

Five years ago, 200 schools were academies: today, 5,000 schools are. Our goal is to complete this school revolution and help every secondary school become an academy. I can announce that we will let sixth-form

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colleges become academies, too, so that they no longer have to pay VAT. We will make local authorities running schools a thing of the past, which will help us save around £600 million on the education services grant.

I can tell the House that as a result of this spending review, not only is the schools budget protected in real terms but the total financial support for education, including childcare and our extended further and higher education loans, will increase by £10 billion. That is a real-terms increase for education, too.

There is something else I can tell the House. We will phase out the arbitrary and unfair school funding system that has systematically underfunded schools in whole swathes of the country. Under the current arrangements, a child from a disadvantaged background in one school can receive half as much funding as a child in identical circumstances in another school. In its place, we will introduce a new national funding formula. I commend the many MPs from all parties who have campaigned for many years to see this day come. The formula will start to be introduced from 2017, and my right hon. Friend the Education Secretary will consult in the new year.

Education continues in our further education colleges and universities—and so do our reforms. We will not, as many predicted, cut core adult skills funding for FE colleges; we will instead protect it in cash terms. I announced in the Budget that we would replace unaffordable student maintenance grants with larger student loans. That saves us over £2 billion a year in this spending review, and it means we can extend support to students who have never before had Government help.

Today I can announce that part-time students will be able to receive maintenance loans, helping some of our poorer students. We will also, for the first time, provide tuition fee loans for those studying higher skills in FE, and extend loans to all postgraduates, too. Almost 250,000 extra students will benefit from all this new support that I am announcing today.

Then there is our apprenticeship programme—the flagship of our commitment to skills. In the last Parliament, we more than doubled the number of apprentices to 2 million. By 2020, we want to see 3 million apprentices. To make sure they are high-quality apprenticeships, we will increase the funding per place, and my right hon. Friend the Business Secretary will create a new business-led body to set the standards. As a result, we will be spending twice as much on apprenticeships by 2020 compared with when we came to office.

To ensure that large businesses share the cost of training the workforce, I announced at the Budget that we will introduce a new apprenticeship levy from April 2017. Today I am setting the rate at 0.5% of an employer’s pay bill. Every employer will receive a £15,000 allowance to offset against the levy, which means over 98% of all employers and all businesses with pay bills of less than £3 million will pay no levy at all. Britain’s apprenticeship levy will raise £3 billion a year and will fund 3 million apprenticeships, with those paying it able to get out more than they put in. It is a huge reform to raise the skills of the nation and address one of the enduring weaknesses of the British economy.

Education and skills are the foundation of opportunity in our country. Next we need to help people into work. The number claiming unemployment benefits has fallen

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to just 2.3%—the lowest rate since 1975. But we are not satisfied that the job is done; we want to see full employment. So today we confirm we will extend the same support and conditionality we currently expect of those on jobseeker’s allowance to over 1 million more benefit claimants. Those signing on will have to attend the jobcentre every week for the first three months. We will increase in real terms the help we provide to people with disabilities to get them into work. This can all be delivered within the 14% savings we make to the resource budget of the Department for Work and Pensions, including by reducing the size of its estate and co-locating jobcentres with local authority buildings. It is the way to save money while improving the front-line service we offer people and providing more support for those who are most vulnerable and most in need of our help.

We cannot say we are fearlessly tackling the most difficult social problems if we turn a blind eye to what goes on in our prisons and criminal justice system. My right hon. Friend the Lord Chancellor has worked with the Lord Chief Justice and others to put forward a typically bold and radical plan to transform our courts so they are fit for the modern age. Under-used courts will be closed, and I can announce today that the money saved will be used to fund a £700 million investment in new technology that will bring further and permanent long-term savings and speed up the process of justice.

Old Victorian prisons in our cities that are not suitable for rehabilitating prisoners will be sold. This will also bring long-term savings and means we can spend over £1 billion in this Parliament building nine new modern prisons. Today, the transformation gets under way with the announcement that the Justice Secretary has just made. I can tell the House that Holloway prison—the biggest women’s jail in western Europe—will close. In the future, women prisoners will serve their sentences in more humane conditions, better designed to keep them away from crime.

By selling these old prisons, we will create more space for housing in our inner cities, for another of the great social failures of our age has been the failure to build enough houses. In the end, spending reviews like this come down to choices about what your priorities are. I am clear: in this spending review, we choose to build. Above all, we choose to build the homes that people can buy, for there is a growing crisis of home ownership in our country. Fifteen years ago, around 60% of people under 35 owned their own home. Next year, the figure is said to be just half that. We made a start on tackling this in the last Parliament, and, with schemes such as our Help to Buy, the number of first-time buyers rose by nearly 60%, but we have not done nearly enough yet, so it is time to do much more.

Today we set out our bold plan to back families who aspire to buy their own home. First, I am doubling the housing budget to £2 billion a year. We will deliver, with Government help, 400,000 affordable new homes by the end of the decade. Affordable means not just affordable to rent, but affordable to buy. That is the biggest house building programme by any Government since the 1970s. Almost half of them will be our starter homes, sold at 20% off market value to young first-time buyers, and 135,000 will be our brand new Help to Buy: Shared

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Ownership, which we announce today. We will remove many of the restrictions on shared ownership—who can buy them, who can build them and who they can be sold on to.

The second part of our housing plan delivers on our manifesto commitment to extend the right to buy to housing association tenants. I can tell the House that this starts with a new pilot. From midnight tonight, tenants of five housing associations will be able to start the process of buying their own home.

The third element of the plan involves accelerating housing supply. We are announcing further reforms to our planning system so that it delivers more homes more quickly. We are releasing public land suitable for 160,000 homes and re-designating unused commercial land for starter homes. We will extend loans for small builders, regenerate more run-down estates and invest over £300 million in delivering at Ebbsfleet the first garden city in nearly a century.

Fourthly, the Government will help address the housing crisis in our capital city with a new scheme—London Help to Buy. Londoners with a 5% deposit will be able to get an interest-free loan worth up to 40% of the value of a newly built home. My hon. Friend the Member for Richmond Park (Zac Goldsmith) has been campaigning on affordable home ownership in London. Today we back him all the way.

The fifth part of our housing plan addresses the fact that more and more homes are being bought as buy-to-lets or second homes. Many of them are cash purchases that are not affected by the restrictions I introduced in the Budget on mortgage interest relief, and many of them are bought by those who are not resident in this country. Frankly, people buying a home to let should not squeeze out families who cannot afford a home to buy. So I am introducing new rates of stamp duty that will be 3% higher on the purchase of additional properties, such as buy-to-lets and second homes. It will be introduced from April next year and we will consult on the details so that corporate property development is not affected. This extra stamp duty raises almost £1 billion by 2021, and we will reinvest some of that money in local communities in London and places like Cornwall, which are being priced out of home ownership. The funds we raise will help build the new homes.

This spending review delivers: a doubling of the housing budget; 400,000 new homes, with extra support for London; estates regenerated; and right to buy rolled-out, paid for by a tax on buy-to-lets and second homes, and delivered by a Conservative Government committed to helping working people who want to buy their own home. For we are the builders.

The fourth and final objective of this spending review is national security. On Monday, the Prime Minister set out to the House the strategic defence and security review. It commits Britain to spending 2% of our income on defence, and it details how these resources will be used to provide new equipment for our war-fighting military, new capabilities for our special forces, new defences for our cyberspace, and new investments in our remarkable intelligence agencies.

By 2020-21, the single intelligence account will rise from £2.1 billion to reach £2.8 billion, and the defence budget will rise from £34 billion today to £40 billion. Britain also commits to spend 0.7% of our national

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income on overseas development, and we will reorientate that budget so that we both meet our moral obligation to the world’s poorest and help those in the fragile and failing states on Europe’s borders. It is overwhelmingly in our national interest that we do so, so our total overseas aid budget will increase to £16.3 billion by 2020.

Britain is unique in the world in making these twin commitments to funding both the hard power of military might and the soft power of international development. It enables us to protect ourselves, project our influence and promote our prosperity. We do so ably supported by my right hon. Friend the Foreign Secretary and our outstanding diplomatic service. To support them in their vital work, I am today protecting in real terms the budget of the Foreign and Commonwealth Office.

But security starts at home. Our police are on the frontline of the fight to keep us safe. In the last Parliament, we made savings in police budgets, but thanks to the reforms of my right hon. Friend the Home Secretary and the hard work of police officers, crime fell and the number of neighbourhood officers increased. That reform must continue in this Parliament. We need to invest in new state-of-the-art mobile communications for our emergency services, introduce new technology at our borders and increase the counter-terrorism budget by 30%. We should allow elected police and crime commissioners greater flexibility in raising local precepts in areas where they have been historically low. Further savings can be made in the police as different forces merge their back offices and share expertise. We will provide a new fund to help with this reform.

I have had representations from the shadow Home Secretary that police budgets should be cut by 10%, but now is not the time for further police cuts. Now is the time to back our police and give them the tools to do the job. I am today announcing that there will be no cuts in the police budget at all. There will be real-terms protection for police funding. The police protect us, and we are going to protect the police.

Five years ago, when I presented my first spending review, the country was on the brink of bankruptcy and our economy was in crisis. We took the difficult decisions then. Five years later, I report on an economy growing faster than its competitors and public finances set to reach a surplus of £10 billion. Today we have set out the further decisions necessary to build this country’s future. Those decisions are sometimes difficult, yes, but they build the great public services families rely on; build the infrastructure and the homes people need; build stronger defences against those who threaten our way of life; and build the strong public finances on which all these things depend.

We were elected as a one nation Government. Today we deliver the spending review of a one nation Government. The guardians of economic security, the protectors of national security, the builders of our better future—this Government, the mainstream representatives of the working people of Britain.

1.38 pm

John McDonnell (Hayes and Harlington) (Lab): Mr Speaker, like me, you have witnessed many autumn statements and other statements by the Chancellor of the Exchequer. You will know that there is the iron law

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of Chancellor’s statements: the louder the cheers for the statement on the day, the greater the disappointment by the weekend when the analysis has been done. From what we have heard today, we do not need to wait until the weekend for the statement to fall apart. Over the past five years, the Chancellor has barely set a target that he has not missed or ignored.

Five years ago, the newly elected Chancellor and Prime Minister came to the House and warned us that the dire economic situation that our country faced meant that a five-year programme of austerity measures was needed: job cuts, wage freezes and cuts in public services. But we were promised, specifically by this Chancellor, that by today the deficit would be eliminated and debt would be under control and falling dramatically. People put their trust in that commitment. [Interruption.]

Mr Speaker: Order. I said earlier that the Prime Minister would be heard; the shadow Chancellor will be heard too. If people think that they are being clever when they are shouting their heads off, they need not bother to try to ask a question, but they should at least try to have the sense to realise the conflict between the two.

John McDonnell: The Prime Minister also assured us that although it was going to be hard and sacrifices had to be made, we were all in it together. Today, five years on, the Chancellor must have some front to come to the House and lecture us about deficit reduction. Today is the day when he was supposed to announce that austerity was over and the deficit was under control. Given what people have heard today, I think that they will feel absolutely betrayed. The reality is that, after five years, the deficit has not been eliminated, and this year it is predicted to be over £70 billion. Instead of taking five years to eliminate the deficit as the Chancellor promised, it is going to take 10. Furthermore, debt-to-GDP will not be the 69% that he promised five years ago. As he said today, it will be 82.5%.

We are now potentially to bequeath to our children a debt of £1.5 trillion. That will be their debt. The Chancellor —[Interruption.] The Chancellor—[Interruption.] The Chancellor continues to miss—

Mr Speaker: Order. Both sides are still shouting their heads off. It is very downmarket, it is very low grade, and it is very widely deprecated by the public. How people can think it is legitimate to behave in that way while trying to reconnect with an electorate who are disillusioned with politics is just bizarre. If some people are so unintelligent that they still cannot grasp the point, I pity them.

John McDonnell: After five years as Chancellor, with that level of debt, there is no one else for him to blame. Past Governments can be blamed for only so long; there are no more excuses for this Chancellor after five years.

We were also promised that if sacrifices had to be made to tackle the deficit, we were not to worry, because we were all in this together. No, we are not. Eight-five per cent. of the money saved from tax and benefit cuts in the last Parliament came directly out of women’s pockets. Disabled people were hit 18 times harder than anyone else. Moreover, 4.1 million children now live in absolute poverty, an increase of 500,000 since 2009-10.

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The fiasco over tax credits demonstrated once and for all that we were not in this together. At the same time as the Chancellor was planning to cut tax credits for working families, he cut inheritance taxes for some of the wealthiest families in the country.

When the Chancellor and the Prime Minister were first elected to their current positions, they were attacked for being “posh boys”. I disagreed with that strongly. People do not choose the class that they are born into, or the wealth that they inherit. Nevertheless, if people are fortunate enough to have wealth or good incomes, like all Members of Parliament, the onus is on them—on us—to take particular care when making decisions about the lives of those who are less fortunate than themselves.

What shocked and, indeed, angered many, not just in the House but throughout the country, was the fact that the Chancellor made no attempt to understand the effects of the decision to cut tax credits. For many families, it would have meant a choice between the children being able to go on that school trip like the other children, and having a decent Christmas or a winter coat. Today the Chancellor has been forced into a U-turn on his tax credit cuts, and I congratulate the Members on both sides of the House who have made that happen. I congratulate the Members in the other House as well. I am glad that the Chancellor has listened to Labour, and has seen sense.

As ever with this Chancellor, however, we await further clarification of the details, particularly if the limit to two children remains, and we are aware of the impact on universal credit. It appears that the 14,000 families who are already on universal credit will still suffer the full cut, and that all families who would newly qualify for tax credits in 2018 will suffer the full cut under universal credit; so this is not the full and fair reversal that we pleaded for. Moreover, the Chancellor remains committed to £12 billion of welfare cuts over the course of this Parliament. We know that they will fall on the most vulnerable, the poorest, and those who are just struggling to survive.

Some believe that the Chancellor is using the deficit and austerity to reshape the role of the British state, and that this is some well-thought-through Machiavellian scheme. Well, I do not think that any more. I am convinced that it is sheer economic illiteracy, built on incompetence and poor judgment. Only four weeks ago, the Chancellor brought his charter for fiscal responsibility to the House. An essential part of it was adherence to his welfare cap, which we supported. Today he has broken his own welfare cap, although he said himself when he introduced it last year that breaking it would be a

“failure of public expenditure control”.—[Official Report, 26 March 2014; Vol. 578, c. 380.]

He is condemned on his own terms, in his own language.

The Government are cutting today, and not investing in the future. The Chancellor is putting us all at future risk. I congratulate my right hon. Friend the Member for Leigh (Andy Burnham) on his campaign against policing cuts, which has forced a U-turn, but we do not forget that we face the highest level of risk from terrorist attack in a generation. We have already lost 17,000 police officers as a result of the cuts that have been made

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under this Government. We know that the first line of intelligence collection, prevention and response consists of the local police officers in the community, so we claim today another Labour gain and victory. However, there are now concerns about the impact of the local council cuts and freezes in expenditure on other emergency services. We fear for the people’s safety as more firefighters’ jobs are cut and fire stations close as a result of today’s settlement.

The Chancellor has announced that he is front-loading part of the additional £8 billion of funding for health. In reality, that will plug only some of the gap in the huge deficits that health trusts are reporting, but the Government are also relying on the finding of £22 billion of unrealistic savings. The extra money seems to be coming from nurses’ training, the public health budget, and other aspects of local authority support for care. That will be a false economy, which will simply cause more burdens to fall on the NHS. All the signs are that we are facing a massive winter crisis in our NHS, and that, yet again, we will have to rely on the professional dedication of its staff. The Health Secretary’s refusal to go to ACAS to settle the junior doctors’ dispute is no way to maintain morale among our NHS professionals.

One of the greatest scandals under this Chancellor has been the attack on social care. Three thousand beds have been lost already and according to the Association of Directors of Adult Social Services, the 2% care precept announced by the Chancellor is not nearly enough to fill the funding gap this Government have created. The result is that some of the most vulnerable people in our society will be at risk and more people will be forced to resort to their local hospital for their care.

We also know much more about the scale of people suffering from mental health problems. We welcome the additional funding today devoted to mental health, but it is no use funding mental health support through the health service when local authority support is being cut as a result of this settlement. More people will be left vulnerable.

In education, the Government claim that schools budgets will be protected, but we fear that the Government will use the new funding formula to take funding away from the pupils who need it most—the most deprived. We will monitor the funding formula carefully to ensure equity.

In today’s statement, the Chancellor has announced that for further education there will be a settlement that restricts it to cash protection. In effect, that means that around the country sixth forms and FE colleges will be under threat and at risk of closure. At a time when the economy is crying out for a skilled, educated workforce, the Government are denying young people access to the local courses they need. On today’s announcements on childcare, we note there is a delay yet again—for another two years. That is another delay following a commitment given.

The Chancellor’s much vaunted pledge on house building is cobbled together from reheated promises from the past. The vast majority have already been announced. The Tories should be judged by their actions, not their words.

The Chancellor’s first act in office was to slash housing investment by 60%. His plans today could still mean 40% less to build the homes we need, compared with the

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investment programme he inherited from Labour. As a result, house building remains at its lowest peacetime level since the 1920s. As my right hon. Friend the Member for Wentworth and Dearne (John Healey) said this morning,

“if hot air built homes, then conservative ministers would have our housing crisis sorted.”

I worry that the vast majority of young people hoping for a new home will be disappointed by the Chancellor’s failure to deliver. His record on building anything so far does not inspire confidence at all. Over the past year, he has forced himself on to building sites throughout the country to secure a photo with a high-vis jacket. When he did his Bob the Builder speech at the Tory party conference, what he did not tell delegates was that his investment record is abysmal. Only 9% of the projects have started under his infrastructure pipeline in two years. In 2012, he announced a £40 billion guarantees scheme. Three years on, only 9% of that sum has been signed up. In 2011, he announced a £20 billion pensions infrastructure platform but four years on only £1 billion of commitments have been secured. The construction industry is actually shrinking this year and going into recession.

The Chancellor has also failed to invest in skills. The Royal Institution of Chartered Surveyors has said that the UK’s biggest infrastructure programmes could grind to a halt unless the Government adopt new measures to tackle the skills and funding issues. The most ironic cut of all must be the virtual closure of large sections of the Department for Business, Innovation and Skills. There are 146,000 unfilled vacancies due to the lack of skilled workers, so naturally the Government’s solution is to move to effectively close the very Department tasked with improving skill levels.

On the environment, the Government have announced today various measures but let us be clear. Ministers can go to the Paris summit on climate change with the proud record of nearly killing off the UK’s once flourishing solar renewable energy sector. On international aid, let me caution that the international aid budget was supposedly protected, but now it is to be raided for defence spending.

On defence, the Government commissioned an aircraft carrier last year. A few years ago, they at least woke up to the fact that it needed aircraft as well. But the funding for the defence review is to come from £1l billion-worth of cuts, with the inevitable loss of thousands of defence workers’ jobs, whose specialist skills will be lost forever.

Alongside those cuts and many more to help dig himself out of the financial hole he has got himself into, the Chancellor is selling off whatever public assets he can. It is no longer the family silver up for sale—the furniture, fixtures and fittings are now being sold. We know who is the first in line to buy. I never envisaged that when it came to nationalising I would be outdone by a Conservative Chancellor. The only difference between us is that I would like to bring services such as rail back into the ownership of the British people. The Chancellor wants to sell them to the People’s Republic of China. Nationalisation is okay for him as long as it is by any state but ours.

To assist Comrade Osborne in his dealings with his new found comrades, I have brought along Mao’s little red book. Let me quote—[Interruption.]

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Mr Speaker: Order. I want to hear about the contents of the book.

John McDonnell: I think the Chancellor will find this invaluable. [Interruption.]

Mr Speaker: Order. The hon. Member for Kingswood (Chris Skidmore) is a historian, if a rather excitable one.

John McDonnell: I thought this would help the Chancellor. Mao is rarely quoted in this Chamber. The quote is this—[Interruption.]Behave.